CONTRIBUTION AND SALE AGREEMENT

EXHIBIT 2.1

EXECUTION VERSION

CONTRIBUTION AND SALE AGREEMENT

      THIS CONTRIBUTION AND SALE AGREEMENT (this “ Agreement ”) is made and entered into as of May 19, 2005, by and among (i) Eljer Plumbingware, Inc., a Delaware corporation (“ Contributor ”), (ii) Jacuzzi Brands Inc., a Delaware corporation (“ Parent ”), (iii) Eljer One, LLC, a Delaware limited liability company (“LLC 1”), (iv) Eljer Two, LLC, a Delaware limited liability company (“ LLC 2 ”), (v) Eljer Three, LLC, a Delaware limited liability company (“ LLC 3 ”), and (vi) BMK/Eljer Holding Corp., a Delaware corporation (the “ Company ”). Contributor, Parent, LLC 1, LLC 2, LLC 3 and the Company are sometimes individually referred to in this Agreement as a “ Party ” and collectively as the “ Parties .”

      WHEREAS, Contributor is in the business of manufacturing, distributing and selling kitchen and bath plumbing fixtures, faucets and related accessories for residential, commercial and institutional markets, including but not limited to vitreous china, cast iron, steel, acrylic, faucets, the Enduracast and Eljer product lines and as a reseller of certain Astracast product lines (the “ Business ”);

      WHEREAS, Parent owns (directly or indirectly) 100% of Contributor’s outstanding capital stock and shall receive substantial direct and indirect benefits from the consummation of the transactions contemplated hereby;

      WHEREAS, Contributor owns 100% of the membership interests of LLC 1, Contributor owns 100% of the membership interests of LLC 2 and Contributor owns 100% of the membership interests of LLC 3;

      WHEREAS, the Parties desire to make certain representations, warranties, covenants and agreements; and

      WHEREAS, the Parties intend that the transactions contemplated by this Agreement, in conjunction with the contribution of an aggregate of $1,000,000 cash by Sun Eljer, LLC, a Delaware limited liability company and Sun Eljer II, LLC, a Delaware limited liability company (collectively “ Sun ”) to the Company in exchange for stock, be treated as a tax-free contribution of assets to the Company pursuant to Code Section 351.

      NOW, THEREFORE, in consideration of the foregoing and the respective representations, mutual covenants, agreements and understandings contained herein and intending to be legally bound, the Parties hereto hereby agree as follows:

ARTICLE I

CERTAIN DEFINITIONS

      1.1 Certain Definitions . For purposes of this Agreement, the following terms have the meanings set forth below:

      “ Affiliate ” of any particular Person means any other Person controlling, controlled by or under common control with such Person. For purposes of this definition, “ control ” (including the terms “ controlling ,” “ controlled by ” and “ under common control with ”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and such “control” will be presumed if any Person owns 10% or more of the voting capital stock or other ownership interests, directly or indirectly, of any other Person.

      “ Assumed Contracts ” means all agreements, contracts, or other binding arrangements of Contributor entered into in the Ordinary Course of Business which relate primarily to the Business (including, without limitation, the Schenley Lease, the Kittanning Lease and any capital lease obligations set forth on the Assumed Capital Lease Schedule attached hereto, but specifically excluding any collective bargaining agreement, any employment agreement and the Verona Leases).

      “ BMK Preferred ” means the 8,500,000 Preferred Units of BMK Holdings, LLC, a Delaware limited liability company, owned by Contributor.

      “ Business Employees ” means all of Contributor’s employees as of the Closing Date, including all active employees and any other employees, including employees inactive as of the Closing Date for any reason.

      “ Capital Stock ” of any Person means any and all shares, interests (including partnership interests), rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any preferred stock, but excluding any debt securities convertible into such equity.

     “ Closing Working Capital ” means Working Capital as of the Closing.

      “ Code ” means the Internal Revenue Code of 1986, as amended, and any reference to any particular Code section shall be interpreted to include any revision of or successor to that section regardless of how numbered or classified.

      “ Company Parties ” means the Company and its Affiliates and their respective members, shareholders, officers, directors, managers, employees, agents, representatives, successors and assigns (it being understood that as of immediately following the Closing, LLC 1, LLC 2 and LLC 3 are all Company Parties).

      “ Contributor Employee Benefit Plan ” means each “employee benefit plan” (as such term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended) maintained or contributed to by (or required to be maintained or contributed to by)

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Contributor or any of its Affiliates on behalf of any current or former employee of the Business, and each other material plan, arrangement, policy, agreement or understanding (whether written or oral) relating to retirement, compensation, deferred compensation, bonus, severance, fringe benefits or any other material employee benefits maintained or contributed to by (or required to be maintained or contributed to by) Contributor or any of its Affiliates for the benefit of any current or former employee of the Business.

      “ Contributor Parties ” means Contributor, Parent and their Affiliates and each of their respective members, shareholders, officers, directors, managers, employees, agents, representatives, successors and assigns.

      “ Environmental and Safety Requirements ” means all applicable federal, state, local and foreign statutes, regulations, ordinances, codes and other provisions having the force or effect of law, all applicable judicial and administrative orders and determinations, all applicable contractual obligations and all applicable common law concerning the effect of the environment on public health and safety and worker health and safety, and pollution or protection of the environment, including all those relating to the presence, use, production, generation, handling, transportation, treatment, storage, disposal, distribution, labeling, testing, processing, discharge, release, threatened release, control or cleanup of, or exposure to, any hazardous materials, substances or wastes, chemical substances or mixtures, pesticides, pollutants, contaminants, toxic chemicals, petroleum products or byproducts, asbestos, polychlorinated biphenyls, noise or radiation, in each case, as previously or now in effect.

      “ Ford City Real Property ” means the real property owned by Contributor and more particularly described on Exhibit A , together with all buildings, structures, improvements and fixtures located thereon, and all easements and other rights and interests appurtenant thereto.

      “ GAAP ” means United States generally accepted accounting principles, as in effect from time to time and consistently applied and in accordance with Contributor’s past practices.

      “ High Performance Flush Technology IP ” means all Proprietary Rights relating to Contributor’s high performance flush technology.

      “ Indebtedness ” means (i) any indebtedness for borrowed money, (ii) any indebtedness evidenced by any note, bond, debenture or other debt security, (iii) any liabilities or obligations for the deferred purchase price of property or services with respect to which Contributor is liable, contingently or otherwise, as obligor or otherwise (other than account payables which are not more than 30 days past due), (iv) any commitment by which Contributor assures a creditor against loss (including contingent reimbursement obligations with respect to letters of credit), (v) any indebtedness guaranteed in any manner by Contributor (including guarantees in the form of an agreement to repurchase or reimburse), (vi) any liabilities or obligations under capitalized leases with respect to which Contributor is liable, contingently or otherwise, as obligor, guarantor or otherwise, or with respect to which obligations Contributor assures a creditor against loss, (vii) any indebtedness or liabilities secured by a Lien (other than Permitted Liens arising by operation of law) on Contributor’s assets, (viii) any letters of credits or liabilities or obligations relating thereto, (ix) amounts owed by Contributor to any Person

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under any noncompetition or consulting arrangements, and (ix) any amounts owed to Affiliates of Contributor, (including intercompany trade and accounts payable).

      “ Indenture ” means the Indenture, dated July 15, 2003, among Wilmington Trust Company in its capacity as trustee, Jacuzzi and the guarantors listed therein.

      “ Kittanning Lease ” mans that certain Agreement, dated October 8, 1999, by and between MHF, Inc. and Contributor.

      “ Kittanning Real Property ” means the real property, together with all buildings, structures, improvements and fixtures located thereon, leased by Contributor pursuant to the Kittanning Lease.

      “ Lien ” or “ Liens ” means any lien (statutory or otherwise), hypothecation, encumbrance, claim, liability, security interest, interest, mortgage, pledge, restriction, charge, instrument, license, preference, priority, security agreement, easement, covenant, encroachment, option, right of recovery, order of any governmental authority, of any kind or nature (including (i) any conditional sale or other title retention agreement and any lease having substantially the same effect as any of the foregoing, (ii) any assignment or deposit arrangement in the nature of a security device, (iii) any claim based on any theory that the Company is a successor, transferee or continuation of Contributor or the Business, and (iv) any leasehold interest, license or other right, in favor of a third party or Contributor, to use any portion of the LLC 2 Acquired Assets (as defined below) or the Company Acquired Assets (as defined below)), whether secured or unsecured, choate or inchoate, filed or unfiled, scheduled or unscheduled, noticed or unnoticed, recorded or unrecorded, contingent or non-contingent, material or non-material, known or unknown.

      “ Loan and Security Agreement ” means the Loan and Security Agreement, dated July 15, 2003, among the Lenders (as defined therein), Jacuzzi, the borrowers and guarantors named therein.

      “ Loss ” means any loss, liability, demand, claim, action, cause of action, cost, damage, diminution in value, deficiency, Tax, penalty, fine or expense, including interest, penalties, reasonable attorneys’ fees and expenses and all amounts paid in investigation, defense or settlement of any of the foregoing and the enforcement of any rights hereunder, but excluding lost profits or punitive damages (unless such lost profits or punitive damages are payable pursuant to a third-party claim).

      “ Ordinary Course of Business ” means the ordinary course of business, consistent with past practice, including with regard to nature, frequency and magnitude.

      “ Person ” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated association, corporation, limited liability company, entity or governmental entity (whether federal, state, county, city or otherwise and including any instrumentality, division, agency or department thereof).

      “ Preferred Stock ” means the Series A Preferred Stock of the Company having the terms set forth in the Certificate of Designation, Number, Powers, Preferences and Relative,

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Participating, Optional and Other Special Rights and Qualifications, Limitations, Restrictions, and other Distinguishing Characteristics of Series A Preferred Stock of BMK/Eljer Holding Corp. and more particularly described on Exhibit D attached hereto.

      “ Property, Plant and Equipment ” means the Ford City Real Property and the Schenley Owned Real Property and all equipment and fixtures located on the Ford City Real Property and the Schenley Owned Real Property.

      “ Proprietary Rights ” means all patents, patent applications, patent disclosures and inventions (whether or not patentable and whether or not reduced to practice) and any reissue, continuation, continuation in part, division, extension or reexamination thereof; trademarks, service marks and trade dress, together with all goodwill associated therewith, and all translations, adaptations, derivations and combinations of the foregoing (and all logos related to the foregoing); copyrights and copyrighted works; Internet domain names; and all registrations, applications and renewals for any of the foregoing; trade secrets and other confidential information, including ideas, know how, related processes and techniques, research and development information, drawings, specifications, designs, plans, proposals and technical data and manuals; computer software (including data and related documentation); and all other intangible properties and rights relating to the Business.

      “ Salem Real Property ” means the real property owned by Contributor commonly known as 921 S. Ellsworth Avenue, Salem, Ohio, together with all buildings, structures, improvements and fixtures located thereon, and all easements and other rights and interests appurtenant thereto.

      “ Schenley Lease ” means that certain Lease Agreement, dated October 21, 1998 by and between E. Glenn McMillan and Eljer Plumbingware, Inc.

      “ Schenley Leased Real Property ” means the real property, together with all buildings, structures, improvements and fixtures located thereon, leased by Contributor pursuant to the Schenley Lease.

      “ Schenley Owned Real Property ” means the real property owned by Contributor and more particularly described on Exhibit B , together with all buildings, structures, improvements and fixtures located thereon, and all easements and other rights and interests appurtenant thereto.

      “ Tax ” or “ Taxes ” means any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, property (including general and special real estate taxes and assessments, special service area charges, tax increment financing, charges, payments in lieu of taxes and similar charges and assessments), windfall profits, environmental (including tax under Code Section 59A), customs duties, capital stock, franchise, profits, foreign or domestic withholding, social security (or similar), unemployment, disability, real property, personal property, intangibles, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated or other tax or similar governmental fee, governmental assessment or governmental charge of any kind whatsoever, whether computed on a separate or consolidated, unitary or combined basis or in any other

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manner including any interest, penalties or additions to Tax or additional amounts with respect to the foregoing whether disputed or not.

      “ Tax Returns ” means returns, declarations, reports, claims for refund, information returns or other documents (including any related or supporting schedules, statements or information) filed or required to be filed in connection with the determination, assessment or collection of Taxes of any Party or the administration of any laws, regulations or administrative requirements relating to any Taxes.

      “ Transferred Employee ” means each Business Employee who accepts the Company’s (or its assignee’s) offer of employment and who becomes employed by the Company (or its assignee).

      “ Verona Leases ” means (i) that certain Lease Contract, dated July 9, 1968, by and between Supervisors Districts 4 and 5 of Lee County, Mississippi, acting by and through the Board of Supervisors of Lee County, Mississippi, and Wallace-Murray Corporation, and (ii) that certain Lease and Agreement, dated November 1, 1970, by and between the Board of Supervisors of Lee County, Mississippi acting for and in behalf of Supervisor’s Districts Nos. Four and Five of Lee County, Mississippi, and Wallace-Murray Corporation, each as amended.

      “ Verona Real Property ” means the real property, together with all buildings, structures, improvements, fixtures, machinery, equipment, and other personal property located thereon, leased by Contributor pursuant to the Verona Leases or otherwise used by Contributor in the Business.

      “ Working Capital ” means an amount, determined as of the Closing, equal to the amount of all LLC 2 Acquired Assets which would be a “current asset” determined in accordance with GAAP, plus all Company Acquired Assets which would be a “current asset” determined in accordance with GAAP, less all Assumed Liabilities which would be a “current liability” determined in accordance with GAAP.

ARTICLE II

CLOSING TRANSACTIONS

     2.1   Contribution of Assets from Contributor to LLC 2.

              (a)   Contributed Assets . On the terms and subject to the conditions set forth in this Agreement, and prior to the transactions described in Sections 2.3 , 2.4 , 2.5 and Article III , LLC 2 shall acquire from Contributor, and Contributor shall sell, convey, assign, transfer and deliver to LLC 2 on the Closing Date, all of Contributor’s interest in assets, properties, rights, titles and interests of every kind and nature owned, licensed or leased by Contributor (including indirect and other forms of beneficial ownership) as of the Closing Date (except for the Property, Plant and Equipment and other than the LLC 2 Excluded Assets (as defined below)), which are used primarily in or otherwise primarily associated with the Business, whether tangible or intangible, real or personal and wherever located and by whomever possessed (the “ LLC 2

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Acquired Assets ”), free and clear of all Liens (other than Permitted Liens), including the following:

     (i) $4,830,000 of cash;

     (ii) all notes and accounts receivable whether current or non-current;

     (iii) all promotional allowances and vendor rebates and similar items;

      (iv) except as provided in Section 2.1(b)(xiv) and Section 2.1(b)(xv) , all finished goods inventories, raw materials, packaging materials, work in process, consigned goods and finished goods (including warehoused inventories and inventories covered by purchase orders), wherever located, including consignment inventory and inventory on order for or in transit to or from Contributor;

      (v) all of Contributor’s interest in the Proprietary Rights (other than the High Performance Flush Technology IP subject to the terms of the License In Agreement described in Section 3.3(b)(xii) and, in the case of Proprietary Rights relating to the Eljer trademark, subject to the terms of the License Out Agreement described in Section 3.3(b)(xiii) ) that are owned by, used by, issued to or licensed to Contributor, along with all of Contributor’s interest in income, royalties, damages and payments accrued, due or payable as of the Closing Date or thereafter (including damages and payments for past, present or future infringements or misappropriations thereof, the right to sue and recover for past infringements or misappropriations thereof and any and all corresponding rights that, now or hereafter, may be secured throughout the world) (collectively, the “ Transferred Proprietary Rights ”);

      (vi) other than Property, Plant and Equipment, all leasehold improvements and all machinery, equipment (including all vehicles, testing equipment and office equipment), fixtures, trade fixtures, computers and related software, and furniture located in any building, office or other space, including without limitation at the Ford City Real Property, the Verona Real Property, the Schenley Leased Real Property, the Schenley Owned Real Property and the Kittanning Real Property;

      (vii) except as provided in Section 2.1(b)(xv), all office supplies, production supplies and other supplies, spare parts, other miscellaneous supplies and other tangible property of any kind located in any building, office or other space leased, owned or occupied by Contributor or in any warehouse or other storage facility where any of Contributor’s properties and assets may be located;

     (viii) all prepayments, prepaid expenses and deposits;

      (ix) the AS400 Model 820 server located in Dallas, Texas and related owned, ancillary equipment, if any, and (to the extent transferable) related software;

      (x) all claims, refunds, credits, causes of action, choices in action, rights of recovery and rights of set-off of any kind;

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      (xi) the right to receive and retain mail, payments of receivables and other communications;

      (xii) the right to bill and receive payment for products shipped or delivered and/or services performed but unbilled or unpaid as of the Closing;

      (xiii) all lists, records and other information pertaining to accounts and referral sources; all lists, records and other information pertaining to suppliers and customers; and all drawings, reports, studies, plans, books, ledgers, files and business and copies of all accounting records of every kind (including all financial, business, sales and marketing plans and information); in each case whether evidenced in writing, electronic data, computer software or otherwise;

      (xiv) all advertising, marketing and promotional materials, all archival materials and all other printed or written materials;

      (xv) all permits, licenses, certifications, authorizations, approvals and similar rights from all permitting, licensing, accrediting and certifying agencies, and the rights to all data and records held by such agencies;

     (xvi) the Assumed Contracts;

      (xvii) all goodwill as a going concern and all other intangible property;

and

      (xviii) all other properties, assets and rights owned by Contributor as of the Closing Date, or in which Contributor has an interest, and which are not otherwise Property, Plant and Equipment or LLC 2 Excluded Assets.

              (b)   Excluded Assets . Notwithstanding the foregoing, the following properties, assets and rights (the “ LLC 2 Excluded Assets ”) are expressly excluded from the transactions contemplated by Section 2.1(a) and, as such, are not included in the LLC 2 Acquired Assets:

      (i) all cash and cash equivalents of Contributor (other than as set forth in Section 2.1(a)(i) );

     (ii) the Property, Plant and Equipment;

      (iii) all stock and other ownership interests in Contributor, any subsidiary of Contributor (other than LLC 1, LLC 2 and LLC 3) or any other entity in which Contributor has an investment (including all equity interests in Zurn Pex, Inc.);

      (iv) Contributor’s corporate charter, qualifications to conduct business as a foreign corporation, arrangements with registered agents relating to foreign qualifications, taxpayer and other identification numbers, seals, minute books, stock transfer books and blank stock certificates and other documents relating solely to the organization, maintenance and existence of Contributor as a corporation ( provided that

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the Company shall be entitled to receive a copy of all such documentation as of the Closing);

      (v) all of Contributor’s rights, titles, and interests (including fee simple interests and leasehold interests) in the Salem Real Property and all buildings, structures, improvements (including leasehold improvements), machinery, equipment (including all vehicles, testing equipment and office equipment), fixtures, trade fixtures, computers and related software, furniture and other personal property (other than inventory) located at the Salem Real Property;

      (vi) the equipment known as the “Pressure Caster” located at the Verona Real Property;

      (vii) all agreements, contracts, or other binding arrangements of Contributor entered into in connection with the Business (other than the Assumed Contracts);

      (viii) the rights of Contributor under or pursuant to this Agreement and the Schedules attached hereto and any other agreements entered into by Contributor pursuant to this Agreement;

     (ix) all deferred income Taxes; (x) all intercompany receivables; (xi) all insurance policies;

     (xii) the High Performance Flush Technology IP;

      (xiii) all LLC 2 Acquired Assets which are in the nature of inventory as such inventory is sold or otherwise disposed of in the Ordinary Course of Business (other than inventory at the Salem Real Property which may be sold outside the Ordinary Course of Business in connection with the contemplated closure of such facility) and not in violation of any provision of this Agreement during the period from the date hereof until the Closing Date;

      (xiv) all excess nitrous oxide emission credits and allowances provided by Title V permit number 03-00026 issued to Contributor and attributable to the section of the Ford City Real Property commonly known as Plant One;

      (xv) all inventory of Jacuzzi and its subsidiaries (other than Contributor) in Contributor’s possession (including certain Jacuzzi and Aqualux toilets), but only to the extent such assets are not on the Closing Statement;

      (xvi) all spare parts inventory for discontinued U.S. Brass product lines, but only to the extent such assets are not on the Closing Statement; and

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      (xvii) all rights and claims for refunds or credit in respect of Taxes incurred by Contributor.

     2.2    Assumption of Liabilities by LLC 2.

              (a)    Assumed Liabilities . Subject to the conditions set forth in this Agreement, and prior to the transactions described in Sections 2.3 , 2.4 , 2.5 and Article III , LLC 2 shall assume only the following debts, liabilities and obligations of Contributor to the extent relating to the Business (collectively, the “ Assumed Liabilities ”):

      (i) obligations and liabilities of Contributor and Parent (including, without limitation, the obligation and cost to provide and administer the required benefits set forth below) to provide post-employment medical and life insurance benefits (including prescription drug coverage, medical insurance and Medicare stipends) under the group medical and life insurance plans and policies of Parent or Contributor (“ Post-Retirement Benefits ”) as in effect prior to the Closing Date with respect to (xx) each former employee and Business Employee of Contributor listed on Schedule 2.2(a) (and any dependents and beneficiaries of such employees) who is currently receiving such benefits or eligible to receive such benefits under the current group medical and life insurance plans and policies of Parent or Contributor and (yy) Transferred Employees and those Business Employees (including any dependents and beneficiaries thereof) who do not meet the eligibility requirements to receive post-employment medical and life insurance benefits under the current group medical and life insurance plans and policies of Parent or Contributor as of the Closing Date but who are subsequently found to be entitled to such benefits by an independent arbitrator or court of competent jurisdiction based upon their service with the Contributor or Parent as of the Closing Date; further, provided, that the Company shall assume and be liable for all obligations or liabilities associated with the Company’s amendment, modification or termination to any benefit, coverage or contribution level in effect as of the Closing Date under the group medical and life insurance plans and policies of Parent or Contributor in effect as of the Closing Date;

      (ii) all promotional allowances and vendor rebates and similar items, to the extent accrued for on the Closing Statement;

      (iii) Contributor’s obligations and liabilities with respect to product warranty claims on products that were sold prior to the Closing Date;

      (iv) any liability or obligation relating to workers’ compensation claims relating to occurrences and/or injuries of Transferred Employees first arising on or after the Closing Date;

      (v) all of Contributor’s accounts payable arising in the Ordinary Course of Business (other than accounts payable that are primarily related to or arise in connection with any Excluded Asset and other than accounts payable owed to Contributor or its Affiliates);

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      (vi) Contributor’s obligations under Assumed Contracts relating to the ongoing Business that were entered into in the Ordinary Course of Business (but only to the extent such Assumed Contracts are assigned to the Company or the Company otherwise receives the rights and benefits of such Assumed Contracts pursuant to Section 3.4 below, and specifically excluding any liability or obligation relating to or arising out of such Assumed Contracts as a result of (A) any breach of such Assumed Contracts occurring on or prior to the Closing Date, (B) any violation of law, breach of warranty, tort or infringement occurring on or prior to the Closing Date; or (C) any charge, complaint, action, suit, proceeding, hearing, investigation, claim or demand for facts, events or circumstances occurring on or prior to the Closing Date); and

      (vii) Contributor’s obligations and liabilities arising in the Ordinary Course of Business with respect to unpaid wages, salary, vacation, sick leave, bonuses and commissions accrued as of the Closing Date solely with respect to the Transferred Employees; and

      (viii) all liabilities and obligations arising from the conduct or operation of the Business, the LLC 2 Acquired Assets or the Company Acquired Assets after the Closing Date (including any liabilities and obligations under Environmental and Safety Requirements (whether now or hereinafter in effect) arising solely from facts, events or conditions occurring after the Closing Date; provided however, for the avoidance of doubt, that this provision shall not include "owner" or "operator" liability under the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA") or other analogous Environmental and Safety Requirements, unless such liability arises solely from contamination conditions caused after the Closing).

      The Company hereby acknowledges that it is assuming the Assumed Liabilities, and the Company shall pay, discharge and perform or cause to be paid, discharged and performed all such liabilities and obligations.

           (b)    Liabilities Not Assumed . Notwithstanding anything to the contrary in this Agreement, LLC 2 shall not assume or in any way become liable for any of Contributor’s debts, liabilities or obligations of any nature whatsoever (other than the Assumed Liabilities), whether accrued, absolute, contingent or otherwise, whether known or unknown, whether due or to become due, whether related to the Business or the LLC 2 Acquired Assets and whether disclosed on the Schedules attached hereto, and regardless of when or by whom asserted, including without limitation clauses (i) through (xvi) below (collectively referred to herein as the “ Excluded Liabilities ”):

      (i) any of Contributor’s liabilities or obligations under this Agreement, the Schedules attached hereto and any other agreements entered into by Contributor in connection with the transactions contemplated by this Agreement;

      (ii) except as provided in Section 7.11 , any of Contributor’s liabilities or obligations for expenses, fees or Taxes incident to or arising out of the negotiation, preparation, approval or authorization of this Agreement or the consummation (or

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preparation for the consummation) of the transactions contemplated hereby (including all attorneys’ and accountants’ fees, brokerage fees and transfer Taxes);

      (iii) except as provided in Section 7.11 , any liability or obligation of Contributor for Taxes for any period;

      (iv) except as specifically set forth in Section 2.2(a)(i) , any liability or obligation under or with respect to any Contributor Employee Benefit Plan or any other employee benefit plan, program, policy or arrangement presently or formerly maintained or contributed to by Contributor or its Affiliates, or with respect to which Contributor or any such Affiliate has any liability, including, without limitation, (yy) any liabilities under any Contributor Employee Benefit Plan that is a “defined benefit plan” (as defined in Section 3(35) of ERISA) or is otherwise a pension plan or (zz) any liabilities relating to medical or dental claims incurred by any current or former employee of the Business prior to the Closing Date under Contributor’s medical and dental plans (other than Contributor’s liability with respect to retiree medical and life insurance claims specifically assumed by LLC 2 in Section 2.2(a)(i) );

      (v) except as specifically set forth in Section 2.2(a)(iii) , any liability or obligation with respect to any products or services that were sold prior to the Closing, including product liability, infringement claims and any related claims and litigation arising prior to, on or after the Closing Date;

      (vi) except as specifically set forth in Sections 2.2(a)(i) and 2.2(a)(vii) , any of Contributor’s liabilities or obligations for vacation pay, sick pay, holiday pay, salary, wages, bonuses, severance or other payments or liabilities of any kind to any Business Employees or former employee of Contributor;

      (vii) except as provided in Section 2.2(a)(iv) , any liability or obligation relating to workers’ compensation claims which were filed or presented on or before the Closing Date or which are filed or presented after the Closing Date but relate to claims, occurrences and/or injuries first arising on or prior to the Closing Date;

      (viii) any of Contributor’s liabilities or obligations (A) arising by reason of any violation or alleged violation of any federal, state, local or foreign law or any requirement of any governmental authority, or (B) arising by reason of any breach or alleged breach by Contributor of any agreement, contract, lease, license, commitment, instrument, judgment, order or decree;

      (ix) any liabilities or obligations arising under any Environmental and Safety Requirements to the extent relating to facts, events or conditions occurring or in existence with respect to the Business, the LLC 2 Acquired Assets or the Company Acquired Assets, the Contributor or any current or former owned or leased properties on or prior to the Closing Date;

      (x) except as specifically set forth in Section 2.2(a)(iii) , any of Contributor’s liabilities or obligations relating to any legal action, proceeding or claim (including labor grievances) arising out of or in connection with Contributor’s conduct of

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the Business or any other conduct of Contributor, Contributor’s officers, directors, employees, consultants, agents or advisors on or prior to the Closing Date;

      (xi) except for capital leases assumed by the Company or any of its subsidiaries, any of Contributor’s liabilities or obligations for Indebtedness;

      (xii) any liabilities or obligations primarily related to any of the LLC 2 Excluded Assets (including under any contracts, leases, commitments or understandings related thereto);

      (xiii) any of Contributor’s liabilities or obligations of Contributor or Parent relating to historical, actual, in-process, or contemplated or other future closure, downsizing, restructuring or combining of Contributor’s facilities including without limitation any such liabilities or obligations set forth on Contributor’s books and records;

      (xiv) except as specifically set forth in Section 2.2(a)(i) and Section 2.2(a)(vi) , any of Contributor’s liabilities or obligations under contracts, leases, commitments or understandings (including without limitation any liabilities or obligations under any collective bargaining agreement and any employment agreement);

      (xv) any of Contributor’s liabilities or obligations which LLC 2, the Company or any of their Affiliates may become liable for as a result of or in connection with the failure by the LLC 2 or the Company or Contributor to comply with any bulk sales or bulk transfers laws or as a result of any “defacto merger” or “successor-in-interest” theories of liability relating to facts, events or conditions occurring or in existence on or prior to the Closing Date; and

      (xvi) except as provided in Section 7.11, any other liabilities or obligations of Contributor not expressly assumed by the Company pursuant to Section 2.2(a) above.

For purposes of this Section 2.2(b) , “ Contributor ” shall be deemed to include all Affiliates of Contributor and any predecessors to Contributor and any Person with respect to which Contributor is a successor-in-interest (including by operation of law, merger, liquidation, consolidation, assignment, assumption or otherwise). Contributor hereby acknowledges that it is retaining the Excluded Liabilities, and Contributor shall pay, discharge and perform all such liabilities and obligations.

      2.3   Contribution of Property from Contributor to LLC 3 . On the terms and subject to the conditions set forth in this Agreement, after the transactions described in Sections 2.1 and 2.2 but before the transactions described in Sections 2.4 , 2.5 and Article III , Contributor shall contribute the BMK Preferred to LLC 3 on the Closing Date free and clear of all Liens.

      2.4   Contribution of Entire Membership Interests of LLC 2 and LLC 3 by Contributor to LLC 1 . On the terms and subject to the conditions set forth in this Agreement, after the transactions described in Sections 2.1 , 2.2 and 2.3 but before the transactions described in Section 2.5 and Article III , Contributor shall contribute (a) all of the membership interests of LLC 2 (the “ LLC 2 Membership Interests ”) to LLC 1 and (b) all of the membership interests of

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each of LLC 3 (the “ LLC 3 Membership Interests ”) to LLC 1, each on the Closing Date free and clear of all Liens.

      2.5   Contribution of Membership Interests of LLC 1 to the Company . On the terms and subject to the conditions set forth in this Agreement, after the transactions described in Sections 2.1 through 2.4 , but before the transactions described in Article III , on the Closing Date, Contributor shall contribute all of the membership interests of LLC 1 (the “ LLC 1 Membership Interests ”) to the Company in exchange for (a) $330,000 cash and (b) 11,000 shares of Preferred Stock of the Company (the “ Shares ”).

ARTICLE III

ADDITIONAL CLOSING TRANSACTIONS

      3.1   Purchase of Assets by the Company . On the terms and subject to the conditions set forth in this Agreement, immediately following the consummation of the transactions described in Article II , the Company shall purchase from Contributor, and Contributor shall sell, convey, assign, transfer and deliver to the Company on the Closing Date, all of Contributor’s interest in assets, properties, rights, titles and interests of every kind and nature in the Property, Plant and Equipment, whether owned, licensed or leased by Contributor (including indirect and other forms of beneficial ownership) as of the Closing Date, whether tangible or intangible, real or personal and wherever located and by whomever possessed (the “ Company Acquired Assets ”), free and clear of all Liens (other than Permitted Liens). For the avoidance of doubt, it is understood and agreed that in connection with the transactions contemplated herein, the Company is purchasing from Contributor a fee simple interest in the Ford City Real Property and the Schenley Owned Real Property (including with respect to buildings 10, 20 and 30) and leasehold interests in the Schenley Leased Real Property (including with respect to building 40) and the Kittanning Real Property.

      3.2   Purchase Price . The aggregate cash purchase price for the Company Acquired Assets shall be $4,500,000.

     3.3   Closing Transactions .

             (a)   Closing . The closing of the transactions contemplated by Article II (together with the closing of the transactions contemplated by this Article III , the “ Closing ”) shall take place in the order described in Article II above and prior to the transactions contemplated by Article III at the offices of Kirkland & Ellis LLP, 200 East Randolph Drive, Chicago, Illinois, or at such other place as is mutually agreeable to the Parties, at 10:00 a.m., local time, within 2 business days of the date the conditions set forth in Article IV are satisfied (or waived by the Party entitled to waive that condition). Immediately following the Closing of the transactions contemplated by Article II , the Article III shall take place and the Closing shall be deemed effective as of the opening of business on the Closing Date.

            (b)   Deliveries . Subject to the conditions set forth in this Agreement, at the Closing, the following Persons will make the following deliveries in the following order:

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      (i) Contributor shall furnish to the Company a statement of the estimated Working Capital as of the close of business on the second business day immediately preceding the Closing Date, which statement shall be prepared by Contributor in accordance with GAAP and shall include only those categories of assets and liabilities and line items included in, and be in a form consistent with, the February 2005 Working Capital Statement set forth in Schedule 3.3(b)(i) ;

      (ii) Contributor shall convey all of the LLC 2 Acquired Assets to LLC 2 and shall deliver to LLC 2 such appropriately executed instruments of sale, transfer, assignment, conveyance and delivery, special warranty deeds, warranty assignments of leases, bills of sale, assignments and assumptions, intellectual property assignments or other intellectual property conveyance documents, certificates of title, vehicle titles, transfer tax declarations and all other instruments of conveyance which are necessary or desirable to effect transfer to LLC 2 of good and marketable title to the LLC 2 Acquired Assets (free and clear of all Liens, other than Permitted Liens), including documents acceptable for recordation in the United States Patent and Trademark Office, the United States Copyright Office and any other similar domestic or foreign office, department or agency (it being understood that all of the foregoing shall be satisfactory in form and substance to LLC 2, the Company and the Company’s counsel);

      (iii) LLC 2 shall assume the Assumed Liabilities by delivery of an appropriate instrument to Contributor;

     (iv) Contributor shall convey the BMK Preferred to LLC 3;

      (v) Contributor shall convey all of the membership interests in LLC 2 to LLC 1 and shall deliver to LLC 1 such appropriately executed instruments of transfer, assignment, conveyance and delivery which are necessary or desirable to effect transfer to LLC 1 of good and marketable title to all of the membership interests of LLC 2 free and clear of all Liens;

      (vi) Contributor shall convey all of the membership interests in LLC 3 to LLC 1 and shall deliver to LLC 1 such appropriately executed instruments of transfer, assignment, conveyance and delivery which are necessary or desirable to effect transfer to LLC 1 of good and marketable title to all of the membership interests of LLC 3 free and clear of all Liens;

      (vii) Contributor shall convey all of the membership interests in LLC 1 to the Company and shall deliver to the Company such appropriately executed instruments of transfer, assignment, conveyance and delivery which are necessary or desirable to effect transfer to the Company of good and marketable title to all of the membership interests of LLC 1 free and clear of all Liens;

      (viii) The Company shall deliver to Contributor (a) $330,000 cash and (b) the Shares, both free and clear of all Liens;

      (ix) The Company shall deliver to Contributor the Cash Purchase Price by wire transfer of immediately available funds;

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      (x) Contributor shall convey all of the Company Acquired Assets to the Company and shall deliver to the Company such appropriately executed instruments of sale, transfer, assignment, conveyance and delivery, special warranty deeds, warranty assignments of leases, bills of sale, assignments and assumptions, intellectual property assignments or other intellectual property conveyance documents, certificates of title, vehicle titles, transfer tax declarations and all other instruments of conveyance which are necessary or desirable to effect transfer to the Company of good and marketable title to the Company Acquired Assets (free and clear of all Liens, other than Permitted Liens), including (A) a special warranty deed with respect to the Ford City Real Property, conveying to the Company fee simple title to such Ford City Real Property, in form and substance satisfactory to the Company and (B) a special warranty deed with respect to the Schenley Owned Real Property, conveying to the Company fee simple title to such Schenley Owned Real Property, in form and substance satisfactory to the Company (it being understood that all of the foregoing shall be satisfactory in form and substance to the Company and its counsel);

      (xi) The Contributor, the Company and Sun shall duly execute the Stockholders’ Agreement in the form attached hereto as Exhibit E ;

      (xii) The Contributor and LLC 2 shall duly execute a License In Agreement whereby Contributor licenses the High Performance Flush Technology IP to Eljer, Inc. (an Affiliate of the Company), on a perpetual, royalty free basis for use in connection with the “Eljer” brand, and beginning on the third anniversary of the Closing Date, for use in connection with other brands in exchange for a reasonable royalty for use on such other brands, in a form reasonably acceptable to the Parties hereto (it being understood that the Parties will continue after the date hereof to negotiate in good faith the terms of the royalty and the rights to any future improvements, extensions, updates, modifications, replacements, versions, enhancements, and developments to the High Performance Flush Technology IP as well as additional terms and conditions appropriate to such a license);

      (xiii) The Contributor and Eljer, Inc. shall duly execute the License Out Agreement whereby Eljer, Inc. licenses to an Affiliate of Parent certain rights to use the Eljer trademark on the Astracast product line for sales to certain retailers in a form reasonably acceptable to the Parties hereto;

      (xiv) Contributor shall deliver to LLC 2 (A) all books, records and other materials used primarily in or otherwise primarily associated with the Business (including with respect to the Property, Plant and Equipment); (B) certified copies of resolutions of Contributor’s board of directors, Parent, and Parent’s board of directors, each of LLC 1, LLC 2 and LLC 3 (and their manager, managing member, board of managers or other governing body) authorizing and approving the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby; and (C) such other documents or instruments as are required to be delivered at the Closing pursuant to the terms hereof or that the Company reasonably requests prior to the Closing Date to effect the transactions contemplated hereby;

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      (xv) The Company shall deliver to Contributor (A) certified copies of resolutions of the Company’s board of directors authorizing and approving the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby and (B) such other documents or instruments as are required to be delivered at the Closing pursuant to the terms hereof or that Contributor reasonably requests prior to the Closing Date to effect the transactions contemplated hereby; and

      (xvi) The Company shall deliver to Contributor such other documents or instruments as are required to be delivered at the Closing pursuant to the terms hereof or that Contributor reasonably requests prior to the Closing Date to effect the transactions contemplated hereby;

      3.4    Nonassignable Contracts . Notwithstanding anything to the contrary herein, to the extent that the assignment hereunder by Contributor to the Company of any Assumed Contract is not permitted or is not permitted without the consent of any other party to such Assumed Contract, this Agreement shall not be deemed to constitute an assignment of any such Assumed Contract if such consent is not given or if such assignment otherwise would constitute a breach of, or cause a loss of contractual benefits under, any such Assumed Contract, and the Company shall assume no obligations or liabilities under any such Assumed Contract. If any consent is not obtained or if such assignment is not permitted irrespective of consent and if the Closing shall occur, Contributor shall cooperate with the Company following the Closing Date