TECHNITROL INC
UNLIMITED GUARANTY DATED DECEMBER 16, 1996
<DOCUMENT>
<TYPE>EX-10.20
<SEQUENCE>20
<FILENAME>d61078_ex10-20.txt
<DESCRIPTION>UNLIMITED GUARANTY DATED DECEMBER 16, 1996
<TEXT>
                                                                   EXHIBIT 10.20

                               UNLIMITED GUARANTY

      GUARANTY, dated as of December 16, 1996 by Technitrol, Inc., a
Pennsylvania corporation, the "Guarantor"), in favor of RHODE ISLAND HOSPITAL
TRUST NATIONAL BANK, a national banking association with its head office at One
Hospital Trust Plaza, Providence, RI, 02903, its foreign and domestic branches
and Affiliates (the "Bank"). In consideration of the Bank's giving, in its
discretion, consignment, time, credit or banking facilities or accommodations to
the Customer(s), the Guarantor agrees as follows:

      1. DEFINITIONS. As used in this Guaranty:

      "Affiliate" means any entity controlling, controlled by or under common
control with the Bank.

      "Business Day" means a day on which banks are open for the transaction of
banking business in Providence, Rhode Island.

      "Customers" mean Doduco, GmbH, of Pforzheim, Germany, a corporation
organized and existing under the laws of Germany and Doduco Espana, SA, of
Madrid Spain, a corporation organized and existing under the laws of Spain and
includes each of their successors.

      "Guaranty" means this instrument as originally executed and includes all
amendments and supplements hereto.

      "Obligations" means all liabilities, agreements and other obligations of
the Customers to the Bank, whether direct or indirect, absolute or contingent,
due or to become due, secured or unsecured, now existing or hereafter arising or
acquired.

      "Obligation Agreement" means any bill of exchange, draft, promissory note,
agreement (including, without limitation, any precious metals consignment
agreement) or other writing evidencing, securing or otherwise executed in
connection with any Obligation.

      "Obligation Currency" means the currency in which an Obligation is to be
paid.

      2. GUARANTY OF PAYMENT AND PERFORMANCE. The Guarantor hereby guarantees to
the Bank the full and punctual payment when due (whether at maturity, by
acceleration or otherwise) at the place specified therefor or, if no place of
payment is specified, at the office designated by the Bank, and the due and
punctual performance, of each Obligation of the Customers to the Bank. This
Guaranty is an absolute, unconditional and continuing guaranty of the full and
punctual payment and performance of the Obligations and not of their
collectibility only and is in no way conditioned upon any requirement that the
Bank first attempt to collect any of the Obligations from the Customers or
resort to any security or other means of obtaining their payment. Should the
Customers default in the payment or performance of any of the Obligations, the
obligations of the Guarantor hereunder shall become immediately due and payable
to the Bank, without demand or notice of any nature, all of which are expressly
waived

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by the Guarantor. Payments by the Guarantor hereunder may be required by the
Bank on any number of occasions.

      3. GUARANTOR'S AGREEMENT TO PAY. The Guarantor further agrees, as the
principal obligor and not as a guarantor only, to pay to the Bank, on demand, in
funds immediately available to the Bank,

      (a)   the amount of each Obligation which has not been paid when due, in
            the Obligation Currency and at the place of payment specified
            therefor, or if no place of payment is specified, at the office
            designated by the Bank; or

      (b)   at the option of the Bank (expressed in its demand for payment
            hereunder) and in lieu of payment in the Obligation Currency, in
            United States currency and at the head office of the Bank, an amount
            equal to the cost in United States currency of the amount of the
            Obligation Currency needed to pay in full and discharge such
            Obligation, determined at the Bank's spot rate of exchange in
            Providence, RI for the purchase of such Obligation Currency with
            United States currency at the close of business on the Business Day
            next preceding the date of payment of such Obligation (or if there
            is no such rate on such date, such rate on the next preceding date
            for which there is such a rate); and

      (c)   in United States currency and at the head office of the Bank, all
            costs and expenses (including court costs and legal expenses)
            incurred or expended by the Bank in connection with the Obligations,
            this Guaranty and the enforcement thereof, together with interest on
            amounts recoverable under this Guaranty from the time such amounts
            become due until payment, at the rate per annum equal to 18% or, if
            higher, the rate of interest announced by Rhode Island Hospital
            Trust National Bank from time to time at its head office as its Base
            Rate, plus 4%; provided that if such interest exceeds the maximum
            amount permitted to be paid under applicable law, then such interest
            shall be reduced to such maximum permitted amount.

      4. UNLIMITED GUARANTY. The liability of the Guarantor hereunder shall be
unlimited.

      5. WAIVERS BY GUARANTOR; BANK'S FREEDOM TO ACT. The Guarantor agrees that
the Obligations will be paid and performed strictly in accordance with their
respective terms and if there is an Obligation Agreement, strictly in accordance
with the terms thereof, regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Bank with respect thereto. The Guarantor waives presentment,
demand, protest, notice of acceptance, notice of Obligations incurred and all
other notices of any kind, all defenses which may be available by virtue of any
valuation, stay, moratorium law or other similar law now or hereafter in effect,
any right to require the marshalling of assets of the Customers, and all
suretyship defenses generally. Without limiting the generality of the foregoing,
the Guarantor agrees to the provisions of any Obligation Agreement and agrees
that the obligations of the Guarantor hereunder shall not be released or
discharged, in whole or in part, or otherwise affected by (i) the failure of the
Bank to assert any


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claim or demand or to enforce any right or remedy against the Customers or with
respect to any Obligation; (ii) any extensions or renewals of any Obligation;
(iii) any rescissions, waivers, amendments or modifications of any of the terms
or provisions of any Obligation Agreement; (iv) the substitution or release of
any person or entity primarily or secondarily liable for any Obligation; (v) the
adequacy of any rights the Bank may have against any collateral or other means
of obtaining repayment of the Obligations; (vi) the impairment of any collateral
securing the Obligations, including without limitation the failure to perfect or
preserve any rights the Bank might have in such collateral or the substitution,
exchange, surrender, release, loss or destruction of any such collateral; or
(vii) any other act or omission which might in any manner or to any extent vary
the risk of the Guarantor or otherwise operate as a release or discharge of the
Guarantor, all of which may be done without notice to the Guarantor. The
Guarantor acknowledges and confirms that it has established its own means of
obtaining from the Customers all information desired by the Guarantor concerning
the financial condition and affairs of the Customers and that the Bank is not
in' any way obligated to inform the Guarantor of changes in the Customers'
financial condition or affairs.

      6. UNENFORCEABILITY OF OBLIGATIONS AGAINST CUSTOMERS. If for any reason
the Customers have no legal existence or is under no legal obligation to
discharge any of the Obligations, or if any of the Obligations have become
irrecoverable from the Customers by operation of law or for any other reason,
this Guaranty shall nevertheless be binding on the Guarantor to the same extent
as if the Guarantor at all times had been the principal obligor on all such
Obligations. In the event that acceleration of the time for payment of the
Obligations is stayed upon the insolvency, bankruptcy or reorganization of the
Customers, or for any other reason, all such amounts otherwise subject to
acceleration under the terms of any Obligation Agreement shall be immediately
due and payable by the Guarantor.

      7. SUBROGATION; SUBORDINATION. The Guarantor waives any right against the
Customers arising as a result of any payment by the Guarantor hereunder, by way
of subrogation, reimbursement, indemnification, contribution or otherwise, The
Guarantor will not prove or prosecute any claim in respect of any payment
hereunder, whether in bankruptcy or insolvency proceedings or otherwise, and the
Guarantor will not claim any set-off or counterclaim against the Customers in
respect of any liability of the Guarantor to the Customers. The payment of any
amounts due with respect to any indebtedness of the Customers now or hereafter
held by the Guarantor is hereby subordinated to the prior payment in full of the
Obligations, provided that so long as no default in the payment or performance
of the Obligations has occurred and is continuing, or no demand for payment of
any of the Obligations has been made that remains unsatisfied, the Customers may
make, and the Guarantor may demand and accept, any scheduled payments of
principal of and interest on such subordinated indebtedness in the amounts at
the rates and on the dates specified in such instruments, securities or other
writings as shall evidence such subordinated indebtedness. The Guarantor agrees
that after the occurrence of any default in the payment or performance of the
Obligations, the Guarantor will not demand, sue for or otherwise attempt to
collect any such indebtedness of the Customers to the Guarantor until the
Obligations shall have been paid in full. If, notwithstanding the foregoing
sentence, the Guarantor shall collect, enforce or receive any amounts in respect
of such indebtedness, such amounts shall be collected, enforced and received by
the Guarantor as trustee for the Bank and be paid over to the Bank on account of
the Obligations without affecting in any manner the liability of the Guarantor
under the other provisions of this Guaranty.


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<PAGE>

      8. SET-OFF, SECURITY. Regardless of the adequacy of any collateral or
other means of obtaining repayment of the Obligations, the Bank is hereby
authorized at any time and from time to time, without notice to the Guarantor
(any such notice being expressly waived by the Guarantor) and to the fullest
extent permitted by law, to set off and apply all deposits (general or special,
time or demand, provisional or final) and other sums credited by or due from the
Bank to the Guarantor or subject to withdrawal by the Guarantor, and in all
securities or other property belonging to the Guarantor now or hereafter held by
the Bank, against the obligations of the Guarantor under this Guaranty, whether
or not the Bank shall have made any demand under this Guaranty and although such
obligations may be contingent or unmatured. In furtherance of such setoff right,
the Guarantor grants to the Bank, as security for the full and punctual payment
and performance of the Guarantor's obligations hereunder, a continuing lien on
and security interest in all such deposits and other sums.

      9. FURTHER ASSURANCES. The Guarantor agrees that it will, from time to
time at the request of the Bank, provide to the Bank its most recent tax
returns, audited and unaudited balance sheets and related statements of income
and cash flows (prepared on a consolidated basis with the Guarantor's
subsidiaries, if any) and such other information relating to the business and
affairs of the Guarantor as the Bank may reasonably request. The Guarantor also
agrees, upon request after any change in the condition or affairs (financial or
otherwise) of the Guarantor deemed by the Bank to be adverse and material, to
secure the payment and performance of its obligations hereunder by delivering,
assigning or transferring to the Bank or granting the Bank a security interest
in additional collateral of a value and character satisfactory to the Bank, and
authorizes the Bank to file any financing statement deemed by the Bank to be
necessary or desirable to perfect any security interest granted by the Guarantor
to the Bank, and as agent for the Guarantor, to sign the name of the Guarantor
thereto. The Guarantor also agrees to do all such things and execute all such
documents, including financing statements, as the Bank may consider necessary or
desirable to give full effect to this Guaranty and to perfect and preserve the
rights and powers of the Bank hereunder.

      10. TERMINATION; REINSTATEMENT. This Guaranty shall remain in full force
and effect until the Bank is given written notice of the Guarantor's intention
to discontinue this Guaranty, notwithstanding any intermediate or temporary
payment or settlement of the whole or any part of the Obligations. No such
notice shall be effective unless received and acknowledged by an officer of the
Bank at its head office or at the branch of the Bank where this Guaranty is
given. No such notice shall affect any rights of the Bank or of any Affiliate
hereunder including, without limitation, the rights set forth in Sections 5 and
7, with respect to Obligations incurred prior to the receipt of such notice or
Obligations incurred pursuant to any contract or commitment in existence prior
to such receipt, and all checks, drafts, notes, instruments (negotiable or
otherwise) and writings made by or for the account of the Customers and drawn
the Bank or any of its agents purporting to be dated on or before the date of
receipt of such notice, although presented to and paid or accepted by the Bank
after that date, shall form part of the Obligations. This Guaranty shall
continue to be effective or be reinstated, notwithstanding any such notice, if
at any time any payment made or value received with respect to an Obligation is
rescinded or must otherwise be returned by the Bank upon the insolvency,
bankruptcy or reorganization of the Customers, or otherwise, all as though such
payment had not been made or value received.


                                      -4-
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      11. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon the
Guarantor, its heirs, successors and assigns, and shall inure to the benefit of
and be enforceable by the Bank and its successors, transferees and assigns.
Without limiting the generality of the foregoing sentence, the Bank may assign
or otherwise transfer any Obligation Agreement or any note held by it evidencing
the Obligations, or sell participations in any interest therein, to any other
person or entity, and such other person or entity shall thereupon become vested,
to the extent set forth in the agreement evidencing such assignment, transfer or
participation, with all the rights in respect thereof granted to the Bank
herein.

      12. AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Guaranty nor consent to any departure by the Guarantor therefrom shall be
effective unless the same shall be in writing and signed by the Bank, No failure
on the part of the Bank to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right.

      13. NOTICES. All notices and other communications called for hereunder
shall be made in writing and, unless otherwise specifically provided herein,
shall be deemed to have been duly made or given when delivered by hand or sent
by first class mail, postage prepaid or, in the case of telegraphic or telexed
notice, when transmitted, answer back received or, in the case of electronic
facsimile transmission, electronic confirmation received, addressed as follows:
if to the Guarantor, at the address set forth beneath its signature hereto, and
if to the Bank, in care of Rhode Island Hospital Trust National Bank, One
Hospital Trust Plaza, Providence, RI 02903, Telex: __________, Facsimile No.
401.278.7829 Attention: Precious Metals, or at such other address as either
party may designate in writing.

      14. GOVERNING LAW; CONSENT TO JURISDICTION. This Guaranty is intended to
take effect as a sealed instrument and shall be governed by, and construed in
accordance with, the laws of the State of Massachusetts. without regard to its
conflicts of laws provisions. The Guarantor agrees that any suit for the
enforcement of this Guaranty may be brought in the courts of the State of Rhode
Island or any federal court sitting therein and consents to the non-exclusive
jurisdiction of such court and to service of process in any such suit being made
upon the Guarantor by mail at the address specified in Section la hereof. The
Guarantor hereby waives any objection that it may now or hereafter have to the
venue of any such suit or any such court or that such suit was brought in an
inconvenient court.

      15. JUDGMENT CURRENCY. If for the purpose of obtaining judgment in any
court or enforcing any such judgment it is necessary to convert any amount due
in any Obligation Currency into any other currency, the rate of exchange used
shall be the Bank's spot rate of exchange for the purchase of the Obligation
Currency with such other currency at the close of business on the Business Day
preceding the date on which judgment is given or any order for payment is made.
The obligation of the Guarantor in respect of any amount due from it hereunder
shall, notwithstanding any judgment or order for a liquidated sum or sums in
respect of amounts due hereunder or under any judgment or order in any other
currency or otherwise, be discharged only to the extent that on the Business Day
following receipt by the Bank of any payment in a currency other than the
Obligation Currency the Bank is able (in accordance with normal banking
procedures) to purchase the Obligation Currency with such other currency. If


                                      -5-
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the amount of the Obligation Currency that the Bank is able to purchase with
such other currency is less than the amount due in the Obligation Currency,
notwithstanding any judgment or order, the Guarantor shall indemnify the Bank
for the shortfall.

      16. SUBSTITUTE CONVERSION RATE. If on any conversion date provided for in
this Guaranty the Bank is not quoting a spot rate of exchange in Providence, RI
for the purchase of an Obligation Currency with United States currency, the rate
of exchange to be applied in lieu thereof shall be the official rate of exchange
for the purchase of United States currency with the relevant Obligation Currency
established by the country in which the Obligation Currency is legal tender as
made available by such country to the International Monetary Fund and as
reported by the International Monetary Fund at its headquarters in Washington,
D.C. to be in effect on such date.

      17. OBLIGATIONS ABSOLUTE. The Guarantor agrees that its obligations
hereunder shall not be affected by (i) any law, regulation, order, decree or
directive (whether or not having the force of law) or any interpretation
thereof, now or hereafter in effect in any jurisdiction, that purports to modify
any of the terms of or rights of the Bank with respect to any Obligation or
under any Obligation Agreement or this Guaranty, including without limitation
any law, regulation, order, decree or directive or interpretation thereof that
purports to require or permit the satisfaction of any Obligation other than
strictly in accordance with the terms of such Obligation and any related
Obligation Agreement (such as by the tender of a currency other than the
Obligation Currency) or that restricts the procurement of the Obligation
Currency by the Customers or the Guarantor; or (ii) any agreement whether or not
signed by or on behalf of the Bank, in connection with the restructuring or
rescheduling of public or private obligations in the Customer's country, whether
or not such agreement is stated to cause or permit the discharge of the
Obligations prior to the final payment in full of the Obligations in the
Obligation Currency in strict accordance with any Obligation Agreement.

      18. SPECIAL AGREEMENT WITH RESPECT TO DEBT RESTRUCTURING. If an Obligation
shall be made subject to a debt restructuring arrangement between a country and
its creditors or creditors of persons or entities of such country, and as a
result thereof the Bank, as holder of such Obligation and other credit
facilities to such country, persons or entities of such country, shall agree to
provide any new credit facilities, the Guarantor shall fund (and be the
beneficial owner of) that amount of such new credit facilities which is
calculated by (i) dividing the face value of such Obligation by the aggregate
amount of the Bank's credit facilities made part of the restructuring
arrangement and (ii) multiplying the result by the amount of such new credit
facilities. The Guarantor agrees to execute and deliver such documents and take
such actions as may be requested by the Bank to effect the purposes of this
Section 18. The Bank agrees to provide the Guarantor with copies of the relevant
documents governing its participation in the restructuring arrangement and new
credit facilities and shall provide the Guarantor with the basis on which it has
calculated the Guarantor's portion of such new credit facilities, which
calculations shall be conclusive absent manifest error.

      19. MISCELLANEOUS. This Guaranty constitutes the entire agreement of the
Guarantor with respect to the matters set forth herein. The rights and remedies
herein provided are cumulative and not exclusive of any remedies provided by law
or any other agreement, and this Guaranty shall be in addition to any other
guaranty of the Obligations. The invalidity or


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unenforceability of any one or more sections of this Guaranty shall not affect
the validity or enforceability of its remaining provisions. Captions are for the
ease of reference only and shall not affect the meaning of the relevant
provisions. The meanings of all defined terms used in this Guaranty shall be
equally applicable to the singular and plural forms of the terms defined.

      IN WITNESS WHEREOF, the Guarantor has executed and delivered this
Guaranty, or caused this Guaranty to be executed and delivered by its duly
authorized officer, as of the date appearing on page one.


                                         /s/ Albert Thorp III
                                        ----------------------------------------

                                        By:      Albert Thorp III
                                           -------------------------------------
                                                 Title* Vice President - Finance
                                        Address: 1210 NorthbrookDrive
                                                --------------------------------
                                                      Suite 385
                                                --------------------------------
                                                      Trevose, PA  19053
                                                --------------------------------
                                        Telex:
                                               ---------------------------------
                                        Facsimile:        215-355-7397
                                                   -----------------------------

Note - A separate guaranty must be signed by each guarantor.

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* To be completed if Guarantor is other than an individual.


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