Exhibit 10.12


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                             PIK ON-LOAN AGREEMENT I
                                (the "AGREEMENT")



between


1.   Pool Acquisition S.A., 19-21 boulevard du Prince Henri, L-1724 Luxembourg,
     Grand-Duche de Luxembourg (the "LENDER")

                                       and

2.   Sanitec International S.A., 19-21 boulevard du Prince Henri, L-1724
     Luxembourg, Grand-Duche de Luxembourg (the "DEBTOR")




PREAMBLE:

1.   The Lender is a limited liability company duly organised under the laws of
     Luxembourg with its registered corporate seat in Luxembourg.

2.   The Debtor is a limited liability company duly organised under the laws of
     Luxembourg with its registered seat in Luxembourg.

3.   The Lender is borrower under a EUR 60,000,000 pik loan agreement (the "PIK
     LOAN AGREEMENT"; the loan referred to as the "PIK LOAN") with Bayerische
     Hypo- und Vereinsbank AG as lender (the "PIK LENDER") (all references in
     this agreement to the PIK Loan Agreement, the PIK Loan, and the PIK Lender
     shall include any agreement that refinances the PIK Loan Agreement, and the
     loan made and the lender under such agreement).

4.   The Lender intends to enter into an agreement with respect to funds that
     have been drawn under the PIK Loan Agreement and loaned to the Debtor upon
     the terms and conditions set forth herein.

NOW, THEREFORE, IT IS AGREED as follows:

1.   DEFINITIONS

     Capitalised terms used herein shall have the same meaning as defined in the
     PIK Loan Agreement unless expressly otherwise defined in this Agreement.



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2.   FACILITY

      The Lender hereby grants to the Debtor a term loan facility in the amount
      of up to (euro) 60,000,000 (the "PIK ON-LOAN I") upon the same terms and
      conditions as contained in the PIK Loan Agreement (except as otherwise set
      forth in this Agreement) save that all references to the "Bank" in the PIK
      Loan Agreement shall for the purpose of this Agreement be understood as
      references to the Lender (for the avoidance of doubt it is agreed that any
      reference to the Bank in this Agreement shall be references to the Bank as
      defined in the PIK Loan Agreement) and all references to the "Borrower" in
      the PIK Loan Agreement shall for the purpose of this Agreement be read as
      references to the Debtor, and, commencing on the date of effectiveness of
      this Agreement, the PIK On-Loan I shall always bear interest at a rate
      that is 0.0625 % greater than the interest rate on the PIK Loan. A copy of
      the PIK Loan Agreement is attached hereto as SCHEDULE 1.

3.   DRAWDOWN

      The Debtor has already received the entire proceeds of the PIK On-Loan I
      or its equivalent.

4.   PURPOSE OF THE LOAN

     The proceeds of the PIK On-Loan I have been used by the Debtor to make an
     on-loan to Sanitec Oy, a limited liability company duly organised under the
     laws of Finland with its registered corporate seat in Helsinki, which used
     the proceeds therefrom to partly refinance its debt under a senior
     multicurrency term loan and revolving credit facilities agreement dated 26
     April 2001 (as amended, novated, supplemented, superseded or extended from
     time to time) (the "SENIOR FACILITY AGREEMENT").

5.   TERM, REPAYMENT OF THE PIK ON-LOAN I

     5.1 The term of the PIK On-Loan I shall correspond to the term of the PIK
         Loan.

     5.2 The Debtor shall repay the PIK On-Loan I in accordance with Clause 4 of
         the PIK Loan Agreement (mutatis mutandis). The Lender hereby authorises
         and instructs the Debtor to repay the PIK On-Loan I to the Bank
         directly in satisfaction of the repayment obligations of the (i) Lender
         under the PIK Loan Agreement and (ii) the Debtor under this Agreement.

     5.3 The parties acknowledge that the repayment of the PIK On-Loan I and the
         uncapitalized interest are subordinate in priority pursuant to the
         SUBORDINATION AGREEMENT dated 26 April 2001 as amended (as defined in
         the Senior Facility Agreement) and/or may become subordinate pursuant
         to any subordination agreement to be entered into in connection with
         the issuance of notes by the Debtor.


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6.   TERMINATION, ACCELERATION, CANCELLATION

     In addition to the right of the Lender to accelerate and cancel the PIK
     On-Loan I upon the occurrence of an Event of Default under this Agreement,
     subject to any subordination agreement to which the Lender is or may become
     a party in relation to this Agreement, the Lender is entitled to terminate
     the PIK On-Loan I and to declare all or any part of the PIK On-Loan I from
     time to time outstanding to be immediately due and payable if and to the
     extent the PIK Lender has declared a corresponding part of the PIK Loan to
     be immediately due and payable under the PIK Loan Agreement. In addition,
     subject to the Subordination Agreement, the PIK On-Loan I may be repaid to
     the extent that it may be repaid pursuant to the terms of the indenture
     governing the notes issued by the Debtor.

7.   REIMBURSEMENT OF COST, EXPENSES AND TAXES

     7.1 The Debtor undertakes to pay and to reimburse or indemnify the Lender,
         on a full indemnity basis, for or against all costs, expenses, charges
         and fees, which shall include, without limitation, stamp, registration
         fees and reasonable legal fees and disbursements of external legal
         advisers (collectively the "COSTS"), incurred or sustained by the
         Lender in connection with the preparation, drafting, negotiation,
         registration, execution and enforcement of this Agreement and/or the
         PIK Loan Agreement and the completion of all further transactions
         therein or herein contemplated. All fees and expenses payable pursuant
         to this Clause shall be paid together with value added tax or any
         similar tax (if any) properly chargeable thereon.

     7.2 The Debtor shall indemnify the Lender against any present and/or future
         liability for taxes other than taxes on income imposed or laid under
         any applicable law on the Lender in connection with the execution of
         this Agreement and/or the PIK Loan Agreement, the performance of any
         obligation there- and hereunder or to render this Agreement and/or the
         PIK Loan Agreement valid and enforceable.

8.   LAW

     This Agreement shall be governed by and construed in accordance with the
     laws of Luxembourg.

9.   MISCELLANEOUS PROVISIONS

     9.1   Any amendment to or variation of this Agreement shall be made in
           writing in order to be valid and binding upon the parties hereto. The
           parties hereto may not waive the form requirement of writing other
           than in writing by signing an amendment hereto.

     9.2   The Debtor shall not be entitled to assign, transfer or otherwise
           dispose of any or all of its rights, claims or benefits hereunder.
           The Lender may assign all of its rights, claims and benefits
           hereunder to the PIK Lender.
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     9.3   Any notice, demand or other communication to be made hereunder or to
           be delivered by one party to the other party pursuant to this
           Agreement shall be made in writing, which shall include the
           transmission of a telefax (if duly signed by authorised signatories).

10.  JURISDICTION

     10.1  The ordinary courts of Luxembourg shall have jurisdiction in respect
           of any dispute arising out of or in connection with this Agreement
           including its validity.

           Notwithstanding the foregoing, the Lender may in its option bring
           legal proceedings against the Debtor in any other place of competent
           jurisdiction, or at any place where any assets of the Debtor are
           located. The Debtor hereby irrevocably submits to the non-exclusive
           jurisdiction of such courts.

     10.2  The Debtor hereby appoints Mr. Alan Brown ("PROCESS AGENT") to act as
           agent for service of process should any proceedings relating to this
           Agreement or the transactions contemplated thereby be brought in
           England and Wales. The Debtor will notify the Process Agent and the
           Process Agent shall confirm its acceptance in writing to the Lender
           in form and substance satisfactory to the Lender.

           This appointment is deemed irrevocable until the PIK On-Loan I has
           been repaid by the Debtor to the Lender in full. If such Process
           Agent wishes to resign or ceases to be validly appointed for any
           reason, the Debtor undertakes to inform the Lender of such wish
           fourteen (14) days in advance and to appoint another Process Agent
           domiciled in England and Wales and procures that such Process Agent
           acknowledges such appointment to the Lender.

           It is agreed that any writ, judgement or other notice or legal
           process shall be sufficiently served on the Debtor, if served upon or
           delivered to the Process Agent at its registered address, being at
           present c/o Twyford Bathrooms, Lawton Road, Alsager, Stoke-on-Trent,
           Staffordshire, ST7 2DF, UK.

11.  PARTIAL INVALIDITY

     If at any time any provision hereof or part thereof is or becomes illegal,
     invalid or unenforceable, the legality, validity or enforceability of the
     remaining provisions hereof shall in no way be affected or impaired
     thereby. The illegal, invalid or unenforceable provision shall be deemed to
     be substituted by a valid, legal and enforceable provision, which reflects
     the intention of the parties hereto to the extent that this is legally
     possible.






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Signed for and on behalf of:


Pool Acquisition S.A.


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Sanitec International S.A.


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