Martha W. Drew
                                          Personal Representative
                                          Estate of Alan W. Drew
                                          834 Island Club Square
                                          Vero Beach, Florida  32963-5505


                                          January 28, 2000


Transnational Industries, Inc.
P.O. Box 198
U.S. Route One
Chadds Ford, Pennsylvania  19317


               Re: Purchase and Sale of Shares of Transnational Industries, Inc.


Ladies and Gentlemen:


     By this letter agreement (this "Letter  Agreement"),  I wish to memorialize
the agreement of  Transnational  Industries,  Inc., a Delaware  corporation (the
"Company"),  to purchase 45,710 issued and outstanding  shares (the "Shares") of
the common stock of the Company from Martha W. Drew, Personal  Representative of
the Estate of Alan W. Drew (the "Seller").

     Section 1. Purchase and Sale; Escrow.

     (a)  The  Seller  hereby  sells  to the  Company,  and the  Company  hereby
purchases from the Seller, all of the right, title and interest of the Seller in
and to the Shares,  as of the date hereof, on the terms and conditions set forth
in this  Letter  Agreement.  The  aggregate  purchase  price  for the  Shares is
$137,130,  payable  by a wire  transfer  of  immediately  available  funds  (the
"Funds")  in  accordance  with the  instructions  provided  by the Seller to the
Company.

     (b) A certificate  representing the Shares,  in genuine and unaltered form,
duly endorsed in blank or accompanied by duly executed stock powers  endorsed in
blank,  with  requisite  stock  transfer  tax  stamps,  if  any,  attached  (the
"Certificate")  is,  simultaneous with the execution and delivery of this Letter
Agreement,  being  held in escrow  by  Robert  DeVellis  (the  "Escrow  Agent"),
attorney for the Seller. Immediately upon the Seller's receipt of the Funds, the
Escrow Agent shall release the Certificate to the Company.

     Section 2. Representations and Warranties of the Seller.

     (a) Title. The Seller owns the Shares, beneficially and of record, free and
clear  of  all  liens,   encumbrances   and  security   interests  of  any  kind
(collectively,   "Liens").   The  delivery  of  a  certificate  or  certificates
representing the Shares will transfer to the Company good and valid title to the
Shares, free and clear of all liens.

     (b)  Authority.  The  execution  and  delivery by the Seller of this Letter
Agreement,  and the performance by the Seller of its obligations hereunder,  are
within the  authority of the Seller,  no other action on the part of the Seller,
any beneficiary or  beneficiaries  of Alan W. Drew or any other person or entity
being  necessary in connection with such  execution,  delivery and  performance.
This  Letter  Agreement  has been duly and  validly  executed  by the Seller and
constitutes a legal,  valid and binding  obligation  of the Seller,  enforceable
against the Seller in accordance with its terms.

     Section 3. Miscellaneous.

     (a) Governing Law. This Letter Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania  applicable to a
contract executed and performed in such  Commonwealth,  without giving effect to
the conflicts of laws principles thereof.

     (b)  Counterparts.  This Letter  Agreement may be executed in any number of
counterparts,  each of  which  will be  deemed  an  original,  but all of  which
together will constitute one and the same instrument.

     (c) Entire Agreement.This Letter Agreement supersedes all prior discussions
and  agreements  between the parties with respect to the subject  matter hereof,
and  contains  the sole and entire  agreement  between the  parties  hereto with
respect to the subject matter hereof.


     Please sign below to indicate agreement to the foregoing.



                         /s/ Martha W. Drew
                         Martha W. Drew
                         Personal Representative of the Estate of Alan W. Drew


Acknowledged and agreed:

TRANSNATIONAL INDUSTRIES, INC.



By:      /s/ Paul L. Dailey
         Name: Paul L. Dailey
         Title: Vice President - Finance


/s/ Robert DeVellis
Robert DeVellis, Escrow Agent