UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

In the matter of

Nortek, Inc., a corporation.

File No. 981-0111

AGREEMENT TO HOLD SEPARATE

This Agreement to Hold Separate is by and between Nortek, Inc. ("Nortek"), a corporation organized and existing under the laws of the State of Delaware, M & S Systems LP ("M & S"), a limited partnership organized and existing under the laws of the State of Delaware and a wholly-owned subsidiary of Nortek, and the Federal Trade Commission (the "Commission"), an independent agency of the United States Government, established under the Federal Trade Commission Act of 1914, 15 U.S.C. 41, et seq.

PREMISES

WHEREAS, Nortek, through its wholly-owned subsidiary NTK Sub, Inc., has proposed to acquire all the outstanding shares of the capital stock of NuTone Inc. ("Proposed Acquisition"); and

WHEREAS, the Commission is now investigating the Proposed Acquisition to determine if it would violate any of the statutes the Commission enforces; and

WHEREAS, Nortek has entered into an Agreement Containing Consent Order ("Consent Agreement"), which requires, among other things, Nortek to divest certain assets of M & S, as defined therein; and

WHEREAS, if the Commission accepts the Consent Agreement, the Commission will place it on the public record for a period of at least sixty (60) days and subsequently may either withdraw such acceptance or issue and serve its Complaint and decision in disposition of the proceeding pursuant to the provisions of Section 2.34 of the Commission’s Rules; and

WHEREAS, the Commission is concerned that if an understanding is not reached preserving the status of M & S during the period prior to the final issuance of the Consent Agreement by the Commission (after the 60-day public notice period), there may be interim competitive harm and divestiture or other relief resulting from a proceeding challenging the legality of the Proposed Acquisition might not be possible, or might be less than an effective remedy; and

WHEREAS, Nortek and M & S entering into this Agreement to Hold Separate shall in no way be construed as an admission by Nortek that the Proposed Acquisition constitutes a violation of any statute; and

WHEREAS, Nortek understands that no act or transaction contemplated by this Agreement to Hold Separate shall be deemed immune or exempt from the provisions of the antitrust laws or the Federal Trade Commission Act by reason of anything contained in this Agreement to Hold Separate.

NOW, THEREFORE, upon the understanding that the Commission has not yet determined whether it will challenge the Proposed Acquisition, and in consideration of the Commission’s agreement that, at the time it accepts the Consent Agreement for public comment, it will grant early termination of the Hart-Scott-Rodino waiting period, Nortek and M & S agree as follows:

1. Nortek agrees to execute and be bound by the terms of the order contained in the Consent Agreement, as if it were final, from the date Nortek signs the Consent Agreement.

2. The terms capitalized herein shall have the same definitions as in the Consent Agreement.

3. Nortek agrees that from the date the Proposed Acquisition is consummated until the earlier of the dates listed in subparagraphs 3.a. - 3.b., it will comply with the provisions of Paragraph 4. of this Agreement to Hold Separate:

a. ten (10) business days after the Commission withdraws its acceptance of the Consent Order pursuant to the provisions of Section 2.34 of the Commission’s rules; or

b. the day after the divestiture required by the Consent Order has been completed.

4. To ensure the complete independence and viability of M & S and to assure that no competitive information is exchanged between the M & S and Nortek, Nortek shall hold M & S separate and apart on the following terms and conditions:

a. Nortek will cause to be appointed, within three (3) days of the date the Proposed Acquisition is consummated, Richard Denman to manage and maintain M & S who will make no changes to M & S other than changes made in the ordinary course of business. This individual ("the Manager") shall manage M & S independently of the management of Nortek’s other businesses. The Manager shall not be involved in any way in the operations or management of any other Nortek business.

b. The Manager shall have exclusive control over M & S, with responsibility for the management of M & S and for maintaining the independence of M & S.

c. Nortek shall not exercise direction or control over, or influence, directly or indirectly, the Manager relating to the operation of M & S; provided, however, that Nortek may exercise only such direction and control over the Manager and M & S as is necessary to assure compliance with this Agreement to Hold Separate and with all applicable laws.

d. Nortek and M & S shall maintain the marketability, viability, and competitiveness of M & S and shall not sell, transfer, encumber it (other than in the normal course of business or to assure compliance with the Consent Agreement), or otherwise impair its marketability, viability or competitiveness.

e. Except as required by law, and except to the extent that necessary information is exchanged in the course of evaluating the Proposed Acquisition, defending investigations or litigation, negotiating and executing agreements to divest the Assets To Be Divested, complying with this Hold Separate Agreement or the consent order, or as necessary to comply with its reporting requirements as a public company, Nortek shall not receive or have access to, or the use of, non-public business information, or any material confidential information about M & S or the activities of the Manager or support service employees involved in the operation of M & S, not in the public domain. In addition, Nortek may receive aggregate financial information relating to M & S, but only to the extent necessary to allow Nortek to prepare federal and state consolidated financial reports or tax returns and to comply with its reporting requirements as a public company. Such information that is obtained pursuant to this subparagraph shall be used only for the purposes set forth in this subparagraph.

f. Nortek shall circulate to all its employees involved with M & S, or any line of products that M & S manufactures and sells, and appropriately display, a copy of this Agreement to Hold Separate and the Consent Agreement.

g. If the Manager ceases to act or fails to act diligently, a substitute Manager shall be appointed subject to the Commission’s approval.

h. The Manager shall have access to and be informed about all companies who inquire about or seek or propose to buy any of the Assets To Be Divested. M & S may require the Manager to sign a confidentiality agreement prohibiting the disclosure of any material confidential information gained as a result of his or her role as a Manager to anyone other than the Commission.

i. The Manager shall report in writing to the Commission every thirty (30) days concerning his or her efforts to accomplish the purposes of this Agreement to Hold Separate.

5. Nortek waives all rights to contest the validity of this Agreement to Hold Separate.

6. For the purpose of determining or securing compliance with this Agreement to Hold Separate, subject to any legally recognized privilege, and upon written request, and on reasonable notice, to Nortek made to its principal office, Nortek and M & S shall permit any duly authorized representative or representatives of the Commission:

a. Access during the office hours of Nortek and M & S, and in the presence of counsel, to inspect any facilities and to inspect and copy all books, ledgers, accounts, correspondence, memoranda, and other records and documents in the possession or under the control of Nortek or M & S relating to compliance with this Agreement to Hold Separate; and

b. Upon five (5) days’ notice to Nortek and M & S, without restraint or interference from it, to interview officers, directors, or employees of Nortek or M & S, who may have counsel present, regarding any such matters.

7. This Agreement to Hold Separate shall not be binding until accepted by the Commission.

Dated:

FEDERAL TRADE COMMISSION

NORTEK, INC.
By: ___________________
Debra A. Valentine
General Counsel

By: ___________________
Richard Bready
Chairman and Chief Executive Officer
Nortek, Inc.

M & S SYSTEMS LP

By: ___________________
Richard Denman
President
M & S Systems LP

By: ___________________
Kevin J. Arquit, Esq.
Rogers & Wells
Counsel for Nortek, Inc.
Counsel for M & S Systems LP