NTK Holdings Bridge Loan Agreement

BRIDGE LOAN AGREEMENT



Dated as of May 10, 2006



among



NTK HOLDINGS, INC.,





The Lenders Party Hereto,



and



GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Administrative Agent



___________________________





GOLDMAN SACHS CREDIT PARTNERS L.P.



and



CREDIT SUISSE SECURITIES (USA) LLC,

as Joint Lead Arrangers and Joint Bookrunners,



CREDIT SUISSE SECURITIES (USA) LLC,

as Syndication Agent,



and



BANC OF AMERICA BRIDGE LLC and

UBS SECURITIES LLC,

as Co-Documentation Agents




[CS&M Ref. No. 5865-444]





ARTICLE I

Definitions and Accounting Terms



1.01 Defined Terms

1.02 Other Interpretive Provisions

1.03 Accounting Terms

1.04 References to Laws

1.05 Times of Day

1.06 Timing of Payment or Performance



ARTICLE II

Loans



2.01 Commitments

2.02 Procedure for Borrowing

2.03 Maturity; Extended Loans; Exchange Notes

2.04 Optional and Mandatory Prepayments

2.05 Repayment of Loans

2.06 Interest and Fees

2.07 Computation of Interest and Fees

2.08 Evidence of Indebtedness

2.09 Payments Generally

2.10 Sharing of Payments

2.11 Change of Control Offer

2.12 Asset Sale Offer



ARTICLE III

Taxes and Increased Costs Protection



3.01 Taxes

3.02 Increased Cost and Reduced Return; Capital Adequacy

3.03 Certain Losses

3.04 Matters Applicable to All Requests for Compensation

3.05 Replacement of Lenders Under Certain Circumstances

3.06 Survival



ARTICLE IV

Conditions Precedent To Effectiveness and to Making of the Initial Loans



4.01 Conditions to Effectiveness



ARTICLE V

Representations and Warranties



5.01 Disclosure

5.02 Capitalization, Organization, Powers and Authorization

5.03 Government Authorization; Other Consents

5.04 No Conflicts

5.05 Financial Statements

5.06 Independent Registered Accounting Firm

5.07 Litigation

5.08 Intellectual Property; Licenses, Etc

5.09 No Material Adverse Effect

5.10 Taxes

5.11 Margin Regulations

5.12 Ownership of Properties

5.13 No Omissions

5.14 Environmental Compliance

5.15 Labor Matters

5.16 Insurance

5.17 ERISA

5.18 Internal Controls

5.19 Investment Company Act

5.20 FCPA

5.21 Sarbanes-Oxley



ARTICLE VI

Covenants



6.01 Corporate Existence

6.02 Payment of Taxes and Other Claims

6.03 Maintenance of Properties and Insurance

6.04 Compliance Certificate; Notice of Default

6.05 Waiver of Stay or Extension Laws

6.06 Incurrence of Indebtedness and Issuance of Preferred Stock.

6.07 Limitation on Restricted Payments

6.08 Limitation on Liens

6.09 Asset Sales

6.10 Limitation on Transactions with Affiliates

6.11 Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

6.12 Future Guarantors

6.13 Reports.

6.14 Designation of Restricted and Unrestricted Subsidiaries

6.15 Business Activities

6.16 Merger, Consolidation, or Sale of Assets

6.17 Exchange Notes



ARTICLE VII

Default and Remedies



7.01 Events of Default

7.02 Acceleration

7.03 Other Remedies

7.04 Waiver of Defaults

7.05 Control by Majority

7.06 Limitation on Suits

7.07 Rights of Lenders To Receive Payment

7.08 Collection Suit by Administrative Agent

7.09 Priorities

7.10 Undertaking for Costs



ARTICLE VIII

Administrative Agent



8.01 Appointment and Authorization of Administrative Agent

8.02 Delegation of Duties

8.03 Liability of Administrative Agent

8.04 Reliance by Administrative Agent

8.05 Notice of Default

8.06 Credit Decision; Disclosure of Information by the Administrative Agent

8.07 Indemnification of the Administrative Agent

8.08 Administrative Agent in its Individual Capacity

8.09 Successor Administrative Agent

8.10 Administrative Agent May File Proofs of Claim

8.11 Other Agents; Arrangers and Bookrunners



ARTICLE IX

Miscellaneous



9.01 Amendments, Etc

9.02 Notices and Other Communications; Facsimile Copies

9.03 No Waiver; Cumulative Remedies

9.04 Attorney Costs, Expenses and Taxes

9.05 Indemnification by the Borrower

9.06 Payments Set Aside

9.07 Successors and Assigns

9.08 Confidentiality

9.09 Setoff

9.10 Interest Rate Limitation

9.11 Counterparts

9.12 Integration

9.13 Survival of Representations and Warranties

9.14 Severability

9.15 Tax Forms

9.16 Governing Law

9.17 Waiver of Right to Trial by Jury

9.18 Binding Effect

9.19 USA PATRIOT Act Notice



SCHEDULES



2.01 Commitments

5.02(a-1) Capitalization

5.02(a-2) Capital Stock

5.02(a-3) Restrictions on Capital Stock

5.02(a-4) Subsidiaries

9.02 A dministrative Agent's Office; Certain Addresses for Notices



EXHIBIT A Form of Exchange Request

EXHIBIT B Form of Interest Payment Election







BRIDGE LOAN AGREEMENT dated as of May 10, 2006 (this " Agreement "), among NTK HOLDINGS, INC., a Delaware corporation (the " Borrower "), the Lenders (as defined in Article I), and GOLDMAN SACHS CREDIT PARTNERS L.P., as administrative agent (in such capacity, the " Administrative Agent ") for the Lenders.



The Borrower has requested the Lenders to make Initial Loans (such term and each other capitalized term used but not defined in this introductory statement having the meaning given to it in Article I) on the Closing Date, in an aggregate principal amount of $205.0 million, the proceeds of which, together with cash on-hand of Nortek, will be used by the Borrower to (a) make a distribution in respect of all outstanding Class A membership interests of Investors LLC and a portion of the outstanding Class B membership interests of Investors LLC in an aggregate amount of approximately $174.9 million, (b) cause Nortek Holdings, Inc. to make a payment to participants under the Holdings Deferred Compensation Plan in an aggregate amount of approximately $54.0 million and (c) pay related fees and expenses (the transactions described in clauses (a) through (c) being collectively referred to herein as the " Bridge Loan Transactions ").



The Lenders are willing to extend such credit to the Borrower on the terms and subject to the conditions set forth herein. Accordingly, the parties hereto agree as follows:



ARTICLE I



DEFINITIONS AND ACCOUNTING TERMS



1.01 Defined Terms . As used in this Agreement, the following terms shall have the meanings set forth below:



" Acquired Debt " means, with respect to any specified Person: (1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Subsidiary of, such specified Person; and (2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.



" Adjusted LIBO Rate " means, for any Interest Period, an interest rate per annum equal to the product of (a) the LIBO Rate in effect for such Interest Period and (b) Statutory Reserves.



" Administrative Agent " means Goldman Sachs Credit Partners L.P. in its capacity as Administrative Agent under any of the Loan Documents, or any successor in such capacity.



" Administrative Agent's Office " means the Administrative Agent's ad-dress and, as appropriate, account as set forth on Schedule 9.02 , or such other address or account as the Administrative Agent may from time to time notify the Borrower and the Lenders.



" Administrative Questionnaire " means an Administrative Questionnaire in a form supplied by the Administrative Agent.



" Affiliate " of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control," as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms "Controlling," " Controlled By" and ?Under Common Control With" shall have correlative meanings.



" Affiliate Transaction " has the meaning specified in Section 6.10 .



" Agent-Related Persons " means the Administrative Agent, together with its Affiliates, and the officers, directors, employees, agents and attorneys-in-fact of such Person and Affiliates.



" Agents " means, collectively, the Administrative Agent, the Arrangers, the Syndication Agent and the Co-Documentation Agents.



" Agreement " means this Bridge Loan Agreement as amended, amended and restated or otherwise modified from time to time.



" Amend " means amend, modify, supplement, restate or amend and restate, including successively; and "Amending" and "Amended" have correlative meanings.



" Applicable Extended Loan Percentage " means, with respect to any Extended Loan, 0 basis points during the Interest Period beginning on the Initial Maturity Date, which amount shall increase by 50 basis points at the beginning of the next succeeding Interest Period and by an additional 50 basis points at the beginning of each subsequent Interest Period.



" Applicable Initial Loan Percentage " means, with respect to any Initial Loan, 250 basis points for each of the first two Interest Periods immediately following the Closing Date, and 350 basis points for each of the two immediately succeeding Interest Periods.



" Approved Fund " means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.



" Arrangers " means Goldman Sachs Credit Partners L.P. and Credit Suisse Securities (USA) LLC, in their capacities as joint lead arrangers and joint bookrunners.



" Asset " means any asset or property, whether real, personal or other, tangible or intangible.



" Asset Acquisition " means (a) an Investment by the Borrower or any of its Restricted Subsidiaries in any other Person if, as a result of such Investment, such Person shall become a Restricted Subsidiary of the Borrower, or shall be merged with or into the Borrower or any Restricted Subsidiary of the Borrower, or (b) the acquisition by the Borrower or any Restricted Subsidiary of the Borrower of all or substantially all of the assets of any other Person or any division or line of business of any other Person.



" Asset Sale " means: (1) the sale, lease, conveyance or other disposition of any assets or rights of the Borrower or any Restricted Subsidiary; provided that the sale, conveyance or other disposition of all or substantially all of the assets of the Borrower and its Restricted Subsidiaries taken as a whole will be governed by Section 2.11 and/or Section 6.16 and not by Section 6.09 ; and (2) the issuance or sale of Equity Interests in or by any of the Borrower' s Restricted Subsidiaries (other than director's qualifying shares or shares required by applicable law to be held by Persons other than the Borrower or a Restricted Subsidiary).



Notwithstanding the preceding, the following items shall not be deemed to be Asset Sales:



(1) any single transaction or series of related transactions that involves assets having a fair market value of less than $5.0 million;



(2) a transfer of assets between or among the Borrower and its Restricted Subsidiaries;



(3) an issuance of Equity Interests by a Restricted Subsidiary to the Borrower or to another Restricted Subsidiary;



(4) the sale, lease, sublease, license, sublicense or consignment of equipment, inventory or other assets in the ordinary course of business;



(5) the sale or other disposition of cash or Cash Equivalents;



(6) a Restricted Payment or Permitted Investment that is permitted under Section 6.07 ;



(7) the licensing of intellectual property to third Persons on customary terms as determined by the Board of Directors of the Borrower in good faith;



(8) any sale of accounts receivable, or participations therein, in connection with any Qualified Receivables Transaction;



(9) any sale or disposition of any property or equipment that has become damaged, worn-out, obsolete, condemned, given over in lieu of deed or otherwise unsuitable or not required for the ordinary course of the business of the Borrower and its Restricted Subsidiaries;



(10) any sale of Equity Interests in, or Indebtedness or other securities of, an Unrestricted Subsidiary;



(11) any foreclosures of assets; and



(12) any disposition of an account receivable in connection with the collection or compromise thereof.



" Asset Sale Offer " has the meaning specified in Section 2.12 .



" Assignment and Assumption " means an Assignment and Assumption entered into by a Lender and an assignee, and accepted by the Administrative Agent, in a form as shall be approved by the Administrative Agent.



" Attorney Costs " means and includes all reasonable fees, expenses and disbursements of any law firm or other external counsel.



" Attributable Debt " in respect of a sale and leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction, including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP.



" Bankruptcy Exceptions " has the meaning specified in Section 5.02(c) .



" Bankruptcy Law " means Title 11, U.S. Code or any similar Federal, state or foreign law for the relief of debtors.



" Beneficial Owner " has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular "person" (as that term is used in Section 13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial ownership of all securities that such "person" has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The terms " Beneficially Owns" and "Beneficially Owned" shall have a corresponding meaning.



" Board " means the Board of Governors of the Federal Reserve System.



" Board of Directors " means: (1) with respect to a corporation, the board of directors of the corporation or a committee thereof authorized to exercise the power of the board of directors of such corporation; (2) with respect to a partnership, the board of directors of the general partner of the partnership; and (3) with respect to any other Person, the board or committee of such Person serving a similar function.



" Board Resolution " means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Administrative Agent.



" Borrower " means NTK Holdings, Inc., a Delaware corporation.



" Borrowing " means the incurrence of the Initial Loans.



" Borrowing Base " means, as of any date, an amount equal to:



(1) 85% of the face amount of all accounts receivable owned by the Borrower and its Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date that were not more than 90 days past due; plus



(2) 65% of the book value of all inventory owned by the Borrower and its Restricted Subsidiaries as of the end of the most recent fiscal quarter preceding such date; all calculated on a consolidated basis and in accordance with GAAP.



" Borrowing Request " means a request by the Borrower in accordance with Section 2.02 , in a form reasonably satisfactory to the Administrative Agent.



" Bridge Loan Transactions " has the meaning specified in the preamble to this Agreement.



" Business Day " means any day other than a Saturday, Sunday or any other day on which banking institutions in the City of New York are required or authorized by law or other governmental action to be closed.



" Calculation Date " has the meaning specified in the definition of the term "Fixed Charge Coverage Ratio".



" Capital Lease Obligation " means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP.



" Capital Stock " means: (1) in the case of a corporation, corporate stock; (2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and (4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.



" Cash Equivalents " means: (1) United States dollars or, in the case of any Foreign Restricted Subsidiary, such local currencies held by it from time to time in the ordinary course of business; (2) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality of the United States, Canada or any member nation of the European Union having maturities of not more than 360 days from the date of acquisition; (3) certificates of deposit, time deposits and eurodollar time deposits with maturities of twelve months or less from the date of acquisition, bankers ? acceptances with maturities not exceeding six months and overnight bank deposits, in each case, with any domestic commercial bank having capital and surplus in excess of $500.0 million; (4) repurchase obligations for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above; (5) commercial paper having the rating of P-1 or better from Moody's or A-1 or better from S&P and in each case maturing within twelve months after the date of acquisition; (6) readily marketable direct obligations issued by any state of the United States or any political subdivision thereof having one of the two highest rating categories from either Moody's or S&P with maturities of twelve months or less from the date of acquisition; (7) instruments equivalent to those referred to in clauses (1) to (6) above denominated in euro or any other foreign currency comparable in credit quality and tenor to those referred to above and customarily used by corporations for cash management purposes in any jurisdiction outside the United States to the extent reasonably required in connection with any business conducted by any Restricted Subsidiary organized in such jurisdiction; and (8) investments in funds which invest substantially all of their assets in Cash Equivalents of the kinds described in clauses (1) through (7) of this definition.



" CERCLA " has the meaning specified in Section 5.14 .



" Change of Control " means the occurrence of any of the following: (1) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Borrower and its Restricted Subsidiaries, taken as a whole, to any "person" (as that term is used in Section 13(d)(3) of the Exchange Act) other than the Principals or Related Parties of the Principals; (2) the adoption of a plan relating to the liquidation or dissolution of the Borrower; (3) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than the Principals and their Related Parties, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the voting power of the Voting Stock of the Borrower or the direct parent company of the Borrower, as the case may be; (4) the first day on which a majority of the members of the Board of Directors of the direct parent company of the Borrower or the Borrower are not Continuing Directors; or (5) the direct parent company of the Borrower or the Borrower consolidates with, or merges with or into, any Person, or any Person consolidates with, or merges with or into, the direct parent company of the Borrower or the Borrower, in any such event pursuant to a transaction in which any of the outstanding Voting Stock of the direct parent company of the Borrower, the Borrower or such other Person is converted into or exchanged for cash, securities or other property, other than any such transaction where (A) the Voting Stock of the direct parent company of the Borrower or the Borrower outstanding immediately prior to such transaction is converted into or exchanged for Voting Stock (other than Disqualified Stock) of the surviving or transferee Person constituting a majority of the outstanding shares of such Voting Stock of such surviving or transferee Person (immediately after giving effect to such issuance) and (B) immediately after such transaction, no "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than the Principals and their Related Parties, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the voting power of the Voting Stock of the surviving or transferee person.



" Change of Control Offer " has the meaning specified in Section 2.11 .



" Change of Control Prepayment " has the meaning specified in Section 2.11 .



" Change of Control Prepayment Date " has the meaning specified in Section 2.11 .



" Closing Date " means May 10, 2006.



" Co-Documentation Agents " means Banc of America Bridge LLC and UBS Securities LLC, as Co-Documentation Agents under the Loan Documents.



" Code " means the United States Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to the Code are to the Code as in effect on the Closing Date and any subsequent provisions of the Code amendatory thereof, supplemental thereto or substituted therefor.



" Commission " means the Securities and Exchange Commission.



" Commitment " means, with respect to each Lender, the commitment of such Lender to make a Loan hereunder as set forth on Schedule 2.01 . The aggregate amount of the Lenders' Commitments is $205.0 million.



" Compensation Period " has the meaning specified in Section 2.09(c) .



" Consolidated Cash Flow " means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period and, without duplication, plus: (1) provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus (2) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether or not paid or accrued and whether or not capitalized (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net of the effect of all payments made or received pursuant to Hedging Obligations), to the extent that any such expense was deducted in computing such Consolidated Net Income; plus (3) depreciation, amortization (including amortization of the step-up in inventory valuation arising from purchase accounting and other intangibles) and other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income; plus (4) any management fees paid by the Borrower or any Restricted Subsidiary to Kelso & Company L.P. or Thomas H. Lee Partners, L.P., as the case may be, or their respective Affiliates, in such period pursuant to management agreements entered into in connection with the Original Transactions pursuant to the Stock Purchase Agreement, to the extent that any such management fees were deducted in computing such Consolidated Net Income; provided that the maximum aggregate amount of such management fees in any 12-month period payable to Thomas H. Lee Partners, L.P. or its Affiliates shall not exceed the amount described in the 2005 10-K; plus (5) any reasonable expenses, fees or charges related to the Original Transactions or any acquisition or Investment, in each case to the extent that any such expenses, fees or charges were deducted in computing such Consolidated Net Income; plus (6) other non-recurring cash charges not to exceed in the aggregate $3.0 million in any fiscal year; minus (7) non-cash items increasing such Consolidated Net Income for such period, excluding any items which represent the reversal of any ...