Document:

<PAGE>

                                                                   Exhibit 10.4

                               TREX COMPANY, INC.
         Amended and Restated 1999 Incentive Plan for Outside Directors
               Non-Incentive Stock Option Agreement for Directors

<TABLE>
<S>                    <C>                                      <C>
Grant Date: _________  Stock Option Exercise Price: $_________  Last Date to Exercise: _______ /1/
</TABLE>

Number of Shares of Common Stock
Covered by Grant of Options:  ________________________

We are pleased to inform you that the Board of Directors or the Compensation
Committee of the Board of Directors has granted you an option to purchase Trex
Company, Inc. common stock. Your grant has been made under the Company's Amended
and Restated 1999 Incentive Plan for Outside Directors (the "Plan"), which,
together with the terms contained in this Agreement, sets forth the terms and
conditions of your grant and is incorporated herein by reference. A copy of the
Plan is attached. Please review it carefully. If any provisions of the Agreement
should appear to be inconsistent with the Plan, the Plan will control.

                                              This stock option grant has been
                                              executed and delivered as of
                                              __________ ___, _____ on behalf of
                                              Trex Company, Inc.

                                              _________________________________
                                              Name:
                                              Title:

ACCEPTED AND AGREED TO:

__________________________
Name of  Optionee:

  This is not a stock certificate or a negotiable instrument. Transferable only
pursuant to Section 11.2 of the Company's Amended and Restated 1999 Stock Option
                               and Incentive Plan.

---------------------
/1/ Certain events can cause an earlier termination of the Option. See "Effects
of Changes in Capitalization" in the Plan.

<PAGE>

1. Vesting:

Subject to the terms of the Plan, the Option becomes vested as to 100% of the
shares of Stock purchasable pursuant to the Option on the first anniversary of
the date of grant of the Option, if Optionee has been providing services to the
Company or a Subsidiary continuously from the Option's date of grant to the
first anniversary of the date of grant. Notwithstanding the foregoing, if you
terminate service as a Director with the Company and such termination is not for
Cause, the Option shall become 100% vested upon your termination.

2. Exercise:

You may exercise this Option, in whole or in part, to purchase a whole number of
vested shares at any time of not less than 100 shares, unless the number of
shares purchased is the total number available for purchase under the Option, by
following the exercise procedures as set forth in the Plan. All exercises must
take place before the Last Date to Exercise (shown on the covers sheet), or such
earlier termination of the Option. The number of shares you may purchase as of
any date cannot exceed the total number of shares vested by that date, less any
shares you have previously acquired by exercising this Option.

3. Option Termination:

Your Option will terminate immediately upon termination of your service for
"Cause." If your service terminates for a reason other than for Cause, the
Option will expire five (5) years after your termination, or, if earlier,
immediately after the Last Date to Exercise. "Cause" means, as determined by the
Board, (i) gross negligence or willful misconduct in connection with the
performance of duties; (ii) conviction of a felony or of a crime involving moral
turpitude; or (iii) material breach of any term of any employment, consulting or
other services, confidentiality, intellectual property or non-competition
agreements.

4. Taxes and Withholding:

This Option shall not constitute an incentive stock option within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended. In the event that
the Company determines that any federal, state, local or foreign tax or
withholding payment is required relating to the exercise or sale of shares
arising from this grant, the Company shall have the right to require such
payments from you, or withhold such amounts from other payments due to you from
the Company, a Subsidiary or an Affiliate.

5. Transferability:

The Option may be transferred in a manner consistent with Section 11.2 of the
Company's Amended and Restated 1999 Stock Option and Incentive Plan.

                                    * * * * *<PAGE>

                                                                    Exhibit 10.5

                               TREX COMPANY, INC.

                        DESCRIPTION OF ANNUAL BONUS PLAN

        Trex Company, Inc. (the "Company") maintains an annual discretionary
incentive bonus plan for the benefit of its executive officers, other officers,
managers and certain other key employees of the Company. Potential bonuses are
specified as a percentage of the employees' annual base salary or salary range
midpoint, depending on grade level. Such percentage levels are approved by the
Compensation Committee of the Board of Directors annually. Bonuses are paid in
the form of cash awards and stock options (valued based upon the Black-Scholes
valuation model). At the beginning of each fiscal year, the Compensation
Committee sets the financial objectives that the Company must achieve for
individuals to qualify for bonus payments.<PAGE>

                                                                  Exhibit 10.145

                                 PROMISSORY NOTE

$480,000.00

                                                                October 31, 2002

FLORIDA DOCUMENTARY STAMP TAX IN THE AMOUNT OF $1,680.00 HAS BEEN AFFIXED TO THE
RECORDED INSTRUMENT PURSUANT TO SECTION 201.08, FLORIDA STATUTE.

Mace Security International, Inc.
1000 Crawford Place
Suite 400
Mt. Laurel, New Jersey 08054

Mace Security Products, Inc.
1000 Crawford Place
Suite 400
Mt. Laurel, New Jersey 08054
Individually and collectively "Borrower")

Wachovia Bank, National Association
214 North Hogan Street - FL0070
Jacksonville, Florida 32202
Hereinafter referred to as "Bank")

Borrower promises to pay to the order of Bank, in lawful money of the United
States of America, at its office indicated above or wherever else Bank may
specify, the sum of Four Hundred Eighty Thousand and No/100 Dollars
($480,000.00) or such sum as may be advanced and outstanding from time to time,
with interest on the unpaid principal balance at the rate and on the terms
provided in this Promissory Note (including all renewals, extensions or
modifications hereof, this "Note").

LOAN AGREEMENT. This Note is subject to the provisions of that certain Loan
Agreement between Bank and Borrower of even date herewith, as modified from time
to time.

USE OF PROCEEDS. Borrower shall use the proceeds of the loan(s) evidenced by
this Note for the commercial purposes of Borrower, as follows: Purchase real
estate and finance capital improvements thereon.

SECURITY. Borrower has granted Bank a security interest in the collateral
described in the Loan Documents, including, but not limited to, real property
collateral described in that certain Mortgage of even date herewith.

INTEREST RATE. Interest shall accrue on the unpaid principal balance of this
Note during each Interest Period from the date hereof at a rate per annum equal
to 1-month LIBOR plus 2.50% ("Interest Rate"). The Interest Rate for each
Interest Period shall accrue each day during such Interest Period, commencing on
and including the first day to but excluding the last day. "Interest Period"
means each period commencing on the last day of the immediately preceding
Interest Period and ending on the same day of the month that interest is due the
number of months thereafter corresponding to the number of months specified
above; provided (i) the first Interest Period shall commence on the date hereof
and end on the first day thereafter that interest is due, (ii) any Interest
Period that ends in a month for which there is no day which numerically
corresponds to the last day of the immediately preceding Interest Period shall
end on the last day of the month, and (iii) any Interest Period that would
otherwise extend past the maturity date of this Note shall end on the maturity
date of this Note. "LIBOR" means, with respect to

<PAGE>

each Interest Period, the rate for U.S. dollar deposits with a maturity equal to
the number of months specified above, as reported on Telerate page 3750 as of
11:00 a.m., London time, on the second London business day before such Interest
Period begins (or if not so reported, then as determined by the Bank from
another recognized source or interbank quotation).

INDEMNIFICATION. Borrower shall indemnify Bank against Bank's loss or expense as
a consequence of (a) Borrower's failure to make any payment when due under this
Note, (b) any payment, prepayment or conversion of any loan on a date other than
the last day of the Interest Period, or (c) any failure to make a borrowing or
conversion after giving notice thereof ("Indemnified Loss or Expense"). The
amount of such Indemnified Loss or Expense shall be determined by Bank based
upon the assumption that Bank funded 100% of that portion of the loan in the
London interbank market.

DEFAULT RATE. In addition to all other rights contained in this Note, if a
Default (as defined herein) occurs and as long as a Default continues, all
outstanding Obligations shall bear interest at the Interest Rate plus 3%
("Default Rate"). The Default Rate shall also apply from acceleration until the
Obligations or any judgment thereon is paid in full.

INTEREST AND FEE(S) COMPUTATION (ACTUAL/360). Interest and fees, if any, shall
be computed on the basis of a 360-day year for the actual number of days in the
applicable period ("Actual/360 Computation"). The Actual/360 Computation
determines the annual effective yield by taking the stated (nominal) rate for a
year's period and then dividing said rate by 360 to determine the daily periodic
rate to be applied for each day in the applicable period. Application of the
Actual/360 Computation produces an annualized effective interest rate exceeding
the nominal rate.

REPAYMENT TERMS. This Note shall be due and payable in consecutive monthly
payments of principal of $2,666.66, plus accrued interest, commencing on
December 1, 2002, and continuing on the same day of each month thereafter until
fully paid. In any event, all principal and accrued interest shall be due and
payable on November 1, 2007.

APPLICATION OF PAYMENTS. Monies received by Bank from any source for application
toward payment of the Obligations shall be applied to accrued interest and then
to principal. If a Default occurs, monies may be applied to the Obligations in
any manner or order deemed appropriate by Bank.

If any payment received by Bank under this Note or other Loan Documents is
rescinded, avoided or for any reason returned by Bank because of any adverse
claim or threatened action, the returned payment shall remain payable as an
obligation of all persons liable under this Note or other Loan Documents as
though such payment had not been made.

DEFINITIONS. Loan Documents. The term "Loan Documents", as used in this Note and
the other Loan Documents, refers to all documents executed in connection with or
related to the loan evidenced by this Note and any prior notes which evidence
all or any portion of the loan evidenced by this Note, and any letters of credit
issued pursuant to any loan agreement to which this Note is subject, any
applications for such letters of credit and any other documents executed in
connection therewith or related thereto, and may include, without limitation, a
commitment letter that survives closing, a loan agreement, this Note, guaranty
agreements, security agreements, security instruments, financing statements,
mortgage instruments, any renewals or modifications, whenever any of the
foregoing are executed, but does not include swap agreements (as defined in 11
U.S.C. (S) 101). Obligations. The term "Obligations", as used in this Note and
the other Loan Documents, refers to any and all indebtedness and other
obligations under this Note, all other obligations under any other Loan
Document(s), and all obligations under any swap agreements (as defined in 11
U.S.C. (S) 101) between Borrower and Bank whenever executed. Certain Other
Terms. All terms that are used but not otherwise defined in any of the Loan
Documents shall have the definitions provided in the Uniform Commercial Code.

LATE CHARGE. If any payments are not timely made, Borrower shall also pay to
Bank a late charge equal to 5% of each payment past due for 10 or more days.

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Acceptance by Bank of any late payment without an accompanying late charge shall
not be deemed a waiver of Bank's right to collect such late charge or to collect
a late charge for any subsequent late payment received.

If this Note is secured by owner-occupied residential real property located
outside the state in which the office of Bank first shown above is located, the
late charge laws of the state where the real property is located shall apply to
this Note and the late charge shall be the highest amount allowable under such
laws. If no amount is stated thereunder, the late charge shall be 5% of each
payment past due for 10 or more days.

ATTORNEYS' FEES AND OTHER COLLECTION COSTS. Borrower shall pay all of Bank's
reasonable expenses incurred to enforce or collect any of the Obligations
including, without limitation, reasonable arbitration, paralegals', attorneys'
and experts' fees and expenses, whether incurred without the commencement of a
suit, in any trial, arbitration, or administrative proceeding, or in any
appellate or bankruptcy proceeding.

USURY. If at any time the effective interest rate under this Note would, but for
this paragraph, exceed the maximum lawful rate, the effective interest rate
under this Note shall be the maximum lawful rate, and any amount received by
Bank in excess of such rate shall be applied to principal and then to fees and
expenses, or, if no such amounts are owing, returned to Borrower.

DEFAULT. If any of the following occurs, a default ("Default") under this Note
shall exist: Nonpayment; Nonperformance. The failure of timely payment or
performance of the Obligations or Default under this Note or any other Loan
Documents. False Warranty. A warranty or representation made or deemed made in
the Loan Documents or furnished Bank in connection with the loan evidenced by
this Note proves materially false, or if of a continuing nature, becomes
materially false. Cross Default. At Bank's option, any default in payment or
performance of any obligation under any other loans, contracts or agreements of
Borrower, any Subsidiary or Affiliate of Borrower, any general partner of or the
holder(s) of the majority ownership interests of Borrower with Bank or its
affiliates ("Affiliate" shall have the meaning as defined in 11 U.S.C. (S) 101,
except that the term "Borrower" shall be substituted for the term "Debtor"
therein; "Subsidiary" shall mean any business in which Borrower holds, directly
or indirectly, a controlling interest). Cessation; Bankruptcy. The death of,
appointment of a guardian for, dissolution of, termination of existence of, loss
of good standing status by, appointment of a receiver for, assignment for the
benefit of creditors of, or commencement of any bankruptcy or insolvency
proceeding by or against Borrower, its Subsidiaries or Affiliates, if any, or
any general partner of or the holder(s) of the majority ownership interests of
Borrower, or any party to the Loan Documents. Material Business Alteration.
Without prior written consent of Bank, a material alteration in the kind or type
of Borrower's business, except that Bank agrees to consent to alterations in the
kind and type of Borrower's business provided that no event of default has
occurred under the Loan Documents. Material Capital Structure or Business
Alteration. Without prior written consent of Bank, (i) a material alteration in
the kind or type of Borrower's business or that of Borrower's Subsidiaries or
Affiliates, except that Bank agrees to consent to alterations in the kind and
type of Borrower's business provided that no event of default has occurred under
the Loan Documents; (ii) the sale of substantially all of the business or assets
of Mace Security International, Inc. if such a sale is outside the ordinary
course of business of Mace Security International, Inc., or more than 50% of the
outstanding stock or voting power of or in any such entity in a single
transaction or a series of transactions; (iii) the acquisition of substantially
all of the business or assets or more than 50% of the outstanding stock or
voting power of any other entity; or (iv) should any Borrower or any of
Borrower's Subsidiaries or Affiliates or any guarantor enter into any merger or
consolidation.

REMEDIES UPON DEFAULT. If a Default occurs under this Note or any Loan
Documents, Bank may at any time thereafter, take the following actions: Bank
Lien. Foreclose its security interest or lien against Borrower's accounts
without notice. Acceleration Upon Default. Accelerate the maturity of this Note
and, at Bank's option, any or all other Obligations, other than Obligations
under any swap agreements (as defined in 11 U.S.C. (S) 101) between Borrower and
Bank, which shall be governed by the default and termination provisions of said
swap agreements; whereupon this Note and the accelerated Obligations shall be
immediately due and payable; provided, however, if the Default is based upon a
bankruptcy or

                                     Page 3

<PAGE>

insolvency proceeding commenced by or against Borrower or any guarantor or
endorser of this Note, all Obligations (other than Obligations under any swap
agreement as referenced above) shall automatically and immediately be due and
payable. Cumulative. Exercise any rights and remedies as provided under the Note
and other Loan Documents, or as provided by law or equity.

FINANCIAL AND OTHER INFORMATION. Borrower shall deliver to Bank such information
as Bank may reasonably request from time to time, including without limitation,
financial statements and information pertaining to Borrower's financial
condition. Such information shall be true, complete, and accurate.

WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of this Note and
other Loan Documents shall be valid unless in writing and signed by an officer
of Bank. No waiver by Bank of any Default shall operate as a waiver of any other
Default or the same Default on a future occasion. Neither the failure nor any
delay on the part of Bank in exercising any right, power, or remedy under this
Note and other Loan Documents shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.

Each Borrower or any person liable under this Note waives presentment, protest,
notice of dishonor, demand for payment, notice of intention to accelerate
maturity, notice of acceleration of maturity, notice of sale and all other
notices of any kind. Further, each agrees that Bank may extend, modify or renew
this Note or make a novation of the loan evidenced by this Note for any period,
and grant any releases, compromises or indulgences with respect to any
collateral securing this Note, or with respect to any other Borrower or any
other person liable under this Note or other Loan Documents, all without notice
to or consent of each Borrower or each person who may be liable under this Note
or any other Loan Document and without affecting the liability of Borrower or
any person who may be liable under this Note or any other Loan Document.

MISCELLANEOUS PROVISIONS. Assignment. This Note and the other Loan Documents
shall inure to the benefit of and be binding upon the parties and their
respective heirs, legal representatives, successors and assigns. Bank's
interests in and rights under this Note and the other Loan Documents are freely
assignable, in whole or in part, by Bank. In addition, nothing in this Note or
any of the other Loan Documents shall prohibit Bank from pledging or assigning
this Note or any of the other Loan Documents or any interest therein to any
Federal Reserve Bank. Borrower shall not assign its rights and interest
hereunder without the prior written consent of Bank, and any attempt by Borrower
to assign without Bank's prior written consent is null and void. Any assignment
shall not release Borrower from the Obligations. Applicable Law; Conflict
Between Documents. This Note and, unless otherwise provided in any other Loan
Document, the other Loan Documents shall be governed by and construed under the
laws of the state named in Bank's address shown above without regard to that
state's conflict of laws principles. If the terms of this Note should conflict
with the terms of any loan agreement or any commitment letter that survives
closing, the terms of this Note shall control. Borrower's Accounts. Except as
prohibited by law, Borrower grants Bank a security interest in all of Borrower's
accounts with Bank and any of its affiliates. Jurisdiction. Borrower irrevocably
agrees to non-exclusive personal jurisdiction in the state named in Bank's
address shown above. Severability. If any provision of this Note or of the other
Loan Documents shall be prohibited or invalid under applicable law, such
provision shall be ineffective but only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Note or other such document. Notices. Any notices
to Borrower shall be sufficiently given, if in writing and mailed or delivered
to the Borrower's address shown above or such other address as provided
hereunder, and to Bank, if in writing and mailed or delivered to Bank's office
address shown above or such other address as Bank may specify in writing from
time to time. In the event that Borrower changes Borrower's address at any time
prior to the date the Obligations are paid in full, Borrower agrees to promptly
give written notice of said change of address by registered or certified mail,
return receipt requested, all charges prepaid. Plural; Captions. All references
in the Loan Documents to Borrower, guarantor, person, document or other nouns of
reference mean both the singular and plural form, as the case may be, and the
term "person" shall mean any individual, person or entity. The captions
contained in the Loan Documents are inserted for convenience only and shall not
affect the meaning or interpretation of the Loan Documents. Advances. Bank may,
in its sole discretion, make other advances which shall be deemed to be advances
under this Note, even

                                     Page 4

<PAGE>

though the stated principal amount of this Note may be exceeded as a result
thereof. Posting of Payments. All payments received during normal banking hours
after 2:00 p.m. local time at the office of Bank first shown above shall be
deemed received at the opening of the next banking day. Joint and Several
Obligations. Each person who signs this Note as a Borrower (as defined herein)
is jointly and severally obligated. Fees and Taxes. Borrower shall promptly pay
all documentary, intangible recordation and/or similar taxes on this transaction
whether assessed at closing or arising from time to time.

ARBITRATION. Upon demand of any party hereto, whether made before or after
institution of any judicial proceeding, any claim or controversy arising out of
or relating to the Loan Documents between parties hereto (a "Dispute") shall be
resolved by binding arbitration conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA") and the Federal Arbitration Act. Disputes
may include, without limitation, tort claims, counterclaims, a dispute as to
whether a matter is subject to arbitration, claims brought as class actions, or
claims arising from documents executed in the future. A judgment upon the award
may be entered in any court having jurisdiction. Notwithstanding the foregoing,
this arbitration provision does not apply to disputes under or related to swap
agreements. Special Rules. All arbitration hearings shall be conducted in the
city named in the address of Bank first stated above. A hearing shall begin
within 90 days of demand for arbitration and all hearings shall conclude within
120 days of demand for arbitration. These time limitations may not be extended
unless a party shows cause for extension and then for no more than a total of 60
days. The expedited procedures set forth in Rule 51 et seq. of the Arbitration
Rules shall be applicable to claims of less than $1,000,000.00. Arbitrators
shall be licensed attorneys selected from the Commercial Financial Dispute
Arbitration Panel of the AAA. The parties do not waive applicable Federal or
state substantive law except as provided herein. Preservation and Limitation of
Remedies. Notwithstanding the preceding binding arbitration provisions, the
parties agree to preserve, without diminution, certain remedies that any party
may exercise before or after an arbitration proceeding is brought. The parties
shall have the right to proceed in any court of proper jurisdiction or by
self-help to exercise or prosecute the following remedies, as applicable: (i)
all rights to foreclose against any real or personal property or other security
by exercising a power of sale or under applicable law by judicial foreclosure
including a proceeding to confirm the sale; (ii) all rights of self-help
including peaceful occupation of real property and collection of rents, set-off,
and peaceful possession of personal property; (iii) obtaining provisional or
ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and filing an involuntary bankruptcy
proceeding; and (iv) when applicable, a judgment by confession of judgment. Any
claim or controversy with regard to any party's entitlement to such remedies is
a Dispute. Waiver of Exemplary Damages. The parties agree that they shall not
have a remedy of punitive or exemplary damages against other parties in any
Dispute and hereby waive any right or claim to punitive or exemplary damages
they have now or which may arise in the future in connection with any Dispute
whether the Dispute is resolved by arbitration or judicially. Waiver of Jury
Trial. THE PARTIES ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY HAVE
IRREVOCABLY WAIVED ANY RIGHT THEY MAY HAVE TO JURY TRIAL WITH REGARD TO A
DISPUTE.

                                     Page 5

<PAGE>

IN WITNESS WHEREOF, Borrower, on the day and year first above written, has
caused this Note to be executed under seal.

                                  Mace Security International, Inc.
                                  Taxpayer Identification Number: 03-0311630

                                  By: /s/ Louis D. Paolino, Jr. (SEAL)
                                      -------------------------
                                      Louis D. Paolino, Jr., Chairman/President

                                  Mace Security Products, Inc.
                                  Taxpayer Identification Number: ______________

                                  By: Louis D. Paolino, Jr. (SEAL)
                                      ----------------------
                                      Louis D. Paolino, Jr., Chairman/President

                                     Page 6

<PAGE>

                                 LOAN AGREEMENT

Wachovia Bank, National Association
214 North Hogan Street - FL0070
Jacksonville, Florida 32202
Hereinafter referred to as the "Bank")

Mace Security International, Inc.
1000 Crawford Place
Suite 400
Mt. Laurel, New Jersey 08054

Mace Security Products, Inc.
1000 Crawford Place
Suite 400
Mt. Laurel, New Jersey 08054
Individually and collectively "Borrower")

This Loan Agreement ("Agreement") is entered into October 31, 2002, by and
between Bank and Borrower.

This Agreement applies to the loan or loans (individually and collectively, the
"Loan") evidenced by one or more promissory notes dated October 31, 2002 or
other notes subject hereto, as modified from time to time (whether one or more,
the "Note") and all Loan Documents. The terms "Loan Documents" and
"Obligations," as used in this Agreement, are defined in the Note.

Relying upon the covenants, agreements, representations and warranties contained
in this Agreement, Bank is willing to extend credit to Borrower upon the terms
and subject to the conditions set forth herein, and Bank and Borrower agree as
follows:

REPRESENTATIONS. Borrower represents that from the date of this Agreement and
until final payment in full of the Obligations: Accurate Information. All
information now and hereafter furnished to Bank is and will be true, correct and
complete. Any such information relating to Borrower's financial condition will
accurately reflect Borrower's financial condition as of the date(s) thereof,
(including all contingent liabilities of every type), and Borrower further
represents that its financial condition has not changed materially or adversely
since the date(s) of such documents. Authorization; Non-Contravention. The
execution, delivery and performance by Borrower and any guarantor, as
applicable, of this Agreement and other Loan Documents to which it is a party
are within its power, have been duly authorized as may be required and, if
necessary, by making appropriate filings with any governmental agency or unit
and are the legal, binding, valid and enforceable obligations of Borrower and
any guarantors; and do not (i) contravene, or constitute (with or without the
giving of notice or lapse of time or both) a violation of any provision of
applicable law, a violation of the organizational documents of Borrower or any
guarantor, or a default under any agreement, judgment, injunction, order, decree
or other instrument binding upon or affecting Borrower or any guarantor, (ii)
result in the creation or imposition of any lien (other than the lien(s) created
by the Loan Documents) on any of Borrower's or any guarantor's assets, or (iii)
give cause for the acceleration of any obligations of Borrower or any guarantor
to any other creditor. Asset Ownership. Borrower has good and marketable title
to all of the properties and assets reflected on the balance sheets and
financial statements supplied Bank by Borrower, and all such properties and
assets are free and clear of mortgages, security deeds, pledges, liens, charges,
and all other encumbrances, except as otherwise disclosed to Bank by Borrower in
the Borrower's annual report Form 10K and Quarterly Reports on Form 10Q
("Permitted Liens"). To Borrower's knowledge, no default has occurred under any
Permitted Liens and no claims or interests adverse to Borrower's present rights
in its properties and assets have arisen. Discharge of Liens and Taxes. Borrower
has duly filed, paid and/or discharged all

<PAGE>

taxes or other claims which may become a lien on any of its property or assets,
except to the extent that such items are being appropriately contested in good
faith and an adequate reserve for the payment thereof is being maintained.
Sufficiency of Capital. Borrower is not, and after consummation of this
Agreement and after giving effect to all indebtedness incurred and liens created
by Borrower in connection with the Note and any other Loan Documents, will not
be, insolvent within the meaning of 11 U.S.C. (S) 101(32). Compliance with Laws.
Borrower is in compliance in all respects with all federal, state and local
laws, rules and regulations applicable to its properties, operations, business,
and finances, including, without limitation, any federal or state laws relating
to liquor (including 18 U.S.C. (S) 3617, et seq.) or narcotics (including 21
U.S.C. (S) 801, et seq.) and/or any commercial crimes; all applicable federal,
state and local laws and regulations intended to protect the environment; and
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), if
applicable. Organization and Authority. Each corporate or limited liability
company Borrower and/or guarantor, as applicable, is duly created, validly
existing and in good standing under the laws of the state of its organization,
and has all powers, governmental licenses, authorizations, consents and
approvals required to operate its business as now conducted. Each corporate or
limited liability company Borrower and/or guarantor, as applicable, is duly
qualified, licensed and in good standing in each jurisdiction where
qualification or licensing is required by the nature of its business or the
character and location of its property, business or customers, and in which the
failure to so qualify or be licensed, as the case may be, in the aggregate,
could have a material adverse effect on the business, financial position,
results of operations, properties or prospects of Borrower or any such
guarantor. No Litigation. There are no pending or threatened suits, claims or
demands against Borrower or any guarantor that have not been otherwise disclosed
to Bank by Borrower in the Borrower's annual report Form 10K and Quarterly
Reports on Form 10Q.

AFFIRMATIVE COVENANTS. Borrower agrees that from the date hereof and until final
payment in full of the Obligations, unless Bank shall otherwise consent in
writing, Borrower will: Access to Books and Records. Allow Bank, or its agents,
during normal business hours, access to the books, records and such other
documents of Borrower as Bank shall reasonably require, and allow Bank, at
Borrower's expense, to inspect, audit and examine the same and to make extracts
therefrom and to make copies thereof. Business Continuity. Conduct its business
in substantially the same manner and locations as such business is now and has
previously been conducted, except that Bank agrees to consent to reasonable
changes in the manner and locations of Borrower's business provided that no
event of default has occurred under the Loan Documents. Certificate of Full
Compliance. Deliver to Bank, with the financial statements required herein, a
certification by Borrower's chief financial officer that Borrower is in full
compliance with the Loan Documents. Compliance with Other Agreements. Comply
with all terms and conditions contained in this Agreement, and any other Loan
Documents, and swap agreements, if applicable, as defined in the 11 U.S.C. (S)
101. Estoppel Certificate. Furnish, within 15 days after request by Bank, a
written statement duly acknowledged of the amount due under the Loan and whether
offsets or defenses exist against the Obligations. Insurance. Maintain adequate
insurance coverage with respect to its properties and business against loss or
damage of the kinds and in the amounts customarily insured against by companies
of established reputation engaged in the same or similar businesses including,
without limitation, commercial general liability insurance, workers compensation
insurance, and business interruption insurance; all in accordance with the terms
of the Mortgage. Maintain Properties. Maintain, preserve and keep its property
in good repair, working order and condition, making all needed replacements,
additions and improvements thereto, to the extent allowed by this Agreement.
Notice of Default and Other Notices. (a) Notice of Default. Furnish to Bank
immediately upon becoming aware of the existence of any condition or event which
constitutes a Default (as defined in the Loan Documents) or any event which,
upon the giving of notice or lapse of time or both, may become a Default,
written notice specifying the nature and period of existence thereof and the
action which Borrower is taking or proposes to take with respect thereto. (b)
Other Notices. Promptly notify Bank in writing of (i) any material adverse
change in its financial condition or its business; (ii) any default under any
material agreement, contract or other instrument to which it is a party or by
which any of its properties are bound, or any acceleration of the maturity of
any indebtedness owing by Borrower; (iii) any material adverse claim against or
affecting Borrower or any part of its properties; (iv) the commencement of, and
any material determination in, any litigation with any third party or any
proceeding before any governmental agency or unit affecting Borrower; and (v) at
least 30 days prior thereto, any change in Borrower's name or address as shown
above, and/or any change in Borrower's structure. Other

                                     Page 2

<PAGE>

Financial Information. Deliver promptly such other information regarding the
operation, business affairs, and financial condition of Borrower which Bank may
reasonably request. Payment of Debts. Pay and discharge when due, and before
subject to penalty or further charge, and otherwise satisfy before maturity or
delinquency, all obligations, debts, taxes, and liabilities of whatever nature
or amount, except those which Borrower in good faith disputes. Reports and
Proxies. Deliver to Bank, promptly, a copy of all financial statements, reports,
notices, and proxy statements, sent by Borrower to stockholders, and all regular
or periodic reports required to be filed by Borrower with any governmental
agency or authority.

NEGATIVE COVENANTS. Borrower agrees that from the date of this Agreement and
until final payment in full of the Obligations, unless Bank shall otherwise
consent in writing, Borrower will not: Change in Fiscal Year. Change its fiscal
year. Default on Other Contracts or Obligations. Default on any material
contract with or obligation when due to a third party or default in the
performance of any obligation to a third party incurred for money borrowed.
Government Intervention. Permit the assertion or making of any seizure, vesting
or intervention by or under authority of any government by which the management
of Borrower or any guarantor is displaced of its authority in the conduct of its
respective business or its such business is curtailed or materially impaired.
Judgment Entered. Permit the entry of any monetary judgment or the assessment
against, the filing of any tax lien against, or the issuance of any writ of
garnishment or attachment against any property of or debts due.

ANNUAL FINANCIAL STATEMENTS. Mace Security International, Inc. shall deliver to
Bank, within 120 days after the close of each fiscal year, audited financial
statements reflecting its operations during such fiscal year, including, without
limitation, a balance sheet, profit and loss statement and statement of cash
flows, with supporting schedules; all on a consolidated basis and in reasonable
detail prepared in conformity with generally accepted accounting principles,
applied on a basis consistent with that of the preceding year. All such
statements shall be examined by an independent certified public accountant
approved by the Borrower's Board of Directors Audit Committee. The opinion of
such independent certified public accountant shall not be acceptable to the Bank
if qualified due to any limitations in scope imposed by Mace Security
International, Inc.

FINANCIAL COVENANTS. Borrower agrees to the following provisions from the date
hereof until final payment in full of the Obligations, unless Bank shall
otherwise consent in writing, using consolidated financial information for Mace
Security International, Inc., its subsidiaries, affiliates and its holding or
parent company, as applicable: Total Liabilities to Tangible Net Worth Ratio.
Mace Security International, Inc. shall, maintain on a consolidated basis a
ratio of Total Liabilities divided by Tangible Net Worth of not more than 2.0 to
1.00 For purposes of this computation, "Total Liabilities" shall mean all
liabilities of Mace Security International, Inc., including capitalized leases
and all reserves for deferred taxes and other deferred sums appearing on the
liabilities side of a balance sheet of Mace Security International, Inc., in
accordance with generally accepted accounting principles applied on a consistent
basis but shall exclude subordinated debt to Bank. "Tangible Net Worth" shall
mean the Total Assets minus Total Liabilities. For purposes of this calculation,
the aggregate amount of any intangible assets of Borrower, including, without
limitation, goodwill, franchises, licenses, patents, trademarks, trade names,
copyrights, service marks, and brand names, shall be subtracted from Total
Assets. Deposit Relationship. Mace Security Products, Inc. shall create a demand
deposit account at Bank into which advance of the Loan may be credited and from
which monthly payments shall be automatically deducted. Debt Service Coverage
Ratio. Mace Security International, Inc. shall maintain a Debt Service Coverage
Ratio of no less than 1.25 to 1.00 at each fiscal yearend. "Debt Service
Coverage Ratio" shall mean the sum of net income before taxes plus depreciation
plus amortization plus interest expense divided by current maturities of
long-term debt plus current maturities of long-term leases plus interest
expense, for the same such twelve month period.

CONDITIONS PRECEDENT. The obligations of Bank to make the loan and any advances
pursuant to this Agreement are subject to the following conditions precedent:
Additional Documents. Receipt by Bank of such additional supporting documents as
Bank or its counsel may reasonably request, including but not limited to a copy
of the construction contract for the property securing this Loan detailing the
type and scope of improvements and the costs of all the improvements to subject
property. Project Construction Funding. At closing, the Bank will advance
$404,000.00 to the Borrower which represents

                                     Page 3

<PAGE>

80% of the "as is" appraised value of the subject property. The remaining
balance of the Loan shall be advanced to the Borrower at the rate of 80% percent
for the cost (not to exceed $95,000.00) of capital expenditures to be advanced
at a later date subject to verification of the completion of such capital
expenditures. Conditions for Final Draw. A certification by the General
Contractor or Subcontractors, if no General Contractor is engaged, shall be
provided to Bank prior to final advance of monies under this Loan evidencing
that all improvements have been completed as detailed in the construction
contract for the property. Any change orders should be noted in the
certification. Copies of lien waivers from all subcontractors shall be provided
to Bank prior to final advance of monies under this Loan. Copies of all legally
valid certificates of occupancy and no building violation certifications
evidencing compliance with all laws, ordinances and regulations relating to the
use and occupancy of the Property shall be provided to Bank prior to final
advance of monies under this Loan.

IN WITNESS WHEREOF, Borrower and Bank, on the day and year first written above,
have caused this Agreement to be executed under seal.

                                   Mace Security International, Inc.

                                   By:  /s/ Louis D. Paolino, Jr. (SEAL)
                                        -------------------------
                                       Louis D. Paolino, Jr., Chairman/President

                                   Mace Security Products, Inc.

                                   By: /s/ Louis D. Paolino, Jr. (SEAL)
                                       -------------------------
                                       Louis D. Paolino, Jr., Chairman/President

                                   Wachovia Bank, National Association

                                   By: /s/ Karen Leikert (SEAL)
                                       -----------------
                                       Karen Leikert, Vice President

                                     Page 4

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