Exhibit 10.18
                                                                   -------------


                             MODIFICATION NUMBER ONE
                                TO LOAN AGREEMENT


Paragon Technologies, Inc. (formerly, "SI Handling Systems, Inc.")
600 Kuebler Road
Easton, Pennsylvania  18040

Ermanco Incorporated
6870 Grand Haven Road
Spring Lake, Michigan  49456
 (Individually and collectively, "Borrower")

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

THIS AGREEMENT is entered into as of January 31, 2000 by and between Bank and
Borrower .

RECITALS

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

Borrower and Bank have agreed to modify the terms of 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.

         The  Loan  Agreement  is  hereby   modified  by  adding  the  following
provisions:

LETTERS OF CREDIT.  Bank will issue standby letters of credit,  (each, a "Letter
of Credit" and collectively,  the "Letters of Credit")  provided,  the aggregate
amount  available  to be drawn  under all  standby  Letters  of Credit  plus the
aggregate  amount of  unreimbursed  drawings under all standby Letters of Credit
and the outstanding  unpaid  principal  balance of the Note at any one time does
not exceed $6,000,000,  and further provided,  no standby Letter of Credit shall
expire more than 365 days after the date it is issued.  Notwithstanding anything
to the contrary contained herein, the aggregate outstanding principal balance of
Advances  (as defined in the Note) plus the  aggregate  amount  available  to be
drawn  under all  Letters of Credit plus the  aggregate  amount of  unreimbursed
drawings  under  all  Letters  of  Credit  at any  one  time  shall  not  exceed
$6,000,000.00. The Letters of Credit are to be used by Borrower


<PAGE>




solely  for  the  purpose  of  expediting  the  purchase  of  inventory.  Bank's
obligation to issue Letters of Credit shall  terminate if Borrower is in default
(however  denominated)  under the Note or the other  Loan  Documents,  or in any
case, if not sooner terminated, on September 30, 2002.


LETTER OF CREDIT FEES.  Borrower  shall pay to Bank, at such times as Bank shall
require, Bank's standard fees in connection with Letters of Credit, as in effect
from time to time, and with respect to standby Letters of Credit, at the time of
issuance of each standby Letter of Credit, a fee equal to 1.00% per annum on the
face amount of the  standby  Letter of Credit for the period of time the standby
Letter of Credit will be outstanding.

ACKNOWLEDGMENTS AND REPRESENTATIONS.  Borrower acknowledges and
represents that the Loan Agreement 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.

COLLATERAL.  Borrower  acknowledges and confirms that there have been no changes
in the  ownership  of any  collateral  pledged  to secure the  Obligations  (the
"Collateral") since the Collateral was originally pledged; Borrower acknowledges
and confirms that the Bank has existing, valid first priority security interests
and liens in the  Collateral;  and that such security  interests and liens shall
secure Borrower's Obligations to Bank, including any modification of the Note or
Loan  Agreement,  if any,  and all future  modifications,  extensions,  renewals
and/or replacements of the Loan Documents .

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 Loan Agreement.

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


<PAGE>




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.

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.


              Paragon Technologies, Inc. (formerly, "SI Handling Systems, Inc.")
              Taxpayer Identification Number: 22-1643428

CORPORATE     By:    /s/ William R. Johnson
                     -----------------------------------------------------------
SEAL                 William R. Johnson, President & CEO


              By:    /s/ William F. Moffitt
                     -----------------------------------------------------------
                     William F. Moffitt, Vice President - Finance



              First Union National Bank
              By:    /s/ Peter A. Gray
                     -----------------------------------------------------------
                     Peter A. Gray, Vice President