MACE SECURITY INTERNATIONAL INC, 10KSB, 2000-03-29

MACE SECURITY INTERNATIONAL INC
10KSB, 2000-03-29
INDUSTRIAL ORGANIC CHEMICALS

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-KSB

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the year ended December 31, 1999 Commission File No. 0-22810

MACE SECURITY INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)

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<S> <C>
Delaware 03-0311630
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
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1000 Crawford Place, Suite 400, Mt. Laurel, NJ 08054
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, Including Area Code: (856) 778-2300

Securities Registered Pursuant to Section 12(b) of the Act: None

Securities Registered Pursuant to Section 12(g) of the Act:

Common Stock, par value $0.01 per share

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
--- ---

Indicate by check if there is no disclosure of delinquent filers in
response to Item 405 of Regulation S-B not contained in this form, and no
disclosure will be contained, to the best of the registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-KSB or any amendment to this Form 10-KSB. [ ]

The aggregate market value of the voting stock held by non-affiliates of
the Registrant, based on the last sale price of the Registrant's Common Stock at
the close of business on March 23, 2000, was approximately $83,831,146.
(Reference is made to page 16 herein for a statement of assumptions upon which
this calculation is based.)

The number of shares of Common Stock, par value $.01 per share, of the
Registrant outstanding as of March 23, 2000 was 23,582,563.

Documents Incorporated by Reference

Portions of the Registrant's definitive Proxy Statement to be filed with
the Commission in connection with the 1999 Annual Meeting of Stockholders (which
proxy statement is expected to be filed with the Commission not later than 120
days after the end of the Registrant's last fiscal year) are incorporated by
reference into Part III of this Form 10-KSB.
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PART I

ITEM 1. DESCRIPTION OF BUSINESS

GENERAL

The Company was incorporated in Delaware on September 1, 1993. Before July
1999, its main business was the production and sale of less-than-lethal defense
sprays and other consumer safety and personal security products. On July 1,
1999, the Company merged American Wash Services, Inc., a company that was
engaged in the business of acquiring and operating car wash facilities, into a
wholly-owned subsidiary of Mace Security International, Inc. On July 9, 1999,
the Company acquired all the outstanding common stock of Innovative Control
Systems, Inc., a developer of point of sale systems for the car wash and oil and
lubrication industries.

Since July 1999, the Company's main business has been the ownership and
operation of full service car wash facilities. Through a separate division, the
Company continues to produce and sell, both in its car wash facilities and
elsewhere, its consumer safety and personal security products. The Company
through Innovative Control Systems, Inc., a wholly-owned subsidiary, develops
and sells car wash and oil and lubrication point of sale systems.

LINES OF BUSINESS

CAR WASH OPERATIONS. On December 31, 1999, the Company, through its
subsidiaries, operated 57 car washes that it either owned or operated under an
operating agreement. In the Philadelphia, Pennsylvania region, it operated 18
locations in New Jersey, Pennsylvania and Delaware. The Company also operated
five locations in the Sarasota, Florida area, 14 locations in Arizona, and 20
locations in Texas. Except for 13 of the Philadelphia-region car washes, which
provide only exterior washing, the rest of the Company's locations are full
service car washes, providing exterior washing and drying, vacuuming and dusting
of dashboards and door panels, and cleaning of all windows and glass. The
typical facility consists of a free standing building of approximately 4,000
square feet, containing a sales area for impulse items and a car wash tunnel of
approximately 75 feet in length. Cars are moved through the car wash tunnel by
a conveyor system where automatic equipment cleans the vehicle as it moves
underneath the equipment. Additional extra services, including wheel cleaning,
fragrance and rust protection treatment, interior and wheel treatments, waxing
and shampooing, are also offered at the locations. Several locations also offer
other consumer products and related car care services, such as professional
detailing services (offered at 43 locations), oil and lubrication services
(offered at 15 locations), gasoline dispensing services (offered at 24
locations), state inspection services (offered at six locations), and
convenience store sales (offered at eight locations). From time to time, the
Company will operate car washes under an operating agreement until the
acquisition is consummated.

SAFETY AND SECURITY DEVICES. The Consumer Division of the Company designs,
markets and sells consumer products for use in protection of the home and
automobile, and for personal and child protection. These products include a line
of defense sprays, personal alarms, whistles, and window and door lock alarms.
The defense sprays, the Consumer Division's most well-known products, include
tear gas sprays, pepper sprays and sprays with both tear gas and pepper
solution. The Consumer Division markets its products through mass
merchants/department stores, consumer catalogues and guns/sporting goods,
hardware, auto, convenience, and drug stores as well as on the Internet. Mace
Anti Crime Bureau(R) ("MACB"), an extension of the Consumer division, develops
and markets security products and literature primarily for the foreign financial
community, including a "dye-pack" used by financial institutions for robbery
protection, state-of-the-art training videos and crisis response materials.
MACB markets to foreign financial institutions and related businesses throughout
the world through direct marketing and the use of independent sales
representatives and distributors as well as exhibitions at national trade shows
and advertisement in trade publications. A contract between the Company's Law
Enforcement division, which was sold in July 1998, and the Department of Defense
required the Company to continue its production of 40 MM cartridges through
August 31, 1999. Those production operations have now been discontinued.
Substantially all of the Company's manufacturing processes are performed at the
Company's Bennington, Vermont facility. The Company's defense spray products are
manufactured on an aerosol filling machine. Most products are packaged in
sealed, tamper-resistant "clamshells." The KinderGard(R) product line is
primarily manufactured by an unrelated company and packaged on-site at the
Vermont facility. Operating results of the KinderGard(R) product line are
immaterial at this time.

POINT OF SALE SYSTEMS AND SOFTWARE SALES AND DEVELOPMENT. Since its
acquisition of Innovative Control Systems, Inc. in July 1999, the Company has
been involved in the development, marketing and sale of automated point-of-sale
control systems that are used to monitor, manage and analyze car wash systems
and lubrication centers. The systems can track labor deployment, materials
consumption, cash controls, real-time sales information, customer data, and
machinery performance, and

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include remote visual monitoring applications. Besides installing the system in
most of the locations operated by the Company, the systems are marketed to other
car wash operators. They have already been installed in more than six hundred
operating locations worldwide and are marketed directly by the Company and
through independent distributors. The systems are designed to operate under the
Windows(R) operating system. Innovative Control Systems, Inc. is located in
Nazareth, Pennsylvania.

BUSINESS STRATEGIES

GROWTH OF CAR WASH BUSINESS.

During 1999, and including its merger with American Wash Services, Inc., the
Company has acquired fifty seven car wash facilities. The majority of the
locations were acquired by acquiring a company, or the assets of a company, that
owned several locations in a given geographic area, such as: the Millennia
acquisition with 11 locations in the Phoenix area, and four in the San Antonio
area; the Colonial acquisition with 10 locations in the Dallas area; the Shammy
Shine acquisition with nine locations in the Philadelphia region; the Eager
Beaver acquisition with five locations in the Sarasota, Florida area; and the
Genie acquisition with three locations in the Austin area. Nine locations were
purchased as individual car washes in areas where the Company had or expected to
have other operating locations in place.

The Company has implemented an aggressive program to expand its car wash
operations. The principal components of the Company's expansion strategy are as
follows:

. ENTER MARKETS. The Company typically seeks to enter a new market by
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acquiring one or several car wash locations in specific geographically diverse
regional locations. The Company's goal is to establish critical mass in a
select region to maximize marketing and advertising initiatives. The Company
believes that through regional advertising it can increase car wash volume.

. EXPANSION OF MARKET SHARE AND SERVICES. After its initial entry into a
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new market, the Company continually seeks to expand its market share through (i)
offering services not previously offered at the acquired car wash, (ii) the
acquisition of additional car wash locations within the geographical region that
can be integrated with the Company's existing operations without increasing
infrastructure, and (iii) expansion into adjacent markets.

. INCREASING PRODUCTIVITY AND OPERATING EFFICIENCY. The Company believes
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that it can reduce the total operating expenses of owned and acquired businesses
by implementing centralized financial controls. In addition, the Company is
implementing programs to take advantage of certain economies of scale in such
areas as the purchase of equipment, chemicals and supplies, parts, equipment
maintenance, data processing, financing arrangements, employee benefits,
insurance, and communications. The Company has established a training facility
in its Phoenix region to provide training to operating personnel that will be
standardized throughout the Company, with an emphasis on customer service, labor
savings, safe operation and improved sales of add-on and ancillary services.
Location managers, once trained, will implement the Company's standardized
service menu option list and high-margin service add-ons at each of the
Company's present and acquired operating locations.

. INTERNAL GROWTH. The Company believes that it can achieve internal
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growth, principally from additional sales into its current markets, by providing
superior and improved service and through its existing marketing efforts. To
improve market share in a given operating region, the Company plans to embark
upon strong regional advertising campaigns emphasizing brand awareness to
increase the percentage of the population using car wash services. The Company
believes that only about 30% of the general population routinely use car wash
services. The Company believes that this relatively low level of participation
is the result of (i) lack of effective advertising; (ii) inconsistent wash
quality and service levels across fragmented locations; and (iii) concerns about
scratches and other adverse effects from the automated wash process. The
Company believes that through consumer education and by developing a strong
brand reputation, known for consistent quality and safe, dependable service
across locations, it can increase consumer participation rates and generate
significant internal growth from existing locations. The Company also intends
to selectively implement price increases when competitive advantages and
appropriate market conditions exist. In addition, the Company believes that it
can achieve internal growth through the addition of ancillary profit centers to
its existing car wash locations such as oil and lubrication centers, gasoline
dispensing services, professional detailing centers and convenience stores.

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GROWTH OF POINT OF SALE AND SOFTWARE BUSINESS.

The Company through its Innovative Control Systems, Inc. subsidiary believes it
can increase sales by developing additional products for the car wash and oil
and lubrication industries. The products under development, include an improved
point of sale system for the oil and lubrication industry, a hand-held device
that can perform order entry and customer tracking by interfaces to Innovative
Control Systems, Inc.'s existing point of sale system, a low cost controller
only product and unattended touch screen kiosk utilizing a sunlight readable
touch screen through live audio and video.

ACQUISITION PROGRAM

The Company believes that there are numerous potential car wash acquisition
candidates, both within the markets that it currently serves and in other
regional markets throughout the United States, which meet its acquisition
criteria. In evaluating potential acquisitions, the Company will consider: (i)
the potential for operating cost reductions, revenue growth through advertising,
and managerial efficiencies; (ii) the commercial viability and underlying real
estate value of each location; (iii) the potential for geographic
diversification throughout the United States; and (iv) other relevant factors.
While the Company intends to continue to focus on the acquisition of existing
car wash locations, it also intends to begin to develop newly-constructed
locations. As consideration for future acquisitions, the Company intends to
continue to use combinations of common stock, cash, and assumption of
indebtedness. The consideration for each future acquisition will vary on a case-
by-case basis depending on the financial interests of the Company, the historic
operating results of the acquisition target, and the growth potential of the
business to be acquired. The Company expects to finance future acquisitions
through funds provided by operations, mortgage loans and the proceeds of
possible future equity.

. COMPLETED ACQUISITIONS. Since May 17, 1999, the Company acquired 13 car
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care companies, and Innovative Control Systems, Inc., a manufacturer and
supplier of computerized software and point of sale systems automated for the
car wash industry.

COMPLETED ACQUISITIONS
MAY 17, 1999-- DECEMBER 29, 1999

DATE ACQUIRED
COMPANY (ACCOUNTING METHOD) LOCATION PRINCIPAL BUSINESS
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Colonial Full Service Car Wash, Inc. May 17, 1999 Dallas and Fort Full Service Car Washes
(Purchase) Worth, Texas

Genie Car Wash of Austin, Inc., Genie Car Care May 18, 1999 Austin, Texas Full Service Car Washes
Center, Inc. and Genie Car Service Center, Inc. (Purchase)

Gabe's Plaza Car Wash, Inc. June 1, 1999 Morrisville, Exterior Only Car Wash
(Purchase) Pennsylvania

Moorestown Car Wash June 22, 1999 Moorestown, New Exterior Only Car Wash
(Purchase) Jersey

American Wash Services, Inc. July 1, 1999 New Jersey, Full Service and Exterior
(Purchase) Pennsylvania Only Car Washes

Stephen Bulboff and Stephen B. Properties Inc. July 1, 1999 New Jersey, Exterior Only Car Washes
(Purchase) Pennsylvania and
Delaware

Innovative Control Systems, Inc. July 9, 1999 Nazareth, Manufacturer and Supplier
(Pooling of Interests) Pennsylvania of Computerized Software
and Tunnel Control Systems

Shammy Man Car Wash August 24, 1999 Phoenix, Arizona Full Service Car Wash
(Purchase)

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50's Classic Car Wash of Lubbock, Inc. and August 25, 1999 Lubbock, Texas Full Service Car Wash
CRCD, Inc. (Pooling of Interests)

Quaker Car Wash, Inc. September 9, 1999 Lubbock, Texas Full Service Car Wash
(Purchase)

Eager Beaver Car Wash, Inc. September 9, 1999 West Coast of Full Service Car Washes
(Pooling of Interests) Florida

White Glove Car Wash October 18, 1999 Tempe, Arizona Full Service Car Wash
(Purchase)

Millennia Car Wash, LLC October 29, 1999 Arizona and Texas Full Service Car Washes
(Purchase)

Cherry Hill Car Wash, Inc. December 29, 1999 Cherry Hill, New Full Service Car Wash
(Purchase) Jersey
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. RECENT DEVELOPMENTS.
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On March 8, 2000 the Company executed a merger agreement with Wash Depot
Holdings, Inc. ("Wash Depot"). Under the Merger Agreement, Wash Depot will be
merged into a subsidiary of the Company. If the Merger closes, the Company will
issue to the shareholders of Wash Depot Holdings, Inc., 8,128,000 shares of the
Company's common stock and will issue approximately 1,350,000 options and
warrants in exchange for options and warrants held in Wash Depot Holdings, Inc.
In connection with the Merger, the Company will assume the indebtedness of Wash
Depot Holdings, Inc., in the approximate amount of $153,000,000. The closing of
the Merger is subject to several conditions, including, anti-trust clearance
under the Hart Scott Rodino Anti-Trust Improvement Act, Mace and Wash Depot
shareholder approval, the consent of the lenders of the Company and Wash Depot
Holdings, Inc., the exchange and review of information between the Company and
Wash Depot Holdings, Inc. and several other typical closing conditions.

The Company entered into a Management Agreement on February 1, 2000, with Mark
Sport, Inc., a Vermont corporation. Mark Sport, Inc. is controlled by Jon E.
Goodrich, a director of the Company. The Management Agreement entitles Mark
Sport, Inc. to operate the Company's Safety and Security Devices Division and
receive all profits or losses for a six-month term. In exchange, Mark Sport,
Inc. pays the Company $20,000 during the term of the Management Agreement plus
an amount equal to the amortization and depreciation on the assets of the
division. In addition, Mark Sport, Inc. must operate the division in
substantially the same manner as it has been operated prior to the Management
Agreement.

MARKETING

CAR WASH BUSINESS. The car care industry services customers on a local and
regional basis. The Company employs operational and customer service people at
its operating locations. The operational and customer service people are
supervised by the management of the operating locations. The Company emphasizes
providing quality services as well as customer satisfaction and retention, and
believes that it will attract customers in the future because of its reputation
for quality service. The Company markets its services through coupon advertising
and direct-mail marketing programs. The Company contains a diverse customer
base, with no single customer accounting for five percent or more of the
Company's consolidated revenues for the fiscal year ended December 31, 1999.
The Company does not believe that the loss of any single customer would have a
material adverse effect on the Company's business or results of operations.

SAFETY AND SECURITY DEVICES. The Company intends to continue its present
marketing procedures and strategy for its line of personal safety and security
devices. Each market category is reached through dedicated in-house sales
managers, and/or through a nationwide network of manufacturers' representatives.
Market categories are also reached through catalogue, magazine and trade
publication advertising, Internet website and promotion at industry trade shows.
The Company also sells directly to wholesale distributors and to certain large
department stores. Mail order and specialty accounts are handled directly by the
Company. It also intends to set up point-of-sale displays of its products at
each car wash operating location to increase impulse sales and enhance brand
awareness.

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POINT OF SALE AND SOFTWARE BUSINESS. The Company intends to continue its
marketing procedures of its technology products. Market categories are reached
through in-house sales people, distributor channels, trade publications,
Internet website, OEM manufacturers and industry trade shows.

PRODUCTION AND SUPPLIES

CAR WASH BUSINESS. The Company does not manufacture any of the car wash
equipment and supplies which it uses. There are numerous suppliers of the
equipment and supplies required by the Company's car wash operations.

SAFETY AND SECURITY DEVICES. Substantially all of the Company's
manufacturing processes for its Safety and Security Devices are performed at the
Company's Bennington, Vermont facility. The Company's defense spray products are
manufactured on an aerosol filling machine. Most products are packaged in
sealed, tamper-resistant "clamshells." The KinderGard(R) product line and its
MaceCash dye pack bag are primarily manufactured by unrelated companies and
packaged on-site at the Vermont facility. There are numerous potential
suppliers of the components and parts required in the Company's production
process. The Company has developed strong beneficial long-term relationships
with many of its suppliers including the following: Allplax, Inc., Moldamatic,
Inc., Piper Impact, Inc., Amber International, Inc. and Springfield Printing,
Inc. In addition, the Company purchases for resale a variety of products
produced by others including whistles, alarms, and window and door locks, among
others.

POINT OF SALE AND SOFTWARE BUSINESS. Substantially all of the Company's
manufacturing processes for its Point of Sale and Software Business are
performed at the Company's Nazareth, Pennsylvania facility. The component parts
of the Company's Point of Sale systems are manufactured by unrelated companies
and assembled at the Nazareth, Pennsylvania facility. There are numerous
potential suppliers of the components and parts required in the Company's
production process. The Company has developed strong beneficial long-term
relationships with many of its suppliers.

COMPETITION

CAR WASH BUSINESS. The car wash industry is a highly fragmented industry
comprised of several "mom and pop" private businesses. At any wash location the
main competitors are privately owned car washes which may in many instances be
located near the Company's car washes. The car wash industry is highly
competitive. Competition is based primarily on location, facilities, customer
service, available services and rates. The Company also faces competition from
sources outside the car wash industry, such as gas stations that offer automated
car wash services. Because barriers to entry in the general car wash industry
are relatively low, competition may arise from new sources not currently
competing with the Company. The Company believes that the largest owner of car
washes is currently Wash Depot Holdings, Inc., which presently operates 73 car
washes throughout the United States. On March 8, 2000, the Company signed a
Merger Agreement with Wash Depot Holdings, Inc. Under the Merger Agreement,
which is subject to many conditions which may not be satisfied, Wash Depot
Holdings, Inc. will be merged into a subsidiary of the Company. The Company also
competes with other companies intending to become a national car wash chain
including, Car Wash Partners, Car Wash of America, Car Spa and Oasis Car Wash.

SAFETY AND SECURITY DEVICES. The Company faces intense competition in the
consumer market. Domestically, there continues to be a number of companies
marketing defense sprays to civilian consumers. While the Company continues to
offer defense spray products that Management believes distinguish themselves
through brand name recognition, superior product features and formulations and
research and development, the Consumer division has experienced a sales decline
for these products. The Company attributes this decline not only to the strong
competition, but also to lower demand in general. Moreover, the Company was not
successful in its brief entry into the retail market in late 1997. The Company
closed its retail stores in the third quarter of 1998.

POINT OF SALE AND SOFTWARE BUSINESS. The Company's primary competitor is
DRB Systems. DRB Systems has a strong presence in the marketplace due to the
large market share they acquired from several years of service to the industry.
The Company competes with DRB Systems by developing and offering more
technologically advanced systems.

TRADEMARKS AND PATENTS

CAR WASH BUSINESS. The Company has not yet selected a trademark under
which its car wash services will be offered. During the year 2000, the Company
intends to select and register a trademark which the Company will use to market
its car washes.

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SAFETY AND SECURITY DEVICES. The Company began marketing products in 1988
under the Mace(R) brand name and related trademarks pursuant to an exclusive
license for sales of defense sprays to the Consumer Market in the continental
United States, and a non-exclusive license for sales to the Consumer Market
worldwide. The license agreement was renegotiated in 1992 to include a purchase
option. The Company exercised this option and purchased outright the Mace(R)
brand name and related trademarks (Pepper Mace(R), Chemical Mace(R), Mace . . .
Just in Case(R), CS Mace(TM) and Magnum Mace(TM)). In conjunction with this
purchase, the Company acquired a non-exclusive worldwide license to promote a
patented pepper spray formula in both markets. There are approximately five
years remaining on the license. The Company also has various other patents and
trademarks for the devices it sells, including, trademarks and patents for, the
Big Jammer(R) door brace, Window Jammer(TM), Sonic Alert(TM), Safety
Flasher(TM), Sport Strobe(TM), Child Safe Alarm(TM), Window Alert(TM), Motion
Alert(TM), Emergency Whistle(TM), and Auto Alert(TM), Screecher(R),
Peppergard(R), Slam(R), and Mace (Mexico)(R), Viper(R) defense spray,
KinderGard(R), Zip-a-Babe(R), Hand n-Hand(R) and Safe-T-Zip(R). The Company has
been issued letters patent on the locking mechanism for the Mark VI defense
spray unit.

In July 1998, in connection with its sale of its Law Enforcement division, the
Company transferred its Mace (R) brand trademark and all related trademarks and
a patent (No. 5,348,193) to its wholly-owned subsidiary, Mace Trademark Corp.
The purchaser of its Law Enforcement division received a 99 year license to use
the Mace (R) brand, certain other such trademarks and the patent in the Law
Enforcement Market only.

An essential part of the Company's business strategy has been to capitalize on,
promote aggressively, and enhance the public's awareness and confidence in the
Mace(R) trademark. The Company relies on the trademark laws to protect its
proprietary rights to the Mace(R) trademark. The Company uses a newspaper
clipping service to identify significant unauthorized uses of the Mace(R)
trademark and provides notice to such users of the Company's willingness to take
legal action for continued unauthorized use.

POINT OF SALE AND SOFTWARE BUSINESS. The Company holds no material patents
or patent licenses, in connection with its Point of Sale and Software business.

GOVERNMENT REGULATION/ENVIRONMENTAL COMPLIANCE

CAR WASH BUSINESS. The Company is subject to various local, state and
federal laws regulating the discharge of pollutants into the environment. The
Company believes that its operations are in compliance in all material
respects with applicable environmental laws and regulations. Compliance with
these laws and regulations is not expected to materially affect the Company's
competitive position. Three major areas of regulation facing the Company are
disposal of lubrication oil at the Company's oil change centers, the compliance
with all underground storage tank laws in connection with the Company's gasoline
sales and the proper recycling and disposal of water used in the Company's car
washes. The Company uses approved waste-oil haulers to remove its oil and
lubricant waste. The Company, before acquiring a gasoline dispensing site,
investigates it to verify that any underground storage tanks are in compliance
with all legal requirements. The Company recycles its waste water and where it
has proper permits it is disposed of into sewage drains, 70% of the detergent
and wax products used in the carwash are recycled within a built-in reclaim
system.

SAFETY AND SECURITY DEVICES. The distribution, sale, ownership and use of
Consumer defense sprays are legal in some form in all 50 states and the District
of Columbia. However, in most states, sales to minors are prohibited and in
several states (MA, MI, NE, NY, WI), sales of defense sprays are highly
regulated. On January 1, 1996, California eased restrictions on defense sprays.
On November 1, 1996, New York lifted an overall ban on defense sprays allowing
for the sale of oleoresin capsicum (OC) pepper sprays in licensed pharmacies and
licensed gun stores only. Massachusetts requires both users and sellers to be
licensed. Wisconsin allows the sale of OC pepper sprays only and they must be
sold from behind a counter or under glass. Michigan does not permit sales of
chloroacetophenone (CN) sprays. Nevada permits sales of
orthochlorobenzalmalononitrile (CS) sprays only. The Company has been successful
notwithstanding these state regulations. There can be no assurance, however,
that broader, more severe restrictions will not be enacted that would have an
adverse impact on the Company's financial condition. The Company believes it is
in compliance with all federal, state, and local environmental laws.

POINT OF SALE AND SOFTWARE BUSINESS. There are no significant federal,
state, or local laws which impact on the Company's Point of Sale and Software
Business.

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RESEARCH AND DEVELOPMENT

CAR WASH BUSINESS. The Company has a car wash school established at one
of its Phoenix, Arizona car washes. The school is used to train managers and
assistant managers for the Company's car washes.

SAFETY AND SECURITY DEVICES. The Company has an on-site laboratory.
Research and development is used by the Company to maintain its reputation in
the defense spray industry. The Company is continually reviewing ideas and
potential licensing arrangements to expand its product lines. Particularly, the
Company spent a significant portion of its research and development budget in
the creation of MaceCash(TM) and other MACB products. During 1999, the Company
spent approximately $13,000 in developing safety and security products.

POINT OF SALE AND SOFTWARE BUSINESS. The Company intends to continue to
devote research and development efforts to enhance its current point of sale
systems, both for car wash operations and for related-industry applications, and
to continue marketing of the Point of Sale systems to customers in and out of
the car wash industry. Development operations concentrate on implementing
advancements of the high tech computer industry and e-commerce into the
Company's car wash operations and multi-site applications. Development has also
been working on the release of a new quick lube management system. During 1999,
the Company spent approximately $113,000 on developing new products.

INSURANCE

The Company maintains various insurance coverages for its assets and operations.
These coverages include Property coverages including Business Interruption
protection for each location. The Company maintains garage keepers and
commercial general liability coverages in the amount of one million dollars
($1,000,000) beneath a ten million dollar ($10,000,000) umbrella. The Company
also maintains fully insured workers compensation policies in every state in
which it operates. Nevertheless, there can be no assurance that the Company's
insurance will provide sufficient coverages in the event a claim is made against
the Company, or that the Company will be able to maintain in place such
insurance at reasonable prices. An uninsured or under insured claim against the
Company of sufficient magnitude could have a material adverse effect on the
Company's business and results of operations.

EMPLOYEES

As of March 20, 2000, the Company had approximately 1,843 employees, of which
approximately 1,715 were employed in the car care services, 39 in the security
products segment, 34 in the computer products and services segment, 49 in
clerical, administrative, and sales positions and six in management. None of
the Company's employees are covered by collective bargaining agreements.

FACTORS INFLUENCING FUTURE RESULTS AND ACCURACY OF FORWARD-LOOKING STATEMENTS

This report includes forward looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended ("Forward Looking Statements"). All statements
other than statements of historical fact included in this section, are Forward
Looking Statements. Although the Company believes that the expectations
reflected in such Forward Looking Statements are reasonable, it can give no
assurance that such expectations will prove to have been correct. Generally,
these statements relate to business plans or strategies, projected or
anticipated benefits or other consequences of such plans or strategies, number
of acquisitions and projected or anticipated benefits from acquisitions made by
or to be made by the Company, or projections involving anticipated revenues,
earnings, levels of capital expenditures or other aspects of operating results.
All phases of the Company's operations are subject to a number of uncertainties,
risks and other influences, many of which are outside the control of the Company
and any one of which, or a combination of which, could materially affect the
results of the Company's operations and whether Forward Looking Statements made
by the Company ultimately prove to be accurate. Such important factors
("Important Factors") that could cause actual results to differ materially from
the Company's expectations are disclosed in this section and elsewhere in this
report. All subsequent written and oral Forward Looking Statements attributable
to the Company or persons acting on its behalf are expressly qualified in their
entirety by the Important Factors described below that could cause actual
results to differ from the Company's expectations. The forward-looking
statements made herein are only made as of the date of this filing and the
Company undertakes no obligation to publicly update such forward-looking
statements to reflect subsequent events or circumstances.

8
<PAGE>

WE NEED TO RAISE ADDITIONAL CAPITAL. At December 31, 1999, we had negative
working capital of approximately $1.4 million. Our business plan will require
significant additional capital to fund acquisitions and internal development and
growth. Our capital requirements also include working capital for daily
operations and significant capital for equipment purchases. To the extent that
we lack cash to meet our future capital needs, we will be required to raise
additional funds through bank borrowings and significant additional equity
and/or debt financing, which may result in significant increases in leverage and
interest expense and/or substantial dilution. If we are unable to raise
additional capital, we will need to reduce substantially the scale of our
operations and to curtail our business plan.

WE HAVE A HISTORY OF LOSSES, WE HAVE WORKING CAPITAL DEFICITS AND WE MAY
INCUR CONTINUING CHARGES. We have reported net losses and working capital
deficits in prior fiscal years and we have recently expended substantial funds
for acquisitions and equipment. In connection with financing acquisitions and
business growth, we anticipate that we will continue to incur significant debt
and interest charges. In addition, we will recognize goodwill amortization
charges in connection with our acquisitions that are accounted for under the
"purchase" method of accounting. The amount of goodwill recognized is the
amount by which the purchase price of a business exceeds the fair market value
of the assets acquired. Goodwill is amortized over a period not to exceed 25
years depending on the business acquired, resulting in an annual non-cash charge
to our earnings during that period. As we continue to acquire additional
businesses, our financial position and results of operations may fluctuate
significantly from period to period.

OUR BUSINESS PLAN POSES RISKS FOR US. Our business objective is to develop
and grow a full service, integrated car care business through acquisitions of
car washes and through the internal development of our car wash facilities by
adding gasoline pumps, oil change facilities and convenience stores to our
locations. We have repositioned our company from a company involved primarily
in the production of consumer defense products to a company that also offers car
wash and car care services. This strategy involves a number of risks,
including:

Risks associated with growth;
Risks associated with acquisitions;
Risks associated with the recruitment and development of management and
operating personnel; and
Risks associated with lack of experience in the car service industries.

If we are unable to manage one or more of these associated risks effectively, we
may not realize our business plan.

WE HAVE A LIMITED OPERATING HISTORY REGARDING OUR CAR WASH AND CAR SERVICE
BUSINESSES. Since July 1999, our main business has been the acquisition and
operation of car wash and car service facilities, which now account for more
than half of our revenues. Because of our relatively limited operating history
with respect to these businesses, we cannot assure you that we will be able to
operate them successfully.

WE MAY NOT BE ABLE TO MANAGE GROWTH. If we succeed in growing, growth will
place significant burdens on our management and on our operational and other
resources. We will need to attract, train, motivate, retain and supervise our
senior managers and other employees and develop a managerial infrastructure. If
we are unable to do this, we will not be able to realize our business
objectives.

OUR STOCK PRICE IS VOLATILE. Our common stock's market price has been and
is likely to continue to be highly volatile. Factors like fluctuations in our
quarterly revenues and operating results, our ongoing acquisition program,
market conditions and economic conditions generally may impact significantly our
common stock's market price. In addition, as we continue to acquire additional
car wash businesses, we may agree to issue common stock that will become
available generally for resale and may have an impact on our common stock's
market price.

RISKS OF ACQUISITIONS. Our strategy to grow in part through acquisitions
depends upon our ability to identify suitable acquisition candidates, and to
consummate acquisitions on financially favorable terms. This strategy involves
risks inherent in assessing acquisition candidates' values, strengths,
weaknesses, risks and profitability and risks related to the financing,
integration and operation of acquired businesses, including:

i. adverse short-term effects on our reported operating results;
ii. diversion of management's attention;
iii. dependence on hiring, training and retaining key personnel; and
iv. risks associated with unanticipated problems or latent liabilities.

9
<PAGE>

We cannot assure you that acquisition opportunities will be available, that we
will have access to the capital required to finance potential acquisitions, that
we will continue to acquire businesses, or that any acquired business will be
profitable.

WE MAY NOT BE ABLE TO INTEGRATE BUSINESSES WE ACQUIRE AND ACHIEVE OPERATING
EFFICIENCIES. We are in the process of combining the businesses and assets that
we have acquired recently into an integrated operating structure. Our future
growth and profitability depend substantially on our ability to operate and
integrate acquired businesses. Our strategy is to achieve economies of scale
and brand-name recognition in part through acquisitions that increase our size.
We cannot assure you that our efforts to integrate acquired operations will be
effective or that we will realize expected results. Our failure to achieve any
of these results could have a material adverse effect on our business and
results of operations.

WE FACE POTENTIAL LIABILITIES ASSOCIATED WITH ACQUISITIONS OF BUSINESSES.
The businesses we acquire may have liabilities that we do not discover or may be
unable to discover during our preacquisition investigations, including
liabilities arising from environmental contamination or prior owners' non-
compliance with environmental laws or other regulatory requirements, and for
which we, as a successor owner or operator, may be responsible.

WE FACE RISKS ASSOCIATED WITH OUR CONSUMER SAFETY PRODUCTS. We face claims
of injury allegedly resulting from our defense sprays. We cannot assure you
that our insurance coverage will be sufficient to cover any judgments won
against us in these lawsuits. If our insurance coverage is exceeded, we will
have to pay the excess liability directly. We are also aware of several claims
that defense sprays used by law enforcement personnel resulted in deaths of
prisoners and of suspects in custody. While we no longer sell defense sprays to
law enforcement agencies, it is possible that the increasing use of defense
sprays by the public could, in the future, lead to additional product liability
claims.

OUR CAR WASH BUSINESS MAY SUFFER UNDER CERTAIN WEATHER CONDITIONS.
Seasonal trends in some periods may affect our car wash business. In
particular, long periods of rain can affect adversely our car wash business as
people typically do not wash their cars during such periods. Conversely,
extended periods of warm, dry weather may encourage customers to wash their own
cars which can affect adversely our car wash business.

CONSUMER DEMAND FOR OUR CAR WASH SERVICES IS UNPREDICTABLE. Our financial
condition and results of operations will depend substantially on consumer demand
for car wash services. Our business depends on consumers choosing to employ
professional services to wash their cars rather than washing their cars
themselves or not washing their cars at all. We cannot assure you that consumer
demand for car wash services will increase as our business expands. Nor can we
assure you that consumer demand will maintain its current level.

WE MUST MAINTAIN OUR CAR WASH EQUIPMENT. Although we undertake to keep our
car washing equipment in proper operating condition, the operating environment
found in car washes results in frequent mechanical problems. If we fail to
properly maintain the equipment, the car wash could become inoperable resulting
in a loss of revenue to us from the inoperable location.

OUR CAR WASH AND CAR SERVICES FACE GOVERNMENTAL REGULATION. We are
governed by federal, state and local laws and regulations, including
environmental regulations, that regulate the operation of our car wash centers
and other car services businesses. Car wash centers utilize cleaning agents and
waxes in the washing process that are then discharged in waste water along with
oils and fluids washed off of vehicles. Other car services, such as gasoline
and lubrication, use of a number of oil derivatives and other regulated
hazardous substances. As a result, we are governed by environmental laws and
regulations dealing with, among other things:

i. transportation, storage, presence, use, disposal and handling of
hazardous materials and hazardous wastes;
ii. discharge of stormwater; and
iii. underground storage tanks.

If any of the previously mentioned substances were found on our property,
however, including leased properties, or if we were found to be in violation of
applicable laws and regulations, we could be responsible for clean-up costs,
property damage and fines or other penalties, any one of which could have a
material adverse effect on our financial condition and results of operations.

OUR CONSUMER SAFETY PRODUCT BUSINESSES FACE GOVERNMENTAL REGULATION. The
distribution, sale, ownership and use of consumer defense sprays are legal in
some form in all 50 states and the District of Columbia. We cannot assure you,
however, that restrictions on the manufacture or use of consumer defense sprays
will not be enacted that would have an adverse impact on our financial
condition. Some of our consumer defense spray manufacturing operations
currently incorporate hazardous materials, the use and emission of which are
regulated by various state and federal environmental protection agencies,
including the

10
<PAGE>

Environmental Protection Agency. We believe that we are in compliance currently
with all state and local statutes governing our disposal of these hazardous
materials, but if there are any changes in environmental permit or regulatory
requirements, or if we fail to comply with any environmental requirements, these
changes or failures may have a material adverse effect on our business and
financial condition.

WE FACE SIGNIFICANT COMPETITION. The extent and kind of competition that
we face varies. The car wash industry is highly competitive. Competition is
based primarily on location, facilities, customer service, available services
and rates. Because barriers to entry into the car wash industry are relatively
low, competition may be expected to continually arise from new sources not
currently competing with us. In this sector of our business we also face
competition from outside the car wash industry, such as gas stations and
convenience stores, that offer automated car wash services. In some cases,
these competitors may have significantly greater financial and operating
resources than we do. In our car service businesses, we face competition from a
number of sources, including regional and national chains, gasoline stations and
companies and automotive companies and specialty stores, both regional and
national.

OUR OPERATIONS ARE DEPENDENT SUBSTANTIALLY ON THE SERVICES OF OUR EXECUTIVE
OFFICERS, PARTICULARLY LOUIS D. PAOLINO, JR. Our operations are dependent
substantially on the services of our executive officers, particularly Louis D.
Paolino, Jr., our Chairman of the Board, Chief Executive Officer and President.
If we lose Mr. Paolino's services or that of one or more of our other executive
officers, the loss could have a material adverse effect on our business and
results of operations. We do not maintain key-man life insurance policies on
our executive officers.

OUR PREFERRED STOCK MAY EFFECT THE RIGHTS OF THE HOLDERS OF OUR COMMON
STOCK; IT MAY ALSO DISCOURAGE ANOTHER PERSON TO ACQUIRE CONTROL OF MACE. Our
Certificate of Incorporation authorizes the issuance of up to 50,000,000 shares
of Preferred Stock. No shares of Preferred Stock are currently outstanding. It
is not possible to state the precise effect of Preferred Stock upon the rights
of the holders of our common stock until the Board of Directors determines the
respective preferences, limitations and relative rights of the holders of one or
more series or classes of the Preferred Stock. However, such effect might
include: (i) reduction of the amount otherwise available for payment of
dividends on Common Stock, to the extent dividends are payable on any issued
shares of Preferred Stock, and restrictions on dividends on Common Stock if
dividends on the Preferred Stock are in arrears, (ii) dilution of the voting
power of the Common Stock to the extent that the Preferred Stock has voting
rights, and (iii) the holders of Common Stock not being entitled to share in the
Company's assets upon liquidation until satisfaction of any liquidation
preference granted to the Preferred Stock.

The Preferred Stock may be viewed as having the effect of discouraging an
unsolicited attempt by another person to acquire control of Mace and may
therefore have an anti-takeover effect. Issuances of authorized preferred
shares can be implemented, and have been implemented by some companies in recent
years with voting or conversion privileges intended to make an acquisition of
the company more difficult or costly. Such an issuance could discourage or
limit the stockholders' participation in certain types of transactions that
might be proposed (such as a tender offer), whether or not such transactions
were favored by the majority of the stockholders, and could enhance the ability
of officers and directors to retain their positions.

SOME PROVISIONS OF DELAWARE LAW MAY PREVENT US FROM BEING ACQUIRED. We are
governed by Section 203 of the Delaware General Corporation Law, which prohibits
a publicly held Delaware corporation from engaging in a "business combination"
with a person who is an "interested stockholder" for a period of three (3)
years, unless approved in a prescribed manner. This provision of Delaware law
may affect our ability to merge with, or to engage in other similar activities
with, some other companies. This means that we may be a less attractive target
to a potential acquirer who otherwise may be willing to pay a price for our
common stock above its market price.

WE DO NOT EXPECT TO PAY CASH DIVIDENDS ON OUR COMMON STOCK. We do not
expect to pay any cash dividends on our common stock in the foreseeable future.
We will reinvest any cash otherwise available for dividends in our business.

THERE ARE ADDITIONAL RISKS SET FORTH IN THE INCORPORATED DOCUMENTS. In
addition to the risk factors set forth above, you should review the financial
statements and exhibits incorporated into this report. Such documents may
contain, in certain instances and from time to time, additional and supplemental
information relating to the risks set forth above and/or additional risks to be
considered by you, including, without limitation, information relating to losses
experienced by Mace in particular historical periods, working capital deficits
of Mace at particular dates, information relating to pending and recently
completed acquisitions, descriptions of new or changed federal or state
regulations applicable to Mace, data relating to remediation and the actions
taken by Mace, and estimates at various times of Mace's potential liabilities
for compliance with environmental laws or in connection with pending litigation.

11
<PAGE>

ITEM 2. DESCRIPTION OF PROPERTIES

The Company's corporate headquarters is located in Mount Laurel, New Jersey.
The Corporation rents approximately 10,000 square feet of space at an annual
cost of $120,000.

CAR WASH PROPERTIES. The principal fixed assets used by the Company are
its car wash facilities used for operating car care services which are described
under "Item 1. Line of Business." The 57 car wash facilities operated by the
Company as of December 31, 1999 are situated on sites owned or leased by the
Company. The Company owns 42 and leases 15 of its car wash facilities. The
location of its car washes and the services offered at the locations are set
forth in summary fashion in the chart below.

TYPE OF NUMBER OF
LOCATIONS /(1)/ CAR WASH /(2)/ FACILITIES
- ---------------------------- --------------- ----------
<S> <C> <C>
Philadelphia, Pennsylvania Exterior Washes 5
Full Service 3

Southern New Jersey Area Full Service 1
Exterior Wash 8

Smyrna, Delaware Exterior Washes 1

Phoenix, Arizona Area Full Service 14

Dallas, Texas Area Full Service 10

Austin, Texas Full Service 3

Lubbock, Texas Full Service 3

Sarasota, Florida Area Full Service 5

San Antonio, Texas Full Service 4
</TABLE>

(1) The majority of the Company's locations are owned except for the
following number of locations which are leased:

(i) Philadelphia, Pennsylvania (4)
(ii) Southern New Jersey Area (1)
(iii) Smyrna, Delaware (1)
(iv) Phoenix, Arizona Area (5)
(v) Dallas, Texas Area (4)

(2) Several locations also offer other consumer products and related car care
services, such as professional detailing services (offered at 43 locations),
oil and lubrication services (offered at 15 locations), gasoline dispensing
services (offered at 24 locations), state inspection services (offered at
six locations), and convenience store sales (offered at eight locations).

The Company owns real estate, buildings, equipment and other properties that it
employs in substantially all of its car wash, security products, computer
products and services operations. The Company expects to make substantial
investments in additional equipment and property for expansion, replacement of
assets, and in connection with future acquisitions.

Many of the car washes are encumbered by first mortgage loans. Of the 42 car
washes owned by the Company as of December 31, 1999, 25 had first mortgage loans
totaling $31,445,883 and 17 were not encumbered.

SAFETY AND SECURITY DEVICES PROPERTIES. The Company leases its facility in
Bennington, Vermont. Substantially all of the Company's operations of its safety
and security device division, including administration and sales, and all of its
production facilities are located at the Bennington facility. The facility
consists of approximately 220,000 square feet. The Company subleases the
facility under a sublease which expires on November 15, 2004 and provides for
the payment of $80,000 in annual rent.

12
<PAGE>

POINT OF SALE AND SOFTWARE PROPERTIES. The Company leases its facility in
Nazareth, Pennsylvania. Substantially all of the Company's operations of its
point of sale and software division, including administration and sales, and all
of its production facilities are located at the Nazareth facility. The facility
consists of approximately 5,000 square feet. The Company leases the facility
under a lease which expires on April 30, 2002 and provides for the payment of
$19,200 in annual rent.

ITEM 3. LEGAL PROCEEDINGS

The following discloses all pending litigation against the Company, other than
routine litigation, involving claims for damages in excess of $1.0 million,
which constitutes approximately ten (10%) percent of the Company's current
assets at December 31, 1999, and also discloses the disposition of claims
previously disclosed.

As disclosed in the Company's 1994 Form 10-KSB, on January 25, 1994, a suit was
filed by Carmeta Gentles on her own behalf and as personal representative of the
estate of Robert Gentles in Ontario Court (General Division), Ontario, Canada,
claiming intentional or negligent manufacture and distribution of the Mark V
Mace(R) brand defense spray unit and that its contents contributed to the
suffering and death of Robert Gentles while in the Kingston Penitentiary in
October 1993. The Company was added as a party defendant on February 8, 1995.
The plaintiff seeks five million dollars in damages. The Company forwarded this
suit to its insurance carrier for defense. The Company does not anticipate that
this claim will result in the payment of damages in excess of the Company's
insurance coverage.

As disclosed in the Company's Form 10-QSB for the quarter ended June 30, 1995,
on April 19, 1995 a suit was filed by Elaine Thomlinson, et al., in Ontario
Court (General Division), Ontario, Canada, claiming unspecified damages to
multiple school children for personal injuries, pain and suffering, emotional
trauma and financial loss and expense in consequence of their exposure to
noxious and hazardous substances while participating in a simulated emergency
exercise conducted at a local school by municipal authorities. This case has
been dismissed without the payment of any damages on the part of the Company or
its insurance company.

On July 27, 1998, the Company was added as a defendant in a suit filed in the
state of West Virginia by Susan H. Jackman, et. al. The litigation concerns an
attack on Mrs. Jackman by two dogs and the alleged failure of a "Muzzle(R)"
product distributed by the Company to repel the dogs. The suit claims product
liability and negligence and seeks one million dollars in damages. The Company
forwarded this suit to its insurance carrier for defense. The Company does not
anticipate that this claim will result in the payment of damages in excess of
the Company's insurance coverage.

On December 13, 1999, the Company was named as a defendant in a suit filed in
the state of New York by Janeen Johnson et. al. The litigation concerns a claim
that a self-defense spray manufactured by the Company and used by a law
enforcement officer contributed to the suffering and death of Christopher
Johnson. The Company forwarded the suit to its insurance carrier for defense.
The Company does not anticipate that this claim will result in the payment of
damages in excess of the Company's insurance coverage.

Although the Company is not aware of any substantiated claim of permanent
personal injury from its products, the Company is aware of reports of incidents
in which, among other things, defense sprays: have been mischievously or
improperly used, in some cases by minors; have not been instantly effective; or
have been ineffective against enraged or intoxicated individuals. Incidents of
this type, or others, could give rise to product liability or other claims, or
to claims that past or future advertising, packaging or other practices should
be, or should have been, modified, or that regulation of products of this nature
should be extended or changed.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Annual Meeting of the stockholders of Mace Security International, Inc. was
held on December 15, 1999. The following proposals were submitted to a vote:
(i) to approve for a one-year term for the Election of Directors, expiring at
the next Annual Meeting, (ii) to approve an Amended and Restated Certificate of
Incorporation for the purpose of: (a) adding a provision limiting the personal
liability of Mace's directors to Mace and its stockholders for monetary damages
for breaches of their fiduciary duties as directors as permitted by Section
102(b)(7) of the Delaware General Corporation Law, and (b) to combine into one
document all previous amendments to Mace's Certificate of Incorporation which
are now in effect, and (iii) to ratify the appointment of Ernst & Young LLP as
Mace's independent auditors for fiscal year 1999. All proposals were adopted by
the shareholders. The voting was as follows:

13
<PAGE>

Broker
Directors: Votes For Votes Against Abstentions Non-Votes
- -------------------------------- ---------- ------------- ----------- ---------
<S> <C> <C> <C> <C>
Louis D. Paolino, Jr. 17,919,956 4,995 - -
Mark S. Alsentzer 17,919,956 4,995 - -
Jon E. Goodrich 17,869,056 55,895 - -
Robert M. Kramer 17,919,956 4,995 - -
Richard B. Muir 17,919,956 4,995 - -
Matthew J. Paolino 17,919,956 4,995 - -
Constantine N. Papadakis 17,919,956 4,995 - -

Approve and adopt Amended
and Restated Certificate of
Incorporation 17,913,009 9,542 2,400 -

Ratify appointment of Ernst &
Young LLP 17,919,179 4,942 830 -
</TABLE>

EXECUTIVE OFFICERS OF THE COMPANY

The following information is furnished in this Part I pursuant to Instruction 3
to Item 401(b) of Regulation S-K:

There are no family relationships between any of the executive officers of the
Company except that Matthew J. Paolino is a brother to Louis D. Paolino, Jr.
The following table sets forth information regarding certain executive officers
of the Company.

NAME AGE POSITION
- ------------------------- --- -------------------------------------------
<S> <C> <C>
Louis D. Paolino, Jr... 43 Chairman of the Board, President, and Chief
Executive Officer

Gregory M. Krzemien.... 40 Chief Financial Officer and Treasurer
Robert M. Kramer....... 47 General Counsel, Executive Vice President
and Secretary
Michael G. Fazio....... 50 Vice President--Operations
Ronald R. Pirollo...... 41 Vice President, Corporate Controller
Matthew J. Paolino..... 35 Vice President
</TABLE>

LOUIS D. PAOLINO, JR. serves as the Chairman of the Board, President and
Chief Executive Officer of the Company. From June 1996 through December 1998,
Mr. Paolino served as Chairman of the Board, President and Chief Executive
Officer of Eastern Environmental Services, Inc. Prior thereto, he was President
of Soil Remediation of Philadelphia, Inc., a company engaged in the business of
treating contaminated soil which was sold to USA Waste Services, Inc., a waste
management corporation, in September 1993. From September 1993 to June 1996,
Mr. Paolino served as a Vice President of USA Waste Services, Inc. From
November 1995 to January 1996, Mr. Paolino served on the Board of Directors of
Metal Management, Inc., formerly known as General Parametrics Corp., a publicly
traded company. Mr. Paolino received a B.S. in Civil Engineering from Drexel
University. Mr. Paolino is 43 years old.

GREGORY M. KRZEMIEN serves as the Chief Financial Officer and Treasurer of the
Company. From August 1992 through December 1998, he served as Chief Financial
Officer and Treasurer of Eastern Environmental Services, Inc. From October 1988
to August 1992, Mr. Krzemien was a senior audit manager with Ernst & Young LLP,
and he held other positions with that firm since 1981. Mr. Krzemien received a
B.S. degree in Accounting from Pennsylvania State University and is a certified
public accountant. Mr. Krzemien is 40 years old.

ROBERT M. KRAMER serves as a director of the Company, and as the General
Counsel, Secretary and Executive Vice President of the Company. From June 1996
through December 1998, he served as General Counsel, Executive Vice President
and Secretary of Eastern Environmental Services, Inc. Mr. Kramer is an attorney
and has practiced law since 1979 with various firms, including Blank Rome
Comisky & McCauley, Philadelphia, Pennsylvania and Arent Fox Kitner Poltkin &
Kahn, Washington, D.C. Since 1989, Mr. Kramer has been the sole partner of
Robert M. Kramer & Associates, P.C., a law firm consisting of three lawyers.

14
<PAGE>

Although Mr. Kramer will continue his private practice of law at Robert M.
Kramer & Associates, P.C., he will devote a substantial amount of time to
performing his duties for the Company. From December 1989 to December 1997, Mr.
Kramer served on the Board of Directors of American Capital Corporation, a
registered securities broker dealer. Mr. Kramer received a J.D. degree from
Temple University of Law School. Mr. Kramer is 47 years old.

MICHAEL G. FAZIO is serving as Vice President - Operations of the Company.
Mr. Fazio has over 25 years of experience in the car care industry. Since 1972,
Mr. Fazio has built and managed twelve car washes which included gas stations,
convenience stores and quick oil changes. In 1997, Mr. Fazio sold his business
to become President and Chief Operating Officer of Wash Depot, a large
consolidator in the car care industry. Under Mr. Fazio's leadership, Wash Depot
grew to $100 million in sales and over 6,000 employees. Mr. Fazio is highly
regarded in the car care industry and is often asked to speak at seminars within
the car wash community. Mr. Fazio is 50 years old.

RONALD R. PIROLLO serves as Vice President and Corporate Controller of the
Company. Mr. Pirollo served as Vice President and Corporate Controller of
Eastern Environmental Services, Inc. from July 1997 to June 1999. Prior
thereto, Mr. Pirollo was with Envirite Corporation for ten years, where he
served in various financial management positions including Vice President -
Finance. Mr. Pirollo received a B.S. degree in Accounting from Villanova
University in 1981. Mr. Pirollo is 41 years old.

MATTHEW J. PAOLINO serves as a director and as a Vice President of the
Company. From 1996 to December 1998, Mr. Paolino served as a director of
Eastern Environmental Services, Inc. as well as Vice President of Risk
Management, Asset Management and Special Waste Divisions of Eastern
Environmental Services, Inc. From 1993 to 1996, Mr. Paolino served as Vice
President and General Manager - Soil Remediation Division of USA Waste Services,
Inc., which was acquired by Eastern in August 1997. Mr. Paolino received a B.S.
degree in Civil Engineering from Villanova University in 1986 and a J.D. degree
from the Widener School of Law in 1994. Mr. Paolino is the brother of Louis D.
Paolino, Jr., the Chairman, President and Chief Executive Officer of the
Company. Mr. Paolino is 35 years old.

EMPLOYEES

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

(a) MARKET PRICE AND DIVIDENDS OF THE REGISTRANT'S COMMON EQUITY

The Company's Common Stock is traded in the over-the-counter market and quoted
on the Nasdaq National Market under the trading symbol "MACE". The common stock
prices reflect inter-dealer quotations, do not include retail markups, markdowns
or commissions and do not necessarily represent actual transactions.

The following table sets forth, for the quarters indicated, the high and low
sale prices per share for the Company's Common Stock, as reported by Nasdaq.

HIGH LOW
------- -------
<S> <C> <C>

Year Ended December 31, 1998
First Quarter................ 1 9/16 7/8
Second Quarter............... 1 11/16 1 1/4
Third Quarter................ 1 1/2 1 1/8
Fourth Quarter............... 1 13/16 1 9/16

Year Ended December 31, 1999
First Quarter................ 6 1 9/16
Second Quarter............... 14 1/8 5 11/16
Third Quarter................ 10 5/8 6 1/16
Fourth Quarter............... 8 7/8 4
</TABLE>

15
<PAGE>

The closing price for the Common Stock on March 23, 2000 was $4.9375 (4 15/16).
For purposes of calculating the aggregate market value of the shares of Common
Stock of the Company held by nonaffiliates, as shown on the cover page of this
report, it has been assumed that all the outstanding shares were held by
nonaffiliates except for the shares held by directors and executive officers of
the Company and stockholders owning 10% or more of the outstanding shares.
However, this should not be deemed to constitute an admission that all such
persons are, in fact, affiliates of the Company, or that there are not other
persons who may be deemed to be affiliates of the Company. Further information
concerning ownership of the Company's securities by executive officers,
directors and principal stockholders will be included in the Company's
definitive proxy statement to be filed with the Securities and Exchange
Commission.

As of March 23, 2000, the Company had 224 holders of record and approximately
1,626 beneficial owners of its Common Stock.

The Company does not anticipate paying any cash dividends in the foreseeable
future and intends to retain all working capital and earnings, if any, for use
in the Company's operations and in the expansion of its business. Any future
determination with respect to the payment of dividends will be at the discretion
of the Board of Directors and will depend upon, among other things, the
Company's results of operations, financial condition and capital requirements,
the terms of any then existing indebtedness, general business conditions, and
such other factors as the Board of Directors deems relevant. Certain of the
Company's credit facilities prohibits or limits the payment of cash dividends
without prior bank approval.

(b) RECENT SALES OF UNREGISTERED SECURITIES

On October 18, 1999, the Company, through its wholly owned subsidiary, Mace Car
Wash, Inc. consummated the acquisition of all the car wash related assets of
White Glove Chicago Partnership ("White Glove Car Wash") in exchange for 29,762
unregistered shares of the Company's common stock issued to the shareholders of
White Glove Car Wash, cash consideration of $130,000 and the issuance of a
$345,000 promissory note. An additional issuance of the Company's common stock
of up to 8,333 shares may be completed pending the resolution of certain post-
closing obligations.

On October 29, 1999, the Company, through its wholly owned subsidiary, Mace Car
Wash, Inc., consummated the acquisition of all the car wash related assets of
Millennia Car Wash, LLC pursuant to the terms of a Real Estate and Asset
Purchase Agreement. Consideration for the acquisition included the assumption
of approximately $15 million of debt, the issuance of 3,500,000 unregistered
shares of the Company's common stock to the shareholders of Millennia, and the
issuance of warrants to purchase 62,500 shares of the Company's common stock.

On December 29, 1999, the Company, through its wholly owned subsidiary, Mace Car
Wash, Inc., consummated the acquisition of all the assets of the car wash
facility having the address of 1505 East Marlton Pike, Cherry Hill, New Jersey
("Cherry Hill Car Wash") in exchange for 63,309 unregistered shares of the
Company's common stock issued to the shareholders of Cherry Hill Car Wash and
cash consideration of $1,900,000.

In December 1999, the Company sold an aggregate of 280,606 shares of common
stock to several accredited investors including certain of the Company's
affiliates pursuant to certain stock purchase and sales agreements. The
purchase price per share was $3.30 for 60,606 shares and $3.00 for 220,000
shares providing aggregate proceeds of $860,000 to the Company.

Under the private placements and acquisitions described above, the Company has
agreed under certain circumstances to register certain of the Shares for the
above transactions for resale under the Securities Act of 1933 (the "Act"). The
sale of the Shares in the private placements and the issuance of the shares in
the aforementioned acquisitions were exempt from the registration provisions of
the Act pursuant to Section 4(2) of the Act and/or Regulation D promulgated
under the Act for transactions not involving a public offering, based on the
fact that the private placements were made to accredited investors who had
access to financial and other relevant data concerning the Company, its
financial condition, business and assets. The securities sold in the private
placement and issued in the acquisitions may not be reoffered or resold absent
registration under the Act or available exemptions from such registration
requirements.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion reviews the Company's operations for the two years
ended December 31, 1999, and should be read in conjunction with the Company's
consolidated financial statements and related notes thereto included elsewhere
herein. The Company has restated its previously issued financial statements for
1998 to reflect the acquisitions of Innovative Control Systems,

16
<PAGE>

Inc., 50's Classic Car Wash, Inc., and Eager Beaver Car Wash, Inc. which were
consummated in July, August and September 1999, respectively and accounted for
under the pooling of interests method of accounting.

The follow discussion includes statements that are forward-looking in nature.
The accuracy of such statements depends upon a variety of factors that may
affect the business and operations of the Company. Certain of these factors are
discussed under "Business -- Factors Influencing Future Results and Accuracy of
Forward-Looking Statements" included in Item 1 of this report.

INTRODUCTION

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1999 COMPARED TO THE YEAR
ENDED DECEMBER 31, 1998

REVENUES

The Company currently operates in three separate business segments: (1) the Car
Care segment, supplying complete car care services (including wash, detailing,
lube, and minor repairs), fuel and merchandise sales, (2) the Security Products
sales segment, producing and marketing defense sprays, and marketing and
retailing consumer safety and security products, and (3) the Computer Hardware
and Software Products and Services segment, developing and manufacturing
specialty point of sale and control software for principally the car care
industries.

CAR CARE SERVICES

The Company owns or operates, pursuant to operating agreements, full service,
exterior only and self-service car wash locations in New Jersey, Pennsylvania,
Delaware, Texas, Florida and Arizona. The Company earns revenues from washing
and detailing automobiles; performing oil and lubrication services, minor auto
repairs, and state inspections; selling fuel; and selling merchandise through
convenience stores within the car wash facilities. Revenues generated for the
year ended December 31, 1999 for the car care segment were comprised of
approximately 77% car wash and detailing, 12% lube and other automotive
services, 9% fuel and merchandise, and 2% from operating agreements.

The majority of revenues are collected in the form of cash or credit card
receipts, thus minimizing customer accounts receivable.

Weather can have a significant impact on volume at the individual locations.
However, the Company believes that the geographic diversity of its operating
locations minimizes weather-related influence on its volume.

SECURITY PRODUCTS

The Company operates its security products segment in two main divisions, the
Consumer Division and the Mace Anti-Crime Bureau Division. The Company's
Consumer Division manufactures and markets personal safety, and home and auto
security products. These products are sold through retail stores, major
discount stores, and at the Company's car care facilities. The Mace Anti-Crime
Bureau Division provides expertise in developing and producing criminal
deterrent systems for government and law enforcement agencies, and financial
institutions.

COMPUTER PRODUCTS AND SERVICES

The Company's computer products and service segment is a developer, manufacturer
and retailer of specialty point of sale and control software for principally the
car care industries. Its primary product, a software package called "Tunnel
Master", provides car wash equipment control, point of sale and management
information, and a software product which provides management and control of
lube operations. The software is usually sold as a package with computer
hardware, car wash tunnel controller equipment and customer service support
contracts. Another software product being marketed is called "Vision Master"
which allows users to access cameras and view operations remotely using a
personal computer from anywhere in the world. These products and services are
sold directly and through independent distributors.

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<PAGE>

COST OF REVENUES

CAR CARE SERVICES

Cost of revenues consists primarily of direct labor and related taxes and
benefits, chemicals, wash and detailing supplies, rent, real estate taxes,
utilities, maintenance and repairs of equipment and facilities, as well as the
cost of the fuel and merchandise sold.

SECURITY PRODUCTS

Cost of revenues consists primarily of costs to manufacture the security
products including direct labor and related taxes and benefits, and raw material
costs.

COMPUTER PRODUCTS AND SERVICES

Cost of revenues consists primarily of costs to develop, manufacture or purchase
the computer software and equipment, including direct labor and related taxes
and benefits, and raw material costs as well as computer support staff salaries
and related taxes and benefits.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Selling, general and administrative expenses consist primarily of management,
clerical and administrative salaries, professional services, insurance premiums,
and costs relating to marketing and sales.

The Company capitalizes direct incremental costs associated with purchase
acquisitions. Indirect acquisition costs, such as executive salaries, corporate
overhead, public relations, and other corporate services and overhead are
expensed as incurred. The Company also charges as an expense any capitalized
expenditures relating to proposed acquisitions that will not be consummated.

At December 31, 1999, capitalized costs related directly to proposed
acquisitions that were not yet consummated were approximately $183,000. The
Company periodically reviews the future likelihood of these acquisitions and
records appropriate provisions against capitalized costs associated with
projects that are not likely to be completed.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization consists primarily of depreciation of buildings
and equipment, and amortization of goodwill and other intangible assets.
Buildings and equipment are depreciated over the estimated useful lives of the
assets using the straight-line method. Goodwill is amortized on a straight-line
basis over 25 years. Other intangibles are amortized over their useful lives
ranging from three to twenty years, using the straight line method.

MERGER COSTS

In 1999, the Company incurred approximately $225,000, $120,000, and $1,530,000
in merger-related costs associated with the ICS, Classic, and Eager Beaver
mergers, respectively, of which approximately $55,000 is remaining in accrued
liabilities at December 31, 1999. Merger costs consisted of transaction-related
expenses of $680,000 which includes deal costs, legal, accounting and other
professional and consulting fees, filing fees, external due diligence costs,
contractual costs, and finder fees as well as employee severance and termination
costs which totaled $1,195,000. Additionally, tax provisions of $(8,000),
$96,000, and $50,000 were recorded at the date of the mergers relating to net
deferred tax liabilities with respect to the termination of the previous S
Corporation elections of ICS, Classic and Eager Beaver, respectively. This
total tax provision of $138,000 is included within income tax expense for 1999.

RESTRUCTURING, ASSET ABANDONMENT COSTS AND CHANGE IN CONTROL CHARGES

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<PAGE>

to the Company's plan to abandon a portion of its currently leased facilities in
Vermont; and a $587,000 non-cash compensation charge relating to the vesting of
variable options to certain previous directors of the Company upon the Company's
recent change in control. The remaining charge of approximately $341,000
includes certain severance costs accrued as well as legal, accounting and other
transaction costs related to the Company's change in control.

OTHER INCOME AND EXPENSE

Other income and expense includes gains and losses on the sale of equipment,
asset write-downs, and rental income largely from subletting at the Company's
Vermont leased facility.

TAXES

The Company recorded a tax benefit of $588,519 for the year ended December 31,
1999 and a tax expense of $4,358 for the year ended December 31, 1998. The net
benefit is comprised of a benefit of approximately $948,000 of Federal and State
taxes at statutory rates, and a $360,000 one-time tax expense related to non-
deductible merger costs and the establishment of deferred income tax liabilities
for pooled companies acquired during 1999, which were S Corporations prior to
the date of merger. The tax benefit reflects the recording of Federal and State
taxes at a rate of 32%. An effective rate lower than the Federal and State
statutory rate for 1999 is primarily due to the use of net operating loss
carryforwards, income from pooled companies which were taxed as S Corporations,
and the one-time effect of the charge from the pooled company acquisitions.

The following table presents the percentage each item in the consolidated
statements of operations bears to total revenues:

<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
-------------
1999 1998
------ -----
<S> <C> <C>

Revenues 100.0% 100.0%

Cost of revenues 64.4 57.3

Selling, general and administrative expenses 23.2 30.2

Depreciation and amortization 4.0 8.2

Merger costs 6.5 -

Restructuring and change in control cost 5.3 -
------ -----
Operating (loss) income (3.4) 4.3

Interest expense, net (3.8) (3.4)

Other (expense) income 0.7 3.1
------ -----
(Loss) income from continuing operations before income (6.5) 4.0

Income tax (benefit) expense (2.0) 0.1
------ -----

(Loss) income from continuing operations (4.5) 3.9

Income (loss) from discontinued operations 0.1 (6.4)
------ -----
Net loss (4.4)% (2.5)%
====== =====
</TABLE>

REVENUES

CAR CARE SERVICES

Revenues for the year ended December 31, 1999 were $22.3 million as compared to
$4.8 million for the year ended December 31, 1998, an increase of $17.5 million
or 365%. Of the $22.3 million of revenues for the year ended December 31, 1999,
$17.1 million or 77% was generated from car wash and detailing, $2.7 million or
12% from lube and other automotive services, $2.1

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<PAGE>

million or 9% from fuel and merchandise sales and $462,000 or 2% from operating
agreements. For the year ended December 31, 1998, $4.4 million or 92% was
generated from car wash and detailing, and $462,000 or 8% from fuel and
merchandise sales.

During 1999, the Company managed several car wash locations under operating
agreements, under which the Company was entitled to all profits generated from
the operation of those locations. The income earned under these agreements is
shown as revenues net of related operating expenses. Revenue including gross
revenue generated by locations under operating agreements was $32.0 million
consisting of $25.6 million, or 80%, from car wash and detailing, $3.3 million,
or 10%, from lube and other automotive services, and $3.1 million, or 10%, from
fuel and merchandise sales.

SECURITY PRODUCTS

Revenues for the year ended December 31, 1999 were $3.4 million as compared to
$2.4 million for the year ended December 31, 1998, an increase of $1.0 million,
or 42%. This increase is primarily attributable to increased sales to the
sporting goods market and major discount stores. This increase was partially
offset by the elimination of sales in the Company's independent Mace retail
stores in the third quarter of 1998.

COMPUTER PRODUCTS AND SERVICES

Revenues for the year ended December 31, 1999 were $2.9 million compared to $2.0
million for the year ended December 31, 1998, an increase of $0.9 million, or
45%. This increase is attributable to an increase in demand for and sales of
the "Tunnel Master" system which continues to expand its functionality and
versatility based on customers' demands.

COST OF REVENUES

CAR CARE SERVICES

Cost of revenues for the year ended December 31, 1999 were $14.8 million, or 64%
of revenues. However, because income earned under operating agreements is shown
as a net figure in revenue, already reduced by cost of revenues, the cost of
revenue percentage for this segment is better analyzed on a gross method.

With revenues and cost of revenues for locations under operating agreement shown
on a gross basis, total cost of revenues was $22.2 million or 69% of revenues
for this segment, with car wash and detailing costs at 66% of respective
revenues, lube and other automotive services costs at 78% of respective
revenues, and fuel and merchandise costs at 84% of respective revenues.

Cost of revenues for the year ended December 31, 1998 were $2.8 million or 60%
of revenues.

SECURITY PRODUCTS

Cost of revenues for the year ended December 31, 1999 were $1.8 million compared
to $1.2 million for the year ended December 31, 1998. Cost of revenues as a
percentage of revenues for the year ended December 31, 1999, was 53% as compared
to 51% for the same period in 1998. The increase in cost of sales as a
percentage of revenues is primarily due to the effect on revenues of promotional
discounts given during 1999.

COMPUTER PRODUCTS AND SERVICES

Cost of revenues for the year ended December 31, 1999 were $1.8 million compared
to $1.2 million for the year ended December 31, 1998. Cost of revenues for the
year ended December 31, 1999 was 62% as compared to 59% for the same period in
1998. The increase in cost of sales as a percentage of revenues is primarily due
to an increase in certain computer hardware components and increases in labor
costs, especially in the area of support services.

Selling, general and administrative expenses for the year ended December 31,
1999 were $6.7 million compared to $2.8 million for the year ended December 31,
1998, an increase of $3.9 million, or 139%. The primary reason for this
increase is the infrastructure established during 1999 in order to effectively
enter the Car Care Industry and execute the Company's growth strategy. These
increased costs included accounting, finance, legal and administrative costs
necessary to integrate the acquisitions consummated. This increase is partially
offset by cost controls placed on previously private companies and favorable
pricing for supplies, insurance, and other indirect costs due to economies of
scale.

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<PAGE>

Depreciation and amortization totaled $1.1 million for the year ended December
31, 1999 as compared to $755,000 for the same period in 1998. This increase is
the result of entering the Car Care industry, which required a substantial
investment in property and equipment. Additionally, certain acquisitions
resulted in the recording of goodwill, which increased amortization expense.

TAXES

At December 31, 1999, the Company has approximately $7.1 million of net
operating loss carryforwards for federal income tax purposes. Components of the
net operating loss carryforwards include $5.9 million from continuing operations
and $1.2 million from acquired net operating losses attributable to the Colonial
Full Service Car Wash, Inc. acquisition. However, due to a change in control,
the Company's ability to use such net operating loss carryforwards may be
limited.

LIQUIDITY AND CAPITAL RESOURCES

The Company's business requires substantial amounts of capital, most notably to
pursue the Company's acquisition strategies and for equipment purchases and
upgrades. The Company plans to meet these capital needs from various financing
sources, including borrowings, internally generated funds, and the issuance of
common stock.

As of December 31, 1999, the Company had a working capital deficit of $1.4
million, including cash and cash equivalents of $2.3 million. For the year
ended December 31, 1999, net cash used in operations was approximately $1.1
million, net cash provided by financing activities was approximately $12.6
million and net cash used in investing activities was approximately $13.8million
resulting in a decrease in cash and cash equivalents of $2.3 million. Capital
expended during the period included $11.2 million relating to acquisitions, $1.1
million of deposits and prepaid costs on future acquisitions, and $2.3 million
for the purchase of operating equipment and real estate.

The Company's acquisition program and operations to date have required
substantial amounts of working capital, and the Company expects to expend
substantial funds to support its acquisition program and capital needs for
equipment. The Company estimates aggregate capital expenditures, exclusive of
acquisitions of businesses, of approximately $1.5 million for the year ending
December 31, 2000. At December 31, 1999, the Company had borrowings of
$32,784,277. The Company does not have any letters of credit outstanding nor
does it maintain a revolving credit facility. Additionally, at December 31,
1999, the Company had approximately $11.7 million of debt which required
refinancing in the first quarter of 2000, including a $4.75 million promissory
note related to the acquisition of Genie, approximately $4.8 million of debt
with Bank One, Texas N.A. ("Bank One") assumed by the Company in connection with
the Colonial acquisition, and a $2.15 million note payable to SouthTrust Bank
relating to the Eager Beaver merger. In February 2000, the Company financed the
remaining $4.35 million balance of the Genie promissory note through a three
year term note (15 year amortization basis) with Bank One, finalized the
assumption of the Colonial notes with Bank One and the original maturities of
the notes due on various dates in 2001, and entered into an extension agreement
with respect to the SouthTrust Bank note until May 2001. The Company has
currently addressed this capital need through the completion of several private
placements of the Company's common stock and the consummation of a Stock
Purchase Agreement. On June 23, 1999, the Company completed its sale of 392,857
shares pursuant to a Stock Purchase and Sale Agreement with the Environmental
Opportunities Fund II, L.P. and the Environmental Opportunities Fund II
(Institutional), L.P. which provided proceeds of $3.3 million. On July 1, 1999,
the Company, pursuant to a Stock Purchase Agreement entered into by the Company
on March 26, 1999, sold 3,735,000 shares of the Company's common stock at a
price of $1.375 per share to Louis D. Paolino, Jr. and certain individuals
designated by Mr. Paolino. Also, on July 1, 1999, the Company consummated a
private placement of 1,600,000 shares of its common stock at $2.00 per share to
certain accredited investors designated by Mr. Paolino. On September 8, 1999,
the Company consummated a private placement of 238,095 shares of the Company's
common stock at a price of $8.40 per share to Park Equity Partners which
provided proceeds of $2 million to the Company. Finally, on December 29, 1999,
the Company sold an aggregate of 280,606 shares of common stock to several
accredited investors including certain of the Company's affiliates at an average
price of $3.07 which provided proceeds of $860,000 to the Company. Total
additional net proceeds from the July 1, 1999 Stock Purchase Agreement and the
July 1/st/,

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<PAGE>

September 9/th/ and December 29/th/ private placements were $10,954,000. The
shares sold pursuant to the above Stock Purchase Agreement and private placement
are unregistered and thus restricted for one year and are subject to certain
selling limitations in the second year. The Company is also actively working
with several parties to raise additional funds through additional equity or debt
placements. No assurance can be given that additional financing will be
available, or if available, that it will be available at acceptable terms.

SEASONALITY AND INFLATION

The Company believes that its car washing and detailing operations are adversely
affected by periods of inclement weather. The Company has mitigated and intends
to continue to mitigate the impact of inclement weather through geographic
diversification of its operations.

The Company believes that inflation and changing prices have not had, and are
not expected to have any material adverse effect on its results of operations in
the near future.

YEAR 2000

The Company has completed its year 2000 remediation plan. Although we believe
our Year 2000 remediation plan was adequate to address the Year 2000 issue, the
Company is continually acquiring new businesses and locations, which may require
an on-going process to convert, assess, and if necessary, remediate newly
acquired systems. This issue is part of our standard due diligence when
evaluating potential acquisitions so that remedial efforts, if any, can be
evaluated and scheduled.

Additionally, the Company's Computer Products and Services operations develop
specialty point of sale and control software for principally the car care
industry. Its primary products are: "Tunnel Master", which provides car wash
equipment control, point of sales, and management information; "Clout", which
provides point of sales and service controls to the quick lube industry; and
"Vision Master", which allows users to access cameras and view operations
remotely using a personal computer. Based on our current assessment, we believe
the current versions of our software products are Year 2000 compliant - that is,
they are capable of adequately distinguishing 21/st/ century dates from 20/th/
century dates. However, our products are generally integrated into other third
party company systems involving hardware and software products that we cannot
adequately evaluate for Year 2000 compliance. Although we have not been a party
to any claims involving our products or services related to Year 2000 compliance
issues, we may in the future be required to defend our products or services in
such claims proceedings, or to negotiate resolutions of claims based on Year
2000 issues.

ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The reports of independent auditors and consolidated financial statements are
included in Part III, ITEM 13. of this Report beginning on page F- 1.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

The firm of Urbach Kahn & Werlin PC served as the independent accountants of the
Company for the two years ended December 31, 1998 and 1997. In May 1999, Urbach
Kahn & Werlin PC resigned as the Company's independent accountants. The reports
of Urbach Kahn & Werlin PC on the Company's consolidated financial statements
for the two fiscal years did not contain any adverse opinion or disclaimer of
opinion, or modification or qualification as to uncertainty, audit scope or
accounting principles. Additionally, there have been no disagreements between
the Company and Urbach Kahn & Werlin PC on any matter of accounting principles
or practices, financial statement disclosure or auditing scope or procedure,
which disagreements, if not resolved to the satisfaction of Urbach Kahn & Werlin
PC, would have caused them to make reference thereto in their report on the
Company's consolidated financial statements for such years.

In May 1999, the Company selected the international accounting firm of Ernst &
Young LLP to serve as the Company's new independent accountants. The
appointment of Ernst & Young LLP as the Company's independent auditors for the
fiscal year 1999 was approved by the Company's Board of Directors and ratified
at the Company's annual meeting of the stockholders held on December 15, 1999.
Ernst & Young LLP has issued an opinion with respect to the audit of the
consolidated balance sheet

22
<PAGE>

of the Company as of December 31, 1998 and the related consolidated statements
of operations, stockholders' equity, and cash flows for each of the two years in
the period ended December 31, 1998, as restated for three pooling of interest
acquisitions completed in 1999. In January 2000, the Company was advised that
Ernst & Young LLP resigned as the Company's independent accountants due to a
business conflict as a result of pending litigation between two clients and the
focus of part of that litigation on financial statements of another client that
Ernst & Young LLP audited. The reports of Ernst & Young LLP on the Company's
consolidated financial statements as restated for the two years ended December
31, 1998 did not contain any adverse opinion or disclaimer of opinion, or
modification or qualification as to uncertainty, audit scope or accounting
principles. In connection with its audits for the two most recent years, there
have been no disagreements between the Company and Ernst & Young LLP on any
matter of accounting principles or practices, financial statement disclosure or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of Ernst & Young LLP, would have caused them to make reference
thereto in their report on the Company's consolidated financial statements for
such years.

In January 2000, the Company selected the international accounting firm of Grant
Thornton LLP to serve as the Company's new independent accountants. Grant
Thornton LLP has not consulted or performed any work for the Company in the last
two years.

PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information concerning directors appearing in the sections entitled
"Election of Directors" in the Company's definitive proxy statement to be filed
with the Securities and Exchange Commission in connection with the Company's
1999 annual meeting of stockholders ("Proxy Statement") is incorporated herein
by this reference. The information concerning executive officers is set forth in
Part I herein.

ITEM 10. EXECUTIVE COMPENSATION

The information contained in the section of the Proxy Statement entitled
"Executive Compensation" is incorporated herein by this reference.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information contained in the section of the Proxy Statement entitled
"Security Ownership of Certain Beneficial Owners and Management" is incorporated
herein by this reference.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information contained in the section of the Proxy Statement entitled
"Certain Transactions" is incorporated herein by this reference.

ITEM 13. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a)(1) Consolidated Financial Statements:

Reports of Independent Auditors

Consolidated Balance Sheets as of December 31, 1999 and 1998

Consolidated Statements of Operations for the years ended December 31,
1999 and 1998

Consolidated Statements of Stockholders' Equity for the years ended
December 31, 1999 and 1998

Consolidated Statements of Cash Flows for the years ended December 31,
1999 and 1998

Notes to Consolidated Financial Statements

(a)(2) The requirements of Schedule II have been included in the notes to the
financial statements. All other schedules for which provision is made in
the applicable accounting regulations of the Securities and Exchange
Commission are not required under the related instructions or are
inapplicable and; therefore, have been omitted.

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<PAGE>

(a)(3) Exhibits:

The following Exhibits are filed as part of this report (exhibits marked
with an asterisk have been previously filed with the Commission and are
incorporated herein by this reference):

(a) Exhibits:

*3.1 Certificate of Incorporation of Mace Security International, Inc.
(Exhibit 3.1 to the Company's Report on Form 10-QSB for the quarter
ended June 30, 1999 (the "June 30, 1999 Form 10-QSB"))
*3.2 Certificate of Amendment of Certificate of Incorporation of Mace
Security International, Inc. (Exhibit 3.2 to the June 30, 1999 Form 10-
QSB)
3.3 Amended and Restated Bylaws of Mace Security International, Inc.
3.4 Amended and Restated Certificate of Incorporation of Mace Security
International, Inc.
*10.3 1993 Non-Qualified Stock Option Plan (1)
*10.22 Trademarks(1)
*10.28 Warrants in connection with the acquisition of the assets of the
KinderGard Corporation(2)
*10.34 Real Estate Purchase Agreement between Vermont
Economic Development Authority and Mace Security International, Inc.(2)
*10.39 Line of Credit Note for $1,500,000 with Vermont National Bank
*10.40 Term Note for $1,500,000 with Vermont National Bank
*10.41 Security Agreement with Vermont National Bank
*10.58 First National Bank of New England Loan closing documents dated
September 25, 1997 - the $800,000 note
*10.59 First National Bank of New England Loan closing documents dated
September 25, 1997 - the $1,000,000 note
*10.60 First National Bank of New England Loan closing documents
dated September 25, 1997 - the $250,000 line of credit
*10.61 Asset Purchase Agreement between the Company and MSP Retail, Inc. dated
September 10, 1997
*10.62 First National Bank of New England loan closing documents dated
February 5, 1998 relating to the $800,000 loan guaranteed by the U.S.
Department of Agriculture
*10.63 Purchase Agreement between the Company and Armor Holdings, Inc. and its
subsidiary dated April 2, 1998
*10.64 Fairness Opinion relating to the sale of substantially
all the assets of the Law Enforcement division to Armor Holdings, Inc.
*10.65 Term Note with MSP, Inc. as payee to the Company dated as of July 1,
1998
*10.66 Employment Agreement between the Company and Jon E. Goodrich effective
as of September 1, 1998 (3)
*10.67 Employment Agreement between the Company and Mark A. Capone effective
as of September 17, 1998 (3)
*10.68 Settlement Agreement between the Company and MSP Retail, Inc. dated
December 2, 1998
*10.69 Merger Agreement between Louis D. Paolino, Red Mountain Holding, Ltd.
and Mace Security International, Inc. dated as of March 26, 1999 +
*10.70 Stock purchase Agreement, between Louis Paolino, Jr. and Mace
Security International, Inc. dated as of March 26, 1999
*10.71 Employment Contract between Mace Security International, Inc. and
Robert M. Kramer dated March 26, 1999 (3)
*10.72 Employment Contract between Mace Security International, Inc. and
Gregory M. Krzemien dated March 26, 1999 (3)
*10.73 Amendment No. 1 to Merger Agreement between Louis D. Paolino, Red
Mountain Holding, Ltd. and Mace Security International, Inc. dated
April 13, 1999
*10.74 Amendment No. 1 to Stock purchase Agreement, between Louis Paolino, Jr.
and Mace Security International, Inc. dated April 13, 1999
*10.75 Stock Purchase Agreement dated as of February 4, 1999, by and between
Gary Higgins, Rosario Higgins, Rosa Maria Dietrich, Rainer Dietrich,
Amy Schmadeke, Elisa Rauch and Gunter Rauch and American Wash Services,
Inc. (Exhibit 2.1 to the Company's Current Report on Form 8-K dated May
17, 1999 (the "May 17, 1999 Form 8-K")) +
*10.76 Amendment Number One to Stock Purchase Agreement dated April 1, 1999,
between Gary Higgins, Rosario Higgins, Rosa Maria Dietrich, Rainer
Dietrich, Amy Schmadeke, Elisa Rauch, Gunter Rauch and Steven Sims and
American Wash Services, Inc. (Exhibit 2.2 to the May 17, 1999 Form 8-K)

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<PAGE>

*10.77 Assignment dated May 17, 1999 between Mace Security International,
Inc., Mace Anti Crime Bureau, Inc., and American Wash Services, Inc.
(Exhibit 2.3 to the May 17, 1999 Form 8-K)
*10.78 Car Wash Asset Purchase/Sale Agreement dated July 8, 1998 between Genie
Car Wash Inc. of Austin, Genie Car Care Center, Inc., Genie Car Service
Center, Inc., and Cornett Limited Partnership and Millennia Car Wash
Group LLC. (Exhibit 2.1 to the Company's Current Report on Form 8-K
dated May 18, 1999 (the "May 18, 1999 Form 8-K")) +
*10.79 First Amendment to Car Wash Asset Purchase/Sale Agreement effective
July 8, 1998 between Genie Car Wash Inc. of Austin, Genie Car Care
Center, Inc., Genie Car Service Center, Inc., and Cornett Limited
Partnership and Millennia Car Wash Group LLC (Exhibit 2.2 to the May
18, 1999 Form 8-K)
*10.80 Second Amendment to Car Wash Asset Purchase/Sale Agreement effective
April 29, 1999 between Genie Car Wash Inc. of Austin, Genie Car Care
Center, Inc., Genie Car Service Center, Inc., and Cornett Limited
Partnership and Millennia Car Wash Group LLC. (Exhibit 2.3 to the May
18, 1999 Form 8-K)
*10.81 Third Amendment to Car Wash Asset Purchase/Sale Agreement effective May
17, 1999 between Genie Car Wash Inc. of Austin, Genie Car Care Center,
Inc., Genie Car Service Center, Inc., and Cornett Limited Partnership
and Millennia Car Wash Group LLC. (Exhibit 2.4 to the May 18, 1999 Form
8-K)
*10.82 Fourth Amendment to Car Wash Asset Purchase/Sale Agreement effective
May 18, 1999 between Genie Car Wash Inc. of Austin, Genie Car Care
Center, Inc., Genie Car Service Center, Inc., and Cornett Limited
Partnership and Millennia Car Wash Group LLC. (Exhibit 2.5 to the May
18, 1999 Form 8-K)
*10.83 Promissory Note in the amount of $4,750,000 by Mace Car Wash-Arizona,
Inc., dated May 18, 1999, payable to Mike W. Cornett as collecting
agent for Genie Car Wash Inc. of Austin, Genie Car Care Center, Inc.,
Genie Car Service Center, Inc. and Cornett Limited Partnership.
(Exhibit 2.6 to the May 18, 1999 Form 8-K)
*10.84 Security Agreement dated May 18, 1999 between Mace Car Wash-Arizona,
Inc. and Genie Car Wash Inc. of Austin, Genie Car Care Center, Inc.,
Genie Car Service Center, Inc. and Cornet Limited Partnership. (Exhibit
2.7 to the May 18, 1999 Form 8-K)
*10.85 Agreement of Sale dated as of April 22, 1999 by and among Gabe Kirikian
and Alice Kirikian, Gabe's Plaza Car Wash, Inc. and Red Mountain
Holdings, Ltd. (Exhibit 2.1 to the Company's Current Report on Form 8-K
dated June 1, 1999 (the "June 1, 1999 Form 8-K")) +
*10.86 First Amendment to Agreement of Sale dated as of May 10, 1999 by and
among Gabe Kirikian and Alice Kirikian, Gabe's Plaza Car Wash, Inc. and
Red Mountain Holdings, Ltd. (Exhibit 2.2 to the June 1, 1999 Form 8-K)
*10.87 Assignment dated May 17, 1999 between Mace Security International, Inc.
and Red Mountain Holdings, Inc. (Exhibit 2.3 to the June 1, 1999 Form
8-K)
*10.88 Agreement of Sale dated as of April 23, 1999 by and among American Wash
Services, Inc. and Mario DeBerardinis and Jennifer DeBerardinis.
(Exhibit 2.1 to the Company's Current Report on Form 8-K dated June 22,
1999 (the "June 22, 1999 Form 8-K")) +
*10.89 Assignment dated June 15, 1999 between Mace Security International,
Inc. and American Wash Services, Inc. (Exhibit 2.2 to the June 22, 1999
Form 8-K)
*10.90 Merger Agreement dated as of March 26, 1999 between Louis D. Paolino,
Jr. and Red Mountain Holding, Ltd. on the one hand, and Mace Security
International, Inc. on the other hand. (Exhibit 2.1 to the Company's
Current Report on Form 8-K dated July 1, 1999 (the " July 1, 1999 AWS
Form 8-K")) +
*10.91 Amendment No. 1 to the Merger Agreement dated as of April 13, 1999.
(Exhibit 2.2 to the July 1, 1999 AWS Form 8-K)
*10.92 Amendment No. 2 to the Merger Agreement dated as of May 24, 1999.
(Exhibit 2.3 to the July 1, 1999 AWS Form 8-K)
*10.93 The Stock Purchase Agreement dated as of March 26, 1999 between Louis
D. Paolino, Jr. and Mace Security International, Inc. (Exhibit 2.4 to
the July 1, 1999 AWS Form 8-K) +
*10.94 Amendment No. 1 to the Stock Purchase Agreement dated as of April 13,
1999. (Exhibit 2.5 to the July 1, 1999 AWS Form 8-K)
*10.95 Amendment No. 2 to the Stock Purchase Agreement dated as of May 24,
1999 (Exhibit 2.6 to the July 1, 1999 AWS Form 8-K)
*10.96 The Real Estate and Asset Purchase Agreement dated as of March 8, 1999,
among Stephen B. Properties, Inc., Stephen Bulboff, and American Wash
Services, Inc. (Exhibit 2.1 to the Company's Current Report on Form 8-K
dated July 1, 1999 (the " July 1, 1999 Form 8-K")) +

25
<PAGE>

*10.97 Lease Assignment and Assumption Agreement dated July 1, 1999 among Mace
Wash, Inc., a wholly-owned subsidiary of Mace Security International,
Inc., Stephen B. Properties, Inc., Stephen Bulboff and American Wash
Services, Inc. (Exhibit 2.2 to the July 1, 1999)

*10.98 Mace Security International, Inc. 1999 Stock Option Plan (3)
*10.99 Operating Agreement between Millennia Car Wash, LLC, Excel Legacy
Corporation and G II Ventures, LLC and Mace Car Wash, Inc.
*10.100 Employment Contract between Mace Security International, Inc. and Louis
D. Paolino, Jr.(3)
*10.101 Employment Contract between Mace Security International, Inc. and
Michael Fazio(3)
*10.102 Stock Purchase Agreement and Sale Agreement dated June 23, 1999 among
Mace Security International, Inc. and the Environmental Opportunities
Fund II, L.P. and Environmental Opportunities Fund II (Institutional),
L.P.
*10.103 Stock Purchase Agreement and Plan of Reorganization dated as of June 1,
1999, by and between Kevin Detrick, Brian Bath, Michael Ruiz, and
Francis Janoski on the one hand, and Mace Security International, Inc.
on the other hand. (Exhibit 2.1 to the Company's Current Report on Form
8-K dated July 9, 1999) +
*10.104 Stock Exchange Agreement dated as of August 13, 1999, by and between
Joe Crawford, Ron Clark, Robert Duggan, Jr., and First National Bank of
Abilene, as Trustee of the Wayne V. Ramsey, Jr., and Mira Marie Ramsey
Family Trust No. 2 on the one hand, and Mace Security International,
Inc. on the other hand. (Exhibit 2.1 to the Company's Current Report on
Form 8-K dated August 25, 1999) +
*10.105 Car Wash Asset Purchase/Sale Agreement dated as of May 11, 1999,
between The Manus Group, Inc. and Mace Car Wash, Inc. (Exhibit 2.1 to
the Company's Current Report on Form 8-K dated August 24, 1999) +
*10.106 Car Wash Asset Purchase/Sale Agreement dated as of August 26, 1998,
between Quaker Car Wash, Inc. and Millennia Car Wash, LLC. (Exhibit 2.1
to the Company's Current Report on Form 8-K dated September 9, 1999
(the "September 9, 1999 Form 8-K")) +
*10.107 Amendment one of the Car Wash Asset Purchase/Sale Agreement dated as of
November 23, 1998. (Exhibit 2.2 to the September 9, 1999 Form 8-K)
*10.108 Amendment two of the Car Wash Asset Purchase/Sale Agreement dated as of
January 6, 1999. (Exhibit 2.3 to the September 9, 1999 Form 8-K)
*10.109 Amendment three of the Car Wash Asset Purchase/Sale Agreement dated as
of February 26, 1999. (Exhibit 2.4 to the September 9, 1999 Form 8-K)
*10.110 Amendment four of the Car Wash Asset Purchase/Sale Agreement dated as
of April 7, 1999. (Exhibit 2.5 to the September 9, 1999 Form 8-K)
*10.111 Amendment five of the Car Wash Asset Purchase/Sale Agreement dated as
of May 10, 1999. (Exhibit 2.6 to the September 9, 1999 Form 8-K)
*10.112 Amendment six of the Car Wash Asset Purchase/Sale Agreement dated as of
June 25, 1999. (Exhibit 2.7 to the September 9, 1999 Form 8-K)
*10.113 Amendment seven of the Car Wash Asset Purchase/Sale Agreement dated as
of August 13, 1999. (Exhibit 2.8 to the September 9, 1999 Form 8-K)
*10.114 Amendment eight of the Car Wash Asset Purchase/Sale Agreement dated as
of August 27, 1999. (Exhibit 2.9 to the September 9, 1999 Form 8-K)
*10.115 Stock Purchase Agreement dated as of June 21, 1999, by and between Ken
H. Bachman, as Trustee under the Kenneth H. Bachman Revocable Trust
under agreement dated September 12, 1994, Claudia Bachman, as Trustee
under the Claudia Bachman Revocable Trust under agreement dated
September 12, 1994, Carolyn Schmidt, Daniel Warmbier, and Diane
Warmbier on the one hand, and Mace Security International, Inc. on the
other hand. (Exhibit 2.1 to the Company's Current Report on Form 8-K
dated September 9, 1999) +
*10.116 Stock Purchase Agreement and Sale Agreement dated September 8, 1999
among Mace Security International, Inc. and Park Equity Partners
*10.117 Car Wash Asset Purchase/Sale Agreement dated as of April 20, 1999,
between White Glove Partnership and Mace Wash, Inc., a wholly owned
subsidiary of Mace Security International, Inc. (Exhibit 2.1 to the
Company's Current Report on Form 8-K dated October 18, 1999) +
*10.118 Amendment one of the Car Wash Asset Purchase/Sale Agreement dated as of
April 20, 1999 (Exhibit 2.2 to the Company's Current Report on Form 8-K
dated October 18, 1999)
*10.119 Real Estate and Asset Purchase Agreement dated March 30, 1999, by and
among Millennia Car Wash, LLC, Excel Legacy Corporation and G II
Ventures, LLC, and Mace Security International, Inc. (Exhibit 2.1 to
the Company's Current Report on Form 8-K dated October 29, 1999) +

26
<PAGE>

*10.120 Amendment No. 1 dated as of March 30, 1999 by and among Millennia Car
Wash, LLC, Excel Legacy Corporation and G II Ventures, LLC, and Mace
Security International, Inc. (Exhibit 2.2 to the Company's Current
Report on Form 8-K dated October 29, 1999) +
*10.121 Closing letter to Real Estate and Asset Purchase Agreement dated March
30, 1999 as amended. (Exhibit 2.3 to the Company's Form 8-K dated
October 29, 1999)
*10.122 Agreement of Sale dated as of August 31, 1999, by and among Cherry Hill
Car Wash, Inc., 1505 Associates General Partnership, Henry Gorenstein
and Joan Rambler, and Mace Car Wash, Inc., a wholly owned subsidiary of
Mace Security International, Inc. (Exhibit 2.1 to the Company's Form 8-
K dated December 29, 1999) +
10.123 Loan Agreement and Promissory Note dated February 17, 2000, between the
Company, its subsidiary Mace Car Wash - Arizona, Inc. and Bank One,
Texas, NA
10.124 Business Loan Agreement dated January 31, 2000, between the Company,
its subsidiary - Colonial Full Service Car Wash, Inc., and Bank One,
Texas, NA; Promissory Note dated February 2, 2000 between the same
parties as above in the amount of $400,000 (pursuant to instruction 2
to Item 601 of Regulation S-B, two additional Promissory Notes, which
are substantially identical in all material respects except as to the
amount of the Promissory Notes) are not being filed in the amount of:
$19,643.97 and $6,482; and a Modification Agreement dated as of January
31, 2000 between the same parties as above in the amount of $110,801.55
(pursuant to instruction 2 to Item 601 of Regulation S-B, Modification
Agreements, which are substantially identical in all material respects
except to the amount of the Modification Agreement) are not being filed
in the amounts of: $39,617.29, $1,947,884.87, $853,745.73, and
$1,696,103.31

11 Statement Re: Computation of Per Share Earnings
21 Subsidiaries of the Company
23.1 Consent of Grant Thornton LLP
23.2 Consent of Ernst & Young LLP
23.3 Consent of Urbach Kahn & Werlin PC
23.4 Consent of D. Williams & Co.
23.5 Consent of Daniel Irwin & Associates, P.C.
23.6 Opinion of Urbach Kahn & Werlin PC
23.7 Opinion of D. Williams & Co.
23.8 Opinion of Daniel Irwin & Associates, P.C.

27 Financial Data Schedule (Electronic filed only)
___________________

* Incorporated by reference
+ Schedules and other attachments to the indicated exhibit have been omitted.
The Company agrees to furnish supplementally to the Commission upon request
a copy of any omitted schedules or attachments.

(1) Incorporated by reference to the exhibit of the same number filed with
the Company's registration statement on Form SB-2 (33-69270) that was
declared effective on November 12, 1993.
(2) Incorporated by reference to the Company's Form 10-QSB report for the
quarter ended 9/30/94 filed on November 14, 1994. It should be noted
that Exhibits 10.25 through 10.34 were previously numbered 10.1 through
10.10 in that report.
(3) Indicates a management contract or compensation plan or arrangement.

(b) Current Reports on Form 8-K or 8-K/A:

On October 19, 1999, the Company filed a report on Form 8-K/A dated August 24,
1999, under Item 7 stating that historic financial statements of Shammy Man Car
Wash are not required to be filed.

On October 29, 1999, the Company filed a report on Form 8-K dated October 18,
1999, under Item 2 to report the acquisition of all of the car wash related
assets of White Glove Chicago Partnership ("White Glove"). In accordance with
the applicable regulations under the Securities and Exchange Act of 1934. The
Company has concluded that Securities and Exchange Act rules do not require the
filing of financial statements with respect to the acquired company.

27
<PAGE>

On November 5, 1999, the Company filed a report on Form 8-K/A dated August 25,
1999, under Item 7 to provide audited combined financial statements for the two
years ended December 31, 1998 and 1997 and the unaudited combined financial
statements for the six months ended June 30, 1999 and 1998, and the pro forma
consolidated financial statements for the year ended December 31, 1998 and the
six months ended June 30, 1999 with respect to the acquisition of 50's Classic
Car Wash of Lubbock, Inc. and CRCD, Inc.

On November 12, 1999, the Company filed a report on Form 8-K dated October 29,
1999, under Item 2 to report the acquisition of all the car wash related assets
of Millennia Car Wash, LLC ("Millennia"). Historic financial statements of
Millennia and pro forma financial information of the Company required under
"Item 7: Financial Statements and Exhibits" were filed on Form 8-K/A on
December 21, 1999.

On November 19, 1999, the Company filed a report on Form 8-K/A dated September
9, 1999, under Item 7 to provide audited financial statements for the two years
ended December 31, 1998 and 1997 and the unaudited financial statements for the
six months ended June 30, 1999 and 1998, and the pro forma consolidated
financial statements for the year ended December 31, 1998 and the six months
ended June 30, 1999 with respect to the acquisition of Quaker Car Wash, Inc.

On November 23, 1999, the Company filed a report on Form 8-K/A dated September
9, 1999, under Item 7 to provide audited financial statements for the two years
ended January 31, 1999 and 1998, the unaudited financial statements for the six
months ended July 31, 1999 and 1998, and the pro forma consolidated financial
statements for the year ended December 31, 1998 and the six months ended June
30, 1999 with respect to the acquisition of Eager Beaver Car Wash, Inc.

On December 21, 1999, the Company filed a report on Form 8-K/A dated October
29, 1999, under Item 7 to provide audited financial statements for the period
April 2, 1998 (date of inception) through December 31, 1998, the unaudited
financial statements for the nine months ended September 30, 1999 and for the
period April 2, 1998 (date of inception) through September 30, 1998, and the
pro forma consolidated financial statements for the year ended December 31,
1998 and the nine months ended September 30, 1999 with respect to the
acquisition of Millennia Car Wash, LLC.

On December 21, 1999, the Company filed a report on Form 8-K under Item 5 to
provide audited restated consolidated financial statements and Management's
Discussion and Analysis of Financial Condition and Results of Operations
(restated), which reflects the acquisition of Innovative Control Systems, Inc.
on July 9, 1999, 50's Classic Car Wash and CRCD, Inc. on August 25, 1999, and
Eager Beaver Car Wash, Inc. on September 9, 1999. Each of these acquisitions
was accounted for as a pooling of interests.

28
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this Report to be signed on its behalf
by the undersigned, thereunto duly authorized.

MACE SECURITY INTERNATIONAL, INC.

By: /s/ Louis D. Paolino, Jr.
--------------------------------------------
Louis D. Paolino, Jr.
Chairman of the Board,
Chief Executive Officer,
and President

DATED the 29 day of March, 2000.

KNOW ALL MEN BY THESE PRESENTS that the undersigned does hereby constitute
and appoint Louis D. Paolino, Jr. and Gregory M. Krzemien, or either of them
acting alone, his true and lawful attorney-in-fact and agent, with full power of
substitution and revocation for him and in his name, place and stead, in any and
all capacities, to sign this Report on Form 10-KSB of Mace Security
International, Inc. and any and all amendments to the Report and to file the
same with all exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorneys-in-
fact and agents full power and authority to do and perform each and every act
and thing requisite and necessary to be done as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or his or their substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report
has been signed below by the following persons on behalf of the Company and in
the capacities and on the dates indicated:

Name Title Date
- ------------------------------ ---------------------------- -------
<S> <C> <C>

/s/ Louis D. Paolino, Jr. Chairman of the Board, 3/29/00
- ------------------------------ Chief Executive Officer,
Louis D. Paolino, Jr. President and Director
(Principal Executive Officer)

/s/ Gregory M. Krzemien Chief Financial Officer 3/29/00
- ------------------------------ and Treasurer (Principal
Gregory M. Krzemien Financial and Accounting Officer)

/s/ Ronald R. Pirollo Chief Accounting Officer and 3/29/00
- ------------------------------ Controller
Ronald R. Pirollo

/s/ Jon E. Goodrich Director 3/29/00
- ------------------------------
Jon E. Goodrich

/s/ Robert M. Kramer Director 3/29/00
- ------------------------------
Robert M. Kramer

/s/ Matthew J. Paolino Director 3/29/00
- ------------------------------
Matthew J. Paolino

/s/ Constantine N. Papadakis Director 3/29/00
- ------------------------------
Constantine N. Papadakis

/s/ Mark S. Alsentzer Director 3/29/00
- ------------------------------
Mark S. Alsentzer

/s/ Richard B. Muir Director 3/29/00
- ------------------------------
Richard B. Muir
</TABLE>

29
<PAGE>

MACE SECURITY INTERNATIONAL, INC.
CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
INDEX TO FINANCIAL INFORMATION

CONTENTS

(a) Financial Information

<S> <C>
Reports of Independent Auditors............................ F-2

Audited Consolidated Financial Statements
-----------------------------------------

Consolidated Balance Sheets................................ F-4

Consolidated Statements of Operations...................... F-6

Consolidated Statements of Stockholders' Equity............ F-7

Consolidated Statements of Cash Flows...................... F-8

Notes to Consolidated Financial Statements................. F-9
</TABLE>

F-1
<PAGE>

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Shareholders and Board of Directors
Mace Security International, Inc.

We have audited the accompanying consolidated balance sheet of Mace Security
International, Inc. and subsidiaries as of December 31, 1999 and the related
consolidated statement of operations, changes in stockholders' equity and cash
flows for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Mace Security
International, Inc. and subsidiaries as of December 31, 1999, and the
consolidated results of their operations and their consolidated cash flows for
the year then ended in conformity with generally accepted accounting principles.

/s/ Grant Thornton LLP

Philadelphia, Pennsylvania
March 17, 2000

F-2
<PAGE>

REPORT OF INDEPENDENT AUDITORS

Board of Directors and Stockholders
Mace Security International, Inc.

We have audited the accompanying consolidated balance sheet (restated) of Mace
Security International, Inc. and subsidiaries as of December 31, 1998, and the
related consolidated statements of operations, stockholders' equity, and cash
flows (restated) for the year then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit. We did not audit the
financial statements of certain of the entities constituting the Company (Mace -
prior to combination for pooling of interest acquisitions, Innovative Control
Systems, Inc., and 50's Classic Car Wash and CRCD, Inc., as discussed in Note
1), which statements reflect total assets constituting 70% at December 31, 1998
and total revenues constituting 57% for the year then ended, of the respective
consolidated financial statement totals. Those statements were audited by other
auditors whose reports have been furnished to us, and our opinion, insofar as it
relates to data included for those entities is based solely on the reports of
the other auditors.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit and the reports of the other auditors provide a
reasonable basis for our opinion.

In our opinion, based on our audit and the reports of other auditors, the
financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Mace Security International, Inc. and
subsidiaries at December 31, 1998, and the consolidated results of their
operations and their cash flows for the year then ended in conformity with
generally accepted accounting principles.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania
December 16, 1999

F-3
<PAGE>

MACE SECURITY INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

ASSETS DECEMBER 31,
----------------------------
1999 1998
------------- -------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,320,804 $ 4,672,695
Accounts receivable, less allowance for doubtful
accounts of $102,393 and $90,904 in 1999 and 1998,
respectively 1,874,547 1,522,710
Inventory 2,800,853 1,761,617
Deferred income taxes 139,705 -
Prepaid expenses and other current assets 2,506,853 299,873
------------- -------------
Total current assets 9,642,762 8,256,895

Property and equipment:
Land 30,429,075 2,129,855
Buildings and leasehold improvements 31,718,084 3,930,558
Machinery and equipment 6,329,030 2,626,072
Furniture and fixtures 231,936 236,864
------------- -------------
Total property and equipment 68,708,125 8,923,349
Accumulated depreciation and amortization (3,826,784) (3,378,974)
------------- -------------
64,881,341 5,544,375

Net assets of discontinued operations - 326,835
Excess of cost over net assets of acquired businesses, net of
accumulated amortization of $276,605 in 1999 20,723,085 -
Other intangible assets, net of accumulated amortization
of $1,144,428 and $1,009,282 in 1999 and 1998, respectively 1,029,347 1,020,702
Notes receivable from stockholders/officers 50,269 543,985
Other assets 1,788,552 233,190
------------- -------------
TOTAL ASSETS $98,115,356 $15,925,982
============= =============
</TABLE>

See accompanying notes.

F-4
<PAGE>

LIABILITIES AND STOCKHOLDERS' EQUITY DECEMBER 31,
----------------------------
1999 1998
------------- -------------
<S> <C> <C>
Current liabilities:
Current portion of notes payable to related parties $ 1,493,806 $ 509,321
Current portion of long-term debt 3,102,003 534,636
Current portion of capital lease obligations 66,371 -
Accounts payable 3,372,950 644,021
Income taxes payable 110,725 -
Deferred revenue 557,154 235,604
Accrued expenses and other current liabilities 2,342,299 571,820
------------- -------------
Total current liabilities 11,045,308 2,495,402

Deferred income taxes 587,625 -
Notes payable to related parties, net of current portion - 1,347,252
Long-term debt, net of current portion 27,794,865 2,767,205
Capital lease obligations, net of current portion 327,232 -
Other liabilities 1,792,498 -

Stockholders' equity:
Preferred stock, $.01 par value:
Authorized shares - 50,000,000
Issued and outstanding shares - none
Common stock, $.01 par value:
Authorized shares - 200,000,000
Issued and outstanding shares of 22,821,675 and 8,179,620
in 1999 and 1998, respectively 228,216 81,796
Additional paid-in capital 63,992,607 14,272,243
Accumulated deficit (7,600,607) (4,985,528)
------------- -------------
56,620,216 9,368,511
Less treasury stock at cost -256,666 common shares (52,388) (52,388)
------------- -------------
Total stockholders' equity 56,567,828 9,316,123
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $98,115,356 $15,925,982
============= =============
</TABLE>

See accompanying notes.

F-5
<PAGE>

MACE SECURITY INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1999 1998
------------- ------------
<S> <C> <C>
Revenues:
Car wash and detailing services $17,073,284 $4,419,870
Security product sales 3,435,312 2,404,221
Computer products and services 2,925,217 2,029,884
Fuel, lube and merchandise sales 4,784,614 345,576
Operating agreements 462,582 -
------------- ------------
28,681,009 9,199,551
Cost of revenues:
Car wash and detailing services 11,136,729 2,598,863
Security product sales 1,818,316 1,230,375
Computer products and services 1,811,447 1,206,044
Fuel, lube and merchandise sales 3,699,950 237,798
------------- ------------
18,466,442 5,273,080

Selling, general and administrative expenses 6,661,015 2,776,900
Depreciation and amortization 1,143,639 755,339
Merger costs 1,875,000 -
Restructuring, asset abandonment costs and change in control charges 1,519,000 -
------------- ------------

Operating (loss) income (984,087) 394,232

Interest expense (1,119,964) (452,674)
Interest income 39,086 137,486
Other income 192,299 284,600
------------- ------------
(Loss) income from continuing operations before income taxes (1,872,666) 363,644

Income tax (benefit) expense (588,519) 4,358
------------- ------------
(Loss) income from continuing operations (1,284,147) 359,286

Income (loss) from discontinued operations,
net of $0 applicable income taxes 24,032 (585,903)
------------- ------------
Net loss $(1,260,115) $ (226,617)
============= ============

Basic (loss) earnings per share
From continuing operations $ (0.10) $ 0.04
From discontinued operations - (0.07)
------------- ------------
Total $ (0.10) $ (0.03)
============= ============
Weighted average number of shares outstanding 13,159,154 8,341,747
============= ============

Diluted (loss) earnings per share
From continuing operations $(0.10) $ 0.04
From discontinued operations - (0.07)
------------- ------------
Total $(0.10) $ (0.03)
============= ============
Weighted average number of shares outstanding 13,159,154 8,364,106
============= ============
</TABLE>

See accompanying notes.

F-6
<PAGE>

MACE SECURITY INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
ADDITIONAL
COMMON COMMON PAID-IN ACCUMULATED TREASURY
SHARES STOCK CAPITAL DEFICIT STOCK TOTAL
------------ ---------- ------------- ------------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1997............. 8,436,286 $ 84,363 $14,271,073 $(4,258,670) $ - $10,096,766

Shares issued as compensation............ - - 1,170 - - 1,170

Shares redeemed in connection
with discontinued operations............ (256,666) (2,567) - - (52,388) (54,955)

Net loss................................. - - - (226,617) - (226,617)

Dividends paid to former stockholders
of pooled companies..................... - - - (500,241) - (500,241)
------------ ---------- ------------- ------------- ---------- -------------
Balance at December 31, 1998............. 8,179,620 81,796 14,272,243 (4,985,528) (52,388) 9,316,123

Exercise of common stock options
and warrants............................ 1,305,746 13,057 2,135,704 - 2,148,761

Proceeds from sale of common stock,
less commissions and issuance
expenses of $457,201................... 6,295,558 62,956 14,191,468 - 14,254,424

Common stock issued in purchase
acquisitions............................ 7,010,500 70,105 26,650,515 - 26,720,620

Warrants issued in purchase
acquisitions............................ 5,176,400 5,176,400

Effect of variable options vesting on
change of control....................... 587,000 587,000

Options issued for consulting
services................................ 26,875 26,875

Common stock issued for consulting
services................................ 4,444 44 26,620 - 26,664

Stock issued to satisfy debt obligation.. 25,807 258 251,358 - 251,616

Income tax benefit from exercise of
non-qualified stock options............. 674,424 674,424

Transactions of pooled companies......... (76,732) (76,732)

Dividends paid to former stockholders
of pooled companies..................... - - - (1,278,232) - (1,278,232)

Net loss................................. - - - (1,260,115) - (1,260,115)
------------ ---------- ------------- ------------- ---------- -------------
Balance at December 31, 1999............. 22,821,675 $228,216 $63,992,607 $(7,600,607) $(52,388) $56,567,828
============ ========== ============= ============= ========== =============
</TABLE>

See accompanying notes.

F-7
<PAGE>

MACE SECURITY INTERNATIONAL, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEAR ENDED DECEMBER 31,
-----------------------------
1999 1998
-------------- -------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $ (1,260,115) $ (226,617)
Adjustments to reconcile net loss
to net cash (used in) provided by operating activities:
Depreciation and amortization 1,143,639 755,339
Provision for losses on receivables 154,465 -
Deferred income taxes (716,172) -
Gain on sale of property and equipment (5,655) (271,452)
Non-cash portion of restructuring and change in
control charges 1,178,000 -
Changes in operating assets and liabilities:
Accounts receivable (425,706) 478,645
Inventory (407,962) (173,431)
Accounts payable 1,020,923 24,654
Deferred revenue 5,571 -
Accrued expenses (900,799) (295,161)
Income taxes 118,837 -
Prepaid expenses and other assets (1,235,058) 24,230
Discontinued operations 326,835 2,492,252
Other (76,732) (78,863)
-------------- -------------
Net cash (used in) provided by operating activities (1,079,929) 2,729,596

INVESTING ACTIVITIES
Acquisition of businesses, net of cash acquired (11,239,410) -
Proceeds from sale of property and equipment 14,850 3,117,235
Purchase of property and equipment (2,301,204) (185,296)
Payments for intangibles (143,789) (53,539)
Payments received on notes receivable from shareholder 903,547 -
Deposits and other prepaid costs on future acquisitions (1,098,560) 1,170
-------------- -------------
Net cash (used in) provided by investing activities (13,864,566) 2,879,570

FINANCING ACTIVITIES
Proceeds from revolving line of credit, long term debt and
capital lease obligations 112,681 90,955
Payments on revolving line of credit, long-term debt
and capital lease obligations (1,979,894) (1,923,076)
Proceeds from issuance of common stock, net of offering costs 15,743,185 -
Net payments on note payable to shareholder (5,136) (138,397)
Purchase of treasury stock - (52,388)
Dividends paid to former stockholders of pooled companies (1,278,232) (500,241)
-------------- -------------
Net cash provided by (used in) financing activities 12,592,604 (2,523,147)
-------------- -------------
Net (decrease) increase in cash and cash equivalents (2,351,891) 3,086,019
Cash and cash equivalents at beginning of period 4,672,695 1,586,676
-------------- -------------
Cash and cash equivalents at end of period $ 2,320,804 $ 4,672,695
============== =============
</TABLE>

See accompanying notes.

F-8
<PAGE>

MACE SECURITY INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of Mace
Security International, Inc. (the parent company) and its wholly owned
subsidiaries (the "Company"). All significant intercompany transactions have
been eliminated in consolidation.

The accompanying consolidated financial statements include the financial
position and results of operations of: (i) Mace Security International, Inc.
(prior to combination), (ii) Innovative Control Systems, Inc. ("ICS") which was
acquired on July 9, 1999, (iii) 50's Classic Car Wash and CRCD, Inc.
(collectively, "Classic") which was acquired on August 25, 1999, and (iv) Eager
Beaver Car Wash, Inc. ("Eager Beaver") which was acquired on September 9, 1999.
These transactions were accounted for as poolings of interests. The Company has
released post-combination financial information that included the date of
consummation of these transactions; and accordingly, the consolidated financial
statements have been restated to include the accounts of ICS, Classic, and Eager
Beaver for all periods presented.

Separate financial information of each of the aforementioned entities as of
December 31, 1998 is as follows:

TOTAL ASSETS
DOLLARS PERCENTAGE
<S> <C> <C>
Mace (prior to combination
for pooling of interest acquisitions) $ 9,777,269 61%
ICS 586,952 4%
Classic 726,049 5%
Eager Beaver 4,835,712 30%
-------------------------
$15,925,982 100%
=========================
</TABLE>

TOTAL REVENUES
YEAR ENDED DECEMBER 31,
--------------------------------------------------
1999 1998
--------------------------------------------------
DOLLARS PERCENTAGE DOLLARS PERCENTAGE
<S> <C> <C> <C> <C>
Mace (prior to combination for
pooling of interest acquisitions) $20,558,041 72% $2,404,221 26%
ICS 2,925,217 10% 2,029,884 22%
Classic 892,158 3% 779,530 9%
Eager Beaver 4,305,593 15% 3,985,916 43%
--------------------------------------------------
$28,681,009 100% $9,199,551 100%
==================================================
</TABLE>

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF BUSINESS

The Company currently operates in three separate business segments: (i) the Car
Care segment, supplying complete car care services (including wash, detailing,
lube, and minor repairs), (ii) the Security Products Sales segment, producing
and marketing retailing consumer safety and security products, and (iii) the
Computer Products and Services segment, developing and manufacturing products
for management and control of the car care industry. The Company's car care
operations are principally located in Texas, Arizona, Florida, Pennsylvania, New
Jersey and Delaware. The Company's security products and computer products and
services provides products and services to various locations throughout the
United States.

REVENUE RECOGNITION

F-9
<PAGE>

Revenue from the Company's Security Products sales segment is recognized when
shipments are made, or for export sales when title has passed.

Revenue from the Company's Car Care segment and Computer Products and Services
segment is recognized when goods are shipped or services are rendered. Revenues
related to telephone support provided by the Computer Products and Services
segment with new unit sales are deferred and recognized as income over the life
of the support contract, which is generally twelve months.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of cash and highly liquid short-term
investments with original maturities of three months or less.

INVENTORIES

Inventories are stated at the lower of cost or market. Cost is determined using
the first-in first-out (FIFO) method for security and car care products and
using the average cost method for the Computer Products and Services segment.
Inventories at the Company's Car Care locations consist of various chemical
cleaning supplies used in operations and merchandise for resale to consumers.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is recorded using the
straight-line method over the estimated useful lives of the assets, which are
generally as follows: buildings and leasehold improvements - 25 to 40 years;
machinery and equipment -5 to 20 years; and furniture and fixtures - 5 to 15
years. Significant additions or improvements extending assets' useful lives are
capitalized; normal maintenance and repair costs are expensed as incurred.
Depreciation and amortization expense was $731,890 and $548,111 for the years
ended December 31, 1999 and 1998, respectively. Maintenance and repairs are
charged to expense as incurred and amounted to $505,000 in 1999 and $82,000 in
1998.

EXCESS COST OVER FAIR MARKET VALUE OF NET ASSETS ACQUIRED

The excess cost over fair market value of net assets acquired is amortized on a
straight-line basis over 25 years commencing on the dates of the respective
acquisitions. Amortization expense of excess cost over fair value of net assets
acquired was $276,605 in 1999 and $0 in 1998.

The Company continually evaluates the value and future benefits of its
intangibles. The Company assesses recoverability from future operations using
income from operations of the related acquired business as a measure. Under
this approach, the carrying value would be reduced if it becomes probable that
the Company's best estimate for expected future cash flows of the related
business would be less than the carrying amount of the intangible over the
remaining amortization period. For the two year period ended December 31, 1999,
there were no adjustments to the carrying amounts of intangibles resulting from
these evaluations.

OTHER INTANGIBLE ASSETS

Other intangible assets consist of trademarks and capitalized computer software
development costs. Trademarks are stated at cost and amortized on a straight-
line basis over 15 years. The Company accounts for costs of its computer
software to be sold or otherwise marketed in accordance with Statements of
Financial Accounting Standards ("SFAS") No. 86, "Accounting for the Costs of
Computer Software to Be Sold, Leased, or Otherwise Marketed". Costs incurred to
establish the technological feasibility of a computer software product to be
sold by the Company are charged to expense when incurred. When technical
feasibility is established, costs are capitalized until the product is
commercialized. When the product is commercialized, capitalized development
costs are amortized over the useful life of the product ranging from three to
five years.

DEFERRED ACQUISITION COSTS

The Company capitalizes legal, accounting, engineering and other direct costs
paid to outside parties that are incurred in connection with potential
acquisitions. The Company, however, routinely evaluates such capitalized costs
and charges to expense those relating to abandoned acquisition candidates.
Indirect acquisition costs, such as executive salaries, general corporate
overhead, and other

F-10
<PAGE>

corporate services are expensed as incurred. Deferred acquisition costs,
included in other assets, were approximately $183,000 at December 31, 1999.

SUPPLEMENTARY CASH FLOW INFORMATION

Interest paid on all indebtedness was $926,658 and $486,096 for the year ended
December 31, 1999 and 1998, respectively.

RESEARCH EXPENSE

Research and development expense, which is charged to operations as incurred,
was approximately $89,000 in 1999 and $71,000 in 1998.

DEFERRED REVENUE

The Company records a liability for outstanding gift certificates and ticket
books at its car care locations sold but not yet redeemed. The Company estimates
these redeemed amounts based on gift certificates and ticket book sales and
redemptions throughout the year as well as utilizing historical sales and
redemptions rates.

Revenues related to telephone support services provided by the Company's
Computer Products and Services segment are recorded as a liability and
recognized as income over the life of the support contract, generally a twelve
month period.

ADVERTISING

The Company expenses the production costs of first time advertising when the
advertising takes place. Advertising expense was approximately $787,000 and
$328,000 in 1999 and 1998, respectively.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities and the reported amounts of revenues and
expenses. Actual results could differ from those estimates.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company's financial instruments consist primarily of cash and cash
equivalents, trade receivables, trade payables and debt instruments. The book
value of cash and cash equivalents, trade receivables, investments in closure
trust funds and trade payables are considered to be representative of their
respective fair values. The carrying value of the Company's long-term debt
approximates fair value based on current rates and terms.

IMPAIRMENT OF LONG-LIVED ASSETS

In accordance with SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of", the Company evaluates the
recoverability of its long-lived assets which include trademarks, other
intangibles, and other assets whenever changes in circumstances indicate that
the carrying amount may not be recoverable. If indications are that the carrying
amount of the asset is not recoverable, the Company will estimate the future
cash flows expected to result from use of the asset and its eventual
disposition. If the sum of the expected future cash flows is less than the
carrying amount of the asset, the Company recognizes an impairment loss. The
impairment loss recognized is measured as the amount by which the carrying
amount of the asset exceeds its fair value.

During 1998, the Company's sale of its Law Enforcement division resulted in an
impairment loss attributable to a trademark. This loss, approximating $550,000,
is included with the gain on the sale of the Law Enforcement division in 1998,
which is a discontinued operation (Note 4).

F-11
<PAGE>

BUSINESS COMBINATIONS

The Company assesses each business combination to determine whether the pooling
of interests or the purchase method of accounting is appropriate. For those
business combinations accounted for under the pooling of interests method, the
financial statements are combined with those of the Company at their historical
amounts, and if material, all periods presented are restated as if the
combination occurred on the first day of the earliest year presented. For those
acquisitions accounted for using the purchase method of accounting, the Company
allocates the cost of the acquired business to the assets acquired and the
liabilities assumed based on estimates of fair values thereof. These estimates
are revised during the allocation period as necessary when, and if, information
regarding contingencies becomes available to define and quantify assets acquired
and liabilities assumed. The allocation period varies but does not exceed one
year. To the extent contingencies such as preacquisition environmental matters,
litigation and related legal fees are resolved or settled during the allocation
period, such items are included in the revised allocation of the purchase price.
After the allocation period, the effect of changes in such contingencies is
included in results of operations in the periods in which the adjustments are
determined.

NEW ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities", which was
effective for fiscal years beginning after June 15, 1999. SFAS No. 133 must be
adopted prospectively and retroactive application is not permitted. SFAS No.
133 will require the Company to record all derivatives on the balance sheet at
fair value. Changes in derivative fair values will either be recognized in
earnings as offsets to the changes in fair value of related hedged assets,
liabilities and firm commitments or for forecasted transactions, deferred and
recorded as a component of accumulated other comprehensive income (loss) in
stockholders' equity until the hedged transactions occur and are recognized in
earnings. The ineffective portion of a hedging derivative's change in fair
value will be immediately recognized in earnings. In June 1999, the FASB issued
SFAS No. 137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133". SFAS No. 133 is now
effective for fiscal years beginning after June 15, 2000. The Company expects
to adopt SFAS No. 133 on January 1, 2001 and does not believe the effect of
adopting SFAS No. 133 will have any material effect on its consolidated
financial position or results of operations.

3. ACQUISITIONS

ACQUISITIONS ACCOUNTED FOR UNDER THE POOLING OF INTERESTS METHOD

On July 9, 1999, the Company completed its merger with Innovative Control
Systems ("ICS") and issued 603,721 unregistered shares of the Company's common
stock, par value $.01, in exchange for all outstanding shares of ICS. ICS
develops and manufactures products for the management and control of the car
care industry. Its primary product, a software package called "Tunnel Master",
provides car wash equipment control, point of sale and management information.
ICS also distributes products for management and control of auto lube operations
and a product called "Vision Master" which allows a user to access cameras and
view operations remotely using a personal computer. The transaction has been
accounted for using the pooling of interests method; and accordingly, the
accompanying consolidated financial statements include the accounts of ICS for
all periods presented.

On August 25, 1999, the Company completed its merger with 50's Classic Car Wash
and CRCD, Inc. (collectively "Classic") and issued 91,677 unregistered shares of
the Company's common stock, par value $.01, in exchange for all outstanding
shares of Classic. Classic owns and operates a car wash in Lubbock, Texas. The
car wash provides a range of services which include full service car wash,
gasoline sales and a custom detail shop. The transaction has been accounted for
using the pooling of interests method; and accordingly, the accompanying
consolidated financial statements include accounts of Classic for all periods
presented.

On September 9, 1999, the Company completed its merger with Eager Beaver Car
Wash, Inc. ("Eager Beaver") and issued 659,222 unregistered shares of the
Company's common stock, par value $.01, in exchange for all of the outstanding
shares of Eager Beaver. Eager Beaver operates car wash facilities and a
lubrication center from locations throughout west central and south central
Florida. Eager Beaver operations provide a full line of car cleaning services
including washing, waxing and detailing services . The transaction has been
accounted for using the pooling of interests method; and accordingly, the
accompanying consolidated financial statements include the accounts of Eager
Beaver for all periods presented. The fiscal year end of Eager Beaver was
January 31. The consolidated results of operations of the Company for the year
ended December 31, 1998 and 1997 include the results of operations of Eager
Beaver for its fiscal year ended January 31, 1999 and 1998, respectively.

F-12
<PAGE>

A detail of revenues and net income (loss) of the separate companies were as
follows:

<TABLE>
<CAPTION>
INCOME (LOSS)
FROM CONTINUING
REVENUES OPERATIONS
------------- ---------------
YEAR ENDED DECEMBER 31, 1999:
<S> <C> <C>
Mace Security International, Inc. $20,558,041 $ (870,167)

ICS 2,925,217 (87,534)

Classic 892,158 10,595

Eager Beaver 4,305,593 (337,041)
------------- ---------------
Combined $28,681,009 $ (1,284,147)
============= ===============

YEAR ENDED DECEMBER 31, 1998:

Mace Security International, Inc. $ 2,404,221 $ (286,532)

ICS 2,029,884 (150,935)

Classic 779,530 76,660

Eager Beaver 3,985,916 720,093
------------- ---------------
Combined $ 9,199,551 $ 359,286
============= ===============
</TABLE>

ICS, Classic, and Eager Beaver were Subchapter S Corporations prior to the
mergers, whereby, the taxable income or loss flowed through to the individual
shareholders. The effects of pro forma taxes as a C Corporation would result in
additional income tax expense of approximately $250,000 and $220,000 for the
years ended December 31, 1999 and 1998, respectively.

ACQUISITIONS ACCOUNTED FOR UNDER THE PURCHASE METHOD

In July 1997, the Company acquired all of the issued and outstanding common
stock of MSP, Inc. (MSP), an Aurora, Colorado marketer of a diversified line of
consumer safety and security products. This transaction was accounted for as a
purchase, and the operations of MSP have been included with the Company's from
the acquisition date. In the event MSP achieves certain financial goals, an
additional 15,000 shares of the Company's common stock is issuable. The purchase
price of $90,000 was represented by 80,000 shares of the Company's stock valued
at $1.125 per share.

In September 1997, the Company acquired all of the issued and outstanding common
stock of MSP Retail, Inc. (MSPR), an operator of two retail stores in the
Denver, Colorado area, specializing in the sale of security products for
personal and home protection. This transaction was recorded as a purchase, and
the operations of MSPR have been included with the Company's from the
acquisition date. The purchase price of $212,000 was represented by 176,666
shares of the Company's common stock valued at $.9375 per share and cash of
$46,300.

The operations of MSP, Inc. and MSP, Retail, Inc. were discontinued in 1998
(Note 4).

F-13
<PAGE>

In September 1997, the Company established Mace Security Centers, Inc., a
subsidiary corporation formed for the purpose of offering franchises for the
operation of retail stores which will sell personal protection and security
products. The subsidiary became active during 1998 selling its first two
franchises.

On May 17, 1999, the Company acquired all of the outstanding stock of Colonial
Full Service Car Wash, Inc. ("Colonial") in exchange for 1,250,991 unregistered
shares of the Company's common stock and the assumption of debt and negative
working capital of approximately $6,579,000. This transaction has been
accounted for using the purchase method of accounting.

On May 18, 1999, the Company acquired certain assets of Genie Car Wash of
Austin, Inc., Genie Car Care Center, Inc., and Genie Car Service Center, Inc.
(collectively, "Genie"). Consideration under the Agreement consisted of 533,333
unregistered shares of common stock of the Company, $1,000,000 of cash, and the
issuance of promissory notes in the amount of $4,750,000 and $180,000. The
assets acquired consist of substantially all of the real estate, equipment, and
inventories utilized in the car wash businesses. This transaction has been
accounted for using the purchase method of accounting.

On June 1, 1999, the Company acquired substantially all of the assets of Gabe's
Plaza Car Wash, Inc. ("Gabe's") in exchange for $210,000 in cash and delivery of
a promissory note for $717,000. The transaction has been accounted for using
the purchase method of accounting.

On June 22, 1999, the Company acquired substantially all of the assets of the
Moorestown Car Wash in exchange for $225,000 and the issuance of 20,930
unregistered shares of common stock of the Company. This transaction has been
accounted for using the purchase method of accounting.

On July 1, 1999, the Company completed, pursuant to a Merger Agreement dated
March 26, 1999, its merger with American Wash Services, Inc. ("AWS"), a car wash
company controlled by Mr. Paolino, pursuant to which AWS was merged with and
into a wholly-owned subsidiary of the Company. Mr. Paolino and Red Mountain
Holdings, Ltd., AWS's other shareholder, received in exchange for all of the
shares of AWS, $4.8 million in cash, and 628,362 unregistered shares of Common
Stock, of which Mr. Paolino received 470,000 shares and Red Mountain received
158,362 shares. Mr. Paolino and Mr. Robert M. Kramer, the current Executive
Vice President and General Counsel of the Company, received additional
consideration in connection with this merger:

. Mr. Paolino received a warrant to purchase 1,500,000 shares of Common
Stock at a purchase price of $1.375 per share;
. Mr. Paolino received a warrant to purchase 250,000 shares of Common
Stock at a purchase price of $2.50 per share; and
. Mr. Kramer received a warrant to purchase 75,000 shares of Common Stock
at a purchase price of $1.375 per share.

The transaction has been accounted for as a purchase.

On July 1, 1999, the Company acquired substantially all the assets of Stephen
Bulboff and Stephen B. Properties, Inc. (collectively, "Shammy Shine" or
"Stephen Bulboff") in exchange for 860,000 unregistered shares of common stock
of the Company and cash consideration of $1,900,000. Stephen Bulboff owns and
operates a total of ten exterior only car washes in Pennsylvania, New Jersey and
Delaware. This transaction has been accounted for as a purchase.

On August 24, 1999, the Company acquired, through a wholly owned subsidiary,
substantially all of the assets of Shammy Man Car Wash ("Shammy Man") in
exchange for 62,649 unregistered shares of common stock cash consideration of
$475,000 and the assumption of approximately $400,000 of debt. This transaction
has been accounted for using the purchase method of accounting.

On September 9, 1999, the Company acquired all of the assets of Quaker Car Wash,
Inc. ("Quaker") in exchange for 224,072 unregistered shares of common stock and
approximately $1,055,000 of cash consideration. This transaction has been
accounted for using the purchase method of accounting.

On October 18, 1999, the Company, through a wholly owned subsidiary, acquired
all of the car wash related assets of White Glove Car Wash ("White Glove")
located in Tempe, Arizona. Consideration consisted of 38,095 unregistered
shares of common stock of the Company, $130,000 of cash, and the issuance of a
$345,000 promissory note. The transaction has been accounted for using the
purchase method of accounting.

On October 29, 1999, the Company consummated the acquisition of Millennia Car
Wash, LLC ("Millennia") which the Company has operated under an operating
agreement since March 31, 1999. Millennia consists of 11 full service car
washes in the

F-14
<PAGE>

Phoenix, Arizona market and six full service car washes in the San Antonio,
Texas market as well as a total of five lube and repair centers, eight fuel
sales operations, and 17 convenience stores. Consideration under the agreement,
as amended, consisted of 3,500,000 unregistered shares of common stock of the
Company and the assumption of approximately $15.0 million of long-term debt. The
transaction has been accounted for using the purchase method of accounting.

Additionally, on December 29, 1999, the Company, through a wholly owned
subsidiary, acquired all of the assets of Cherry Hill Car Wash, Inc. and 1505
Associates General Partnership ("Cherry Hill Car Wash") located in Cherry Hill,
New Jersey. Consideration consisted of 63,309 unregistered shares of common
stock of the Company and $1,900,000 of cash. The transaction has been accounted
for using the purchase method of accounting.

The unaudited pro forma information set forth below assumes the seven
significant acquisitions accounted for under the purchase method had occurred at
the beginning of the periods presented. The unaudited pro forma information is
presented for informational purposes only and is not necessarily indicative of
the results of operations that actually would have been achieved had the
acquisitions been consummated at that time:

YEAR ENDED DECEMBER 31,
-------------------------
1999 1998
----------- -----------
<S> <C> <C>
Revenues...................... $50,816,000 $37,865,000
Net (loss) income............. $ (986,000) $ 1,016,000
Diluted (loss) earnings
per share................... $ (0.06) $ .07
</TABLE>

4. DISCONTINUED OPERATIONS

On July 14, 1998, the Company sold substantially all of the assets of its Law
Enforcement division within its security products segment for cash of
$4,985,651. The sales price for the fixed assets, license fees, and intangibles
was $3,117,235 which represented the book value as of December 31, 1997. The
sales price for inventory was $1,868,416 which represented the book value at
July 14, 1998. Proceeds from the sale of the inventory are included in net cash
provided by operating activities on the consolidated statement of cash flows.
Accordingly, the operating results of its Law Enforcement division have been
segregated from continuing operations and reported, on a comprehensive basis, as
a separate line item on the consolidated statement of operations entitled "Loss
from discontinued operations" and entitled "Net assets of discontinued
operations" on the consolidated Balance Sheet. In conjunction with the sale of
assets, the Company licensed to the purchaser the use of Mace(R) and related
trademarks and a patent for use by the purchaser in the Law Enforcement market
and received a one-time license fee of $650,000. The Company retained the cash
and customer accounts receivable from the Law Enforcement division at closing.
The Company utilized a portion of the sales price, $1,725,202, to pay off all
outstanding bank debt to a financial institution under its term loan agreements.

A portion of the sales price, $600,000, was retained by the purchaser in escrow
to secure, among other things, the Company's obligations under the
representations and warranties in the purchase agreement. During 1999, this
amount was returned to the Company. Notwithstanding the sale of the Law
Enforcement division, the Company fulfilled its obligation under a nonassignable
Department of Defense contract which was completed in September of 1999.
Accordingly, this contract is included in discontinued operations in the
accompanying consolidated statements of operations for the year ended December
31, 1998 and through September 30, 1999.

During 1998, the Company disposed of two wholly-owned subsidiaries, MSP, Inc. (a
Colorado distributor) and MSP Retail, Inc. (Colorado retail stores which were
operated as Mace Security Centers). The contracts between the Company and the
former owners of the distributorship and retail stores allowed the Company to
put back the shares of MSP, Inc. and MSP Retail, Inc. to the former owners if
certain pre-tax earnings targets were not met within one year following the
Company's acquisition. In both cases, the aforementioned subsidiaries failed to
make their pre-tax earnings targets. The Company put back the shares of MSP,
Inc. to the former owner in exchange for 80,000 shares of the Company that were
tendered as consideration in the acquisition of MSP, Inc. In a modified version
of the put with respect to MSP Retail, Inc., the Company transferred the net
assets of MSP Retail, Inc. to a corporation owned by the former owner in
exchange for 176,666 shares of the Company that were tendered as consideration
in the acquisition of MSP Retail, Inc. Further, both contracts called for
repayment of working capital loaned by the Company to MSP, Inc. and MSP Retail,
Inc. The repayment amount as defined by the contracts is the money loaned by
the Company reduced by

F-15
<PAGE>

operating losses incurred by the respective subsidiaries during the twelve-month
period each was owned by the Company. As a result of the disposition of these
subsidiaries, the Company incurred losses of $67,013 and $47,317 related to MSP,
Inc. and MSP Retail, Inc., respectively.

5. ACCOUNTS RECEIVABLE

The Company performs ongoing credit evaluations of its customers and generally
does not require collateral. Risk of losses from international sales within the
security products segment are minimized by requiring the majority of customers
to provide irrevocable confirmed letters of credit and/or cash advances. The
Company maintains an allowance for doubtful accounts at a level that management
believes is sufficient to cover potential credit losses.

The changes in the allowance for doubtful accounts are summarized as follows:

YEAR ENDED DECEMBER 31,
--------------------------
1999 1998
------------ ------------
<S> <C> <C>
Balance at beginning of year $ 90,904 $ 101,936

Additions (charged to expense) 154,465 130,654

Deductions (142,976) (141,686)
------------ ------------
Balance at end of year $ 102,393 $ 90,904
============ ============
</TABLE>

6. INVENTORIES

Inventories consist of the following:

<TABLE>
<S> <C> <C>
Finished goods $ 548,615 $ 598,114

Work in process 93,561 126,696

Raw materials and supplies 1,091,026 937,308

Fuel, merchandise inventory and car wash supplies 1,067,651 99,499
------------ ------------
$2,800,853 $1,761,617
============ ============
</TABLE>

7. OTHER INTANGIBLES

The components of other intangibles are summarized below:

<TABLE>
<S> <C> <C>
Trademarks $1,743,154 $1,712,853

Trademark protection costs 154,208 154,088

Capitalized development costs 276,413 163,043
------------ ------------
Total intangibles 2,173,775 2,029,984

Less: Accumulated amortization of other 1,144,428 1,009,282
------------ ------------
intangibles, net $1,029,347 $1,020,702
============ ============
</TABLE>

Amortization of other intangible assets was $135,146 and $207,228 for the year
ended December 31, 1999 and 1998, respectively.

F-16
<PAGE>

8. LONG-TERM DEBT AND NOTES PAYABLE

Long-term debt and notes payable consist of the following:

DECEMBER 31,
---------------------------
1999 1998
------------- ------------
<S> <C> <C>
Notes payable to Franchise Mortgage Acceptance Corporation
("FMAC"), interest rate of 8.52%, due in monthly installments
totaling $145,936 including interest, due in September 2013,
collateralized by real property, equipment and inventory of
certain of the Millennia Car Wash locations $14,190,326 $ -

Notes payable to Cornett Ltd. Partnership, interest rate of 10%.
The note was due in full on February 18, 2000 and was
refinanced with Bank One, Texas, NA on February 17,
2000. The Bank One note, which provides for an interest
rate of prime plus .25% (9.0% at February 17, 2000), is due
in monthly installments of $45,642 including interest, due in
February 2003, collateralized by real property and
equipment of Genie 4,750,000 -

Notes payable to Bank One, Texas, NA, interest rates ranging from
8.75% to 8.9%, due in monthly installments totaling $63,678
per month including interest, due on various dates ranging
from June 2000 to July 2002, collateralized by real property
and equipment of certain of Colonial Car Wash locations 4,691,905 -

Note payable - SouthTrust Bank, interest rate equal to the one,
three or five year United States Treasury (as defined) plus 225
basis points; payable in equal monthly payments of principal
and interest of $18,370, due with a final balloon payment in
May 2001, collateralized by car wash facilities of Eager
Beaver 2,155,637 2,221,858

Notes payable to Western National Bank, interest rate of 8.75%,
due in monthly installments of $20,988 including interest, due
in October 2014, collateralized by real property and equipment
in Lubbock, Texas 2,087,064 -

Affiliate convertible notes payable to Bullseye Properties, interest
at an interest rate of 7%, principal balance due on demand 1,351,306 1,389,399

Notes payable to Merriman Park J.V., interest rate of 8.0%, due in
monthly installments of $10,825 including interest, due in
November 2011, collateralized by real property and equipment
of certain of Colonial Car Wash locations 995,842 -

Note payable to Gabe and Alice Kirikian, interest rate of 7% due
in quarterly payments of $25,850 plus interest, due in July
2004, collateralized by real property of Gabe's Plaza Car
Wash 491,150 -

Note payable to Southwest Bank, interest rate of 10.0%, due in
monthly principal payments of $8,686 including interest, due
in October 2000, collateralized by real property and equipment
of certain of Colonial Car Wash locations 441,571 -

Capitalized lease payable to Columbia Credit Company, interest
rate of 14.35%, due in monthly installments of $8,314
including interest, due in May 2005, collateralized by certain
equipment of Shammy Man 373,460 -

Note payable to Mitra II, interest rate of 8%, payable in monthly
principal installments of $5,000 plus interest, due in
November 2000, collateralized by certain real property in
Arizona 359,405 -

Notes payable to White Glove Partnership, interest rate of 8%,
due in January 2000 345,000 -
</TABLE>

F-17
<PAGE>

<S> <C> <C>
Note payable to Sovereign Bank, interest rate
of prime plus one percent (9.5% at December 31, 1999), due
on demand, secured by accounts receivable, inventory and
fixed assets of ICS 150,000 150,000

Notes payable to various creditors, interest rates ranging from 5%
to 14.6%, payable in monthly installments totaling $5,827, due
through June 2003 collateralized by equipment of the
Company 125,314 -

Note payable to related party, interest rate of 6%, due on demand 122,500 74,500

Notes payable to individuals for consulting services, interest rates
from 8% to 12%, due on demand 100,000 -

Notes payable to various financial institutions, interest rates
ranging from 3.9% to 8.9%, payable in monthly installments
totaling $2,159, due through October 2002 33,797 56,127

Interest only demand note payable to related party, interest rate
of 7% 20,000 40,000

Notes payable to First National Bank of Abilene, interest rate of
8.75%, due in monthly installments of $7,900 including
interest, repaid in August 1999, collateralized by equipment
and inventory of Classic - 621,936

Grant payable to Ben Franklin Technology Center (BFTC), repaid
in July 1999 through the issuance of 25,807 shares of Mace
stock - 246,920

Note payable to First National Bank of Abilene, interest rate of
8.75%, repaid in 1999, secured by equipment and inventory of
Classic - 5,000

Notes payable to stockholder, interest rate of 10% due monthly,
paid in full in August 1999 - 244,611

Notes payable to related party, interest rate of prime plus 1/2%
(8.25% at December 31, 1998), repaid in December 1999 - 100,000

Note payable to shareholder, no stated interest rate, due on demand - 8,063
------------- ------------
32,784,277 5,158,414
Less: current portion 4,662,180 1,043,957
------------- ------------
$28,122,097 $4,114,457
============= ============
</TABLE>

In August 1999, the Company assumed a 7% Convertible Promissory Note in the
amount of $1,348,379 in connection with an acquisition accounted for as a
pooling of interests. The note is payable in monthly installments of $12,276,
including interest, commencing in March 2000. The principal amount of the note,
including unpaid interest, is convertible into the Company's common stock at the
rate of $3.62 per share until August 2000 and at $3.875 per share thereafter.
Upon conversion of a portion, but not all, of the principal balance to common
stock, the remaining principal balance will be due in equal monthly installments
until August 2014. The unpaid principal balance of the note is callable by the
holder by providing the Company with a 90 day notice any time after April 15,
2000. Accordingly, the entire principal balance at December 31, 1999 has been
classified as a current maturity of long-term debt.

Certain of the Company's debt, specifically the note payable to Cornett Ltd.
Partnership and certain notes payable to Bank One, Texas, N.A. with maturities
in January and February, 2000 were refinanced with Bank One, Texas, N.A. in
February 2000. Accordingly, this debt has been classified as long-term to
reflect the term of the new credit facilities.

The Company has received grants from the Ben Franklin Technology Center (BFTC)
to assist the Company in developing its products and to create and maintain jobs
in Pennsylvania. The grants are repaid when the products for which the grants
are provided are commercialized and the repayments are made on either a royalty
basis or as a lump sum. The liability of $246,920 as of

F-18
<PAGE>

December 31, 1998 represents the total amount of grants received by the Company.
This liability was repaid in July 1999 through the issuance of 25,807 shares of
Mace stock.

Several of the notes payable above require the maintenance of certain financial
ratios, including interest coverage ratios, leverage ratios, and debt reserve
ratios. These financial covenant requirements were met as of December 31, 1999.

Certain machinery and equipment notes payable discussed above have been
classified as capital lease obligations in the balance sheet.

Maturities of long-term debt are as follows: 2000 - $4,662,180; 2001 -
$7,601,592; 2002 - $1,194,738; 2003 - $4,990,729; 2004 and thereafter -
$14,335,038.

9. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1999 1998
------------ ----------
<S> <C> <C>
Accrued compensation $ 539,315 $135,300

Customer prepayments - 160,626

Accrued acquisition and merger
transaction costs 378,519 -

Property and other non-income taxes 654,371 29,208

Other 770,094 246,686
------------ ----------
$2,342,299 $571,820
============ ==========
</TABLE>

10. LIABILITIES

In connection with certain acquisitions made by the Company during 1999, the
Company has accrued liabilities totaling $1,792,498 payable in common stock
and/or cash to sellers upon satisfactory resolution of certain contingencies.
These amounts have been included in the purchase price allocations of the
respective acquisitions.

11. STOCK OPTION PLANS

During September 1993, the Company adopted the 1993 Stock Option Plan (the
Plan). The Plan provides for the issuance of up to 630,000 shares of common
stock upon exercise of the options. The Company has reserved 630,000 shares of
common stock to satisfy the requirements of the Plan. The options are non-
qualified stock options and are not transferable by the recipient. The Plan is
administered by the Compensation Committee of the Board of Directors, which may
grant options to employees, directors and consultants to the Company. The term
of each option may not exceed fifteen years from the date of grant. Options are
exercisable over either a 10 or 15 year period and exercise prices are not less
than the market value of the shares on the date of grant.

In December 1999, the Company's stockholders approved the 1999 Stock Option Plan
providing for the granting of incentive stock options or nonqualified stock
options to directors, officers, or employees of the Company. Under this plan,
15,000,000 shares are reserved for issuance. Incentive stock options and
nonqualified options have terms which are determined by the Company's
Compensation Committee ("the Committee") with exercise prices not less than the
market value of the shares on the date of grant. The options generally expire
ten years from the date of grant and are exercisable based upon graduated
vesting schedules as determined by the Committee. As of December 31,1999,
3,161,418 options have been granted under the 1993 and 1999 Plan including
1,567,962 nonqualified stock options.

The Company has elected to follow Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" (APB 25) and related Interpretations
in accounting for its employee stock options because, as discussed below, the
alternative fair value accounting provided for under FASB Statement No. 123,
"Accounting for Stock-Based Compensation," requires use of option

F-19
<PAGE>

valuation models that are not developed for use in valuing employee stock
options. Under APB 25, if the exercise price of the Company's employee stock
options equals the market price of the underlying stock on the date of grant, no
compensation expense is recognized.

Pro forma information regarding net income and earnings per share is required by
Statement 123, and has been determined as if the Company had accounted for its
employee stock options under the fair value method of that Statement. The fair
value for these options was estimated at the date of grant using a Black-Scholes
option pricing model with the following weighted average assumptions for grants
in 1999 and 1998; risk-free interest rate ranges of 5.03% to 6.32% in 1999 and
from 5.53% to 5.88% in 1998; dividend yield of 0%; expected volatility of the
market price of the Company's common stock of 86.0% in 1999 and 89.5% in 1998;
and a weighted-average expected life of the option of ten years.

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of highly
subjective assumptions including the expected stock price volatility. Because
the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate, in management's
opinion, the existing models do not necessarily provide a reliable single
measure of the fair value of its employee stock options.

For purposes of pro forma disclosures, the estimated fair value of the options
is amortized to expense over the options' vesting period. Pro forma results are
not likely to be representative of the effects on reported or pro forma results
of operations for future years. The Company's pro forma information is as
follows:

YEAR ENDED DECEMBER 31,
--------------------------
1999 1998
------------- -----------
<S> <C> <C>
Pro forma net loss $(2,998,477) $(350,876)

Pro forma diluted loss per share $ (0.23) $ (0.04)
</TABLE>

Activity with respect to these plans is as follows:

1999 1998
------------------------ -----------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
EXERCISE EXERCISE
NUMBER PRICE NUMBER PRICE
------------ ----------- ---------- ------------
<S> <C> <C> <C> <C>
Options outstanding beginning of period 501,000 $ 1.37 437,800 $ 1.48

Options granted 2,840,918 $ 5.37 98,500 $ 1.10

Options exercised (439,710) $ 1.73 -

Options repurchased - $ - (4,800) $ 5.50

Options canceled (180,500) $ 4.69 (30,500) $ 1.38
------------ ----------
Options outstanding end of period 2,721,708 $ 5.26 501,000 $ 1.37
============ ==========
Options exercisable 398,876 $ 4.33 501,000 $ 1.37
============ ==========
Shares available for granting of options 12,468,582 129,000
============ ==========
</TABLE>

F-20
<PAGE>

Stock options outstanding at December 31, 1999 under both plans are summarized
as follows:

<TABLE>
<CAPTION>
WEIGHTED AVG. WEIGHTED
RANGE OF NUMBER REMAINING AVG. EXERCISE
EXERCISE PRICES OUTSTANDING CONTRACTUAL LIFE PRICE
- ---------------- --------------- ------------------ ---------------
<S> <C> <C> <C>
$ 1.19 - $1.79 192,917 12.50 years $ 1.38
$ 2.69 - $4.03 1,023,373 9.26 years $ 2.92
$ 5.25 - $8.50 1,321,418 9.18 years $ 7.02
$ 8.38 - $11.00 184,000 9.44 years $10.25
---------------
2,721,708
===============
</TABLE>

In connection with the initial public offering of the Company's securities in
November 1993, the Company issued a total of 75,000 common stock purchase
warrants to the underwriters of the securities. These warrants expired in
November 1998.

In August 1994, the Company issued warrants to purchase 60,000 shares of Mace
Security International, Inc. common stock at $4.25 per share in connection with
the purchase of certain assets of a business. The warrants are exercisable over
a ten year period, expiring on August 24, 2004. On July 14, 1998, in connection
with the sale of the Law Enforcement division (Note 4), the Company issued to
the purchaser 300,000 warrants to purchase common stock of the Company at $1.25
per share. These warrants were fully exercised in March 1999.

The Company has a remaining total of 2,150,464 warrants to purchase common stock
outstanding at December 31, 1999, all of which are exercisable. In 1999, the
Company issued warrants to purchase a total of 2,656,500 shares of the Company's
stock at a weighted average exercise price of $2.11 per share in connection with
the purchase of certain businesses and to a director. Warrants exercised in
1999 totaled 866,036 at a weighted average exercise price of $1.64 per share.
The terms of the warrants have been established by the Board of Directors. The
warrants are exercisable at any time through August 2, 2009 and have an exercise
price ranging from $1.375 to $9.25 per share.

During the exercise period, the Company will reserve a sufficient number of
shares of its common stock to provide for the exercise of the rights represented
by option and warrant holders.

12. INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax liabilities and assets at December 31, 1999 and 1998
are as follows:

DECEMBER 31,
---------------------------
1999 1998
------------- -------------
<S> <C> <C>
Deferred tax liabilities:
Property, equipment and intangibles.......... $(2,547,637) $ (215,225)
Other, net................................... - (32,548)
------------- -------------
Total deferred tax liabilities............ (2,547,637) (247,773)
Deferred tax assets:
Allowance for doubtful accounts.............. 38,695 12,878
Inventories.................................. 61,549 45,147
Net operating loss carryforwards............. 2,543,447 1,355,600
Deferred revenue............................. 84,405 -
Compensation and related transition costs.... 195,478 -
Other, net................................... 91,143 1,357
------------- -------------
Total deferred assets..................... 3,014,717 1,414,982
Valuation allowance for deferred tax assets... (915,000) (1,167,209)
------------- -------------
Net deferred tax assets....................... 2,099,717 247,773
------------- -------------
Net deferred tax (liabilities) assets......... $ (447,920) $ -
============= =============
</TABLE>

F-21
<PAGE>

The valuation allowance for deferred tax assets decreased by $252,000 during
1999. At December 31, 1999, the Company has net operating loss carryforwards
for federal income tax purposes of approximately $7,100,000 that begin to expire
during the year ended December 31, 2008, if unused. A valuation allowance has
been provided to reduce the deferred tax assets to a level which, more likely
than not, will be realized. However, due to a change in control, use of these
net operating loss carryforwards may be limited.

The components of income tax (benefit) expense are:

1999 1998
----------- -----------
<S> <C> <C>
Current (principally state taxes).............. $ 127,653 $ 4,358
Deferred....................................... (716,172) -
----------- -----------
Total income tax (benefit) expense............. $(588,519) $ 4,358
=========== ===========
</TABLE>

The significant components of deferred income tax expense attributed to loss
from continuing operations for the years ended December 31, 1999 and 1998 are
as follows:
<TABLE>
<CAPTION>

1999 1998
----------- -----------
<S> <C> <C>
Deferred tax expense........................... $ 439,842 $ 58,008
Loss carry forward............................. (903,805) (203,600)
Valuation allowance for deferred tax assets.... (252,209) 145,592
----------- -----------
$(716,172) $ -
=========== ===========
</TABLE>

A reconciliation of income tax computed at the U.S. federal statutory tax
rates to the provision for income taxes is as follows:

<TABLE>
<CAPTION>
1999 1998

----------- -----------
<S> <C> <C>
Tax at U.S. federal statutory rate............. $(647,022) $ (75,568)
S Corporation income prior to pooling date..... (225,290) (219,578)
State taxes, net of federal benefit............ 30,509 4,358
Nondeductible costs and other acquisition
accounting adjustments....................... 285,220 -
S Corporation status termination............... 121,648 -
Valuation allowance for deferred tax assets.... (192,259) 295,146
Other.......................................... 38,675 -
----------- -----------
Provision for income taxes $(588,519) $ 4,358
=========== ===========
</TABLE>

F-22
<PAGE>

13. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share:

YEAR ENDED DECEMBER 31,
--------------------------
1999 1998
------------- ------------
<S> <C> <C>
Numerator:
(Loss) income from continuing operations $(1,284,147) $ 359,286
Income (loss) from discontinued operations 24,032 (585,903)
------------- ------------
Net loss $(1,260,115) $ (226,617)
============= ============
Denominator:
Denominator for basic income (loss)
per share - weighted average shares 13,159,154 8,341,747
Dilutive effect of options and warrants - 22,359
------------- ------------
Denominator for diluted income (loss)
per share - weighted average shares 13,159,154 8,364,106
============= ============
Basic (loss) income per share:
From continuing operations $ (0.10) $ 0.04
From discontinued operations - (0.07)
------------- ------------
Total $ (0.10) $ (0.03)
============= ============

Diluted (loss) income per share:
From continuing operations $ (0.10) $ 0.04
From discontinued operations - (0.07)
------------- ------------
Total $ (0.10) $ (0.03)
============= ============
</TABLE>

The Company's options and warrants outstanding at December 31, 1999 have not
been included in the calculation of diluted earnings per share in that it would
be anti-dilutive.

14. CONCENTRATION OF CREDIT RISK

The Company maintains its cash accounts in high quality financial institutions.
At times, these balances may exceed insured amounts.

15. COMMITMENTS AND CONTINGENCIES

The Company is obligated under various operating leases, primarily for certain
equipment, vehicles, and real estate. Certain of these leases contain purchase
options, renewal provisions, and contingent rentals for proportionate share of
taxes, utilities, insurance, and annual cost of living increases. Future
minimum lease payments under operating leases with initial or remaining
noncancellable lease terms in excess of one year as of December 31, 1999 are as
follows: 2000 - $1,345,222 , 2001 - $1,279,924, 2002 - $1,191,408, 2003 -
$1,090,873, 2004 and thereafter - $3,648,897. Rental expense under these leases
was $778,616 and $182,000 for the years ended December 31, 1999 and 1998,
respectively.

The Company has entered into month to month and long-term sublease agreements
with tenants of their operating facility in Bennington, Vermont, including a
related party. Total sublease rental income was $133,842 and $110,406 in 1999
and 1998, respectively.

The Company was a party to a real estate purchase agreement with the Vermont
Economic Development Authority (VEDA) for the purchase of the Center and North
Wings of its security products office and manufacturing operation, after the
satisfaction or waiver of certain contingencies by VEDA. The Company previously
deposited $75,000 of the total cash portion into an escrow account as required
by the agreement. The Company elected not to purchase the building and leased
the premises from VEDA through

F-23
<PAGE>

November 15, 1999 for $4,000 per month, together with taxes, insurance and
utilities. The Company assigned to Vermont Mill Properties, Inc. ("VMP"), an
entity controlled by Jon Goodrich, all of its rights and obligations under the
VEDA Agreement including certain leasehold improvements abandoned by the
Company. Effective November 15, 1999, the Company entered into a lease with VMP
to continue to utilize space for its security products office and manufacturing
operation for $6,667 per month. The lease is for a term of five years and
provides for renewal options. Rent expense under this lease was $10,000 in 1999.

The Company leases a portion of the building space at several of its car wash
facilities either on a month-to-month basis or under cancellable leases. During
fiscal 1999 and 1998 revenues of approximately $60,824 and $36,800, respectively
were recognized under these leasing arrangements. These amounts are classified
as other income in the accompanying statements of income.

The Company is subject to federal and state environmental regulations,
including rules relating to air and water pollution and the storage and disposal
of oil, other chemicals, and waste. The Company believes that it complies with
all applicable laws relating to its business.

Certain of the Company's executive officers have entered into employment
agreements whereby they will be entitled to immediate vesting provisions of
issued options should the officer be terminated upon a change in control of the
Company. Additionally, the employment agreement of the Company's Chief
Executive Officer, Louis D. Paolino, Jr., entitles Mr. Paolino to receive a fee
of $7,000,000 upon termination of employment under certain conditions including
upon termination as a result of a change in control.

The Company is a party to various legal proceedings related to its normal
business activities. In the opinion of the Company's management, none of these
proceedings are material in relation to the Company's results of operations,
liquidity, cash flows or financial condition.

16. EMPLOYEE BENEFIT PLANS

Two subsidiaries of the Company maintain voluntary 401(k) plans covering
substantially all of their respective employees. Under one of the plans,
employees may contribute from 1% to 20% of their regular wages, up to the limit
permitted by the Department of Labor. The Company matches 25% of each dollar
contributed by employees up to 4% of their wages. The cost of the plan amounted
to approximately $15,000 and $21,000 in 1999 and 1998, respectively.

Under the second plan, employees may contribute from 1% to 25%. The Company
match for this plan is discretionary. The cost of the plan amounted to
approximately $2,000 in 1999.

F-24
<PAGE>

17. OPERATING AGREEMENTS

Currently, the Company is managing several car wash locations under operating
agreements, under which the Company is entitled to all profits generated from
the operation of those locations. These operating agreements generally arise
from pending acquisitions that will be closed pending completion of certain
conditions. The pretax income earned under these operating agreements is
presented in the accompanying statements of operations as revenue from operating
agreements net of all operating expenses.

The results of operations subject to operating agreements in the year ended
December 31, 1999 were as follows:

YEAR ENDED
DECEMBER 31,
1999
-------------
REVENUES
<S> <C>
Car wash and detailing services $ 8,421,825
Lube and other automotive services 641,296
Fuel and merchandise sales 1,038,746
-------------
10,101,867

COST OF REVENUES
Car wash and detailing services 5,816,466
Lube and other automotive services 595,356
Fuel and merchandise sales 911,139
-------------
7,322,961

Selling, general, and administrative expenses 901,883
Depreciation and amortization 722,064
-------------
Operating income 1,154,959

Interest expense, net (790,331)
Other income 97,954
-------------
Income earned under operating agreements $ 462,582
=============
</TABLE>

18. RESTRUCTURING, ASSET ABANDONMENT COSTS AND CHANGE IN CONTROL CHARGES

In conjunction with the Company's recent change in control, the Company
restructured certain of its security products operations, abandoned certain
operations and assets, and incurred certain other change in control related
costs. A restructuring, asset abandonment, and change in control charge
totaling $1,519,000 was recorded in the second quarter ending June 30, 1999. Of
this charge, $1,178,000 is non-cash in nature consisting of a $218,000 write-off
of certain assets as a result of management abandoning certain product lines
within the Company's security products segment; a $373,000 write-off of
leasehold improvements related to the Company's plan to abandon a portion of its
currently leased facilities in Vermont; and a $587,000 non-cash compensation
charge relating to the vesting of variable options to certain previous
directors of the Company upon the Company's recent change in control. The
remaining charge of approximately $341,000 includes certain severance costs
accrued as well as legal, accounting and other transaction costs related to the
Company's change in control.

19. RELATED PARTY TRANSACTIONS

In August 1999, Mace entered into a month-to-month lease with Bluepointe, Inc.,
a corporation controlled by Louis D. Paolino, Jr., Mace's Chairman, President
and Chief Executive Officer, for Mace's executive offices in Mt. Laurel, New
Jersey. The lease provides for monthly rental payments of $10,000. Mace
believes that the terms of this lease are competitive when compared to similar
facilities in the Mt. Laurel, New Jersey area.

Robert M. Kramer, Mace's General Counsel, Executive Vice President and
Secretary, is engaged in the practice of law through Robert M. Kramer &
Associates, P.C., a professional corporation owned by Mr. Kramer, which has
rendered legal services to Mace since April 1999. Mace has paid such
corporation approximately $165,000 since April 1, 1999.

F-25
<PAGE>

During this fiscal year, Mace has paid approximately $391,000 for car wash
parts, equipment and related services to Sonny's Enterprises, Inc., a car wash
parts and equipment company owned by Paul G. Fazio, the brother of Michael
Fazio, Mace's Vice President of Operations. Mace contracted with Sonny's
Enterprises based on the quality of parts, equipment and services offered by
Sonny's Enterprises and the competitive prices that Sonny's Enterprises offered
for such parts, equipment and services.

From time to time and during fiscal 1999 and 1998, Eager Beaver made unsecured
non-interest bearing advances to certain of its stockholders who are also
officers. Substantially all of the advances were subsequently repaid from the
dividend distributions of Eager Beaver.

The Company's Florida administrative operations occupy 1,500 square feet under
an informal arrangement with Bullseye Properties, Inc., an affiliated company.
Under these arrangements, Eager Beaver pays no rent but is responsible for
insurance, maintenance, utilities and certain common area charges on a pro rata
basis. Eager Beaver provides monthly accounting and administrative services to
Bullseye Properties, Inc. Revenues recognized under this arrangement totaled
approximately $7,100 and $12,100 in each of fiscal 1999 and 1998.

The Company believes that each of the transactions described above was entered
into on an arm's-length basis in the ordinary course of the Company's business
and on the terms no less favorable to the Company than could be obtained from
unaffiliated third parties.

20. SEGMENT REPORTING

The Company evaluates performances and allocates resources based on operating
income of each reportable segment rather than at the operating unit level. The
Company defines operating income as revenues less cost of revenues, selling,
general and administrative expense, and depreciation and amortization expense.
The accounting policies of the reportable segments are the same as those
described in the summary of significant accounting policies (see Note 2). There
is no intercompany profit or loss on intersegment sales.

The Company's reportable segments are business units that offer different
services and products. The reportable segments are each managed separately
because they provide distinct services or produce and distribute distinct
products through different processes.

Selected financial information for each reportable segment is as follows:

YEAR ENDED DECEMBER 31,
----------------------------
1999 1998
------------- -------------
<S> <C> <C>
Revenues:
Car care - external customers $22,320,480 $ 4,765,446
Security products - external customers 3,435,312 2,404,221
Security products - intersegment revenues 11,620 -
Computer products and services -external
customers 2,925,217 2,029,884
Computer products and services -
intersegment revenues 625,216 -
Elimination of intersegment revenues (636,836) -
------------- -------------
$28,681,009 $ 9,199,551
============= =============

Operating income (loss):
Car care $ 2,970,086 $ 1,060,103
Security products (942,002) (545,321)
Computer products and services 381,829 (120,550)
------------- -------------
$ 2,409,913 $ 394,232
============= =============
</TABLE>

F-26
<PAGE>

<S> <C> <C>
Assets:
Car care $93,283,956 $ 5,561,761
Security products 4,353,734 9,777,269
Computer products and services 477,666 586,952
------------- -------------
$98,115,356 $15,925,982
============= =============

Capital expenditures:
Car care $ 5,266,537 $ 40,784
Security products 88,463 122,568
Computer products and services 46,204 21,944
------------- -------------
$ 5,401,204 $ 185,296
============= =============

Depreciation and amortization:
Car care $ 834,298 $ 198,595
Security products 261,219 516,714
Computer products and services 48,122 40,030
------------- -------------
$ 1,143,639 $ 755,339
============= =============
</TABLE>

A reconciliation of operating income by reportable segment to total reported
operating loss for the year ended December 31, 1999 is as follows:

<TABLE>

<S> <C>
Total operating income for
reportable segments $2,409,913
Merger costs 1,875,000
Restructuring, asset abandonment
costs and change in control costs 1,519,000
------------
Total consolidated operating loss $ (984,087)
============
</TABLE>

21. SUBSEQUENT EVENTS

On March 8, 2000, the Company entered into a merger agreement with Wash Depot
Holdings, Inc. ("Wash Depot"). Under the Merger Agreement, Wash Depot will be
merged into a subsidiary of the Company. If the merger closes, the Company will
issue approximately 8.1 million shares of the Company's common stock, par value
$.01, and the assumption of approximately $153 million of long-term debt. Wash
Depot, an operator of 73 car wash locations in 15 states, is a private company
headquartered in Saugus, Massachusetts. Of Wash Depot's 73 car wash locations,
all contain professional detailing services, 72 contain convenience stores or
similar related retail product shops, 15 contain oil and lubrication centers and
eight contain gasoline dispensing services. Closing under the agreement is
subject to several conditions, including: Mace and Wash Depot shareholder
approval, lender consents, review of information to be exchanged between Mace
and Wash Depot, antitrust clearance and other typical closing conditions.
Though Mace is optimistic that closing will occur, no assurance can be given
that the closing conditions will be satisfied. The transaction, should it close,
will be accounted for as a purchase.

On March 24, 2000, the Company, through a wholly owned owned subsidiary,
acquired all of the truck wash released assets of Red baron Truck Washes, Inc.
("Red Baron") with a total of five operating locations in Arizona, Indiana, Ohio
and Texas. Consideration consisted of 568,421 registered shares of common stock
of the Company and the issuance of a secured $1 million promissory note to the
seller. The transaction will be accoutned for using the purchase method of
accounting.

F-27
<PAGE>

EXHIBIT INDEX

Item No. Description
- -------- -----------

3.3 Amended and Restated Bylaws of Mace Security International, Inc.
3.4 Amended and Restated Certificate of Incorporation of Mace Security
International, Inc.
10.123 Loan Agreement and Promissory Note dated February 17, 2000,
between the Company, its subsidiary Mace Car Wash - Arizona, Inc. and
Bank One, Texas, NA

10.124 Business Loan Agreement dated January 31, 2000, between the Company,
its subsidiary - Colonial Full Service Car Wash, Inc., and Bank One,
Texas, NA; Promissory Note dated February 2, 2000 between the same
parties as above in the amount of $400,000 (pursuant to instruction 2
to Item 601 of Regulation S-B, two additional Promissory Notes, which
are substantially identical in all material respects except as to the
amount of the Promissory Notes) are not being filed in the amount of:
$19,643.97 and $6,482; and a Modification Agreement dated as of
January 31, 2000 between the same parties as above in the amount of
$110,801.55 (pursuant to instruction 2 to Item 601 of Regulation S-B,
Modification Agreements, which are substantially identical in all
material respects except to the amount of the Modification Agreement)
are not being filed in the amounts of: $39,617.29, $1,947,884.87,
$853,745.73, and $1,696,103.31

<PAGE>

EXHIBIT 3.3

AMENDED AND RESTATED
BYLAWS

MACE SECURITY INTERNATIONAL, INC.
(A Delaware Corporation)

ARTICLE 1
OFFICES

Section 1.01. Offices. The Corporation may have offices at such places both
-------
within and without the State of Delaware as the Board of Directors may from time
to time determine or the business of the Corporation may require.

ARTICLE 2
MEETINGS OF STOCKHOLDERS

Section 2.01. Place of Meeting. Meetings of the stockholders shall be held at
----------------
such place, within the State of Delaware or elsewhere, as may be fixed from time
to time by the Board of Directors. If no place is so fixed for a meeting, it
shall be held at the Corporation's then principal executive office.

Section 2.02. Annual Meeting. The annual meeting of stockholders shall be
--------------
held, unless the Board of Directors shall fix some other hour or date therefor,
at 10:00 o'clock A.M. on the first Tuesday of May in each year, if not a legal
holiday under the laws of Delaware, and, if a legal holiday, then on the next
succeeding secular day not a legal holiday under the laws of Delaware, at which
the stockholders shall elect by plurality vote a Board of Directors, and
transact such other business as may properly be brought before the meeting.

Section 2.03. Notice of Annual Meetings. Written notice of the annual
-------------------------
meeting stating the place, date and hour of the meeting shall be given to each
stockholder entitled to vote at such meeting not less than 10 days nor more than
60 days before the date of the meeting.

Section 2.04. List of Stockholders. The officer who has charge of the stock
--------------------
ledger of the Corporation shall prepare and make, at least 10 days before every
meeting of stockholders, a complete list of stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
10 days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be so specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
<PAGE>

Section 2.05. Special Meetings. Special meetings of the stockholders, for
----------------
any purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called by the Chairman of the Board or the
President and shall be called by the President or Secretary at the request in
writing of a majority of the Board of Directors. Such request shall state the
purpose or purposes of the proposed meeting. Business transacted at any special
meeting of stockholders shall be limited to the purposes stated in the notice.

Section 2.06. Notice of Special Meetings. Written notice of a special
--------------------------
meeting stating the place, date and hour of the meeting and the purpose or
purposes for which the meeting is called, shall be given to each stockholder
entitled to vote at such meeting not less than 10 days nor more than 60 days
before the date of the meeting.

Section 2.07. Quorum; Voting. The holders of a majority of the stock issued
--------------
and outstanding and entitled to vote thereat, present in person or represented
by proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business, except as otherwise provided by statute or by the
Certificate of Incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting. When a quorum is present at any meeting, except for
elections of directors, which shall be decided by plurality vote, the vote of
the holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of statute or of the
Certificate of Incorporation, a different vote is required, in which case such
express provision shall govern and control the decision of such question.
Unless otherwise provided in the Certificate of Incorporation, each stockholder
shall at every meeting of stockholders be entitled to one vote in person or by
proxy for each share of the capital stock having voting power held by such
stockholder, but no shares shall be voted pursuant to a proxy more than three
years after the date of the proxy unless the proxy provides for a longer period.

Section 2.08. Action Without a Meeting. Unless otherwise restricted by the
------------------------
Certificate of Incorporation, any action required or permitted to be taken at
any annual or special meeting of stockholders may be taken without a meeting,
without prior notice and without a vote, if a consent or consents in writing
setting forth the action so taken shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted and shall be delivered to the Corporation by
delivery to its registered office in the State, its principal place of business,
or an officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to a
corporation's registered office shall be by hand or by certified or registered
mail, return receipt requested. Every written consent shall bear the date of
signature of each stockholder who signs

2
<PAGE>

the consent and no written consent shall be effective to take the corporate
action referred to therein unless, within sixty days after the earliest dated
consent delivered in the manner required by this Section to the corporation,
written consents signed by a sufficient number of stockholders to take action
are delivered in the manner required by this Section to the Corporation. Prompt
notice of the taking of the corporate action without a meeting by less than
unanimous written consent shall be given to those stockholders who have not
consented in writing.

ARTICLE 3
DIRECTORS

Section 3.01. Number and Term of Office. The number of directors of the
-------------------------
Corporation shall be such number as shall be designated from time to time by
resolution of the Board of Directors and initially shall be seven (7). The
directors shall be elected at the annual meeting of the stockholders, except as
provided in Section 3.02 hereof. Each director elected shall hold office for a
term of one year and shall serve until his successor is elected and qualified or
until his earlier death, resignation or removal. Directors need not be
stockholders.

Section 3.02. Vacancies. Except as otherwise provided by the Corporation's
---------
Certificate of Incorporation, vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director, and the directors so chosen shall hold office until
the next annual election and until their successors are duly elected and shall
qualify, unless sooner displaced. If there are no directors in office, then an
election of directors may be held in the manner provided by statute. If, at the
time of filling any vacancy or any newly created directorship, the directors
then in office shall constitute less than a majority of the whole board (as
constituted immediately prior to any such increase), the Court of Chancery may,
upon application of any stockholder or stockholders holding at least 10 percent
of the total number of the shares at the time outstanding having the right to
vote for such directors, summarily order an election to be held to fill any such
vacancies or newly created directorships, or to replace the directors chosen by
the directors then in office.

Section 3.03. Resignations; Removal. Any director may resign at any time by
---------------------
giving written notice to the Board of Directors, the Chairman of the Board, if
there is one, the President, or the Secretary. Such resignation shall take
effect at the time of receipt thereof or at any later time specified therein;
and, unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective. Any director may be removed at any
time by the unanimous vote of all other directors or as provided in the
Corporation's Certificate of Incorporation.

Section 3.04. Direction of Management. The business of the Corporation shall
-----------------------
be managed under the direction of its Board of Directors, which may exercise all
such powers of the Corporation and do all such lawful acts and things as are not
by statute or by the Certificate of Incorporation or by these Bylaws directed or
required to be exercised or done by the stockholders.

Section 3.05. Place of Meetings. The Board of Directors of the Corporation
-----------------
may hold meetings, both regular and special, either within or without the State
of Delaware.

3
<PAGE>

Section 3.06. Annual Meeting. Immediately after each annual election of
--------------
directors, the Board of Directors shall meet for the purpose of organization,
election of officers, and the transaction of other business, at the place where
such election of directors was held or, if notice of such meeting is given, at
the place specified in such notice. Notice of such meeting need not be given.
In the absence of a quorum at said meeting, the same may be held at any other
time and place which shall be specified in a notice given as hereinafter
provided for special meetings of the Board of Directors, or as shall be
specified in a written waiver signed by the directors, if any, not attending and
participating in the meeting.

Section 3.07. Regular Meetings. Regular meetings of the Board of Directors
----------------
may be held without notice at such time and place as shall from time to time be
determined by the Board.

Section 3.08. Special Meetings. Special meetings of the Board of Directors
----------------
may be called by the Chairman of the Board, if there is one, or the President on
2 days' notice to each director; either personally (including telephone), or in
the manner specified in Section 4.01; special meetings shall be called by the
Chairman of the Board, if there is one, or the President or the Secretary in
like manner and on like notice on the written request of two directors.

Section 3.09. Quorum; Voting. At all meetings of the Board, a majority of
--------------
the directors shall constitute a quorum for the transaction of business; and at
all meetings of any committee of the Board, a majority of the members of such
committee shall constitute a quorum for the transaction of business. The act of
a majority of the directors present at any meeting of the Board of Directors or
any committee thereof at which there is a quorum present shall be the act of the
Board of Directors or such committee, as the case may be, except as may be
otherwise specifically provided by statute or by the Certificate of
Incorporation. If a quorum shall not be present at any meeting of the Board of
Directors or committee thereof, the directors present thereat may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.

Section 3.10. Action Without a Meeting. Any action required or permitted to
------------------------
be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all members of the Board or committee, as the
case may be, consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board or committee.

Section 3.11. Participation in Meetings. One or more directors may
-------------------------
participate in any meeting of the Board or committee thereof by means of
conference telephone or similar communications equipment by which all persons
participating can hear each other.

Section 3.12. Committees of Directors. The Board of Directors may, by
-----------------------
resolution passed by a majority of the whole Board, designate one or more
committees, each committee to consist of one or more of the directors of the
Corporation. The Board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. Any such committee, to the extent provided in the
resolution, shall have and may exercise all of the powers and authority of

4
<PAGE>

the Board of Directors and may authorize the seal of the Corporation to be
affixed to all papers which may require it, but no such committee shall have the
power or authority in reference to amending the Certificate of Incorporation
(except that a committee may, to the extent authorized in the resolution
providing for the issuance of shares of stock adopted by the Board of Directors,
fix any preferences or rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the Corporation or the conversion
into, or the exchange of such shares for, shares of any other class or classes
or any other series of the same or any other class or classes of stock of the
Corporation), adopting an agreement of merger or consolidation, recommending to
the stockholders the sale, lease or exchange of all or substantially all of the
Corporation's property and assets, recommending to the stockholders a
dissolution of the Corporation or a revocation of a dissolution, or amending the
Bylaws of the Corporation; and, unless the resolution expressly so provides, no
such committee shall have the power or authority to declare a dividend, to
authorize the issuance of stock, or to adopt a certificate of ownership and
merger. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the Board of Directors.
Each committee shall keep regular minutes of its meetings and report the same to
the Board of Directors when requested.

Section 3.13. Compensation of Directors. Each director shall be entitled to
-------------------------
receive such compensation, if any, as may from time to time be fixed by the
Board of Directors. Members of special or standing committees may be allowed
like compensation for attending committee meetings. Directors may also be
reimbursed by the Corporation for all reasonable expenses incurred in traveling
to and from the place of each meeting of the Board or of any such committee or
otherwise incurred in the performance of their duties as directors. No payment
referred to herein shall preclude any director from serving the Corporation in
any other capacity and receiving compensation therefor.

ARTICLE 4
NOTICES

Section 4.01. Notices. Whenever, under the provisions of law or of the
-------
Certificate of Incorporation or of these Bylaws, notice is required to be given
to any director or stockholder, such requirement shall not be construed to
necessitate personal notice. Such notice may in every instance be effectively
given by depositing a writing in a post office or letter box, in a postpaid,
sealed wrapper, or by dispatching a prepaid telegram, cable, telecopy or telex
or by delivering a writing in a sealed wrapper prepaid to a courier service
guaranteeing delivery within 2 business days, in each case addressed to such
director or stockholder, at his address as it appears on the records of the
Corporation in the case of a stockholder and at his business address (unless he
shall have filed a written request with the Secretary that notices be directed
to a different address) in the case of a director. Such notice shall be deemed
to be given at the time it is so dispatched.

Section 4.02. Waiver of Notice. Whenever, under the provisions of law or of
----------------
the Certificate of Incorporation or of these Bylaws, notice is required to be
given, a waiver thereof in writing, signed by the person or persons entitled to
said notice, whether before or after the time

5
<PAGE>

of the event for which notice is to be given, shall be deemed equivalent
thereto. Neither the business nor the purpose of any meeting need be specified
in such a waiver.

ARTICLE 5
OFFICERS

Section 5.01. Number. The officers of the Corporation shall be a Chief
------
Executive Officer, a President, a Secretary and a Treasurer, and may also
include a Chairman of the Board, one or more Vice Presidents, one or more
Assistant Secretaries and Assistant Treasurers, and such other officers as may
be elected by the Board of Directors. Any number of offices may be held by the
same person.

Section 5.02. Election and Term of Office. The officers of the Corporation
---------------------------
shall be elected by the Board of Directors. Officers shall hold office at the
pleasure of the Board.

Section 5.03. Removal. Any officer may be removed at any time by the Board
-------
of Directors. Any vacancy occurring in any office of the Corporation may be
filled by the Board of Directors.

Section 5.04. Chairman of the Board. The Chairman of the Board, if there is
---------------------
one, shall preside at all meetings of the Board of Directors and shall perform
such other duties, if any, as may be specified by the Board from time to time.

Section 5.05. Chief Executive Officer. The Chief Executive Officer shall be
-----------------------
the chief executive officer of the Corporation and shall have overall
responsibility for the management of the business and operations of the
Corporation and shall see that all orders and resolutions of the Board are
carried into effect. In the absence of the Chairman of the Board, the Chief
Executive Officer shall preside over meetings of the Board of Directors and
shall also have such other duties as from time to time may be assigned to him by
the Board.

Section 5.06. President. In general, the President shall perform all duties
---------
incident to the office of President and such other duties as from time to time
may be assigned to him by the Board.

Section 5.07. Vice Presidents. The Vice Presidents shall perform such duties
---------------
and have such authority as may be specified in these Bylaws or by the Board of
Directors or the President. In the absence or disability of the President, the
Vice Presidents, in order of seniority established by the Board of Directors or
the President, shall perform the duties and exercise the powers of the
President.

Section 5.08. Secretary. The Secretary shall attend all meetings of the
---------
Board of Directors and all meetings of the stockholders and record all the
proceedings of the meetings of the stockholders and of the Board of Directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required. He shall give, or cause to be given, notice
of all meetings of the stockholders and special meetings of the Board of
Directors, and shall perform such other duties as may be prescribed by the Board
of Directors or the

6
<PAGE>

President. He shall have custody of the corporate seal of the Corporation and
he, or an Assistant Secretary, shall have authority to affix the same to any
instrument, and when so affixed it may be attested by his signature or by the
signature of such Assistant Secretary. The Board of Directors may give general
authority to any other officer to affix the seal of the Corporation and to
attest the affixing by his signature.

Section 5.09. Assistant Secretaries. The Assistant Secretary or Secretaries
---------------------
shall, in the absence or disability of the Secretary, perform the duties and
exercise the authority of the Secretary and shall perform such other duties and
have such other authority as the Board of Directors or the President may from
time to time prescribe.

Section 5.10. Treasurer. The Treasurer shall have the custody of the
---------
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all monies and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Corporation as may be ordered by
the Board of Directors or the President or the Chief Financial Officer, taking
proper vouchers for such disbursements, and shall render to the Board of
Directors when the Board so requires, an account of all his transactions as
Treasurer and of the financial condition of the Corporation.

Section 5.11. Assistant Treasurers. The Assistant Treasurer or Treasurers
--------------------
shall, in the absence or disability of the Treasurer, perform the duties and
exercise the authority of the Treasurer and shall perform such other duties and
have such other authority as the Board of Directors may from time to time
prescribe.

ARTICLE 6
INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 6.01. Indemnification. Each person who was or is made a party or is
---------------
threatened to be made a party or is involved in any action, suit or proceeding,
whether civil, criminal, administrative or investigative (hereinafter a
"proceeding"), by reason of the fact that he or she, or a person of whom he or
she is the legal representative, is or was a director or officer, of the
Corporation or is or was serving at the request of the Corporation as a director
or officer (or person performing similar function), employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including service with respect to employee benefit plans, whether the basis of
such proceeding is alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while serving as a director,
officer, employee or agent, shall be indemnified and held harmless by the
Corporation to the fullest extent authorized by the Delaware General Corporation
Law, as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than said law permitted the
Corporation to provide prior to such amendment), against all expense, liability
and loss (including attorney's fees, judgments, fines, ERISA excise taxes or
penalties and amounts paid or to be paid in settlement) reasonably incurred or
suffered by such person in connection therewith and such indemnification shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of his or her heirs, executors and
administrators: provided, however, that except as provided in paragraph (b)
hereof, the Corporation shall indemnify any such person seeking indemnification
in connection with a proceeding (or part thereof) initiated by such person only
if such proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation.

Section 6.02. Advances. The right to indemnification conferred by this
--------
Article 6 shall include the right to be paid by the Corporation the expenses
incurred in defending any such proceeding in advance of its final disposition,
including, without limitation, attorney's fees, expert fees and all costs of
litigation. Subject to the tender to the Corporation of any undertaking then
required under the Delaware General Corporation law with respect to the
repayment amounts of amounts advanced, any such expenses, including, without
limitation, attorney's fees, expert fees, and all costs of litigation, shall be
paid automatically and promptly upon tender by the director, officer, or
employee, as applicable, of a demand therefor.

7
<PAGE>
Section 6.03. Procedure. If a claim under this Article 6 is not paid in full
---------
by the Corporation within thirty days after a written claim has been received by
the Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim, and if successful in
whole or in part, the claimant shall be entitled to be paid also the expense of
prosecuting such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct which make it permissible under the Delaware
General Corporation Law for the Corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she met the applicable
standard of conduct set forth in the Delaware General Corporation Law, nor an
actual determination by the Corporation (including its Board of Directors,
independent legal counsel, or its stockholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to the action or create
a presumption that the claimant has not met the applicable standard of conduct.

Section 6.04. Other Rights. The indemnification and advancement of expenses
------------
provided by this Article 6 shall not be deemed exclusive of any other rights to
which those seeking indemnification or advancement of expenses may be entitled
under any insurance or other agreement, vote of shareholders or disinterested
directors or otherwise, both as to actions in their official capacity and as to
actions in another capacity while holding an office, and shall continue as to a
person who has ceased to be a director or officer and shall inure to the benefit
of the heirs, executors and administrators of such person.

Section 6.05. Insurance. The Corporation shall have power to purchase and
---------
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee, agent, fiduciary or other
representative of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the Corporation would have the power to indemnify
him against such liability under the provisions of these Bylaws.

Section 6.06. Modification. The duties of the Corporation to indemnify and
------------
to advance expenses to a director or officer provided in this Article 6 shall be
in the nature of a contract between the Corporation and each such director or
officer, and no amendment or repeal of any provision of this Article 6 shall
alter, to the detriment of such director or officer, the right of such person to
the advancement of expenses or indemnification related to a claim based on an
act or failure to act which took place prior to such amendment, repeal or
termination.

Section 6.07. Employees. The Corporation may, by action of its Board of
---------
Directors, extend the provisions of this Article 6 to specific employees and
agents of the Corporation or other corporation, partnership, joint venture
trust, or other enterprise, as applicable, with the same scope and effect as are
applicable to directors and officers hereunder.

ARTICLE 7
CERTIFICATES OF STOCK

Section 7.01. Stock Certificates. Every holder of stock in the Corporation
------------------
shall be entitled to have a certificate in the form prescribed by the Board of
Directors signed on behalf of the Corporation by the Chairman of the Board or
the President or a Vice President and by the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the Corporation,
representing the number of shares owned by him in the Corporation. Any or all
signatures on the certificate may be a facsimile. In case any officer, transfer
agent or registrar who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer, transfer agent or
registrar before such certificate is issued, it may be issued by the Corporation
with the same effect as if such person were such officer, transfer agent, or
registrar at the date of issue.

Section 7.02. Lost Certificates. The Board of Directors may direct a new
-----------------
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When

8
<PAGE>

authorizing such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or
certificates, or his legal representative, to advertise the same in such manner
as it shall require and/or to give the Corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the Corporation
with respect to the certificate alleged to have been lost, stolen or destroyed.

Section 7.03. Transfers of Stock. Upon surrender to the Corporation or the
------------------
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.

Section 7.04. Fixing Record Date. The Board of Directors of the Corporation
------------------
may fix a record date for the purpose of determining the stockholders entitled
to notice of, or to vote at, any meeting of stockholders or any adjournment
thereof, or to consent to corporate action in writing without a meeting, or to
receive payment of any dividend or other distribution or allotment of any
rights, or to exercise any rights in respect of any change, conversion or
exchange of stock or for the purpose of any other lawful action. Such record
date shall not precede the date upon which the resolution fixing the record date
is adopted by the Board of Directors and such record date shall not be (i) in
the case of such a meeting of stockholders, more than 60 nor less than 10 days
before the date of the meeting of stockholders, or (ii) in the case of consents
in writing without a meeting, more than 10 days after the date upon which the
resolution fixing the record date is adopted by the Board of Directors, or (iii)
in other cases, more than 60 days prior to the payment or allotment or change,
conversion or exchange or other action. A determination of stockholders of
record entitled to notice of or to vote at a meeting of stockholders shall apply
to any adjournment of the meeting unless the Board of Directors fixes a new
record date for the adjourned meeting.

Section 7.05. Registered Stockholders. The Corporation shall be entitled to
-----------------------
recognize the exclusive right of a person registered on its books as the owner
of stock to receive dividends and to vote as such owner, and shall be entitled
to hold liable for calls and assessments a person registered on its books as the
owner of stock, and shall not be bound to recognize any equitable or other claim
to, or interest in, such stock on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
the laws of Delaware.

ARTICLE 8
AMENDMENTS

Section 8.01. Amendments. Except as otherwise required by the Corporation's
----------
Certificate of Incorporation, these Bylaws may be altered, amended or repealed,
and new Bylaws may be adopted, by the stockholders or by the Board of Directors
at any regular meeting of the stockholders or of the Board of Directors or at
any special meeting of the stockholders or of the Board of Directors if notice
of such alteration, amendment, repeal or adoption of new Bylaws be contained in
the notice of such special meeting.

9
<PAGE>

ARTICLE 9
LIMITATIONS REGARDING CONVERSION OF PREFERRED STOCK

Section 9.01. Notwithstanding the provisions contained in the Certificate of
Incorporation authorizing the Board of Directors to authorize and issue
preferred stock in such series and classes and containing such designations as
it determines to be appropriate, the Board of Directors shall not be authorized
to issue preferred stock entitling the holder thereof to more than one vote per
share or containing conversion rights that would allow the holder thereof to
convert shares of preferred stock into common stock if the consideration
therefor would be less than 80% of the fair market value of the common stock.
The fair market value of the common stock shall be determined by the good faith
judgement of the Board of Directors considering, among other things, the recent
trading prices of the common stock, the restrictions on the common stock
received upon the conversion and the conversion period.

<PAGE>

EXHIBIT 3.4

AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
MACE SECURITY INTERNATIONAL, INC.

Mace Security International, Inc., a Delaware corporation (the
"Corporation"), does hereby amend and restate its Certificate of Incorporation,
as amended, pursuant to the provisions of Section 242 and Section 245 of the
Delaware General Corporation Law as set forth below:

1. The name of the Corporation is "Mace Security International, Inc." The
date of filing of the Corporation's original Certificate of Incorporation with
the Secretary of State of Delaware was September 16, 1993.

2. The text of the Certificate of Incorporation of the Corporation is
hereby amended and restated to read in its entirety as follows:

FIRST: The name of the Corporation is Mace Security International, Inc.

SECOND: The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware
19801. The name of the Corporation's registered agent at such address is The
Corporation Trust Company, in the County of New Castle.

THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.

FOURTH: The total number of shares of capital stock that the Corporation
shall have authority to issue is Two Hundred Million (200,000,000) shares of
common stock, par value $.01 per share (the "Common Stock"), and Fifty Million
(50,000,000) shares of preferred stock, par value $.01 per share (the "Preferred
Stock"). The terms and conditions of the Common Stock and the Preferred Stock
shall be as follows:

(a) Common Stock.
------------
<PAGE>

(1) All outstanding shares of Common Stock shall be identical and
shall entitle the holders thereof to the same rights and
privileges. The holders of shares of Common Stock shall have no
preemptive or preferential rights of subscription to any shares
of any class of capital stock of the Corporation.

(2) When, as and if dividends or distributions are declared on
outstanding shares of Common Stock, whether payable in cash, in
property or in securities of the Corporation, the holders of
outstanding shares of Common Stock shall be entitled to share
equally in such dividends and distributions.

(3) Upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the holders of
outstanding shares of Common Stock shall be entitled to share
equally in the assets of the Corporation to be distributed among
the holders of shares of the Common Stock.

(4) The holders of outstanding shares of Common Stock shall have
the right to vote on (or, as provided by law, take action by
consent with respect to) the election and removal of the
directors of the Corporation and on, and with respect to, all
other matters to be voted on or consented to by the stockholders
of the Corporation, and each holder shall be entitled to one vote
for each share of Common Stock held. Except as otherwise
provided by law or by the terms of a class or series of the
Preferred Stock fixed by a resolution or resolutions of the Board
of Directors adopted pursuant to paragraph (b) below, the holders
of shares of Preferred Stock shall not have any right to vote on,
or consent with respect to, any matters to be voted on or
consented to by the stockholders of the Corporation and the
shares of Preferred Stock shall not be included in determining
the number of shares voting or entitled to vote on any such
matters.

(b) Preferred Stock. Shares of Preferred Stock of the Corporation may
---------------
be issued from time to time in one or more classes or series, each of
which shall have such distinctive designation or title as shall be
fixed by the Board of Directors of the Corporation prior to the
issuance of any shares thereof. Each such class or series of
Preferred Stock shall have such voting powers, full or limited, or no
voting powers, and such other relative rights, powers and preferences,
including, without limitation, rights to dividends, conversion rights,
if any, redemption price and liquidation preference, and such
qualifications, limitations or restrictions thereof, as shall be
stated in such resolution or resolutions providing for the issuance of
such class or series as may be adopted from time to time by the Board
of Directors prior to the issuance of any shares thereof pursuant to
the authority hereby expressly vested in it, all in accordance with
the laws of the State of Delaware. Except as expressly provided in
such resolution or resolutions or as required by law, the holders of
Preferred Stock shall have no rights as stockholders of the
Corporation.

2
<PAGE>

FIFTH: In furtherance and not in limitation of the general powers
conferred by the laws of the State of Delaware, the Board of Directors is
expressly authorized to make, alter or repeal the Bylaws of the Corporation,
except as specifically otherwise provided therein.

SIXTH: A director of the Corporation shall have no personal liability
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director except to the extent that Section 102(b)(7) (or any
successor provision) of the Delaware General Corporation Law, as amended from
time to time, expressly provides that the liability of a director may not be
eliminated or limited. No amendment or repeal of this paragraph SIXTH shall
apply to or have any effect on the liability or alleged liability of any
director of the Corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment or repeal.

3. The stockholders of the Corporation, at an annual meeting of
stockholders called and held upon notice properly given in accordance with
Section 222 of the Delaware General Corporation Law, have adopted and approved
this Amended and Restated Certificate of Incorporation in accordance with the
provisions of Section 212 of the Delaware General Corporation Law.

4. This Amended and Restated Certificate of Incorporation has been duly
adopted and approved in accordance with the provisions of Sections 242 and 245
of the Delaware General Corporation Law.

IN WITNESS WHEREOF, the Corporation has caused this Amended and
Restated Certificate of Incorporation to be executed by a duly authorized
officer of the Corporation this 28 day of December, 1999.

MACE SECURITY INTERNATIONAL, INC.

By:/s/ Gregory M. Krzemien
------------------------
Gregory M. Krzemien
Chief Financial Officer

<PAGE>

EXHIBIT 10.123

LOAN AGREEMENT

February 17, 2000

Mace Car Wash-Arizona, Inc. dba Genie Car Wash
1000 Crawford Place, Suite 400
Mount Laurel, New Jersey 08054

Attention: Robert M. Kramer, Secretary

Gentlemen:

This Loan Agreement (the "Loan Agreement") will evidence the terms of a real
estate loan by and between MACE CAR WASH-ARIZONA, INC. dba GENIE CAR WASH
("Borrower"), MACE SECURITY INTERNATIONAL, INC. ("Guarantor") and BANK ONE,
TEXAS, NATIONAL ASSOCIATION ("Bank"):

1. AMOUNT AND TERMS OF LOAN.
------------------------

a. Commitment. Subject to the terms and conditions of, and relying on the
----------
representations and warranties contained in, the Loan Documents (this
Loan Agreement, the Note [as hereinafter defined], the loan application
and supplemental financial statements and any other instruments,
documents and agreements now or hereafter evidencing, securing,
governing, guaranteeing and/or pertaining to the indebtedness described
in the Note or any part thereof hereinafter collectively referred to as
the "Loan Documents"), Bank will advance at closing the agreed loan
amount of $4,900,000.00.

b. Purpose. The loan funds shall be used for the purpose of refinancing
-------
existing loans on the land and improvements at 1021 William Cannon
Drive, Austin, Texas, more fully described as Parcel I in Exhibit "A"
attached hereto and incorporated herein; 1311 South Lamar Blvd.,
Austin, Texas, more fully described as Parcel II in said Exhibit "A";
and 7320 Burnet Road, Austin, Texas, more fully described as Parcel III
in said Exhibit "A". Borrower shall execute a Note payable to Bank in
the amount of $4,900,000.00 (the "Note") to evidence the total amount
of the funds to be advanced pursuant hereto.

c. Interest Rate and Payments.
--------------------------

(i) Interest Rate. Interest shall accrue on such portion of the
-------------
$4,900,000.00 which has been advanced to Borrower from the date
advanced until paid at a fluctuating rate per annum which shall
from day to day be equal to the lesser of (a) the Maximum Rate (as
hereinafter defined), or (b) a rate ("Contract Rate"), calculated
-------------
on the basis of the actual days elapsed but computed as if each
year consisted of 360 days, equal to the sum of (i) the Prime Rate
of interest ("Prime Rate") as established from time to time by
----------
Bank (which may not be the lowest, best or most favorable rate of
interest which Bank may charge on loans to its customers) plus
(ii) one-fourth percent (.25%), each change in the rate to be
charged on this Note to become effective without notice to
Borrower on the effective date of each change in the Maximum Rate
or the Prime Rate, as the case may be; provided, however, that if
at any time the Contract Rate shall exceed the Maximum Rate,
thereby causing the interest on this Note to be limited to the
Maximum Rate, then any subsequent reduction in the Prime Rate
shall not reduce the rate of interest on this Note
<PAGE>

below the Maximum Rate until the total amount of interest accrued
on this Note equals the amount of interest which would have
accrued on this Note if the Contract Rate had at all times been in
effect.

The term "Maximum Rate," as used herein, shall mean at the
------------
particular time in question the maximum rate of interest which,
under applicable law, may then be charged on the Note. If such
maximum rate of interest changes after the date hereof and the
Note provides for a fluctuating rate of interest, the Maximum Rate
shall be automatically increased or decreased, as the case may be,
without notice to Borrower from time to time as of the effective
date of each change in such maximum rate. If applicable law
ceases to provide for such a maximum rate of interest, the Maximum
Rate shall be equal to eighteen percent (18%) per annum.

(ii) Payments. The Note shall be paid as follows:
--------

Principal and interest shall be amortized on the basis of a
fifteen (15) year term payable in monthly installments of
principal and interest in the amount of Forty-Nine Thousand, Six
Hundred Ninety-Nine and 06/100 ($49,699.06) commencing on March
17, 2000, and continuing on the same day of each month thereafter
through February 17, 2001. Interest shall be adjusted with each
change in the Prime Rate. Each such payment shall be applied first
to accrued but unpaid interest and then to principal. Commencing
on March 17, 2001 and continuing through February 17, 2002, the
amount of such monthly principal and interest payments shall be
determined based upon the Prime Rate in effect on February 17,
2001, and amortized over the remaining portion of the fifteen (15)
year amortization period. Commencing on March 17th of each year
beginning in 2002, the monthly principal and interest installments
thereafter due and payable shall be adjusted annually based on the
remaining portion of the fifteen (15) year amortization period and
the Prime Rate in effect on the 17th day of February of that year.
In the event the Prime Rate shall increase to a rate such that the
monthly payment of principal and interest then payable shall not
be sufficient to equal the total unpaid interest accrued to such
payment date, then Borrower shall pay monthly an amount equal to
the interest due on such payment date.

The outstanding principal balance of the Note, together with all
accrued but unpaid interest, shall be due and payable on February
17, 2003.

(iii) Prepayment. Borrower may from time to time prepay all or any
----------
portion of the principal of the Note for which right Borrower
shall also pay a penalty equal to a percentage of the prepayment
amount. Prior to the first anniversary date of the Note, the
penalty shall be three percent (3%). After the first anniversary
date of the Note and after each successive anniversary date
thereafter, the penalty previously in effect shall reduce by one
percent (1%). Partial prepayments shall be applied to
installments of principal in the inverse order of maturity and
will not reduce the amount or time of payment of the remaining
installments.

(iv) Application of Payments. Unless otherwise agreed to in writing,
-----------------------
or otherwise required by applicable law, payments will be applied
first to unpaid accrued interest, then to principal, and any
remaining amount to any unpaid collection costs, late charges and
other charges; provided, however, upon delinquency or other
default, Bank reserves the right to apply payments among
principal, interest, late charges, collection costs and other
charges, at its discretion.
<PAGE>

2. COLLATERAL. As collateral and security for the indebtedness evidenced by
----------
the Note, Borrower shall grant and hereby grants to Bank, its successors and
assigns, a first and prior deed of trust lien and security interest in and
to the properties described in Exhibit "A", Exhibit "B" and Exhibit "C"
attached hereto and incorporated herein (the "Property").

3. CROSS COLLATERALIZATION AND CROSS DEFAULT. The loan documents evidencing
-----------------------------------------
the loan hereby created shall contain cross default and cross
collateralization provisions for any and all other loans by and between
Borrower, Guarantor and Bank.

4. GUARANTOR. As a condition precedent to the Bank's obligation to make the
---------
contemplated loan to Borrower, Borrower agrees to cause MACE SECURITY
INTERNATIONAL, INC. ("Guarantor") to execute and deliver to Bank
contemporaneously herewith its guaranty agreement executed by such Guarantor
in form and substance satisfactory to Bank.

5. REPRESENTATIONS AND WARRANTIES. Borrower and Guarantor hereby represent and
------------------------------
warrant to Bank as follows:

a. Existence. Borrower is a corporation duly organized, validly existing
---------
and in good standing under the laws of the State of Arizona and all
other states where it is doing business and has all requisite power and
authority to execute and deliver the Loan Documents.

b. Binding Obligations. The execution, delivery and performance of this
-------------------
Loan Agreement and all of the other Loan Documents by Borrower have
been duly authorized by all necessary action by Borrower, and
constitute legal, valid and binding obligations of Borrower,
enforceable in accordance with their respective terms, except as
limited by bankruptcy, insolvency or similar laws of general
application relating to the enforcement of creditors' rights and except
to the extent specific remedies may generally be limited by equitable
principles.

c. No Consent. The execution, delivery and performance of this Loan
----------
Agreement and the other Loan Documents, and the consummation of the
transactions contemplated hereby and thereby, do not (i) conflict with,
result in a violation of, or constitute a default under (A) any
provision of its Articles of Incorporation or Bylaws, or any agreement
or other instrument binding upon Borrower, or (B) any law, governmental
regulation, court decree or order applicable to Borrower, or (ii)
require the consent, approval or authorization of any third party.

d. Financial Condition. Each financial statement of Borrower and
-------------------
Guarantor supplied to Bank truly discloses and fairly presents
Borrower's and Guarantor's financial condition as of the date of each
such statement. There has been no material adverse change in such
financial condition or results of operations of Borrower or Guarantor
subsequent to the date of the most recent financial statement supplied
to Bank.

e. Litigation. There are no actions, suits or proceedings, pending or, to
----------
the knowledge of Borrower or Guarantor, threatened against or affecting
Borrower or Guarantor or the properties of Borrower or Guarantor,
before any court or governmental department, commission or board,
which, if determined adversely to Borrower or Guarantor, would have a
material adverse effect on the financial condition, properties or
operations of Borrower or Guarantor.

f. Taxes; Governmental Charges. Borrower and Guarantor have filed all
---------------------------
federal, state and local tax reports and returns required by any law or
regulation to be filed and have either duly paid all taxes, duties and
charges indicated due on the basis of such returns and reports, or made
adequate provision for the payment thereof, and the assessment of any
material amount of additional taxes in excess of those paid and
reported is not reasonably expected.
<PAGE>

g. Investments and Guaranties. Neither Borrower nor Guarantor have made
--------------------------
investments in, advances to or guaranties of the obligation of any
other person or entity, except as disclosed in the financial statements
of Borrower and Guarantor.

6. CONDITIONS PRECEDENT TO ADVANCES. Bank's obligation to make any advance
--------------------------------
under this Loan Agreement and other Loan Documents shall be subject to the
conditions precedent that, as of the date of such advance and after giving
effect thereto (i) all representations and warranties made to Bank in this
Loan Agreement and the other Loan Documents shall be true and correct as of
and if made on such date, (ii) no material adverse change in the financial
condition of Borrower since the effective date of the most recent financial
statements furnished to bank by Borrower shall have occurred and be
continuing, (iii) no event has occurred and is continuing, or would result
from the requested advance, which with notice or lapse of time, or both,
would constitute an Event of Default (as hereinafter defined), and (iv) Bank
has received of all Loan Documents appropriately executed by Borrower and
all other proper parties.

7. AFFIRMATIVE COVENANTS. Until (i) the Note and all other obligations and
---------------------
liabilities of Borrower and Guarantor under this Loan Agreement and the
other Loan Documents are fully paid and satisfied, and (ii) the Bank has no
further commitment to lend hereunder, Borrower and Guarantor agree and
covenant that they will, unless Bank shall otherwise consent in writing:

a. Accounts and Records. Maintain all books and records in accordance
--------------------
with generally accepted accounting principles.

b. Right of Inspection. Permit Bank to visit properties and installations
-------------------
of Borrower and Guarantor and to examine, audit and make and take away
copies or reproductions of Borrower's and Guarantor's books and
records, at all reasonable times.

c. Right to Additional Information. Furnish Bank with such additional
-------------------------------
information and statements, lists of assets and liabilities, tax
returns and other reports with respect to the condition and business
operations of Borrower and Guarantor as Bank may request from time to
time.

d. Compliance with Laws. Conduct Borrower's and Guarantor's business in
--------------------
an orderly and efficient manner consistent with good business
practices, and perform and comply with all statutes, rules, regulations
and/or ordinances imposed by any governmental unit upon Borrower's and
Guarantor's business operations and properties (including without
limitation, all applicable environmental statutes, rules, regulations
and ordinances).

e. Taxes. Pay and discharge when due all of their indebtedness and
-----
obligations, including without limitation, all assessments, taxes,
governmental charges, levies and liens, of every kind and nature,
imposed upon Borrower and Guarantor or their properties, income, or
profits, prior to the date on which penalties would attach, and all
lawful claims that, if unpaid, might become a lien or charge upon any
of Borrower's or Guarantor's properties, income, or profits; provided,
however, neither Borrower nor Guarantor will be required to pay and
discharge any such assessment, tax, charge, levy, lien or claim so long
as (i) the legality of the same shall be contested in good faith by
appropriate judicial, administrative or other legal proceedings, and
(ii) Borrower and Guarantor shall have established on their books
adequate reserves with respect to such contested assessment, tax,
charge, levy, lien or claim in accordance with generally accepted
accounting principles, consistently applied.

f. Insurance. Maintain insurance, including but not limited to, fire
---------
insurance, comprehensive property damage, public liability, worker's
compensation, business interruption and other insurance deemed
necessary or otherwise required by Bank.
<PAGE>

g. Notice of Indebtedness. Promptly inform Bank of the creation,
----------------------
incurrence or assumption by Borrower or Guarantor of any actual or
contingent liabilities not permitted under this Loan Agreement.

h. Notice of Litigation. Promptly after the commencement thereof, notify
--------------------
Bank of all actions, suits and proceedings before any court or any
governmental department, commission or board affecting Borrower or
Guarantor or any of their properties.

i. Notice of Material Adverse Change. Promptly inform Bank of (i) any and
---------------------------------
all material adverse changes in Borrower's or Guarantor's financial
condition, and (ii) all claims made against Borrower or Guarantor which
could materially affect the financial condition of Borrower or
Guarantor.

j. Additional Documentation. Execute and deliver, or cause to be executed
------------------------
and delivered, any and all other agreements, instruments or documents
which Bank may reasonably request in order to give effect to the
transactions contemplated under this Loan Agreement and the other Loan
Documents.

k. Reporting Requirements.
----------------------

Borrower. Borrower will deliver to Bank within forty-five (45) days
--------
after the end of each fiscal quarter of Borrower a financial statement
or balance sheet and income statement of Borrower as of the end of such
period. Such financial statements, balance sheets and income
statements shall be in form, scope and detail satisfactory to Bank and
shall be prepared by Borrower or representative of Borrower acceptable
to Bank. Borrower will deliver to Bank, within one hundred twenty
(120) days after the close of the fiscal year a financial statement or
balance sheet and income statement of such Borrower as of the end of
such fiscal year. Such financial statements, balance sheets and income
statements shall be in form, scope and detail satisfactory to Bank.
If, and as often as, reasonably requested by Bank, Borrower will make
further reports of operations in such form as Bank prescribes, setting
out full data requested by Bank.

Borrower further covenants and agrees with Bank that, while this Loan
Agreement is in effect, within forty-five (45) days after the end of
each fiscal quarter of Borrower, and within one hundred twenty (120)
days after the end of each fiscal year of Borrower, Borrower shall
furnish to Bank a certificate executed by Borrower's chief financial
officer, or other officer or person acceptable to Bank, (a) certifying
that the representations and warranties set forth in this Loan
Agreement are true and correct as of the date of the certificate and
that, as of the date of the certificate, no Event of Default exists
under this Loan Agreement, and (b) based upon Borrower's audited
financial statements for the ended fiscal year, demonstrating
compliance with all financial covenants applicable to Borrower as set
forth in this Loan Agreement.

Guarantor. Guarantor will deliver to Bank, within one hundred twenty
----------
(120) days after the close of the fiscal year of such Guarantor a
financial statement or balance sheet and income statement of Guarantor
as of the end of such period. Such financial statements, balance
sheets and income statements will include all subsidiaries and shall be
in form, scope and detail satisfactory to Bank and shall be audited by
a certified public accountant acceptable to Bank acceptable to Bank.
If, and as often as, reasonably requested by Bank, said Guarantor will
make further reports of operations in such form as Bank prescribes,
setting out full data requested by Bank.

Guarantor further covenants and agrees with Bank that, while this Loan
Agreement.

<PAGE>

l. Continuity of Operations. Maintain continuity of operations as
------------------------
represented to Bank.

m. Debt Service Coverage Ratio.
---------------------------

Borrower. Borrower covenants and agrees with Bank that, while this
--------
Loan Agreement is in effect, Borrower will comply with the following:
Maintain, as of the end of each fiscal quarter, a ratio of (a) net
income, plus amortization, depreciation, and interest expense, plus
lease expense, for the preceding full twelve month period, to (b)
current maturities of long term debt, plus current maturities of long
term leases, plus operating lease expense, for the same such twelve
month period, of not less than 1.2 to 1.0. All computations made to
determine compliance with the requirements contained in this paragraph
shall be made in accordance with generally accepted accounting
principles, applied on a consistent basis.

Borrower further covenants and agrees with Bank that, while this Loan
Agreement is in effect, Borrower will comply with the following:
Maintain, as of the end of each fiscal quarter, a ratio of (a) net
income, plus amortization, depreciation, and interest expense, plus
lease expense, minus Distributions, for the preceding full twelve month
period, to (b) current maturities of long term debt, plus current
maturities of long term leases, plus operating lease expense, for the
same such twelve month period, of not less than 1 to 1. As used in
this covenant, the term "Distributions" shall mean all dividends and
other distributions made by Borrower to its parent, Mace Security
International, Inc. Except as provided above, all computations made to
determine compliance with the requirements contained in this paragraph
shall be made in accordance with generally accepted accounting
principles, applied on a consistent basis.

Guarantor. Guarantor covenants and agrees with Bank that, while this
---------
Loan Agreement is in effect Guarantor will comply with the following:
Maintain, as of the end of each fiscal quarter, a ratio of (a) net
income, plus amortization, depreciation, and interest expense, plus
income taxes, for the preceding full twelve month period, to (b)
current maturities of long term debt, plus current maturities of long
term leases, plus interest expense, for the same such twelve month
period, of not less than 1.5 to 1.0. All computations made to determine
compliance with the requirements contained in this paragraph shall be
made in accordance with generally accepted accounting principles,
applied on a consistent basis.

n. Debt to Tangible Net Worth Ratio.
--------------------------------

Borrower. Borrower covenants and agrees with Bank that, while this
--------
Loan Agreement is in effect, Borrower will comply with the following:
Maintain as of the end of each fiscal quarter, a ratio of (a) total
liabilities, to (b) Tangible Net Worth, of less than 2.5 to 1.0. As
used in this covenant, the term "Tangible Net Worth" shall mean
Borrower's total assets excluding all intangible assets (including,
without limitation, goodwill, trademarks, patents, copyrights,
organization expenses, and similar intangible items) less total
liabilities excluding Subordinated Debt. As used in this covenant,
the term "Subordinated Debt" shall mean all indebtedness owing by
Borrower which has been subordinated by written agreement to all
indebtedness now or hereafter owing by Borrower to Bank, such agreement
to be in form and substance acceptable to Bank. Except as provided
above, all computations made to determine compliance with the
requirements contained in this paragraph shall be made in accordance
with generally accepted accounting principles, applied on a consistent
basis, and certified by Borrower as being true and correct.

Guarantor. Guarantor covenants and agrees with Bank that, while this
---------
Loan Agreement is in effect, Guarantor will comply with the following:
Guarantor will
<PAGE>

maintain as of the end of each fiscal quarter, a ratio of (a) total
liabilities, to (b) Tangible Net Worth, of less than 2 to 1. As used in
thus covenant, the term "Tangible Net Worth" shall mean Guarantor's
total assets excluding all intangible assets (including, without
limitation, goodwill, trademarks, patents, copyrights, organization
expenses, and similar intangible items) less total liabilities
excluding Subordinated Debt. As used in this covenant, the term
"Subordinated Debt" shall mean all indebtedness owing by Guarantor
which has been subordinated by written agreement to all indebtedness
now or hereafter owing by Guarantor to Bank, including but not limited
to Guarantor's guarantee of indebtedness of Borrower to Bank, such
agreement to be in form and substance acceptable to Bank. Except as
provided above, all computations made to determine compliance with the
requirements contained in this paragraph shall be made in accordance
with generally accepted accounting principles, applied on a consistent
basis.

8. NEGATIVE COVENANTS. Until (i) the Note and all obligations and liability
------------------
under this Loan Agreement are fully paid and satisfied, and (ii) the Bank
has no further commitment to lend hereunder, neither Borrower nor Guarantor
will, without the prior written consent of Bank:

a. Liens. Create, incur, assume or suffer to exist any lien on the
-----
collateral securing the payment of the subject loan.

b. Use of Loan Proceeds. Use the loan proceeds for any purpose other than
--------------------
that stated in Paragraph 1b of this Loan Agreement. Borrower
represents and warrants that no portion of any advance or loan made
hereunder shall be used directly or indirectly to purchase ineligible
securities, as defined by applicable regulations of the Federal Reserve
Board, underwritten by any affiliate of Banc One Corporation during the
underwriting period and for 30 days thereafter.

c. Nature of Business. Make any material change in the nature of
------------------
Borrower's or Guarantor's business as carried on as of the date hereof.

d. Transfer of Assets. Permit the sale, pledge or other transfer of any
-------------------
of Borrower's or Guarantor's assets or the real estate security for
this loan.

e. Transfer of Ownership. Permit the sale, pledge or other transfer of
---------------------
any of the ownership interest in Borrower or the real estate security
for this loan.

f. Change in Management. Permit a change in the management of Borrower or
--------------------
Guarantor, however, such consent shall not be unreasonably withheld,
provided that Borrower's or Guarantor's new management is as qualified
as existing management.

g. Affiliate Transactions. Guarantor will not engage in any transaction
----------------------
with an affiliate of Guarantor, other than wholly owned subsidiaries,
unless such transaction is made on terms no less favorable than those
available with similarly qualified third parties.

9. APPRAISALS. Borrower covenants and agrees with Bank that while this Loan
----------
Agreement is in effect, Borrower will reimburse Bank for any and all costs
incurred by Bank if, from time to time while any indebtedness remains
unpaid, Bank, in its sole discretion, obtains an appraisal of all or any
part of the collateral which is real property. At the request of Borrower,
Bank will furnish Borrower with a copy of any such appraisal.

10. EVENTS OF DEFAULT. Each of the following shall constitute an "Event of
-----------------
Default" under this Loan Agreement:

a. The failure of Borrower to pay when due any part of the principal of,
or interest on, the Note or any other indebtedness or obligations owing
to Bank by Borrower from time to time and the continuation of such
failure for a period of ten (10) days from the due date.
<PAGE>

b. The failure of Borrower or Guarantor to timely and properly observe,
keep or perform any representation, covenant, agreement, warranty or
condition required herein or in any of the other Loan Documents.

c. The failure of Borrower or Guarantor to timely and properly provide the
financial reportings required in Paragraph 7k and the continuation of
such failure for a period of thirty (30) days.

d. The occurrence of an event of default under any of the other Loan
Documents or under any other agreement now existing or hereafter
arising between Bank and Borrower and Guarantor.

e. Any representation contained herein or in any of the other Loan
Documents made by Borrower or any Obligated party is false or
misleading in any material respect.

f. If Borrower or any Obligated party: (i) becomes insolvent, or makes a
transfer in fraud of creditors, or makes an assignment for the benefit
of creditors, or admits in writing its inability to pay its debts as
they become due; (ii) generally is not paying its debts as such debts
become due; (iii) has a receiver, trustee or custodian appointed for,
or take possession of, all or substantially all of the assets of such
party, either in a proceeding brought by such party or in a proceeding
brought against such party and such appointment is not discharged or
such possession is not terminated within sixty (60) days after the
effective date thereof or such party consents to or acquiesces in such
appointment or possession; (iv) files a petition for relief under the
United States Bankruptcy Code or any other present or future federal or
state insolvency, bankruptcy or similar laws (all of the foregoing
hereinafter collectively called "Applicable Bankruptcy Law') or an
involuntary petition for relief is filed against such a party under any
Applicable Bankruptcy Law and such involuntary petition is not
dismissed within sixty (60) days after the filing thereof, or an order
for relief naming such party is entered under any Applicable Bankruptcy
Law, or any composition, rearrangement, extension, reorganization or
other relief of debtors now or hereafter existing is requested or
consented to by such party; (v) fails to have discharged within a
period of thirty (30) days any attachment , sequestration or similar
writ levied upon any property of such party; or (vi) fails to pay
within thirty (30) days any final money judgment against such party.

Nothing contained in this Loan Agreement shall be construed to limit the
events of default enumerated in any of the other Loan Documents and all such
events of default shall be cumulative. The term "Obligated Party", as used
herein, shall mean any party other than Borrower who secures, guarantees
and/or is otherwise obligated to pay all or any portion of the indebtedness
evidenced by the Note.

11. LATE CHARGES. If a payment is ten (10) or more days late, Borrower will pay
------------
a delinquency charge in an amount equal to the greater of (i) $25.00, or
(ii) 5.0% of the amount of the delinquent payment up to the maximum amount
of $1,500.00 per late charge. Upon default, including failure to pay upon
final maturity, Bank, at its option, may also, if permitted under applicable
law, do one or both of the following: (a) increase the applicable interest
rate on the Note three (3.00) percentage points, and (b) add any unpaid
accrued interest to principal and such sum will bear interest therefrom
until paid at the rate provided in the Note (including any increased rate).
The interest rate will not exceed the maximum rate permitted by applicable
law.

12. REMEDIES. Upon the occurrence of any one or more of the foregoing Events of
--------
Default, the entire unpaid balance of principal of the Note, together with
all accrued but unpaid interest thereon, and all other indebtedness owing to
Bank by Borrower or Guarantor at such time shall,
<PAGE>

at the option of Bank, become immediately due and payable without further
notice, demand, presentation, notice of dishonor, notice of intent to
accelerate, notice of acceleration, protest or notice of protest of any
kind, all of which are expressly waived by Borrower; and the Note and all
other indebtedness owing to Bank by Borrower or Guarantor at such time
shall, without any action by Bank, become due and payable, without further
notice, demand, presentation, notice of dishonor, notice of acceleration,
notice of intent to accelerate, protest or notice of protest of any kind,
all of which are expressly waived by Borrower and Guarantor. All rights and
remedies of Bank set forth in this Loan Agreement and in any of the other
Loan Documents may also be exercised by Bank, at its option to be exercised
in its sole discretion, upon the occurrence of an Event of Default.

13. RIGHTS CUMULATIVE. All rights of Bank under the terms of this Loan
-----------------
Agreement shall be cumulative of, and in addition to, the rights of Bank
under any and all other agreements between Borrower, Guarantor and Bank
(including, but not limited to, the other Loan Documents), and not in
substitution or diminution of any rights now or hereafter held by Bank under
the terms of any other agreement.

14. WAIVER AND AGREEMENT. Neither the failure nor any delay on the part of Bank
--------------------
to exercise any right, power or privilege herein or under any of the other
Loan Documents shall operate as a waiver thereof, nor shall any single or
partial exercise of such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege. No waiver of any provision in this Loan Agreement or in any of
the other Loan Documents and no departure by Borrower or Guarantor therefrom
shall be effective unless the same shall be in writing and signed by Bank,
and then shall be effective only in the specific instance and for the
purpose for which given and to the extent specified in such writing. No
Modification or amendment to this Loan Agreement or to any of the other Loan
Documents shall be valid or effective unless the same is signed by the party
against whom it is sought to be enforced.

15. BENEFITS. This Loan Agreement shall be binding upon and inure to the
--------
benefit of Bank and Borrower and Guarantor, and their respective successors
and assigns, provided, however, that Borrower may not, without the prior
written consent of Bank, assign any rights, powers, duties or obligations
under this Loan Agreement or any of the other Loan Documents.

16. NOTICES. All notices, requests, demands or other communications required or
-------
permitted to be given pursuant to this Agreement shall be in writing and
given by (i) personal delivery, (ii) expedited delivery service with proof
of delivery, or (iii) United States mail, postage prepaid, registered or
certified mail, return receipt requested, sent to the intended addressee at
the address set forth on the signature page hereof and shall be deemed to
have been received either, in the case of personal delivery, as of the time
of personal delivery, in the case of expedited delivery service, as of the
date of first attempted delivery at the address and in the manner provided
herein, or in the case of mail, upon deposit in a depository receptacle
under the care and custody of the United States Postal Service. Either
party shall have the right to change its address for notice hereunder to any
other location within the continental United States by notice to the other
party of such new address at least thirty (30) days prior to the effective
date of such new address.

17. CONSTRUCTION. This Loan Agreement and the other Loan Documents have been
------------
executed and delivered in the State of Texas, shall be governed by and
construed in accordance with the laws of the State of Texas, and shall be
performable by the parties hereto in the county in Texas where the Bank's
address set forth on the signature page hereof is located.

18. EXPENSES. Borrower shall pay all costs and expenses (including, without
--------
limitation, reasonable attorneys' fees) in connection with (i) any action
required in the course of administration of the indebtedness and obligations
evidenced by the Loan Documents, and (ii) any action in the enforcement of
Bank's rights upon the occurrence of Event of Default.
<PAGE>

19. ENTIRE AGREEMENT. This Loan Agreement (together with the other Loan
----------------
Documents) contains the entire agreement among the parties regarding the
subject matter hereof and supersedes all prior written and oral agreements
and understandings among the parties hereto regarding same.

20. ARBITRATION. Bank, Borrower and Guarantor agree that upon the written
------------
demand of either party, whether made before or after the institution of any
legal proceedings, but prior to the rendering of any judgment in that
proceeding, all disputes, claims and controversies between them, whether
individual, joint, or class in nature, arising from the Note, any related
document or otherwise, including without limitation, contract disputes and
tort claims, shall be resolved by binding arbitration pursuant to the
Commercial Rules of the American Arbitration Association ("AAA"). Any
arbitration proceeding held pursuant to this arbitration provision shall be
conducted in the city nearest the Borrower's address having an AAA regional
office, or at any other place selected by mutual agreement of the parties.
No act to take or dispose of any collateral shall constitute a waiver of
this arbitration agreement or be prohibited by this arbitration agreement.
This arbitration provision shall not limit the right of either party during
any dispute, claim or controversy to seek, use and employ ancillary, or
preliminary rights and/or remedies, judicial or otherwise, for the purposes
of realizing upon, preserving, protecting, foreclosing upon or proceeding
under forcible entry and detainer for possession of, any real or personal
property, and any such action shall not be deemed an election of remedies.
Such remedies include, without limitation, obtaining injunctive relief or a
temporary restraining order, invoking a power of sale under any deed of
trust or mortgage, obtaining a writ of attachment or imposition of a
receivership, or exercising any rights relating to personal property,
including exercising the right of set-off, or taking or disposing of such
property with or without judicial process pursuant to the Uniform Commercial
Code. Any disputes, claims or controversies concerning the lawfulness or
reasonableness of an act, or exercise of any right or remedy concerning any
collateral, including any claim to rescind, reform, or otherwise modify any
agreement relating to the collateral, shall also be arbitrated; provided,
however that no arbitrator shall have the right or the power to enjoin or
restrain any act of either party. Judgment upon any award rendered by any
arbitrator may be entered in any court having jurisdiction. The statute of
limitations, estoppel, waiver, laches and similar doctrines which would
otherwise be applicable in an action brought by a party shall be applicable
in any arbitration proceeding, and the commencement of an arbitration
proceeding shall be deemed the commencement of any action for these
purposes. The Federal Arbitration Act (Title 9 of the United States Code)
shall apply to the construction, interpretation, and enforcement of this
arbitration provision.

21. JURY WAIVER. THE UNDERSIGNED HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND
------------
UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG
THE UNDERSIGNED ARISING OUT OF OR IN ANY WAY RELATED TO THIS DOCUMENT, ANY
OTHER RELATED DOCUMENT, OR ANY RELATIONSHIP BETWEEN THE UNDERSIGNED. THIS
PROVISION IS A MATERIAL INDUCEMENT TO BANK TO PROVIDE THE FINANCING
DESCRIBED HEREIN OR IN THE OTHER RELATED DOCUMENTS.

If the foregoing correctly sets forth our mutual agreement, please so
acknowledge by signing and returning this Loan Agreement to the undersigned.

Yours very truly,

BANK ONE, TEXAS, NATIONAL ASSOCIATION
<PAGE>

By: /s/ Mark W. Warren
------------------
Mark W. Warren
Vice President

Bank's Address:
1301 S. Bowen Road, Suite 125
Arlington, Texas 76013
Attention: Mark W. Warren

ACCEPTED as of the date first
written above.

BORROWER:

MACE CAR WASH-ARIZONA, INC. dba GENIE CAR WASH

By: /s/ Robert M. Kramer
--------------------
Robert M. Kramer, Secretary

1000 Crawford Place, Suite 400
Mount Laurel, New Jersey 08054

GUARANTOR:

MACE SECURITY INTERNATIONAL, INC.

By: /s/ Gregory M. Krzemien
------------------------
Gregory M. Krzemien, Treasurer

1000 Crawford Place, Suite 400
Mount Laurel, New Jersey 08054
<PAGE>

PROMISSORY NOTE

$4,900,000.00 February 17, 2000

FOR VALUE RECEIVED, on or before February 17, 2003 ("Maturity Date"), the
-------------
undersigned and if more than one, each of them, jointly and severally
(hereinafter referred to as "Borrower"), promises to pay to the order of BANK
--------
ONE, TEXAS, NATIONAL ASSOCIATION ("Bank") at its offices in Tarrant County,
----
Texas at 1301 S. Bowen Road, Suite 125, Arlington, Texas 76013, the principal
amount of FOUR MILLION, NINE HUNDRED HOUSAND AND NO/100 DOLLARS ($4,900,000.00)
("Total Principal Amount"), or such amount less than the Total Principal Amount
----------------------
which has been advanced to Borrower if the total amount advanced under this
Promissory Note ("Note") is less than the Total Principal Amount, together with
----
interest on such portion of the Total Principal Amount which has been advanced
to Borrower from the date advanced until paid at a fluctuating rate per annum
which shall from day to day be equal to the lesser of (a) the Maximum Rate (as
hereinafter defined), or (b) a rate ("Contract Rate"), calculated on the basis
-------------
of the actual days elapsed but computed as if each year consisted of 360days,
equal to the sum of (i) the Prime Rate of interest ("Prime Rate") as established
----------
from time to time by Bank (which may not be the lowest, best or most favorable
rate of interest which Bank may charge on loans to its customers) plus (ii) one-
fourth percent (.25%), each change in the rate to be charged on this Note to
become effective without notice to Borrower on the effective date of each change
in the Maximum Rate or the Prime Rate, as the case may be; provided, however,
that if at any time the Contract Rate shall exceed the Maximum Rate, thereby
causing the interest on this Note to be limited to the Maximum Rate, then any
subsequent reduction in the Prime Rate shall not reduce the rate of interest on
this Note below the Maximum Rate until the total amount of interest accrued on
this Note equals the amount of interest which would have accrued on this Note if
the Contract Rate had at all times been in effect.

The term "Maximum Rate," as used herein, shall mean at the particular time
------------
in question the maximum rate of interest which, under applicable law, may then
be charged on this Note. If such maximum rate of interest changes after the
date hereof and this Note provides for a fluctuating rate of interest, the
Maximum Rate shall be automatically increased or decreased, as the case may be,
without notice to Borrower from time to time as of the effective date of each
change in such maximum rate. If applicable law ceases to provide for such a
maximum rate of interest, the Maximum Rate shall be equal to eighteen percent
(18%) per annum.

Interest on this Note is computed by applying the ratio of the annual
interest rate over a year of 360 days, multiplied by the outstanding principal
balance, multiplied by the actual number of days the principal balance is
outstanding.

The principal of and all accrued but unpaid interest on this Note shall be
due and payable as follows:

(x) Principal and interest shall be amortized on the basis of a fifteen
(15) year term payable in monthly installments of principal and interest in the
amount of Forty-Nine Thousand, Six Hundred Ninety-Nine and 06/100 Dollars
($49,699.06) commencing on March 17, 2000, and continuing on the same day of
each month thereafter through February 17, 2001. Interest shall be adjusted
with each change in the Prime Rate. Each such payment shall be applied first to
accrued but unpaid interest and then to principal. Commencing on March 17, 2001
and continuing through February 17, 2002, the amount of such monthly principal
and interest payments shall be determined based upon the Prime Rate in effect on
February 17, 2001, and amortized over the remaining portion of the fifteen (15)
year amortization period. Commencing on March 17th of each year beginning in
2002, the monthly principal and interest installments thereafter due and payable
shall be adjusted annually based on the remaining portion of the fifteen (15)
year amortization period and the Prime Rate in effect on the 17th day of
February of that year. In the event the Prime Rate shall increase to a rate
such that the monthly payment of principal and interest then payable shall not
be sufficient to equal the total unpaid interest accrued to such payment date,
then Borrower shall pay monthly an amount equal to the interest due on
<PAGE>

such payment date.

(x) the outstanding principal balance of this Note, together with all
accrued but unpaid interest, shall be due and payable on the Maturity Date.

If a payment is ten (10) or more days late, Borrower will pay a delinquency
charge in an amount equal to the greater of (i) $25.00, or (ii) 5.0% of the
amount of the delinquent payment up to the maximum amount of $1,500.00 per late
charge. Upon default, including failure to pay upon final maturity, Bank, at
its option, may also, if permitted under applicable law, do one or both of the
following: (a) increase the applicable interest rate on this Note three (3.00)
percentage points, and (b) add any unpaid accrued interest to principal and such
sum will bear interest therefrom until paid at the rate provided in this Note
(including any increased rate). The interest rate will not exceed the maximum
rate permitted by applicable law.

Borrower may from time to time prepay all or any portion of the principal of
this Note for which right Borrower shall also pay a penalty equal to a
percentage of the prepayment amount. Prior to the first anniversary date of the
Note, the penalty shall be three percent (3%). After the first anniversary date
of the Note and after each successive anniversary date thereafter, the penalty
previously in effect shall reduce by one percent (1%). Partial prepayments
shall be applied to installments of principal in the inverse order of maturity
and will not reduce the amount or time of payment of the remaining installments.
Unless otherwise agreed to in writing, or otherwise required by applicable law,
payments will be applied first to unpaid accrued interest, then to principal,
and any remaining amount to any unpaid collection costs, late charges and other
charges; provided, however, upon delinquency or other default, Bank reserves the
right to apply payments among principal, interest, late charges, collection
costs and other charges, at its discretion. All prepayments shall be applied
to the indebtedness owing hereunder in such order and manner as Bank may from
time to time determine in its sole discretion. All payments and prepayments of
principal of or interest on this Note shall be made in lawful money of the
United States of America in immediately available funds, at the address of Bank
indicated above, or such other place as the holder of this Note shall designate
in writing to Borrower. If any payment of principal of or interest on this Note
shall become due on a day which is not a Business Day (as hereinafter defined),
such payment shall be made on the next succeeding Business Day and any such
extension of time shall be included in computing interest in connection with
such payment. As used herein, the term "Business Day" shall mean any day other
------------
than a Saturday, Sunday or any other day on which national banking associations
are authorized to be closed. The books and records of Bank shall be prima facie
----- -----
evidence of all outstanding principal of and accrued and unpaid interest on this
Note.

This Note has been executed and delivered pursuant to that certain Loan
Agreement of even date herewith by and between Borrower and Bank ("Loan
----
Agreement"), and] is secured by, inter alia, the following:
- --------- ----- ----

A Deed of Trust, Security Agreement and Assignment of Rents and Leases of
even date herewith from Borrower in favor of Barbara D. Christian, Trustee
for the benefit of the Bank, covering certain real property situated in
Travis County, Texas, as more particularly described therein.

This Note, the Loan Agreement and all other documents evidencing, securing,
governing, guaranteeing and/or pertaining to this Note, including but not
limited to those documents described above, are hereinafter collectively
referred to as the "Loan Documents." The holder of this Note is entitled to the
--------------
benefits and security provided in the Loan Documents.

Borrower agrees that no advances under this Note shall be used for personal,
family or household purposes, and that all advances hereunder shall be used
solely for business, commercial, investment, or other similar purposes.

Borrower agrees that upon the occurrence of any one or more of the following
events of default ("Event of Default"):
----------------
<PAGE>

(a) failure of Borrower to pay any installment of principal of or interest
on this Note or on any other indebtedness of Borrower to Bank when due; or

(b) the occurrence of any event of default specified in any of the other
Loan Documents; or

(c) the bankruptcy or insolvency of, the assignment for the benefit of
creditors by, or the appointment of a receiver for any of the property of,
or the liquidation, termination, dissolution or death or legal incapacity
of, any party liable for the payment of this Note, whether as maker,
endorser, guarantor, surety or otherwise;

the holder of this Note may, at its option, without further notice or demand,
(i) declare the outstanding principal balance of and accrued but unpaid interest
on this Note at once due and payable, (ii) refuse to advance any additional
amounts under this Note, (iii) foreclose all liens securing payment hereof, (iv)
pursue any and all other rights, remedies and recourses available to the holder
hereof, including but not limited to any such rights, remedies or recourses
under the Loan Documents, at law or in equity, or (v) pursue any combination of
the foregoing.

The failure to exercise the option to accelerate the maturity of this Note
or any other right, remedy or recourse available to the holder hereof upon the
occurrence of an Event of Default hereunder shall not constitute a waiver of the
right of the holder of this Note to exercise the same at that time or at any
subsequent time with respect to such Event of Default or any other Event of
Default. The rights, remedies and recourses of the holder hereof, as provided
in this Note and in any of the other Loan Documents, shall be cumulative and
concurrent and may be pursued separately, successively or together as often as
occasion therefore shall arise, at the sole discretion of the holder hereof.
The acceptance by the holder hereof of any payment under this Note which is less
than the payment in full of all amounts due and payable at the time of such
payment shall not (i) constitute a waiver of or impair, reduce, release or
extinguish any right, remedy or recourse of the holder hereof, or nullify any
prior exercise of any such right, remedy or recourse, or (ii) impair, reduce,
release or extinguish the obligations of any party liable under any of the Loan
Documents as originally provided herein or therein.

This Note and all of the other Loan Documents are intended to be performed
in accordance with, and only to the extent permitted by, all applicable usury
laws. If any provision hereof or of any of the other Loan Documents or the
application thereof to any person or circumstance shall, for any reason and to
any extent, be invalid or unenforceable, neither the application of such
provision to any other person or circumstance nor the remainder of the
instrument in which such provision is contained shall be affected thereby and
shall be enforced to the greatest extent permitted by law. It is expressly
stipulated and agreed to be the intent of the holder hereof to at all times
comply with the usury and other applicable laws now or hereafter governing the
interest payable on the indebtedness evidenced by this Note. If the applicable
law is ever revised, repealed or judicially interpreted so as to render usurious
any amount called for under this Note or under any of the other Loan Documents,
or contracted for, charged, taken, reserved or received with respect to the
indebtedness evidenced by this Note, or if Bank's exercise of the option to
accelerate the maturity of this Note, or if any prepayment by Borrower results
in Borrower having paid any interest in excess of that permitted by law, then it
is the express intent of Borrower and Bank that all excess amounts theretofore
collected by Bank be credited on the principal balance of this Note (or, if this
Note and all other indebtedness arising under or pursuant to the other Loan
Documents have been paid in full, refunded to Borrower), and the provisions of
this Note and the other Loan Documents immediately be deemed reformed and the
amounts thereafter collectable hereunder and thereunder reduced, without the
necessity of the execution of any new document, so as to comply with the then
applicable law, but so as to permit the recovery of the fullest amount otherwise
called for hereunder or thereunder. All sums paid, or agreed to be paid, by
Borrower for the use, forbearance, detention, taking, charging, receiving or
reserving of the indebtedness of Borrower to Bank under this Note or arising
under or pursuant to the other Loan Documents shall, to the maximum extent
permitted by applicable law, be amortized, prorated,
<PAGE>

allocated and spread throughout the full term of such indebtedness until payment
in full so that the rate or amount of interest on account of such indebtedness
does not exceed the usury ceiling from time to time in effect and applicable to
such indebtedness for so long as such indebtedness is outstanding. To the extent
federal law permits Bank to contract for, charge or receive a greater amount of
interest, Bank will rely on federal law instead of the Texas Finance Code, as
supplemented by Texas Credit Title, for the purpose of determining the Maximum
Rate. Additionally, to the maximum extent permitted by applicable law now or
hereafter in effect, Bank may, at its option and from time to time, implement
any other method of computing the Maximum Rate under the Texas Finance Code, as
supplemented by Texas Credit Title, or under other applicable law, by giving
notice, if required, to Borrower as provided by applicable law now or hereafter
in effect. Notwithstanding anything to the contrary contained herein or in any
of the other Loan Documents, it is not the intention of Bank to accelerate the
maturity of any interest that has not accrued at the time of such acceleration
or to collect unearned interest at the time of such acceleration.

In no event shall Chapter 346 of the Texas Finance Code (which regulates
certain revolving loan accounts and revolving tri-party accounts) apply to this
Note. To the extent that Chapter 303 of the Texas Finance Code, is applicable
to this Note, the "weekly ceiling" specified in such Chapter 303 is the
applicable ceiling; provided that, if any applicable law permits greater
interest, the law permitting the greatest interest shall apply.

If this Note is placed in the hands of an attorney for collection, or is
collected in whole or in part by suit or through probate, bankruptcy or other
legal proceedings of any kind, Borrower agrees to pay, in addition to all other
sums payable hereunder, all costs and expenses of collection, including but not
limited to reasonable attorneys' fees.

Borrower and any and all endorsers and guarantors of this Note severally
waive presentment for payment, notice of nonpayment, protest, demand, notice of
protest, notice of intent to accelerate, notice of acceleration and dishonor,
diligence in enforcement and indulgences of every kind and without further
notice hereby agree to renewals, extensions, exchanges or releases of
collateral, taking of additional collateral, indulgences or partial payments,
either before or after maturity.

Bank and Borrower agree that upon the written demand of either party,
whether made before or after the institution of any legal proceedings, but prior
to the rendering of any judgment in that proceeding, all disputes, claims and
controversies between them, whether individual, joint, or class in nature,
arising from this Note, any related document or otherwise, including without
limitation, contract disputes and tort claims, shall be resolved by binding
arbitration pursuant to the Commercial Rules of the American Arbitration
Association ("AAA"). Any arbitration proceeding held pursuant to this
arbitration provision shall be conducted in the city nearest the Borrower's
address having an AAA regional office, or at any other place selected by mutual
agreement of the parties. No act to take or dispose of any collateral shall
constitute a waiver of this arbitration agreement or be prohibited by this
arbitration agreement. This arbitration provision shall not limit the right of
either party during any dispute, claim or controversy to seek, use and employ
ancillary, or preliminary rights and/or remedies, judicial or otherwise, for the
purposes of realizing upon, preserving, protecting, foreclosing upon or
proceeding under forcible entry and detainer for possession of, any real or
personal property, and any such action shall not be deemed an election of
remedies. Such remedies include, without limitation, obtaining injunctive
relief or a temporary restraining order, invoking a power of sale under any deed
of trust or mortgage, obtaining a writ of attachment or imposition of a
receivership, or exercising any rights relating to personal property, including
exercising the right of set-off, or taking or disposing of such property with or
without judicial process pursuant to the Uniform Commercial Code. Any disputes,
claims or controversies concerning the lawfulness or reasonableness of an act,
or exercise of any right or remedy concerning any collateral, including any
claim to rescind, reform, or otherwise modify any agreement relating to the
collateral, shall also be arbitrated; provided, however that no arbitrator shall
have the right or the power to enjoin or restrain any act of either party.
Judgment upon any award rendered by any arbitrator may be entered in any court
having jurisdiction. The statute of limitations, estoppel, waiver, laches and
similar doctrines which would otherwise be applicable in an action brought by a
party shall be applicable in any arbitration proceeding, and the commencement of
<PAGE>

an arbitration proceeding shall be deemed the commencement of any action for
these purposes. The Federal Arbitration Act (Title 9 of the United States Code)
shall apply to the construction, interpretation, and enforcement of this
arbitration provision.

THE UNDERSIGNED AND BANK (BY ITS ACCEPTANCE HEREOF) HEREBY VOLUNTARILY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR
OTHERWISE) BETWEEN OR AMONG THE UNDERSIGNED AND BANK ARISING OUT OF OR IN ANY
WAY RELATED TO THIS DOCUMENT, ANY OTHER RELATED DOCUMENT, OR ANY RELATIONSHIP
BETWEEN BANK AND THE UNDERSIGNED. THIS PROVISION IS A MATERIAL INDUCEMENT TO
BANK TO PROVIDE THE FINANCING DESCRIBED HEREIN OR IN THE OTHER RELATED
DOCUMENTS.

THIS NOTE HAS BEEN EXECUTED UNDER, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS, EXCEPT AS SUCH LAWS ARE
PREEMPTED BY APPLICABLE FEDERAL LAWS.

This Note is given in renewal, extension and modification, but not
extinguishment, of all amounts left owing and unpaid on the following notes:

That certain note dated May 18, 1999 executed and delivered by Mace Car Wash
Arizona, Inc. and payable to the order of CORNETT LIMITED PARTNERSHIP, a
Texas limited partnership; GENIE CAR WASH, INC. OF AUSTIN, a Texas
corporation; GENIE CAR SERVICE CENTER, INC., a Texas corporation; and GENIE
CAR CARE CENTER, INC., a Texas corporation, in the stated principal amount
of $4,750,000.00; and

Notwithstanding the above, the parties agree and acknowledge that the total
principal due on such renewed indebtedness is the principal amount of this Note
which is $4,900,000.00.

BORROWER:

MACE CAR WASH-ARIZONA, INC. dba GENIE CAR WASH

By: /s/ Robert M. Kramer
--------------------
Robert M. Kramer, Secretary

<PAGE>
EXHIBIT 10.124

BANK ONE.

BUSINESS LOAN AGREEMENT
<TABLE>
<CAPTION>

- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
$1,696,103.31 01-31-2000 410 1744079801 17460
- --------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this
document to any particular loan or item.

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

Borrower: COLONIAL FULL SERVICE CAR WASH, INC. Lender: Bank One, Texas, N.A.
1000 CRAWFORD PLACE SUITE 400 Arlington-Bowen Banking Center - Arlington
MOUNT LAUREL, NJ 08054 1301 S. Bowen Rd.
Arlington, TX 76013
========================================================================================================
</TABLE>

THIS BUSINESS LOAN AGREEMENT between COLONIAL FULL SERVICE CAR WASH, INC.
("Borrower") and Bank One, Texas, N.A. ("Lender") is made and executed as of
January 31, 2000. This Agreement governs all loans, credit facilities and/or
other financial accommodations described herein and, unless otherwise agreed to
in writing by Lender and Borrower, all other present and future loans, credit
facilities and other financial accommodations provided by Lender to Borrower.
All such loans, credit facilities and other financial accommodations, together
with all renewals, amendments and modifications thereof, are referred to in this
Agreement individually as the "Loan" and collectively as the "Loans." Borrower
understands and agrees that: (a) In granting, renewing, or extending any Loan,
Lender is relying upon Borrower's representations, warranties, and agreements,
as set forth in this Agreement; and (b) all such Loans shall be and shall remain
subject to the following terms and conditions of this Agreement.

TERM. This Agreement shall be effective as of January 31, 2000, and shall
continue thereafter until all Loans and other obligations owing by Borrower to
Lender hereunder have been paid in full and Lender has no commitments or
obligations to make further advances under the Loans to Borrower.

DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code as adopted in
the State of Texas. All references to dollar amounts shall mean amounts in
lawful money of the United States of America.

AGREEMENT. The word "Agreement" means this Business Loan Agreement, as
may be amended or modified from time to time, together with all
exhibits and schedules attached hereto from time to time.

BORROWER. The word "Borrower" means COLONIAL FULL SERVICE CAR WASH,
INC.

COLLATERAL. The word "Collateral" means and includes without limitation
all property and assets granted as collateral for any Loan, whether
real or personal property, whether granted directly or indirectly,
whether granted now or in the future, and whether granted in the form
of a security interest, mortgage, dead of trust, assignment, pledge,
chattel mortgage, chattel trust, factor's lien, equipment trust,
conditional sale, trust receipt, lien, charge, lien or title retention
contract, lease or consignment intended as a security device, or any
other security or lien interest whatsoever, whether created by law,
contract, or otherwise.

ERISA. The word "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.

GRANTOR. The word "Grantor" means and includes each and all of the
persons or entitles granting a Security Interest in any Collateral for
any of the Loans.

GUARANTOR. The word "Guarantor" means and includes each and all of the
guarantors, sureties, and accommodation parties for any of the Loans.

INDEBTEDNESS. The word "Indebtedness" means the indebtedness evidenced
by the Note, including all principal and accrued interest thereon,
together with all other liabilities, costs and expenses for which
Borrower is responsible under this Agreement or under any of the
Related Documents. In addition, the word "Indebtedness" includes all
other obligations, debts and liabilities, plus any accrued interest
thereon, owing by Borrower, or any one or more of them, to Lender of
any kind or character, now existing or hereafter arising, as well as
all present and future claims by Lender against Borrower, or any one or
more of them, and all renewals, extensions, modifications,
substitutions and rearrangements of any of the foregoing; whether such
Indebtedness arises by note, draft, acceptance, guaranty, endorsement,
letter of credit, assignment, overdraft, indemnity agreement or
otherwise; whether such Indebtedness is voluntary or involuntary, due
or not due, direct or indirect, absolute or contingent, liquidated or
unliquidated; whether Borrower may be liable individually or jointly
with others; whether Borrower may be liable primarily or secondarily or
as debtor, maker, comaker, drawer, endorser, guarantor, surety,
accommodation party or otherwise.

LENDER. The word "Lender" means Bank One, Texas, N.A., its successors
and assigns.

NOTE. The word "Note" means any and all promissory note or notes which
evidence Borrower's Loans in favor of Lender, as well as any amendment,
modification, renewal or replacement thereof.

PERMITTED LIENS. The words "Permitted Liens" mean: (a) liens and
security interests securing indebtedness owed by borrower to Lender;
(b) liens for taxes, assessments, or similar charges either (i) not yet
due, or (ii) being contested in good faith by appropriate proceedings
for and which Borrower has established adequate reserves; (c) purchase
money liens or purchase money security interests upon or in any
property acquired or held by Borrower in the ordinary course of
business to secure any indebtedness permitted under this Agreement; and
(d) liens and security interests which, as of the date of this
Agreement, have been disclosed to and approved by the Lender in
writing.

RELATED DOCUMENTS. The words "Related Documents" mean and include
without limitation the Note and all credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages,
deeds of trust, and all other instruments, agreements and documents,
whether now or hereafter existing, executed in connection with the
Note.

SECURITY AGREEMENT. The words "Security Agreement" mean and include
without limitation any agreements, promises, covenants, arrangements,
understandings or other agreements, whether created by law, contract,
or otherwise, evidencing, governing, representing, or creating a
Security Interest.

SECURITY INTEREST. The words "Security Interest" mean and include
without limitation any type of security Interest, whether in the form
of a lien, charge, mortgage, deed of trust, assignment, pledge, chattel
mortgage, chattel trust, factor's lien, equipment trust, conditional
sale, trust receipt, lien or title retention contract, lease or
consignment intended as a security device, or any other security or
lien interest whatsoever, whether created by law, contract, or
otherwise.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each request for an advance or
disbursement of Loan proceeds, as of the date of any renewal, extension or
modification of any Loan, and at all times any indebtedness exists hereafter:

ORGANIZATION. Borrower is a corporation which is duly organized,
validly existing, and in good standing under the laws of the state of
Borrower's Incorporation and is duly qualified and in good standing in
all other states in which Borrower is doing business. Borrower has the
full power and authority to own its properties and to transact the
businesses in which it is presently engaged or presently proposes to
engage.

AUTHORIZATION. The execution, delivery, and performance of this
Agreement and all Related Documents to which Borrower is a party have
been duly authorized by all necessary action; do not require the
consent or approval of any other person, regulatory authority or
governmental body; and do not conflict with, result in a violation of,
or constitute a default under (a) any provision of its articles of
incorporation or organization, or bylaws, or any agreement or other
instrument binding upon Borrower or (b) any law, governmental
regulation, court decree, or order applicable to Borrower. Borrower has
all requisite power and authority to execute and deliver this Agreement
and all other Related Documents to which Borrower is a party.

FINANCIAL INFORMATION. Each financial statement of Borrower supplied to
Lender truly and completely discloses Borrower's financial condition as
of the date of the statement, and there has been no material adverse
change in Borrower's financial condition subsequent to the date of the
most recent financial statement supplied to Lender. Borrower has no
material contingent obligations except as disclosed in such financial
statements.

LEGAL EFFECT. This Agreement and all other Related Documents to which
Borrower is a party constitute legal, valid and binding obligations of
Borrower enforceable against Borrower in accordance with their
respective terms, except as limited by bankruptcy, insolvency or
similar laws of general application relating to the enforcement of
creditors' rights and except to the extent specific remedies may
generally be limited by equitable principles.

PROPERTIES. Except as contemplated by this Agreement or as previously
disclosed in Borrower's financial statements or in writing to Lender
and as accepted by Lender, and except for property tax liens for taxes
not presently due and payable, Borrower is the sole owner of, and has
good title to, all of Borrower's properties free and clear of all
Security Interests, and has not executed any security documents or
financing statements relating to such properties. All of Borrower's
properties are titled in Borrower's legal name, and Borrower has not

<PAGE>

01-31-2000 BUSINESS LOAN AGREEMENT Page 2
Loan No (Continued)
================================================================================
used, or filed a financing statement under, any other name for at least
the last six (6) years.

COMPLIANCE. Except as disclosed in writing to Lender (a) Borrower is
conducting Borrower's businesses in material compliance with all
applicable federal, state and local laws, statutes, ordinances, rules,
regulations, orders, determinations and court decisions, including
without limitation, those pertaining to health or environmental
matters, and (b) Borrower otherwise does not have any known material
contingent liability in connection with the release into the
environment, disposal or the improper storage of any toxic or hazardous
substance or solid waste.

LITIGATION AND CLAIMS. No litigation, claim, investigation,
administrative proceeding or similar action (including those for unpaid
taxes) against Borrower is pending or threatened, and no other event
has occurred which may in any one case or in the aggregate materially
adversely effect Borrower's financial condition or properties, other
than litigation, claims, or other events, if any, that have been
disclosed to and acknowledged by Lender in writing.

TAXES. All tax returns and reports of Borrower that are or were
required to be filed, have been filed, and all taxes, assessments and
other governmental charges have been paid in full, except those that
have been disclosed in writing to Lender which are presently being or
to be contested by Borrower in good faith in the ordinary course of
business and for which adequate reserves have been provided.

LIEN PRIORITY. Unless otherwise previously disclosed to and approved by
Lender in writing, Borrower has not entered into any Security
Agreements, granted a Security Interest or permitted the filing or
attachment of any Security Interests on or affecting any of the
Collateral, except in favor of Lender.

LICENSES, TRADEMARKS AND PATENTS. Borrower possesses and will continue
to possess all permits, licenses, trademarks, patents and rights
thereto which are needed to conduct Borrower's business and Borrower's
business does not conflict with or violate any valid rights of others
with respect to the foregoing.

COMMERCIAL PURPOSES. Borrower intends to use the Loan proceeds solely
for business or commercial related purposes approved by Lender and such
proceeds will not be used for the purchasing or carrying of "margin
stock" as defined in Regulation U issued by the Board of Governors of
the Federal Reserve System.

INELIGIBLE SECURITIES. No portion or any advance or Loan made hereunder
shall be used directly or indirectly to purchase ineligible securities,
as defined by applicable regulations of the Federal Reserve Board,
underwritten by Lender or any other affiliate of Banc One Corporation
during the underwriting period and for 30 days thereafter.

EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which Borrower
may have any liability complies in all material respects with all
applicable requirements of law and regulations, and (i) no Reportable
Event nor Prohibited Transaction (as defined in ERISA) has occurred
with respect to any such plan, (ii) Borrower has not withdrawn from any
such plan or initiated steps to do so, (iii) no steps have been taken
to terminate any such plan, and (iv) there are no unfunded liabilities
other than those previously disclosed to Lender in writing.

LOCATION OF BORROWER'S OFFICES AND RECORDS. Borrower's place of
business, or Borrower's chief executive office if Borrower has more
than one place of business, is located at 1000 CRAWFORD PLACE SUITE
400, MOUNT LAUREL, NJ 05054. Unless Borrower has designated otherwise
in writing this location is also the office or offices where Borrower
keeps its records concerning the Collateral.

INFORMATION. All information heretofore or contemporaneously herewith
furnished by Borrower to Lender for the purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all
information hereafter furnished by or on behalf of Borrower to Lender
will be, true and accurate in every material respect on the date as of
which such information is dated or certified; and none of such
information is or will be incomplete by omitting to state any material
fact necessary to make such information not misleading.

SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Borrower understands and
agrees that Lender, without Independent Investigation, is relying upon
the above representations and warranties in extending Loan advances to
Borrower. Borrower further agrees that the foregoing representations
and warranties shall be continuing in nature and shall remain in full
force and effect during the term of this Agreement.

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:

LITIGATION. Promptly inform Lender in writing of (a) all material
adverse changes in Borrower's financial condition, (b) all existing and
all threatened litigation, claims, investigations, administrative
proceedings or similar actions affecting Borrower or any Guarantor
which could materially affect the financial condition of Borrower or
the financial condition of any Guarantor, and (c) the creation,
occurrence or assumption by Borrower of any actual or contingent
liabilities not permitted under this Agreement.

FINANCIAL RECORDS. Maintain its books and records in accordance with
generally accepted accounting principles, applied on a consistent
basis, and permit Lender to examine, audit and make and take away
copies or reproductions of Borrower" books and records at all
reasonable times. If Borrower now or at any time hereafter maintains
any records (including without limitation computer generated records
and computer software programs for the generation of such records) in
the possession of a third party, Borrower, upon request of Lender,
shall notify such party to permit Lender free access to such records at
all reasonable times and to provide Lender with copies of any records
it may request, all at Borrower's expense.

FINANCIAL STATEMENTS. Furnish Lender with, as soon as available, but in
no event later than one hundred twenty (120) days after the end of each
fiscal year, Borrower's balance sheet, income statement, and statement
of changes in financial position for the year ended, and, as soon as
available, but in no event later than forty five (45) days after the
end of each fiscal quarter, Borrower's balance sheet, income statement,
and statement of changes in financial position for the period ended,
prepared and certified, subject to year-end review adjustments, as
correct to the best knowledge and belief by Borrower's chief financial
officer or other officer or person acceptable to Lender. All financial
reports required to be provided under this Agreement shall be prepared
in accordance with generally accepted accounting principles, applied on
a consistent basis, and certified by Borrower as being true and
correct.

ADDITIONAL INFORMATION. Furnish such additional information and
statements, lists of assets and liabilities, agings of receivables and
payables, inventory schedules, budgets, forecasts, tax returns, and
other reports with respect to Borrower's financial condition and
business operations as Lender may request from time to time.

INSURANCE. Maintain fire and other risk insurance, public liability
insurance, business interruption insurance and such other insurance as
Lender may require with respect to Borrower's properties and
operations, in form, amounts, and coverages reasonably acceptable to
Lender. BORROWER MAY FURNISH THE REQUIRED INSURANCE WHETHER THROUGH
EXISTING POLICIES OWNED OR CONTROLLED BY BORROWER OR THROUGH EQUIVALENT
INSURANCE FROM ANY INSURANCE COMPANY AUTHORIZED TO TRANSACT BUSINESS IN
THE STATE OF TEXAS. If Borrower fails to provide any required insurance
or fails to continue such insurance in force, Lender may, but shall not
be required to, do so at Borrower" expense, and the cost of the
insurance will be added to the Indebtedness. If any such insurance is
procured by Lender at a rate or charge not fixed or approved by the
State Board of Insurance, Borrower will be so notified, and Borrower
will have the option for five (5) days of furnishing equivalent
insurance through any Insurer authorized to transact business in Texas.
Borrower, upon request of Lender, will deliver to Lender from time to
time the policies or certificates of insurance in form satisfactory to
Lender, including stipulations that coverages will not be cancelled or
diminished without at least thirty (30) days' prior written notice to
Lender. In connection with all policies covering assets in which Lender
holds or is offered a Security Interest for the Loans, Borrower will
provide Lender with such Lender loss payable or other endorsements as
Lender may require.

INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports
on each existing insurance policy showing such information as Lender
may reasonably request, including without limitation the following: (a)
the name of the insurer; (b) the risks insured; (c) the amount of the
policy; (d) the properties insured; (e) the then current property
values on the basis of which insurance has been obtained, and the
manner of determining those values; and (f) the expiration date of the
policy.

GUARANTIES. Prior to or contemporaneously with the execution of this
Agreement, furnish to Lender guaranty agreements executed by the
guarantor named below covering such Loans or other Indebtedness and
otherwise being in form and substance satisfactory to Lender in its
sole and absolute discretion:

GUARANTOR

MACE SECURITY INTERNATIONAL, INC.

OTHER AGREEMENTS. Comply with all terms and conditions of all other
agreements, whether now or hereafter existing, between Borrower and any
other party and notify Lender immediately in writing of any default in
connection with any other such agreements.

LOAN PROCEEDS. Use all Loan proceeds solely for Borrower's business
operations, unless specifically consented to the contrary by Lender in
writing.

TAXES, CHARGES AND LIENS. Pay and discharge when due all of its
indebtedness and obligations, including without limitation all
assessments, taxes, governmental charges, levies and liens, of every
kind and nature, imposed upon Borrower or its properties, income, or
profits, prior to the date on which penalties would attach, and all
lawful claims that, if unpaid, might become a lien or charge upon any
of Borrower's properties, income, or profits; provided however,
Borrower will not be required to pay and discharge any such assessment,
tax, charge, levy, lien or claim so long as (a) the legality of the
same shall be contested in good faith in appropriate proceedings, and
(b)
<PAGE>

01-31-2000 BUSINESS LOAN AGREEMENT Page 3
Loan No (Continued)
================================================================================
Borrower shall have established on its books adequate reserves with
respect to such contested assessment, tax, charge, levy, lien, or claim
in accordance with generally accepted accounting principles. Borrower,
upon demand of Lender, will furnish to Lender evidence of payment of
the assessments, taxes, charges, levies, liens and claims and will
authorize the appropriate governmental official to deliver to Lender at
any time a written statement of any assessments, taxes, charges,
levies, liens and claims against Borrower's properties, income, or
profits.

PERFORMANCE. Perform and comply with all terms, conditions, and
provisions set forth in this Agreement and in the Related Documents in
a timely manner, and promptly notify Lender if Borrower learns of the
occurrence of any event which constitutes an Event of Default under
this Agreement or under any of the Related Documents.

OPERATIONS. Conduct its business affairs in a reasonable and prudent
manner and in compliance with all applicable federal, state and
municipal laws, ordinances, rules and regulations respecting its
properties, charters, businesses and operations, including without
limitation, compliance with the Americans With Disabilities Act, all
applicable environmental statues, rules, regulations and ordinances and
with all minimum funding standards and other requirements of ERISA and
other laws applicable to Borrower's employee benefit plans.

COMPLIANCE CERTIFICATE. Unless waived in writing by Lender, provide
Lender QUARTERLY WITHIN 45 DAYS WITH A CERTIFICATE EXECUTED BY
Borrower's chief financial officer, or other officer or person
acceptable to Lender, (a) certifying that the representations and
warranties set forth in this Agreement are true and correct as of the
date of the certificate and that, as of the date of the certificate, no
Event or Default exists under this Agreement, and (b) demonstrating
compliance with all financial covenants set forth in this Agreement.

ADDITIONAL ASSURANCES. Make, execute and deliver to Lender such
promissory notes, mortgages, deeds of trust, security agreements,
financing statements, instruments, documents and other agreements as
Lender or its attorneys may reasonably request to evidence and secure
the Loans and to perfect all Security Interests.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:

MAINTAIN BASIC BUSINESS. Engage in any business activities
substantially different than those in which Borrower is presently
engaged.

CONTINUITY OF OPERATIONS. Cease operations, liquidate, dissolve or
merge or consolidate with or into any other entity.

LIENS. Mortgage, assign, pledge, grant a security interest in or
otherwise encumber Borrower's assets, except as allowed as a Permitted
Lien.

TRANSFER OF ASSETS. Transfer, sell or otherwise dispose of any of
Borrower's assets other than in the ordinary course of business.

CHANGE IN MANAGEMENT. Permit a change in the senior executive or
management personnel of Borrower; however, such consent shall not be
unreasonably withheld, provided that Borrower's or Guarantor's new
management is as qualified as existing management.

TRANSFER OF OWNERSHIP. Permit the sale, pledge or other transfer of any
ownership interest in Borrower.

CONDITIONS PRECEDENT TO ADVANCES. If Lender is obligated to make any Loan
advances or to otherwise disburse any Loan proceeds to Borrower, such obligation
shall be subject to the conditions precedent that as of the date of such advance
or disbursement and after giving effect thereto (a) all representations and
warranties made to Lender in this Agreement and the Related Documents shall be
true and correct as of and as if made on such date, (b) no material adverse
change in the financial condition of Borrower or any Guarantor since the
effective date of the most recent financial statements furnished to Lender, or
in the value of any Collateral, shall have occurred and be continuing, (c) no
event has occurred and is continuing, or would result from the requested advance
or disbursement, which with notice or lapse of time, or both, would constitute
an Event of Default, (d) no Guarantor has sought, claimed or otherwise attempted
to limit, modify or revoke such Guarantor's guaranty of any Loan, and (e) Lender
has received all Related Documents appropriately executed by Borrower and all
other proper parties.

ADDITIONAL AFFIRMATIVE COVENANT - FINANCIAL STATEMENTS. Borrower further
covenants and agrees with Lender that, while this Agreement is in effect,
Borrower will provide Lender with the annual financial statements, including a
balance sheet, income statement and statement of changes in financial position,
for the year ended, of MACE SECURITY INTERNATIONAL, INC. within ONE HUNDRED
TWENTY (120) days after the end of its fiscal year end, such financial
statements to be audited by certified public accountant(s) reasonably acceptable
to Lender.

ADDITIONAL AFFIRMATIVE COVENANT - DEBT TO TANGIBLE NET WORTH RATIO. Borrower
further covenants and agrees with Lender that, while this Agreement is in
effect, Borrower will comply with the following: Maintain as of the end of each
fiscal quarter; a ratio of (a) total liabilities, to (b) Tangible Net Worth of
less than 3.25 to 1.0. As used in this covenant, the term "Tangible Net Worth"
shall mean borrower's total assets excluding all intangible assets (including,
without limitation, goodwill, trademarks, patents, copyrights, organization
expenses, and similar intangible items) less total liabilities excluding
Subordinated Debt. As used in this covenant the term "Subordinated Debt" shall
mean an indebtedness owing by Borrower which has been subordinated by written
agreement to all indebtedness now or hereafter owing by Borrower to Lender, such
agreement to be in form and substance acceptable to Lender. Except as provided
above, all computations made to determine compliance with the requirements
contained in this paragraph shall be made in accordance with generally accepted
accounting principles, applied on a consistent basis, and certified by Borrower
as being true and correct.

RIGHT OF SETOFF. Unless a lien would be prohibited by law or would render a
nontaxable account taxable, Borrower grants to Lender a contractual security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or any other account), including without
limitation all accounts held jointly with someone else and all accounts Borrower
may open in the future. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the Indebtedness against
any and all such accounts.

EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:

DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when
due on any of the Indebtedness.

OTHER DEFAULTS. Failure of Borrower, any Guarantor or any Grantor to
comply with or to perform when due any other term, obligation, covenant
or condition contained in this Agreement, the Note or in any of the
other Related Documents, or failure of Borrower to comply with or to
perform any other term, obligation, covenant or condition contained in
any other agreement now existing or hereafter arising between Lender
and Borrower.

FALSE STATEMENTS. Any warranty, representation or statement made or
furnished to Lender under this Agreement or the Related Documents is
false or misleading in any material respect.

DEFAULT TO THIRD PARTY. The occurrence of any event which permits the
acceleration of the maturity of any indebtedness owing by Borrower,
Grantor or any Guarantor to any third party under any agreement or
undertaking.

BANKRUPTCY OR INSOLVENCY. If the Borrower, Grantor or any Guarantor:
(i) becomes insolvent, or makes a transfer in fraud of creditors, or
makes an assignment for the benefit of creditors, or admits in writing
its inability to pay its debts as they become due; (ii) generally is
not paying its debts as such debts become due; (iii) has a receiver,
trustee or custodian appointed for, or take possession of, all or
substantially all of the assets of such party or any of the Collateral,
either in a proceeding brought by such party or in a proceeding brought
against such party and such appointment is not discharged or such
possession is not terminated within sixty (60) days after the effective
date thereof or such party consents to or acquiesces in such
appointment or possession; (iv) files a petition for relief under the
United States Bankruptcy Code or any other present or future federal or
state insolvency, bankruptcy or similar laws (all of the foregoing
hereinafter collectively called "Applicable Bankruptcy Law") or an
involuntary petition for relief is filed against such party under any
Applicable Bankruptcy Law and such involuntary petition is not
dismissed within sixty (60) days after the filing thereof, or an order
for relief naming such party is entered under any Applicable Bankruptcy
Law, or any composition, rearrangement, extension, reorganization or
other relief of debtors now or hereafter existing is requested or
consented to by such party; (v) fails to have discharged within a
period of sixty (60) days any attachment, sequestration or similar writ
levied upon any property of such party; or (vi) fails to pay within
thirty (30) days any final money judgment against such party.

LIQUIDATION, DEATH AND RELATED EVENTS. If Borrower, Grantor or any
Guarantor is an entity, the liquidation, dissolution, merger or
consolidation of any such entity or, if any of such parties is an
individual, the death or legal incapacity of any such individual.

CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower, any
creditor of any Grantor against any collateral securing the
Indebtedness, or by any governmental agency.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, Lender may,
at its option, without further notice or demand, (a) terminate all commitments
and obligations of Lender to make Loans to Borrower, if any, (b) declare all
Loans and any other Indebtedness immediately due and payable, (c) refuse to
advance any additional amounts under the Note, or (d) exercise all the rights
and remedies provided in the Note or in any of the Related Documents or
available at law, in equity, or otherwise, provided, however, if any Event of
Default of the type described in the "Bankruptcy or Insolvency" subsection above
shall occur, all Loans and any other Indebtedness shall automatically become due
and payable, without any notice, demand or action by Lender. Except as may be
prohibited by applicable law, all of Lender's rights and remedies shall be
cumulative and may be exercised singularly or concurrently. Election by Lender
to pursue any remedies shall not exclude pursuit of any other remedy, and an
election to make expenditures or to take action to perform an obligation of
Borrower or any Grantor shall
<PAGE>

01-31-2000 BUSINESS LOAN AGREEMENT Page 4
Loan No (Continued)
================================================================================
not affect Lender's right to declare a default and to exercise its rights and
remedies.

MISCELLANEOUS PROVISIONS.

AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Agreement. No alteration of or amendment
to this Agreement shall be effective unless given in writing and signed
by the party or parties sought to be charged or bound by the alteration
or amendment. This Agreement supersedes all existing loan agreements
previously executed between Borrower and Lender with respect to the
Loans unless Borrower and Lender agree in writing to the contrary.

APPLICABLE LAW. This Agreement has been delivered to Lender and
accepted by Lender in the State of Texas. Subject to the provision son
arbitration, this Agreement shall be governed by and construed in
accordance with the laws of the State of Texas without regard to any
conflict of laws or provisions thereof.

JURY WAIVER. THE UNDERSIGNED HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY
AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE)
BETWEEN OR AMONG THE UNDERSIGNED AND LENDER ARISING OUT OF OR IN ANY
WAY RELATED TO THIS DOCUMENT, AND ANY OTHER RELATED DOCUMENT, OR ANY
RELATIONSHIP BETWEEN LENDER AND THE BORROWER. THIS PROVISION IS A
MATERIAL INDUCEMENT TO LENDER TO PROVIDE THE FINANCING DESCRIBED HEREIN
OR IN THE OTHER RELATED DOCUMENTS.

ARBITRATION. Lender and Borrower agree that upon the written demand of
either party, whether made before or after the institution of any legal
proceedings, but prior to the rendering of any judgment in that
proceeding, all disputes, claims and controversies between them,
whether individual, joint, or class in nature, arising from this
Agreement, any Related Document or otherwise, including without
limitation contract disputes and tort claims, shall be resolved by
binding arbitration pursuant to the Commercial Rules of the American
Arbitration Association ("AAA"). Any arbitration proceeding held
pursuant to this arbitration provision shall be conducted in the city
nearest the Borrower's address having an AAA regional office, or at any
other place selected by mutual agreement of the parties. No act to take
or dispose of any Collateral shall constitute a waiver of this
arbitration agreement or be prohibited by this arbitration agreement.
This arbitration provision shall not limit the right of either party
during any dispute, claim or controversy to seek, use, and employ
ancillary, or preliminary rights and/or remedies, judicial or
otherwise, for the purposes of realizing upon, preserving, protecting,
foreclosing upon or proceeding under forcible entry and detainer for
possession of, any real or personal property, and any such action shall
not be deemed an election of remedies. Such remedies include, without
limitation, obtaining injunctive relief or a temporary restraining
order, invoking a power of sale under any deed of trust or mortgage,
obtaining a writ of attachment or imposition of a receivership, or
exercising any rights relating to personal property, including
exercising the right of set-off, or taking or disposing of such
property with or without judicial process pursuant to the Uniform
Commercial Code. Any disputes, claims, or controversies concerning the
lawfulness or reasonableness of an act, or exercise of any right or
remedy, concerning any Collateral, including any claim to rescind,
reform, or otherwise modify any agreement relating to the Collateral,
shall also be arbitrated; provided, however that no arbitrator shall
have the right or the power to enjoin or restrain any act of either
party. Judgment upon any award rendered by any arbitrator may be
entered in any court having jurisdiction. The statute of limitations,
estoppel, waiver, laches and similar doctrines which would otherwise be
applicable in an action brought by a party shall be applicable in any
arbitration proceeding, and the commencement of an arbitration
proceeding shall be deemed the commencement of any action for these
purposes. The Federal Arbitration Act (Title 9 of the United States
Code) shall apply to the construction, interpretation, and enforcement
of this arbitration provision.

CAPTION HEADINGS. Caption headings in this Agreement are for
convenience purposes only and are not to be used to interpret or define
the provisions of this Agreement.

CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to Lender's
sale or transfer, whether now or later, of one or more participation
interests in the Loans to one or more purchasers, whether related or
unrelated to Lender. Lender may provide, without any limitation
whatsoever, to any one or more purchasers, or potential purchasers, any
information or knowledge Lender may have about Borrower or about any
other matter relating to the Loan, and Borrower hereby waives any
rights to privacy it may have with respect to such matters. Borrower
additionally waives any and all notices of sale of participation
interests, as well as all notices of any repurchase of such
participation interests.

COSTS AND EXPENSES. Except as otherwise limited by the Texas Finance
Code, as supplemented by Texas Credit Title, Borrower agrees to pay
upon demand all of Lender's expenses, including attorney's fees,
incurred in connection with the preparation, execution, enforcement,
modification and collection of this Agreement or in connection with the
Loans made pursuant to this Agreement. Lender may hire one or more
attorneys to help collect the Indebtedness if Borrower does not pay,
and Borrower will pay Lender's reasonable attorneys' fees.

NOTICES. All notices required to be given under this Agreement shall be
given in writing, and shall be effective when actually delivered or
when deposited with a nationally recognized overnight courier or
deposited in the United States mail, first class, postage prepaid,
addressed to the party to whom the notice is to be given at the address
shown above. Any party may change its address for notices under this
Agreement by giving formal written notice to the other parties,
specifying that the purpose of the notice is to change the party's
address. To the extent permitted by applicable law, if there is more
than one Borrower, notice to any Borrower will constitute notice to all
Borrowers. For notice purposes, Borrower will keep Lender informed at
all times of Borrower's current address(es).

SEVERABILITY. If a court of competent jurisdiction finds any provision
of this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible,
any such offending provision shall be deemed to be modified to be
within the limits of enforceability or validity; however, if the
offending provision cannot be so modified, it shall be stricken and all
other provisions of this Agreement in all other respects shall remain
valid and enforceable.

COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of
which together shall constitute the same document. Signature pages may
be detached from the counterparts to a single copy of this Agreement to
physically form one document.

SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
behalf of Borrower shall bind its successors and assigns and shall
inure to the benefit of Lender, its successors and assigns. Borrower
shall not, however, have the right to assign its rights under this
Agreement or any interest therein, without the prior written consent of
Lender.

SURVIVAL. All warranties, representations, and covenants made by
Borrower in this Agreement or in any certificate or other instrument
delivered by Borrower to Lender under this Agreement shall be
considered to have been relied upon by Lender and will survive the
making of the Loan and delivery to Lender of the Related Documents,
regardless of any investigation made by Lender or on Lender's behalf.

TIME IS OF THE ESSENCE. Time is of the essence in the performance of
this Agreement.

WAIVER. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender.
No delay or omission on the part of Lender in exercising any right
shall operate as a waiver of such right or any other right. A waiver by
Lender of a provision of this Agreement shall not prejudice or
constitute a waiver of Lender's right otherwise to demand strict
compliance with that provision or any other provision of this
Agreement. No prior waiver by Lender, nor any course of dealing between
Lender and Borrower, or between Lender and any Grantor or Guarantor,
shall constitute a waiver of any of Lender's rights or of any
obligations of Borrower or of any Grantor as to any future
transactions. Whenever the consent of Lender is required under this
Agreement, the granting of such consent by Lender in any instance shall
not constitute continuing consent in subsequent instances where such
consent is required, and in all cases such consent may be granted or
withheld in the sole discretion of Lender.
<PAGE>

01-31-2000 BUSINESS LOAN AGREEMENT Page 5
Loan No (Continued)
================================================================================
BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS EXECUTED AS OF
THE DATE SET FORTH ABOVE.

BORROWER:

COLONIAL FULL SERVICE CAR WASH, INC.

By: /s/ GREGORY M. KRZEMIEN
----------------------------------
Gregory M. Krzemien, Treasurer

LENDER:

Bank One, Texas, N.A.

By: /s/ MARK WARREN
----------------------------------
Mark Warren
Authorized Officer

================================================================================
<PAGE>

BANK ONE.

PROMISSORY NOTE
<TABLE>
<CAPTION>

- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
$400,000.00 02-21-2000 02-21-2003 410 1744079801 17460
- --------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this
document to any particular loan or item.

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

PROMISE TO PAY. For value received, COLONIAL FULL SERVICE CAR WASH, INC.
("Borrower") promises to pay to Bank One, Texas, N.A. ("Lender"), or order, in
lawful money of the United States of America, the principal amount of Four
Hundred Thousand & 00/100 Dollars ($400,000.00), together with interest on the
unpaid principal balance from the date advanced until paid in full.

PAYMENT. This Note shall be payable as follows: The principal of and interest on
this Note shall be due and payable in 36 equal monthly installments in the
amount of $4,057.07 each, commencing on March 21, 2000, and continuing on the
same day of each month thereafter, with one final installment in the amount of
the principal balance then outstanding, together with all accrued but unpaid
interest, being due and payable on February 21, 2003. The amount of each of the
foregoing scheduled payments includes principal and interest. The annual
interest rate for this Note is computed on a 365/360 basis; that is, by applying
the ratio of the annual interest rate over a year of 360 days, multiplied by the
outstanding principal balance, multiplied by the actual number of days the
principal balance is outstanding, unless such calculation would result in a
usurious rate, in which case interest shall be calculated on a per diem basis of
a year of 365 of 366 days, as the case may be. Borrower will pay Lender at the
address designated by Lender from time to time in writing. If any payment of
principal of or interest on this Note shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day. As
used herein, the term "Business Day" shall mean any day other than a Saturday,
Sunday or any other day on which national banking associations are authorized to
be closed. Unless otherwise agreed to, in writing, or otherwise required by
applicable law, payments will be applied first to accrued, unpaid interest, then
to principal, and any remaining amount to any unpaid collection costs, late
charges and other charges, provided, however, upon delinquency or other default,
Lender reserves the right to apply payments among principal, interest, late
charges, collection costs and other charges at its discretion. The books and
records of Lender shall be prime facie evidence of all outstanding principal of
and accrued but unpaid interest on this Note. If this Note is governed by or is
executed in connection with a loan agreement, this Note is subject to the terms
and provisions thereof.

VARIABLE INTEREST RATE. The interest rate on this Note is subject to fluctuation
based upon the Prime Rate of Interest in effect from time to time (the "Index")
(which rate may not be the lowest, best or most favorable rate of interest which
Lender may charge on loans to its customers). "Prime Rate" shall mean the rate
announced from time to time by Lender as its prime rate. Each change in the rate
to be charged on this Note will become effective without notice on the same day
as the Index changes. Except as otherwise provided herein, the unpaid principal
balance of this Note will accrue interest at a rate per annum which will from
time to time be equal to the sum of the Index, plus 0.250%. NOTICE: Under no
circumstances will the interest rate on this Note be more than the maximum rate
allowed by applicable law. If at any time any interest rate to be charged
hereunder that is based on the Index is greater than the maximum rate allowed by
applicable law, thereby causing the interest rate on this Note to be limited to
the maximum rate allowed by applicable law, any subsequent reduction in the
Index will not reduce the rate of interest on this Note below the maximum rate
allowed by applicable law until the total amount of interest accrued on this
Note equals the amount of interest that would have accrued on this Note if the
interest rate based on the Index had at all times been in effect. For purposes
of this Note, the "maximum rate allowed by applicable law" means the greater of
(a) the maximum rate of interest permitted under federal or other law applicable
to the Indebtedness evidenced by this Note, or (b) the "Weekly Rate Ceiling" as
referred to in Section 303.201 of the Texas Finance Code, as supplemented by the
Texas Credit Title. Whenever increases occur in the interest rate, Lender, at
its option, may do one or more of the following: (a) increase borrower's
payments to ensure Borrower's loan will pay off by its original final maturity
date, (b) increase Borrower's payments to cover accruing interest, (c) increase
the number of Borrower's payments, and (d) continue Borrower's payments at the
same amount and increase Borrower's final payment.

PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance charges
are earned fully as of the date of the loan and will not be subject to refund
upon early payment (whether voluntary or as a result of default), except as
otherwise required by law. Except for the foregoing, Borrower may pay without
premium or fee all or a portion of the principal amount owed hereunder earlier
than it is due. All prepayments shall be applied to the indebtedness owing
hereunder in such order and manner as Lender may from time to time determine in
its sole discretion.

LATE CHARGES. If a payment is 10 days or more late, Borrower will be charged
5.000% of the regularly scheduled payment or $25.00, whichever is greater.

POST MATURITY RATE. The Post Maturity Rate on this Note is the lesser of the
maximum rate allowed by applicable law or 3.250 percentage points over the
Index. Borrower will pay interest on all sums due after final maturity, whether
by acceleration or otherwise, at that rate, with the exception of any amounts
added to the principal balance of this Note based on Lender's payment of
insurance premiums, which will continue to accrue interest at the pre-maturity
rate.

DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment of principal or interest when due under this
Note or any other indebtedness owing now or hereafter by Borrower to Lender; (b)
failure of Borrower or any other party to comply with or perform any term,
obligation, covenant or condition contained in this Note or in any other
promissory note, credit agreement, loan agreement, guaranty, security agreement,
mortgage, deed of trust or any other instrument, agreement or document, whether
now or hereafter existing, executed in connection with this Note (the Note and
all such other instruments, agreements, and documents shall be collectively
known herein as the "Related Documents"); (c) Any representation or statement
made or furnished to Lender herein, in any of the Related Documents or in
connection with any of the foregoing is false or misleading in any material
respect; (d) Borrower or any other party liable for the payment of this Note,
whether as maker, endorser, guarantor, surety or otherwise, becomes insolvent or
bankrupt, has a receiver or trustee appointed for any part of its property,
makes an assignment for the benefit of its creditors, or any proceeding is
commenced either by any such party or against it under any bankruptcy or
insolvency laws; (e) the occurrence of any event of default specified in any of
the other Related Documents or in any other agreement now or hereafter arising
between Borrower and Lender; (f) the occurrence of any event which permits the
acceleration of the maturity of any indebtedness owing now or hereafter by
Borrower to any third party; or (g) the liquidation, termination, dissolution,
death or legal incapacity of Borrower or any other party liable for the payment
of this Note, whether as maker, endorser, guarantor, surety, or otherwise.

LENDER'S RIGHTS. Upon default, Lender may at its option, without further notice
or demand (i) declare the entire indebtedness, including the unpaid principal
balance on this Note, all accrued unpaid interest, and all other amounts, costs
and expenses for which Borrower is responsible under this Note or any other
Related Document, immediately due, (ii) refuse to advance any additional amounts
under this Note, (iii) foreclose all liens securing payment hereof, (iv) pursue
any other rights, remedies and recourses available to the Lender, including
without limitation, any such rights, remedies or recourses under the Related
Documents, at law or in equity, or (v) pursue any combination of the foregoing.
The rights, remedies and recourses of Lender, as provided in this Note and in
the other Related Documents, shall be cumulative and concurrent and may be
pursued separately, successively or together as often as occasion therefore
shall arise, at the sole discretion of Lender. The acceptance by Lender of any
payment under this Note which is less than the payment in full of all amounts
due and payable at the time of such payment shall not (i) constitute a waiver of
or impair, reduce, release or extinguish any right, remedy or recourse of
Lender, or nullify any prior exercise of any such right, remedy or recourse, or
(ii) impair, reduce, release or extinguish the obligations of any party liable
under any of the Related Documents as originally provided herein or therein.
Lender may hire an attorney to help collect this Note if Borrower does not pay,
and Borrower will pay Lender's reasonable attorneys' fees and all other costs of
collection. To the extent interest is not paid on or before the fifth day after
it becomes due and payable, Lender may, at its option, add such accrued but
unpaid interest to the principal balance of this Note. This Note has been
delivered to Lender and accepted by Lender in the State of Texas. Subject to the
provision son arbitration, this Note shall be governed by and construed in
accordance with the laws of the State of Texas without regard to any conflict of
laws or provisions thereof.

PURPOSE. Borrower agrees that no advances under this Note shall be used for
personal, family, or household purposes and that all advances hereunder shall be
used solely for business, commercial, agricultural or other similar purposes.

JURY WAIVER. THE BORROWER AND LENDER (BY ITS ACCEPTANCE HEREOF) HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT
OR OTHERWISE) BETWEEN OR AMONG THE BORROWER AND LENDER ARISING OUT OF OR IN ANY
WAY RELATED TO THIS NOTE, ANY OTHER RELATED DOCUMENT, OR ANY RELATIONSHIP
BETWEEN LENDER AND BORROWER. THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER
TO PROVIDE THE FINANCING EVIDENCED BY THIS NOTE.

DISHONORED CHECK CHARGE. Borrower will pay a processing fee of $25.00 if any
check given by Borrower to Lender as a payment on this
<PAGE>

02-21-2000 PROMISSORY NOTE Page 2
Loan No (Continued)
================================================================================
loan is dishonored.

ARBITRATION. Lender and Borrower agree that upon the written demand of either
party, whether made before or after the institution of any legal proceedings,
but prior to the rendering of any judgment in that proceeding, all disputes,
claims and controversies between them, whether individual, joint, or class in
nature, arising from this Note, any Related Document or otherwise, including
without limitation contract disputes and tort claims, shall be resolved by
binding arbitration pursuant to the Commercial Rules of the American Arbitration
Association ("AAA"). Any arbitration proceeding held pursuant to this
arbitration provision shall be conducted in the city nearest the Borrower's
address having an AAA regional office, or at any other place selected by mutual
agreement of the parties. No act to take or dispose of any collateral shall
constitute a waiver of this arbitration agreement or be prohibited by this
arbitration agreement. This arbitration provision shall not limit the right of
either party during any dispute, claim or controversy to seek, use, and employ
ancillary, or preliminary rights and/or remedies, judicial or otherwise, for the
purposes of realizing upon, preserving, protecting, foreclosing upon or
proceeding under forcible entry and detainer for possession of, any real or
personal property, and any such action shall not be deemed an election of
remedies. Such remedies include, without limitation, obtaining injunctive relief
or a temporary restraining order, invoking a power of sale under any deed of
trust or mortgage, obtaining a writ of attachment or imposition of a
receivership, or exercising any rights relating to personal property, including
exercising the right of set-off, or taking or disposing of such property with or
without judicial process pursuant to the Uniform Commercial Code. Any disputes,
claims, or controversies concerning the lawfulness or reasonableness of an act,
or exercise of any right or remedy, concerning any collateral, including any
claim to rescind, reform, or otherwise modify any agreement relating to the
collateral, shall also be arbitrated; provided, however that no arbitrator shall
have the right or the power to enjoin or restrain any act of either party.
Judgment upon any award rendered by any arbitrator may be entered in any court
having jurisdiction. The statute of limitations, estoppel, waiver, laches and
similar doctrines which would otherwise be applicable in an action brought by a
party shall be applicable in any arbitration proceeding, and the commencement of
an arbitration proceeding shall be deemed the commencement of any action for
these purposes. The Federal Arbitration Act (Title 9 of the United States Code)
shall apply to the construction, interpretation, and enforcement of this
arbitration provision.

LATE CHARGES. On an after the date of execution of this Agreement,
notwithstanding any other provision in the Note or in the Related Documents to
the contrary, and specifically in lieu of any other provision with respect to
charges for late payments, the following provision with respect to late charges
for late payments shall apply. If a payment is 10 days or more late, Borrower
will be charged 5.0% of the regularly scheduled payment of Twenty Five Dollars
($25.00), whichever is greater, up to the maximum amount of One Thousand Five
Hundred Dollars ($1,500.00) per late charge.

PAYMENT ADJUSTMENTS. NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS NOTE, ON EACH
ANNIVERSARY DATE OF THIS NOTE PRIOR TO MATURITY BEGINNING IN 2001 (EACH, AN
"ADJUSTMENT DATE"), THE AMOUNT OF THE MONTHLY INSTALLMENTS OF PRINCIPAL AND
INTEREST THEREAFTER DUE AND PAYABLE SHALL BE ADJUSTED TO AN AMOUNT SUFFICIENT TO
AMORTIZE THE UNPAID PRINCIPAL BALANCE ON SUCH ADJUSTMENT DATE (AFTER GIVING
EFFECT TO ANY PAYMENT DUE ON SUCH DATE), AT THE INTEREST RATE THEN IN EFFECT, IN
EQUAL MONTHLY INSTALLMENTS OF PRINCIPAL AND INTEREST OVER AN ASSUMED TERM WHICH
BEGINS ON SUCH DATE AND ENDS ON THE ANNIVERSARY DATE OF THIS NOTE IN 2015;
PROVIDED HOWEVER, THAT IN NO EVENT SHALL ANY MONTHLY PAYMENT BE LESS THAN THE
AMOUNT OF THE ACCRUED BUT UNPAID INTEREST UNDER THIS NOTE AS OF SUCH PAYMENT DUE
DATE.

GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will
not affect the rest of the Note. In particular, this section means (among other
things) that Borrower does not agree or intend to pay, and Lender does not agree
or intend to contract for, charge, collect, take, reserve or receive
(collectively referred to herein as "charge or collect"), any amount in the
nature of interest or in the nature of a fee for this loan, which would in any
way or event (including demand, prepayment, or acceleration) cause Lender to
charge or collect more for this loan than the maximum Lender would be permitted
to charge or collect by federal law or the law of the State of Texas (as
applicable). Any such excess interest or unauthorized fee shall, instead of
anything stated to the contrary, be applied first to reduce the principal
balance of this loan, and when the principal has been paid in full, be refunded
to Borrower. The right to accelerate maturity of sums due under this Note does
not include the right to accelerate any interest which has not otherwise accrued
on the date of such acceleration, and Lender does not intend to charge or
collect any unearned interest in the event of acceleration. All sums paid or
agreed to be paid to Lender for the use, forbearance or detention of sums due
hereunder shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full term of the loan evidenced by
this Note until payment in full so that the rate or amount of interest on
account of the loan evidenced hereby does not exceed the applicable usury
ceiling. Lender may delay or forgo enforcing any of its rights or remedies under
this Note without losing them. Borrower and any other person who signs,
guarantees or endorses this Note, to the extent allowed by law, severally waive
presentment, demand for payment, protest, notice of protest, notice of dishonor,
notice of intent to accelerate the maturity of this Note, notice of acceleration
of the maturity of this Note, diligence in enforcement and indulgences of every
kind. Upon any change in the terms of this Note, and unless otherwise expressly
stated in writing, no party who signs this Note, whether as maker, guarantor,
accommodation maker or endorser, shall be released from liability. All such
parties agree that Lender may renew or extend (repeatedly and for any length of
time) this Note, or release any party or guarantor or collateral; or impair,
fail to realize upon or perfect Lender's security interest in the collateral
without the consent of or notice to anyone. All such parties also agree that
Lender may modify this Note without the consent of or notice to anyone other
than the party with whom the modification is made. Borrower agrees to provide to
Lender such further financial information with respect to Borrower as Lender may
reasonably request from time to time, including, without limitation, financial
statements in form and detail satisfactory to Lender.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE.

BORROWER:

COLONIAL FULL SERVICE CAR WASH, INC.

By: /s/ GREGORY M. KRZEMIEN
----------------------------------
Gregory M. Krzemien, Treasurer

================================================================================
<PAGE>

RECORDATION REQUESTED BY:
Bank One, Texas, N.A.
1301 S. Bowen Rd.
Arlington, TX 76013

WHEN RECORDED MAIL TO:
Banc One Operations Services
P.O. Box 901094
Fort Worth, TX 76101-2094

SPACE ABOVE THIS LINE IS FOR RECORDER'S USE ONLY
- --------------------------------------------------------------------------------
BANK ONE [LOGO OMITTED]

MODIFICATION AGREEMENT

THIS MODIFICATION AGREEMENT ("Agreement") is executed to be effective as of
JANUARY 31, 2000, by COLONIAL FULL SERVICE CAR WASH, INC., whose address is 1000
CRAWFORD PLACE SUITE 400, MOUNT LAUREL, NJ 08054 (referred to below as
"Grantor") and Bank One, Texas, N.A. (referred to below as "Lender"), whose
address is 1301 S. Bowen Rd., Arlington, TX 76013.

WITNESSETH:

WHEREAS, a loan ("Loan") was made to Grantor in the amount of $150,000.00,
evidenced by a promissory note (as renewed, extended or modified, the "Note")
dated June 21, 1996, executed and delivered by Grantor in the principal amount
of the Loan (the Note being more fully described in the Deed of Trust); and

WHEREAS, Grantor executed and delivered a deed of trust (as renewed, extended or
modified, the "Deed of Trust") dated June 21, 1996, to trustee for the benefit
of Lender, which is recorded in the Real Property Records of DALLAS County,
Texas FILED FOR RECORD ON JUNE 26, 1996 VOLUME 96124 PAGE 01987 covering the
following real property:

LOT 6, BLOCK 1, SHARPSTON HEIGHTS, ADDITION NO. 1 AN ADDITION TO THE
CITY OF GRAND PRAIRIE, DALLAS COUNTY, TEXAS, ACCORDING TO THE PLAT
THEREOF RECORDED IN VOLUME 95039, PAGE 3209, MAP RECORDS, DALLAS
COUNTY, TEXAS

, together with all improvements, appurtenances, other properties (whether real
or personal), rights and interests described in and encumbered by the Deed of
Trust (collectively, the "Property"), to secure the payment of the Note and
performance of the other obligations set forth in the Note, Deed of Trust and
all credit agreements, loan agreements, guaranties, security agreements,
mortgages, deeds of trust and all other instruments, agreements and documents,
whether now or hereinafter existing, executed in connection with the Loan (the
Note, Deed of Trust and such other instruments, agreements and documents
collectively known herein as the "Related Documents"); and

WHEREAS, Lender is the owner and holder of the Note, Deed of Trust and the other
Related Documents; and

WHEREAS, the parties hereto now propose to modify certain of the terms and
provisions of the Note, the Deed of Trust and the other Related Documents as
provided herein.

NOW THEREFORE, for and in consideration of the premises and the mutual covenants
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

MATURITY DATE. The maturity date of the Note shall be January 21, 2001
("Maturity Date"), when the unpaid principal balance of the Note,
together with all accrued but unpaid interest thereon, shall be due and
payable. Grantor hereby renews and modifies, but does not extinguish,
the Note and the liens, security interests and assignments created and
evidenced by the Deed of Trust.

INTEREST RATE. As of the effective date hereof, interest on the
principal balance of the Note from time to time remaining unpaid prior
to maturity shall be payable at the following rate:

The interest rate on this Note is subject to fluctuation based upon the
Prime Rate of Interest in effect from time to time (the "Index") (which
rate may not be the lowest, best or most favorable rate of interest
which Lender may charge on loans to its customers). "Prime Rate" shall
mean the rate announced from time to time by Lender as its prime rate.
Each change in the rate to be charged on this Note will become
effective without notice on the same day as the Index changes. Except
as otherwise provided herein, the unpaid principal balance of this Note
will accrue interest at a rate per annum which will from time to time
be equal to the sum of the Index, plus 0.250%. NOTICE: Under no
circumstances will the interest rate on the Note be more than the
maximum rate allowed by applicable law. If at any time any interest
rate to be charged hereunder that is based on the Index is greater than
the maximum rate allowed by applicable law, thereby causing the
interest rate on this Note to be limited to the maximum rate allowed by
applicable law, any subsequent reduction in the Index will not reduce
the rate of interest on this Note below the maximum rate allowed by
applicable law until the total amount of interest accrued on this Note
equals the amount of interest that would have accrued on this Note if
the interest rate based on the Index had at all times been in effect.
For purposes of this Agreement, the "maximum rate allowed by applicable
law" means the greater of (a) the maximum rate of interest permitted
under federal or other law applicable to the indebtedness evidenced by
this Agreement, or (b) the "Weekly Rate Ceiling" as referred to in
Section 303.201 of the Texas Finance Code, as supplemented by the Texas
Credit Title. Whenever increases occur in the interest rate, Lender, at
its option, may do one or more of the following: (a) increase
Borrower's payments to ensure Borrower's loan will pay off by its
original final maturity date, (b) increase Borrower's payments to cover
accruing interest, (c) increase the number of Borrower's payments, and
(d) continue Borrower's payments at the same amount and increase
Borrower's final payment. Under no circumstances shall the interest
rate charged, collected or contracted for on the Note exceed the
maximum rate permitted by law. If such maximum rate of interest changes
after the date hereof and the Note is accruing interest at a
fluctuating rate, the maximum rate permitted by law shall be
automatically increased or decreased, as the case may be, without
notice from time to time as of the effective date of each change in
such maximum rate.

PAYMENT TERMS. The Note, as modified hereby, shall be payable as
follows; Borrower will pay this loan in accordance with the following
payment schedule:

11 consecutive monthly principal and interest payments in
the initial amount of $1,826.05 each, beginning February
29, 2000; and 1 principal and interest payment in the
initial amount of $100,085.16 on January 21, 2001. This
estimated final payment is based on the assumption that
all payments will be made exactly as scheduled and that
this Index does not change; the actual final payment will
be for all principal and accrued interest not yet paid,
together with any other unpaid amounts under this
Agreement.

Grantor hereby expressly promises to pay to the order of Lender the principal
amount of the Note and all accrued but unpaid interest now or hereafter to
become due and payable under the Note, as modified hereby.

CURRENT NOTE BALANCE. As of the effective date hereof, the outstanding principal
balance of this Note is 110,801.55.

ACKNOWLEDGMENT. Except as otherwise specified herein, the terms and provisions
hereof shall in no manner impair, limit, restrict or otherwise effect the
obligations of any party to the Related Documents. Grantor hereby acknowledges,
agrees and represents that (a) Grantor is indebted to Lender pursuant to the
terms of the Note, as modified hereby; (b) the liens, security interests and
assignments created and evidenced by the Related Documents are, respectively,
valid and subsisting liens, security interests and assignments of the respective
dignity and priority recited in the Related Documents; (c) the lien of the Deed
of Trust is hereby renewed and/or modified, as the case may be, so as to secure
the payment of the Note, as modified hereby; (d) there are no claims or offsets
against, or defenses of counterclaims to, the terms or provisions of the Related
Documents and the obligations created or evidenced by the Related Documents; (e)
there are no claims, offsets, defenses or counterclaims arising from any of
Lender" acts or omissions with respect to the Property, the Related Documents or
Lender's performance under the Related Documents or with respect to the
Property; (f) the representations and warranties contained in the Related
Documents are true and correct representations and warranties of Grantor and
third parties, as of the date hereof; and (g) Lender is not in default and no
event has occured which, with the passage of time, giving of notice, or both,
would constitute a default by Lender of Lender's obligations under the terms and
provisions of the Related Documents. For purposes of this Agreement, "Lender"
shall include Lender's predecessors, successors, assigns, agents and present and
former officers, directors, employees, and representatives and any persons or
entities owned or controlled,
<PAGE>

01-31-2000 Modification Agreement Page 2
Loan No (Continued)
================================================================================
owning or controlling, or under common control or otherwise affiliated with,
Lender.

NO WAIVER OF REMEDIES. Except as may be expressly set forth herein, nothing
contained in this Agreement shall prejudice, act as, or be deemed to be, a
waiver of any right, remedy or recourse available to Lender by reason of the
occurrence or existence of any fact, circumstance or event constituting a
default under the Note or any of the other Related Documents.

COSTS AND EXPENSES. Contemporaneously with the execution and delivery hereof,
Grantor shall pay, or cause to be paid, all costs and expenses incident to the
recordation hereof and the consummation of the transaction contemplated hereby,
including, but not limited to, recording fees, title insurance policy or
endorsement premiums or other charges of any applicable title company, and
reasonable fees and expenses, if applicable, of legal counsel to Lender.

EFFECTIVENESS OF THE RELATED DOCUMENTS. Except as expressly modified by the
terms and provisions hereof or provided herein to the contrary, each and every
term and provision of the Note, Deed of Trust and other Related Documents are
hereby ratified and shall remain in full force and effect and the parties hereto
covenant to observe, comply with and perform each of the terms and provisions of
the Related Documents, as modified hereby; provided, however, that any reference
in any of the Related Documents to the Loan, the amount constituting the Loan,
any defined terms, or to any of the other Related Documents shall be deemed,
from and after the date hereof, to refer to the Loan, the amount constituting
the Loan, the defined terms and to such other Related Documents, as modified
hereby. The parties hereto agree that the modification as provided herein shall
in no manner violate, impair or affect the liens and security interests created
and evidenced by the Deed of Trust and the other Related Documents (except as
expressly modified, amended, renewed and extended herein) and that such liens
and security interests shall not be and are not in any manner released or
waived; the purpose of this instrument being simply to modify the Note, Deed of
Trust and the other Related Documents as expressly set forth herein.

EXECUTION AND DELIVERY OF AGREEMENT BY LENDER. Lender shall not be bound by this
Agreement until (i) Lender has executed and delivered this Agreement, (ii) the
other party(ies) to this Agreement have performed all of their obligations under
this Agreement to be performed contemporaneously with the execution and delivery
of this Agreement, (iii) if required by Lender, each guarantor of the Loan, if
any, has executed and delivered to Lender a consent agreement, in form and
substance satisfactory to Lender, and (iv) if required by Lender, the other
party(ies) to this Agreement and each guarantor of the Loan, if any, have
executed and delivered to Lender an arbitration resolution, an environmental
questionnaire, and an environmental certification and indemnity agreement, all
in form and substance satisfactory to Lender.

BINDING AGREEMENT. This Agreement shall be binding upon, and inure to the
benefit of, the heirs, executors, administrators, personal representatives,
successors and assigns of the parties hereto.

ADDITIONAL DOCUMENTATION. From time to time, the other party(ies) to this
Agreement shall execute or procure and deliver to Lender such other and further
documents securing or pertaining to the Loan or the Related Documents as shall
be reasonably requested by Lender and to take and cause to be taken all such
actions as Lender shall deem necessary or appropriate in connection with, or
related to, this Agreement and the transactions contemplated hereby, including,
but not limited to, such actions as shall be necessary (a) to record this
Agreement and any related instrument, document or agreement, (b) to cause and
insurer satisfactory to Lender to issue a mortgagee policy of title insurance
with respect to the lien of the Deed of Trust or, at Lender's sole option, an
endorsement to any existing mortgagee policy of title insurance, such policy or
endorsement to be in form and substance satisfactory Lender, and (c) to satisfy
appraisal and any other legal requirements under applicable law and/or in
accordance with Lender's policies and procedures.

GOVERNING LAW. THE TERMS AND CONDITIONS HEREOF SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

COUNTERPART EXECUTION. This Agreement may be executed in one or more
counterparts, each of which shall be deemed in an original and all of which
together shall constitute one and the same document. Signature pages may be
detached from the counterparts and attached to a single copy of this Agreement
to physically form one document.

INTEREST DAY BASIS. Interest on this Note is computed on a 365/360 simple
interest basis; that is, by applying the ratio of the annual interest rate over
a year of 360 days multiplied by the outstanding principal balance, multiplied
by this actual number of days the principal balance is outstanding, unless such
calculation would result in a usurious rate, in which case interest shall be
calculated on a per diem basis of a year of 365 or 366, days as the case may be.

LATE CHARGE. On and after the date of execution of this Agreement,
notwithstanding any other provision in the Note or in the Related Documents to
the contrary, and specifically in lieu of any other provision with respect to
charges for late payments, the following provision with respect to charges for
late payments shall apply; if a payment is 10 days or more late, Borrower will
be charged 5.0% to the regularly scheduled payment or Twenty Five Dollars
($25.00), whichever is greater, up to the maximum amount of One Thousand Five
Hundred Dollars ($1,500.00) per late charge.

EACH PARTY HERETO ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS AGREEMENT,
EACH AND EACH AGREES TO ITS TERMS.

GRANTOR:

COLONIAL FULL SERVICE CAR WASH, INC.

By: /s/ GREGORY M. KRZEMIEN
----------------------------------
Gregory M. Krzemien, Treasurer

LENDER:

Bank One, Texas, N.A.

By: /s/ MARK WARREN
----------------------------------
Mark Warren

Name & Title Sr. Vice President

- --------------------------------------------------------------------------------
CORPORATE ACKNOWLEDGMENT

STATE OF NEW JERSEY
---------------------------)
COUNTY OF GLOUCESTER )SS
---------------------------)

This instrument was acknowledged before me on February 23, 2000 by GREG
KRZEMIEN, TREASURER of COLONIAL FULL SERVICE CAR WASH, INC., a Texas
corporation, on behalf of said corporation.

HOLLY J. HENSLEY /s/ HOLLY J. HENSLEY
NOTARY PUBLIC OF NEW JERSEY -------------------------------------
COMMISSION EXPIRES 12/1/2004 Holly J. Hensley
Notary Public State of NJ

<PAGE>
Exhibit 11

<TABLE>
<CAPTION>
Year ended December 31,
---------------------------------------------
1999 1998
---------------------------------------------
<S> <C> <C>
Basic:
Weighted average shares outstanding 13,159,154 8,341,747
==================== ===================

Net (loss) income:
From continuing operations ($1,284,147) $359,286
From discontinued operations 24,032 (585,903)
--------------------- -------------------
Total ($1,260,115) ($226,617)
===================== ===================

Basic (loss) earning per share:
From continuing operations ($0.10) $0.04
From discontinued operations - (0.07)
--------------------- -------------------
Total ($0.10) ($0.03)
===================== ===================

Diluted:
Weighted average shares outstanding 13,159,154 8,341,747

Net effect of dilutive stock options and warrants
based on the treasury stock method
using the year-end market price, if
higher than average market price - 22,359
--------------------- -------------------
Total 13,159,154 8,364,106
===================== ===================

Diluted (loss) earning per share:
From continuing operations ($0.10) $0.04
From discontinued operations - (0.07)
--------------------- -------------------
Total ($0.10) ($0.03)
===================== ===================

</TABLE>

<PAGE>
<TABLE>
<CAPTION>
Exhibit 21

State of
Subsidiary Incorporation
- ----------------------------------------------------
<S> <C>
Car Care, Inc. Delaware
Care Investment, Inc. Delaware
Colonial Full Service Car Wash, Inc. Texas
CRCD, Inc. Texas
Eager Beaver Car Wash, Inc. Florida
F.E.D. Properties, Inc. New York
50's Classic Car Wash of Lubbock, Inc. Texas
Innovative Control Systems, Inc. Pennsylvania
Mace Car Wash - Arizona, Inc. Arizona
Mace Car Wash, Inc. Delaware
Mace Security Centers, Inc. Colorado
Mace Trademark Corp. Delaware
Mace Truck Wash, Inc. Delaware
Mace Wash, Inc. Delaware
MSP Retail, Inc. Colorado
Worth Manufacturing, Inc. Texas

</TABLE>

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT AUDITORS

We have issued our report dated March 17, 2000, accompanying the consolidated
financial statements included in the Annual Report of Mace Security
International, Inc. on Form 10-K for the year ended December 31, 1999. We
hereby consent to the incorporation by reference of said report in the
Registration Statements of Mace Security International, Inc. on Form S-3 (File
No. 333-87981, filed September 28, 1999 amended December 23, 1999); Form S-4
(File No. 333-89717 filed on October 26, 1999 amended December 23, 1999) and
Forms S-8 (File No. 333-31757 filed on July 22, 1997 and File No. 333-93311
filed on December 21, 1999).

/s/GRANT THORNTON LLP

Philadelphia, Pennsylvania
March 28, 2000

<PAGE>

EXHIBIT 23.2

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the following Registration
Statements of Mace Security International, Inc.:

Form S-8 No. 333-31757
Form S-3 No. 333-87981
Form S-4 No. 333-89717
Form S-8 No. 333-93311

of our report dated December 16, 1999 with respect to the consolidated financial
statements (restated) of Mace Security International, Inc. as of December 31,
1998 and for the year then ended included in this Annual Report (Form 10-K) for
the year ended December 31, 1999.

/s/ ERNST & YOUNG LLP

Philadelphia, Pennsylvania
March 23, 2000

<PAGE>

EXHIBIT 23.3

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statements of
Mace Security International, Inc. on Form S-8 (Registration No. 333-31757) filed
on July 22, 1997; Form S-3 (Registration No. 333-87981) filed on September 28,
1999, amended on December 23, 1999; Form S-4 (Registration No. 333-89717) filed
on October 26, 1999, amended on December 21, 1999; Form S-8 (Registration No.
333-93311) filed December 21, 1999 of our report dated April 2, 1999 on the
consolidated financial statements (before restatement) of Mace Security
International, Inc. (the "Company"), included in the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1999.

/s/ URBACH KAHN & WERLIN PC

Albany, New York
March 24, 2000

<PAGE>

EXHIBIT 23.4

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement of
Mace Security International, Inc. on Form S-8 (Registration No. 333-31757) filed
on July 22, 1997; Form S-3 (Registration No. 333-87981) filed on September 28,
1999, amended on December 23, 1999; Form S-4 (Registration No. 333-89717) filed
on October 26, 1999, amended on December 21, 1999; Form S-8 (Registration No.
333-93311) filed December 21, 1999 of our report dated September 14, 1999 with
respect to the combined financial statements of 50's Classic Car Wash of
Lubbock, Inc. and CRCD, Inc. included in Mace Security International, Inc.'s
Annual Report on Form 10-KSB filed with the Securities and Exchange Commission
on or about March 28, 2000.

/s/ D. WILLIAMS & CO., P.C.

Lubbock, TX
March 22, 2000

<PAGE>

EXHIBIT 23.5

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration Statement of
Mace Security International, Inc. on Form S-8 (Registration No. 333-31757) filed
on July 22, 1997; Form S-3 (Registration No. 333-87981) filed on September 28,
1999, amended on December 23, 1999; Form S-4 (Registration No. 333-89717) filed
on October 26, 1999, amended on December 21, 1999; Form S-8 (Registration No.
333-93311) filed December 21, 1999 of our report dated September 18, 1999, with
respect to the financial statements of Innovative Control Systems, Inc. included
in Mace Security International, Inc.'s Annual Report on Form 10-KSB filed with
the Securities and Exchange Commission on or about March 28, 2000.

/s/DANIEL P. IRWIN AND ASSOCIATES P.C.

Strafford-Wayne, Pennsylvania
March 24, 2000

<PAGE>

EXHIBIT 23.6

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
and Stockholders of
Mace Security International, Inc.

We have audited the accompanying consolidated balance sheet (before restatement)
of Mace Security International, Inc. and subsidiaries as of December 31, 1998,
and the related consolidated statements of operations, stockholders' equity and
cash flows (before restatement) for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Mace Security
International, Inc. and subsidiaries as of December 31, 1998, and the results of
their operations and their cash flows for the year then ended in conformity with
generally accepted accounting principles.

/s/URBACH KAHN & WERLIN PC

Albany, New York
April 2, 1999

<PAGE>

EXHIBIT 23.7

The Board of Directors
50's Classic Car Wash
and CRCD, Inc.

INDEPENDENT AUDITORS' REPORT

We have audited the accompanying combined balance sheet of 50's Classic Car
Wash and CRCD, Inc. (Companies) as of December 31, 1998 and the related combined
statements of income, common stock and equity, and cash flows for the year then
ended. The combined financial statements include the financial statements of
50's Classic Car Wash and CRCD, Inc., which are related through common ownership
and management. These combined financial statements are the responsibility of
the Companies' management. Our responsibility is to express an opinion on these
combined financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the combined financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the combined financial statements. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the financial position of the Companies as of
December 31, 1998, and the results of their operations and their cash flows for
the year then ended in conformity with generally accepted accounting principles.

/s/ D. Williams & Co., P.C.

September 14, 1999

<PAGE>

EXHIBIT 23.8

INDEPENDENT AUDITORS' REPORT

To The Board of Directors
Innovative Control Systems, Inc.
112 Meyer Road
Nazareth, Pennsylvania 18064

We have audited the accompanying Balance Sheet of Innovative Control Systems,
Inc. as of December 31, 1998, and the Statements of Operations, Retained
Earnings, Changes in Stockholders' Equity and Cash Flows for the calendar year
then ended. These Financial Statements are the responsibility of the Company's
Management. Our responsibility is to express an opinion on these Financial
Statements based on our audit.

We conducted our audit in accordance with Generally Accepted Auditing Standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Innovative Control Systems,
Inc. as of December 31, 1998 and the results of its operations and cash flows
for the period then ended in conformity with generally accepted accounting
principles.

/s/DANIEL P. IRWIN AND ASSOCIATES P.C.

Strafford-Wayne, Pennsylvania
September 18, 1999

<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 2,321
<SECURITIES> 0
<RECEIVABLES> 1,977
<ALLOWANCES> 102
<INVENTORY> 2,801
<CURRENT-ASSETS> 9,643
<PP&E> 68,708
<DEPRECIATION> 3,827
<TOTAL-ASSETS> 98,115
<CURRENT-LIABILITIES> 11,045
<BONDS> 28,122
0
0
<COMMON> 228
<OTHER-SE> 56,340
<TOTAL-LIABILITY-AND-EQUITY> 98,115
<SALES> 11,145
<TOTAL-REVENUES> 28,681
<CGS> 7,330
<TOTAL-COSTS> 18,466
<OTHER-EXPENSES> 10,967
<LOSS-PROVISION> 154
<INTEREST-EXPENSE> 1,120
<INCOME-PRETAX> (1,873)
<INCOME-TAX> (589)
<INCOME-CONTINUING> (1,284)
<DISCONTINUED> 24
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,260)
<EPS-BASIC> (.10)
<EPS-DILUTED> (.10)

</TABLE>