Document:

EXHIBIT 10.1

                          SECURITIES PURCHASE AGREEMENT

     This Securities  Purchase  Agreement (this  "Agreement") is dated as of May
26, 2004, among Mace Security  International,  Inc., a Delaware corporation (the
"Company"),  and each purchaser  identified on the signature pages hereto (each,
including  its  successors  and assigns,  a  "Purchaser"  and  collectively  the
"Purchasers"); and

     WHEREAS,  subject to the terms and  conditions  set forth in this Agreement
and pursuant to Section 4(2) of the Securities Act (as defined below),  and Rule
506  promulgated  thereunder,  the  Company  desires  to issue  and sell to each
Purchaser,  and each Purchaser,  severally and not jointly,  desires to purchase
from the Company in the  aggregate,  up to  $5,000,000 of shares of Common Stock
and Warrants on the Closing Date.

     NOW, THEREFORE,  IN CONSIDERATION of the mutual covenants contained in this
Agreement,  and for  other  good and  valuable  consideration  the  receipt  and
adequacy of which are hereby acknowledged, the Company and each Purchaser agrees
as follows:

                                   ARTICLE I.
                                   DEFINITIONS

     1.1  Definitions.  In  addition  to the  terms  defined  elsewhere  in this
Agreement,  for all purposes of this  Agreement,  the  following  terms have the
meanings indicated in this Section 1.1:

          "Action"  shall  have the  meaning  ascribed  to such term in  Section
     3.1(j).

          "Affiliate" means any Person that,  directly or indirectly through one
     or more  intermediaries,  controls or is  controlled  by or is under common
     control  with a Person as such terms are used in and  construed  under Rule
     144. With respect to a Purchaser,  any investment  fund or managed  account
     that is managed on a discretionary  basis by the same investment manager as
     such Purchaser will be deemed to be an Affiliate of such Purchaser.

          "Closing"  means the  closing of the  purchase  and sale of the Common
     Stock and the Warrants pursuant to Section 2.1.

          "Closing  Date"  means  the  Trading  Day when all of the  Transaction
     Documents  have been  executed  and  delivered  by the  applicable  parties
     thereto, and all conditions precedent to (i) the Purchasers' obligations to
     pay the Subscription  Amount and (ii) the Company's  obligations to deliver
     the Securities have been satisfied or waived.

          "Closing  Price" means on any  particular  date (a) the last  reported
     closing  bid price per  share of Common  Stock on such date on the  Trading
     Market (as reported by Bloomberg L.P. at 4:15 PM (New York time), or (b) if
     there is no such  price on such  date,  then the  closing  bid price on the
     Trading  Market on the date  nearest  preceding  such

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     date (as  reported  by  Bloomberg  L.P.  at 4:15 PM (New York time) for the
     closing bid price for regular  session  trading on such day), or (c) if the
     Common Stock is not then listed or quoted on a Trading Market and if prices
     for the Common Stock are then quoted on the OTC Bulletin Board, the closing
     bid price of the Common Stock for such date (or the nearest preceding date)
     on the OTC Bulletin  Board (as  reported by Bloomberg  L.P. at 4:15 PM (New
     York  time),  (d) if the Common  Stock is not then  listed or quoted on the
     Trading  Market and if prices for the Common Stock are then reported in the
     "pink  sheets"  published  by the Pink Sheets LLC  (formerly  the  National
     Quotation  Bureau  Incorporated  (or  a  similar   organization  or  agency
     succeeding to its functions of reporting prices), the most recent bid price
     per share of the Common Stock so  reported,  or (e) if the shares of Common
     Stock are not then  publicly  traded  the fair  market  value of a share of
     Common Stock as determined by a qualified independent appraiser selected in
     good faith by the  Purchasers  of a majority in interest of the Shares then
     outstanding.

          "Commission" means the Securities and Exchange Commission.

          "Common Stock" means the common stock of the Company,  $0.01 par value
     per share, and any securities into which such common stock may hereafter be
     reclassified.

          "Common Stock  Equivalents" means any securities of the Company or the
     Subsidiaries  which would entitle the holder thereof to acquire at any time
     Common Stock,  including  without  limitation,  any debt,  preferred stock,
     rights,  options,  warrants  or  other  instrument  that  is  at  any  time
     convertible  into or  exchangeable  for, or  otherwise  entitles the holder
     thereof to receive, Common Stock.

          "Company Counsel" means __________________________________.

          "Disclosure  Schedules" means the Disclosure  Schedules of the Company
     delivered concurrently herewith.

          "Effective  Date" means the date that the  Registration  Statement  is
     first declared effective by the Commission.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended.

          "Exempt  Issuance" means the issuance of (a) shares of Common Stock or
     options to employees,  officers or directors of the Company pursuant to any
     stock or option plan duly adopted by a majority of the non-employee members
     of the Board of  Directors of the Company or a majority of the members of a
     committee of  non-employee  directors  established  for such  purpose,  (b)
     securities  upon the exercise of or  conversion  of any  securities  issued
     hereunder,   convertible   securities,   options  or  warrants  issued  and
     outstanding on the date of this  Agreement,  provided that such  securities
     have not been  amended  since the date of this  Agreement  to increase  the
     number  of  such  securities,   and  (c)  securities   issued  pursuant  to
     acquisitions  or strategic  transactions,  provided any such issuance shall
     only be to a Person which is, itself or through its  subsidiaries,  selling
     assets or a business that is  synergistic  with the business of the Company
     and in which the Company receives benefits in addition to the investment of
     funds,  but shall not include a  transaction  in which the Company is
     issuing  securities  primarily for the purpose  of raising  capital  or to
     an entity  whose  primary  business  is investing in securities.

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          "FW" means Feldman Weinstein LLP with offices located at 420 Lexington
     Avenue, Suite 2620, New York, New York 10170-0002.

          "Intellectual Property Rights" shall have the meaning ascribed to such
     term in Section 3.1(o).

          "Liens" means a lien, charge, security interest, encumbrance, right of
     first refusal, preemptive right or other restriction.

          "Material Adverse Effect" shall have the meaning ascribed to such term
     in Section 3.1(b).

          "Material  Permits"  shall have the  meaning  ascribed to such term in
     Section 3.1(m).

          "Per Share  Purchase  Price" equals $5.47,  subject to adjustment  for
     reverse and forward stock splits,  stock dividends,  stock combinations and
     other similar transactions of the Common Stock that occur after the date of
     this Agreement.

          "Person"  means an  individual  or  corporation,  partnership,  trust,
     incorporated  or  unincorporated   association,   joint  venture,   limited
     liability  company,  joint  stock  company,  government  (or an  agency  or
     subdivision thereof) or other entity of any kind.

          "Proceeding" means an action, claim, suit, investigation or proceeding
     (including,  without  limitation,  an investigation or partial  proceeding,
     such as a deposition), whether commenced or threatened.

          "Registration   Rights   Agreement"  means  the  Registration   Rights
     Agreement,  dated as of the date of this  Agreement,  among the Company and
     each Purchaser, in the form of Exhibit A hereto.

          "Registration  Statement" means a registration  statement  meeting the
     requirements  set forth in the  Registration  Rights Agreement and covering
     the resale by the Purchasers of the Shares and the Warrant Shares.

          "Required  Approvals"  shall have the meaning ascribed to such term in
     Section 3.1(e).

          "Rule 144" means Rule 144  promulgated by the  Commission  pursuant to
     the  Securities  Act, as such Rule may be amended from time to time, or any
     similar  rule or  regulation  hereafter  adopted by the  Commission  having
     substantially the same effect as such Rule.

          "SEC Reports" shall have the meaning  ascribed to such term in Section
     3.1(h).

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          "Securities" means the Shares, the Warrants and the Warrant Shares.

          "Securities Act" means the Securities Act of 1933, as amended.

          "Shares"  means the shares of Common  Stock issued or issuable to each
     Purchaser pursuant to this Agreement.

          "Subscription  Amount" means,  as to each  Purchaser,  the amounts set
     forth below such Purchaser's  signature block on the signature page hereto,
     in United States dollars and in immediately available funds.

          "Subsidiary"  shall mean the subsidiaries of the Company,  if any, set
     forth on Schedule 3.1(a).

          "Trading  Day"  means a day on which the  Common  Stock is traded on a
     Trading Market.

          "Trading Market" means the following markets or exchanges on which the
     Common Stock is listed or quoted for trading on the date in  question:  the
     Nasdaq SmallCap  Market,  the American Stock  Exchange,  the New York Stock
     Exchange or the Nasdaq National Market.

          "Transaction  Documents"  means this  Agreement,  the Warrants and the
     Registration  Rights  Agreement  and  any  other  documents  or  agreements
     executed in connection with the transactions contemplated hereunder.

          "Warrants"  means the Common Stock Purchase  Warrants,  in the form of
     Exhibit B, issuable to the Purchasers at the Closing,  which warrants shall
     be exercisable  immediately upon issuance for a term of 5 years and have an
     exercise price equal to $7.50, per share.

          "Warrant  Shares"  means  the  shares of Common  Stock  issuable  upon
     exercise of the Warrants.

                                   ARTICLE II.
                                PURCHASE AND SALE

     2.1 Closing.  On the Closing Date,  each Purchaser  shall purchase from the
Company,  severally and not jointly with the other  Purchasers,  and the Company
shall  issue and sell to each  Purchaser,  (a) a number of Shares  equal to such
Purchaser's  Subscription Amount divided by the Per Share Purchase Price and (b)
the  Warrants as  determined  pursuant  to Section  2.2(a)(iii).  The  aggregate
Subscription  Amount for Shares sold hereunder  shall be up to $5,000,000.  Upon
satisfaction of the conditions set forth in Section 2.2, the Closing shall occur
at the offices of FW or such other location as the parties shall mutually agree.

     2.2 Deliveries.

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          (a) On the  Closing  Date,  the Company  shall  deliver or cause to be
     delivered to each Purchaser the following:

               (i) this Agreement duly executed by the Company;

               (ii) a copy  of the  irrevocable  instructions  to the  Company's
          transfer  agent  instructing  the  transfer  agent to  deliver,  on an
          expedited basis, a certificate  evidencing a number of Shares equal to
          such Purchaser's Subscription Amount divided by the Per Share Purchase
          Price, registered in the name of such Purchaser;

               (iii)  within 3 Trading  Days of the  Closing  Date,  a  Warrant,
          registered  in the name of such  Purchaser,  pursuant  to  which  such
          Purchaser  shall  have the right to acquire up to the number of shares
          of  Common  Stock  equal to 20% of the  Shares  to be  issued  to such
          Purchaser at the Closing;

               (iv) the  Registration  Rights  Agreement  duly  executed  by the
          Company; and

               (v) a legal opinion of Company Counsel,  in the form of Exhibit C
          attached hereto.

          (b) On the Closing Date,  each Purchaser  shall deliver or cause to be
     delivered to the Company the following:

               (i) this Agreement duly executed by such Purchaser;

               (ii) such Purchaser's Subscription Amount by wire transfer to the
          account as specified in writing by the Company; and

               (iii) the  Registration  Rights  Agreement  duly executed by such
          Purchaser.

     2.3 Closing Conditions.

          (a) The  obligations of the Company  hereunder in connection  with the
     Closing are subject to the following conditions being met:

               (i) the  accuracy in all material  respects  when made and on the
          Closing Date of the  representations  and warranties of the Purchasers
          contained herein;

               (ii) all obligations,  covenants and agreements of the Purchasers
          required to be  performed  at or prior to the Closing  Date shall have
          been performed; and

               (iii) the  delivery by the  Purchasers  of the items set forth in
          Section 2.2(b) of this Agreement.

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          (b)  The  respective   obligations  of  the  Purchasers  hereunder  in
     connection with the Closing are subject to the following  conditions  being
     met:

               (i) the accuracy in all material  respects on the Closing Date of
          the representations and warranties of the Company contained herein;

               (ii) all  obligations,  covenants  and  agreements of the Company
          required to be  performed  at or prior to the Closing  Date shall have
          been performed;

               (iii)  the  delivery  by the  Company  of the  items set forth in
          Section 2.2(a) of this Agreement;

               (iv)  there  shall  have been no  Material  Adverse  Effect  with
          respect to the Company since the date hereof;

               (v) the Company  shall have  received an  aggregate  Subscription
          Amount among all Purchasers equal to no less than $4,000,000; and

               (vi) From the date  hereof to the  Closing  Date,  trading in the
          Common Stock shall not have been suspended by the  Commission  (except
          for any  suspension  of trading of limited  duration  agreed to by the
          Company,  which  suspension shall be terminated prior to the Closing),
          and,  at any time prior to the  Closing  Date,  trading in  securities
          generally as reported by Bloomberg  Financial  Markets  shall not have
          been  suspended  or  limited,  or minimum  prices  shall not have been
          established  on securities  whose trades are reported by such service,
          or on any Trading  Market,  nor shall a banking  moratorium  have been
          declared either by the United States or New York State authorities nor
          shall there have  occurred  any  material  outbreak or  escalation  of
          hostilities  or  other  national  or  international  calamity  of such
          magnitude  in its effect on, or any  material  adverse  change in, any
          financial  market which,  in each case, in the reasonable  judgment of
          each Purchaser,  makes it impracticable or inadvisable to purchase the
          Shares at the Closing.

                                  ARTICLE III.
                         REPRESENTATIONS AND WARRANTIES

     3.1  Representations  and  Warranties  of the Company.  Except as set forth
under the  corresponding  section of the Disclosure  Schedules which  Disclosure
Schedules  shall  be  deemed  a  part  hereof,  the  Company  hereby  makes  the
representations and warranties set forth below to each Purchaser:

          (a) Subsidiaries.  All of the direct and indirect  subsidiaries of the
     Company are set forth on Schedule  3.1(a).  The Company  owns,  directly or
     indirectly,  all of the capital  stock or other  equity  interests  of each
     Subsidiary free and clear of any Liens,  and all the issued and outstanding
     shares of capital stock of each Subsidiary are validly issued and are fully
     paid, non-assessable and free of preemptive and similar rights to subscribe

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     for or  purchase  securities.  If the  Company  has no  subsidiaries,  then
     references  in the  Transaction  Documents  to  the  Subsidiaries  will  be
     disregarded.

          (b)  Organization  and  Qualification.  Each  of the  Company  and the
     Subsidiaries is an entity duly incorporated or otherwise organized, validly
     existing and in good  standing  under the laws of the  jurisdiction  of its
     incorporation or organization (as applicable), with the requisite power and
     authority  to own and use its  properties  and  assets  and to carry on its
     business as currently conducted.  Neither the Company nor any Subsidiary is
     in  violation  or  default  of  any  of the  provisions  of its  respective
     certificate or articles of incorporation, bylaws or other organizational or
     charter  documents.  Each  of the  Company  and  the  Subsidiaries  is duly
     qualified  to  conduct  business  and  is in  good  standing  as a  foreign
     corporation or other entity in each jurisdiction in which the nature of the
     business  conducted  or  property  owned  by it  makes  such  qualification
     necessary, except where the failure to be so qualified or in good standing,
     as the case may be, could not have or  reasonably  be expected to result in
     (i) a material adverse effect on the legality,  validity or  enforceability
     of any Transaction Document,  (ii) a material adverse effect on the results
     of operations,  assets,  business,  prospects or financial condition of the
     Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
     effect on the  Company's  ability to perform in any  material  respect on a
     timely basis its obligations  under any  Transaction  Document (any of (i),
     (ii) or (iii),  a "Material  Adverse  Effect") and no  Proceeding  has been
     instituted  in any such  jurisdiction  revoking,  limiting or curtailing or
     seeking  to  revoke,   limit  or  curtail  such  power  and   authority  or
     qualification.

          (c)  Authorization;   Enforcement.   The  Company  has  the  requisite
     corporate  power  and  authority  to  enter  into  and  to  consummate  the
     transactions   contemplated  by  each  of  the  Transaction  Documents  and
     otherwise  to carry  out its  obligations  thereunder.  The  execution  and
     delivery  of each  of the  Transaction  Documents  by the  Company  and the
     consummation by it of the transactions  contemplated thereby have been duly
     authorized  by all  necessary  action  on the  part of the  Company  and no
     further  action is required by the Company in  connection  therewith  other
     than in connection with the Required Approvals.  Each Transaction  Document
     has been (or upon  delivery  will have been) duly  executed  by the Company
     and, when delivered in accordance  with the terms hereof,  will  constitute
     the valid and binding  obligation  of the Company  enforceable  against the
     Company in  accordance  with its terms except (i) as limited by  applicable
     bankruptcy,  insolvency,  reorganization,  moratorium  and  other  laws  of
     general  application  affecting  enforcement of creditors' rights generally
     and (ii) as  limited  by laws  relating  to the  availability  of  specific
     performance, injunctive relief or other equitable remedies.

          (d) No  Conflicts.  The  execution,  delivery and  performance  of the
     Transaction  Documents by the Company,  the issuance and sale of the Shares
     and the consummation by the Company of the other transactions  contemplated
     thereby do not and will not (i) conflict  with or violate any  provision of
     the Company's or any Subsidiary's certificate or articles of incorporation,
     bylaws or other organizational or charter documents, or (ii) conflict with,
     or  constitute  a default (or an event that with notice or lapse of

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     time or both would become a default)  under,  result in the creation of any
     Lien upon any of the properties or assets of the Company or any Subsidiary,
     or give to others any rights of  termination,  amendment,  acceleration  or
     cancellation  (with or  without  notice,  lapse of time or  both)  of,  any
     agreement,  credit facility, debt or other instrument (evidencing a Company
     or  Subsidiary  debt or  otherwise)  or other  understanding  to which  the
     Company or any  Subsidiary  is a party or by which any property or asset of
     the Company or any Subsidiary is bound or affected, or (iii) subject to the
     Required  Approvals,  conflict  with or result in a  violation  of any law,
     rule, regulation, order, judgment,  injunction, decree or other restriction
     of any court or governmental authority to which the Company or a Subsidiary
     is subject  (including  federal and state securities laws and regulations),
     or by which any property or asset of the Company or a  Subsidiary  is bound
     or affected, or (iv) conflict with or violate the terms of any agreement by
     which the Company or any  Subsidiary  is bound or to which any  property or
     asset of the Company or any Subsidiary is bound or affected;  except in the
     case of each  of  clauses  (ii)  and  (iii),  such  as  could  not  have or
     reasonably be expected to result in a Material Adverse Effect.

          (e) Filings,  Consents and  Approvals.  The Company is not required to
     obtain any consent, waiver,  authorization or order of, give any notice to,
     or make any filing or registration with, any court or other federal, state,
     local or other  governmental  authority or other Person in connection  with
     the execution,  delivery and  performance by the Company of the Transaction
     Documents,  other than (i) filings required pursuant to Section 4.4 of this
     Agreement,  (ii)  the  filing  with  the  Commission  of  the  Registration
     Statement,  (iii)  application(s) to each applicable Trading Market for the
     listing of the Shares and Warrant  Shares for  trading  thereon in the time
     and  manner  required  thereby,  and  (iv)  the  filing  of Form D with the
     Commission  and such  filings as are  required to be made under  applicable
     state securities laws (collectively, the "Required Approvals").

          (f)  Issuance  of the  Securities.  The Shares and  Warrants  are duly
     authorized and, when issued and paid for in accordance with the Transaction
     Documents,  will be duly and validly issued,  fully paid and nonassessable,
     free and clear of all Liens imposed by the Company other than  restrictions
     on transfer provided for in the Transaction Documents.  The Warrant Shares,
     when issued in accordance with the terms of the Transaction Documents, will
     be  validly  issued,  fully paid and  nonassessable,  free and clear of all
     Liens  imposed by the  Company.  The  Company  has  reserved  from its duly
     authorized  capital  stock the  maximum  number  of shares of Common  Stock
     issuable pursuant to this Agreement and the Warrants.

          (g) Capitalization.  The capitalization of the Company is as described
     in the Company's most recent periodic report filed with the Commission. The
     Company  has not issued any  capital  stock  since such  filing  other than
     pursuant to the  exercise of employee  stock  options  under the  Company's
     stock  option  plans,  the  issuance of shares of Common Stock to employees
     pursuant to the Company's  employee stock purchase plan and pursuant to the
     conversion or exercise of outstanding Common Stock  Equivalents.  No Person
     has any right of first refusal,  preemptive right,  right of participation,
     or any similar right to participate in the transactions contemplated by the
     Transaction  Documents.  Except as a result of the purchase and sale of the
     Securities,  there are no outstanding options,  warrants,  script rights to
     subscribe to, calls or commitments of any character whatsoever relating to,
     or securities,  rights or obligations convertible into or exchangeable for,
     or giving any Person any right to subscribe  for or acquire,  any shares of
     Common Stock, or contracts, commitments,  understandings or

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     arrangements  by which the Company or any Subsidiary is or may become bound
     to issue  additional  shares  of  Common  Stock,  or  securities  or rights
     convertible or exchangeable into shares of Common Stock. The issue and sale
     of the  Securities  will not obligate the Company to issue shares of Common
     Stock or other  securities  to any Person (other than the  Purchasers)  and
     will not result in a right of any holder of  Company  securities  to adjust
     the exercise,  conversion,  exchange or reset price under such  securities.
     All of the  outstanding  shares of capital stock of the Company are validly
     issued,  fully paid and nonassessable,  have been issued in compliance with
     all federal and state securities laws, and none of such outstanding  shares
     was issued in  violation  of any  preemptive  rights or  similar  rights to
     subscribe for or purchase securities.  No further approval or authorization
     of any  stockholder,  the Board of  Directors  of the  Company or others is
     required for the  issuance  and sale of the Shares.  Except as disclosed in
     the SEC Reports, there are no stockholders agreements, voting agreements or
     other similar  agreements  with respect to the  Company's  capital stock to
     which the Company is a party or, to the  knowledge of the Company,  between
     or among any of the Company's stockholders.

          (h) SEC  Reports;  Financial  Statements.  The  Company  has filed all
     reports  required  to be  filed  by it  under  the  Securities  Act and the
     Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the
     two years  preceding the date hereof (or such shorter period as the Company
     was  required  by law to file  such  material)  (the  foregoing  materials,
     including the exhibits thereto,  being  collectively  referred to herein as
     the "SEC  Reports") on a timely basis or has received a valid  extension of
     such  time of  filing  and has  filed  any  such SEC  Reports  prior to the
     expiration of any such extension.  As of their  respective  dates,  the SEC
     Reports  complied in all material  respects  with the  requirements  of the
     Securities  Act and the Exchange Act and the rules and  regulations  of the
     Commission promulgated thereunder, and none of the SEC Reports, when filed,
     contained  any untrue  statement  of a material  fact or omitted to state a
     material fact  required to be stated  therein or necessary in order to make
     the statements therein, in light of the circumstances under which they were
     made, not misleading.  The financial  statements of the Company included in
     the SEC Reports comply in all material respects with applicable  accounting
     requirements  and the rules and  regulations of the Commission with respect
     thereto as in effect at the time of filing. Such financial  statements have
     been  prepared  in  accordance  with  United  States   generally   accepted
     accounting  principles  applied on a  consistent  basis  during the periods
     involved ("GAAP"),  except as may be otherwise  specified in such financial
     statements  or the  notes  thereto  and  except  that  unaudited  financial
     statements  may not contain  all  footnotes  required  by GAAP,  and fairly
     present in all material respects the financial  position of the Company and
     its  consolidated  subsidiaries  as of and for the  dates  thereof  and the
     results of operations  and cash flows for the periods then ended,  subject,
     in the case of unaudited statements, to normal, immaterial,  year-end audit
     adjustments.

          (i) Material  Changes.  Since the date of the latest audited financial
     statements  included  within  the  SEC  Reports,   except  as  specifically
     disclosed in the SEC Reports,  (i) there has been no event,  occurrence  or
     development  that has had or that could reasonably be expected to result in
     a  Material  Adverse  Effect,   (ii)  the  Company  has  not  incurred  any
     liabilities  (contingent  or otherwise)  other than (A) trade  payables and
     accrued  expenses  incurred in the ordinary  course of business  consistent
     with past practice and (B)  liabilities

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<PAGE>

     not required to be reflected in the Company's financial statements pursuant
     to GAAP or required to be disclosed  in filings  made with the  Commission,
     (iii) the  Company  has not  altered  its  method of  accounting,  (iv) the
     Company has not  declared or made any dividend or  distribution  of cash or
     other  property  to its  stockholders  or  purchased,  redeemed or made any
     agreements  to purchase  or redeem any shares of its capital  stock and (v)
     the Company has not issued any equity  securities to any officer,  director
     or Affiliate,  except pursuant to existing  Company stock option plans. The
     Company  does not have  pending  before  the  Commission  any  request  for
     confidential treatment of information.

          (j)  Litigation.   There  is  no  action,  suit,  inquiry,  notice  of
     violation,  proceeding or investigation pending or, to the knowledge of the
     Company, threatened against or affecting the Company, any Subsidiary or any
     of  their  respective  properties  before  or  by  any  court,  arbitrator,
     governmental or  administrative  agency or regulatory  authority  (federal,
     state,  county,  local or foreign)  (collectively,  an "Action")  which (i)
     adversely affects or challenges the legality, validity or enforceability of
     any of the Transaction  Documents or the Securities or (ii) could, if there
     were an unfavorable decision, have or reasonably be expected to result in a
     Material  Adverse Effect.  Neither the Company nor any Subsidiary,  nor any
     director  or  officer  thereof,  is or has been the  subject  of any Action
     involving  a claim of  violation  of or  liability  under  federal or state
     securities laws or a claim of breach of fiduciary duty. There has not been,
     and to the knowledge of the Company,  there is not pending or contemplated,
     any investigation by the Commission involving the Company or any current or
     former  director or officer of the Company.  The  Commission has not issued
     any  stop  order  or  other  order  suspending  the  effectiveness  of  any
     registration  statement  filed by the Company or any  Subsidiary  under the
     Exchange Act or the Securities Act.

          (k) Labor  Relations.  No  material  labor  dispute  exists or, to the
     knowledge of the Company,  is imminent with respect to any of the employees
     of the Company  which could  reasonably be expected to result in a Material
     Adverse Effect.

          (l)  Compliance.  Neither  the Company  nor any  Subsidiary  (i) is in
     default  under or in violation  of (and no event has occurred  that has not
     been waived that,  with notice or lapse of time or both,  would result in a
     default by the Company or any Subsidiary under), nor has the Company or any
     Subsidiary  received  notice of a claim that it is in default under or that
     it is in violation of, any indenture, loan or credit agreement or any other
     agreement or instrument to which it is a party or by which it or any of its
     properties  is bound  (whether or not such  default or  violation  has been
     waived),  (ii) is in  violation  of any order of any court,  arbitrator  or
     governmental  body,  or (iii) is or has been in  violation  of any statute,
     rule  or  regulation  of  any  governmental  authority,  including  without
     limitation  all foreign,  federal,  state and local laws  applicable to its
     business except in each case as could not have a Material Adverse Effect.

          (m) Regulatory Permits.  The Company and the Subsidiaries  possess all
     certificates, authorizations and permits issued by the appropriate federal,
     state, local or foreign regulatory  authorities  necessary to conduct their
     respective  businesses  as described  in the SEC Reports,  except where the
     failure to possess such permits could not

                                      -10-

<PAGE>

     have or  reasonably  be  expected  to result in a Material  Adverse  Effect
     ("Material  Permits"),  and  neither the  Company  nor any  Subsidiary  has
     received  any  notice  of   proceedings   relating  to  the  revocation  or
     modification of any Material Permit.

          (n) Title to Assets.  The Company and the  Subsidiaries  have good and
     marketable  title in fee simple to all real property  owned by them that is
     material to the business of the Company and the  Subsidiaries  and good and
     marketable title in all personal property owned by them that is material to
     the  business of the Company  and the  Subsidiaries,  in each case free and
     clear of all Liens,  except for Liens as do not materially affect the value
     of such  property  and do not  materially  interfere  with the use made and
     proposed to be made of such  property  by the Company and the  Subsidiaries
     and Liens for the payment of federal,  state or other taxes, the payment of
     which is neither delinquent nor subject to penalties. Any real property and
     facilities held under lease by the Company and the Subsidiaries are held by
     them under valid,  subsisting and  enforceable  leases of which the Company
     and the Subsidiaries are in compliance.

          (o) Patents and Trademarks.  The Company and the Subsidiaries have, or
     have rights to use, all patents, patent applications, trademarks, trademark
     applications,  service marks, trade names,  copyrights,  licenses and other
     similar  rights  necessary  or material  for use in  connection  with their
     respective businesses as described in the SEC Reports and which the failure
     to so  have  could  have  a  Material  Adverse  Effect  (collectively,  the
     "Intellectual Property Rights"). Neither the Company nor any Subsidiary has
     received a written notice that the Intellectual Property Rights used by the
     Company or any  Subsidiary  violates  or  infringes  upon the rights of any
     Person.  To the knowledge of the Company,  all such  Intellectual  Property
     Rights are  enforceable  and there is no existing  infringement  by another
     Person of any of the Intellectual Property Rights of others.

          (p)  Insurance.  The  Company  and the  Subsidiaries  are  insured  by
     insurers of  recognized  financial  responsibility  against such losses and
     risks and in such amounts as are prudent and customary in the businesses in
     which  the  Company  and  the  Subsidiaries  are  engaged.  To the  best of
     Company's knowledge, such insurance contracts and policies are accurate and
     complete.  Neither the Company nor any Subsidiary has any reason to believe
     that it will not be able to renew its  existing  insurance  coverage as and
     when such  coverage  expires or to obtain  similar  coverage  from  similar
     insurers as may be necessary to continue its business without a significant
     increase in cost.

          (q) Transactions With Affiliates and Employees. Except as set forth in
     the SEC  Reports,  none of the officers or directors of the Company and, to
     the  knowledge  of the  Company,  none of the  employees  of the Company is
     presently a party to any  transaction  with the  Company or any  Subsidiary
     (other than for services as employees,  officers and directors),  including
     any contract,  agreement or other arrangement  providing for the furnishing
     of services to or by, providing for rental of real or personal  property to
     or from, or otherwise  requiring payments to or from any officer,  director
     or such employee or, to the  knowledge of the Company,  any entity in which
     any officer,  director,  or any such employee has a substantial interest or
     is an  officer,  director,  trustee or  partner,  in each case in excess of
     $60,000  other  than (i) for  payment  of  salary  or  consulting  fees for
     services  rendered,  (ii)  reimbursement for expenses incurred on behalf

                                      -11-
<PAGE>

     of the  Company  and (iii) for other  employee  benefits,  including  stock
     option agreements under any stock option plan of the Company.

          (r) Sarbanes-Oxley;  Internal Accounting  Controls.  The Company is in
     material  compliance with all provisions of the  Sarbanes-Oxley Act of 2002
     which are  applicable  to it as of the  Closing  Date.  The Company and the
     Subsidiaries  maintain a system of internal  accounting controls sufficient
     to provide  reasonable  assurance  that (i)  transactions  are  executed in
     accordance  with  management's  general or  specific  authorizations,  (ii)
     transactions  are recorded as necessary to permit  preparation of financial
     statements in conformity  with GAAP and to maintain  asset  accountability,
     (iii) access to assets is permitted  only in accordance  with  management's
     general or specific authorization, and (iv) the recorded accountability for
     assets is compared  with the existing  assets at  reasonable  intervals and
     appropriate  action is taken with respect to any  differences.  The Company
     has established  disclosure controls and procedures (as defined in Exchange
     Act Rules  13a-15(e)  and  15d-15(e))  for the  Company and  designed  such
     disclosure  controls and  procedures  to ensure that  material  information
     relating to the Company,  including its subsidiaries,  is made known to the
     certifying  officers by others within those entities,  particularly  during
     the period in which the Company's most recently filed periodic report under
     the  Exchange  Act, as the case may be, is being  prepared.  The  Company's
     certifying  officers  have  evaluated  the  effectiveness  of the Company's
     controls and procedures as of the date prior to the filing date of the most
     recently  filed  periodic  report under the  Exchange  Act (such date,  the
     "Evaluation  Date").  The  Company  presented  in its most  recently  filed
     periodic  report under the Exchange Act the  conclusions  of the certifying
     officers about the effectiveness of the disclosure  controls and procedures
     based on their  evaluations as of the Evaluation Date. Since the Evaluation
     Date,  there have been no  significant  changes in the  Company's  internal
     controls  (as such term is defined in Item 307(b) of  Regulation  S-K under
     the Exchange  Act) or, to the  Company's  knowledge,  in other factors that
     could significantly affect the Company's internal controls.

          (s) Certain Fees. No brokerage or finder's fees or commissions  are or
     will  be  payable  by the  Company  to any  broker,  financial  advisor  or
     consultant,  finder,  placement  agent,  investment  banker,  bank or other
     Person with respect to the transactions contemplated by this Agreement. The
     Purchasers  shall  have no  obligation  with  respect  to any  fees or with
     respect to any claims  made by or on behalf of other  Persons for fees of a
     type  contemplated  in this Section that may be due in connection  with the
     transactions contemplated by this Agreement.

          (t)  Private  Placement.  Assuming  the  accuracy  of  the  Purchasers
     representations  and warranties  set forth in Section 3.2, no  registration
     under  the  Securities  Act is  required  for  the  offer  and  sale of the
     Securities by the Company to the  Purchasers as  contemplated  hereby.  The
     issuance and sale of the Securities hereunder does not contravene the rules
     and regulations of the Trading Market.

          (u)  Investment  Company.  The Company is not, and is not an Affiliate
     of, and immediately after receipt of payment for the Shares, will not be or
     be an  Affiliate  of, an  "investment  company"  within the  meaning of the
     Investment  Company Act of 1940, as

                                      -12-

<PAGE>

     amended. The Company shall conduct its business in a manner so that it will
     not become subject to the Investment Company Act.

          (v) Registration  Rights. No Person has any right to cause the Company
     to effect the  registration  under the  Securities Act of any securities of
     the Company.

          (w) Listing and Maintenance  Requirements.  The Company's Common Stock
     is  registered  pursuant  to Section  12(g) of the  Exchange  Act,  and the
     Company  has taken no action  designed  to,  or which to its  knowledge  is
     likely to have the effect of,  terminating  the  registration of the Common
     Stock under the Exchange Act nor has the Company  received any notification
     that the Commission is  contemplating  terminating such  registration.  The
     Company  has not,  in the 12 months  preceding  the date  hereof,  received
     notice  from any  Trading  Market on which the Common  Stock is or has been
     listed or quoted to the effect that the Company is not in  compliance  with
     the listing or maintenance requirements of such Trading Market. The Company
     is, and has no reason to believe that it will not in the foreseeable future
     continue  to be,  in  compliance  with all  such  listing  and  maintenance
     requirements.

          (x) Application of Takeover Protections.  The Company and its Board of
     Directors  have  taken all  necessary  action,  if any,  in order to render
     inapplicable any control share acquisition,  business  combination,  poison
     pill (including any distribution under a rights agreement) or other similar
     anti-takeover  provision under the Company's  Certificate of  Incorporation
     (or similar  charter  documents) or the laws of its state of  incorporation
     that is or could become  applicable  to the  Purchasers  as a result of the
     Purchasers and the Company fulfilling their obligations or exercising their
     rights under the Transaction  Documents,  including without  limitation the
     Company's  issuance of the Securities and the Purchasers'  ownership of the
     Securities.

          (y) Disclosure. The Company confirms that, neither the Company nor any
     other Person  acting on its behalf has provided  any of the  Purchasers  or
     their  agents or counsel with any  information  that  constitutes  or might
     constitute material,  non-public  information.  The Company understands and
     confirms that the Purchasers will rely on the foregoing representations and
     covenants in  effecting  transactions  in  securities  of the Company.  All
     disclosure provided to the Purchasers  regarding the Company,  its business
     and  the  transactions   contemplated  hereby,   including  the  Disclosure
     Schedules to this Agreement,  furnished by or on behalf of the Company with
     respect to the  representations  and  warranties  made  herein are true and
     correct  with respect to such  representations  and  warranties  and do not
     contain  any  untrue  statement  of a  material  fact or omit to state  any
     material fact  necessary in order to make the statements  made therein,  in
     light of the circumstances under which they were made, not misleading.  The
     Company  acknowledges  and agrees that no  Purchaser  makes or has made any
     representations or warranties with respect to the transactions contemplated
     hereby other than those specifically set forth in Section 3.2 hereof.

          (z) No Integrated  Offering.  Assuming the accuracy of the Purchasers'
     representations  and  warranties  set forth in  Section  3.2,  neither  the
     Company,  nor any of its affiliates,  nor any Person acting on its or their
     behalf  has,  directly  or  indirectly,  made

                                      -13-

<PAGE>

     any  offers or sales of any  security  or  solicited  any offers to buy any
     security,  under  circumstances  that  would  cause  this  offering  of the
     Securities  to be  integrated  with  prior  offerings  by the  Company  for
     purposes  of the  Securities  Act or any  applicable  shareholder  approval
     provisions,  including, without limitation, under the rules and regulations
     of  any  exchange  or  automated  quotation  system  on  which  any  of the
     securities of the Company are listed or designated.

          (aa) Solvency.  Based on the financial  condition of the Company as of
     the Closing Date after  giving  effect to the receipt by the Company of the
     proceeds from the sale of the Securities hereunder,  (i) the Company's fair
     saleable value of its assets exceeds the amount that will be required to be
     paid on or in respect of the Company's existing debts and other liabilities
     (including known contingent liabilities) as they mature; (ii) the Company's
     assets  do not  constitute  unreasonably  small  capital  to  carry  on its
     business for the current fiscal year as now conducted and as proposed to be
     conducted  including its capital  needs taking into account the  particular
     capital  requirements  of  the  business  conducted  by  the  Company,  and
     projected capital requirements and capital availability  thereof; and (iii)
     the  current  cash flow of the  Company,  together  with the  proceeds  the
     Company would receive, were it to liquidate all of its assets, after taking
     into account all anticipated  uses of the cash,  would be sufficient to pay
     all amounts on or in respect of its debt when such  amounts are required to
     be paid.  The Company  does not intend to incur debts beyond its ability to
     pay such debts as they mature  (taking  into account the timing and amounts
     of cash to be payable on or in respect of its debt).

          (bb) Form S-3  Eligibility.  The Company is  eligible to register  the
     resale of its Common  Stock by the  Purchasers  under Form S-3  promulgated
     under the Securities Act and the Company hereby covenants and agrees to use
     its best  efforts to  maintain  its  eligibility  to use Form S-3 until the
     Registration  Statement  covering  the resale of the Shares shall have been
     filed with, and declared effective by, the Commission.

          (cc) Taxes. Except for matters that would not,  individually or in the
     aggregate,  have or reasonably be expected to result in a Material  Adverse
     Effect,  the Company and each  Subsidiary has filed all necessary  federal,
     state and foreign  income and franchise tax returns and has paid or accrued
     all taxes shown as due  thereon,  and the Company has no knowledge of a tax
     deficiency which has been asserted or threatened against the Company or any
     Subsidiary.

          (dd) General  Solicitation.  Neither the Company nor any person acting
     on behalf of the  Company has offered or sold any of the Shares by any form
     of general solicitation or general advertising. The Company has offered the
     Shares  for sale  only to the  Purchasers  and  certain  other  "accredited
     investors" within the meaning of Rule 501 under the Securities Act.

          (ee)  Foreign  Corrupt  Practices.  Neither  the  Company,  nor to the
     knowledge of the Company, any agent or other person acting on behalf of the
     Company,  has (i)  directly  or  indirectly,  used any  corrupt  funds  for
     unlawful  contributions,  gifts,  entertainment or other unlawful  expenses
     related to foreign or domestic political  activity,  (ii) made any unlawful
     payment to foreign or domestic government  officials or employees or to any

                                      -14-

<PAGE>

     foreign or domestic  political  parties or campaigns from corporate  funds,
     (iii)  failed to disclose  fully any  contribution  made by the Company (or
     made by any  person  acting on its  behalf of which the  Company  is aware)
     which is in violation of law, or (iv) violated in any material  respect any
     provision of the Foreign Corrupt Practices Act of 1977, as amended.

          (ff) Accountants.  The Company's accountants are set forth on Schedule
     3.1(ff)  of the  Disclosure  Schedule.  To the  Company's  knowledge,  such
     accountants,  who the Company  expects  will  express  their  opinion  with
     respect to the financial  statements to be included in the Company's Annual
     Report on Form 10-K for the year ended December 31, 2004,  are  independent
     accountants as required by the Securities Act.

          (gg)  Acknowledgment  Regarding  Purchasers'  Purchase of Shares.  The
     Company  acknowledges  and  agrees  that each of the  Purchasers  is acting
     solely in the  capacity of an arm's  length  purchaser  with respect to the
     Transaction Documents and the transactions contemplated hereby. The Company
     further  acknowledges that no Purchaser is acting as a financial advisor or
     fiduciary of the Company (or in any similar  capacity) with respect to this
     Agreement and the transactions  contemplated hereby and any advice given by
     any  Purchaser  or any of their  respective  representatives  or  agents in
     connection with this Agreement and the transactions  contemplated hereby is
     merely  incidental to the Purchasers'  purchase of the Shares.  The Company
     further  represents to each Purchaser that the Company's  decision to enter
     into this Agreement has been based solely on the independent  evaluation of
     the   transactions   contemplated   hereby   by   the   Company   and   its
     representatives.

     3.2  Representations  and  Warranties  of the  Purchasers.  Each  Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows:

          (a)  Organization;   Authority.  Such  Purchaser  is  an  entity  duly
     organized,  validly  existing  and in good  standing  under the laws of the
     jurisdiction of its organization with full right,  corporate or partnership
     power  and  authority  to enter  into and to  consummate  the  transactions
     contemplated  by the  Transaction  Documents and otherwise to carry out its
     obligations  thereunder.  The execution,  delivery and  performance by such
     Purchaser of the transactions contemplated by this Agreement have been duly
     authorized by all necessary corporate or similar action on the part of such
     Purchaser.  Each Transaction  Document to which it is a party has been duly
     executed  by such  Purchaser,  and  when  delivered  by such  Purchaser  in
     accordance  with the terms hereof,  will  constitute  the valid and legally
     binding obligation of such Purchaser,  enforceable against it in accordance
     with its terms,  except (i) as limited by general equitable  principles and
     applicable  bankruptcy,  insolvency,  reorganization,  moratorium and other
     laws of general  application  affecting  enforcement  of creditors'  rights
     generally, (ii) as limited by laws relating to the availability of specific
     performance,  injunctive  relief  or other  equitable  remedies  and  (iii)
     insofar as  indemnification  and contribution  provisions may be limited by
     applicable law.

                                      -15-
<PAGE>

          (b) Purchaser  Representation.  Such  Purchaser  understands  that the
     Securities are "restricted  securities" and have not been registered  under
     the Securities Act or any applicable  state securities law and is acquiring
     the  Securities  as principal for its own account and not with a view to or
     for  distributing or reselling such Securities or any part thereof,  has no
     present  intention  of  distributing  any of  such  Securities  and  has no
     arrangement  or  understanding   with  any  other  persons   regarding  the
     distribution  of such  Securities  (this  representation  and  warranty not
     limiting  such  Purchaser's  right to sell the  Securities  pursuant to the
     Registration  Statement or otherwise in compliance with applicable  federal
     and state  securities  laws).  Such  Purchaser is acquiring the  Securities
     hereunder in the ordinary  course of its business.  Such Purchaser does not
     have any  agreement  or  understanding,  directly or  indirectly,  with any
     Person to distribute any of the Securities.

          (c)  Purchaser  Status.  At the time such  Purchaser  was  offered the
     Securities, it was, and at the date hereof it is, and on each date on which
     it exercises any Warrants,  it will be either: (i) an "accredited investor"
     as defined in Rule 501(a)(1),  (a)(2),  (a)(3),  (a)(7) or (a)(8) under the
     Securities Act or (ii) a "qualified institutional buyer" as defined in Rule
     144A(a)  under the  Securities  Act.  Such  Purchaser is not required to be
     registered as a broker-dealer under Section 15 of the Exchange Act.

          (d)  Experience of Such  Purchaser.  Such  Purchaser,  either alone or
     together with its representatives,  has such knowledge,  sophistication and
     experience  in  business  and  financial  matters  so as to be  capable  of
     evaluating  the  merits  and  risks of the  prospective  investment  in the
     Securities,  and has so evaluated the merits and risks of such  investment.
     Such  Purchaser is able to bear the economic  risk of an  investment in the
     Securities  and, at the present  time, is able to afford a complete loss of
     such investment.

          (e)  General  Solicitation.  Such  Purchaser  is  not  purchasing  the
     Securities  as a result  of any  advertisement,  article,  notice  or other
     communication regarding the Securities published in any newspaper, magazine
     or similar media or broadcast over  television or radio or presented at any
     seminar or any other general solicitation or general advertisement.

          (f) Short Sales.  Such Purchaser has not directly or  indirectly,  nor
     has any Person  acting on behalf of or pursuant to any  understanding  with
     such Purchaser, engaged in any Short Sales in the securities of the Company
     (including,  without  limitations,  any Short Sales involving the Company's
     securities)  since  the  time  that  such  Purchaser  was  first  contacted
     regarding  an  investment  in the Company.  For  purposes of this  Section,
     "Short Sales" include, without limitation,  all "short sales" as defined in
     Rule 3b-3 of the Exchange Act. Such Purchaser covenants that neither it nor
     any affiliates acting on its behalf or pursuant to any  understanding  with
     it will engage in any Short  Sales prior to the time that the  transactions
     contemplated by this Agreement are first publicly announced as described in
     Section 4.4.

     The Company  acknowledges  and agrees that each  Purchaser does not make or
has not made any  representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in this Section 3.2.

                                      -16-
<PAGE>

                                   ARTICLE IV.
                         OTHER AGREEMENTS OF THE PARTIES

     4.1 Transfer Restrictions.

          (a) The  Securities  may only be disposed of in compliance  with state
     and federal  securities laws. In connection with any transfer of Securities
     other than pursuant to an effective  registration statement or Rule 144, to
     the Company or to an  Affiliate  of a  Purchaser  or in  connection  with a
     pledge as  contemplated  in Section  4.1(b),  the  Company  may require the
     transferor thereof to provide to the Company an opinion of counsel selected
     by the transferor and  reasonably  acceptable to the Company,  the form and
     substance  of which  opinion and shall be  reasonably  satisfactory  to the
     Company, to the effect that such transfer does not require  registration of
     such  transferred  Securities  under the Securities  Act. As a condition of
     transfer,  any such  transferee  shall  agree in writing to be bound by the
     terms of this Agreement and shall have the rights of a Purchaser under this
     Agreement and the Registration Rights Agreement.

          (b) The Purchasers agree to the imprinting,  so long as is required by
     this Section 4.1(b),  of a legend on any of the Securities in the following
     form:

          THESE  SECURITIES  HAVE NOT BEEN  REGISTERED  WITH THE  SECURITIES AND
          EXCHANGE  COMMISSION  OR THE  SECURITIES  COMMISSION  OF ANY  STATE IN
          RELIANCE UPON AN EXEMPTION FROM REGISTRATION  UNDER THE SECURITIES ACT
          OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,  MAY NOT
          BE  OFFERED  OR SOLD  EXCEPT  PURSUANT  TO AN  EFFECTIVE  REGISTRATION
          STATEMENT  UNDER  THE  SECURITIES  ACT  OR  PURSUANT  TO AN  AVAILABLE
          EXEMPTION FROM, OR IN A TRANSACTION  NOT SUBJECT TO, THE  REGISTRATION
          REQUIREMENTS  OF THE SECURITIES ACT AND IN ACCORDANCE  WITH APPLICABLE
          STATE  SECURITIES  LAWS AS EVIDENCED BY A LEGAL  OPINION OF COUNSEL TO
          THE  TRANSFEROR  TO SUCH  EFFECT,  THE  SUBSTANCE  OF  WHICH  SHALL BE
          REASONABLY ACCEPTABLE TO THE COMPANY.  THESE SECURITIES MAY BE PLEDGED
          IN  CONNECTION  WITH A BONA  FIDE  MARGIN  ACCOUNT  WITH A  REGISTERED
          BROKER-DEALER  OR OTHER LOAN WITH A FINANCIAL  INSTITUTION  THAT IS AN
          "ACCREDITED  INVESTOR" AS DEFINED IN RULE 501(a) UNDER THE  SECURITIES
          ACT.

          The Company  acknowledges and agrees that a Purchaser may from time to
     time  pledge  pursuant to a bona fide margin  agreement  with a  registered
     broker-dealer or grant a security interest in some or all of the Securities
     to a financial  institution that is an "accredited  investor" as defined in
     Rule  501(a)  under the  Securities  Act and who  agrees to be bound by the
     provisions of this Agreement and the Registration  Rights Agreement and, if
     required under the terms of such  arrangement,  such Purchaser may transfer
     pledged or secured  Securities to the pledgees or secured  parties.  Such a
     pledge or  transfer  would not be subject to approval of the Company and no
     legal  opinion of legal

                                      -17-

<PAGE>

     counsel of the  pledgee,  secured  party or pledgor  shall be  required  in
     connection therewith.  Further, no notice shall be required of such pledge.
     At the  appropriate  Purchaser's  expense,  the  Company  will  execute and
     deliver  such  reasonable  documentation  as a pledgee or secured  party of
     Securities may reasonably  request in connection  with a pledge or transfer
     of the Securities, including, if the Securities are subject to registration
     pursuant to the Registration  Rights Agreement,  the preparation and filing
     of any  required  prospectus  supplement  under  Rule  424(b)(3)  under the
     Securities  Act or other  applicable  provision  of the  Securities  Act to
     appropriately amend the list of Selling Stockholders thereunder.

          (c)  Certificates  evidencing  the Shares and Warrant Shares shall not
     contain any legend (including the legend set forth in Section 4.1(b)),  (i)
     while a  registration  statement  (including  the  Registration  Statement)
     covering the resale of such security is effective under the Securities Act,
     or (ii)  following  any sale of such Shares or Warrant  Shares  pursuant to
     Rule 144, or (iii) if such Shares or Warrant  Shares are  eligible for sale
     under Rule 144(k),  or (iv) if such legend is not required under applicable
     requirements of the Securities Act (including judicial  interpretations and
     pronouncements  issued by the Staff of the  Commission).  The Company shall
     cause its counsel to issue a legal opinion to the Company's  transfer agent
     promptly  after the Effective  Date if required by the  Company's  transfer
     agent to effect the removal of the legend hereunder.  If all or any portion
     of a Warrant is exercised at a time when there is an effective registration
     statement to cover the resale of the Warrant  Shares,  such Warrant  Shares
     shall be issued free of all legends.  The Company agrees that following the
     Effective  Date or at such time as such legend is no longer  required under
     this Section  4.1(c),  it will, no later than three Trading Days  following
     the delivery by a Purchaser to the Company or the Company's  transfer agent
     of a certificate representing Shares or Warrant Shares, as the case may be,
     issued with a restrictive  legend (such date, the "Legend  Removal  Date"),
     deliver  or  cause  to  be  delivered  to  such   Purchaser  a  certificate
     representing  such  Securities  that is free from all restrictive and other
     legends.  The  Company  may not make any  notation  on its  records or give
     instructions  to  any  transfer  agent  of the  Company  that  enlarge  the
     restrictions on transfer set forth in this Section.

          (d) In addition to such  Purchaser's  other  available  remedies,  the
     Company shall pay to a Purchaser,  in cash, as partial  liquidated  damages
     and not as a penalty, for each $1,000 of Shares or Warrant Shares (based on
     the  Closing  Price of the  Common  Stock on the date such  Securities  are
     submitted to the Company's  transfer agent) subject to Section 4.1(c),  $10
     per Trading Day  (increasing  to $20 per Trading Day five (5) Trading  Days
     after such  damages  have begun to accrue)  for each  Trading Day after the
     Legend  Removal Date until such  certificate  is delivered.  Nothing herein
     shall  limit  such  Purchaser's  right to  pursue  actual  damages  for the
     Company's  failure to deliver  certificates  representing any Securities as
     required by the  Transaction  Documents,  and such Purchaser shall have the
     right to pursue all remedies available to it at law or in equity including,
     without  limitation,  a decree of specific  performance  and/or  injunctive
     relief.

          (e)  Each  Purchaser,   severally  and  not  jointly  with  the  other
     Purchasers,  agrees  that  the  removal  of  the  restrictive  legend  from
     certificates  representing  Securities  as set

                                      -18-
<PAGE>

     forth in this Section 4.1 is predicated  upon the  Company's  reliance that
     the Purchaser will sell any Securities  pursuant to either the registration
     requirements  of the Securities  Act,  including any applicable  prospectus
     delivery requirements, or an exemption therefrom.

          (f) Until the date that is 30 days  following the Effective  Date, the
     Company   shall  not   undertake  a  reverse  or  forward  stock  split  or
     reclassification  of the Common Stock without the prior written  consent of
     the Purchasers holding a majority in interest of the Shares.

     4.2 Furnishing of  Information.  As long as any Purchaser owns  Securities,
the Company  covenants to timely file (or obtain  extensions in respect  thereof
and file within the applicable grace period) all reports required to be filed by
the Company  after the date hereof  pursuant to the Exchange Act. As long as any
Purchaser  owns  Securities,  if the  Company is not  required  to file  reports
pursuant to the Exchange Act, it will prepare and furnish to the  Purchasers and
make publicly  available in accordance  with Rule 144(c) such  information as is
required for the Purchasers to sell the  Securities  under Rule 144. The Company
further  covenants  that it will  take  such  further  action  as any  holder of
Securities may reasonably request,  all to the extent required from time to time
to enable such Person to sell such  Securities  without  registration  under the
Securities Act within the limitation of the exemptions provided by Rule 144.

     4.3  Integration.  The  Company  shall not sell,  offer for sale or solicit
offers to buy or  otherwise  negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale
of the  Securities  in a manner that would  require the  registration  under the
Securities  Act of the sale of the Securities to the Purchasers or that would be
integrated  with the offer or sale of the  Securities  for purposes of the rules
and  regulations  of any Trading  Market such that it would require  shareholder
approval  prior to the  closing of such  other  transaction  unless  shareholder
approval is obtained before the closing of such subsequent transaction.

     4.4 Securities Laws Disclosure;  Publicity. The Company shall, by 8:30 a.m.
Eastern time on the Trading Day following the date hereof, issue a press release
or file a Current Report on Form 8-K, in each case reasonably acceptable to each
Purchaser disclosing the material terms of the transactions contemplated hereby;
provided,  however,  if a Purchaser objects to a press release or Current Report
on Form 8-K, the Company  shall still be  permitted  to file a press  release or
Current  Report on Form 8-K but only to the extent  required by law. The Company
and each  Purchaser  shall  consult  with each other in issuing  any other press
releases with respect to the transactions  contemplated  hereby, and neither the
Company nor any Purchaser  shall issue any such press release or otherwise  make
any such public statement without the prior consent of the Company, with respect
to any press  release of any  Purchaser,  or without  the prior  consent of each
Purchaser, with respect to any press release of the Company, which consent shall
not  unreasonably be withheld,  except if such disclosure is required by law, in
which case the  disclosing  party  shall  promptly  provide the other party with
prior notice of such public  statement  or  communication.  Notwithstanding  the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or
include  the name of any  Purchaser  in any filing  with the  Commission  or any
regulatory  agency or Trading Market,  without the prior written consent of such
Purchaser,  except (i) as required by federal  securities law in connection with
the registration statement

                                      -19-

<PAGE>

contemplated by the  Registration  Rights  Agreement and (ii) to the extent such
disclosure is required by law or Trading Market  regulations,  in which case the
Company shall provide the  Purchasers  with a copy of the  disclosure  permitted
under subclause (i) or (ii).

     4.5  Shareholders  Rights  Plan.  No claim will be made or  enforced by the
Company or, to the knowledge of the Company, any other Person that any Purchaser
is an "Acquiring  Person" under any shareholders  rights plan or similar plan or
arrangement in effect or hereafter adopted by the Company, or that any Purchaser
could be deemed to trigger the  provisions of any such plan or  arrangement,  by
virtue of  receiving  Securities  under the  Transaction  Documents or under any
other  agreement  between  the  Company and the  Purchasers.  The Company  shall
conduct  its  business  in a manner so that it will not  become  subject  to the
Investment Company Act.

     4.6 Non-Public  Information.  The Company covenants and agrees that neither
it nor any other Person  acting on its behalf will provide any  Purchaser or its
agents or counsel with any  information  that the Company  believes  constitutes
material non-public information,  unless prior thereto such Purchaser shall have
executed  a written  agreement  regarding  the  confidentiality  and use of such
information.  The Company  understands and confirms that each Purchaser shall be
relying on the foregoing representations in effecting transactions in securities
of the Company.

     4.7 Use of Proceeds.  Except as set forth on Schedule 4.7 attached  hereto,
the Company shall use the net proceeds from the sale of the Securities hereunder
for working capital  purposes and not for the satisfaction of any portion of the
Company's debt (other than payment of trade  payables in the ordinary  course of
the Company's  business and prior  practices),  to redeem any Company  equity or
equity-equivalent securities or to settle any outstanding litigation.

     4.8 Reimbursement. If any Purchaser becomes involved in any capacity in any
Proceeding by or against any Person who is a stockholder of the Company  (except
as a result of sales,  pledges,  margin sales and similar  transactions  by such
Purchaser  to or with any  current  stockholder  or a claim by the  Person  that
Purchaser did not have the authority to enter into this transaction),  solely as
a result of such Purchaser's acquisition of the Securities under this Agreement,
the Company will reimburse  such  Purchaser for its  reasonable  legal and other
expenses  (including  the cost of any  investigation  preparation  and travel in
connection  therewith)  incurred in connection  therewith,  as such expenses are
incurred.  The  reimbursement  obligations  of the Company under this  paragraph
shall be in addition to any  liability  which the  Company may  otherwise  have,
shall  extend  upon the same  terms  and  conditions  to any  Affiliates  of the
Purchasers who are actually named in such action,  proceeding or  investigation,
and partners,  directors, agents, employees and controlling persons (if any), as
the case may be, of the Purchasers and any such Affiliate,  and shall be binding
upon and inure to the benefit of any  successors,  assigns,  heirs and  personal
representatives  of the Company,  the  Purchasers and any such Affiliate and any
such Person.  The Company also agrees that neither the  Purchasers  nor any such
Affiliates,  partners, directors, agents, employees or controlling persons shall
have any liability to the Company or any Person asserting claims on behalf of or
in right of the Company  solely as a result of acquiring  the  Securities  under
this Agreement.

     4.9  Indemnification  of  Purchasers.  Subject  to the  provisions  of this
Section  4.9,  the Company  will  indemnify  and hold the  Purchasers  and their
directors,  officers,  shareholders,

                                      -20-

<PAGE>

partners, employees and agents (each, a "Purchaser Party") harmless from any and
all losses, liabilities,  obligations, claims, contingencies, damages, costs and
expenses, including all judgments, amounts paid in settlements,  court costs and
reasonable  attorneys' fees and costs of  investigation  that any such Purchaser
Party may suffer or incur as a result of or relating to (a) any breach of any of
the representations,  warranties, covenants or agreements made by the Company in
this  Agreement  or in  the  other  Transaction  Documents  or  (b)  any  action
instituted against a Purchaser,  or any of them or their respective  Affiliates,
by any  stockholder  of the Company who is not an Affiliate  of such  Purchaser,
with  respect  to any  of  the  transactions  contemplated  by  the  Transaction
Documents  (unless  such  action  is  based  upon a breach  of such  Purchaser's
representation,  warranties or covenants under the Transaction  Documents or any
agreements or  understandings  such Purchaser may have with any such stockholder
or any  violations by the Purchaser of state or federal  securities  laws or any
conduct by such Purchaser which constitutes  fraud,  gross  negligence,  willful
misconduct or malfeasance). If any action shall be brought against any Purchaser
Party in respect of which  indemnity may be sought  pursuant to this  Agreement,
such  Purchaser  Party shall  promptly  notify the  Company in writing,  and the
Company  shall have the right to assume the defense  thereof with counsel of its
own  choosing.  Any  Purchaser  Party  shall  have the right to employ  separate
counsel in any such action and participate in the defense thereof,  but the fees
and expenses of such  counsel  shall be at the expense of such  Purchaser  Party
except to the  extent  that (i) the  employment  thereof  has been  specifically
authorized  by the  Company in  writing,  (ii) the  Company  has failed  after a
reasonable  period of time to assume such defense and to employ counsel or (iii)
in such action there is, in the reasonable  opinion of such separate counsel,  a
material  conflict on any material issue between the position of the Company and
the  position of such  Purchaser  Party.  The Company  will not be liable to any
Purchaser  Party under this  Agreement  (i) for any  settlement  by an Purchaser
Party effected without the Company's prior written  consent,  which shall not be
unreasonably  withheld or delayed; or (ii) to the extent, but only to the extent
that a loss, claim, damage or liability is attributable to any Purchaser Party's
breach of any of the representations,  warranties,  covenants or agreements made
by the Purchasers in this Agreement or in the other Transaction Documents.

     4.10  Reservation of Common Stock.  As of the date hereof,  the Company has
reserved  and the Company  shall  continue to reserve and keep  available at all
times, free of preemptive  rights, a sufficient number of shares of Common Stock
for the  purpose of  enabling  the  Company  to issue  Shares  pursuant  to this
Agreement and Warrant Shares pursuant to any exercise of the Warrants.

     4.11 Listing of Common Stock. The Company hereby agrees to use best efforts
to maintain the listing of the Common Stock on a Trading Market,  and as soon as
reasonably  practicable following the Closing (but not later than the earlier of
the Effective Date and the first anniversary of the Closing Date) to list all of
the Shares and  Warrant  Shares on such  Trading  Market.  The  Company  further
agrees,  if the  Company  applies to have the Common  Stock  traded on any other
Trading  Market,  it will  include  in such  application  all of the  Shares and
Warrant Shares,  and will take such other action as is necessary to cause all of
the  Shares and  Warrant  Shares to be listed on such  other  Trading  Market as
promptly as possible.  The Company will take all action reasonably  necessary to
continue  the listing and  trading of its Common  Stock on a Trading  Market and
will  comply in all  respects  with the  Company's  reporting,  filing and other
obligations under the bylaws or rules of the Trading Market.

                                      -21-
<PAGE>

     4.12 Equal Treatment of Purchasers.  No  consideration  shall be offered or
paid to any  person  to amend or  consent  to a waiver  or  modification  of any
provision of any of the Transaction  Documents unless the same  consideration is
also  offered  to  all  of  the  parties  to  the  Transaction  Documents.   For
clarification  purposes,  this provision constitutes a separate right granted to
each Purchaser by the Company and negotiated  separately by each Purchaser,  and
is intended to treat for the Company the  Purchasers as a class and shall not in
any way be  construed  as the  Purchasers  acting in  concert or as a group with
respect to the purchase, disposition or voting of Securities or otherwise.

     4.13 Participation in Future Financing. From the date hereof until 6 months
after the Effective  Date, upon any financing by the Company of its Common Stock
or Common Stock Equivalents (a "Subsequent  Financing"),  each Purchaser (or its
designees)  shall  have the  right to  participate  in,  (a) if such  Subsequent
Financing will be undertaken by one proposed  investor (and, if applicable,  its
Affiliates)  100%  of  such  Subsequent   Financing  (subject  to  the  Pro-Rata
allocation  provided  for below) and (b) if such  Subsequent  Financing  will be
undertaken by more than one proposed investor (excluding its Affiliates), all or
part of such Subsequent  Financing (subject to the Pro-Rata  allocation provided
for below) (the "Participation  Maximum").  At least five (5) Trading Days prior
to the closing of the  Subsequent  Financing,  the Company shall deliver to each
Purchaser a written  notice of its  intention to effect a  Subsequent  Financing
("Pre-Notice"),  which Pre-Notice shall ask such Purchaser if it wants to review
the details of such financing (such additional  notice, a "Subsequent  Financing
Notice").  Upon the  request  of a  Purchaser,  and only upon a request  by such
Purchaser, for a Subsequent Financing Notice, the Company shall promptly, but no
later  than one (1)  Trading  Day  after  such  request,  deliver  a  Subsequent
Financing  Notice to such  Purchaser.  The  Subsequent  Financing  Notice  shall
describe in reasonable  detail the proposed terms of such Subsequent  Financing,
the amount of proceeds  intended to be raised  thereunder,  the Person with whom
such  Subsequent  Financing  is proposed to be  effected,  and attached to which
shall be a term sheet or similar document relating thereto. If by 6:30 p.m. (New
York City  time) on the fifth  Trading  Day  after  all of the  Purchasers  have
received the Pre-Notice, notifications by the Purchasers of their willingness to
participate  in  the  Subsequent  Financing  (or to  cause  their  designees  to
participate) is, in the aggregate,  less than the total amount of the Subsequent
Financing,  then the Company may effect the remaining portion (or in the case of
clause  (a) above,  all) of such  Subsequent  Financing  on the terms and to the
Persons set forth in the Subsequent Financing Notice. If the Company receives no
notice from a Purchaser as of such fifth (5th) Trading Day, such Purchaser shall
be deemed to have  notified the Company  that it does not elect to  participate.
The Company  must  provide the  Purchasers  with a second  Subsequent  Financing
Notice,  and the Purchasers will again have the right of participation set forth
above in this Section 4.13, if the Subsequent  Financing  subject to the initial
Subsequent  Financing  Notice is not  consummated for any reason on the terms or
substantially  equivalent  terms set forth in such Subsequent  Financing  Notice
within 60  Trading  Days  after  the date of the  initial  Subsequent  Financing
Notice.  In the event the Company  receives  responses to  Subsequent  Financing
Notices from  Purchasers  seeking to purchase more than the aggregate  amount of
the Subsequent  Financing,  each such Purchaser shall have the right to purchase
their Pro Rata Portion (as defined  below) of the  Participation  Maximum.  "Pro
Rata  Portion"  is the  ratio  of (x)  the  Subscription  Amount  of  Securities
purchased  by a  participating  Purchaser  and  (y)  the  sum of  the  aggregate
Subscription  Amount  of

                                      -22-

<PAGE>

all participating  Purchasers.  Notwithstanding the foregoing, this Section 4.13
shall not apply in respect of an Exempt Issuance.

     4.14  Prohibition on Future  Financing.  From the date hereof until 45 days
after the Effective  Date,  neither the Company nor any  Subsidiary  shall issue
shares of Common Stock or Common Stock Equivalents;  provided,  however,  the 45
day period set forth in this  Section  4.14 shall be extended  for the number of
Trading  Days during  such  period in which (y)  trading in the Common  Stock is
suspended by any Trading  Market,  or (z)  following  the  Effective  Date,  the
Registration  Statement  is not  effective  or the  prospectus  included  in the
Registration  Statement may not be used by the  Purchasers for the resale of the
Shares and Warrant  Shares.  Notwithstanding  the  foregoing,  this Section 4.14
shall not apply in respect of an Exempt Issuance.

     4.15 Delivery of Securities  After Closing.  The Company shall deliver,  or
cause to be  delivered,  the  respective  Shares and Warrants  purchased by each
Purchaser to such Purchaser within 3 Trading Days of the Closing Date.

                                   ARTICLE V.
                                  MISCELLANEOUS

     5.1 Fees and Expenses.  At the Closing,  the Company will reimburse Langley
Partners,  LP  ("Langley")  the sum of $25,000 for its reasonable and documented
legal fees and expenses.  Accordingly, in lieu of the foregoing payments, on the
Closing Date, the  Subscription  Amount Langley is to pay for the Shares and the
Warrants shall be reduced by $25,000.  The Company shall  deliver,  prior to the
Closing, a completed and executed copy of the Closing Statement, attached hereto
as Annex A. Except as otherwise  set forth in this  Agreement,  each party shall
pay the fees and  expenses  of its  advisers,  counsel,  accountants  and  other
experts,  if any, and all other expenses  incurred by such party incident to the
negotiation, preparation, execution, delivery and performance of this Agreement.
The Company  shall pay all stamp and other taxes and duties levied in connection
with the sale of the Securities.

     5.2 Entire Agreement. The Transaction Documents, together with the exhibits
and  schedules  thereto,  contain the entire  understanding  of the parties with
respect to the subject  matter  hereof and supersede  all prior  agreements  and
understandings, oral or written, with respect to such matters, which the parties
acknowledge have been merged into such documents, exhibits and schedules.

     5.3  Notices.  Any and all notices or other  communications  or  deliveries
required or permitted to be provided  hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of  transmission,  if
such notice or  communication is delivered via facsimile at the facsimile number
set forth on the signature  pages  attached  hereto prior to 6:30 p.m. (New York
City  time)  on a  Trading  Day,  (b) the next  Trading  Day  after  the date of
transmission,  if such notice or communication is delivered via facsimile at the
facsimile  number set forth on the signature pages attached hereto on a day that
is not a Trading Day or later than 6:30 p.m. (New York City time) on any Trading
Day, (c) the second  Trading Day following the date of mailing,  if sent by U.S.
nationally  recognized  overnight courier service, or (d) upon

                                      -23-
<PAGE>

actual  receipt by the party to whom such notice is  required  to be given.  The
address  for  such  notices  and  communications  shall  be as set  forth on the
signature pages attached hereto.

     5.4  Amendments;  Waivers.  No provision of this Agreement may be waived or
amended except in a written instrument  signed, in the case of an amendment,  by
the Company and each Purchaser or, in the case of a waiver, by the party against
whom  enforcement  of any such waiver is sought.  No waiver of any default  with
respect to any provision,  condition or  requirement of this Agreement  shall be
deemed to be a  continuing  waiver in the  future or a waiver of any  subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of either party to exercise  any right  hereunder in
any manner impair the exercise of any such right.

     5.5  Construction.  The headings  herein are for  convenience  only, do not
constitute a part of this  Agreement  and shall not be deemed to limit or affect
any of the provisions hereof. The language used in this Agreement will be deemed
to be the language chosen by the parties to express their mutual intent,  and no
rules of strict construction will be applied against any party.

     5.6 Successors and Assigns.  This Agreement shall be binding upon and inure
to the benefit of the parties and their  successors and permitted  assigns.  The
Company may not assign this  Agreement  or any rights or  obligations  hereunder
without the prior written  consent of each  Purchaser.  Any Purchaser may assign
any or all of its  rights  under  this  Agreement  to any  Person  to whom  such
Purchaser  assigns or transfers any Securities,  provided such transferee agrees
in  writing to be bound,  with  respect to the  transferred  Securities,  by the
provisions hereof that apply to the "Purchasers".

     5.7 No  Third-Party  Beneficiaries.  This  Agreement  is  intended  for the
benefit of the parties  hereto and their  respective  successors  and  permitted
assigns and is not for the benefit of, nor may any provision  hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.9.

     5.8 Governing  Law. All questions  concerning the  construction,  validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance  with the internal laws of the State of
New York,  without  regard to the  principles of conflicts of law thereof.  Each
party hereby irrevocably submits to the exclusive  jurisdiction of the state and
federal  courts  sitting in the City of New York,  borough of Manhattan  for the
adjudication  of any dispute  hereunder  or in  connection  herewith or with any
transaction  contemplated  hereby or discussed herein (including with respect to
the enforcement of any of the  Transaction  Documents),  and hereby  irrevocably
waives,  and agrees not to assert in any suit,  action or proceeding,  any claim
that it is not personally  subject to the  jurisdiction of any such court,  that
such suit,  action or  proceeding  is  improper or  inconvenient  venue for such
proceeding. Each party hereby irrevocably waives personal service of process and
consents  to process  being  served in any such suit,  action or  proceeding  by
mailing a copy thereof via  registered or certified  mail or overnight  delivery
(with  evidence of  delivery) to such party at the address in effect for notices
to it under this  Agreement and agrees that such service shall  constitute  good
and sufficient  service of process and notice thereof.  Nothing contained herein
shall be  deemed to limit in any way any right to serve  process  in any  manner
permitted  by law. The parties  hereby  waive all rights to a trial by jury.  If
either party shall commence an action or proceeding to

                                      -24-

<PAGE>

enforce any provisions of the Transaction  Documents,  then the prevailing party
in such  action or  proceeding  shall be  reimbursed  by the other party for its
attorneys'  fees and other costs and expenses  incurred with the  investigation,
preparation and prosecution of such action or proceeding.

     5.9 Survival.  The  representations and warranties herein shall survive the
Closing  and  delivery  of the Shares and Warrant  Shares  until the  applicable
statute of limitations lapses.

     5.10 Execution. This Agreement may be executed in two or more counterparts,
all of which when taken  together shall be considered one and the same agreement
and shall become effective when  counterparts have been signed by each party and
delivered to the other  party,  it being  understood  that both parties need not
sign the same  counterpart.  In the event that any  signature  is  delivered  by
facsimile  transmission,  such  signature  shall  create  a  valid  and  binding
obligation  of the  party  executing  (or on  whose  behalf  such  signature  is
executed)  with the same force and effect as if such  facsimile  signature  page
were an original thereof.

     5.11 Severability. If any provision of this Agreement is held to be invalid
or  unenforceable  in  any  respect,  the  validity  and  enforceability  of the
remaining  terms  and  provisions  of  this  Agreement  shall  not in any way be
affected or impaired  thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor,  and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

     5.12  Rescission  and  Withdrawal  Right.  Notwithstanding  anything to the
contrary  contained in (and  without  limiting  any similar  provisions  of) the
Transaction  Documents,  whenever  any  Purchaser  exercises a right,  election,
demand or option  under a  Transaction  Document and the Company does not timely
perform its related  obligations within the periods therein provided,  then such
Purchaser may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any relevant notice,  demand or election in whole
or in part without prejudice to its future actions and rights.

     5.13 Replacement of Securities. If any certificate or instrument evidencing
any Securities is mutilated,  lost, stolen or destroyed, the Company shall issue
or cause to be issued in exchange  and  substitution  for and upon  cancellation
thereof,  or  in  lieu  of  and  substitution  therefor,  a new  certificate  or
instrument,  but only upon receipt of evidence  reasonably  satisfactory  to the
Company  of such  loss,  theft  or  destruction  and  customary  and  reasonable
indemnity,  if requested.  The  applicants  for a new  certificate or instrument
under  such  circumstances  shall  also  pay any  reasonable  third-party  costs
associated with the issuance of such replacement Securities.

     5.14  Remedies.  In  addition  to being  entitled  to  exercise  all rights
provided herein or granted by law,  including  recovery of damages,  each of the
Purchasers  and the Company will be entitled to specific  performance  under the
Transaction  Documents.  The  parties  agree that  monetary  damages  may not be
adequate  compensation  for  any  loss  incurred  by  reason  of any  breach  of
obligations  described in the  foregoing  sentence and hereby agrees to waive in
any action for specific  performance  of any such  obligation the defense that a
remedy at law would be adequate.

                                      -25-
<PAGE>

     5.15 Payment Set Aside.  To the extent that the Company  makes a payment or
payments to any Purchaser  pursuant to any  Transaction  Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such  enforcement  or exercise or any part thereof are  subsequently
invalidated,  declared to be fraudulent or  preferential,  set aside,  recovered
from, disgorged by or are required to be refunded,  repaid or otherwise restored
to the  Company,  a  trustee,  receiver  or  any  other  person  under  any  law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable  cause of action),  then to the extent of any such  restoration
the  obligation  or part thereof  originally  intended to be satisfied  shall be
revived and  continued  in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

     5.16  Independent  Nature  of  Purchasers'   Obligations  and  Rights.  The
obligations of each Purchaser under any Transaction Document are several and not
joint with the  obligations of any other  Purchaser,  and no Purchaser  shall be
responsible  in any way for the  performance  of the  obligations  of any  other
Purchaser under any Transaction  Document.  Nothing  contained  herein or in any
Transaction  Document,  and no action taken by any Purchaser  pursuant  thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a
joint  venture  or any other kind of entity,  or create a  presumption  that the
Purchasers  are in any way acting in concert or as a group with  respect to such
obligations or the transactions  contemplated by the Transaction Document.  Each
Purchaser  shall be  entitled to  independently  protect and enforce its rights,
including without limitation, the rights arising out of this Agreement or out of
the other  Transaction  Documents,  and it shall not be necessary  for any other
Purchaser  to be  joined  as an  additional  party  in any  proceeding  for such
purpose.  Each Purchaser has been  represented by its own separate legal counsel
in their review and  negotiation of the  Transaction  Documents.  For reasons of
administrative  convenience only,  Purchasers and their respective  counsel have
chosen to communicate  with the Company through FW. FW does not represent all of
the  Purchasers  but  only  Langley,  who has  acted as  placement  agent to the
transaction.  The Company has  elected to provide all  Purchasers  with the same
terms and  Transaction  Documents  for the  convenience  of the  Company and not
because it was required or requested to do so by the Purchasers.

     5.17  Liquidated  Damages.  The  Company's  obligations  to pay any partial
liquidated  damages or other amounts owing under the Transaction  Documents is a
continuing  obligation of the Company and shall not  terminate  until all unpaid
partial liquidated damages and other amounts have been paid  notwithstanding the
fact that the instrument or security  pursuant to which such partial  liquidated
damages  or  other  amounts  are due  and  payable  shall  have  been  canceled.
Notwithstanding  anything to the Transaction  Documents to the contrary,  if the
Company is found liable for damages for a breach of the  Transaction  Documents,
any  liquidated  damages paid in  connection  with such breach shall reduce such
damages by the amount paid; provided, however, no Purchaser shall be required to
return any payments for liquidated damages as a result of this provision.

                            (Signature Page Follows)

                                      -26-
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective  authorized  signatories as of
the date first indicated above.

MACE SECURITY INTERNATIONAL, INC.                           Address for Notice:
                                                            -------------------

By: /s/ Robert Kramer
    -----------------                                       1000 Crawford Place
    Name:  Robert Kramer                                    Mt.Laurel, NJ  08054
    Title: Executive Vice President

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

                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                     SIGNATURE PAGES FOR PURCHASERS FOLLOW]

                                      -27-
<PAGE>

        [PURCHASER SIGNATURE PAGES TO MACE SECURITIES PURCHASE AGREEMENT]

     IN WITNESS WHEREOF,  the undersigned  have caused this Securities  Purchase
Agreement to be duly executed by their respective  authorized  signatories as of
the date first indicated above.

Signature of Authorized Signatory of Investing Entity:    /s/ Jeffrey Thorp
                                                      --------------------------

Name of Investing Entity:                  Langley Partners, L.P.
                         -------------------------------------------------------

Name of Authorized Signatory:               Langley Capital, LLC
                             ---------------------------------------------------

Title of Authorized Signatory:              Managing Member
                              --------------------------------------------------
By:                                           Jeffrey Thorp
                              --------------------------------------------------
Email Address of Authorized Entity:
                                   ---------------------------------------------
Address for Notice of Investing Entity:

535 Madison Avenue
7th Floor
New York, NY  10022

With copies to:   Mr. Robert Charron
                  Feldman Weinstein LLP
                  The Graybar Building
                  420 Lexington Avenue
                  New York, New York  10170-0002
                  Direct: (212) 931-8704
                  Facsimile: (212) 401-4741

Subscription Amount:     $5,005,050
                    -----------------------
Shares:                     915,000
                    -----------------------
Warrant Shares:             183,000
                    -----------------------
EIN Number:  [PROVIDE THIS UNDER SEPARATE COVER]

                           [SIGNATURE PAGES CONTINUE]

                                       -28-EXHIBIT 10.2

                          REGISTRATION RIGHTS AGREEMENT

     This Registration  Rights Agreement (this  "Agreement") is made and entered
into as of May 26,  2004,  by and among Mace  Security  International,  Inc.,  a
Delaware corporation (the "Company"),  and the purchasers signatory hereto (each
such purchaser, a "Purchaser" and collectively, the "Purchasers").

     This Agreement is made pursuant to the Securities Purchase Agreement, dated
as of the date  hereof  among the  Company  and the  Purchasers  (the  "Purchase
Agreement").

     The Company and the Purchasers hereby agree as follows:

     1.  Definitions.  Capitalized  terms used and not otherwise  defined herein
that are defined in the Purchase  Agreement  shall have the meanings  given such
terms in the Purchase Agreement. As used in this Agreement,  the following terms
shall have the following meanings:

          "Advice" shall have the meaning set forth in Section 6(d).

          "Effectiveness Date" means, with respect to the Registration Statement
     required to be filed  hereunder,  the earlier of (a) the 95th  calendar day
     following  the date of the  Purchase  Agreement  (125 days in the case of a
     "full review" by the Commission"),  and (b) the fifth Trading Day following
     the date on which  the  Company  is  notified  by the  Commission  that the
     Registration  Statement  will not be  reviewed  or is no longer  subject to
     further review and comments.

          "Effectiveness  Period"  shall have the  meaning  set forth in Section
     2(a).

          "Event" shall have the meaning set forth in Section 2(b).

          "Event Date" shall have the meaning set forth in Section 2(b).

          "Filing  Date"  means,  with  respect  to the  Registration  Statement
     required to be filed hereunder, the 35th calendar day following the date of
     the Purchase Agreement.

          "Holder" or "Holders" means the holder or holders, as the case may be,
     from time to time of Registrable Securities.

          "Indemnified Party" shall have the meaning set forth in Section 5(c).

          "Indemnifying Party" shall have the meaning set forth in Section 5(c).

          "Losses" shall have the meaning set forth in Section 5(a).

                                        1
<PAGE>

          "Proceeding" means an action, claim, suit, investigation or proceeding
     (including,  without  limitation,  an investigation or partial  proceeding,
     such as a deposition), whether commenced or threatened.

          "Prospectus"  means  the  prospectus   included  in  the  Registration
     Statement  (including,  without limitation,  a prospectus that includes any
     information  previously  omitted  from a  prospectus  filed  as  part of an
     effective  registration  statement in reliance  upon Rule 430A  promulgated
     under the  Securities  Act), as amended or  supplemented  by any prospectus
     supplement, with respect to the terms of the offering of any portion of the
     Registrable Securities covered by the Registration Statement, and all other
     amendments and  supplements  to the  Prospectus,  including  post-effective
     amendments,  and all  material  incorporated  by  reference or deemed to be
     incorporated by reference in such Prospectus.

          "Registrable  Securities"  means  all of the  Shares  and the  Warrant
     Shares,  together  with any shares of Common Stock issued or issuable  upon
     any  stock  split,  dividend  or other  distribution,  recapitalization  or
     similar event with respect to the foregoing.

          "Registration Statement" means the registration statements required to
     be filed hereunder, including (in each case) the Prospectus, amendments and
     supplements to the registration statement or Prospectus, including pre- and
     post-effective   amendments,   all  exhibits  thereto,   and  all  material
     incorporated  by reference or deemed to be incorporated by reference in the
     registration statement.

          "Rule 415" means Rule 415  promulgated by the  Commission  pursuant to
     the  Securities  Act, as such Rule may be amended from time to time, or any
     similar  rule or  regulation  hereafter  adopted by the  Commission  having
     substantially the same purpose and effect as such Rule.

          "Rule 424" means Rule 424  promulgated by the  Commission  pursuant to
     the  Securities  Act, as such Rule may be amended from time to time, or any
     similar  rule or  regulation  hereafter  adopted by the  Commission  having
     substantially the same purpose and effect as such Rule.

     2. Registration.

          (a) On or prior to the Filing Date, the Company shall prepare and file
     with the Commission the Registration  Statement  covering the resale of all
     of the  Registrable  Securities  for an offering to be made on a continuous
     basis pursuant to Rule 415. The Registration  Statement  required hereunder
     shall  be on Form S-3  (except  if the  Company  is not  then  eligible  to
     register for resale the  Registrable  Securities on Form S-3, in which case
     the  Registration  shall  be on  another  appropriate  form  in  accordance
     herewith).  The  Registration  Statement  required  hereunder shall contain
     (except if otherwise  directed by the Holders)  substantially  the "Plan of
     Distribution"  attached  hereto  as Annex A.  Subject  to the terms of this
     Agreement, the Company shall use its best efforts to cause the Registration
     Statement to be declared  effective under

                                       2

<PAGE>

     the Securities Act as promptly as possible after the filing thereof, but in
     any event not later  than the  Effectiveness  Date,  and shall use its best
     efforts to keep the Registration Statement continuously effective under the
     Securities Act until the date when all  Registrable  Securities  covered by
     the  Registration  Statement  have been sold or may be sold without  volume
     restrictions  pursuant to Rule 144(k) as  determined  by the counsel to the
     Company pursuant to a written opinion letter to such effect,  addressed and
     acceptable to the Company's  transfer  agent and the affected  Holders (the
     "Effectiveness Period").

          (b) If: (i) a  Registration  Statement is not filed on or prior to the
     Filing  Date  (if  the  Company  files  a  Registration  Statement  without
     affording the Holder the  opportunity  to review and comment on the same as
     required by Section 3(a), the Company shall not be deemed to have satisfied
     this clause (i)), or (ii) the Company  fails to file with the  Commission a
     request for acceleration in accordance with Rule 461 promulgated  under the
     Securities  Act,  within five  Trading Days of the date that the Company is
     notified  (orally or in writing,  whichever  is earlier) by the  Commission
     that a Registration  Statement will not be "reviewed," or is not subject to
     further review, or (iii) prior to the date when such Registration Statement
     is first declared effective by the Commission,  the Company fails to file a
     pre-effective  amendment and otherwise  respond in writing to comments made
     by the  Commission  in respect  of such  Registration  Statement  within 15
     calendar  days  after  the  receipt  of  comments  by or  notice  from  the
     Commission  that such  amendment  is required  in order for a  Registration
     Statement to be declared effective,  or (iv) a Registration Statement filed
     or  required  to be  filed  hereunder  is  not  declared  effective  by the
     Commission on or before the Effectiveness Date, or (v) after a Registration
     Statement is first declared effective by the Commission,  it ceases for any
     reason to remain  continuously  effective as to all Registrable  Securities
     for which it is required to be effective,  or the Holders are not permitted
     to utilize the Prospectus  therein to resell such  Registrable  Securities,
     for in any such  case 15  calendar  consecutive  days  but no more  than an
     aggregate of 15 calendar days during any 12 month period (which need not be
     consecutive  Trading  Days)(any such failure or breach being referred to as
     an "Event,"  and for  purposes of clause (i) or (iv) the date on which such
     Event  occurs,  or for  purposes of clause (ii) the date on which such five
     Trading Day period is  exceeded,  or for  purposes of clause (iii) the date
     which such 15 calendar days is exceeded,  or for purposes of clause (v) the
     date on which such 15 calendar day period is exceeded  being referred to as
     "Event Date"), then on each such Event Date and on each monthly anniversary
     of each such Event Date (if the applicable  Event shall not have been cured
     by such date) until the applicable Event is cured, the Company shall pay to
     each Holder an amount in cash, as liquidated  damages and not as a penalty,
     equal to 1.5% of the aggregate  purchase price paid by such Holder pursuant
     to the Purchase Agreement for any Registrable  Securities then held by such
     Holder;  provided,  however, with respect to liquidated damages that accrue
     pursuant to clause (iv), the rate at which  liquidated  damages will accrue
     during the first 30 days following the Effectiveness Date shall be 1.0%. If
     the Company fails to pay any liquidated damages pursuant to this Section in
     full  within  seven  days  after the date  payable,  the  Company  will pay
     interest  thereon at a rate of 18% per annum (or such lesser maximum amount
     that is permitted  to be paid by  applicable  law) to the Holder,  accruing
     daily from the date such  liquidated  damages  are due until such  amounts,
     plus all such interest  thereon,  are paid in full. The liquidated  damages
     pursuant to the terms hereof shall apply on a daily  pro-rata basis for any
     portion of a month prior to the cure of an Event.  Notwithstanding anything
     herein to the contrary,  liquidated damages shall be the sole and exclusive
     remedy of a Holder with respect to any Events that occur

                                       3

<PAGE>

     hereunder prior to the 8 month  anniversary of the date hereof but shall be
     in addition to any other rights such Holder may have under  applicable  law
     after the 8 month anniversary of the date hereof.

     3. Registration Procedures

        In connection with the Company's registration obligations hereunder, the
Company shall:

          (a) Not  less  than  five  Trading  Days  prior to the  filing  of the
     Registration  Statement  or any  related  Prospectus  or any  amendment  or
     supplement thereto, the Company shall, (i) furnish to the Holders copies of
     all such documents proposed to be filed (including  documents  incorporated
     or deemed incorporated by reference to the extent requested by such Person)
     which  documents  will be subject to the review of such  Holders,  and (ii)
     cause its officers and directors,  counsel and independent certified public
     accountants  to respond to such  inquiries  as shall be  necessary,  in the
     reasonable   opinion  of   respective   counsel  to  conduct  a  reasonable
     investigation  within the meaning of the Securities  Act. The Company shall
     not  file  the  Registration  Statement  or  any  such  Prospectus  or  any
     amendments or supplements thereto to which the Holders of a majority of the
     Registrable Securities shall reasonably object in good faith, provided that
     the  Company  is  notified  of such  objection  in  writing no later than 5
     Trading  Days  after  the  Holders  have been so  furnished  copies of such
     documents.  Each  Holder  agrees to  furnish  to the  Company  a  completed
     Questionnaire in the form attached to this Agreement as Annex B (a "Selling
     Holder  Questionnaire")  not less than two Trading Days prior to the Filing
     Date or by the end of the fourth  Trading Day  following  the date on which
     such Holder receives draft materials in accordance with this Section.

          (b)  (i)  Prepare  and  file  with  the  Commission  such  amendments,
     including post-effective  amendments, to the Registration Statement and the
     Prospectus  used in  connection  therewith  as may be necessary to keep the
     Registration   Statement   continuously  effective  as  to  the  applicable
     Registrable  Securities for the  Effectiveness  Period and prepare and file
     with the Commission  such  additional  Registration  Statements in order to
     register  for  resale  under  the  Securities  Act  all of the  Registrable
     Securities; (ii) cause the related Prospectus to be amended or supplemented
     by any required Prospectus supplement, and as so supplemented or amended to
     be filed  pursuant to Rule 424;  (iii)  respond as  promptly as  reasonably
     possible to any comments  received from the Commission  with respect to the
     Registration  Statement  or any  amendment  thereto  and,  as  promptly  as
     reasonably  possible,  upon request,  provide the Holders true and complete
     copies of all  correspondence  from and to the  Commission  relating to the
     Registration  Statement;  and (iv) comply in all material respects with the
     provisions of the  Securities  Act and the Exchange Act with respect to the
     disposition  of all  Registrable  Securities  covered  by the  Registration
     Statement  during the  applicable  period in  accordance  with the intended
     methods of disposition by the Holders thereof set forth in the Registration
     Statement as so amended or in such Prospectus as so supplemented.

          (c)  Notify  the  Holders  of  Registrable  Securities  to be  sold as
     promptly as  reasonably  possible  and (if  requested  by any such  Person)
     confirm  such notice in writing

                                       4

<PAGE>

     promptly  following  the day (i)(A)  when a  Prospectus  or any  Prospectus
     supplement or  post-effective  amendment to the  Registration  Statement is
     proposed to be filed; (B) when the Commission  notifies the Company whether
     there will be a "review" of the  Registration  Statement  and  whenever the
     Commission  comments in writing on the Registration  Statement (the Company
     shall upon request provide true and complete copies thereof and all written
     responses  thereto  to each of the  Holders);  and (C) with  respect to the
     Registration Statement or any post-effective  amendment,  when the same has
     become  effective;  (ii) of any  request  by the  Commission  or any  other
     Federal or state governmental  authority during the period of effectiveness
     of  the  Registration  Statement  for  amendments  or  supplements  to  the
     Registration Statement or Prospectus or for additional  information;  (iii)
     of  the  issuance  by  the   Commission  or  any  other  federal  or  state
     governmental  authority of any stop order  suspending the  effectiveness of
     the  Registration   Statement  covering  any  or  all  of  the  Registrable
     Securities or the initiation of any Proceedings  for that purpose;  (iv) of
     the  receipt  by  the  Company  of any  notification  with  respect  to the
     suspension of the  qualification or exemption from  qualification of any of
     the Registrable Securities for sale in any jurisdiction,  or the initiation
     or  threatening  of  any  Proceeding  for  such  purpose;  and  (v)  of the
     occurrence  of any  event or  passage  of time  that  makes  the  financial
     statements included in the Registration  Statement ineligible for inclusion
     therein or any statement made in the  Registration  Statement or Prospectus
     or any  document  incorporated  or deemed  to be  incorporated  therein  by
     reference  untrue in any material respect or that requires any revisions to
     the Registration  Statement,  Prospectus or other documents so that, in the
     case of the Registration  Statement or the Prospectus,  as the case may be,
     it will not  contain  any untrue  statement  of a material  fact or omit to
     state any material fact required to be stated  therein or necessary to make
     the statements therein, in light of the circumstances under which they were
     made, not misleading.

          (d) Use commercially  reasonable efforts to avoid the issuance of, or,
     if  issued,   obtain  the  withdrawal  of  (i)  any  order  suspending  the
     effectiveness of the Registration  Statement, or (ii) any suspension of the
     qualification  (or exemption from  qualification) of any of the Registrable
     Securities  for  sale  in any  jurisdiction,  at the  earliest  practicable
     moment.

          (e) Furnish to each Holder,  without  charge,  at least one  conformed
     copy of the Registration  Statement and each amendment  thereto,  including
     financial statements and schedules, all documents incorporated or deemed to
     be  incorporated  therein  by  reference  to the extent  requested  by such
     Person,  and all exhibits to the extent requested by such Person (including
     those previously furnished or incorporated by reference) promptly after the
     filing of such documents with the Commission.

          (f) Promptly deliver to each Holder, without charge, as many copies of
     the Prospectus or Prospectuses (including each form of prospectus) and each
     amendment or supplement  thereto as such Persons may reasonably  request in
     connection with resales by the Holder of Registrable Securities. Subject to
     the terms of this Agreement, the Company hereby consents to the use of such
     Prospectus and each amendment or supplement  thereto by each of the selling
     Holders  in  connection  with  the  offering  and  sale

                                       5

<PAGE>

     of the Registrable  Securities covered by such Prospectus and any amendment
     or supplement  thereto,  except after the giving on any notice  pursuant to
     Section 3(c).

          (g) Prior to any resale of Registrable Securities by a Holder, use its
     commercially  reasonable  efforts to register or qualify or cooperate  with
     the selling  Holders in connection with the  registration or  qualification
     (or exemption from the Registration or  qualification)  of such Registrable
     Securities  for the resale by the Holder under the  securities  or Blue Sky
     laws  of  such  jurisdictions  within  the  United  States  as  any  Holder
     reasonably  requests in writing,  to keep the Registration or qualification
     (or exemption  therefrom)  effective during the Effectiveness Period and to
     do any and all other  acts or things  reasonably  necessary  to enable  the
     disposition in such jurisdictions of the Registrable  Securities covered by
     the  Registration  Statement;  provided,  that  the  Company  shall  not be
     required to qualify  generally to do business in any jurisdiction  where it
     is not then so  qualified,  subject the Company to any  material tax in any
     such jurisdiction where it is not then so subject or file a general consent
     to service of process in any such jurisdiction.

          (h) If  requested  by the  Holders,  cooperate  with  the  Holders  to
     facilitate the timely preparation and delivery of certificates representing
     Registrable  Securities  to be delivered  to a  transferee  pursuant to the
     Registration  Statement,  which  certificates  shall be free, to the extent
     permitted by the Purchase  Agreement,  of all restrictive  legends,  and to
     enable  such  Registrable  Securities  to  be  in  such  denominations  and
     registered in such names as any such Holders may request.

          (i) Upon the occurrence of any event  contemplated by Section 3(c)(v),
     as promptly as  reasonably  possible,  prepare a supplement  or  amendment,
     including a post-effective  amendment,  to the Registration  Statement or a
     supplement to the related Prospectus or any document incorporated or deemed
     to be  incorporated  therein  by  reference,  and file any  other  required
     document  so  that,  as  thereafter  delivered,  neither  the  Registration
     Statement  nor such  Prospectus  will  contain  an  untrue  statement  of a
     material  fact or omit to  state a  material  fact  required  to be  stated
     therein  or  necessary  to make  the  statements  therein,  in light of the
     circumstances  under which they were made, not  misleading.  If the Company
     notifies the Holders in accordance with clauses (ii) through (v) of Section
     3(c) above to suspend the use of any Prospectus until the requisite changes
     to such  Prospectus  have been made,  then the Holders shall suspend use of
     such  Prospectus.  The Company will use its best efforts to ensure that the
     use of the  Prospectus  may be resumed as promptly as is  practicable.  The
     Company  shall be entitled to exercise its right under this Section 3(i) to
     suspend  the  availability  of a  Registration  Statement  and  Prospectus,
     subject to the payment of liquidated  damages pursuant to Section 2(b), for
     a period not to exceed 60 days (which need not be consecutive  days) in any
     12 month period.

          (j)  Comply  with  all  applicable   rules  and   regulations  of  the
     Commission.

          (k) The  Company  may require  each  selling  Holder to furnish to the
     Company a certified  statement  as to the number of shares of Common  Stock
     beneficially  owned by such Holder and, if required by the Commission,  the
     person  thereof  that has voting and

                                       6

<PAGE>

     dispositive control over the Shares. During any periods that the Company is
     unable to meet its obligations  hereunder with respect to the  registration
     of the  Registrable  Securities  solely because any Holder fails to furnish
     such information  within three Trading Days of the Company's  request,  any
     liquidated  damages  that are  accruing at such time as to such Holder only
     shall be tolled and any Event that may  otherwise  occur solely  because of
     such  delay  shall  be  suspended  as  to  such  Holder  only,  until  such
     information is delivered to the Company.

     4. Registration Expenses. All fees and expenses incident to the performance
of or  compliance  with  this  Agreement  by the  Company  shall be borne by the
Company  whether or not any  Registrable  Securities  are sold  pursuant  to the
Registration  Statement.  The fees and  expenses  referred  to in the  foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including,  without  limitation,  fees and expenses (A) with respect to filings
required  to be made with the Trading  Market on which the Common  Stock is then
listed for trading,  and (B) in compliance with applicable  state  securities or
Blue Sky laws), (ii) printing expenses (including, without limitation,  expenses
of printing certificates for Registrable Securities and of printing prospectuses
if the  printing of  prospectuses  is  reasonably  requested by the holders of a
majority of the Registrable Securities included in the Registration  Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance,  if the Company
so desires  such  insurance,  and (vi) fees and  expenses  of all other  Persons
retained by the Company in connection with the  consummation of the transactions
contemplated  by this Agreement.  In addition,  the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including,  without limitation,
all salaries and expenses of its  officers  and  employees  performing  legal or
accounting  duties),  the expense of any annual  audit and the fees and expenses
incurred in  connection  with the listing of the  Registrable  Securities on any
securities  exchange  as  required  hereunder.  In no event shall the Company be
responsible  for any  broker or  similar  commissions  or,  except to the extent
provided for in the Transaction Documents,  any legal fees or other costs of the
Holders.

     5. Indemnification

          (a) Indemnification by the Company. The Company shall, notwithstanding
     any termination of this Agreement, indemnify and hold harmless each Holder,
     the officers,  directors, agents and employees of each of them, each Person
     who  controls  any such  Holder  (within  the  meaning of Section 15 of the
     Securities  Act or  Section  20 of the  Exchange  Act)  and  the  officers,
     directors,  agents and employees of each such  controlling  Person,  to the
     fullest  extent  permitted by applicable  law, from and against any and all
     losses, claims, damages, liabilities, costs (including, without limitation,
     reasonable  attorneys'  fees) and  expenses  (collectively,  "Losses"),  as
     incurred,  arising  out of or  relating  to any  untrue or  alleged  untrue
     statement of a material fact contained in the Registration  Statement,  any
     Prospectus  or any form of  prospectus  or in any  amendment or  supplement
     thereto or in any preliminary prospectus,  or arising out of or relating to
     any omission or alleged  omission of a material  fact required to be stated
     therein or  necessary  to make the  statements  therein (in the case of any
     Prospectus or form of prospectus  or  supplement  thereto,  in light of the
     circumstances  under  which they were made) not  misleading,  except to the
     extent,  but  only to the  extent,  that  (i)  such  untrue  statements  or

                                       7

<PAGE>

     omissions are based solely upon information regarding such Holder furnished
     in writing to the Company by such Holder  expressly for use therein,  or to
     the extent that such  information  relates to such Holder or such  Holder's
     proposed method of distribution of Registrable  Securities and was reviewed
     and expressly  approved in writing by such Holder  expressly for use in the
     Registration  Statement,  such  Prospectus or such form of Prospectus or in
     any amendment or supplement  thereto (it being  understood  that the Holder
     has  approved  Annex A hereto for this  purpose)  or (ii) in the case of an
     occurrence of an event of the type specified in Section  3(c)(ii)-(v),  the
     use by such Holder of an outdated or defective Prospectus after the Company
     has  notified  such Holder in writing  that the  Prospectus  is outdated or
     defective   and  prior  to  the  receipt  by  such  Holder  of  the  Advice
     contemplated in Section 6(d). The Company shall notify the Holders promptly
     of the  institution,  threat or  assertion of any  Proceeding  of which the
     Company is aware in connection with the  transactions  contemplated by this
     Agreement.

          (b) Indemnification by Holders.  Each Holder shall,  severally and not
     jointly, indemnify and hold harmless the Company, its directors,  officers,
     agents and  employees,  each Person who  controls  the Company  (within the
     meaning of Section 15 of the  Securities Act and Section 20 of the Exchange
     Act), and the directors,  officers, agents or employees of such controlling
     Persons,  to the fullest  extent  permitted  by  applicable  law,  from and
     against  all Losses,  as  incurred,  to the extent  arising out of or based
     solely  upon:  (x) such  Holder's  failure  to comply  with the  prospectus
     delivery  requirements  of the  Securities Act or (y) any untrue or alleged
     untrue   statement  of  a  material  fact  contained  in  any  Registration
     Statement, any Prospectus,  or any form of prospectus,  or in any amendment
     or supplement thereto or in any preliminary  prospectus,  or arising out of
     or relating to any omission or alleged omission of a material fact required
     to be stated  therein  or  necessary  to make the  statements  therein  not
     misleading  (i) to the  extent,  but only to the  extent,  that such untrue
     statement  or omission is  contained  in any  information  so  furnished in
     writing by such Holder to the Company  specifically  for  inclusion  in the
     Registration  Statement or such  Prospectus  or (ii) to the extent that (1)
     such untrue  statements  or  omissions  are based  solely upon  information
     regarding  such Holder  furnished  in writing to the Company by such Holder
     expressly for use therein,  or to the extent that such information  relates
     to  such  Holder  or such  Holder's  proposed  method  of  distribution  of
     Registrable  Securities and was reviewed and expressly  approved in writing
     by such Holder  expressly for use in the  Registration  Statement (it being
     understood  that the Holder has approved  Annex A hereto for this purpose),
     such  Prospectus  or  such  form  of  Prospectus  or in  any  amendment  or
     supplement  thereto or (2) in the case of an  occurrence of an event of the
     type  specified  in  Section  3(c)(ii)-(v),  the use by such  Holder  of an
     outdated or defective Prospectus after the Company has notified such Holder
     in writing that the  Prospectus  is outdated or defective  and prior to the
     receipt by such Holder of the Advice  contemplated  in Section  6(d). In no
     event shall the  liability  of any selling  Holder  hereunder be greater in
     amount than the dollar  amount of the net proceeds  received by such Holder
     upon  the  sale  of  the  Registrable   Securities   giving  rise  to  such
     indemnification obligation.

          (c) Conduct of Indemnification Proceedings. If any Proceeding shall be
     brought or asserted against any Person entitled to indemnity  hereunder (an
     "Indemnified  Party"),  such  Indemnified  Party shall promptly  notify the
     Person from whom indemnity

                                       8

<PAGE>

     is sought (the "Indemnifying Party") in writing, and the Indemnifying Party
     shall  have  the  right  to  assume  the  defense  thereof,  including  the
     employment of counsel reasonably  satisfactory to the Indemnified Party and
     the payment of all fees and expenses  incurred in  connection  with defense
     thereof;  provided,  that the failure of any Indemnified Party to give such
     notice  shall not  relieve the  Indemnifying  Party of its  obligations  or
     liabilities  pursuant  to this  Agreement,  except (and only) to the extent
     that it shall be finally  determined  by a court of competent  jurisdiction
     (which  determination is not subject to appeal or further review) that such
     failure shall have prejudiced the Indemnifying Party.

          An Indemnified  Party shall have the right to employ separate  counsel
     in any such Proceeding and to participate in the defense  thereof,  but the
     fees  and  expenses  of  such  counsel  shall  be at the  expense  of  such
     Indemnified Party or Parties unless:  (1) the Indemnifying Party has agreed
     in writing to pay such fees and expenses;  (2) the Indemnifying Party shall
     have failed promptly to assume the defense of such Proceeding and to employ
     counsel  reasonably  satisfactory  to such  Indemnified  Party  in any such
     Proceeding;  or (3) the named parties to any such Proceeding (including any
     impleaded parties) include both such Indemnified Party and the Indemnifying
     Party, and such Indemnified Party shall reasonably  believe that a material
     conflict  of  interest  is  likely  to exist if the  same  counsel  were to
     represent such Indemnified Party and the Indemnifying Party (in which case,
     if such Indemnified  Party notifies the Indemnifying  Party in writing that
     it elects to employ  separate  counsel at the  expense of the  Indemnifying
     Party,  the  Indemnifying  Party  shall not have the  right to  assume  the
     defense  thereof  and the  reasonable  fees and  expenses  of one  separate
     counsel  shall  be  at  the  expense  of  the  Indemnifying   Party).   The
     Indemnifying  Party  shall not be  liable  for any  settlement  of any such
     Proceeding effected without its written consent, which consent shall not be
     unreasonably  withheld.  No  Indemnifying  Party  shall,  without the prior
     written  consent of the  Indemnified  Party,  effect any  settlement of any
     pending  Proceeding in respect of which any  Indemnified  Party is a party,
     unless  such  settlement   includes  an   unconditional   release  of  such
     Indemnified  Party from all liability on claims that are the subject matter
     of such Proceeding.

          Subject  to the  terms  of this  Agreement,  all  reasonable  fees and
     expenses of the Indemnified  Party (including  reasonable fees and expenses
     to the extent  incurred in connection  with  investigating  or preparing to
     defend such  Proceeding  in a manner not  inconsistent  with this  Section)
     shall be paid to the  Indemnified  Party,  as incurred,  within ten Trading
     Days of written notice thereof to the Indemnifying  Party;  provided,  that
     the Indemnified Party shall promptly  reimburse the Indemnifying  Party for
     that portion of such fees and expenses applicable to such actions for which
     such  Indemnified  Party  is not  entitled  to  indemnification  hereunder,
     determined based upon the relative faults of the parties.

          (d) Contribution. If a claim for indemnification under Section 5(a) or
     5(b) is unavailable to an Indemnified  Party (by reason of public policy or
     otherwise),  then each  Indemnifying  Party, in lieu of  indemnifying  such
     Indemnified  Party,  shall contribute to the amount paid or payable by such
     Indemnified  Party as a result of such  Losses,  in such  proportion  as is
     appropriate  to reflect the relative  fault of the  Indemnifying  Party and
     Indemnified  Party in connection with the actions,  statements or omissions
     that  resulted  in

                                       9

<PAGE>

     such Losses as well as any other  relevant  equitable  considerations.  The
     relative fault of such  Indemnifying  Party and Indemnified  Party shall be
     determined  by  reference  to,  among other  things,  whether any action in
     question,  including any untrue or alleged  untrue  statement of a material
     fact or omission or alleged  omission of a material fact, has been taken or
     made by, or relates to information  supplied by, such Indemnifying Party or
     Indemnified Party, and the parties' relative intent,  knowledge,  access to
     information and opportunity to correct or prevent such action, statement or
     omission.  The amount  paid or payable by a party as a result of any Losses
     shall be deemed to include,  subject to the  limitations  set forth in this
     Agreement,  any reasonable  attorneys' or other reasonable fees or expenses
     incurred by such party in connection with any Proceeding to the extent such
     party  would  have  been  indemnified  for  such  fees or  expenses  if the
     indemnification provided for in this Section was available to such party in
     accordance with its terms.

          The parties  hereto  agree that it would not be just and  equitable if
     contribution  pursuant to this  Section  5(d) were  determined  by pro rata
     allocation  or by any other  method of  allocation  that does not take into
     account  the  equitable  considerations  referred  to  in  the  immediately
     preceding  paragraph.  Notwithstanding the provisions of this Section 5(d),
     no Holder shall be required to contribute,  in the aggregate, any amount in
     excess of the amount by which the proceeds actually received by such Holder
     from the  sale of the  Registrable  Securities  subject  to the  Proceeding
     exceeds  the amount of any  damages  that such  Holder has  otherwise  been
     required to pay by reason of such  untrue or alleged  untrue  statement  or
     omission or alleged omission, except in the case of fraud by such Holder.

          The indemnity and  contribution  agreements  contained in this Section
     are in addition to any liability that the Indemnifying  Parties may have to
     the Indemnified Parties.

     6. Miscellaneous

          (a) Remedies.  In the event of a breach by the Company or by a Holder,
     of any of their  obligations  under  this  Agreement,  each  Holder  or the
     Company,  as the case may be, in addition to being entitled to exercise all
     rights  granted  by law and under this  Agreement,  including  recovery  of
     damages,  will be entitled to specific performance of its rights under this
     Agreement.  The Company and each Holder agree that  monetary  damages would
     not provide  adequate  compensation  for any losses incurred by reason of a
     breach by it of any of the  provisions of this Agreement and hereby further
     agrees that, in the event of any action for specific performance in respect
     of such  breach,  it shall waive the defense  that a remedy at law would be
     adequate.

          (b) No  Piggyback  on  Registrations.  Except as set forth on Schedule
     6(b) attached  hereto,  neither the Company nor any of its security holders
     (other  than the  Holders in such  capacity  pursuant  hereto)  may include
     securities  of the  Company  in a  Registration  Statement  other  than the
     Registrable  Securities.  No Person  has any right to cause the  Company to
     effect the  registration  under the Securities Act of any securities of the
     Company. The Company shall not file any other registration  statement until
     after the Effective Date.

                                       10
<PAGE>

          (c) Compliance.  Each Holder  covenants and agrees that it will comply
     with  the  prospectus  delivery  requirements  of  the  Securities  Act  as
     applicable  to  it in  connection  with  sales  of  Registrable  Securities
     pursuant to the Registration Statement.

          (d) Discontinued Disposition. Each Holder agrees by its acquisition of
     such Registrable Securities that, upon receipt of a notice from the Company
     of the occurrence of any event of the kind described in Section 3(c),  such
     Holder  will  forthwith   discontinue   disposition  of  such   Registrable
     Securities under the Registration  Statement until such Holder's receipt of
     the  copies of the  supplemented  Prospectus  and/or  amended  Registration
     Statement or until it is advised in writing  (the  "Advice") by the Company
     that the use of the applicable  Prospectus  may be resumed,  and, in either
     case, has received  copies of any additional or  supplemental  filings that
     are  incorporated  or  deemed  to be  incorporated  by  reference  in  such
     Prospectus or Registration Statement. The Company will use its best efforts
     to ensure that the use of the  Prospectus  may be resumed as promptly as it
     practicable.  The Company agrees and  acknowledges  that any periods during
     which  the  Holder  is  required  to  discontinue  the  disposition  of the
     Registrable  Securities  hereunder  shall be subject to the  provisions  of
     Section 2(b).

          (e) Piggy-Back Registrations.  If at any time during the Effectiveness
     Period there is not an effective Registration Statement covering all of the
     Registrable  Securities and the Company shall determine to prepare and file
     with the  Commission a registration  statement  relating to an offering for
     its own account or the account of others under the Securities Act of any of
     its  equity  securities,  other  than on  Form  S-4 or Form  S-8  (each  as
     promulgated under the Securities Act) or their then equivalents relating to
     equity securities to be issued solely in connection with any acquisition of
     any entity or business or equity securities issuable in connection with the
     stock option or other employee  benefit plans,  then the Company shall send
     to each  Holder a  written  notice  of such  determination  and,  if within
     fifteen  days  after  the date of such  notice,  any such  Holder  shall so
     request  in  writing,  the  Company  shall  include  in  such  registration
     statement  all or any  part  of such  Registrable  Securities  such  Holder
     requests  to be  registered,  subject  to  customary  underwriter  cutbacks
     applicable to all holders of registration rights.

          (f)  Amendments  and  Waivers.   The  provisions  of  this  Agreement,
     including the provisions of this sentence, may not be amended,  modified or
     supplemented,  and waivers or consents to  departures  from the  provisions
     hereof may not be given,  unless the same shall be in writing and signed by
     the Company and each Holder of the then outstanding Registrable Securities.

          (g) Notices. Any and all notices or other communications or deliveries
     required or permitted to be provided  hereunder shall be made in accordance
     with the provisions of the Purchase Agreement.

          (h) Successors and Assigns.  This Agreement shall inure to the benefit
     of and be binding upon the successors and permitted  assigns of each of the
     parties  and shall  inure to the  benefit of each  Holder.  Each Holder may
     assign their  respective  rights hereunder in the manner and to the Persons
     as permitted under the Purchase Agreement.

                                       11
<PAGE>

          (i) Execution and Counterparts.  This Agreement may be executed in any
     number of  counterparts,  each of which when so executed shall be deemed to
     be an original and, all of which taken  together  shall  constitute one and
     the same  Agreement.  In the  event  that any  signature  is  delivered  by
     facsimile  transmission,  such  signature  shall  create  a  valid  binding
     obligation  of the party  executing  (or on whose behalf such  signature is
     executed)  the same  with the same  force and  effect as if such  facsimile
     signature were the original thereof.

          (j)  Governing  Law.  All  questions   concerning  the   construction,
     validity,  enforcement  and  interpretation  of  this  Agreement  shall  be
     determined with the provisions of the Purchase Agreement.

          (k) Cumulative  Remedies.  The remedies provided herein are cumulative
     and not exclusive of any remedies provided by law.

          (l) Severability.  If any term, provision,  covenant or restriction of
     this Agreement is held by a court of competent  jurisdiction to be invalid,
     illegal,  void or  unenforceable,  the remainder of the terms,  provisions,
     covenants and  restrictions set forth herein shall remain in full force and
     effect and shall in no way be affected,  impaired or  invalidated,  and the
     parties hereto shall use their commercially  reasonable efforts to find and
     employ an alternative  means to achieve the same or substantially  the same
     result  as  that  contemplated  by  such  term,   provision,   covenant  or
     restriction.  It is hereby  stipulated  and declared to be the intention of
     the parties that they would have executed the remaining terms,  provisions,
     covenants  and  restrictions  without  including  any of such  that  may be
     hereafter declared invalid, illegal, void or unenforceable.

          (m) Headings.  The headings in this  Agreement are for  convenience of
     reference only and shall not limit or otherwise affect the meaning hereof.

          (n)  Independent  Nature of Purchasers'  Obligations  and Rights.  The
     obligations  of each  Holder  hereunder  are several and not joint with the
     obligations  of  any  other  Holder  hereunder,  and  no  Holder  shall  be
     responsible in any way for the  performance of the obligations of any other
     Holder  hereunder.  Nothing  contained  herein or in any other agreement or
     document  delivered  at any  closing,  and no  action  taken by any  Holder
     pursuant hereto or thereto,  shall be deemed to constitute the Holders as a
     partnership,  an association,  a joint venture or any other kind of entity,
     or create a  presumption  that the Holders are in any way acting in concert
     with respect to such obligations or the  transactions  contemplated by this
     Agreement. Each Holder shall be entitled to protect and enforce its rights,
     including without limitation the rights arising out of this Agreement,  and
     it  shall  not be  necessary  for  any  other  Holder  to be  joined  as an
     additional party in any proceeding for such purpose.

                            *************************

                                       12
<PAGE>

     IN WITNESS  WHEREOF,  the parties have  executed this  Registration  Rights
Agreement as of the date first written above.

                                             MACE SECURITY INTERNATIONAL, INC.

                                             By: /s/ Robert Kramer
                                                 ------------------------------
                                                 Name:  Robert Kramer
                                                 Title: Executive Vice President

                       [SIGNATURE PAGE OF HOLDERS FOLLOWS]

                                       13
<PAGE>

                    [PURCHASER'S SIGNATURE PAGE TO MACE RRA]

Name of Investing Entity:           Jeffrey Thorp
                         -------------------------------------------------------
Signature of Authorized Signatory of Investing entity:  /s/ Jeffrey Thorp
                                                      --------------------------
Name of Authorized Signatory:       Langley Capital, LLC
                             ---------------------------------------------------
Title of Authorized Signatory:      General Partner
                              --------------------------------------------------
Title of Authorized Signatory:      Managing Member
                              --------------------------------------------------
By:                               /s/ Jeffrey Thorp
                              --------------------------------------------------

With Copies to:   Mr. Robert Charron
                  Feldman Weinstein LLP
                  The Graybar Building
                  420 Lexington Avenue
                  New York, New York  10170-0002
                  Direct:  (212) 931-8704
                  Facsimile: (212) 401-4741

                           [SIGNATURE PAGES CONTINUE]

                                       14
<PAGE>

                                     ANNEX A

                              Plan of Distribution

     The Selling  Stockholders (the "Selling  Stockholders") of the common stock
("Common Stock") of Mace Security International, Inc. (the "Company") and any of
their  pledgees,  assignees and  successors-in-interest  may, from time to time,
sell any or all of their shares of Common Stock on any stock exchange, market or
trading  facility  on which the shares  are  traded or in private  transactions.
These sales may be at fixed or negotiated prices.  The Selling  Stockholders may
use any one or more of the following methods when selling shares:

     o    ordinary brokerage transactions and transactions in which the
          broker-dealer solicits purchasers;

     o    block  trades  in which the  broker-dealer  will  attempt  to sell the
          shares as agent but may  position and resell a portion of the block as
          principal to facilitate the transaction;

     o    purchases by a broker-dealer as principal and resale by the
          broker-dealer for its account;

     o    an exchange distribution in accordance with the rules of the
          applicable exchange;

     o    privately negotiated transactions;

     o    settlement of short sales entered into after the date of this
          prospectus;

     o    broker-dealers  may  agree  with the  Selling  Stockholders  to sell a
          specified number of such shares at a stipulated price per share;

     o    a combination of any such methods of sale;

     o    through the writing or settlement of options or other hedging
          transactions, whether through an options exchange or otherwise; or

     o    any other method permitted pursuant to applicable law.

     The  Selling  Stockholders  may also sell  shares  under Rule 144 under the
Securities Act of 1933, as amended (the "Securities Act"), if available,  rather
than under this prospectus.

     Broker-dealers  engaged by the Selling  Stockholders  may arrange for other
brokers-dealers to participate in sales.  Broker-dealers may receive commissions
or discounts from the Selling  Stockholders  (or, if any  broker-dealer  acts as
agent  for the  purchaser  of  shares,  from the  purchaser)  in  amounts  to be
negotiated.  Each  Selling  Stockholder  does not expect these  commissions  and
discounts  relating  to its sales of shares to exceed what is  customary  in the
types of transactions involved.

                                       15
<PAGE>

     In connection with the sale of our common stock or interests  therein,  the
Selling  Stockholders may enter into hedging transactions with broker-dealers or
other  financial  institutions,  which may in turn  engage in short sales of the
common stock in the course of hedging the  positions  they  assume.  The Selling
Stockholders  may also sell shares of our common  stock short and deliver  these
securities  to close out their  short  positions,  or loan or pledge  the common
stock to  broker-dealers  that in turn may sell these  securities.  The  Selling
Stockholders   may  also  enter   into   option  or  other   transactions   with
broker-dealers  or other  financial  institutions or the creation of one or more
derivative  securities which require the delivery to such broker-dealer or other
financial  institution of shares offered by this  prospectus,  which shares such
broker-dealer  or  other  financial  institution  may  resell  pursuant  to this
prospectus (as supplemented or amended to reflect such transaction).

     The Selling Stockholders and any broker-dealers or agents that are involved
in selling the shares may be deemed to be  "underwriters"  within the meaning of
the Securities Act in connection with such sales. In such event, any commissions
received  by such  broker-dealers  or agents and any profit on the resale of the
shares  purchased  by them  may be  deemed  to be  underwriting  commissions  or
discounts  under the Securities  Act. Each Selling  Stockholder has informed the
Company  that it does not have  any  agreement  or  understanding,  directly  or
indirectly, with any person to distribute the Common Stock.

     The Company is required to pay certain  fees and  expenses  incurred by the
Company  incident to the  registration of the shares.  The Company has agreed to
indemnify the Selling Stockholders against certain losses,  claims,  damages and
liabilities, including liabilities under the Securities Act.

     Because Selling Stockholders may be deemed to be "underwriters"  within the
meaning of the Securities  Act, they will be subject to the prospectus  delivery
requirements of the Securities Act. In addition,  any securities covered by this
prospectus  which qualify for sale pursuant to Rule 144 under the Securities Act
may be sold under Rule 144 rather  than  under  this  prospectus.  Each  Selling
Stockholder  has  advised  us that they have not  entered  into any  agreements,
understandings or arrangements  with any underwriter or broker-dealer  regarding
the sale of the resale shares.  There is no underwriter or  coordinating  broker
acting in connection  with the proposed sale of the resale shares by the Selling
Stockholders.

     We agreed to keep this  prospectus  effective  until the earlier of (i) the
date on which  the  shares  may be resold by the  Selling  Stockholders  without
registration  and  without  regard to any volume  limitations  by reason of Rule
144(k) under the  Securities Act or any other rule of similar effect or (ii) all
of the shares have been sold  pursuant to the  prospectus  or Rule 144 under the
Securities  Act or any other rule of similar  effect.  The resale shares will be
sold only through  registered or licensed  brokers or dealers if required  under
applicable  state securities  laws. In addition,  in certain states,  the resale
shares may not be sold unless they have been registered or qualified for sale in
the applicable  state or an exemption  from the  registration  or  qualification
requirement is available and is complied with.

     Under applicable  rules and regulations  under the Exchange Act, any person
engaged in the distribution of the resale shares may not  simultaneously  engage
in market making activities with respect to our common stock for a period of two
business days prior to the commencement of the  distribution.  In addition,  the
Selling  Stockholders  will be subject to applicable  provisions of the Exchange
Act and the rules and regulations thereunder,  including Regulation M, which may
limit the timing of  purchases  and sales of shares of our  common  stock by the
Selling Stockholders or any other person. We will make copies of this prospectus
available  to the Selling  Stockholders  and have  informed  them of the need to
deliver a copy of this  prospectus to each  purchaser at or prior to the time of
the sale.

                                       16
<PAGE>

                                     Annex B

                        MACE SECURITY INTERNATIONAL, INC.

                 Selling Securityholder Notice and Questionnaire

     The undersigned beneficial owner of common stock, $0.01 par value per share
(the "Common Stock"), of Mace Security International, Inc. (the "Company"), (the
"Registrable  Securities")  understands that the Company has filed or intends to
file  with  the  Securities  and  Exchange   Commission  (the   "Commission")  a
registration  statement  on Form  S-3  (the  "Registration  Statement")  for the
registration and resale under Rule 415 of the Securities Act of 1933, as amended
(the "Securities  Act"), of the Registrable  Securities,  in accordance with the
terms of the  Registration  Rights  Agreement,  dated as of May ___,  2004  (the
"Registration  Rights  Agreement"),  among the Company and the Purchasers  named
therein.  A copy of the  Registration  Rights  Agreement is  available  from the
Company upon request at the address set forth below.  All capitalized  terms not
otherwise  defined  herein  shall  have the  meanings  ascribed  thereto  in the
Registration Rights Agreement.

     Certain   legal   consequences   arise  from  being   named  as  a  selling
securityholder  in  the  Registration  Statement  and  the  related  prospectus.
Accordingly, holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel  regarding the consequences of being
named  or not  being  named  as a  selling  securityholder  in the  Registration
Statement and the related prospectus.

                                     NOTICE

     The  undersigned   beneficial  owner  (the  "Selling   Securityholder")  of
Registrable Securities hereby elects to include the Registrable Securities owned
by it and listed below in Item 3 (unless otherwise  specified under such Item 3)
in the Registration Statement.

                                       17
<PAGE>

The  undersigned  hereby  provides the following  information to the Company and
represents and warrants that such information is accurate:

                                  QUESTIONNAIRE

1. Name.

     (a)  Full Legal Name of Selling Securityholder

          ----------------------------------------------------------------------

     (b)  Full  Legal Name of  Registered  Holder (if not the same as (a) above)
          through which Registrable Securities Listed in Item 3 below are held:

          ----------------------------------------------------------------------

     (c)  Full Legal  Name of  Natural  Control  Person  (which  means a natural
          person who directly you  indirectly  alone or with others has power to
          vote or dispose of the securities covered by the questionnaire):

          ----------------------------------------------------------------------

2. Address for Notices to Selling Securityholder:

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Telephone:
          ----------------------------------------------------------------------
Fax:
    ----------------------------------------------------------------------------
Contact Person:
               -----------------------------------------------------------------

3. Beneficial Ownership of Registrable Securities:

     (a)  Type and  Principal  Amount  of  Registrable  Securities  beneficially
          owned:

          ----------------------------------------------------------------------

          ----------------------------------------------------------------------

          ----------------------------------------------------------------------

                                       18
<PAGE>

4. Broker-Dealer Status:

     (a) Are you a broker-dealer?

                                  Yes | |      No | |

     Note: If yes, the Commission's staff has indicated that you should be
           identified as an underwriter in the Registration Statement.

     (b) Are you an affiliate of a broker-dealer?

                                  Yes | |      No | |

     (c)  If you are an  affiliate of a  broker-dealer,  do you certify that you
          bought the Registrable  Securities in the ordinary course of business,
          and at the time of the purchase of the  Registrable  Securities  to be
          resold,  you  had  no  agreements  or   understandings,   directly  or
          indirectly, with any person to distribute the Registrable Securities?

                                  Yes | |      No | |

   Note:  If no, the Commission's staff has indicated that you should be
          identified as an underwriter in the Registration Statement.

5. Beneficial  Ownership of Other Securities of the Company Owned by the Selling
   Securityholder.

   Except  as set  forth  below  in this  Item  5,  the  undersigned  is not the
   beneficial  or registered  owner of any  securities of the Company other than
   the Registrable Securities listed above in Item 3.

     (a)  Type and Amount of Other Securities  beneficially owned by the Selling
          Securityholder:

          ----------------------------------------------------------------------
          ----------------------------------------------------------------------

                                       19
<PAGE>

6. Relationships with the Company:

     Except  as  set  forth  below,  neither  the  undersigned  nor  any  of its
     affiliates,  officers,  directors or principal equity holders (owners of 5%
     of more of the equity  securities of the undersigned) has held any position
     or office or has had any other material  relationship  with the Company (or
     its predecessors or affiliates) during the past three years.

     State any exceptions here:

     ---------------------------------------------------------------------------
     ---------------------------------------------------------------------------

     The undersigned  agrees to promptly notify the Company of any  inaccuracies
or changes in the information  provided herein that may occur  subsequent to the
date hereof at any time while the Registration Statement remains effective.

     By  signing  below,  the  undersigned  consents  to the  disclosure  of the
information  contained  herein  in its  answers  to  Items 1  through  6 and the
inclusion of such  information  in the  Registration  Statement  and the related
prospectus.  The undersigned  understands  that such  information will be relied
upon by the Company in  connection  with the  preparation  or  amendment  of the
Registration Statement and the related prospectus.

     IN WITNESS  WHEREOF the  undersigned,  by authority duly given,  has caused
this Notice and  Questionnaire  to be executed and delivered either in person or
by its duly authorized agent.

Dated:                                     Beneficial Owner:
      --------------------                                  --------------------
                                           By:
                                              ----------------------------------
                                              Name:
                                              Title:

PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED  NOTICE AND  QUESTIONNAIRE,  AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

                                       20

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