MODIFICATION OF LOAN AGREEMENT

      This Modification of Loan Agreement (the "Modification") is made as of
this 11th day of April, 1997 by and among MACE SECURITY INTERNATIONAL, INC., a
Vermont corporation with its principal office and place of business at 160
Benmont Avenue, Bennington, Vermont 05201 ("Borrower") and KEYBANK NATIONAL
ASSOCIATION (formerly known as Key Bank of New York), a national banking
association with an office for the transaction of business at 66 South Pearl
Street, Albany, New York 12207 ("Bank").

      WHEREAS, the Borrower and the Bank entered into a Loan Agreement dated
October 31, 1996 (the "Loan Agreement"); and

      WHEREAS, the terms of the Loan Agreement required the Borrower to meet
certain financial performance criteria; and

      WHEREAS, Borrower has requested that the Bank waive the requirement that
Borrower comply with the financial performance criteria for the fiscal quarters
which ended December 31 1996 and March 31, 1997; and

      WHEREAS, the Bank has agreed to said waivers in consideration of Borrower
modifying the calculation of the "Borrowing Base" (as the quoted term is defined
in the Loan Agreement) and paying the Waiver Fee (hereinbelow defined);

      NOW, THEREFORE, the parties hereto hereby agree as follows:

      1. DEFINITIONS. All capitalized terms used herein not otherwise defined
herein or defined by the context of their usage, shall have those definitions
set forth in the Loan Agreement.

      2. MODIFICATIONS OF 7(e) AND (f).

            (a) The definition of Borrowing Base set forth in the Loan Agreement
is modified to the following:

      "The "Borrowing Base" shall be fifty (50%) percent of Eligible Accounts
      Receivable."

            (b) The definition of Eligible Inventory and the concept of using
Eligible Inventory in calculating the Borrowing Base are deleted.

            (c) "Eligible Accounts Receivable" and "Eligible Accounts" shall now
mean all accounts receivable in excess of $3,000,000.00 recorded on the
Borrower's books in accordance with generally accepted accounting principals
("GAAP") consistently applied, aged not more than sixty (60) days from the due
date which meet the criteria in subparagraph (f) of covenant 7 of the Loan
Agreement but shall not include any such account which is evidenced by an
"instrument" or which constitutes "chattel paper".
<PAGE>

            (d) At 7(f), subitem (16) is deleted and replaced with the
following:

      "(16) If the account debtor does not have a substantial business operation
      in the United States or if the account arose from a sale of goods which
      were shipped outside the United States unless the account is supported by
      an irrevocable letter of credit or guaranteed by a party, in either
      instance fully acceptable to the Bank;"

      3. FINANCIAL PERFORMANCE COVENANT WAIVERS. The Bank hereby waives any
failure of the Borrower to comply with the provisions of Covenants 8(d), 8(j),
8(k). 8(l) and 8(m) for the year ended December 31, 1996 and the rolling four
quarter periods ended December 31, 1996 and March 3l, 1997.

      4. WAIVER FEE. Borrower shall pay the Bank a fee of $7,500.00 (the "Waiver
Fee") as compensation for the Waiver as set forth in covenant 3 herein. The
parties acknowledge that it is difficult to calculate the value of said waiver
to Borrower but the Waiver Fee is a reasonable compensation for the waiver of
rights by the Bank and the increased risk to the Bank evidenced by Borrower's
failure to meet the financial performance criteria set forth in the Loan
Agreement.

      5. NO FURTHER MODIFICATIONS. Except as modified herein, the Loan Agreement
is hereby ratified and confirmed. To the extent necessary, if any, any other
Loan Documents executed in conjunction with the Loan Agreement are hereby
modified to reflect the terms of this Modification.

      IN WITNESS WHEREOF, the parties hereto have duly executed this
Modification as of the day and year first above written.

                                       Mace Security International, Inc.



                                       By: /s/ Jon E. Goodrich, President
                                           -------------------------------------
                                           Name:
                                           Title:


                                       KeyBank National Association



                                       By: /s/ Michael D. Carroll
                                           -------------------------------------
                                           Michael D. Carroll 
                                           Vice President


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