PARAGON TECHNOLOGIES INC
EXHIBIT 10.36 - SECURITY AGREEMENT
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<TYPE>EX-10
<SEQUENCE>7
<FILENAME>ex10-36.txt
<DESCRIPTION>EXHIBIT 10.36 - SECURITY AGREEMENT
<TEXT>
                                                                   Exhibit 10.36
                                                                   -------------
                               SECURITY AGREEMENT

                                                                    June 5, 2003
Paragon Technologies, Inc.
600 Kuebler Road
Easton, Pennsylvania  18040
(Hereinafter referred to as "Debtor")

Wachovia Bank, National Association
702 Hamilton Street
Allentown, Pennsylvania  18101
(Hereinafter referred to as "Bank")

For value received and to secure payment and performance of the Term Loan A
obligations of Debtor (also referred to collectively herein as "Borrower") to
Bank however created, arising or evidenced, whether direct or indirect, absolute
or contingent, now existing or hereafter arising or acquired, and whether or not
evidenced by a Loan Document, including swap agreements (as defined in 11 U.S.C.
ss.101), future advances, and all costs and expenses incurred by Bank to obtain,
preserve, perfect and enforce the security interest granted herein and to
maintain, preserve and collect the property subject to the security interest
(collectively, "Obligations"), Debtor hereby grants to Bank a continuing
security interest in and lien upon the following described property, whether now
owned or hereafter acquired, and any additions, replacements, accessions, or
substitutions thereof and all cash and non-cash proceeds and products thereof
(collectively, "Collateral"): Debtor's deposit account number, and
such other replacement account as may be specifically designated in writing by
Bank from time to time, and all cash now or hereafter deposited therein.

Debtor hereby represents and agrees that:

OWNERSHIP. Debtor owns the Collateral or Debtor will purchase and acquire rights
in the Collateral within ten days of the date advances are made under the Loan
Documents. If Collateral is being acquired with the proceeds of an advance under
the Loan Documents, Debtor authorizes Bank to disburse proceeds directly to the
seller of the Collateral. The Collateral is free and clear of all liens,
security interests, and claims except those previously reported in writing to
and approved by Bank, and Debtor will keep the Collateral free and clear from
all liens, security interests and claims, other than those granted to or
approved by Bank.

NAME AND OFFICES; JURISDICTION OF ORGANIZATION. The name and address of Debtor
appearing at the beginning of this Agreement are Debtor's exact legal name and
the address of its chief executive office. There has been no change in the name
of Debtor, or the name under which Debtor conducts business, within the five
years preceding the date hereof except as previously reported in writing to
Bank. Debtor has not moved its chief executive office within the five years
preceding the date hereof except as previously reported in writing to Bank.
Debtor is organized under the laws of the State of Delaware and has not changed
the jurisdiction of its organization within the five years preceding the date
hereof except as previously reported in writing to Bank.

TITLE/TAXES. Debtor has good and marketable title to Collateral and will warrant
and defend same against all claims. Debtor will not transfer or sell Collateral
(except as permitted herein). Debtor agrees to pay promptly all taxes and
assessments upon or for the use of Collateral and on this Security Agreement. At
its option, Bank may discharge taxes, liens, security interests or other
encumbrances at any time levied or placed on Collateral. Debtor agrees to
reimburse Bank, on demand, for any such payment made by Bank. Any amounts so
paid shall be added to the Obligations.

WAIVERS. Debtor agrees not to assert against Bank as a defense (legal or
equitable), as a set-off, as a counterclaim, or otherwise, any claims Debtor may
have against any seller or lessor that provided personal property or services
relating to any part of the Collateral. Debtor waives all exemptions and


<PAGE>



homestead rights with regard to the Collateral. Debtor waives any and all rights
to any bond or security which might be required by applicable law prior to the
exercise of any of Bank's remedies against any Collateral. All rights of Bank
and security interests hereunder, and all obligations of Debtor hereunder, shall
be absolute and unconditional, not discharged or impaired irrespective of (and
regardless of whether Debtor receives any notice of): (i) any lack of validity
or enforceability of any Loan Document; (ii) any change in the time, manner or
place of payment or performance, or in any term, of all or any of the
Obligations or the Loan Documents or any other amendment or waiver of or any
consent to any departure from any Loan Document; (iii) any exchange, release or
non-perfection of any collateral, or any release of or modifications of the
obligations of any guarantor or other obligor; (iv) any amendment or waiver of
or consent to departure from any Loan Document or other agreement. To the extent
permitted by law, Debtor hereby waives any rights under any valuation, stay,
appraisement, extension or redemption laws now existing or which may hereafter
exist and which, but for this provision, might be applicable to any sale or
disposition of the Collateral by Bank; and any other circumstance which might
otherwise constitute a defense available to, or a discharge of any party with
respect to the Obligations.

NOTIFICATIONS; LOCATION OF COLLATERAL. Debtor will notify Bank in writing at
least 30 days prior to any change in: (i) Debtor's chief place of business
and/or residence; (ii) Debtor's name or identity; (iii) Debtor's
corporate/organizational structure; or (iv) the jurisdiction in which Debtor is
organized. In addition, Debtor shall promptly notify Bank of any claims or
alleged claims of any other person or entity to the Collateral or the
institution of any litigation, arbitration, governmental investigation or
administrative proceedings against or affecting the Collateral. Debtor will keep
Collateral at the location(s) previously provided to Bank until such time as
Bank provides written advance consent to a change of location. Debtor will bear
the cost of preparing and filing any documents necessary to protect Bank's
liens.

FINANCING STATEMENTS, POWER OF ATTORNEY. No financing statement (other than any
filed or approved by Bank) covering any Collateral is on file in any public
filing office, except for such as show the Bank as the secured creditor. On
request of Bank, Debtor will execute one or more financing statements in form
satisfactory to Bank and will pay all costs and expenses of filing the same or
of filing this Security Agreement in all public filing offices, where filing is
deemed by Bank to be desirable. Bank is authorized to file financing statements
relating to Collateral without Debtor's signature where authorized by law.
Debtor hereby constitutes and appoints Bank the true and lawful attorney of
Debtor with full power of substitution to take any and all appropriate action
and to execute any and all documents or instruments that may be necessary or
desirable to accomplish the purpose and carry out the terms of this Security
Agreement, including, without limitation, to complete, execute, and deliver any
Control Agreement(s) by Bank, Debtor and Third Party(ies) that may be or become
required in connection herewith (individually and collectively the "Control
Agreement"), and any instructions to Third Party(ies) regarding, among other
things, control and disposition of any Collateral which is the subject of such
Control Agreement(s). The foregoing power of attorney is coupled with an
interest and shall be irrevocable until all of the Obligations have been paid in
full. Neither Bank nor anyone acting on its behalf shall be liable for good
faith acts, omissions, errors in judgment, or mistakes in fact in such capacity
as attorney-in-fact. Debtor agrees to take such other actions, at Debtor's
expense, as might be requested for the perfection, continuation and assignment,
in whole or in part, of the security interests granted herein and to assure
Bank's intended priority position.

CHATTEL PAPER, ACCOUNTS, GENERAL INTANGIBLES. Debtor warrants that Collateral
consisting of chattel paper, accounts, or general intangibles is (i) genuine and
enforceable in accordance with its terms; (ii) not subject to any defense,
set-off, claim or counterclaim of a material nature against Debtor except as to
which Debtor has notified Bank in writing; and (iii) not subject to any other
circumstances that would impair the validity, enforceability, value, or amount
of such Collateral except as to which Debtor has notified Bank in writing.

COLLATERAL DUTIES. Bank shall have no custodial or ministerial duties to perform
with respect to Collateral pledged except as set forth herein; and by way of
explanation and not by way of limitation, Bank shall incur no liability for any
of the following: (i) loss or depreciation of Collateral (unless caused by its
willful misconduct or gross negligence), (ii) failure to present any paper for
payment or protest, to protest or give notice of nonpayment, or any other notice
with respect to any paper or Collateral.



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TRANSFER OF COLLATERAL. Bank may assign its rights in Collateral or any part
thereof to any assignee who shall thereupon become vested with all the powers
and rights herein given to Bank with respect to the property so transferred and
delivered, and Bank shall thereafter be forever relieved and fully discharged
from any liability with respect to such property so transferred, but with
respect to any property not so transferred, Bank shall retain all rights and
powers hereby given.

INSPECTION, BOOKS AND RECORDS. Debtor will at all times keep accurate and
complete (in all material respects) records covering each item of Collateral,
including the proceeds therefrom. Bank, or any of its agents, shall have the
right, at intervals to be determined by Bank and without hindrance or delay, at
Debtor's expense, to inspect, audit, and examine the Collateral and to make
extracts from the books, records, journals, orders, receipts, correspondence and
other data relating to Collateral, Debtor's business or any other transaction
between the parties hereto. Debtor will at its expense furnish Bank copies
thereof upon request.

CROSS COLLATERALIZATION LIMITATION. As to any other existing or future consumer
purpose loan made by Bank to Debtor, within the meaning of the Federal Consumer
Credit Protection Act, Bank expressly waives any security interest granted
herein in Collateral that Debtor uses as a principal dwelling and household
goods.

ATTORNEYS' FEES AND OTHER COSTS OF COLLECTION. Debtor shall pay all of Bank's
reasonable expenses incurred in enforcing this Security Agreement and in
preserving and liquidating Collateral, including but not limited to, reasonable
arbitration, paralegals', attorneys' and experts' fees and expenses, whether
incurred with or without the commencement of a suit, trial, arbitration, or
administrative proceeding, or in any appellate or bankruptcy proceeding.

DEFAULT. If any of the following occurs, a default ("Default") under this
Security Agreement shall exist: Loan Document Default. A default under any Loan
Document. Collateral Loss or Destruction. Any loss, theft, substantial damage,
or destruction of Collateral not fully covered by insurance, or as to which
insurance proceeds are not remitted to Bank within 30 days of the loss.
Collateral Sale, Lease or Encumbrance. Any sale, lease, or encumbrance of any
Collateral not specifically permitted herein without prior written consent of
Bank. Levy, Seizure or Attachment. The making of any levy, seizure, or
attachment on or of Collateral which is not removed within 10 days. Unauthorized
Collection of Collateral. Any attempt to collect, cash in or otherwise recover
deposits that are Collateral. Third Party Breach. Any default or breach by a
Third Party of any provision contained in any Control Agreement executed in
connection with any of the Collateral. Unauthorized Termination. Any attempt to
terminate, revoke, rescind, modify, or violate the terms of this Security
Agreement or any Control Agreement without the prior written consent of Bank.

REMEDIES ON DEFAULT (INCLUDING POWER OF SALE). If a Default occurs, all of the
Obligations shall be immediately due and payable, without notice and Bank shall
have all the rights and remedies of a secured party under the Uniform Commercial
Code. Without limitation thereto, Bank shall have the following rights and
remedies: (i) to take immediate possession of Collateral, without notice or
resort to legal process, and for such purpose, to enter upon any premises on
which Collateral or any part thereof may be situated and to remove the same
therefrom, or, at its option, to render Collateral unusable or dispose of said
Collateral on Debtor's premises; or (ii) to exercise its right of set-off or
bank lien as to any monies of Debtor deposited in accounts of any nature
maintained by Debtor with Bank or affiliates of Bank, without advance notice,
regardless of whether such accounts are general or special.

Any notice of sale, disposition or other action by Bank required by law and sent
to Debtor at Debtor's address shown above, or at such other address of Debtor as
may from time to time be shown on the records of Bank, at least 5 days prior to
such action, shall constitute reasonable notice to Debtor. Notice shall be
deemed given or sent when mailed postage prepaid to Debtor's address as provided
herein. Bank shall be entitled to apply the proceeds of any sale or other
disposition of the Collateral, and the payments received by Bank with respect to
any of the Collateral, to Obligations in such order and manner as Bank may
determine. Collateral that is subject to rapid declines in value and is
customarily sold in



                                     Page 3
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recognized markets may be disposed of by Bank in a recognized market for such
collateral without providing notice of sale. Debtor waives any and all
requirements that the Bank sell or dispose of all or any part of the Collateral
at any particular time, regardless of whether Debtor has requested such sale or
disposition.

REMEDIES ARE CUMULATIVE. No failure on the part of Bank to exercise, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise by Bank or any right,
power or remedy hereunder preclude any other or further exercise thereof or the
exercise of any right, power or remedy. The remedies herein provided are
cumulative and are not exclusive of any remedies provided by law, in equity, or
in other Loan Documents.

MISCELLANEOUS. (i) Amendments and Waivers. No waiver, amendment or modification
of any provision of this Security Agreement shall be valid unless in writing and
signed by Debtor and an officer of Bank. No waiver by Bank of any Default shall
operate as a waiver of any other Default or of the same Default on a future
occasion. (ii) Assignment. All rights of Bank hereunder are freely assignable,
in whole or in part, and shall inure to the benefit of and be enforceable by
Bank, its successors, assigns and affiliates. Debtor shall not assign its rights
and interest hereunder without the prior written consent of Bank, and any
attempt by Debtor to assign without Bank's prior written consent is null and
void. Any assignment shall not release Debtor from the Obligations. This
Security Agreement shall be binding upon Debtor, and the heirs, personal
representatives, successors, and assigns of Debtor. (iii) Applicable Law;
Conflict Between Documents. This Security Agreement shall be governed by and
construed under the law of the jurisdiction named in the address of the Bank
first shown above (the "Jurisdiction") without regard to that Jurisdiction's
conflict of laws principles, except to the extent that the UCC requires the
application of the law of a different jurisdiction. If any terms of this
Security Agreement conflict with the terms of any commitment letter or loan
proposal, the terms of this Security Agreement shall control. (iv) Jurisdiction.
Debtor irrevocably agrees to non-exclusive personal jurisdiction in the
Jurisdiction in which the office of Bank as stated above is located. (v)
Severability. If any provision of this Security Agreement shall be prohibited by
or invalid under applicable law, such provision shall be ineffective but only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Security Agreement. (vi)
Notices. Any notices to Debtor shall be sufficiently given, if in writing and
mailed or delivered to the address of Debtor shown above or such other address
as provided hereunder; and to Bank, if in writing and mailed or delivered to
Bank's office address shown above or such other address as Bank may specify in
writing from time to time. In the event that Debtor changes Debtor's mailing
address at any time prior to the date the Obligations are paid in full, Debtor
agrees to promptly give written notice of said change of address by registered
or certified mail, return receipt requested, all charges prepaid. (vii)
Captions. The captions contained herein are inserted for convenience only and
shall not affect the meaning or interpretation of this Security Agreement or any
provision hereof. The use of the plural shall also mean the singular, and vice
versa. (viii) Joint and Several Liability. If more than one party has signed
this Security Agreement, such parties are jointly and severally obligated
hereunder. (ix) Binding Contract. Debtor by execution and Bank by acceptance of
this Security Agreement, agree that each party is bound by all terms and
provisions of this Security Agreement.

DEFINITIONS. Loan Documents. The term "Loan Documents" refers to all documents,
including this Agreement, whether now or hereafter existing, executed in
connection with or related to the Obligations, and may include, without
limitation and whether executed by Debtor or others, commitment letters that
survive closing, loan agreements, promissory notes, guaranty agreements, deposit
or other similar agreements, other security agreements, letters of credit and
applications for letters of credit, security instruments, financing statements,
mortgage instruments, any renewals or modifications, whenever any of the
foregoing are executed, but does not include swap agreements (as defined in 11
U.S.C. ss. 101). Third Party. The term "Third Party" means any Broker,
Collateral Agent, Securities Intermediary and/or bank which from time to time
maintains a securities account, and is acting in such capacity, for Debtor or
maintains a deposit account for Debtor with respect to any part of the
Collateral. UCC. "UCC" means the Uniform Commercial Code as presently and
hereafter enacted in the Jurisdiction. Terms defined in the UCC. Any term used
in this Agreement and in any financing statement filed in connection herewith
which is defined in the UCC and not otherwise defined in this Agreement or any
other Loan Document has the



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meaning given to the term in the UCC. Debtor acknowledges and understands that
any such term relating to the description of Collateral may be defined in one or
both of (i) the version of Article 9 of the UCC as enacted and in force in the
Jurisdiction on the date this Agreement is signed by Debtor or (ii) a revised
version of Article 9 of the UCC (substantially in the form of Revised Article 9
(2000 Revision) version thereof promulgated by the National Conference of
Commissioners on Uniform State Laws and the American Law Institute) ("Revised
Article 9") enacted and in force in the Jurisdiction at any relevant future
time. In light of the foregoing, Debtor agrees that, if terms defining items or
classes of Collateral change or are added as a result of the enactment of
Revised Article 9 in the Jurisdiction, the meaning to be ascribed to any such
term with respect to any particular item or class of Collateral hereunder and
the interpretation thereof after the date of such enactment shall be (a) if such
term is defined in both versions of Article 9 and such definitions differ, the
broader or more encompassing of the two definitions, regardless of duplication,
and (b) if such term is defined under only one of the versions of Article 9, the
definition in that version.

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

                                    Paragon Technologies, Inc.
                                    Taxpayer Identification Number:


                                    By: /s/ William R. Johnson        (SEAL)
                                        ------------------------------
                                        William R. Johnson, President




















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                                    EXHIBIT A

                                DEBTOR'S ACCOUNT

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