[Form of Income Tax Allocation Agreement by and among Walter Industries, Inc., the Walter Affiliates (as defined therein), Mueller Water Products, Inc. and the Mueller Affiliates (as defined therein)]

THIS AMENDED AND RESTATED INCOME TAX ALLOCATION AGREEMENT (this Agreement) dated as of , 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).

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 Walters ownership of Mueller, on a fully diluted basis, to less than eighty percent (80%) of the value of Muellers common stock (the IPO);

WHEREAS, as a result of the reduction in Walters 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).

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