PARAGON TECHNOLOGIES INC
EX-10.24
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>ex10-24.txt
<DESCRIPTION>EX-10.24
<TEXT>
                                                                   Exhibit 10.24
                                                                   -------------



            SIXTH AMENDMENT TO LINE OF CREDIT NOTE AND LOAN AGREEMENT

                                (LINE OF CREDIT)

Paragon Technologies, Inc., formerly,
SI Handling Systems, Inc. and Ermanco, Inc.
600 Kuebler Road
Easton, Pennsylvania  18040
(Hereinafter referred to as "Borrower")

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

         THIS SIXTH AMENDMENT TO LINE OF CREDIT NOTE AND LOAN AGREEMENT is
entered into as of August 9, 2002 by and between Bank and Borrower.

                                    RECITALS

         Bank is the holder of a Line of Credit executed and delivered by
Borrower, dated September 30, 1999, in the original principal amount of
$6,000,000.00 (as amended, the Note); and certain other loan documents,
including without limitation, a Loan Agreement, dated September 30, 1999 (as
amended, the Loan Agreement");

         Borrower and Bank have agreed to modify the terms of the Note and the
Loan Agreement.

         In consideration of Bank's continued extension of credit and the
agreements contained herein, the parties agree as follows:

                                    AGREEMENT

ACKNOWLEDGMENT OF BALANCE. Borrower acknowledges that the most recent Commercial
Loan Invoice sent to Borrower with respect to the Obligations under the Note is
correct.

MODIFICATIONS.

  1.     The Note and the Loan Agreement are hereby modified by decreasing the
         principal amount thereof from $6,000,000.00 to $2,000,000.00.

  2.     The section entitled REPAYMENT TERMS of the Note is hereby amended by
         extending the maturity date from September 30, 2002 to June 30, 2003.

  3.     The Loan Agreement is hereby modified by amending the provision
         regarding Availability as follows:

                  Availability. Notwithstanding anything to the contrary
                  contained herein, the aggregate outstanding principal balance
                  of Advances (as defined in the Note) (the "Total
                  Outstandings") at any one time shall not exceed the lesser of
                  $2,000,000.00 or the Borrowing Base (as hereinafter defined).
                  In the event that the Total Outstandings at any time exceeds
                  the Borrowing Base, Borrower shall pay to Bank the amount of
                  such excess immediately upon receipt by Borrower of written
                  notice that the Borrowing Base has been exceeded.


                                      1
<PAGE>


  4.     The Loan Agreement is hereby modified by amending the provision
         regarding Funds Flow Coverage Ratio as follows:

                  Funds Flow Coverage Ratio. Borrower shall, for the quarters
                  ending September 30, 2002, December 31, 2002, March 31, 2003
                  and June 30, 2003, maintain a Funds Flow Coverage Ratio of not
                  less than 1.00 to 1.00; and for the quarter ending September
                  30, 2003 and at all times thereafter, maintain a Funds Flow
                  Coverage Ratio of not less than 1.25 to 1.00, to be measured
                  quarterly on a rolling four quarters basis at each quarter's
                  end. Funds Flow Coverage Ratio shall mean the sum of earnings
                  (excluding earnings attributed to SI/Baker and SI-Egemin)
                  before interest expense, taxes, depreciation and amortization,
                  plus dividends distributed by SI/Baker and SI-Egemin divided
                  by the sum of all current maturities of long term debt and
                  capital lease obligations plus interest expense.

  5.     The Loan Agreement is hereby modified by adding the following provision
         as an additional Financial Covenant:

                  Minimum Liquidity. Borrower shall, at all times, maintain not
                  less than $5,000,000.00 in cash, measured at quarters end.

  6.     Attached hereto as Exhibit "A" is a revised Compliance Certificate
         which is hereby substituted for the prior Compliance Certificate in its
         place and stead.


WAIVER.  Borrower has failed to comply with the required Funds Flow Coverage
Ratio for the quarter  ending  June 30,  2002.  Borrower  has  requested  Bank's
waiver,  and Bank does hereby waive this failure to meet the Funds Flow Coverage
Ratio for the quarter  ending June 30,  2002.  This is a one-time  waiver  only.
After the quarter  ending June 30,  2002,  the  provision  regarding  Funds Flow
Coverage Ratio shall remain in full force and effect.

WAIVER FEE. Simultaneously with the execution of this Agreement by Borrower,
Borrower shall deliver to Bank a modification fee in the amount of $10,000.00.

ACKNOWLEDGMENTS AND REPRESENTATIONS. Borrower acknowledges and represents that
the Note and other Loan Documents, as amended hereby, are in full force and
effect without any defense, counterclaim, right or claim of set-off; that, after
giving effect to this Agreement, no default or event that with the passage of
time or giving of notice would constitute a default under the Loan Documents has
occurred, all representations and warranties contained in the Loan Documents are
true and correct as of this date, all necessary action to authorize the
execution and delivery of this Agreement has been taken; and this Agreement is a
modification of an existing obligation and is not a novation.

MISCELLANEOUS. This Agreement shall be construed in accordance with and governed
by the laws of the applicable state as originally provided in the Loan
Documents, without reference to that state's conflicts of law principles. This
Agreement and the other Loan Documents constitute the sole agreement of the
parties with respect to the subject matter thereof and supersede all oral
negotiations and prior writings with respect to the subject matter thereof. No
amendment of this Agreement, and no waiver of any one or more of the provisions
hereof shall be effective unless set forth in writing and signed by the parties
hereto. The illegality, unenforceability or inconsistency of any provision of
this Agreement shall not in any way affect or impair the legality,
enforceability or consistency of the remaining provisions of this Agreement or
the other Loan Documents. This Agreement and the other Loan Documents are
intended to be consistent. However, in the event of any inconsistencies among
this Agreement and any of the Loan Documents, the terms of this Agreement, and
then the Note, shall control. This Agreement may be executed in any number of
counterparts and by the different parties on separate counterparts. Each such
counterpart shall be deemed an original, but all such counterparts shall
together constitute one and the same agreement. Terms used in this Agreement
which are capitalized and not otherwise defined herein shall have the meanings
ascribed to such terms in the Note.


                                       2
<PAGE>


DEFINITIONS. The term "Loan Documents" used in this Agreement and other Loan
Documents refers to all documents, agreements, and instruments executed in
connection with any of the Obligations (as defined herein), and may include,
without limitation, modification agreements, a commitment letter that survives
closing, a loan agreement, any note, guaranty agreements, security agreements,
security instruments, financing statements, mortgage instruments, letters of
credit and 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). The term "Obligations" used in this Agreement refers to any and all
indebtedness and other obligations of every kind and description of the Borrower
to the Bank or to any Bank affiliate, whether or not under the Loan Documents,
and whether such debts or obligations are primary or secondary, direct or
indirect, absolute or contingent, sole, joint or several, secured or unsecured,
due or to become due, contractual, including, without limitation, swap
agreements (as defined in 11 U.S.C. ss. 101), arising by tort, arising by
operation of law, by overdraft or otherwise, or now or hereafter existing,
including, without limitation, principal, interest, fees, late fees, expenses,
attorneys' fees and costs that have been or may hereafter be contracted or
incurred.

Borrower reaffirms and restates the following with respect to the Note as
modified herein:

CONFESSION OF JUDGMENT. THE FOLLOWING PARAGRAPH SETS FORTH A POWER OF AUTHORITY
FOR ANY ATTORNEY TO CONFESS JUDGMENT AGAINST BORROWER. IN GRANTING THIS WARRANT
OF ATTORNEY TO CONFESS JUDGMENT AGAINST BORROWER, THE BORROWER, FOLLOWING
CONSULTATION WITH (OR DECISION NOT TO CONSULT) SEPARATE COUNSEL FOR BORROWER AND
WITH KNOWLEDGE OF THE LEGAL EFFECT HEREOF, HEREBY KNOWINGLY, INTENTIONALLY,
VOLUNTARILY, INTELLIGENTLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS THE
BORROWER HAS OR MAY HAVE TO PRIOR NOTICE AND AN OPPORTUNITY FOR HEARING UNDER
THE RESPECTIVE CONSTITUTIONS AND LAWS OF THE UNITED STATES OF AMERICA,
COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE INCLUDING, WITHOUT LIMITATION, A
HEARING PRIOR TO GARNISHMENT AND ATTACHMENT OF THE BORROWER'S BANK ACCOUNT AND
OTHER ASSETS. BORROWER ACKNOWLEDGES AND UNDERSTANDS THAT BY ENTERING INTO THIS
AGREEMENT CONTAINING A CONFESSION OF JUDGMENT CLAUSE THAT BORROWER IS
VOLUNTARILY, INTELLIGENTLY AND KNOWINGLY GIVING UP ANY AND ALL RIGHTS, INCLUDING
CONSTITUTIONAL RIGHTS, THAT BORROWER HAS OR MAY HAVE TO NOTICE AND A HEARING
BEFORE JUDGMENT CAN BE ENTERED AGAINST BORROWER AND BEFORE THE BORROWER'S
ASSETS, INCLUDING, WITHOUT LIMITATION, ITS BANK ACCOUNTS, MAY BE GARNISHED,
LEVIED, EXECUTED UPON AND/OR ATTACHED. BORROWER UNDERSTANDS THAT ANY SUCH
GARNISHMENT, LEVY, EXECUTION AND/OR ATTACHMENT SHALL RENDER THE PROPERTY
GARNISHED, LEVIED, EXECUTED UPON OR ATTACHED IMMEDIATELY UNAVAILABLE TO
BORROWER. IT IS SPECIFICALLY ACKNOWLEDGED BY BORROWER THAT THE BANK HAS RELIED
ON THIS WARRANT OF ATTORNEY AND THE RIGHTS WAIVED BY BORROWER HEREIN IN
RECEIVING THIS AGREEMENT AND AS AN INDUCEMENT TO GRANT FINANCIAL ACCOMMODATIONS
TO THE BORROWER.

If a Default occurs under the Note or any other Loan Documents, each Borrower
hereby jointly and severally authorizes and empowers any attorney of any court
of record or the prothonotary or clerk of any county in the Commonwealth of
Pennsylvania, or in any jurisdiction where permitted by law or the clerk of any
United States District Court, to appear for Borrower in any and all actions
which may be brought hereunder and enter and confess judgment against the
Borrower or any of them in favor of the Bank for such sums as are due or may
become due hereunder or under any other Loan Documents, together with costs of
suit and actual collection costs including, without limitation, reasonable
attorney's fees equal to 5% of the Obligations then due and owing but in no
event less than $5,000.00, with or without declaration, without prior notice,
without stay of execution and with release of all procedural errors and the
right to issue executions forthwith. To the extent permitted by law, Borrower
waives the right of inquisition on any real estate levied on, voluntarily
condemns the same, authorizes the prothonotary or clerk to enter upon the writ
of execution this voluntary condemnation and agrees that such real estate may be
sold on a writ of execution; and also waives any relief from any appraisement,
stay or exemption law of any state now in force or hereafter enacted. Borrower
further waives the right to any notice and hearing prior to the execution, levy,
attachment or other type of enforcement of any judgment obtained hereunder,


                                       3
<PAGE>


including, without limitation, the right to be notified and heard prior to the
garnishment, levy, execution upon and attachment of Borrower's bank accounts and
other property. If a copy of the Agreement verified by affidavit of any officer
of the Bank shall have been filed in such action, it shall not be necessary to
file the original thereof as a warrant of attorney, any practice or usage to the
contrary notwithstanding. The authority herein granted to confess judgment shall
not be exhausted by any single exercise thereof, but shall continue and may be
exercised from time to time as often as the Bank shall find it necessary and
desirable and at all times until full payment of all amounts due hereunder and
under any other Loan Documents. The Bank may confess one or more judgments in
the same or different jurisdictions for all or any part of the Obligations
arising hereunder or under any other Loan Documents to which Borrower is a
party, without regard to whether judgment has theretofore been confessed on more
than one occasion for the same Obligations. In the event that any judgment
confessed against the Borrower is stricken or opened upon application by or on
behalf of Borrower or any obligor for any reason, the Bank is hereby authorized
and empowered to again appear for and confess judgment against Borrower for any
part or all of the Obligations owing under the Note and/or for any other
liabilities, as herein provided.

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







                                       4
<PAGE>


IN WITNESS WHEREOF, the undersigned have signed and sealed this Agreement the
day and year first above written.

PLACE OF EXECUTION AND DELIVERY. Borrower hereby certifies that this Agreement
and the Loan Documents were executed in the Commonwealth of Pennsylvania and
delivered to Bank in the Commonwealth of Pennsylvania.


Wachovia Bank, National Association         Paragon Technologies, Inc.


By: /s/ William M. Hogan                   By: /s/ William R. Johnson
    --------------------------------           ---------------------------------
    William M. Hogan, Vice President           William R. Johnson, President



                                            Ermanco Incorporated


                                           By: /s/ Ronald J. Semanick
                                               ---------------------------------
                                               Ronald J. Semanick, Treasurer






















                                       5
<PAGE>


                                    Exhibit A
                             Compliance Certificate
                      Borrower: Paragon Technologies, Inc.
                             Account#
                                      --------------

Wachovia Bank, National Association                    No.      ________________
702 Hamilton Mall
Allentown, Pennsylvania 18101                          Date     ________________

We hereby certify that as of ___________________________, the Borrower is in
full and complete compliance with all terms, conditions and covenants contained
in that certain Loan Agreement dated September 30, 1999 between First Union
National Bank, now Wachovia Bank, National Association and the Borrower, as
amended, and all Loan Documents as referenced therein, including without
limitation, the following financial covenants:

<TABLE>
<S>    <C>     <C>                                                                            <C>                   <C>
1.     Funds Flow Coverage Ratio is _________ to 1.00, calculated as
       follows:
       (a)     Earnings before interest expense, taxes, depreciation and amortization . . . . $_______________
               Minus earnings attributed to SI/Baker and SI-Egemin  . . . . . . . . . . . . . $_______________
               Plus dividends distributed by SI/Baker and SI-Egemin . . . . . . . . . . . . . $_______________
                  Total. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $_______________

       (b)     Current maturities of long-term debt as of period end date . . . . . . . . . . $_______________
               Current maturities of Capital Lease Obligations as of period end date. . . . . $_______________
               Interest Expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $_______________
       (c)        Total. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $_______________

                       (a)  Divided by (c) =  ________ to 1.00 [prior to 9/30/03 not less than 1.00 to 1.00]
                                                       [on and after 9/30/03 no less than 1.25 to 1.00]

2.     Total Liabilities to Net Worth Ratio is ________ to 1.00, calculated as follows:
       (a)     Total Assets. . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $_______________
       (b)     Total Liabilities (excluding subordinated debt). . . . . . . . . . . . . . . . . . . . . . . . . . . $_______________
       (c)     Net Worth (a less b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $_______________

               Total Liabilities (excluding subordinated debt) to Net Worth Ratio (b divided by c) is __________ to 1.00
                           [must be not more than 1.75 to 1.00]

3.     Current Ratio is __________ to 1.00, calculated as follows:
       (a)     Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $_______________
       (b)     Current Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $_______________
                       (a) Divided by (b) = ________ to 1.00 [must be not less than 1.20 to 1.00]

4.     Borrower's Aggregate Debt
               Borrower's Outstanding Debt (List)
               Obligations to Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $_______________
               Obligations to Other Institutional Lenders . . . . . . . . . . . . . . . . . . $_______________
               SI-Egemin Investments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . $_______________
               Obligations to Shareholders, Subsidiaries and Other Affiliates . . . . . . . . $_______________
               Capital Lease Obligations  . . . . . . . . . . . . . . . . . . . . . . . . . . $_______________
               Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $_______________
       (a)     Total Outstanding Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $_______________
                Bank Obligations ($______________)
                SI-Egemin Investments ($___________)
                                    [not to exceed $525,000.00]
                Subordinated Notes to former Ermanco shareholders ($_____________)
                                    [not to exceed $3,000,000.00]
       (b)     Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $_______________
                                    (a) minus (b) = $______________
                                    [not to exceed $400,000.00]

5.       Minimum Liquidity is $_________________ [must not be less than $5,000,000.00]

I hereby certify to the best of the undersigned's knowledge, information, and
belief, this above financial information, as derived from Borrower's accounting
records, as true and correct, and that no material adverse change in the
financial condition of Borrower has occurred since the date of this
certification.
                                       Paragon Technologies, Inc.

                              By:      _________________________________________
                                       Name:____________________________________
                                       Title:___________________________________
</TABLE>

</TEXT>
</DOCUMENT>
