Exhibit 10.2

 

INCOME TAX ALLOCATION AGREEMENT

 

THIS INCOME TAX ALLOCATION AGREEMENT (this “Agreement”) dated as of May 26, 2006
is made and entered into by Walter Industries, Inc., a Delaware corporation
(“Walter”) and the Walter Affiliates (as defined below), and Mueller Water
Products, Inc., a Delaware corporation (“Mueller”) and the Mueller Affiliates
(as defined below).

 

RECITALS

 

WHEREAS, Walter is the common parent corporation of an “affiliated group” of
corporations within the meaning of Section 1504(a) of the Internal Revenue Code
of 1986, as amended (the “Code”) and of certain combined groups as defined under
similar laws of other jurisdictions and Mueller and the Mueller Affiliates are,
as of the date hereof, and have been members of such groups;

 

WHEREAS, the groups of which Walter is the common parent and Mueller and the
Mueller Affiliates are members file or intend to file Consolidated Returns and
Combined Returns (each as defined below);

 

WHEREAS, Mueller intends to effect the initial public offering by Mueller of
Mueller common stock that will reduce Walter’s ownership of Mueller, on a fully
diluted basis, to less than eighty percent (80%) of the value of Mueller’s
common stock (the “IPO”);

 

WHEREAS, as a result of the reduction in Walter’s ownership, Mueller and the
Mueller Affiliates will cease to be members of the Consolidated Group and
may cease to be members of one or more Combined Groups (each as defined below);

 

WHEREAS, Walter intends to make a distribution of the issued and outstanding
shares of Mueller stock pro rata to the holders of Walter capital stock in a
transaction that is intended to qualify as a tax-free distribution under
Section 355 of the Code; and

 

WHEREAS, Walter and Mueller desire to set forth their agreement regarding the
allocation of taxes, the filing of tax returns, the administration of tax
contests and other related matters and to replace in its entirety the Income Tax
Allocation Agreement, dated as of October 3, 2005, between Walter and Mueller
setting forth their agreement with respect to certain tax matters (the “Original
Income Tax Allocation Agreement”) with the terms of this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and promises contained
herein, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

 

SECTION 1.                                DEFINITIONS

 

1.1                                 “AUDIT” INCLUDES ANY AUDIT, ASSESSMENT OF
TAXES, OTHER EXAMINATION BY ANY TAX AUTHORITY, PROCEEDING, OR APPEAL OF SUCH
PROCEEDING RELATING TO TAXES, WHETHER ADMINISTRATIVE OR JUDICIAL.

 

--------------------------------------------------------------------------------

 

1.2                                 “COMBINED GROUP” MEANS A GROUP OF
CORPORATIONS OR OTHER ENTITIES THAT FILES A COMBINED RETURN.

 

1.3                                 “COMBINED RETURN” MEANS ANY TAX RETURN WITH
RESPECT TO NON-FEDERAL TAXES FILED ON A CONSOLIDATED, COMBINED (INCLUDING NEXUS
COMBINATION, WORLDWIDE COMBINATION, DOMESTIC COMBINATION, LINE OF BUSINESS
COMBINATION OR ANY OTHER FORM OF COMBINATION) OR UNITARY BASIS WHEREIN ONE OR
MORE MEMBERS OF THE MUELLER GROUP JOIN IN THE FILING OF A TAX RETURN WITH WALTER
OR A WALTER AFFILIATE THAT IS NOT ALSO A MEMBER OF THE MUELLER GROUP.

 

1.4                                 “CONSOLIDATED GROUP” MEANS THE AFFILIATED
GROUP OF CORPORATIONS WITHIN THE MEANING OF SECTION 1504(A) OF THE CODE OF WHICH
WALTER IS THE COMMON PARENT AND WHICH INCLUDES THE MUELLER GROUP.

 

1.5                                 “CONSOLIDATED RETURN” MEANS ANY TAX RETURN
WITH RESPECT TO FEDERAL INCOME TAXES FILED BY THE CONSOLIDATED GROUP PURSUANT TO
SECTION 1501 OF THE CODE.

 

1.6                                 “DECONSOLIDATION” MEANS ANY EVENT PURSUANT
TO WHICH MUELLER AND THE MUELLER GROUP CEASE TO BE INCLUDIBLE IN EITHER THE
CONSOLIDATED GROUP OR ANY COMBINED GROUP, AS THE CONTEXT REQUIRES.

 

1.7                                 “DECONSOLIDATION DATE” MEANS THE CLOSE OF
BUSINESS ON THE DAY ON WHICH A DECONSOLIDATION OCCURS. UNLESS OTHERWISE REQUIRED
BY THE RELEVANT TAX AUTHORITY OR A COURT OF COMPETENT JURISDICTION, WALTER AND
MUELLER, FOR ITSELF AND THE MUELLER GROUP, AGREE TO FILE ALL TAX RETURNS, AND TO
TAKE ALL OTHER ACTIONS, RELATING TO FEDERAL INCOME TAXES OR NON-FEDERAL COMBINED
TAXES IN A MANNER CONSISTENT WITH THE POSITION THAT MUELLER AND THE MUELLER
GROUP ARE INCLUDIBLE IN THE CONSOLIDATED GROUP AND ANY APPLICABLE COMBINED GROUP
FOR ALL DAYS FROM THE DATE HEREOF THROUGH AND INCLUDING A DECONSOLIDATION DATE.

 

1.8                                 “DISTRIBUTION” MEANS ANY DISTRIBUTION BY
WALTER OF THE ISSUED AND OUTSTANDING SHARES OF MUELLER STOCK THAT WALTER HOLDS
AT SUCH TIME IN A TRANSACTION INTENDED TO QUALIFY AS A TAX-FREE DISTRIBUTION
UNDER SECTION 355 OF THE CODE.

 

1.9                                 “DISTRIBUTION TAXES” MEANS ANY (I) TAXES
IMPOSED ON, OR INCREASE IN TAXES INCURRED BY, WALTER OR ANY WALTER AFFILIATE AND
(II) ANY TAXES OF A WALTER SHAREHOLDER (OR FORMER WALTER SHAREHOLDER) THAT ARE
REQUIRED TO BE PAID OR REIMBURSED BY WALTER OR ANY WALTER AFFILIATE PURSUANT TO
A LEGAL DETERMINATION, RESULTING FROM, OR ARISING IN CONNECTION WITH, THE
FAILURE OF A DISTRIBUTION TO QUALIFY AS A TAX-FREE TRANSACTION UNDER SECTION 355
OF THE CODE (INCLUDING, WITHOUT LIMITATION, ANY TAX RESULTING FROM THE
APPLICATION OF SECTION 355(D) OR SECTION 355(E) OF THE CODE TO A DISTRIBUTION)
OR CORRESPONDING PROVISIONS OF THE LAWS OF ANY OTHER JURISDICTIONS. ANY TAX
REFERRED TO IN THE IMMEDIATELY PRECEDING SENTENCE SHALL BE DETERMINED USING THE
HIGHEST APPLICABLE STATUTORY TAX RATE FOR THE RELEVANT TAXABLE PERIOD (OR
PORTION THEREOF).

 

1.10                           “ESTIMATED TAX INSTALLMENT DATE” MEANS THE
INSTALLMENT DUE DATES PRESCRIBED IN SECTION 6655(C) OF THE CODE (PRESENTLY
APRIL 15, JUNE 15, SEPTEMBER 15 AND DECEMBER 15).

 

1.11                           “FEDERAL INCOME TAX” OR “FEDERAL INCOME TAXES”
MEANS ANY TAX IMPOSED UNDER SUBTITLE A OF THE CODE (INCLUDING THE TAXES IMPOSED
BY SECTIONS 11, 55, 59A, AND 1201(A) OF THE CODE), INCLUDING ANY INTEREST,
ADDITIONS TO TAX, OR PENALTIES

 

2

--------------------------------------------------------------------------------

 

applicable thereto, and any other income based United States Federal Tax which
is hereinafter imposed upon corporations.

 

1.12                           “FEDERAL TAX” MEANS ANY TAX IMPOSED UNDER THE
CODE OR OTHERWISE UNDER UNITED STATES FEDERAL TAX LAW.

 

1.13                           “FINAL DETERMINATION” MEANS (A) THE FINAL
RESOLUTION OF ANY TAX (OR OTHER MATTER) FOR A TAXABLE PERIOD, INCLUDING ANY
RELATED INTEREST OR PENALTIES, THAT, UNDER APPLICABLE LAW, IS NOT SUBJECT TO
FURTHER APPEAL, REVIEW OR MODIFICATION THROUGH PROCEEDINGS OR OTHERWISE,
INCLUDING (1) BY THE EXPIRATION OF A STATUTE OF LIMITATIONS (GIVING EFFECT TO
ANY EXTENSION, WAIVER OR MITIGATION THEREOF) OR A PERIOD FOR THE FILING OF
CLAIMS FOR REFUNDS, AMENDED RETURNS, APPEALS FROM ADVERSE DETERMINATIONS, OR
RECOVERING ANY REFUND (INCLUDING BY OFFSET), (2) BY A DECISION, JUDGMENT,
DECREE, OR OTHER ORDER BY A COURT OF COMPETENT JURISDICTION, WHICH HAS BECOME
FINAL AND UNAPPEALABLE, (3) BY A CLOSING AGREEMENT OR AN ACCEPTED OFFER IN
COMPROMISE UNDER SECTION 7121 OR 7122 OF THE CODE, OR COMPARABLE AGREEMENTS
UNDER LAWS OF OTHER JURISDICTIONS, (4) BY EXECUTION OF AN IRS FORM 870-AD, OR BY
A COMPARABLE FORM UNDER THE LAWS OF OTHER JURISDICTIONS (EXCLUDING, HOWEVER, ANY
SUCH FORM THAT RESERVES (WHETHER BY ITS TERMS OR BY OPERATION OF LAW) THE RIGHT
OF THE TAXPAYER TO FILE A CLAIM FOR REFUND AND/OR THE RIGHT OF THE TAX AUTHORITY
TO ASSERT A FURTHER DEFICIENCY), OR (5) BY ANY ALLOWANCE OF A REFUND OR CREDIT,
BUT ONLY AFTER THE EXPIRATION OF ALL PERIODS DURING WHICH SUCH REFUND OR CREDIT
MAY BE RECOVERED (INCLUDING BY WAY OF OFFSET) OR (B) THE PAYMENT OF TAX BY ANY
MEMBER OF THE CONSOLIDATED GROUP OR COMBINED GROUP WITH RESPECT TO ANY ITEM
DISALLOWED OR ADJUSTED BY A TAX AUTHORITY PROVIDED THAT WALTER DETERMINES THAT
NO ACTION SHOULD BE TAKEN TO RECOUP SUCH PAYMENT.

 

1.14                           “IRS” MEANS THE INTERNAL REVENUE SERVICE.

 

1.15                           “MARKET VALUATION” MEANS AS OF THE FIRST BUSINESS
DAY IMMEDIATELY FOLLOWING THE DATE ON WHICH THE DISTRIBUTION IS EFFECTED
(I) WITH RESPECT TO MUELLER, THE FAIR MARKET VALUE OF ALL OF ITS ISSUED AND
OUTSTANDING STOCK (MEASURED USING THE MEAN OF THE HIGH AND LOW OF THE PUBLIC
TRADING PRICE AS PUBLISHED IN THE WALL STREET JOURNAL) AS OF SUCH DATE, OR
(II) WITH RESPECT TO WALTER, THE FAIR MARKET VALUE OF ALL OF ITS ISSUED AND
OUTSTANDING STOCK (MEASURED USING THE MEAN OF THE HIGH AND LOW OF THE PUBLIC
TRADING PRICE AS PUBLISHED IN THE WALL STREET JOURNAL) AS OF SUCH DATE.

 

1.16                           “MUELLER AFFILIATE” MEANS ANY CORPORATION OR
OTHER ENTITY, INCLUDING ANY ENTITY THAT IS A DISREGARDED ENTITY FOR FEDERAL
INCOME TAX PURPOSES, DIRECTLY OR INDIRECTLY “CONTROLLED” BY MUELLER WHERE
“CONTROL” MEANS THE OWNERSHIP OF FIFTY PERCENT (50%) OR MORE OF THE OWNERSHIP
INTERESTS OF SUCH CORPORATION OR OTHER ENTITY (BY VOTE OR VALUE) OR THE
POSSESSION, DIRECTLY OR INDIRECTLY, OF THE POWER TO DIRECT OR CAUSE THE
DIRECTION OF THE MANAGEMENT OR POLICIES OF SUCH CORPORATION OR OTHER ENTITY.

 

1.17                           “MUELLER BUSINESS” MEANS THE BUSINESS AND
OPERATIONS CONDUCTED BY MUELLER AND ITS AFFILIATES AS SUCH BUSINESS AND
OPERATIONS WILL CONTINUE AFTER THE DATE OF THE IPO.

 

1.18                           “MUELLER GROUP” MEANS THE AFFILIATED GROUP OF
CORPORATIONS, INCLUDING ANY ENTITY THAT IS A DISREGARDED ENTITY FOR FEDERAL
INCOME TAX PURPOSES, AS DEFINED IN SECTION 1504(A) OF THE CODE, OR SIMILAR GROUP
OF ENTITIES AS DEFINED UNDER SIMILAR LAWS OF OTHER JURISDICTIONS, OF WHICH
MUELLER WOULD BE THE COMMON PARENT IF IT WERE NOT A SUBSIDIARY OF WALTER, AND
ANY CORPORATION OR OTHER ENTITY, INCLUDING ANY ENTITY THAT IS A DISREGARDED
ENTITY

 

3

--------------------------------------------------------------------------------

 

for federal income tax purposes, which may be or become a member of such group
from time to time.

 

1.19                           “MUELLER GROUP COMBINED TAX LIABILITY” MEANS,
WITH RESPECT TO ANY TAXABLE YEAR, THE MUELLER GROUP’S LIABILITY FOR NON-FEDERAL
COMBINED TAXES AS DETERMINED UNDER SECTION 3.6 OF THIS AGREEMENT.

 

1.20                           “MUELLER GROUP FEDERAL INCOME TAX LIABILITY”
MEANS, WITH RESPECT TO ANY TAXABLE YEAR, THE MUELLER GROUP’S LIABILITY FOR
FEDERAL INCOME TAXES AS DETERMINED UNDER SECTION 3.5 OF THIS AGREEMENT.

 

1.21                           “NON-FEDERAL COMBINED TAXES” MEANS ANY
NON-FEDERAL TAXES WITH RESPECT TO WHICH A COMBINED RETURN IS FILED.

 

1.22                           “NON-FEDERAL SEPARATE TAXES” MEANS ANY
NON-FEDERAL TAXES THAT ARE NOT NON-FEDERAL COMBINED TAXES.

 

1.23                           “NON-FEDERAL TAXES” MEANS ANY TAX OTHER THAN A
FEDERAL TAX.

 

1.24                           “OFFICER’S CERTIFICATE” MEANS A LETTER EXECUTED
BY AN OFFICER OF WALTER OR MUELLER AND PROVIDED TO TAX COUNSEL AS A CONDITION
FOR THE COMPLETION OF A TAX OPINION OR SUPPLEMENTAL TAX OPINION.

 

1.25                           “POST-DECONSOLIDATION PERIOD” MEANS A TAXABLE
PERIOD BEGINNING AFTER THE APPLICABLE DECONSOLIDATION DATE.

 

1.26                           “PRE-DECONSOLIDATION PERIOD” MEANS ANY TAXABLE
PERIOD BEGINNING ON OR PRIOR TO THE APPLICABLE DECONSOLIDATION DATE.

 

1.27                           “PRO FORMA MUELLER GROUP COMBINED RETURN” MEANS A
PRO FORMA NON-FEDERAL COMBINED TAX RETURN OR OTHER SCHEDULE PREPARED PURSUANT TO
SECTION 3.6 OF THIS AGREEMENT.

 

1.28                           “PRO FORMA MUELLER GROUP CONSOLIDATED RETURN”
MEANS A PRO FORMA CONSOLIDATED FEDERAL INCOME TAX RETURN PREPARED PURSUANT TO
SECTION 3.5(B) OF THIS AGREEMENT.

 

1.29                           “REDETERMINATION AMOUNT” MEANS, WITH RESPECT TO
ANY TAXABLE YEAR, THE AMOUNT DETERMINED UNDER SECTION 3.10 OF THIS AGREEMENT.

 

1.30                           “RULING” MEANS (I) ANY PRIVATE LETTER RULING
ISSUED BY THE IRS IN CONNECTION WITH A DISTRIBUTION IN RESPONSE TO A REQUEST FOR
SUCH A PRIVATE LETTER RULING FILED BY WALTER (OR ANY WALTER AFFILIATE) PRIOR TO
THE DATE OF A DISTRIBUTION, AND (II) ANY SIMILAR RULING ISSUED BY ANY OTHER TAX
AUTHORITY ADDRESSING THE APPLICATION OF A PROVISION OF THE LAWS OF ANOTHER
JURISDICTION TO A DISTRIBUTION.

 

1.31                           “RULING DOCUMENTS” MEANS (I) THE REQUEST FOR A
RULING FILED WITH THE IRS, TOGETHER WITH ANY SUPPLEMENTAL FILINGS OR OTHER
MATERIALS SUBSEQUENTLY SUBMITTED ON BEHALF OF WALTER, ITS AFFILIATES AND
SHAREHOLDERS TO THE IRS, OR ON BEHALF OF MUELLER, ITS AFFILIATES AND
SHAREHOLDERS TO THE IRS THE APPENDICES AND EXHIBITS THERETO, AND ANY RULING
ISSUED BY THE IRS TO WALTER (OR ANY WALTER AFFILIATE) OR MUELLER (OR ANY MUELLER
AFFILIATE) IN

 

4

--------------------------------------------------------------------------------

 

connection with a Distribution and (ii) any similar filings submitted to, or
rulings issued by, any other Tax Authority in connection with a Distribution.

 

1.32                           “SUPPLEMENTAL RULING” MEANS (I) ANY RULING (OTHER
THAN THE RULING) ISSUED BY THE IRS IN CONNECTION WITH A DISTRIBUTION, AND
(II) ANY SIMILAR RULING ISSUED BY ANY OTHER TAX AUTHORITY ADDRESSING THE
APPLICATION OF A PROVISION OF THE LAWS OF ANOTHER JURISDICTION TO A
DISTRIBUTION.

 

1.33                           “SUPPLEMENTAL RULING DOCUMENTS” MEANS (I) THE
REQUEST FOR A SUPPLEMENTAL RULING, TOGETHER WITH ANY SUPPLEMENTAL FILINGS OR
OTHER MATERIALS SUBSEQUENTLY SUBMITTED, THE APPENDICES AND EXHIBITS THERETO, AND
ANY SUPPLEMENTAL RULINGS ISSUED BY THE IRS IN CONNECTION WITH A DISTRIBUTION AND
(II) ANY SIMILAR FILINGS SUBMITTED TO, OR RULINGS ISSUED BY, ANY OTHER TAX
AUTHORITY IN CONNECTION WITH A DISTRIBUTION.

 

1.34                           “SUPPLEMENTAL TAX OPINION” HAS THE MEANING SET
FORTH IN SECTION 4.2(C) OF THIS AGREEMENT.

 

1.35                           “TAX ASSET” MEANS ANY NET OPERATING LOSS, NET
CAPITAL LOSS, INVESTMENT TAX CREDIT, FOREIGN TAX CREDIT, CHARITABLE DEDUCTION OR
ANY OTHER DEDUCTION, CREDIT OR TAX ATTRIBUTE WHICH COULD REDUCE TAXES (INCLUDING
WITHOUT LIMITATION DEDUCTIONS AND CREDITS RELATED TO ALTERNATIVE MINIMUM TAXES).

 

1.36                           “TAX AUTHORITY” INCLUDES THE IRS AND ANY STATE,
LOCAL, OR OTHER GOVERNMENTAL AUTHORITY RESPONSIBLE FOR THE ADMINISTRATION OF ANY
TAXES.

 

1.37                           “TAX COUNSEL” MEANS A NATIONALLY RECOGNIZED LAW
FIRM OR ACCOUNTING FIRM SELECTED BY WALTER TO PROVIDE A TAX OPINION OR A
SUPPLEMENTAL TAX OPINION.

 

1.38                           “TAX” OR “TAXES” MEANS ANY CHARGES, FEES, LEVIES,
IMPOSTS, DUTIES, OR OTHER ASSESSMENTS OF A SIMILAR NATURE, INCLUDING WITHOUT
LIMITATION, INCOME, ALTERNATIVE OR ADD-ON MINIMUM, GROSS RECEIPTS, EXCISE,
EMPLOYMENT, SALES, USE, TRANSFER, LICENSE, PAYROLL, FRANCHISE, SEVERANCE, STAMP,
OCCUPATION, WINDFALL PROFITS, WITHHOLDING, SOCIAL SECURITY, UNEMPLOYMENT,
DISABILITY, AD VALOREM, ESTIMATED, HIGHWAY USE, COMMERCIAL RENT, CAPITAL STOCK,
PAID UP CAPITAL, RECORDING, REGISTRATION, PROPERTY, REAL PROPERTY GAINS, VALUE
ADDED, BUSINESS LICENSE, CUSTOM DUTIES, OR OTHER TAX OR GOVERNMENTAL FEE OF ANY
KIND WHATSOEVER, IMPOSED OR REQUIRED TO BE WITHHELD BY ANY TAX AUTHORITY
INCLUDING ANY INTEREST, ADDITIONS TO TAX, OR PENALTIES APPLICABLE THERETO.

 

1.39                           “TAX RETURN” OR “TAX RETURNS” MEANS ANY RETURN,
DECLARATION, STATEMENT, REPORT, SCHEDULE, CERTIFICATE, FORM, INFORMATION RETURN
OR ANY OTHER DOCUMENT (AND ANY RELATED OR SUPPORTING INFORMATION) INCLUDING AN
AMENDED TAX RETURN REQUIRED TO BE SUPPLIED TO, OR FILED WITH, A TAX AUTHORITY
WITH RESPECT TO TAXES.

 

1.40                           “TAX OPINION” MEANS AN OPINION ISSUED BY TAX
COUNSEL AS ONE OF THE CONDITIONS TO COMPLETING A DISTRIBUTION ADDRESSING CERTAIN
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF A DISTRIBUTION UNDER
SECTION 355 OF THE CODE.

 

1.41                           “WALTER AFFILIATE” MEANS ANY CORPORATION OR OTHER
ENTITY, INCLUDING ANY ENTITY THAT IS DISREGARDED FOR FEDERAL INCOME TAX
PURPOSES, DIRECTLY OR INDIRECTLY “CONTROLLED” BY WALTER WHERE “CONTROL” MEANS
THE OWNERSHIP OF FIFTY PERCENT (50%) OR MORE OF THE OWNERSHIP INTERESTS OF SUCH
CORPORATION OR OTHER ENTITY (BY VOTE OR VALUE) OR THE POSSESSION,

 

5

--------------------------------------------------------------------------------

 

directly or indirectly, of the power to direct or cause the direction of the
management or policies of such corporation or other entity, but at all times
excluding Mueller or any Mueller Affiliate.

 

1.42                           “WALTER BUSINESS” MEANS ALL OF THE BUSINESSES AND
OPERATIONS CONDUCTED BY WALTER AND ITS AFFILIATES, EXCLUDING THE MUELLER
BUSINESS, AT ANY TIME, WHETHER PRIOR TO, OR AFTER THE DATE OF THE IPO.

 

SECTION 2.                                PREPARATION AND FILING OF TAX RETURNS

 

2.1                                 IN GENERAL. (A)  WALTER SHALL HAVE THE SOLE
AND EXCLUSIVE RESPONSIBILITY FOR THE PREPARATION AND FILING OF ANY CONSOLIDATED
RETURN OR COMBINED RETURN.

 

(b) Mueller shall, subject to Section 2.2 of this Agreement, be responsible for
preparing and filing all Tax Returns of Mueller and the Mueller Affiliates other
than those described in Section 2.1(a) of this Agreement.

 

2.2                                 PREPARATION AND FILING OF RETURNS. (A) ALL
TAX RETURNS FILED AFTER THE DATE OF THIS AGREEMENT BY WALTER, ANY WALTER
AFFILIATE, MUELLER, OR ANY MUELLER AFFILIATE SHALL (1) BE PREPARED IN A MANNER
THAT IS CONSISTENT WITH SECTION 4 OF THIS AGREEMENT AND THE CODE, AND (2) FILED
ON A TIMELY BASIS (TAKING INTO ACCOUNT APPLICABLE EXTENSIONS) BY THE PARTY
RESPONSIBLE FOR SUCH FILING UNDER SECTION 2.1 OF THIS AGREEMENT.

 

(B)                                 IN ITS SOLE DISCRETION, WALTER SHALL HAVE
THE EXCLUSIVE RIGHT WITH RESPECT TO ANY CONSOLIDATED RETURN OR COMBINED RETURN
(A) TO DETERMINE (1) THE MANNER IN WHICH SUCH TAX RETURN SHALL BE PREPARED AND
FILED, INCLUDING, WITHOUT LIMITATION, THE MANNER IN WHICH ANY ITEM OF INCOME,
GAIN, LOSS, DEDUCTION OR CREDIT SHALL BE REPORTED, (2) WHETHER ANY EXTENSIONS
MAY BE REQUESTED, (3) THE ELECTIONS THAT WILL BE MADE BY ANY MEMBER OF THE
CONSOLIDATED GROUP OR APPLICABLE COMBINED GROUP, AND (4) WHETHER ANY AMENDED TAX
RETURNS SHOULD BE FILED, (B) TO CONTROL, CONTEST, AND REPRESENT THE INTERESTS OF
THE CONSOLIDATED GROUP AND ANY COMBINED GROUP IN ANY AUDIT AND TO RESOLVE,
SETTLE, OR AGREE TO ANY ADJUSTMENT OR DEFICIENCY PROPOSED, ASSERTED OR ASSESSED
AS A RESULT OF ANY AUDIT, (C) TO FILE, PROSECUTE, COMPROMISE OR SETTLE ANY CLAIM
FOR REFUND, AND (D) TO DETERMINE WHETHER ANY REFUNDS, TO WHICH THE CONSOLIDATED
GROUP OR APPLICABLE COMBINED GROUP MAY BE ENTITLED, SHALL BE PAID BY WAY OF
REFUND OR CREDITED AGAINST THE TAX LIABILITY OF THE CONSOLIDATED GROUP OR
APPLICABLE COMBINED GROUP. MUELLER, FOR ITSELF AND ITS SUBSIDIARIES, HEREBY
IRREVOCABLY APPOINTS WALTER AS ITS AGENT AND ATTORNEY-IN-FACT TO TAKE SUCH
ACTION (INCLUDING THE EXECUTION OF DOCUMENTS) AS WALTER MAY DEEM APPROPRIATE TO
EFFECT THE FOREGOING.

 

2.3                                 FURNISHING INFORMATION. MUELLER (OR THE
APPLICABLE MUELLER AFFILIATE) SHALL (A) FURNISH TO WALTER IN A TIMELY MANNER
SUCH INFORMATION AND DOCUMENTS AS WALTER MAY REASONABLY REQUEST FOR PURPOSES OF
(1) PREPARING ANY ORIGINAL OR AMENDED CONSOLIDATED RETURN OR COMBINED RETURN,
(2) CONTESTING OR DEFENDING ANY AUDIT RELATING TO A CONSOLIDATED RETURN OR A
COMBINED RETURN, AND (3) MAKING ANY DETERMINATION OR COMPUTATION NECESSARY OR
APPROPRIATE UNDER THIS AGREEMENT, (B) COOPERATE IN ANY AUDIT OF ANY CONSOLIDATED
RETURN OR COMBINED RETURN, (C) RETAIN AND PROVIDE ON DEMAND BOOKS, RECORDS,
DOCUMENTATION OR OTHER INFORMATION RELATING TO ANY TAX RETURN UNTIL THE LATER OF
(1) THE EXPIRATION OF THE APPLICABLE STATUTE OF LIMITATIONS (GIVING EFFECT TO
ANY EXTENSION, WAIVER, OR MITIGATION THEREOF) AND (2) IN THE EVENT ANY CLAIM IS
MADE UNDER THIS AGREEMENT FOR WHICH SUCH INFORMATION IS RELEVANT, UNTIL A FINAL
DETERMINATION WITH RESPECT TO SUCH CLAIM, AND (D) TAKE SUCH ACTION AS WALTER
MAY DEEM APPROPRIATE IN CONNECTION THEREWITH. WALTER SHALL PROVIDE MUELLER (OR
THE

 

6

--------------------------------------------------------------------------------

 

applicable Mueller Affiliate) any assistance reasonably required in providing
any information requested pursuant to this Section 2.3.

 

2.4                                 EXPENSES. MUELLER SHALL REIMBURSE WALTER FOR
ANY OUTSIDE LEGAL AND ACCOUNTING EXPENSES INCURRED BY WALTER IN THE COURSE OF
THE CONDUCT OF ANY AUDIT REGARDING THE TAX LIABILITY OF THE CONSOLIDATED GROUP
OR ANY COMBINED GROUP, AND FOR ANY OTHER EXPENSE INCURRED BY WALTER IN THE
COURSE OF ANY LITIGATION RELATING THERETO, TO THE EXTENT SUCH COSTS ARE
REASONABLY ATTRIBUTABLE TO MUELLER OR ANY MUELLER AFFILIATE AND PROVIDED WALTER
HAS CONFERRED WITH MUELLER AS TO THE PORTION OF THE AUDIT RELATING TO MUELLER OR
THE MUELLER AFFILIATE. NOTWITHSTANDING THE FOREGOING, WALTER SHALL HAVE THE SOLE
DISCRETION TO CONTROL, CONTEST, REPRESENT, FILE, PROSECUTE, CHALLENGE OR SETTLE
ANY AUDIT PURSUANT TO SECTION 2.2 OF THIS AGREEMENT.

 

SECTION 3.                                PAYMENT OF TAXES AND TAX SHARING
AMOUNTS

 

3.1                                 FEDERAL INCOME TAXES. WALTER SHALL PAY (OR
CAUSE TO BE PAID) TO THE IRS ALL FEDERAL INCOME TAXES, IF ANY, OF THE
CONSOLIDATED GROUP.

 

3.2                                 NON-FEDERAL COMBINED TAXES. WALTER SHALL PAY
(OR CAUSE TO BE PAID) TO THE APPROPRIATE TAX AUTHORITIES ALL NON-FEDERAL
COMBINED TAXES, IF ANY, OF ANY COMBINED GROUP.

 

3.3                                 NON-FEDERAL SEPARATE TAXES AND OTHER TAXES.
MUELLER SHALL PAY TO THE APPROPRIATE TAX AUTHORITIES ALL NON-FEDERAL SEPARATE
TAXES AND ANY OTHER TAXES (OTHER THAN THOSE DESCRIBED IN SECTION 3.1 AND
SECTION 3.2 OF THIS AGREEMENT), IF ANY, OF MUELLER AND THE MUELLER AFFILIATES.

 

3.4                                 MUELLER LIABILITY FOR FEDERAL INCOME TAXES
AND NON-FEDERAL COMBINED TAXES. FOR EACH TAXABLE YEAR (OR PORTION THEREOF ENDING
ON THE APPLICABLE DECONSOLIDATION DATE) DURING A PRE-DECONSOLIDATION PERIOD,
MUELLER SHALL PAY TO WALTER AN AMOUNT EQUAL TO THE SUM OF THE MUELLER GROUP
FEDERAL INCOME TAX LIABILITY AND THE MUELLER GROUP COMBINED TAX LIABILITY FOR
SUCH PERIOD.

 

3.5                                 MUELLER GROUP FEDERAL INCOME TAX LIABILITY.
(A)  IN GENERAL. THE MUELLER GROUP FEDERAL INCOME TAX LIABILITY FOR EACH TAXABLE
YEAR (OR PORTION THEREOF ENDING ON THE APPLICABLE DECONSOLIDATION DATE) SHALL BE
THE MUELLER GROUP’S LIABILITY FOR FEDERAL INCOME TAXES AS DETERMINED ON A PRO
FORMA MUELLER GROUP CONSOLIDATED RETURN PREPARED IN ACCORDANCE WITH
SECTION 3.5(B) OF THIS AGREEMENT.

 

(B)                                 PRO FORMA FEDERAL RETURN. FOR EACH TAXABLE
YEAR (OR PORTION THEREOF ENDING ON THE APPLICABLE DECONSOLIDATION DATE) DURING A
PRE-DECONSOLIDATION PERIOD, WALTER SHALL PREPARE OR CAUSE TO BE PREPARED (AND,
AS REQUESTED BY WALTER, MUELLER SHALL COOPERATE IN PREPARING) A PRO FORMA
MUELLER GROUP CONSOLIDATED RETURN AS IF THE MUELLER GROUP WERE NOT AND NEVER
WERE PART OF THE CONSOLIDATED GROUP, BUT RATHER WERE A SEPARATE AFFILIATED GROUP
OF CORPORATIONS OF WHICH MUELLER WERE THE COMMON PARENT FILING A CONSOLIDATED
FEDERAL INCOME TAX RETURN PURSUANT TO SECTION 1501 OF THE CODE. FOR PURPOSES OF
THIS SECTION 3.5(B), THE MUELLER GROUP’S FEDERAL INCOME TAX LIABILITY SHALL NOT
BE REDUCED BY THE MUELLER GROUP’S CARRYBACKS AND CARRYOVERS OF FEDERAL TAX
ASSETS FROM OTHER TAXABLE YEARS (SUCH ITEMS BEING ADDRESSED BY
SECTION 3.5(C) HEREIN).

 

7

--------------------------------------------------------------------------------

 

(c)                                  FEDERAL TAX ASSETS. Walter shall pay to the
Mueller Group, not later than 15 business days after Walter makes a payment to,
or receives a payment, credit or offset from any Tax Authority pursuant to this
Section 3, the amount, if any, by which one or more federal Tax Assets of the
Mueller Group reduced the Federal Income Tax liability of the Consolidated Group
for any taxable year. For purposes of computing the amount of the payment
described in this Section 3.5(c), one or more federal Tax Assets of the Mueller
Group shall be considered to have reduced the Consolidated Group’s Federal
Income Tax liability in a given year by an amount equal to the difference, if
any, between (i) the amount of the Consolidated Group’s Federal Income Tax
liability for the year computed without regard to such Tax Asset or Tax Assets
and (ii) the amount of the Consolidated Group’s Federal Income Tax liability for
the year computed with regard to such Tax Asset or Tax Assets.

 

3.6                                 MUELLER GROUP COMBINED TAX LIABILITY. (A) IN
GENERAL. THE MUELLER GROUP COMBINED TAX LIABILITY FOR EACH TAXABLE YEAR (OR
PORTION THEREOF ENDING ON THE APPLICABLE DECONSOLIDATION DATE) SHALL BE THE SUM
FOR SUCH TAXABLE PERIOD OF THE MUELLER GROUP’S LIABILITY FOR EACH NON-FEDERAL
COMBINED TAX, AS DETERMINED ON PRO FORMA MUELLER GROUP COMBINED RETURNS PREPARED
IN A MANNER CONSISTENT WITH THE PRINCIPLES AND PROCEDURES SET FORTH IN
SECTION 3.5 HEREOF.

 

(b)                                 STATE TAX ASSETS. Walter shall pay to the
Mueller Group, not later than 15 business days after Walter makes a payment to,
or receives a payment, credit or offset from any Tax Authority pursuant to this
Section 3, the amount, if any, by which one or more state or local Tax Assets of
Mueller and the Mueller Affiliates reduced the Combined Tax liability of the
applicable Combined Group for any taxable year. For purposes of computing the
amount of the payment described in this Section 3.6(b), one or more state or
local Tax Assets of Mueller and the Mueller Affiliates shall be considered to
have reduced the Combined Group’s Tax liability in a given year by an amount
equal to the difference, if any, between (i) the amount of the Combined Group’s
Tax liability for the year computed without regard to such Tax Asset or Tax
Assets and (ii) the amount of the Combined Group’s Tax liability for the year
computed with regard to such Tax Asset or Tax Assets.

 

3.7                                 FOREIGN TAX ASSETS. ANY OTHER TAX ASSETS
(OTHER THAN TAX ASSETS DESCRIBED IN SECTIONS 3.5(C) AND 3.6(B)) WILL BE
REIMBURSED AT THE TIME OF USE BY WALTER OR WALTER AFFILIATES IN ACCORDANCE WITH
PRINCIPLES SET FORTH IN SECTIONS 3.5(C) AND 3.6(B).

 

3.8                                 TAX SHARING INSTALLMENT PAYMENTS. (A) 
FEDERAL INCOME TAXES. NOT LATER THAN FIVE BUSINESS DAYS PRIOR TO EACH ESTIMATED
TAX INSTALLMENT DATE WITH RESPECT TO ANY PRE-DECONSOLIDATION PERIOD, WALTER
SHALL DETERMINE UNDER SECTION 6655 OF THE CODE THE ESTIMATED AMOUNT OF THE
RELATED INSTALLMENT OF THE MUELLER GROUP FEDERAL INCOME TAX LIABILITY. MUELLER
SHALL THEN PAY TO WALTER, NOT LATER THAN SUCH ESTIMATED TAX INSTALLMENT DATE,
THE AMOUNT THUS DETERMINED.

 

(B)                                 NON-FEDERAL COMBINED TAXES. NOT LATER THAN
FIVE BUSINESS DAYS PRIOR TO ANY ESTIMATED TAX INSTALLMENT DATE WITH RESPECT TO
NON-FEDERAL COMBINED TAXES FOR ANY PRE-DECONSOLIDATION PERIOD, WALTER SHALL
DETERMINE THE ESTIMATED AMOUNT OF THE RELATED INSTALLMENT OF THE MUELLER GROUP
COMBINED TAX LIABILITY FOR THE TAXABLE YEAR. MUELLER SHALL PAY TO WALTER, NOT
LATER THAN THE DUE DATE FOR SUCH INSTALLMENT, THE AMOUNT THUS DETERMINED.

 

3.9                                 TAX SHARING TRUE-UP PAYMENTS. (A)  FEDERAL
INCOME TAXES. NOT LATER THAN 15 BUSINESS DAYS AFTER THE CONSOLIDATED RETURN IS
FILED WITH RESPECT

 

8

--------------------------------------------------------------------------------

 

to any Pre-Deconsolidation Period, Walter shall deliver to Mueller a Pro Forma
Mueller Group Consolidated Return or other comparable schedule reflecting the
Mueller Group Federal Income Tax Liability for such taxable year (or portion
thereof ending on the applicable Deconsolidation Date). Not later than 10
business days after the date such Pro Forma Mueller Group Consolidated Return or
other schedule is delivered, Mueller shall pay to Walter, or Walter shall pay to
Mueller, as appropriate, an amount equal to the difference, if any, between the
Mueller Group Federal Income Tax Liability for such taxable year (or portion
thereof ending on the applicable Deconsolidation Date) and the aggregate amount
paid by Mueller with respect to such taxable year (or portion thereof ending on
the applicable Deconsolidation Date) under Section 3.8(a) of this Agreement.

 

(B)                                 NON-FEDERAL COMBINED TAXES. NOT LATER THAN
15 BUSINESS DAYS AFTER THE COMBINED RETURN IS FILED WITH RESPECT TO ANY PERIOD
THAT INCLUDES ANY PRE-DECONSOLIDATION PERIOD, WALTER SHALL DELIVER TO MUELLER A
PRO FORMA MUELLER GROUP COMBINED RETURN OR OTHER COMPARABLE SCHEDULE REFLECTING
THE MUELLER GROUP COMBINED TAX LIABILITY FOR SUCH TAXABLE YEAR (OR PORTION
THEREOF ENDING ON THE APPLICABLE DECONSOLIDATION DATE). NOT LATER THAN 10
BUSINESS DAYS FOLLOWING DELIVERY OF SUCH PRO FORMA MUELLER GROUP COMBINED RETURN
OR OTHER SCHEDULE, MUELLER SHALL PAY TO WALTER, OR WALTER SHALL PAY TO MUELLER,
AS APPROPRIATE, AN AMOUNT EQUAL TO THE DIFFERENCE, IF ANY, BETWEEN THE MUELLER
GROUP COMBINED TAX LIABILITY FOR SUCH TAXABLE YEAR (OR PORTION THEREOF ENDING ON
THE APPLICABLE DECONSOLIDATION DATE) AND THE AMOUNT PAID BY MUELLER WITH RESPECT
TO SUCH TAXABLE YEAR (OR PORTION THEREOF ENDING ON THE APPLICABLE
DECONSOLIDATION DATE) UNDER SECTION 3.8(B) OF THIS AGREEMENT.

 

3.10                           REDETERMINATION AMOUNT. (A)  IN GENERAL. IN THE
EVENT OF ANY REDETERMINATION OF ANY ITEM OF INCOME, GAIN, LOSS, DEDUCTION OR
CREDIT OF ANY MEMBER OF THE CONSOLIDATED GROUP OR ANY COMBINED GROUP AS A RESULT
OF A FINAL DETERMINATION OR ANY SETTLEMENT OR COMPROMISE WITH ANY TAX AUTHORITY
(INCLUDING ANY AMENDED TAX RETURN OR CLAIM FOR REFUND FILED BY WALTER), MUELLER
SHALL PAY WALTER OR WALTER SHALL PAY MUELLER, AS THE CASE MAY BE, THE
REDETERMINATION AMOUNT.

 

(B)                                 COMPUTATION. THE REDETERMINATION AMOUNT
SHALL BE THE DIFFERENCE, IF ANY, BETWEEN ALL AMOUNTS PREVIOUSLY DETERMINED UNDER
SECTION 3 OF THIS AGREEMENT AND ALL AMOUNTS THAT WOULD HAVE BEEN DETERMINED
UNDER SECTION 3 OF THIS AGREEMENT TAKING SUCH REDETERMINATION INTO ACCOUNT
(INCLUDING ANY ADDITIONS TO TAX OR PENALTIES APPLICABLE THERETO), TOGETHER WITH
INTEREST FOR EACH DAY CALCULATED (1) WITH RESPECT TO REDETERMINATIONS AFFECTING
FEDERAL INCOME TAXES, AT THE RATE DETERMINED, IN THE CASE OF PAYMENT BY MUELLER
TO WALTER, UNDER SECTION 6621(A)(2) OF THE CODE AND, IN THE CASE OF PAYMENT BY
WALTER TO MUELLER, UNDER SECTION 6621(A)(1) OF THE CODE, AND (2) WITH RESPECT TO
REDETERMINATIONS AFFECTING NON-FEDERAL COMBINED TAXES, UNDER SIMILAR LAWS, IF
ANY, OF OTHER JURISDICTIONS.

 

(C)                                  PAYMENT. WALTER SHALL DELIVER TO MUELLER A
SCHEDULE REFLECTING THE COMPUTATION OF ANY REDETERMINATION AMOUNT WITH RESPECT
TO ANY TAXABLE YEAR. NOT LATER THAN 5 BUSINESS DAYS AFTER THE DATE SUCH
SCHEDULE IS DELIVERED, MUELLER SHALL PAY WALTER, OR WALTER SHALL PAY MUELLER,
SUCH REDETERMINATION AMOUNT.

 

3.11.                        INTEREST. Payments under this Section 3 that are
not made within the prescribed period shall thereafter bear interest at the
Federal short-term rate established pursuant to Section 6621 of the Code.

 

9

--------------------------------------------------------------------------------

 

3.12.                        CARRYBACKS. (a) In the event any Tax Asset of the
Mueller Group for any Post-Deconsolidation Period is eligible to be carried back
to a Pre-Deconsolidation Period, Mueller shall, to the extent permitted by
applicable law, elect to carry such amounts forward to any Post-Deconsolidation
Period. If Mueller is required by law to carry back any such Tax Asset to a
taxable Pre-Deconsolidation Period, Walter agrees to make a payment to Mueller
to the extent that such a payment would be required under the terms of
Section 3.5(c), Section 3.6(b) or Section 3.7 of this Agreement, net of any
expenses incurred by Walter or Walter Affiliates. If subsequent to the payment
by Walter to Mueller of any such amount, there shall be (a) a Final
Determination which results in a disallowance or a reduction of the Tax Asset so
carried back or (b) a reduction in the amount of the benefit realized by the
Walter Group for any reason, Mueller shall repay to Walter, within 30 business
days of such event any amount which would not have been payable to Mueller
pursuant to this Section 3.12 had the amount of the benefit been determined in
light of these events. Mueller shall hold Walter harmless for any penalty,
addition to Tax or interest payable by any member of the Walter Group as a
result of any such event. Any such amount shall be paid by Mueller to Walter
within 30 business days of the payment by Walter or any member of the
Consolidated Group or Combined Group of any such penalty, addition to Tax, or
interest.

 

SECTION 4.                                DECONSOLIDATION AND DISTRIBUTION TAXES

 

4.1                                 CONTINUING COVENANTS. MUELLER, FOR ITSELF
AND THE MUELLER AFFILIATES, COVENANTS THAT ON OR AFTER A DECONSOLIDATION IT WILL
NOT (NOR WILL IT CAUSE OR PERMIT ANY MEMBER OF THE MUELLER GROUP ), IN RESPECT
OF ANY PRE-DECONSOLIDATION PERIOD, (I) MAKE OR CHANGE ANY TAX ELECTION,
(II) CHANGE ANY ACCOUNTING METHOD, (III) AMEND ANY TAX RETURN OR TAKE ANY TAX
POSITION ON ANY TAX RETURN THAT IS INCONSISTENT WITH ANY TAX POSITION ON ANY TAX
RETURN OF THE WALTER GROUP, OR (IV) TAKE ANY ACTION, OMIT TO TAKE ANY ACTION OR
ENTER INTO ANY TRANSACTION THAT RESULTS IN ANY INCREASED TAX LIABILITY OR
REDUCTION OF ANY TAX ASSET OF THE WALTER GROUP.

 

4.2                                 ADDITIONAL CONTINUING COVENANTS. (A) 
MUELLER RESTRICTIONS. MUELLER AGREES THAT, UNTIL SUCH TIME AS THE STOCK OF
MUELLER OWNED BY WALTER AND WALTER AFFILIATES CONSTITUTES FIFTY PERCENT (50%) OR
LESS OF THE TOTAL COMBINED VOTING POWER OF ALL OF THE OUTSTANDING STOCK OF
MUELLER, MUELLER (1) WILL NOT KNOWINGLY TAKE OR FAIL TO TAKE, OR PERMIT ANY
MUELLER AFFILIATE TO KNOWINGLY TAKE OR FAIL TO TAKE, ANY ACTION THAT COULD
REASONABLY BE EXPECTED TO PRECLUDE WALTER’S ABILITY TO EFFECTUATE A
DISTRIBUTION, AND (2) WILL NOT ISSUE ANY STOCK OF MUELLER (OR ANY INSTRUMENT
THAT IS CONVERTIBLE, EXERCISABLE OR EXCHANGEABLE INTO ANY SUCH STOCK) IN AN
ACQUISITION OR PUBLIC OR PRIVATE OFFERING IF, IMMEDIATELY AFTER SUCH ISSUANCE,
WALTER WOULD, OR WOULD REASONABLY BE EXPECTED TO, NOT OWN STOCK OF MUELLER THAT,
ON A FULLY DILUTED BASIS, CONSTITUTES “CONTROL” (WITHIN THE MEANING OF
SECTION 368(C) OF THE CODE) OF MUELLER. IN THE EVENT OF A DISTRIBUTION, MUELLER
AGREES THAT (1) IT WILL TAKE, AND CAUSE EACH MUELLER AFFILIATE TO TAKE, ANY
ACTION REASONABLY REQUESTED BY WALTER IN ORDER TO ENABLE WALTER TO EFFECTUATE A
DISTRIBUTION (INCLUDING, WITHOUT LIMITATION, ANY INTERNAL RESTRUCTURING
NECESSARY TO SATISFY THE ACTIVE TRADE OR BUSINESS REQUIREMENT OF
SECTION 355(B) OF THE CODE) AND (2) IT WILL NOT TAKE OR FAIL TO TAKE, OR PERMIT
ANY MUELLER AFFILIATE TO TAKE OR FAIL TO TAKE, ANY ACTION WHERE SUCH ACTION OR
FAILURE TO ACT WOULD BE INCONSISTENT WITH ANY WRITTEN REPRESENTATIONS OF AN
OFFICER OF MUELLER PURSUANT TO SECTION 4.2(E) OF THIS AGREEMENT WITH RESPECT TO
ANY MATERIAL, INFORMATION, COVENANT OR REPRESENTATION THAT RELATES TO FACTS OR
MATTERS RELATED TO MUELLER, ANY MUELLER AFFILIATE, OR THE MUELLER BUSINESS IN AN
OFFICER’S CERTIFICATE, TAX OPINION, SUPPLEMENTAL TAX OPINION, RULING DOCUMENTS,
SUPPLEMENTAL RULING DOCUMENTS, RULING, OR SUPPLEMENTAL RULING OTHER THAN AS

 

10

--------------------------------------------------------------------------------

 

permitted by Section 4.2(c) of this Agreement. For this purpose an action is
considered inconsistent with a representation if the representation states that
there is no plan or intention to take such action. In the event of a
Distribution, Mueller agrees that it will not take (and it will cause the
Mueller Affiliates to refrain from taking) any position on a Tax Return that is
inconsistent with the treatment of a Distribution as a tax-free transaction
under Section 355 of the Code.

 

(B)                                 WALTER RESTRICTIONS. IN THE EVENT OF A
DISTRIBUTION, WALTER AGREES THAT IT WILL NOT TAKE OR FAIL TO TAKE, OR PERMIT ANY
WALTER AFFILIATE TO TAKE OR FAIL TO TAKE, ANY ACTION WHERE SUCH ACTION OR
FAILURE TO ACT WOULD BE INCONSISTENT WITH ANY MATERIAL, INFORMATION, COVENANT OR
REPRESENTATION THAT RELATES TO FACTS OR MATTERS RELATED TO WALTER (OR ANY WALTER
AFFILIATE) OR WITHIN THE CONTROL OF WALTER AND IS CONTAINED IN AN OFFICER’S
CERTIFICATE, TAX OPINION, SUPPLEMENTAL TAX OPINION, RULING DOCUMENTS,
SUPPLEMENTAL RULING DOCUMENTS, RULING, OR SUPPLEMENTAL RULING. FOR THIS PURPOSE
AN ACTION IS CONSIDERED INCONSISTENT WITH A REPRESENTATION IF THE REPRESENTATION
STATES THAT THERE IS NO PLAN OR INTENTION TO TAKE SUCH ACTION. IN THE EVENT OF A
DISTRIBUTION, WALTER AGREES THAT IT WILL NOT TAKE (AND IT WILL CAUSE THE WALTER
AFFILIATES TO REFRAIN FROM TAKING) ANY POSITION ON A TAX RETURN THAT IS
INCONSISTENT WITH THE TREATMENT OF A DISTRIBUTION AS A TAX-FREE TRANSACTION
UNDER SECTION 355 OF THE CODE.

 

(C)                                  CERTAIN MUELLER ACTIONS FOLLOWING A
DISTRIBUTION. IN THE EVENT OF A DISTRIBUTION, MUELLER AGREES THAT, DURING THE
2-YEAR PERIOD FOLLOWING A DISTRIBUTION, WITHOUT FIRST OBTAINING, AT MUELLER’S
OWN EXPENSE, EITHER A SUPPLEMENTAL OPINION FROM TAX COUNSEL THAT SUCH ACTION
WILL NOT RESULT IN DISTRIBUTION TAXES (A “SUPPLEMENTAL TAX OPINION”) OR A
SUPPLEMENTAL RULING THAT SUCH ACTION WILL NOT RESULT IN DISTRIBUTION TAXES,
UNLESS IN ANY SUCH CASE WALTER AND MUELLER AGREE OTHERWISE, MUELLER SHALL NOT
(1) SELL ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF MUELLER OR ANY MUELLER
AFFILIATE, (2) MERGE MUELLER OR ANY MUELLER AFFILIATE WITH ANOTHER ENTITY,
WITHOUT REGARD TO WHICH PARTY IS THE SURVIVING ENTITY, (3) TRANSFER ANY ASSETS
OF MUELLER IN A TRANSACTION DESCRIBED IN SECTION 351 (OTHER THAN A TRANSFER TO A
CORPORATION WHICH FILES A CONSOLIDATED RETURN WITH MUELLER AND WHICH IS
WHOLLY-OWNED, DIRECTLY OR INDIRECTLY, BY MUELLER) OR SUBPARAGRAPH (C) OR (D) OF
SECTION 368(A)(1) OF THE CODE, (4) ISSUE STOCK OF MUELLER OR ANY MUELLER
AFFILIATE (OR ANY INSTRUMENT THAT IS CONVERTIBLE OR EXCHANGEABLE INTO ANY SUCH
STOCK) IN AN ACQUISITION OR PUBLIC OR PRIVATE OFFERING, OR (5) FACILITATE OR
OTHERWISE PARTICIPATE IN ANY ACQUISITION OF STOCK IN MUELLER THAT WOULD RESULT
IN ANY SHAREHOLDER OWNING FIVE PERCENT (5%) OR MORE OF THE OUTSTANDING STOCK OF
MUELLER. MUELLER OR ANY MUELLER AFFILIATE SHALL ONLY UNDERTAKE ANY OF SUCH
ACTIONS AFTER WALTER’S RECEIPT OF SUCH SUPPLEMENTAL TAX OPINION OR SUPPLEMENTAL
RULING AND PURSUANT TO THE TERMS AND CONDITIONS OF ANY SUCH SUPPLEMENTAL TAX
OPINION OR SUPPLEMENTAL RULING OR AS OTHERWISE CONSENTED TO IN WRITING IN
ADVANCE BY WALTER. THE PARTIES HEREBY AGREE THAT THEY WILL ACT IN GOOD FAITH TO
TAKE ALL REASONABLE STEPS NECESSARY TO AMEND THIS SECTION 4.2(C), FROM TIME TO
TIME, BY MUTUAL AGREEMENT, TO (I) ADD CERTAIN ACTIONS TO THE LIST CONTAINED
HEREIN, OR (II) REMOVE CERTAIN ACTIONS FROM THE LIST CONTAINED HEREIN, IN EITHER
CASE, IN ORDER TO REFLECT ANY RELEVANT CHANGE IN LAW, REGULATION OR
ADMINISTRATIVE INTERPRETATION OCCURRING AFTER THE DATE OF THIS AGREEMENT.

 

(D)                                 NOTICE OF SPECIFIED TRANSACTIONS. NOT LATER
THAN 30 DAYS PRIOR TO ENTERING INTO ANY ORAL OR WRITTEN CONTRACT OR AGREEMENT,
AND NOT LATER THAN 5 DAYS AFTER IT FIRST BECOMES AWARE OF ANY NEGOTIATIONS, PLAN
OR INTENTION (REGARDLESS OF WHETHER IT IS A PARTY TO SUCH NEGOTIATIONS, PLAN OR
INTENTION), REGARDING ANY OF THE TRANSACTIONS DESCRIBED IN SECTION 4.2(C) OF
THIS AGREEMENT, MUELLER SHALL PROVIDE WRITTEN NOTICE OF ITS INTENT TO CONSUMMATE

 

11

--------------------------------------------------------------------------------

 

SUCH TRANSACTION OR THE NEGOTIATIONS, PLAN OR INTENTION OF WHICH IT BECOMES
AWARE, AS THE CASE MAY BE, TO WALTER.

 

(E)                                  MUELLER COOPERATION. MUELLER AGREES THAT,
AT THE REQUEST OF WALTER, MUELLER SHALL COOPERATE FULLY WITH WALTER TO TAKE ANY
ACTION NECESSARY OR REASONABLY HELPFUL TO EFFECTUATE A DISTRIBUTION, INCLUDING
SEEKING TO OBTAIN, AS EXPEDITIOUSLY AS POSSIBLE, A TAX OPINION, SUPPLEMENTAL TAX
OPINION, RULING, AND/OR SUPPLEMENTAL RULING. SUCH COOPERATION SHALL INCLUDE THE
EXECUTION OF ANY DOCUMENTS THAT MAY BE NECESSARY OR REASONABLY HELPFUL IN
CONNECTION WITH OBTAINING ANY TAX OPINION, SUPPLEMENTAL TAX OPINION, RULING,
AND/OR SUPPLEMENTAL RULING (INCLUDING, WITHOUT LIMITATION, ANY (I) POWER OF
ATTORNEY, (II) OFFICER’S CERTIFICATE, (III) RULING DOCUMENTS, (IV) SUPPLEMENTAL
RULINGS DOCUMENTS, AND/OR (V) REASONABLY REQUESTED WRITTEN REPRESENTATIONS
CONFIRMING THAT (A) MUELLER HAS READ THE OFFICER’S CERTIFICATE, RULING
DOCUMENTS, AND/OR SUPPLEMENTAL RULING DOCUMENTS AND (B) ALL INFORMATION AND
REPRESENTATIONS, IF ANY, RELATING TO MUELLER, ANY MUELLER AFFILIATE, OR THE
MUELLER BUSINESS CONTAINED IN THE OFFICER’S CERTIFICATE, RULING DOCUMENTS,
AND/OR SUPPLEMENTAL RULING DOCUMENTS ARE TRUE, CORRECT AND COMPLETE IN ALL
MATERIAL RESPECTS).

 

4.3                                 DISTRIBUTION TAXES. THE PARTIES HAVE SET
FORTH HOW CERTAIN TAX MATTERS WITH RESPECT TO A DISTRIBUTION WOULD BE HANDLED IN
THE EVENT THAT A DISTRIBUTION IS PURSUED AT SOME FUTURE TIME.

 

(A)                                  WALTER’S LIABILITY FOR DISTRIBUTION TAXES.
IN THE EVENT OF A DISTRIBUTION, NOTWITHSTANDING SECTION 3 OF THIS AGREEMENT,
WALTER AND EACH WALTER AFFILIATE SHALL BE JOINTLY AND SEVERALLY LIABLE FOR ANY
DISTRIBUTION TAXES, TO THE EXTENT THAT SUCH DISTRIBUTION TAXES ARE ATTRIBUTABLE
TO, CAUSED BY, OR RESULT FROM, ONE OR MORE OF THE FOLLOWING:

 

(1)                                  ANY ACTION OR OMISSION BY WALTER (OR ANY
WALTER AFFILIATE) INCONSISTENT WITH ANY MATERIAL, INFORMATION, COVENANT OR
REPRESENTATION RELATED TO WALTER, ANY WALTER AFFILIATE, OR THE WALTER BUSINESS
IN AN OFFICER’S CERTIFICATE, TAX OPINION, SUPPLEMENTAL TAX OPINION, RULING
DOCUMENTS, SUPPLEMENTAL RULING DOCUMENTS, RULING, OR SUPPLEMENTAL RULING (FOR
THE AVOIDANCE OF DOUBT, DISCLOSURE OF ANY ACTION OR FACT THAT IS INCONSISTENT
WITH ANY MATERIAL, INFORMATION, COVENANT OR REPRESENTATION SUBMITTED TO TAX
COUNSEL, THE IRS, OR OTHER TAX AUTHORITY, AS APPLICABLE, IN CONNECTION WITH AN
OFFICER’S CERTIFICATE, TAX OPINION, SUPPLEMENTAL TAX OPINION, RULING DOCUMENTS,
SUPPLEMENTAL RULING DOCUMENTS, RULING, OR SUPPLEMENTAL RULING SHALL NOT RELIEVE
WALTER (OR ANY WALTER AFFILIATE) OF LIABILITY UNDER THIS AGREEMENT);

 

(2)                                  ANY ACTION OR OMISSION BY WALTER (OR ANY
WALTER AFFILIATE), INCLUDING A CESSATION, TRANSFER TO AFFILIATES, OR DISPOSITION
OF ITS ACTIVE TRADES OR BUSINESSES, OR AN ISSUANCE OF STOCK, STOCK BUYBACK OR
PAYMENT OF AN EXTRAORDINARY DIVIDEND BY WALTER (OR ANY WALTER AFFILIATE)
FOLLOWING A DISTRIBUTION;

 

(3)                                  ANY ACQUISITION OF ANY STOCK OR ASSETS OF
WALTER (OR ANY WALTER AFFILIATE) BY ONE OR MORE OTHER PERSONS (OTHER THAN
MUELLER OR A MUELLER AFFILIATE) PRIOR TO OR FOLLOWING A DISTRIBUTION; OR

 

(4)                                  ANY ISSUANCE OF STOCK BY WALTER (OR ANY
WALTER AFFILIATE).

 

(B)                                 MUELLER’S LIABILITY FOR DISTRIBUTION TAXES.
IN THE EVENT OF A DISTRIBUTION, NOTWITHSTANDING SECTION 3 OF THIS AGREEMENT,
MUELLER AND EACH MUELLER AFFILIATE SHALL BE JOINTLY AND SEVERALLY LIABLE FOR ANY
DISTRIBUTION TAXES, TO THE EXTENT THAT

 

12

--------------------------------------------------------------------------------

 

SUCH DISTRIBUTION TAXES ARE ATTRIBUTABLE TO, CAUSED BY, OR RESULT FROM, ONE OR
MORE OF THE FOLLOWING:

 

(1)                                  ANY ACTION OR OMISSION BY MUELLER (OR ANY
MUELLER AFFILIATE) AFTER A DISTRIBUTION AT ANY TIME, THAT IS INCONSISTENT WITH
ANY WRITTEN REPRESENTATIONS OF AN OFFICER OF MUELLER PURSUANT TO
SECTION 4.2(E) OF THIS AGREEMENT WITH RESPECT TO ANY MATERIAL, INFORMATION,
COVENANT OR REPRESENTATION RELATED TO MUELLER, ANY MUELLER AFFILIATE, OR THE
MUELLER BUSINESS IN AN OFFICER’S CERTIFICATE, TAX OPINION, SUPPLEMENTAL TAX
OPINION, RULING DOCUMENTS, SUPPLEMENTAL RULING DOCUMENTS, RULING, OR
SUPPLEMENTAL RULING (FOR THE AVOIDANCE OF DOUBT, DISCLOSURE BY MUELLER (OR ANY
MUELLER AFFILIATE) TO WALTER (OR ANY WALTER AFFILIATE) OF ANY ACTION OR FACT
THAT IS INCONSISTENT WITH ANY MATERIAL, INFORMATION, COVENANT OR REPRESENTATION
SUBMITTED TO TAX COUNSEL, THE IRS, OR OTHER TAX AUTHORITY, AS APPLICABLE, IN
CONNECTION WITH AN OFFICER’S CERTIFICATE, TAX OPINION, SUPPLEMENTAL TAX OPINION,
RULING DOCUMENTS, SUPPLEMENTAL RULING DOCUMENTS, RULING, OR SUPPLEMENTAL RULING
SHALL NOT RELIEVE MUELLER (OR ANY MUELLER AFFILIATE) OF LIABILITY UNDER THIS
AGREEMENT);

 

(2)                                  ANY ACTION OR OMISSION BY MUELLER (OR ANY
MUELLER AFFILIATE) AFTER THE DATE OF A DISTRIBUTION (INCLUDING ANY ACT OR
OMISSION THAT IS IN FURTHERANCE OF, CONNECTED TO, OR PART OF A PLAN OR SERIES OF
RELATED TRANSACTIONS (WITHIN THE MEANING OF SECTION 355(E) OF THE CODE)
OCCURRING ON OR PRIOR TO THE DATE OF A DISTRIBUTION) INCLUDING A CESSATION,
TRANSFER TO AFFILIATES OR DISPOSITION OF THE ACTIVE TRADES OR BUSINESSES OF
MUELLER (OR ANY MUELLER AFFILIATE), STOCK BUYBACK OR PAYMENT OF AN EXTRAORDINARY
DIVIDEND;

 

(3)                                  ANY ACQUISITION OF ANY STOCK OR ASSETS OF
MUELLER (OR ANY MUELLER AFFILIATE) BY ONE OR MORE OTHER PERSONS (OTHER THAN
WALTER OR ANY WALTER AFFILIATE) PRIOR TO OR FOLLOWING A DISTRIBUTION; OR

 

(4)                                  ANY ISSUANCE OF STOCK BY MUELLER (OR ANY
MUELLER AFFILIATE) AFTER A DISTRIBUTION, INCLUDING ANY ISSUANCE PURSUANT TO THE
EXERCISE OF EMPLOYEE STOCK OPTIONS OR OTHER EMPLOYMENT RELATED ARRANGEMENTS OR
THE EXERCISE OF WARRANTS.

 

(C)                                  JOINT LIABILITY FOR REMAINING DISTRIBUTION
TAXES. WALTER AND EACH WALTER AFFILIATE SHALL BE LIABLE FOR A PERCENTAGE OF ANY
DISTRIBUTION TAXES (NOT OTHERWISE ALLOCATED BY SECTIONS 4.3(A) OR (B) OF THIS
AGREEMENT) EQUAL TO THE QUOTIENT OF (I) WALTER’S MARKET VALUATION, DIVIDED BY
(II) THE SUM OF (X) WALTER’S MARKET VALUATION, AND (Y) MUELLER’S MARKET
VALUATION. MUELLER AND EACH MUELLER AFFILIATE SHALL BE JOINTLY AND SEVERALLY
LIABLE FOR A PERCENTAGE OF ANY DISTRIBUTION TAXES (NOT OTHERWISE ALLOCATED BY
SECTIONS 4.3(A) OR (B) OF THIS AGREEMENT) EQUAL TO THE QUOTIENT OF (I) MUELLER’S
MARKET VALUATION, DIVIDED BY (II) THE SUM OF (X) WALTER’S MARKET VALUATION, AND
(Y) MUELLER’S MARKET VALUATION.

 

SECTION 5.                                MISCELLANEOUS

 

5.1                                 TERM. ALL RIGHTS AND OBLIGATIONS ARISING
HEREUNDER SHALL SURVIVE UNTIL THEY ARE FULLY EFFECTUATED OR PERFORMED PROVIDED
THAT, NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, THIS AGREEMENT
SHALL REMAIN IN EFFECT AND ITS PROVISIONS SHALL SURVIVE FOR THE FULL PERIOD OF
ALL APPLICABLE STATUTES OF LIMITATION (GIVING EFFECT TO ANY EXTENSION, WAIVER OR
MITIGATION THEREOF).

 

5.2                                 ALLOCATIONS. (A)  IN GENERAL. ALL
COMPUTATIONS WITH RESPECT TO ANY PRE-DECONSOLIDATION PERIOD SHALL BE MADE
PURSUANT TO THE PRINCIPLES OF TREASURY REGULATIONS

 

13

--------------------------------------------------------------------------------

 

Section 1.1502-76(b), taking into account such elections thereunder as Walter,
in its sole discretion, shall make.

 

(B)                                 TAX ASSETS. WALTER SHALL ADVISE MUELLER IN
WRITING WITHIN 90 DAYS AFTER THE FILING OF THE CONSOLIDATED RETURN FOR THE
TAXABLE YEAR THAT INCLUDES THE DECONSOLIDATION DATE OF THE ALLOCATION OF ANY TAX
ASSETS AMONG WALTER, EACH WALTER AFFILIATE, MUELLER, AND EACH MUELLER AFFILIATE.
THE PARTIES HEREBY AGREE THAT, FOR PURPOSES OF DETERMINING SUCH ALLOCATION,
WALTER SHALL BE FREE TO USE ANY LEGALLY PERMISSIBLE METHOD OF ALLOCATION IN ITS
SOLE DISCRETION.

 

5.3                                 CHANGES IN LAW. ANY REFERENCE TO A PROVISION
OF THE CODE OR A SIMILAR LAW OF ANOTHER JURISDICTION SHALL INCLUDE A REFERENCE
TO ANY SUCCESSOR PROVISION TO SUCH PROVISION.

 

5.4                                 CONFIDENTIALITY. EACH PARTY SHALL HOLD AND
CAUSE ITS ADVISORS AND CONSULTANTS TO HOLD IN STRICT CONFIDENCE, UNLESS
COMPELLED TO DISCLOSE BY JUDICIAL OR ADMINISTRATIVE PROCESS OR, IN THE OPINION
OF ITS COUNSEL, BY OTHER REQUIREMENTS OF LAW, ALL INFORMATION (OTHER THAN ANY
SUCH INFORMATION RELATING SOLELY TO THE BUSINESS OR AFFAIRS OF SUCH PARTY)
CONCERNING THE OTHER PARTIES HERETO FURNISHED IT BY SUCH OTHER PARTY OR ITS
REPRESENTATIVES PURSUANT TO THIS AGREEMENT (EXCEPT TO THE EXTENT THAT SUCH
INFORMATION CAN BE SHOWN TO HAVE BEEN (A) PREVIOUSLY KNOWN BY THE PARTY TO WHICH
IT WAS FURNISHED, (B) IN THE PUBLIC DOMAIN THROUGH NO FAULT OF SUCH PARTY, OR
(C) LATER LAWFULLY ACQUIRED FROM OTHER SOURCES NOT UNDER A DUTY OF
CONFIDENTIALITY BY THE PARTY TO WHICH IT WAS FURNISHED), AND EACH PARTY SHALL
NOT RELEASE OR DISCLOSE SUCH INFORMATION TO ANY OTHER PERSON, EXCEPT ITS
AUDITORS, ATTORNEYS, FINANCIAL ADVISORS, BANKERS AND OTHER CONSULTANTS WHO SHALL
BE ADVISED OF AND AGREE TO BE BOUND BY THE PROVISIONS OF THIS SECTION 5.4. EACH
PARTY SHALL BE DEEMED TO HAVE SATISFIED ITS OBLIGATION TO HOLD CONFIDENTIAL
INFORMATION CONCERNING OR SUPPLIED BY THE OTHER PARTY IF IT EXERCISES THE SAME
CARE AS IT TAKES TO PRESERVE CONFIDENTIALITY FOR ITS OWN SIMILAR INFORMATION.

 

5.5                                 SUCCESSORS. THIS AGREEMENT SHALL BE BINDING
ON AND INURE TO THE BENEFIT OF ANY SUCCESSOR, BY MERGER, ACQUISITION OF ASSETS
OR OTHERWISE, TO ANY OF THE PARTIES HERETO (INCLUDING ANY SUCCESSOR OF WALTER
AND MUELLER SUCCEEDING TO THE TAX ATTRIBUTES OF SUCH PARTY UNDER SECTION 381 OF
THE CODE), TO THE SAME EXTENT AS IF SUCH SUCCESSOR HAD BEEN AN ORIGINAL PARTY.

 

5.6                                 AUTHORIZATION, ETC. EACH OF THE PARTIES
HERETO HEREBY REPRESENTS AND WARRANTS THAT IT HAS THE POWER AND AUTHORITY TO
EXECUTE, DELIVER AND PERFORM THIS AGREEMENT, THAT THIS AGREEMENT HAS BEEN DULY
AUTHORIZED BY ALL NECESSARY CORPORATE ACTION ON THE PART OF SUCH PARTY, THAT
THIS AGREEMENT CONSTITUTES A LEGAL, VALID AND BINDING OBLIGATION OF EACH SUCH
PARTY AND THAT THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT BY SUCH
PARTY DOES NOT CONTRAVENE OR CONFLICT WITH ANY PROVISION OF LAW OR OF ITS
CHARTER OR BYLAWS OR ANY AGREEMENT, INSTRUMENT OR ORDER BINDING ON SUCH PARTY.

 

5.7                                 ENTIRE AGREEMENT. THIS AGREEMENT CONTAINS
THE ENTIRE AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND SUPERSEDES ALL PRIOR AGREEMENTS.

 

5.8                                 SECTION CAPTIONS. SECTION CAPTIONS USED IN
THIS AGREEMENT ARE FOR CONVENIENCE AND REFERENCE ONLY AND SHALL NOT AFFECT THE
CONSTRUCTION OF THIS AGREEMENT.

 

14

--------------------------------------------------------------------------------

 

5.9                                 GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO LAWS AND PRINCIPLES RELATING TO CONFLICTS OF LAW.

 

5.10                           COUNTERPARTS. THIS AGREEMENT MAY BE EXECUTED IN
ANY NUMBER OF COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL
OF WHICH TOGETHER SHALL CONSTITUTE ONE AND THE SAME AGREEMENT.

 

5.11                           WAIVERS AND AMENDMENTS. THIS AGREEMENT SHALL NOT
BE WAIVED, AMENDED OR OTHERWISE MODIFIED EXCEPT IN WRITING, DULY EXECUTED BY ALL
OF THE PARTIES HERETO.

 

5.12                           SEVERABILITY. IN CASE ANY ONE OR MORE OF THE
PROVISIONS IN THIS AGREEMENT SHOULD BE INVALID, ILLEGAL OR UNENFORCEABLE, THE
ENFORCEABILITY OF THE REMAINING PROVISIONS HEREOF WILL NOT IN ANY WAY BE
EFFECTED OR IMPAIRED THEREBY.

 

5.13                           NO THIRD PARTY BENEFICIARIES. THIS AGREEMENT IS
SOLELY FOR THE BENEFIT OF THE PARTIES TO THIS AGREEMENT AND EACH WALTER
AFFILIATE AND MUELLER AFFILIATE AND SHOULD NOT BE DEEMED TO CONFER UPON THIRD
PARTIES ANY REMEDY, CLAIM, LIABILITY, REIMBURSEMENT, CLAIM OF ACTION OR OTHER
RIGHTS IN EXCESS OF THOSE EXISTING WITHOUT THIS AGREEMENT.

 

5.14                           OTHER REMEDIES. MUELLER RECOGNIZES THAT ANY
FAILURE BY IT OR ANY MUELLER AFFILIATE TO COMPLY WITH ITS OBLIGATIONS UNDER
SECTION 4 OF THIS AGREEMENT WOULD, IN THE EVENT OF A DISTRIBUTION, RESULT IN
DISTRIBUTION TAXES THAT WOULD CAUSE IRREPARABLE HARM TO WALTER, WALTER
AFFILIATES, AND THEIR STOCKHOLDERS. ACCORDINGLY, WALTER SHALL BE ENTITLED TO AN
INJUNCTION OR INJUNCTIONS TO PREVENT BREACHES OF THIS AGREEMENT AND TO ENFORCE
SPECIFICALLY THE TERMS AND PROVISIONS OF THIS AGREEMENT, THIS BEING IN ADDITION
TO ANY OTHER REMEDY TO WHICH WALTER IS ENTITLED AT LAW OR IN EQUITY.

 

15

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed by a duly authorized officer as of the date first above written.

 

 

 

WALTER INDUSTRIES, INC.

 

on behalf of itself and the Walter Affiliates

 

 

 

By:

      /s/ William F. Ohrt

 

 

Name:

William F. Ohrt

 

Title:

Executive Vice President and

 

 

Chief Financial Officer

 

 

 

MUELLER WATER PRODUCTS, INC.

 

on behalf of itself and the Mueller Affiliates

 

 

 

 

 

By:

      /s/ Victor P. Patrick

 

 

Name:

Victor P. Patrick

 

Title:

Vice President and Secretary

 

 

 

 

--------------------------------------------------------------------------------