RENEWAL LINE OF CREDIT
                                      NOTE

                               Media, Pennsylvania

Maximum Credit Limit:      $1,100,000.00                      Date: July 7, 2000

                                   Background

         A. First  Keystone  Federal  Savings Bank, a corporation  organized and
existing  under the laws of the United States of America,  (hereinafter  "Bank")
extended  to  Transnational  Industries,  Inc.  and  Spitz,  Inc.,  (hereinafter
collectively,  jointly and severally  referred to as the  "Debtor"),  two credit
facilities  on June 12, 1997.  Specifically,  the Bank extended to Debtor a term
credit   facility  in  the  principal  sum  of  Eight  Hundred  Twenty  Thousand
($820,000.00)  Dollars  evidenced  by that  certain  Promissory  Note (the "Term
Note") made by Debtor and  delivered to Bank on June 12, 1997 (the "Term Loan").
The Term Loan is not intended to be modified. The Bank also extended to Debtor a
revolving  line of  credit  not to exceed  the  aggregate  sum of Eight  Hundred
Thousand  ($800,000.00)  Dollars, (the "Line of Credit") to be advanced pursuant
to the terms of a Line of Credit  Agreement  between  Bank and Debtor dated June
12, 1997. The indebtedness to Bank under the Line of Credit is evidenced by that
certain  Line of Credit Note  executed by Debtor and  delivered to Bank June 12,
1997 (the  "Line of  Credit  Note").  The Term  Loan and the Line of Credit  are
secured by, among other things, all of the accounts, inventory,  receivables and
equipment  of  Debtor  pursuant  to  that  certain  Security  Agreement,  Pledge
Agreement and UCC-1 Financing  Statements between Bank and Debtor dated June 12,
1997.

         B. Debtor has requested Bank to reduce the rate of interest  charged on
the Line of Credit  from  time to time as set  forth in the Line of Credit  Note
from the Wall Street Prime Rate plus two (2.0%) percent per annum to Wall Street
Prime Rate plus  one-half  (0.50%)  percent per annum,  subject,  however to the
interest rate adjustment  provisions as set forth in this Renewal Line of Credit
Note.

         C. Debtor has also  requested  that the Line of Credit be  increased to
One Million One Hundred Thousand ($1,1000,000.00) Dollars.

         D. As of the date hereof the outstanding  balance of the Line of Credit
Note is six hundred ninety-five thousand dollars ($695,000 ).

         E. Bank has no obligation to reduce the rate of interest charged on the
Line of Credit or to increase  the maximum  available  credit  under the Line of
Credit.  Bank is willing to reduce the rate and increase  the maximum  available
credit  under the Line of Credit  on the terms and  conditions  set forth in the
Modification Agreement of even date herewith (the "Modification  Agreement") and
this Renewal Line of Credit Note  (hereinafter  the "Note").  The Line of Credit

<PAGE>

Agreement  between  Bank and Debtor dated June 12,  1997,  and the  Modification
Agreement shall  hereinafter  collectively be referred to as the "Line of Credit
Agreement".

         FOR VALUE  RECEIVED,  WITHOUT  DEFALCATION  AND INTENDING TO BE LEGALLY
BOUND HEREBY, Debtor promises to pay to the order of Bank at its offices located
at 22 West State Street,  Media,  Pennsylvania  19063 or such other place as the
holder  hereof may from time to time direct,  the sum of One Million One Hundred
Thousand  ($1,100,000.00)  Dollars,  or so much thereof as may be advanced  from
time to time, and remain unpaid, under the Line of Credit Agreement, as the same
is amended by the Modification  Agreement,  together with interest from the date
hereof at the per annum rate of one-half  of one (.50% ) percent  above the Wall
Street  Prime  Rate  (hereinafter  defined)  in  effect  from  time to time (the
"Rate"),  the effective  date of any change in the Rate to be the date of change
of the Wall Street Prime Rate, to be paid as follows:

                  (i) On August 1, 2000, a payment of interest only on the daily
         principal  balance  outstanding  from the date hereof to July 31, 2000,
         and  thereafter  a payment  of  interest  only on the  daily  principal
         balance  outstanding  from the date hereof in monthly  installments  of
         said interest  payable on the first day of September,  2000, and on the
         same day of each month  thereafter  until  July 6, 2005 (the  "Maturity
         Date"), at which time the entire  indebtedness  evidenced by this Note,
         including, without limitation, the entire outstanding principal balance
         and  accrued  interest  thereon,  together  with any other sums due and
         payable under this Note, shall be payable in full;

                  (ii) The Wall Street Prime Rate is the "Prime Rate"  published
         in the "Money Rates" section of The Wall Street Journal, or the average
         "Prime Rate" if more than one is published.  If The Wall Street Journal
         ceases to be published or goes on strike or is otherwise  not published
         for any period of time, or if it ceases to publish a "Prime Rate", then
         Bank may use any similar published prime or base rate; and

                  (iii)  The  amount  of any  monthly  installment  shall be the
         result obtained by multiplying  the product of the outstanding  balance
         on any day times the  applicable  Rate by a fraction,  the numerator of
         which is the  actual  number of days  during  the  period for which the
         calculation  is  being  made  that any  given  outstanding  balance  is
         applicable, and the denominator of which is three hundred sixty (360).

         I.  ADVANCES:  Subject to the terms and conditions of this Note and the
Line of Credit  Agreement,  Bank agrees to advance to Spitz,  Inc.  from time to
time and until July 6, 2005 (the "Maturity Date"),  such sums as Spitz, Inc. may
request, in writing,  not to exceed at any time outstanding the principal sum of
One Million One Hundred  Thousand  ($1,100,000.00)  Dollars (the "Maximum Credit
Limit").  Within  the limits of this Note and the Line of Credit  Agreement  and
prior to the Maturity Date Spitz, Inc. may borrow, repay, and borrow again.

         II. SECURITY:  The payment of this Note is secured by, inter alia, that
certain  Security  Agreement,  Pledge  Agreement and UCC-1 Financing  Statements


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<PAGE>

executed  and  delivered  to Bank on or about  June 12,  1997,  encumbering  the
Collateral  as  defined  in the  Security  Agreement  and the  Pledge  Agreement
respectively.

         III. ADVANCES FOR PROTECTION OF SECURITY INTEREST:  In the event Debtor
fails to pay any cost or expense relating to the protection of the Collateral as
defined in the Security  Agreement and the Pledge Agreement  respectively,  then
Bank may,  at its option and without  prior  notice,  advance  sums on behalf of
Debtor  in  payment  of any of the  aforesaid,  including,  without  limitation,
charges and claims,  prior liens and insurance premiums without prejudice to the
right of enforcement of the within indebtedness or the other remedies of Bank as
hereinafter  set forth by reason of the failure of Debtor to make payment of the
same; and all such sums so advanced by Bank shall be added to and become part of
the within  indebtedness,  with  interest on each advance at the Rate,  from the
dates of the respective expenditures,  shall be secured by the security for this
Note,  and shall be payable by Debtor to Bank upon demand.  The  production of a
receipt by the Bank shall be conclusive proof of a payment or advance authorized
hereby and the amount and validity  thereof.  The  provisions of this  paragraph
shall apply after the entry of a judgment in any  collection  action  based upon
this Note or the  security for this Note and Debtor shall be obligated to pay to
Bank any post judgment advances made by Bank pursuant to this paragraph.

         IV. REPAYMENTS: Debtor may at any time prepay the principal outstanding
balance  hereof in whole or in part without  penalty or premium,  provided  that
Debtor gives written notice to Bank prior to or contemporaneously  with any such
prepayment of principal.  Partial  prepayments shall be applied first on account
of  interest,  then on account  of other  sums due under  this Note,  other than
principal, and then on account of principal.

         V.  DEFAULT  RATE OF  INTEREST:  In the event  Debtor  fails to pay any
amount due under this Note when due or as demanded,  then interest  shall at all
times  during the  continuance  of such payment  default  accrue on all sums due
under  this  Note at the Rate plus five (5%)  percent  per annum  (the  "Default
Rate").

         VI. LATE  CHARGE:  In the event any monthly  installment  shall  become
overdue for a period of fifteen (15) days,  Debtor shall  promptly pay to Bank a
late charge of five (5) cents for each dollar so overdue.

         VII.  DEFAULT.  (a) Each of the following shall  constitute an event of
default by Debtor ("Event of Default") hereunder:

                  (i) any installment of interest, or principal and interest, or
         any other sum  required  hereunder  remains  unpaid  for the  period of
         fifteen  (15) days  after it shall  become due in  accordance  with the
         provisions hereof; or

                  (ii) the  continuance for thirty (30) days after notice of any
         default,  other than a monetary  default,  in the performance of any of
         the terms, covenants, agreements, obligations undertakings,  provisions
         or conditions contained herein; or

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<PAGE>

                  (iii)  the  occurrence  of any  Event  of  Default  under  the
         provisions of the Security Agreement and/or the Pledge Agreement, or

                  (iv) the  occurrence  of an Event of  Default  under any other
         obligation  or  indebtedness  of  Debtor  to  Bank  including,  without
         limitation, the occurrence of any Event of Default under the Term Note,
         or

                  (v) in the Bank's sole but reasonable  discretion,  a material
         adverse  change  occurring  in the  financial  condition of Debtor when
         compared  to the  financial  condition  of the  Debtor set forth in the
         financial statements included within the Debtor's Annual Report on Form
         10-KSB for the fiscal year ended January 31, 1999, or

                  (vi) any transfer,  sale or other  disposition  of fifty (50%)
         percent  or more of the  legal or  beneficial  ownership  interests  in
         Transnational Industries, Inc., or

                  (vii) any transfer,  sale or other disposition of any legal or
         beneficial  ownership  interest  in  Spitz,  Inc.,  other  than to Bank
         pursuant to the Pledge Agreement.

         (b) Upon the  occurrence  and  during  the  continuance  of an Event of
Default,  the entire unpaid  principal  balance  hereof,  together with interest
accrued  thereon  at the  Rate  hereinbefore  specified  to the date of Event of
Default and  thereafter  at the Default  Rate,  and all other sums due by Debtor
hereunder,  under the Security Agreement, or under the Pledge Agreement together
with  reasonable   attorney's  fees,   shall,  upon  the  declaration  of  Bank,
immediately become due and payable without presentment, demand or further action
of any kind,  and payment of the same may be enforced and  recovered in whole or
in part at any time by the entry of judgment on this Note or any other  judicial
proceeding  and the  issuance of a writ of  execution  thereon  upon any real or
personal  property  of Debtor;  and Bank may also  recover all costs of suit and
other expenses, including the cost of the title search, in connection therewith.

         (c) Upon the  occurrence  and  during  the  continuance  of an Event of
Default and upon the  acceleration  of the entire unpaid balance of principal of
this Note,  interest  shall  continue to accrue  thereafter  at the Default Rate
until this Note,  and all sums due  hereunder,  are paid in full,  including the
period  following  the entry of any  judgment.  Interest  after  default  at the
Default Rate shall be calculated on the basis of a three hundred sixty (360) day
year, but charged for the actual number of days elapsed.


         (d) The rights and remedies provided herein, in the Security Agreement,
or in the Pledge  Agreement  shall be cumulative and concurrent and shall not be
exclusive of any right or remedy  provided by law, in equity or otherwise.  Said
rights and remedies  may, at the sole  discretion  of Bank,  be pursued  singly,
successively  or together as often as occasion  therefor  shall  arise,  against


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<PAGE>

Debtor and/or the Collateral or any other security for this Note, as applicable.
No failure on the part of Bank to exercise any of such rights or remedies  shall
be deemed a waiver of any such  rights or  remedies  or of any Event of  Default
hereunder.

         (e) Upon the  occurrence  and  during  the  continuance  of an Event of
Default,  Bank shall have the right, but not the duty, to cure such default,  in
part or in its  entirety,  and all amounts  expended or debts  incurred by Bank,
including reasonable  attorneys' fees, shall be deemed to be advances to Debtor,
shall be added to the  principal  due under this  Note,  shall be secured by the
security for this Note,  and shall be payable by Debtor to Bank upon demand with
interest at the Default Rate.

         VIII. WARRANT OF ATTORNEY.

         THE FOLLOWING  SECTION SETS FORTH WARRANTS OF ATTORNEY FOR ANY ATTORNEY
TO CONFESS  JUDGMENTS  AGAINST DEBTOR. IN GRANTING THESE WARRANTS OF ATTORNEY TO
CONFESS  JUDGMENTS  AGAINST  DEBTOR,  DEBTOR  HEREBY  KNOWINGLY,  INTENTIONALLY,
VOLUNTARILY,  AND  UNCONDITIONALLY  WAIVES ANY AND ALL RIGHTS DEBTOR MAY HAVE TO
PRIOR NOTICE AND AN OPPORTUNITY  FOR HEARING UNDER THE RESPECTIVE  CONSTITUTIONS
AND LAWS OF THE COMMONWEALTH OF PENNSYLVANIA AND THE UNITED STATES OF AMERICA.

         UPON  DEBTOR'S  FAILURE TO PAY ANY SUM DUE HEREUNDER AS AND WHEN DUE OR
DEMANDED  DEBTOR DOES HEREBY  IRREVOCABLY  AUTHORIZE AND EMPOWER ANY ATTORNEY OF
THE  PROTHONOTARY OF ANY COURT OF RECORD OF THE  COMMONWEALTH OF PENNSYLVANIA OR
ELSEWHERE  TO  APPEAR  FOR  DEBTOR  IN ANY SUCH  COURT,  AND WITH OR  WITHOUT  A
COMPLAINT OR DECLARATION  FILED, IN AN APPROPRIATE ACTION BROUGHT AGAINST DEBTOR
ON THIS NOTE, TO ENTER AND CONFESS  JUDGMENT  AGAINST DEBTOR IN FAVOR OF BANK OR
ITS SUCCESSORS AND ASSIGNS, FOR THE ENTIRE AMOUNT DUE TO BANK UPON SUCH EVENT OF
DEFAULT  AS  PROVIDED  HEREIN,  TOGETHER  WITH  COSTS  OF  SUIT  AND  REASONABLE
ATTORNEYS'  FEES, BUT IN NO EVENT LESS THAN FIVE THOUSAND  ($5,000.00)  DOLLARS;
AND FOR SO DOING THIS NOTE OR A COPY  HEREOF  VERIFIED BY  AFFIDAVIT  SHALL BE A
SUFFICIENT  WARRANT.  THE AUTHORITY HEREIN GRANTED TO APPEAR,  ENTER AND CONFESS
JUDGMENT SHALL NOT BE EXHAUSTED BY ANY ONE OR MORE  EXERCISES  THEREOF OR BY ANY
DEFECTIVE  EXERCISE THEREOF,  BUT SHALL CONTINUE AND BE EXERCISABLE FROM TIME TO

  (Initials of Officer of  Debtor)            (Initials of Officer of  Debtor)


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<PAGE>

TIME UNTIL THE FULL PAYMENT OF ALL AMOUNTS DUE FROM DEBTOR TO BANK HEREUNDER AND
UNDER THE LINE OF CREDIT AGREEMENT IS MADE.

         DEBTOR  ACKNOWLEDGES THAT IT HAS HAD THE ASSISTANCE OF LEGAL COUNSEL IN
THE REVIEW AND EXECUTION OF THIS NOTE AND FURTHER  ACKNOWLEDGES THAT THE MEANING
AND EFFECT OF THE FOREGOING  PROVISIONS  CONCERNING  CONFESSION OF JUDGMENT HAVE
BEEN FULLY  EXPLAINED  TO DEBTOR BY SUCH  COUNSEL  AND AS  EVIDENCE OF SUCH FACT
SIGNS ITS INITIALS.


   (Initials of Officer of  Debtor)            (Initials of Officer of  Debtor)

         IX. WAIVER OF BENEFIT AND DEFECTS.  Debtor hereby waives the benefit of
any  laws  now or  hereafter  enacted  providing  for  any  stay  of  execution,
marshaling of assets,  exemption  from civil process,  redemption,  extension of
time  for  payment,  or  valuation  or  appraisement  of all or any  part of the
Collateral or any other security for this Note, exempting all or any part of the
Collateral,  or any other security for this Note from  attachment,  levy or sale
upon any such execution or conflicting  with any provision of this Note.  Debtor
waives and releases Bank and said attorney or attorneys from all errors, defects
and  imperfections  whatsoever  in  confessing  any  such  judgment  or  in  any
proceedings  relating  thereto or  instituted by Bank  hereunder.  Debtor hereby
agrees that any property that may be levied upon pursuant to a judgment obtained
under this Note may be sold upon any execution  thereon in whole or in part, and
in any manner and order that Bank, in its sole discretion may elect.

         X.  MISCELLANEOUS:  Debtor  hereby waives  protest,  notice of protest,
presentment, dishonor, notice of dishonor and demand. Debtor agrees to reimburse
Bank for all costs and expenses  including  reasonable  counsel fees incurred by
Bank in connection  with the  enforcement  hereof.  The rights and privileges of
Bank under this Note shall inure to the benefit of its  successors  and assigns.
All representations, warranties and agreements of Debtor made in connection with
this Note shall bind Debtor's  successors and assigns.  If any provision of this
Note  shall  for any  reason  be  held  to be  invalid  or  unenforceable,  such
invalidity or unenforceability  shall not affect any other provision hereof, but
this Note shall be construed as if such invalid or  unenforceable  provision had
never  been  contained  herein.  This Note has been  delivered  in, and shall be
governed by the laws of the Commonwealth of Pennsylvania.

         The  Debtor  agrees and  acknowledges  that the use herein and in other
documents  being  entered into between the Debtor and Bank of even date herewith
of the phrase "upon the  occurrence  and during the  continuance  of an Event of
Default" and other similar  phrases,  does not mean and shall not be interpreted
to mean that, subsequent to such time as the Bank has accelerated amounts due to


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<PAGE>

it upon the occurrence of an Event of Default,  the Debtor can cure the Event of
Default  by  paying  less  than  the  amount  that  has  been  so   accelerated.
Notwithstanding  anything in the foregoing  sentence to the  contrary,  upon the
occurrence  of an Event of Default and prior to Banks  acceleration  of the sums
due or exercise of any other  remedy of Bank,  Debtor does not have the right to
cure the Event of Default, and Bank shall not be obligated to accept any payment
or other  performance  tendered  to cure the Event of Default.  Further,  in the
event Bank waives an Event of Default  and permits  Debtor to cure such Event of
Default,  such waiver shall not constitute a waiver of any  subsequent  Event of
Default  or create or be  interpreted  to create any right of Debtor to cure any
subsequent Event of Default.

         XI. NO WAIVER.  The granting,  with or without notice, of any extension
or extensions of time for payment of any sum or sums due  hereunder,  or for the
performance of any covenant, provision, condition or agreement contained herein,
in the Security  Agreement,  or in the Pledge Agreement,  or the granting of any
other  indulgence,  or the taking or releasing or  subordinating of any security
for the indebtedness evidenced hereby, or any other modification or amendment of
this  Note,  the  Security  Agreement,  or the Pledge  Agreement  will in no way
release or discharge  the  liability  of Debtor,  whether or not granted or done
with the knowledge or consent of Debtor.

         XII. NOTICES: All notices, invoices,  requests and other communications
hereunder  shall be in writing and shall be sent by first  class  mail,  postage
prepaid, and addressed as follows:

         For Bank:
                           First Keystone Federal Savings Bank
                           22 West State Street
                           Media, PA  19063
                           Attention: A. Charles Amentt Jr., Vice President

         For Debtor:
                           Transnational Industries, Inc.
                           P.O.Box 198
                           Route 1
                           Chadds Ford PA 19317

                           and

                           Spitz, Inc.
                           P.O. Box 198
                           Route 1
                           Chadds Ford PA 19317
                           Attention: Mr. Paul L. Dailey, Vice President



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<PAGE>

                           with a copy (which shall not constitute notice) to:

                           Finn Dixon & Herling LLP
                           One Landmark Square, Suite 1400
                           Stamford, CT   06901
                           Attention: David I. Albin, Esq.

         XIII.  GOVERNING  LAW:  This Note shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.

         XIV.  JOINT AND SEVERAL  LIABILITY:  Each and every entity signing this
Note is fully and personally  obligated to keep all of the promises made in this
Note including,  without  limitation,  the promises to pay the full amount owed.
Bank may enforce its rights  under this Note  against  each entity  signing this
Note individually or jointly.

         XV. RENEWAL NOTE:  This Note is executed and delivered in  substitution
and  replacement  of the  Borrower's  obligations  under  and  the  indebtedness
evidenced by the Line of Credit Note. This Note stands in the place and stead of
the Line of Credit Note and is not an additional  indebtedness or a satisfaction
of the  indebtedness  evidenced by the Line of Credit Note. The indebtedness and
obligations  evidenced  by the  Line of  Credit  Note  are  continued,  renewed,
extended and modified by this Note and such  indebtedness  is and shall continue
to be secured by the  Security  Agreement,  Pledge  agreement,  UCC-1  Financing
Statements and Line of Credit Agreement without novation or interruption.

         XIV.  WAIVER OF JURY TRIAL: BY ITS EXECUTION AND DELIVERY OF THIS NOTE,
THE DEBTOR HEREBY KNOWINGLY,  VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT
MAY  HAVE TO A TRIAL BY JURY IN  RESPECT  OF ANY  LITIGATION  BASED  HEREON,  OR
ARISING  OUT OF,  UNDER OR IN  CONNECTION  WITH,  THIS NOTE,  THE LINE OF CREDIT
AGREEMENT,  ANY OTHER DOCUMENT OR INSTRUMENT  RELATED HERETO OR THERETO,  ANY OF
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE BANK OR THE
DEBTOR IN  CONNECTION  HEREWITH  OR  THEREWITH.  THIS  PROVISION  IS A  MATERIAL
INDUCEMENT FOR THE BANK TO ENTER INTO THIS NOTE.

         [THIS SPACE INTENTIONALLY LEFT BLANK. SIGNATURE PAGE FOLLOWS.]


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<PAGE>

         IN WITNESS  WHEREOF,  and intending to be legally bound hereby,  Debtor
has duly  executed  this  Note  the day and year  first  above  written  and has
hereunto set hand and seal.

WITNESS:                              Debtor:

                                      TRANSNATIONAL INDUSTRIES, INC.

/s/ Donn Guthrie (as to both)         By: /s/ Charles H. Holmes Jr.       (SEAL)
                                      -----------------------------



                                      ATTEST: /s/ Paul L Dailey           (SEAL)
                                      -----------------------------


WITNESS:                              Debtor:

                                      SPITZ, INC.

/s/ Donn Guthrie (as to both)         By: /s/ Charles H. Holmes Jr.       (SEAL)
                                      -----------------------------



                                      ATTEST: /s/ Paul L Dailey           (SEAL)
                                      -----------------------------


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