Exhibit 10.18
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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
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
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
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SEAL William R. Johnson, President & CEO
By: /s/ William F. Moffitt
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William F. Moffitt, Vice President - Finance
First Union National Bank
By: /s/ Peter A. Gray
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Peter A. Gray, Vice President