Exhibit 10.3

 

 

 

 
U.S. GUARANTY
 
Dated as of May 20, 2008
 
From
 
THE GUARANTORS NAMED HEREIN
 
and
 
THE ADDITIONAL GUARANTORS REFERRED TO HEREIN
 
as Guarantors
 
in favor of
 
THE SECURED PARTIES REFERRED TO IN
 
THE CREDIT AGREEMENT REFERRED TO HEREIN
 

T A B L E  O F  C O N T E N T S
 
Section                                                                                                                                Page
 
Section 1.   Guaranty; Limitation of Liability
1

 
Section 2.   Guaranty Absolute
2

 
Section 3.   Waivers and Acknowledgments
3

 
Section 4.   Subrogation
4

 
Section 5.   Payments Free and Clear of Taxes, Etc.
4

 
Section 6.   Representations and Warranties
4

 
Section 7.   Covenants
5

 
Section 8.   Amendments, Guaranty Supplements, Etc.
5

 
Section 9.   Notices, Etc.
5

 
Section 10.   No Waiver; Remedies
6

 
Section 11.   Right of Set-off
6

 
Section 12.   Indemnification
6

 
Section 13.   Subordination
7

 
Section 14.   Continuing Guaranty; Assignments under the Credit Agreement
7

 
Section 15.   Execution in Counterparts
8

 
Section 16.   Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.
8

 

 
Exhibit A - Guaranty Supplement
 

 
U.S. GUARANTY
 
U.S. GUARANTY dated as of May 20, 2008 made by Nortek, Inc. (the “Specified U.S.
Borrower”), the Persons listed on the signature pages hereof under the caption
“U.S. Subsidiary Guarantors” and the Additional Guarantors (as defined in
Section 8(b)) (the Specified U.S. Borrower, such Persons so listed and the
Additional Guarantors being, collectively, the “Guarantors” and, individually,
each a “Guarantor”) in favor of the Secured Parties (as defined in the Credit
Agreement referred to below).
 
 
PRELIMINARY STATEMENT.  Nortek, Inc. and the other Loan Parties party
thereto are parties to a Credit Agreement dated as of May 20, 2008 (as amended,
amended and restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”; the capitalized terms defined therein and not otherwise
defined herein being used herein as therein defined) with certain Lenders party
thereto, and Bank of America, N.A., as Administrative Agent for such
Lenders.  Each Guarantor may receive, directly or indirectly, a portion of the
proceeds of the Loans under the Credit Agreement and will derive substantial
direct and indirect benefits from the transactions contemplated by the Credit
Agreement.  It is a condition precedent to the making of Loans by Lenders and
the issuance of Letters of Credit by the L/C Issuers under the Credit Agreement,
the entry by the Hedge Banks into Secured Hedge Agreements and the entry by the
Cash Management Banks into Secured Cash Management Agreements from time to time,
that each Guarantor shall have executed and delivered this Guaranty.
 
NOW, THEREFORE, in consideration of the premises and in order to induce the
Lenders to make Loans and the L/C Issuers to issue Letters of Credit under the
Credit Agreement, the Hedge Banks to enter into Secured Hedge Agreements  and
the Cash Management Banks to enter into Secured Cash Management Agreements from
time to time, each Guarantor, jointly and severally with each other Guarantor,
hereby agrees as follows:
 
Section 1.   Guaranty; Limitation of Liability .  (a)  Each Guarantor hereby
absolutely, unconditionally and irrevocably guarantees the punctual payment when
due, whether at scheduled maturity or on any date of a required prepayment or by
acceleration, demand or otherwise, of all Obligations of each other Loan Party
now or hereafter existing under or in respect of the Loan Documents (including,
without limitation, any extensions, modifications, substitutions, amendments or
renewals of any or all of the foregoing Obligations), whether direct or
indirect, absolute or contingent, and whether for principal, interest, premiums,
fees, indemnities, contract causes of action, costs, expenses or otherwise (such
Obligations being the “Guaranteed Obligations”), and agrees to pay any and all
reasonable expenses (including, without limitation, reasonable fees and expenses
of counsel) incurred by the Administrative Agent or any other Secured Party in
enforcing any rights under this Guaranty or any other Loan Document.  Without
limiting the generality of the foregoing, each Guarantor’s liability shall
extend to all amounts that constitute part of the Guaranteed Obligations and
would be owed by any other Loan Party to any Secured Party under or in respect
of the Loan Documents but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such other Loan Party.
 
(b) Each Guarantor, and by its acceptance of this Guaranty, the Administrative
Agent and each other Secured Party, hereby confirms that it is the intention of
all such Persons that this Guaranty and the Obligations of each Guarantor
hereunder not constitute a fraudulent transfer or conveyance for purposes of
Debtor Relief Laws, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar foreign, federal or state law to the
extent applicable to this Guaranty and the Obligations of each Guarantor
hereunder.  To effectuate the foregoing intention, the Administrative Agent, the
other Secured Parties and the Guarantors hereby irrevocably agree that the
Obligations of each Guarantor under this Guaranty at any time shall be limited
to the maximum amount as will result in the Obligations of such Guarantor under
this Guaranty not constituting a fraudulent transfer or conveyance.
(c) Each Guarantor hereby unconditionally and irrevocably agrees that in the
event any payment shall be required to be made to any Secured Party under this
Guaranty or any other guaranty, such Guarantor will contribute, to the maximum
extent permitted by law, such amounts to each other Guarantor and each other
guarantor so as to maximize the aggregate amount paid to the Secured Parties
under or in respect of the Loan Documents.
 
Section 2.   Guaranty Absolute.  Each Guarantor guarantees that the Guaranteed
Obligations will be paid strictly in accordance with the terms of the Loan
Documents, regardless of any law, regulation or order now or hereafter in effect
in any jurisdiction affecting any of such terms or the rights of any Secured
Party with respect thereto.  The Obligations of each Guarantor under or in
respect of this Guaranty are independent of the Guaranteed Obligations or any
other Obligations of any other Loan Party under or in respect of the Loan
Documents, and a separate action or actions may be brought and prosecuted
against each Guarantor to enforce this Guaranty, irrespective of whether any
action is brought against the Borrowers or any other Loan Party or whether any
Borrower or any other Loan Party is joined in any such action or actions.  The
liability of each Guarantor under this Guaranty shall be irrevocable, absolute
and unconditional irrespective of, and each Guarantor hereby irrevocably waives
any defenses it may now have or hereafter acquire in any way relating to, any or
all of the following:
 
(a) any lack of validity or enforceability of any Loan Document or any agreement
or instrument relating thereto;
 
(b) any change in the time, manner or place of payment of, or in any other term
of, all or any of the Guaranteed Obligations or any other Obligations of any
other Loan Party under or in respect of the Loan Documents, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to any Loan Party or any of
its Subsidiaries or otherwise;
 
(c) any taking, exchange, release or non-perfection of any Collateral or any
other collateral, or any taking, release or amendment or waiver of, or consent
to departure from, any other guaranty, for all or any of the Guaranteed
Obligations;
 
(d) any manner of application of Collateral or any other collateral, or proceeds
thereof, to all or any of the Guaranteed Obligations, or any manner of sale or
other disposition of any Collateral or any other collateral for all or any of
the Guaranteed Obligations or any other Obligations of any Loan Party under the
Loan Documents or any other assets of any Loan Party or any of its Subsidiaries;
 
(e) any change, restructuring or termination of the corporate structure or
existence of any Loan Party or any of its Subsidiaries;
 
(f) any failure of any Secured Party to disclose to any Loan Party any
information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party now or
hereafter known to such Secured Party (each Guarantor waiving any duty on the
part of the Secured Parties to disclose such information);
 
(g) the failure of any other Person to execute or deliver this Guaranty, any
Guaranty Supplement (as hereinafter defined) or any other guaranty or agreement
or the release or reduction of liability of any Guarantor or other guarantor or
surety with respect to the Guaranteed Obligations; or
 
(h) any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by any
Secured Party that might otherwise constitute a defense available to, or a
discharge of, any Loan Party or any other guarantor or surety.
 
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of any Borrower or any other Loan Party
or otherwise, all as though such payment had not been made.
 
Section 3.   Waivers and Acknowledgments.  (a)  Each Guarantor hereby
unconditionally and irrevocably waives, to the fullest extent permitted by law,
promptness, diligence, notice of acceptance, presentment, demand for
performance, notice of nonperformance, default, acceleration, protest or
dishonor and any other notice with respect to any of the Guaranteed Obligations
and this Guaranty and any requirement that any Secured Party protect, secure,
perfect or insure any Lien or any property subject thereto or exhaust any right
or take any action against any Loan Party or any other Person or any Collateral.
 
(b) Each Guarantor hereby unconditionally and irrevocably waives, to the fullest
extent permitted by law, any right to revoke this Guaranty and acknowledges that
this Guaranty is continuing in nature and applies to all Guaranteed Obligations,
whether existing now or in the future.
 
(c) Each Guarantor hereby unconditionally and irrevocably waives, to the fullest
extent permitted by law, (i) any defense arising by reason of any claim or
defense based upon an election of remedies by any Secured Party that in any
manner impairs, reduces, releases or otherwise adversely affects the
subrogation, reimbursement, exoneration, contribution or indemnification rights
of such Guarantor or other rights of such Guarantor to proceed against any of
the other Loan Parties, any other guarantor or any other Person or any
Collateral and (ii) any defense based on any right of set-off or counterclaim
against or in respect of the Obligations of such Guarantor hereunder.
 
(d) Each Guarantor acknowledges that the Administrative Agent may, in accordance
with the terms of the Loan Documents, without notice to or demand upon such
Guarantor and without affecting the liability of such Guarantor under this
Guaranty, foreclose under any mortgage by nonjudicial sale, and each Guarantor
hereby waives, to the fullest extent permitted by law, any defense to the
recovery by the Administrative Agent and the other Secured Parties against such
Guarantor of any deficiency after such nonjudicial sale and any defense or
benefits that may be afforded by applicable Law.
 
(e) Each Guarantor hereby unconditionally and irrevocably waives, to the fullest
extent permitted by law, any duty on the part of any Secured Party to disclose
to such Guarantor any matter, fact or thing relating to the business, condition
(financial or otherwise), operations, performance, properties or prospects of
any other Loan Party or any of its Subsidiaries now or hereafter known by such
Secured Party.
 
(f) Each Guarantor acknowledges that it will receive substantial direct and
indirect benefits from the financing arrangements contemplated by the Loan
Documents and that the waivers set forth in Section 2 and this Section 3 are
knowingly made in contemplation of such benefits.
 
Section 4.   Subrogation.  Each Guarantor hereby unconditionally and irrevocably
agrees not to exercise any rights that it may now have or hereafter acquire
against the Borrowers, any other Loan Party or any other insider guarantor that
arise from the existence, payment, performance or enforcement of such
Guarantor’s Obligations under or in respect of this Guaranty or any other Loan
Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of any Secured Party against the Borrowers,
any other Loan Party or any other insider guarantor or any Collateral, whether
or not such claim, remedy or right arises in equity or under contract, statute
or common law, including, without limitation, the right to take or receive from
the Borrowers, any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been paid in full in cash, all Letters of Credit, all
Secured Hedge Agreements and all Secured Cash Management Agreements shall have
expired or been terminated and the Commitments shall have expired or been
terminated.  If any amount shall be paid to any Guarantor in violation of the
immediately preceding sentence at any time prior to the termination of the
Aggregate Commitments and payment in full of all Obligations (other than (A)
contingent indemnification obligations and (B) obligations and liabilities under
Secured Cash Management Agreements and Secured Hedge Agreements as to which
arrangements reasonably satisfactory to the applicable Cash Management Bank or
Hedge Bank shall have been made) and the expiration or termination of all
Letters of Credit (other than Letters of Credit as to which other arrangements
reasonably satisfactory to the Administrative Agent and the applicable L/C
Issuer shall have been made, such amount shall be received and held in trust for
the benefit of the Secured Parties, shall be segregated from other property and
funds of such Guarantor and shall forthwith be paid or delivered to the
Administrative Agent in the same form as so received (with any necessary
endorsement or assignment) to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Guaranty, whether matured
or unmatured, in accordance with the terms of the Loan Documents, or to be held
as Collateral for any Guaranteed Obligations or other amounts payable under this
Guaranty thereafter arising.  If (i) any Guarantor shall make payment to any
Secured Party of all or any part of the Guaranteed Obligations, (ii) the
Aggregate Commitments shall have been terminated and all Obligations shall have
been paid in full (other than (A) contingent indemnification obligations and (B)
obligations and liabilities under Secured Cash Management Agreements and Secured
Hedge Agreements as to which arrangements reasonably satisfactory to the
applicable Cash Management Bank or Hedge Bank shall have been made) and (iii)
all Letters of Credit shall have terminated or expired (other than Letters of
Credit as to which other arrangements satisfactory to the Administrative Agent
and the applicable L/C Issuer shall have been made, the Secured Parties will, at
such Guarantor’s request and expense, execute and deliver to such Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to such Guarantor of an
interest in the Guaranteed Obligations resulting from such payment made by such
Guarantor pursuant to this Guaranty.
 
Section 5.   Payments Free and Clear of Taxes, Etc.   Any and all payments made
by any Guarantor under or in respect of this Guaranty or any other Loan Document
shall be made in accordance with Sections 2.12 and 3.01 of the Credit Agreement,
and such Guarantor shall make such payments free and clear of and without
deduction for any and all present or future Taxes and shall indemnify each
Secured Party for Indemnified Taxes and Other Taxes, in each case on the same
terms and to the same extent that payments by the Borrowers are required to be
made free and clear of such Taxes or the Borrowers are required to indemnify
such Indemnified Taxes and Other Taxes, pursuant to the terms of the Credit
Agreement.
 
Section 6.   Representations and Warranties.  Each Guarantor hereby makes each
representation and warranty made in the Loan Documents by the Borrowers with
respect to such Guarantor and each Guarantor hereby further represents and
warrants as follows:
 
(a) There are no conditions precedent to the effectiveness of this Guaranty that
have not been satisfied or waived.
 
(b) Each Guarantor has, independently and without reliance upon any Secured
Party and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Guaranty and each
other Loan Document to which it is or is to be a party, and such Guarantor has
established adequate means of obtaining from each other Loan Party on a
continuing basis information pertaining to, and is now and on a continuing basis
will be completely familiar with, the business, condition (financial or
otherwise), operations, performance, properties and prospects of such other Loan
Party.
 
Section 7.   Covenants.  Each Guarantor covenants and agrees that, so long as
any part of the Guaranteed Obligations shall remain unpaid, any Letter of Credit
shall be outstanding, any Lender shall have any Commitment, any Secured Hedge
Agreement or any Secured Cash Management Agreement shall be in effect, such
Guarantor will perform and observe, and cause each of its Subsidiaries to
perform and observe, all of the terms, covenants and agreements set forth in the
Loan Documents on its or their part to be performed or observed or that the
Borrowers have agreed to cause such Guarantor or such Subsidiaries to perform or
observe.
 
Section 8.   Amendments, Guaranty Supplements, Etc.  (a)  No amendment or waiver
of any provision of this Guaranty and no consent to any departure by any
Guarantor therefrom shall in any event be effective unless the same shall be in
writing executed in accordance with and subject to the terms and conditions of
Section 11.01 of the Credit Agreement, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
 
(b) Upon the execution and delivery by any Person of a guaranty supplement in
substantially the form of Exhibit A hereto (each, a “Guaranty Supplement”),
(i) such Person shall be referred to as an “Additional Guarantor” and shall
become and be a Guarantor hereunder, and each reference in this Guaranty to a
“Guarantor” shall also mean and be a reference to such Additional Guarantor, and
each reference in any other Loan Document to a “U.S. Guarantor” or a “Guarantor”
shall also mean and be a reference to such Additional Guarantor, and (ii) each
reference herein to “this Guaranty”, “hereunder”, “hereof” or words of like
import referring to this Guaranty, and each reference in any other Loan Document
to the “U.S. Guaranty”, “thereunder”, “thereof” or words of like import
referring to this Guaranty, shall mean and be a reference to this Guaranty as
supplemented by such Guaranty Supplement.
 
Section 9.   Notices, Etc.  All notices and other communications provided for
hereunder shall be in writing (including telegraphic, telecopy or telex
communication) and mailed, telegraphed, telecopied, telexed or delivered to it,
if to any Guarantor, addressed to it in care of the Borrowers at the Borrowers’
addresses specified in Section 11.02 of the Credit Agreement, if to any Agent or
any Lender, at its address specified in Section 11.02 of the Credit Agreement,
if to any Hedge Bank, at its address specified in the Secured Hedge Agreement to
which it is a party, if to any Cash Management Bank, at its address specified in
the Secured Cash Management Agreement to which it is a party, or, as to any
party, at such other address as shall be designated by such party in a written
notice to each other party.  All such notices and other communications shall,
when mailed, telegraphed, telecopied or telexed, be effective when deposited in
the mails, delivered to the telegraph company, transmitted by telecopier or
confirmed by telex answerback, respectively.  Delivery by telecopier, or in
“pdf” or similar format by electronic mail of an executed counterpart of a
signature page to any amendment or waiver of any provision of this Guaranty or
of any Guaranty Supplement to be executed and delivered hereunder shall be
effective as delivery of an original executed counterpart thereof.
 
Section 10.   No Waiver; Remedies.  No failure on the part of any Secured Party
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.  The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
 
Section 11.   Right of Set-off.  Upon the occurrence and during the continuance
of any Event of Default, each Lender and each L/C Issuer and each of their
respective Affiliates is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations at any time owing by such Lender, such L/C Issuer or such
Affiliate to or for the credit or the account of any Guarantor against any and
all of the Obligations of such Guarantor now or hereafter existing under the
Loan Documents, irrespective of whether such Lender, such L/C Issuer or such
Affiliate shall have made any demand under this Guaranty or any other Loan
Document and although such Obligations may be unmatured.  Each Agent and each
Lender agrees promptly to notify such Guarantor after any such set-off and
application; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application.  The rights of each Agent
and each Lender and their respective Affiliates under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Agent, such Lender and their respective Affiliates
may have.
 
Section 12.   Indemnification.  (a)  Without limitation on any other Obligations
of any Guarantor or remedies of the Secured Parties under this Guaranty, each
Guarantor shall, to the fullest extent permitted by law, jointly and severally
indemnify and hold harmless each Secured Party and their respective Related
Parties (each, an “Indemnified Party”) from any and all claims, damages, losses,
liabilities and reasonably related expenses (including, without limitation,
reasonable fees and expenses of counsel) that may be incurred by or asserted
against any Indemnified Party in connection with or as a result of any failure
of any Guaranteed Obligations to be the legal, valid and binding obligations of
any Loan Party enforceable against such Loan Party in accordance with their
terms; provided that such indemnity shall not, as to any Indemnified Party, be
available to the extent that such losses, claims, damages, liabilities or
related expenses (x) are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence or
willful misconduct of such Indemnified Party or (y) result from a claim brought
by such Guarantor against an Indemnified Party for breach in bad faith of such
Indemnified Party’s obligations hereunder or under any Loan Document, if such
Guarantor has obtained a final and nonappealable judgment in its favor on such
claim as determined by a court of competent jurisdiction.
 
(b) Each Guarantor hereby also agrees that none of the Indemnified Parties shall
have any liability (whether direct or indirect, in contract, tort or otherwise)
to any of the Guarantors or any of their respective Related Parties, and each
Guarantor hereby agrees not to assert any claim against any Indemnified Party on
any theory of liability, for special, indirect, consequential or punitive
damages arising out of or otherwise relating to the Facilities, the actual or
proposed use of the proceeds of the Loans or the Letters of Credit, the Loan
Documents or any of the transactions contemplated by the Loan Documents.
 
(c) Without prejudice to the survival of any of the other agreements of any
Guarantor under this Guaranty or any of the other Loan Documents, the agreements
and obligations of each Guarantor contained in Section 1(a) (with respect to
enforcement expenses), the last sentence of Section 2, Section 5 and this
Section 12 shall survive the payment in full of the Guaranteed Obligations and
all of the other amounts payable under this Guaranty.
 
Section 13.   Subordination.  Each Guarantor hereby subordinates any and all
debts, liabilities and other Obligations owed to such Guarantor by each other
Loan Party (the “Subordinated Obligations”) to the Guaranteed Obligations to the
extent and in the manner hereinafter set forth in this Section 13:
 
(a) Prohibited Payments, Etc.  Except during the continuance of an Event of
Default, each Guarantor may receive regularly scheduled payments from any other
Loan Party on account of the Subordinated Obligations.  After the occurrence and
during the continuance of any Event of Default, however, unless the
Administrative Agent otherwise agrees, no Guarantor shall demand, accept or take
any action to collect any payment on account of the Subordinated Obligations.
 
(b) Prior Payment of Guaranteed Obligations.  In any proceeding under any Debtor
Relief Law relating to any other Loan Party, each Guarantor agrees that the
Secured Parties shall be entitled to receive payment in full in cash of all
Guaranteed Obligations (including all interest and expenses accruing after the
commencement of a proceeding under any Debtor Relief Law, whether or not
constituting an allowed claim in such proceeding (“Post Petition Interest”))
before such Guarantor receives payment of any Subordinated Obligations.
 
(c) Turn-Over.  After the occurrence and during the continuance of any Event of
Default, each Guarantor shall, if the Administrative Agent so requests, collect,
enforce and receive payments on account of the Subordinated Obligations as
trustee for the Secured Parties and deliver such payments to the Administrative
Agent on account of the Guaranteed Obligations (including all Post Petition
Interest), together with any necessary endorsements or other instruments of
transfer, but without reducing or affecting in any manner the liability of such
Guarantor under the other provisions of this Guaranty.
 
(d) Administrative Agent Authorization.  After the occurrence and during the
continuance of any Event of Default, the Administrative Agent is authorized and
empowered (but without any obligation to so do), in its discretion, (i) in the
name of each Guarantor, to collect and enforce, and to submit claims in respect
of, Subordinated Obligations and to apply any amounts received thereon to the
Guaranteed Obligations (including any and all Post Petition Interest), and (ii)
to require each Guarantor (A) to collect and enforce, and to submit claims in
respect of, Subordinated Obligations and (B) to pay any amounts received on such
obligations to the Administrative Agent for application to the Guaranteed
Obligations (including any and all Post Petition Interest).
 
Section 14.   Continuing Guaranty; Assignments under the Credit Agreement.  This
Guaranty is a continuing guaranty and shall (a) remain in full force and effect
until the termination of the Aggregate Commitments and payment in full of all
Obligations (other than (i) contingent indemnification obligations and (ii)
obligations and liabilities under Secured Cash Management Agreements and Secured
Hedge Agreements as to which arrangements satisfactory to the applicable Cash
Management Bank or Hedge Bank shall have been made) and the expiration or
termination of all Letters of Credit (other than Letters of Credit as to which
other arrangements satisfactory to the Administrative Agent and the applicable
L/C Issuer shall have been made, (b) be binding upon the Guarantor, its
successors and assigns and (c) inure to the benefit of and be enforceable by the
Secured Parties and their successors, transferees and assigns.  Without limiting
the generality of clause (c) of the immediately preceding sentence, any Secured
Party may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement (including, without limitation, all or
any portion of its Commitments, the Loans owing to it and the Note or Notes held
by it) to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted to such Secured Party herein or
otherwise, in each case as and to the extent provided in Section 11.06 of the
Credit Agreement.  No Guarantor shall have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Secured Parties.
 
Section 15.   Execution in Counterparts.  This Guaranty and each amendment,
waiver and consent with respect hereto may be executed in any number of
counterparts and by different parties thereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.  Delivery of an executed
counterpart of a signature page to this Guaranty by telecopier or in “pdf” or
similar format by electronic mail shall be effective as delivery of an original
executed counterpart of this Guaranty.
 
Section 16.   Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.  (a)  This
Guaranty shall be governed by, and construed in accordance with, the laws of the
State of New York.
 
(b) Each Guarantor hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any New York State court
or federal court of the United States of America sitting in New York City, and
any appellate court from any thereof, in any action or proceeding arising out of
or relating to this Guaranty or any of the other Loan Documents to which it is
or is to be a party, or for recognition or enforcement of any judgment, and each
Guarantor hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State court or, to the extent permitted by law, in such federal
court.  Each Guarantor agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.  Nothing in this
Guaranty or any other Loan Document shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Guaranty or
any other Loan Document in the courts of any jurisdiction.
 
(c) Each Guarantor irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection that it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Guaranty or any of the other Loan Documents to which it is or
is to be a party in any New York State or federal court.  Each Guarantor hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such suit, action or proceeding in any
such court.
 
(d) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE CREDIT
EXTENSIONS OR THE ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

 
[REMAINDER OF PAGE INTENTIONALLY BLANK]
 

 
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly executed
and delivered by its officer thereunto duly authorized as of the date first
above written.
 

 
ADVANCED BRIDGING TECHNOLOGIES, INC.

 
AIGIS MECHTRONICS, INC.

 
ALLSTAR PRO, LLC

 
AUBREY MANUFACTURING, INC.

 
BROAN-NUTONE LLC

 
CES GROUP, INC.

 
CLEANPAK INTERNATIONAL, INC.

 
ELAN HOME SYSTEMS, L.L.C.

 
GEFEN, INC.

 
GOVERNAIR CORPORATION

 
GTO, INC.

 
HC INSTALLATIONS, INC.

 
HOMELOGIC LLC

 
HUNTAIR, INC.

 
INTERNATIONAL ELECTRONICS, INC.

 
J.A.R. INDUSTRIES, INC.

 
JENSEN INDUSTRIES, INC.

 
LINEAR H.K. LLC

 
LINEAR LLC

 
LITETOUCH, INC.

 
MAGENTA RESEARCH LTD.

 
MAMMOTH CHINA LTD.

 
MAMMOTH, INC.

 
NILES AUDIO CORPORATION

 
NORDYNE CHINA LLC

 
NORDYNE INC.

 
NORDYNE INTERNATIONAL, INC.

 
NORTEK, INC.

 
NORTEK INTERNATIONAL, INC.

 
NUTONE INC.

 
OMNIMOUNT SYSTEMS, INC.

 
OPERATOR SPECIALTY COMPANY, INC.

 
PACIFIC ZEPHYR RANGE HOOD, INC.

 
PANAMAX INC.

 
RANGAIRE GP, INC.

 
RANGAIRE LP

 
RANGAIRE LP, INC.

 
SECURE WIRELESS, INC.

 
SPEAKERCRAFT, INC.

 
SUNFIRE CORPORATION

 
TEMTROL, INC.

 
WDS LLC

 
WEBCO, INC.

 
XANTECH CORPORATION

 
ZEPHYR CORPORATION

 
By_______________________________________

 
Title:

 
Exhibit A
 
To The
 
U.S. Guaranty
 
FORM OF U.S. GUARANTY SUPPLEMENT
 
_________ __, ____
 
Bank of America, N.A., as Administrative Agent
 
[Address of Administrative Agent]
 
Attention:  _________
 
Credit Agreement dated as of May 20, 2008 among
 Nortek, Inc., a Delaware corporation (the “Specified U.S. Borrower”), the other
Loan Parties thereto, the Lenders
party to the Credit Agreement,
and Bank of America, N.A., as Administrative Agent for the Lenders
 
Ladies and Gentlemen:
 
Reference is made to the above-captioned Credit Agreement and to the U.S.
Guaranty referred to therein (such U.S. Guaranty, as in effect on the date
hereof and as it may hereafter be amended, supplemented or otherwise modified
from time to time, together with this Guaranty Supplement, being the “U.S.
Guaranty”).  The capitalized terms defined in the U.S. Guaranty or in the Credit
Agreement and not otherwise defined herein are used herein as therein defined.
 
Section 1. Guaranty; Limitation of Liability.  (a)  The undersigned hereby
absolutely, unconditionally and irrevocably guarantees the punctual payment when
due, whether at scheduled maturity or on any date of a required prepayment or by
acceleration, demand or otherwise, of all Obligations of each other Loan Party
now or hereafter existing under or in respect of the Loan Documents (including,
without limitation, any extensions, modifications, substitutions, amendments or
renewals of any or all of the foregoing Obligations), whether direct or
indirect, absolute or contingent, and whether for principal, interest, premium,
fees, indemnities, contract causes of action, costs, expenses or otherwise (such
Obligations being the “Guaranteed Obligations”), and agrees to pay any and all
reasonable expenses (including, without limitation, reasonable fees and expenses
of counsel) incurred by the Administrative Agent or any other Secured Party in
enforcing any rights under this Guaranty Supplement, the U.S. Guaranty, any
Secured Hedge Agreement or any Secured Cash Management Agreement or any other
Loan Document.  Without limiting the generality of the foregoing, the
undersigned’s liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by any other Loan Party to any Secured
Party under or in respect of the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Loan Party.
 
(b) The undersigned, and by its acceptance of this Guaranty Supplement, the
Administrative Agent and each other Secured Party, hereby confirms that it is
the intention of all such Persons that this Guaranty Supplement, the U.S.
Guaranty and the Obligations of the undersigned hereunder and thereunder not
constitute a fraudulent transfer or conveyance for purposes of Debtor Relief
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar foreign, federal or state law to the extent applicable to this
Guaranty Supplement, the U.S. Guaranty and the Obligations of the undersigned
hereunder and thereunder.  To effectuate the foregoing intention, the
Administrative Agent, the other Secured Parties and the undersigned hereby
irrevocably agree that the Obligations of the undersigned under this Guaranty
Supplement and the U.S. Guaranty at any time shall be limited to the maximum
amount as will result in the Obligations of the undersigned under this Guaranty
Supplement and the U.S. Guaranty not constituting a fraudulent transfer or
conveyance.
 
(c) The undersigned hereby unconditionally and irrevocably agrees that in the
event any payment shall be required to be made to any Secured Party under this
Guaranty Supplement, the U.S. Guaranty or any other guaranty, the undersigned
will contribute, to the maximum extent permitted by applicable law, such amounts
to each other Guarantor and each other guarantor so as to maximize the aggregate
amount paid to the Secured Parties under or in respect of the Loan Documents.
 
Section 2. Obligations Under the Guaranty.  The undersigned hereby agrees, as of
the date first above written, to be bound as a Guarantor by all of the terms and
conditions of the U.S. Guaranty to the same extent as each of the other
Guarantors thereunder.  The undersigned further agrees, as of the date first
above written, that each reference in the Subsidiary  Guaranty to an “Additional
Guarantor” or a “Guarantor” shall also mean and be a reference to the
undersigned, and each reference in any other Loan Document to a “U.S.
Guarantor”, a “Guarantor” or a “Loan Party” shall also mean and be a reference
to the undersigned.
 
Section 3. Representations and Warranties.  The undersigned hereby makes each
representation and warranty set forth in Section 6 of the U.S. Guaranty to the
same extent as each other Guarantor.
 
Section 4. Delivery by Telecopier.  Delivery of an executed counterpart of a
signature page to this Guaranty Supplement by telecopier or in “pdf” or similar
format by electronic mail shall be effective as delivery of an original executed
counterpart of this Guaranty Supplement.
 
Section 5. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.  (a)  This
Guaranty Supplement shall be governed by, and construed in accordance with, the
laws of the State of New York.
 
(b) The undersigned hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of any New York State court
or any federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Guaranty Supplement, the U.S. Guaranty or any of the
other Loan Documents to which it is or is to be a party, or for recognition or
enforcement of any judgment, and the undersigned hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in any such New York State court or, to
the extent permitted by law, in such federal court.  The undersigned agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.  Nothing in this Guaranty Supplement or the U.S. Guaranty or
any other Loan Document shall affect any right that any party may otherwise have
to bring any action or proceeding relating to this Guaranty Supplement, the U.S.
Guaranty or any of the other Loan Documents to which it is or is to be a party
in the courts of any other jurisdiction.
 
(c) The undersigned irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Guaranty Supplement, the U.S. Guaranty or any of the
other Loan Documents to which it is or is to be a party in any New York State or
federal court.  The undersigned hereby irrevocably waives, to the fullest extent
permitted by law, the defense of an inconvenient forum to the maintenance of
such suit, action or proceeding in any such court.
 
(d) THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE CREDIT
EXTENSIONS OR THE ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.
 
 
Very truly yours,

 
[NAME OF ADDITIONAL GUARANTOR]

 

 
By _____________________________

 
Title: