Document:

EXHIBIT 10.1
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                          REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION  RIGHTS AGREEMENT (this "Agreement") dated as of June
, 2000, by and among PARAGON TECHNOLOGIES,  INC., (formerly known as SI Handling
Systems,  Inc.), a Pennsylvania  corporation,  with headquarters  located at 600
Kuebler Road, Easton,  Pennsylvania  18040 (the "Company"),  and the individuals
identified on Exhibit A attached hereto (the "Investors").

                                    WHEREAS:

         A.   The Company issued an aggregate of 481,284 shares of the
Company's common stock (the "Common Stock") pursuant to the Stock Purchase
Agreement dated as of August 6, 1999 among SI Handling Systems, Inc., Ermanco
Incorporated ("Ermanco") and the Investors (the "Stock Purchase Agreement").

         B.   The Company executed certain  promissory  notes  in the  original
aggregate  principal  amount of $3,000,000,  each dated  September 30, 1999 (the
"Promissory Notes") in favor of the Investors,  pursuant to which the Company is
obligated  to make  payments of interest on a quarterly  basis.  The Company may
elect to make the interest payment in shares of Common Stock,  provided however,
that the  Company  agreed  to  provide  certain  registration  rights  under the
Securities Act of 1933, as amended, and the rules and regulations  thereunder as
amended or supplemented  from time to time, or any successor  thereto (the "1933
Act"), and applicable state securities laws, subject to the conditions contained
herein;

         C.   In connection with the Stock Purchase Agreement, the Company
agreed to provide certain piggyback registration rights under the 1933 Act, and
applicable state securities laws, subject to the conditions contained herein;

         D.   The Company and the Investors are entering into this Agreement to
set forth  the  terms and  conditions  under  which  the  Company  will file and
maintain the effectiveness of a shelf registration statement for the Registrable
Securities.

         NOW,  THEREFORE,  in  consideration  of the  premises  and  the  mutual
covenants  contained  herein  and other  good and  valuable  consideration,  the
receipt and  sufficiency of which are hereby  acknowledged,  and intending to be
legally bound, the Company and the Investors hereby agree as follows:

         1.   DEFINITIONS. As used in this Agreement, the following terms shall
have the following meanings unless the context shall otherwise require:

              a.   "register," "registered," and "registration" refer to a
registration effected by preparing  and filing a  Registration  Statement or
Statements in compliance with the 1933 Act and  pursuant to Rule 415 under the
1933 Act or any  successor rule providing for offering  securities on a
continuous  basis ("Rule 415"), and the declaration or ordering of effectiveness
of such  Registration  Statement by the United States Securities and Exchange
Commission (the "SEC").

              b.   "Registrable Securities" means the Shares and any shares of
capital stock issued or issuable as a dividend on or in exchange for or
otherwise with respect to any of the foregoing.

              c.   "Registration Period" means the period beginning on the date
on which the initial Registration  Statement filed under this Agreement is
declared effective by the SEC and ending on the date which is the earlier of:
(i) the date on which all of the Registrable  Securities  have been sold
pursuant to any  Registration Statement,  whether filed pursuant to this
Agreement or otherwise;  and (ii) the first  date  on  which  public  sale  of
any of the  Registrable  Securities  is permitted pursuant to Rule 144 or any
other rule or regulation permitting public sale  without  registration  under
the 1933 Act (in any  case,  as  amended  or supplemented, or any successors
thereto).

              d.   "Registration Statement" means a registration statement of
the Company under the 1933 Act.

              e.   "Shares" means the Common Stock issued pursuant to the Stock
Purchase Agreement and the interest paid to the Investors as shares of Common
Stock.

         2.   REGISTRATION.  The Company shall use its  commercially  reasonable
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efforts to effect the  registration of all of the Registrable  Securities  under
the 1933 Act on a Registration Statement on Form S-3, to obtain effectiveness of
the  Registration  Statement  filed  to  effect  such  registration  as  soon as
reasonably  practicable  thereafter,  and to continue  to use such  commercially
reasonable efforts to maintain such  effectiveness for the Registration  Period,
subject to the provisions of Sections 4 and 5 hereof.  Notwithstanding  anything
herein  to the  contrary,  the  Company  shall  have  no  obligation  to  file a
Registration Statement or maintain the effectiveness of a Registration Statement
if it is, or at any time becomes,  ineligible to use short form  registration on
Form S-3.

         3.   REGISTRATION PROCEDURES.  In connection with the registration of
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the Registrable Securities, pursuant to Section 2, the Company shall:

              a.   prepare and file with the SEC a Registration Statement with
respect  to  the  Registrable  Securities,  as  expeditiously  as is  reasonably
practicable,  and thereafter use its  commercially  reasonable  efforts to cause
such   Registration   Statement  to  become  effective  as  soon  as  reasonably
practicable  after such filing,  and keep the Registration  Statement  effective
pursuant to Rule 415 until the expiration of the Registration Period;

              b.   use its commercially reasonable efforts to prepare and file
with  the  SEC  such  amendments  (including   post-effective   amendments)  and
supplements to the Registration  Statement and the prospectus used in connection
with the  Registration  Statement as may be  necessary to keep the  Registration
Statement  effective at all times during the  Registration  Period,  and, during
such period,  comply with the Company's  obligations under the provisions of the
1933 Act with respect to the  disposition of all  Registrable  Securities of the
Company  covered by the  Registration  Statement  until such time as all of such
Registrable  Securities  have been disposed of in  accordance  with the intended
methods of  disposition  by the  seller or  sellers  thereof as set forth in the
Registration Statement;

              c.   furnish to the  Investors  (i)  promptly  after the same is
prepared  and  publicly  distributed,  filed with the SEC,  or  received  by the
Company, one copy of the Registration  Statement and any amendment thereto, each
preliminary  prospectus and prospectus and each amendment or supplement thereto,
and (ii)  such  number  of  copies  of a  prospectus,  including  a  preliminary
prospectus,  and all amendments and supplements thereto and such other documents
in the Company's  possession as the Investors may reasonably request in order to
facilitate the disposition of the Registrable Securities owned by the Investors;

              d.   use commercially  reasonable efforts to register or qualify
the  Registrable  Securities  covered by the  Registration  Statement under such
other securities or "blue sky" laws of such  jurisdictions in the United States,
to the extent  required  pursuant to such laws, and as the Investors who hold an
interest  in  the  Registrable  Securities  being  offered  reasonably  request,
provided,  however,  that the  Company  shall not for any purpose be required in
connection  therewith or as a condition thereto to (i) qualify to do business in
any  jurisdiction  where it would not  otherwise  be required to qualify but for
this  Section  3(d),  (ii)  subject  itself  to  general  taxation  in any  such
jurisdiction,  (iii)  file a general  consent  to service of process in any such
jurisdiction, (iv) provide any undertakings that cause the Company undue expense
or burden,  or (v) make any change in its charter or bylaws,  which in each case
the Board of  Directors  of the  Company  determines  to be contrary to the best
interests of the Company and its shareholders;

              e.   as promptly as  practicable  after  becoming  aware of such
event,  notify the Investors of the happening of any event, of which the Company
has knowledge,  as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omission to state a material fact required to be stated  therein or necessary to
make the  statements  therein,  in light of the  circumstances  under which such
statements  were made,  not  misleading,  and use its  reasonable  best  efforts
promptly to prepare a supplement or amendment to the  Registration  Statement to
correct such untrue statement or omission,  and deliver such number of copies of
such  supplement or amendment to the  Investors as the Investors may  reasonably
request;

              f.   use its  commercially  reasonable  efforts to  prevent  the
issuance  of  any  stop  order  or  other   suspension  of  effectiveness  of  a
Registration  Statement,  and,  if  such an  order  is  issued,  to  obtain  the
withdrawal  of such  order at the  earliest  possible  moment  and to notify the
Investors of the issuance of such order and the resolution thereof;

              g.   make generally available to its security holders as soon as
practical,  but not later  than  ninety  (90) days after the close of the period
covered thereby, an earnings statement (in form complying with the provisions of
Rule 158 under the 1933 Act) covering a twelve-month  period beginning not later
than the first day of the Company's  fiscal quarter next following the effective
date of the Registration Statement;

              h.   provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than the effective date of the
Registration Statement; and

              i.   use  its  commercially  reasonable  efforts  to  list  the
Registrable  Securities  covered by any Registration  Statement filed under this
Agreement with the securities  exchange or to cause such Registrable  Securities
to be  designated  or  approved  for  designation  as a national  market  system
security on the inter-dealer  quotation system on which the Common Stock is then
listed or designated.

         4.   LIMITATIONS ON REGISTRATION RIGHTS; HOLDBACK. Notwithstanding
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anything to the contrary contained in this Agreement:

              a.    The Company may delay the filing, suspend the effectiveness
of a  Registration  Statement  under  Section  2(a) or require the  Investors to
suspend sales or other dispositions of Registrable Securities under an effective
Registration  Statement for such time as may be required by the Company,  (i) if
in  the  Company's  Board  of  Directors'  judgment,  the  sale  of  Registrable
Securities  pursuant thereto would interfere with or be detrimental to a planned
offering,  by the  Company of any of the  Company's  securities,  (ii) if in the
Company's  Board of  Directors'  judgment,  the sale of  Registrable  Securities
thereunder  would have a material  adverse  effect on the  business,  prospects,
operations,  results of operations, assets, liabilities, or condition (financial
or otherwise)  of the Company;  or (iii) for such time as may be required by the
Company at any time when the Company is engaged in  discussions  concerning  any
merger,  financing,  business  combination,  sale of the  Company or any similar
transaction  or  when  the  Company  would  be  required  to  disclose  in  such
Registration  Statement  material  information  that it would not  otherwise  be
required  to disclose in its  filings  with the SEC  pursuant to the  Securities
Exchange Act of 1934,  and the rules and  regulations  thereunder  as amended or
supplemented  from time to time, or any  successor  thereto (the "1934 Act") and
that  it has not  then  disclosed  in such  filings  with  the SEC (an  "Allowed
Delay"). In the event of an Allowed Delay, the Company shall promptly (x) notify
the  Investors  in  writing (a "Delay  Notice")  of the  existence  (but not the
substance) of material  non-public  information  giving rise to an Allowed Delay
and  (y)  advise  the  Investors  in  writing  to  cease  all  sales  under  the
Registration  Statement  until the expiration of the period  provided for in the
Delay Notice.  Upon expiration of the Allowed Delay,  the Company shall again be
bound by the first  sentence  of Section  3(e) with  respect to the  information
giving rise thereto.

              b.   If during any period when a Registration Statement covering
Registrable Securities filed pursuant to Section 2(a) is effective,  the Company
proposes to file a  Registration  Statement on Forms S-1 or S-4 (or any of their
respective  successor forms), then the Company shall have the right to terminate
the  effectiveness  of the  Registration  Statement  covering  such  Registrable
Securities  for a period of not more than one  hundred  and eighty  (180)  days.
During  such one  hundred  and eighty  (180) day period  the  Company  shall use
reasonable  efforts to prepare and file a  Registration  Statement  covering the
shares  of  Common  Stock  sought  to be  registered  by  the  Company  and  the
Registrable  Securities for which such Registration Statement was filed pursuant
to Section 2(a). In any such event, the Investors shall include such Registrable
Securities in the Company Registration Statement.

              c.   If the  Company  shall  at any  time  register  any of its
securities  under  the  1933  Act,  for  offer or sale to the  public,  then the
Investors  shall  not make any  short  sale of,  grant an  option  for the sale,
assignment,  transfer, pledge,  hypothecation,  gift or other disposition of any
Registrable  Securities  (other  than for the public  sale of those  Registrable
Securities included in and sold pursuant to such registration) without the prior
written  consent of the  Company  for such  period as may be  designated  by the
Company,  or, if the registration shall be, in whole or in part, an underwritten
offering, the managing underwriter,  in writing to the Investors;  provided that
no such period shall begin more than ten (10) days prior to the effectiveness of
the registration  statement  pursuant to which  such  public  offer or sale will
be made and shall not last more than one hundred and eighty (180) days after the
effective  date of such  registration statement.

              d.   The Company shall use its commercially  reasonable  efforts
to keep the Registration  Statement effective during the requisite period unless
(i) required by applicable law to suspend the  effectiveness of the Registration
Statement,  (ii) the continued effectiveness of the Registration Statement would
require  the  Company to  disclose a material  financing,  acquisition  or other
corporate transaction,  and the Board of Directors shall have determined in good
faith that such  disclosure is not in the best  interests of the Company and the
holders of its  outstanding  Common Stock, or (iii) the Board of Directors shall
have  determined in good faith that there is a valid business  purpose or reason
for such suspension.

         5.   OBLIGATIONS OF THE INVESTORS. In connection with the registration
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of the Registrable Securities, the Investors shall:

              a.   furnish  to  the  Company  a  Questionnaire   for  Selling
Shareholders  in the form attached to this Agreement as Exhibit B and such other
information  regarding  itself,  the  Registrable  Securities held by it and the
intended method of disposition of the Registrable Securities held by it as shall
be reasonably required to effect the registration of such Registrable Securities
and shall execute such  documents in connection  with such  registration  as the
Company may reasonably request;

              b.   cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder;

              c.   upon  receipt  of  any  notice  from  the  Company  of the
happening  of any  event  of  the  kind  described  in  Section  3(e)  or  3(f),
immediately  discontinue  disposition of Registrable  Securities pursuant to the
Registration  Statement covering such Registrable  Securities until, in the case
of an event of the kind described in Section 3(e), the Investors' receipt of the
copies of the  supplemented or amended  prospectus  contemplated by Section 3(e)
or,  in the case of an event of the kind  described  in  Section  3(f),  written
notification  by the Company of the  resolution  of the event and  authority  to
continue the disposition of Registrable  Securities pursuant to the Registration
Statement,  and, if so directed by the  Company,  deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate  of
destruction) all copies in the Investors' possession, of the prospectus covering
such Registrable  Securities current at the time of receipt of the notice of the
happening of an event as described in Section 3(e) or 3(f);

              d.   notify  the  Company  of its  desire  to sell  Registrable
Securities pursuant to the Registration  Statement filed under this Agreement at
least three (3)  business  days prior to any intended  sale of such  Registrable
Securities pursuant to such Registration Statement;

              e.   upon receipt of any Delay Notice, immediately discontinue
disposition of Registrable Securities until the expiration of the Delay Period
or any extension thereof pursuant to a subsequent Delay Notice;

              f.   sell, transfer and otherwise dispose of the Registrable
Securities only through broker and dealer transactions; and

              g.   comply with all applicable laws and regulations in connection
with any sale, transfer or other disposition of Registrable Securities.

         6.   EXPENSES  OF  REGISTRATION.  All  reasonable  expenses, other than
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underwriting  fees,  discounts  and  commissions  (which  shall  be borne by the
Investors), incurred in connection with registrations, filings or qualifications
pursuant to the Company's  obligations under Section 2 and 3 including,  without
limitation, all registration,  listing and qualifications fees, printers and the
Company's  accounting  fees, and the fees and  disbursements  of counsel for the
Company, shall be borne by the Company.

         7.   INDEMNIFICATION. In the event any Registrable Securities are
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included in a Registration Statement under this Agreement:

              a.   To the extent permitted by law, the Company will indemnify,
hold  harmless  and  defend the  Investors,  each of the  Investors'  directors,
officers, partners, employees, agents and each person who controls the Investors
within the meaning of the 1933 Act or the 1934 Act, if any,  (each, an "Investor
Indemnified  Person"),  against  any losses,  claims,  damages,  liabilities  or
expenses (collectively,  together with actions,  proceedings or inquiries by any
regulatory or self-regulatory organization,  whether commenced or threatened, in
respect  thereof,  "Claims") to which any of them may become subject  insofar as
such Claims are caused by: (i) any untrue  statement or alleged untrue statement
of a  material  fact in a  Registration  Statement  or the  omission  or alleged
omission to state  therein a material fact required to be stated or necessary to
make the  statements  therein not  misleading,  or (ii) any untrue  statement or
alleged  untrue  statement  of a  material  fact  contained  in any  preliminary
prospectus if used prior to the effective date of such  Registration  Statement,
or contained in the final prospectus (as amended or supplemented, if the Company
files any amendment thereof or supplement  thereto with the SEC) or the omission
or alleged  omission to state  therein any material  fact  necessary to make the
statements  made  therein,  in  light  of  the  circumstances  under  which  the
statements  therein were made,  not  misleading,  (the matters in the  foregoing
clauses  (i)  and  (ii)  being,  collectively,  "Violations").  Subject  to  the
restrictions  set forth in  Section  7(c) with  respect  to the  number of legal
counsel,  the Company shall  reimburse  the Investors and each such  controlling
person,  promptly as such expenses are incurred and are due and payable, for any
reasonable  legal  fees  or  other  reasonable  expenses  incurred  by  them  in
connection  with  investigating  or  defending  any such Claim.  Notwithstanding
anything  to  the  contrary  contained  herein,  the  indemnification  agreement
contained in this Section 7(a):  (x) shall not apply to a Claim to the extent it
is caused  by a  Violation  which is based  upon or  arises  out of  information
furnished in writing to the Company by any Indemnified  Person or agent for such
Indemnified  Person  expressly for use in connection with the preparation of the
Registration  Statement or any such amendment thereof or supplement thereto; (y)
shall not apply to amounts paid in settlement of any Claim if such settlement is
effected  without the prior written consent of the Company,  which consent shall
not be unreasonably withheld; and (z) with respect to any preliminary prospectus
or prospectus,  shall not inure to the benefit of any Indemnified  Person if the
untrue statement or omission of material fact contained therein was corrected on
a timely  basis in the  final  prospectus  or a  corrected  prospectus,  as then
amended or  supplemented,  such final or  corrected  prospectus  was timely made
available by the Company  pursuant to Section 3(c) hereof,  and the  Indemnified
Person was promptly advised in writing not to use the incorrect prospectus prior
to  the  use  giving  rise  to  a  Violation   and  such   Indemnified   Person,
notwithstanding  such advice, used it. Such indemnity shall remain in full force
and  effect  regardless  of  any  investigation  made  by or on  behalf  of  the
Indemnified Person and shall survive the transfer of the Registrable  Securities
by the Investors.

              b.   In connection with any Registration  Statement in which the
Investors are  participating,  the Investors will  indemnify,  hold harmless and
defend, to the same extent and in the same manner set forth in Section 7(a), the
Company, each of its directors,  officers, employees, agents and each person who
controls  the Company  within the  meaning of the 1933 Act or the 1934 Act,  any
underwriter  and  any  other  shareholder  selling  securities  pursuant  to the
Registration  Statement  or any of its  directors  or officers or any person who
controls such  shareholder or underwriter  within the meaning of the 1933 Act or
the 1934 Act (collectively,  a "Company Indemnified Person"),  against any Claim
to which any of them may  become  subject,  under the 1933 Act,  the 1934 Act or
otherwise, insofar as such Claim is caused by any Violation, in each case to the
extent (and only to the extent) that such  Violation is based upon or arises out
of written  information  furnished to the Company by the  Investors or agent for
the Investors expressly for use in connection with such Registration  Statement;
and subject to Section  7(c) the  Investors  will  reimburse  any legal or other
expenses  (promptly  as such  expenses  are  incurred  and are due and  payable)
reasonably  incurred by them in connection with  investigating  or defending any
such Claim;  provided,  however,  that the indemnity agreement contained in this
Section 7(b) shall not apply to amounts paid in  settlement of any Claim if such
settlement is effected without the prior written consent of the Investors, which
consent shall not be unreasonably withheld; provided, further, however, that the
Investors shall be liable under this Agreement  (including this Section 7(b) and
Section 8) for only that amount as does not exceed the net proceeds (i.e., after
deduction of selling  commissions and discounts) to the Investors as a result of
the sale of Registrable Securities pursuant to such Registration Statement. Such
indemnity shall remain in full force and effect  regardless of any investigation
made by or on behalf of such Indemnified Person. Notwithstanding anything to the
contrary  contained  herein,  the  indemnification  agreement  contained in this
Section 7(b) with respect to any preliminary  prospectus  shall not inure to the
benefit  of any  Indemnified  Person if the  untrue  statement  or  omission  of
material fact contained in the preliminary  prospectus was corrected on a timely
basis in the prospectus, as then amended or supplemented.

              c.   Promptly after receipt by an Investor Indemnified Person or
a Company Indemnified Person (as applicable, an "Indemnified Person") under this
Section  7  of  notice  of  the  commencement  of  any  action   (including  any
governmental  action),  such  Indemnified  Person  shall,  if a Claim in respect
thereof is to be made  against any  indemnifying  person  under this  Section 7,
deliver to the indemnifying person a written notice of the commencement thereof,
and the indemnifying  person shall have the right to participate in, and, to the
extent the indemnifying  person so desires,  jointly with any other indemnifying
person similarly noticed,  to assume control of the defense thereof with counsel
mutually  satisfactory to the  indemnifying  person and the Indemnified  Person;
provided, however, that an Indemnified Person shall have the right to retain its
own counsel  with the fees and expenses to be paid by the  indemnifying  person,
if, in the reasonable  opinion of counsel retained by the  indemnifying  person,
the   representation  by  such  counsel  of  the  Indemnified   Person  and  the
indemnifying  person would be  inappropriate  due to actual or likely  differing
interests  between such Indemnified  Person and any other person  represented by
such counsel in such proceeding.  The indemnifying person shall pay for only one
separate legal counsel for the Indemnified Persons, and such legal counsel shall
be selected by the persons  and  entities  identified  on Schedule A attached to
this Agreement  holding a  majority-in-interest  of the  Registrable  Securities
included  in the  Registration  Statement  to which  the Claim  relates,  if the
Investors  is entitled to  indemnification  hereunder,  or the  Company,  if the
Company is entitled to indemnification  hereunder, as applicable. The failure to
deliver  written notice to the  indemnifying  person within a reasonable time of
the commencement of any such action shall not relieve such  indemnifying  person
of any liability to the  Indemnified  Person under this Section 7, except to the
extent that the  indemnifying  person is actually  prejudiced  in its ability to
defend such action. The indemnification required by this Section 7 shall be made
by  periodic   payments  of  the  amount   thereof  during  the  course  of  the
investigation or defense, as such expense, loss, damage or liability is incurred
and is due and payable.

         8.   CONTRIBUTION. To the extent any indemnification by an indemnifying
person is prohibited or limited by law, the  indemnifying  person agrees to make
the  maximum  contribution  with  respect  to any  amounts  for  which  it would
otherwise  be liable  under  Section 7 to the fullest  extent  permitted by law;
provided,  however,  that (i) no contribution shall be made under  circumstances
where the maker would not have been liable for  indemnification  under the fault
standards  set forth in  Section  7, (ii) no  seller of  Registrable  Securities
guilty of fraudulent  misrepresentation  (within the meaning of Section 11(f) of
the 1933 Act) shall be entitled to  contribution  from any seller of Registrable
Securities who was not guilty of such  fraudulent  misrepresentation,  and (iii)
contribution  (together with any indemnification or other obligations under this
Agreement) by any seller of Registrable Securities shall be limited in amount to
the net  amount  of  proceeds  received  by such  seller  from  the sale of such
Registrable  Securities and provided,  further,  that such contribution shall be
made in such  proportion as is  appropriate to reflect the relative fault of the
Company on the one hand, and the Investors on the other,  in connection with the
statements or omissions which resulted in such claims.

         9.   REPORTS UNDER THE 1934 ACT.  With a view to making  available to
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the Investors the benefits of Rule 144  promulgated  under the 1933 Act or any
other similar rule or  regulation of the SEC that may at any time permit the
Investors to sell restricted  securities of the Company to the public without
registration ("Rule 144"), the Company shall use its commercially reasonable
efforts to:

              a.   make and keep public information available, as those terms
are understood and defined in Rule 144; and

              b.   file with the SEC in a timely  manner all reports and other
documents  required  of the  Company  under the 1934 Act so long as the  Company
remains  subject to such  requirements  and the filing of such reports and other
documents is required for the applicable provisions of Rule 144.

         10.  AMENDMENT OF REGISTRATION RIGHTS. Provisions of this Agreement may
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be amended and the observance  thereof may be waived  (either  generally or in a
particular  instance  and  either  retroactively  or  prospectively),  only with
written  consent of the  Company  and the  Investors  holding a majority  of the
Registrable Securities. Any amendment or waiver effected in accordance with this
Section 10 shall be binding upon the Investors and the Company.

         11.  MISCELLANEOUS.
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              a.   Notices  required or permitted to be given  hereunder shall
be in  writing  and shall be deemed to be  sufficiently  given  when  personally
delivered (by hand,  by courier,  by facsimile  transmission  or other means) or
sent by certified mail, return receipt  requested,  properly  addressed and with
proper postage pre-paid,

                                    if to the Company:

                                    Paragon Technologies, Inc.
                                    600 Kuebler Road,
                                    Easton, Pennsylvania 18040
                                    Attention:  Chief Financial Officer
                                    Telecopy:  (610) 252-3102

                                    with a copy to:

                                    Pepper Hamilton LLP
                                    Suite 400
                                    1235 Westlakes Drive
                                    Berwyn, PA  19312
                                    Attention: Jeffrey P. Libson, Esquire
                                    Telecopy: (610) 640-7825

                                    if to the Investors:

                                    Leon C. Kirschner
                                    Ermanco Incorporated
                                    6870 Grand Haven Road
                                    Spring Lake, MI 49456
                                    Telecopy:  (231) 798-8322

or at such other  address as each such party  furnishes to the Company by notice
given in  accordance  with this  Section  11(b),  and shall be  effective,  when
personally  delivered,  upon receipt, when by overnight courier, or the business
day after delivery or drop off with such courier, and, when so sent by certified
mail, four (4) days after deposit with the United States Postal Service.

              b.   Failure of any party to exercise any right or remedy under
this  Agreement or otherwise,  or delay by a party in  exercising  such right or
remedy, shall not operate as a waiver thereof.

              c.   This Agreement shall be enforced, governed by and construed
in accordance with the laws of the  Commonwealth  of Pennsylvania  applicable to
agreements made and to be performed entirely within  Pennsylvania.  In the event
that any  provision  of this  Agreement  is invalid or  unenforceable  under any
applicable  statute  or  rule  of law,  then  such  provision  shall  be  deemed
inoperative  to the extent that it may  conflict  therewith  and shall be deemed
modified to conform with such statute or rule of law. Any provision hereof which
may prove invalid or  unenforceable  under any law shall not affect the validity
or  enforceability  of any other  provision  hereof.  The parties  hereto hereby
submit to the exclusive jurisdiction of the United States Federal Courts located
in the Eastern  District of  Pennsylvania  with  respect to any dispute  arising
under this Agreement or the transactions contemplated hereby.

              d.   This Agreement  constitutes the entire  agreement among the
parties  hereto  with  respect  to  the  subject  matter  hereof.  There  are no
restrictions,  promises, warranties or undertakings,  other than those set forth
or  referred  to  herein  and  therein.  This  Agreement  supersedes  all  prior
agreements  and  understandings  among the parties  hereto  with  respect to the
subject matter hereof.

              e.   This Agreement shall inure to the benefit of and be binding
upon the successors and assigns of each of the parties hereto; provided that the
Investors shall not have the right to assign their rights under this Agreement.

              f.   The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

              g.   This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original but all of which shall  constitute one
and the same  agreement.  This  Agreement,  once  executed  by a  party,  may be
delivered to the other party hereto by facsimile  transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.

              h.   Each party  shall do and  perform,  or cause to be done and
performed,  all such further acts and things,  and shall execute and deliver all
such other  agreements,  certificates,  instruments and documents,  as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

         IN WITNESS  WHEREOF,  the  Company and the  Investors  have caused this
Agreement to be duly executed as of the date first above written.

                                              PARAGON TECHNOLOGIES, INC.

                                              By:_______________________________
                                              Name:_____________________________
                                              Its:______________________________

                                              INVESTOR

                                              By:_______________________________

<PAGE>

                                    EXHIBIT A

                                    INVESTORS

Steven Shulman
Leon C. Kirschner
Thomas C. Hubbell
Lee F. Schomberg
Guy G. Hollister
Wilton W. Wyman, Jr.
Gordon A. Hellberg
Andrew Knaut
Thomas L. Bergy
Robert R. Nezbeth
Donald H. Kloosterhouse
James J. Bronsema
John R. Planteroth
William C. Pipp<PAGE>

                                                                 EXHIBIT 10.3

                              EMPLOYMENT AGREEMENT

            EMPLOYMENT AGREEMENT dated as of the 23rd day of July between
TELESCENTS, INC., a New York corporation (the "Company"), and Jason S. Apfel
(the "Executive").

                              W I T N E S S E T H :

            WHEREAS, the Company has entered into an Agreement and Plan of
Merger dated as of the date hereof with National Capital Management Corporation,
a Delaware corporation ("NCMC"), and the other parties thereto, pursuant to
which the Company will merge with a subsidiary of NCMC (the "Merger") and become
a wholly-owned subsidiary of NCMC and NCMC will change its corporate name to
FragranceNet.com, Inc. (NCMC also being referred to herein as "FragranceNet");
and

            WHEREAS, the Company desires to employ the Executive in an executive
capacity and to be assured of his services in such capacity, on the terms and
conditions hereinafter set forth; and

            WHEREAS, the Executive is willing to accept such employment on such
terms and conditions.

            NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the Company and the Executive hereby agree as
follows:

            1. Employment, Term.

            1.1 Employment. The Company agrees to employ the Executive, and the
Executive agrees to serve in the employ of the Company, for the term set forth
in Section 1.2, in the positions and with the responsibilities, duties and
authority set forth in Section 2 and on the other terms and conditions set forth
in this Agreement.

            1.2 Term. The term of the Executive's employment under this
Agreement shall commence on the date hereof and shall continue until terminated
in accordance with Section 6 of this Agreement.

            2. Position, Duties.

            The Executive shall serve as President and Chief Executive Officer
of the Company. The Executive shall have such responsibilities and duties
consistent with such executive positions as shall be assigned to him from time
to time by the Board of Directors of the Company. The Executive shall devote his
full business time and attention to the performance of his responsibilities and
duties hereunder. Effective upon consummation of the Merger, the Executive shall
also serve as President and Chief Executive Officer of FragranceNet.

<PAGE>
                                                                               2

            3. Salary, Incentive Bonus.

            3.1 Salary. The Company shall pay to the Executive a base salary,
initially at the rate of $110,000 per annum, payable in accordance with the
standard payroll practices of the Company. The Executive's base salary shall be
increased annually by an amount equal to the incentive bonus earned by the
Executive in the prior fiscal year pursuant to Section 3.2, such increase to
take effect on the date of payment of such incentive bonus.

            3.2 Incentive Bonus. (a) In addition to the base salary provided for
in Section 3.1, the Company shall pay to the Executive an incentive bonus with
respect to each fiscal year of the Company ending during the term of this
Agreement in an amount equal to two percent (2%) of Sales in excess of Target
Sales. For purposes of this Agreement: "Sales" shall mean sales of the Company
as shown in the audited financial statements of the Company for the applicable
fiscal year; and "Target Sales" shall mean (a) for the fiscal year of the
Company ending March 31, 2000, $1,000,000 and (b) for the fiscal year of the
Company ending March 31, 2001 and each subsequent fiscal year, Sales for the
fiscal year of the Company immediately preceding such year. In no event shall
the Executive be entitled to an incentive bonus on Sales in excess of
$10,000,000; at such time as Sales shall exceed $10,000,000, the Executive and
the Company shall, at the option of the Executive, negotiate a new incentive
bonus formula in good faith. Sales shall not include revenue from businesses
owned by NCMC immediately prior to the Merger.

                  (b) In the event of the termination of employment of the
Executive by the Company without Cause (as defined in Section 6), or by reason
of the death or Disability (as defined in Section 6) of the Executive, the
Executive (or his estate or other legal representative) shall be entitled to a
bonus for the fiscal year in which such termination takes place in an amount
equal to the product of (i) the bonus for such fiscal year determined pursuant
to Section 3.2(a), multiplied by (ii) a fraction, the numerator of which is the
number of days from the beginning of such fiscal year to the date of
termination, and the denominator of which is 365.

                  (c) The bonus payable to the Executive (or his estate or other
legal representative) for any fiscal year of the Company pursuant to this
Section 3.2 shall be paid by the Company within thirty (30) days of receipt by
the Company of the audited financial statements of the Company for such fiscal
year.

            4. Expense Reimbursement.

            During the term of this Agreement, the Company shall reimburse the
Executive for all reasonable and necessary out-of-pocket expenses incurred by
him in connection with the performance of his duties hereunder, upon the
presentation of proper accounts therefor in accordance with the Company's
policies.

<PAGE>
                                                                               3

            5. Benefits.

            During the term of this Agreement, the Executive will be eligible to
participate in all employee benefit plans and programs offered by the Company
from time to time to its employees, subject to the provisions of such plans and
programs as in effect from time to time.

            6. Termination of Employment.

            6.1 General. Either the Company or the Executive may terminate the
employment of the Executive on thirty (30) days' advance written notice to the
other.

            6.2 Termination Without Cause. In the event that the Executive's
employment with the Company shall be terminated by the Company without Cause (as
hereinafter defined), and not as a result of the Executive's death or Disability
(as hereinafter defined), the Company shall pay the Executive severance in the
form of salary continuation (determined at the Executive's highest rate of
salary with the Company in effect during the one-year period ending on the date
of termination), payable through the regular payroll of the Company, for the
Applicable Period (as hereinafter defined) commencing on the date of termination
of the Executive's employment. The Executive shall be under no obligation to
seek other employment or otherwise to mitigate the Company's obligation to make
such severance payment to the Executive. The severance provided for in this
Section 6 shall be in lieu of, and no severance shall be payable to the
Executive under, any other severance plan or policy of the Company. The Company
shall also pay to the Executive any incentive bonus payable pursuant to Section
3 of this Agreement, at the time prescribed by such Section. The Company shall,
during the Applicable Period, continue to provide the Executive with health
insurance benefits on the same basis, including any Company-paid premiums, as
such benefits are provided to employees of the Company. The Executive's rights
under the other benefit plans and programs of the Company shall be determined in
accordance with the terms of such plans and programs as then in effect. In the
event of such termination neither the Executive nor the Company shall have any
further rights or obligations under this Agreement, except as set forth in
Sections 7, 8, 9 and 10 of this Agreement. For purposes of this Section 6.2,
"Applicable Period" shall mean a period of six (6) months.

            6.3 Definitions. For purposes of this Agreement: "Cause" shall mean
(a) the Executive's material failure to properly discharge the Executive's
duties and responsibilities to the Company, which failure continues after
written notice from the Company and a reasonable period to remedy such failure,
(b) any act of willful misappropriation by the Executive against the Company or
(c) the Executive's indictment, conviction or plea of guilty or nolo contendere
with respect to any crime involving moral turpitude or a felony; and
"Disability" shall mean the Executive's failure by reason of sickness, accident
or physical or mental disability to substantially perform the duties and
responsibilities of the Executive's employment with the Company for a cumulative
period of three (3) months in any period of twelve (12) consecutive months.

<PAGE>
                                                                               4

            6.4 Resignation of all Positions. Upon termination of the employment
of the Executive with the Company, the Executive shall be deemed to have
resigned all of his positions as an officer, director and trustee of any benefit
plan of the Company or any parent or subsidiary of the Company.

            7. Confidential Information.

            7.1 Nondisclosure. The Executive shall, during the term of this
Agreement and at all times thereafter, treat as confidential and, except as
required in the performance of his duties and responsibilities under this
Agreement, not disclose, publish or otherwise make available to the public or to
any individual, firm or corporation any confidential information (as hereinafter
defined).

            7.2 Confidential Information Defined. For the purposes hereof, the
term "confidential information" shall mean all information acquired by the
Executive in the course of the Executive's employment with the Company in any
way concerning the products, projects, activities, business or affairs of the
Company and its Parent or subsidiaries or its or their customers, including,
without limitation, all information concerning trade secrets and the products or
projects of the Company and its subsidiaries and/or any improvements therein,
all sales and financial information concerning the Company and its subsidiaries,
all customer and supplier lists, all information concerning projects in research
and development or marketing plans for any such products or projects, and all
information in any way concerning the products, projects, activities, business
or affairs of customers of the Company or its subsidiaries which is furnished to
the Executive by the Company or its subsidiaries or any of their agents or
customers, as such; provided, however, that the term "confidential information"
shall not include information which (a) becomes generally available to the
public other than as a result of a disclosure by the Executive, (b) was
available to the Executive on a non-confidential basis prior to his employment
with the Company or (c) becomes available to the Executive on a non-confidential
basis from a source other than the Company or its subsidiaries or any of their
agents or customers provided that such source is not bound by a confidentiality
agreement with the Company or its subsidiaries or any of such agents or
customers.

            8. Intellectual Property.

            The Executive agrees that all inventions and copyrightable or
patentable material, and all trade secrets, processes, know-how, practices,
designs, technologies and methods which the Executive may make or develop during
the period of the Executive's employment with the Company relating to the
business of the Company shall belong to and shall be owned by the Company,
whether the Executive shall make or develop them individually or jointly with
others or on the Executive's own time or on the time of the Company. The
Executive agrees that, upon the request of the Company and without further
consideration, the Executive shall expressly assign to the Company all of the
Executive's right, title and interest in and to each such invention, material,
trade secret, process, know-how, practice, design, technology and method and
shall sign all papers and do all other acts necessary, at the Company's expense,
to assist the

<PAGE>
                                                                               5

Company to obtain patents or copyrights on or otherwise to perfect the Company's
right, title and interest in and to each such invention, material, trade secret,
process, know-how, practice, design, technology and method in any and all
countries.

            9. Post-Employment Restriction.

            In order to induce the Company to enter into this Agreement, and in
consideration of his employment hereunder, the Executive agrees, for the benefit
of the Company, that he will not, during the period of his employment with the
Company and thereafter, for a period of one (1) year commencing on the date of
termination of his employment with the Company, employ or entice or endeavor to
solicit the employment of any person who was an employee of the Company at any
time during the one-year period ending on the date of termination of the
Executive's employment with the Company, either for his own account or for any
individual, firm or corporation.

            10. Equitable Relief.

            In the event of a breach or threatened breach by the Executive of
any of the provisions of Section 7, 8 or 9 of this Agreement, the Executive
hereby consents and agrees that the Company shall be entitled to an injunction
or similar equitable relief from any court of competent jurisdiction restraining
the Executive from committing or continuing any such breach or threatened breach
or granting specific performance of any act required to be performed by the
Executive under any of such provisions, without the necessity of showing any
actual damage or that money damages would not afford an adequate remedy and
without the necessity of posting any bond or other security. Nothing herein
shall be construed as prohibiting the Company from pursuing any other remedies
at law or in equity which it may have.

            11. Successors and Assigns.

            11.1 Of the Company. The Company shall require any successors
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such succession had taken
place. As used in this Section, the "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law and this Agreement shall be binding upon, and
inure to the benefit of, the Company, as so defined.

            11.2 Of the Executive. The Executive may not assign this Agreement
or any part thereof; provided, however, that nothing herein shall preclude one
or more beneficiaries of the Executive from receiving any amount that may be
payable following the occurrence of his legal incompetency or his death and
shall not preclude the legal representative of his estate from receiving such
amount or from assigning any right hereunder to the person or persons entitled
thereto under his will or, in the case of intestacy, to the person or persons
entitled thereto under

<PAGE>
                                                                               6

the laws of intestacy applicable to his estate. The term "beneficiaries", as
used in this Agreement, shall mean a beneficiary or beneficiaries so designated
to receive any such amount or, if no beneficiary has been so designated, the
legal representative of the Executive (in the event of his incompetency) or the
Executive's estate.

            12. Governing Law.

            This Agreement shall be deemed a contract made under, and for all
purposes shall be construed in accordance with, the laws of the State of New
York applicable to contracts to be performed entirely within such state. In the
event that a court of any jurisdiction shall hold any of the provisions of this
Agreement to be wholly or partially unenforceable for any reason, such
determination shall not bar or in any way affect the Company's right to relief
as provided for herein in the courts of any other jurisdiction. Such provisions,
as they relate to each jurisdiction, are, for this purpose, severable into
diverse and independent covenants.

            13. Entire Agreement.

            This Agreement contains all the understandings and representations
between the parties hereto pertaining to the subject matter hereof and
supersedes all undertakings and agreements, whether oral or in writing, if any
there be, previously entered into by them with respect thereto.

            14. Amendment, Modification, Waiver.

            No provision of this Agreement may be amended or modified unless
such amendment or modification is agreed to in writing and signed by the
Executive and by a duly authorized representative of the Company other than the
Executive. Except as otherwise specifically provided in this Agreement, no
waiver by either party hereto of any breach by the other party hereto of any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar provision or condition at
the same or any prior or subsequent time, nor shall the failure of or delay by
either party hereto in exercising any right, power or privilege hereunder
operate as a waiver thereof to preclude any other or further exercise thereof or
the exercise of any other such right, power or privilege.

            15. Arbitration.

            Any controversy or claim arising out of or relating to this
Agreement, or any breach thereof, shall, except as provided in Section 10, be
settled by arbitration in accordance with the rules of the American Arbitration
Association then in effect and judgment upon such award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The
arbitration shall be held in New York, New York. The arbitration award shall
include attorneys' fees and costs to the prevailing party.

            16. Notices.

<PAGE>
                                                                               7

            Any notice to be given hereunder shall be in writing and delivered
personally or sent by certified mail, postage prepaid, return receipt requested,
addressed to the party concerned at the address indicated below or at such other
address as such party may subsequently designate by like notice:

            If to the Company:

                  2070 Deer Park Avenue
                  Deer Park, New York 11729
                  Attention: Vice Chairman

            If to the Executive:

                  Jason S. Apfel
                  2070 Deer Park Avenue
                  Deer Park, New York 11729

            17. Severability.

            Should any provision of this Agreement be held by a court or
arbitration panel of competent jurisdiction to be enforceable only if modified,
such holding shall not affect the validity of the remainder of this Agreement,
the balance of which shall continue to be binding upon the parties hereto with
any such modification to become a part hereof and treated as though originally
set forth in this Agreement. The parties further agree that any such court or
arbitration panel is expressly authorized to modify any such unenforceable
provision of this Agreement in lieu of severing such unenforceable provision
from this Agreement in its entirety, whether by rewriting the offending
provision, deleting any or all of the offending provision, adding additional
language to this Agreement, or by making such other modifications as it deems
warranted to carry out the intent and agreement of the parties as embodied
herein to the maximum extent permitted by law. The parties expressly agree that
this Agreement as so modified by the court or arbitration panel shall be binding
upon and enforceable against each of them. In any event, should one or more of
the provisions of this Agreement be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions hereof, and if such provision or provisions are not
modified as provided above, this Agreement shall be construed as if such
invalid, illegal or unenforceable provisions had never been set forth herein.

            18. Withholding.

            Anything to the contrary notwithstanding, all payments required to
be made by the Company hereunder to the Executive or his beneficiaries,
including his estate, shall be subject to withholding of such amounts relating
to taxes as the Company may reasonably determine it should withhold pursuant to
any applicable law or regulation. In lieu of withholding such amounts, in whole
or in part, the Company, may, in its sole discretion, accept other provision for
payment of taxes as permitted by law, provided it is satisfied in its sole
discretion

<PAGE>
                                                                               8

that all requirements of law affecting its responsibilities to withhold such
taxes have been satisfied.

            19. Survivorship.

            The respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.

            20.   Titles.

            Titles of the sections and paragraphs of this Agreement are intended
solely for convenience and no provision of this Agreement is to be construed by
reference to the title of any section or paragraph.

                            *           *          *

<PAGE>
                                                                               9

            IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.

                                          TELESCENTS, INC.

                                          By    /s/ Dennis M. Apfel
                                            ----------------------------------

                                                /s/ Jason S. Apfel
                                          ------------------------------------
                                                  Jason S. Apfel

Agreed as to Sections 2 and 3.3:

FRAGRANCENET.COM, INC.

By    /s/ Dennis M. Apfel
  ----------------------------------

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