Document:

Exhibit 10.4

                           SENIOR NOTES LOAN AGREEMENT

                                DATED MAY 7, 2002

                                     BETWEEN

                           SANITEC INTERNATIONAL S.A.
                                    AS LENDER

                                       AND

                                   SANITEC OY
                                   AS BORROWER

                  ____________________________________________

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1.       TABLE OF CONTENTS

1.       The Loan Facility
2.       Term, Repayment of the Loan
3.       Interest, Expenses
4.       Prepayment
5.       Payments
6.       Cancellation or Acceleration of the Loan, Events of Default
7.       Reimbursement of Cost and Taxes
8.       Law
9.       Miscellaneous Provisions
10.      Jurisdiction
11.      Partial Invalidity

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This Senior Notes Loan Agreement is made this 7th day of May, 2002 between
SANITEC INTERNATIONAL S.A., a company with limited liability organised under
Luxembourg law and registered with the Companies Register of Luxembourg under
number B 82055, having its registered office at 19-21 boulevard du Prince Henri,
L - 1724 Luxembourg ("LENDER"), and SANITEC OY, a limited liability company
established and organised under the laws of Finland, registered with the trade
register of Finland under Company ID number 1700086-7, with registered address
at Mikonkatu 15A, 00100 Helsinki, Finland ("SANITEC" or "BORROWER").

WHEREAS

(A)      Sanitec as original borrower together with the entities that have
         acceded thereto as additional borrowers, and Bayerische Hypo- und
         Vereinsbank AG ("ARRANGER"), Bayerische Hypo- und Vereinsbank AG,
         London Branch and other banks as set forth in Exhibit 1 hereto
         (collectively the "SENIOR BANKS") as lenders and Bayerische Hypo- und
         Vereinsbank AG, London Branch as agent are parties to a senior facility
         agreement dated 26 April 2001 as amended, extended, renewed, restated
         supplemented or otherwise modified from time to time, and any agreement
         governing indebtedness incurred to refinance the borrowings and
         commitments then outstanding or permitted to be outstanding under such
         facilities agreement or a successor facilities agreement, whether by
         the same or any other lender or group of lenders (in each case in whole
         or in part, without limitation as to amount, terms, conditions,
         covenants and other provisions) (the "SENIOR FACILITY AGREEMENT") (any
         lenders under the Senior Facility Agreement from time to tome are
         herein referred to as the "Banks") ;

(B)      Pool Financing Helsinki Oy as borrower, Sanitec as original guarantor
         together with the entities that have acceded thereto as additional
         guarantors, and the Arranger, Bayerische Hypo- und Vereinsbank AG, and
         other banks as set forth in Exhibit 2 hereto (collectively the "JUNIOR
         BANKS") as lenders and Bayerische Hypo- und Vereinsbank AG as agent are
         parties to a junior facility agreement dated 26 April 2001 (as the same
         has been amended, supplemented and/or varied, the "JUNIOR FACILITY
         AGREEMENT") as in effect on the date hereof;

(C)      The Lender intends to issue notes (the "NOTES") under an indenture
         ("INDENTURE") pursuant to the terms and conditions set out therein in
         an aggregate principal amount of (euro) 260,000,000 (such amount the
         "GROSS PROCEEDS"), which shall be made available to Sanitec as borrower
         as a loan facility to finance the repayment of all amounts outstanding
         under the Junior Facility Agreement (references to the Notes shall also
         include the Exchange Notes as defined below); and

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(D)      The Lender, the Borrower, the Bank of New York as Trustee under the
         Indenture (the "Trustee") and the Banks named therein have entered into
         a Senior Notes Subordination Agreement pursuant to which the claims and
         rights of the Lender under this Agreement have been subordinated to the
         claims of the Banks under the Senior Facility Agreement, as such
         subordination agreement is amended, extended, renewed, restated
         supplemented, replaced or otherwise modified from time to time, and any
         subordination agreement that may be entered into in connection with the
         Senior Facility Agreement (in each case without limitation as to terms,
         conditions, covenants and other provisions) ("SENIOR NOTES
         SUBORDINATION AGREEMENT").

(E)      In connection with entering into this agreement, the Lender has also
         entered into a Deed of Pledge with the Trustee ("Deed of Pledge"),
         pledging the Lender's rights under this agreement to the Trustee in
         order to secure the obligations of the Lender under the Indenture and
         the Notes.

NOW, IT IS HEREBY AGREED AS FOLLOWS:

1.       THE LOAN FACILITY
         -----------------

1.1      The Lender agrees to make available to the Borrower upon the terms and
         subject to the conditions set out hereinafter a loan (the "LOAN") in an
         aggregate amount equal to the Gross Proceeds.

1.2      The Loan less any discount provided to the initial purchasers of the
         Notes, costs, expenses, commissions, fees and taxes (collectively
         "EXPENSES") incurred by the Lender in connection with the issuance of
         the Notes (to the extent the Lender is not or will not be compensated
         for such Expenses by way of withdrawals from the Borrower) which shall
         be borne by the Borrower pursuant to clause 3.2 hereof (the net amount
         of the Loan referred to as "PROCEEDS FROM THE NOTES") shall be
         disbursed in one amount on the same day as the Proceeds from the Notes
         are received by the Lender ("DISBURSEMENT DATE"). The Proceeds from the
         Notes shall be disbursed by the Lender directly to the respective
         lenders under the Junior Facility Agreement in satisfaction of the
         outstanding sums under that loan agreement.

2.       TERM, REPAYMENT OF THE LOAN

2.1      The term of the Loan shall commence simultaneously with the
         commencement of the term of the Notes and expire simultaneously with
         the Notes on the scheduled maturity date of the Notes, which is
         currently scheduled for May 15, 2012 (the "TERM OF THE LOAN").

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2.2      The Borrower shall repay the aggregate principal amount of the Loan by
         one single payment on the last day of the Term of the Loan or sooner if
         the Notes are redeemed, repurchased or otherwise prepaid, in part or in
         full in the same respective amount, pursuant to the terms of the
         Indenture. The Lender will notify the Borrower in writing not less than
         10 Business Days (as that term is defined in the Indenture) prior to
         any such payment becoming due.

3.       INTEREST, EXPENSES
         ------------------

3.1      Interest shall accrue on the Loan on a daily basis, commencing on the
         date that interest begins accruing on the Notes, until repayment of the
         Loan. The Borrower shall pay interest on the Loan in the manner that
         interest is payable under the Indenture, and in an amount that is the
         sum of the interest payable by the Lender under the Indenture and
         0.0625% p.a. and, if applicable, additional interest under an agreement
         between the Lender and the initial purchasers of the Notes with respect
         to the registration of a like principal amount of notes (the "EXCHANGE
         NOTES") with the United States Securities and Exchange Commission and
         the exchange of the Exchange Notes for the Notes ("INTEREST"). Such
         Interest shall be due and payable by the Borrower to the Lender on the
         date (each an "INTEREST PAYMENT DATE") that is 2 Business Days before
         the corresponding interest on the Notes becomes due and payable by the
         Lender to the holders of the Notes ("NOTEHOLDERS"). All references in
         this Agreement to the Notes shall include the Exchange Notes.

3.2      In addition, the Borrower shall pay the Lender an amount or amounts
         equal to any amount due and payable under the Notes that is not
         classified as interest or principal at such times, including without
         limitation Expenses and Additional Amounts (as defined in the
         Indenture), as those amounts are due and payable under the Notes.

3.3      If any payment due and payable by the Borrower hereunder is not made on
         the applicable due date, the Lender shall be entitled to charge lump
         sum damages in an amount equal to the amount payable by the Lender to
         the Noteholders because of such delay in payment.

3.4      The Lender shall notify the Borrower in writing of the date on which
         any payment becomes due and payable pursuant to this Agreement not
         later than 10 Business Days before such payment is due.

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4.       PREPAYMENT
         ----------

         The Borrower may not make prepayments on the Loan except where such
         payment corresponds to a payment due under or in connection with the
         Notes.

5.       PAYMENTS
         --------

5.1      All payments by the Borrower to the Lender hereunder shall be made in
         EURO to such account as the Lender may from time to time nominate in
         writing to the Borrower.

         In the event of the Lender receiving payments or being credited with
         amounts in a currency other than the currency in which the payment is
         owed by the Borrower (be it in cash, as a remittance or by utilising
         cash deposits or the like), the Lender will credit the Borrower with
         the amount of such currency, which it may obtain by exchanging such
         currency at the spot rate of exchange in the foreign exchange market at
         the earliest possible time it may exchange such payment.

5.2      All amounts due and payable by the Borrower hereunder shall be paid net
         in full without any set off, retention, withholding or deduction of
         whatever nature for or on account of charges, fees, duties, costs,
         expenses and taxes relating to or in connection with such payments
         until the receipt of such payments by the bank designated by the Lender
         (together "COSTS"), which Costs shall be for the account of and be
         borne by the Borrower, and payments shall only be considered to have
         been fully made with discharging effect upon the Borrower to the Lender
         if and to the extent such payments shall have been credited to the
         relevant account of the Lender designated by it and are at the free
         disposal of the Lender without any restriction related to or caused by
         the Borrower.

         In the event the Borrower is required by law to make any such deduction
         or withholding from any payment hereunder, then the Borrower shall
         promptly notify the Lender and forthwith pay to the Lender such
         additional amount necessary to ensure that the Lender receives and
         retains (free from any liability relating to deduction or withholding)
         a net amount which, after deduction or withholding, is equal to the
         full amount which the Lender would have received had no such deduction
         or withholding been made.

         If payments have been credited to the designated account of the Lender
         prior to the due date for such payment, this shall not entitle the
         Borrower to any credit of interest.

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5.3      The place of performance in respect of payment obligations of the
         Borrower shall be the place of the bank designated by the Lender to
         receive the relevant payment.

5.4      The Borrower hereby irrevocably authorises the Lender to apply any
         payment received from the Borrower, in its discretion, in or towards
         satisfaction of any sum due and owed to the Lender hereunder.

5.5      If any payment falls due hereunder on a day which is not a Business
         Day, the Borrower shall effect payment in the manner that payment is
         required to be made pursuant to the Indenture in such circumstances.

6.       CANCELLATION OR ACCELERATION OF THE LOAN, EVENTS OF DEFAULT
         -----------------------------------------------------------

6.1      An Event of Default under the Indenture shall constitute an event of
         default under this Agreement.

6.2      On the occurrence of any one or more of the Events of Default or at any
         time thereafter, the Lender shall be entitled, notwithstanding and
         without prejudice to any other rights and remedies under any applicable
         law, upon five (5) days' prior written notice (and provided the Event
         of Default is not cured during such period) to declare that any amount
         payable under this Agreement shall become immediately due and payable
         by the Borrower to the Lender.

         Notwithstanding such acceleration, the Borrower shall be obliged to
         indemnify the Lender for and against all Costs as a consequence of or
         in connection with the acceleration of the Loan.

7.       REIMBURSEMENT OF COSTS AND TAXES
         --------------------------------

7.1      The Borrower undertakes to pay and to reimburse or indemnify the
         Lender, on a full indemnity basis, for or against all Costs which shall
         include, without limitation, stamp duties, registration fees and
         reasonable legal fees and disbursements of external legal advisers,
         reasonably incurred or sustained by the Lender which accrue in
         connection with the enforcement of this Agreement. 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 Borrower shall indemnify the Lenders 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.

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8.       LAW
         ---

         This Agreement shall be governed by and construed in accordance with
         Finnish law.

9.       MISCELLANEOUS PROVISIONS
         ------------------------

9.1      The Lender and the Borrower acknowledge that i) pursuant to the Senior
         Notes Subordination Agreement the claims and rights of the Lender under
         this Agreement are subordinated to the claims and rights of the Banks
         under the Senior Facility Agreement, and ii) pursuant to the Deed of
         Pledge, the Lender has pledged its rights and interests hereunder to
         the Trustee for the benefit of the holders of the Notes. The Lender
         undertakes in favour of the Banks under the Senior Facility Agreement
         that it will not take any action to enforce or seek to exercise any of
         its claims or rights under this Agreement against the Borrower unless
         permitted pursuant to the Senior Notes Subordination Agreement.

9.2      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. Any amendments to this
         agreement shall be made in compliance with Section 4.18 of the
         Indenture.

9.3      The Borrower shall not be entitled to assign, transfer or otherwise
         dispose of any or all of its rights, claims or benefits hereunder. The
         Lender shall only be permitted to assign, transfer or otherwise dispose
         of any of its rights, claims or benefits hereunder to the extent
         permitted by the Indenture.

9.4      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) and shall be
         delivered or communicated to the parties hereto at the addresses set
         forth on page 3 above.

10.      JURISDICTION
         ------------

         The courts of Finland shall have jurisdiction in respect of any dispute
         arising out of or in connection with this Agreement, including its
         validity, the District Court of Helsinki being the court of first
         instance.

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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.

[____________], this 7th day of May, 2002

___________________________
SANITEC INTERNATIONAL S.A.

_____________________________________
SANITEC OY

__________________________
BAYERISCHE HYPO- UND VEREINSBANK AG
(with respect to clause 9.1)

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                                                                       EXHIBIT 1

                                THE SENIOR BANKS

The Governor and Company of the Bank of Ireland
The Governor and Company of the Bank of Scotland
Bayerische Landesbank Girozentrale
BHF-Bank Aktiengesellschaft
CDP Euromezz S.a.R.L.
Credit Suisse First Boston
Dresdner Bank AG in Hamburg
Mizuho Corporate Bank, Ltd
Goldman Sachs Credit Partners, LP
Harbourmaster Loan Corporation B.V
Landesbank Hessen-Thueringen Girozentrale
Landesbank Schleswig-Holstein Girozentrale
Nordea Bank Finland Plc
Merrill Lynch Capital Corporation
OKO Osuuspankkien Keskusoankki Oyj
The Prudential Assurance Company Limited
The Royal Bank of Scotland Plc, Niederlassung Frankfurt
NORDIC INVESTMENT BANK
Jubilee CDO I B.V.
Deutsche Bank AG, London Duchess I CDO S.A.
Centrobanca Banca di Credito Finanziario e Mobilare S.p.A.
Bayerische Hypo-und Vereinsbank AG, London branch

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                                                                       EXHIBIT 2

                                THE JUNIOR BANKS

The Governor and Company of the Bank of Ireland
Bayerische Landesbank Girozentrale
Mizuho Corporate Bank, Ltd
Goldman Sachs Credit Partners, LP
Landesbank Schleswig-Holstein Girozentrale
Merrill Lynch Capital Corporation
The Prudential Assurance Company Limited
Copernicus Euro CDO-I B.V
Blue Eagle CDO I S.A.
Jubilee CDO I B.V.
Duchess I CDO S.A
RMF Umbrella SICAV-MI Fonds High Yield Europe
RMF Umbrella SICAV-RMF High Yield Opportunities
Swiss Life High Yield Strategies
Bayerische Hypo-und Vereinsbank AG, London branchExhibit 10.5

                              POOL ACQUISITION S.A.
                             AS SUBORDINATED LENDER

                           SANITEC INTERNATIONAL S.A.
                                   AS COMPANY

                              THE BANK OF NEW YORK
                     AS TRUSTEE FOR THE HOLDERS OF THE NOTES

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

                  INTERCOMPANY ON-LOANS SUBORDINATION AGREEMENT

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

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                                    CONTENTS

CLAUSE                                                                 PAGE

1.       INTERPRETATION...................................................2

2.       SUBORDINATION OF SUBORDINATED LIABILITIES........................4

3.       COVENANTS OF THE SUBORDINATED CREDITORS..........................5

4.       PROHIBITED PAYMENTS..............................................6

5.       SUBROGATION......................................................6

6.       ENFORCEMENT......................................................6

7.       OTHER SECURITY AND DEALINGS......................................7

8.       REALISATION OF DISTRIBUTIONS.....................................7

9.       SUCCESSION.......................................................8

10.      NOTICES, AMENDMENTS, WAIVER......................................8

11.      COUNTERPARTS.....................................................8

12.      PARTIAL INVALIDITY; WAIVER.......................................8

13.      LAW..............................................................9

14.      THIRD PARTY RIGHTS...............................................9

15.      JURISDICTION.....................................................9

16.      FURTHER ASSURANCE...............................................10

<PAGE>

This INTERCOMPANY ON-LOANS SUBORDINATION AGREEMENT (the "AGREEMENT") is made the
7th day of May 2002

BETWEEN:

(1)      POOL ACQUISITION S.A., a public limited liability company organised
         under the laws of Luxembourg (the "SUBORDINATED LENDER"); and

(2)      SANITEC INTERNATIONAL S.A., a public limited liability company
         organised under the laws of Luxembourg (the "COMPANY"); and

(3)      THE BANK OF NEW YORK, acting as Trustee under the Indenture (the
         "TRUSTEE").

WHEREAS:

(A)      The Subordinated Lender directly holds approximately 93% of the capital
         stock of the Company. The Company holds a 100% of the capital stock in
         Pool Acquisition Netherlands B.V. (in liquidation), which holds 100% of
         the capital stock in Sanitec Oy (previously called Pool Acquisition
         Helsinki Oy) ("SANITEC") and Pool Sub-Financing Helsinki Oy. Pool
         Sub-Financing Helsinki Oy holds 100% of the capital stock in Pool
         Financing Helsinki Oy.

(B)      Certain investors (the "INVESTORS") have granted a shareholder loan to
         Sanitec under a Shareholder Loan Agreement (the "SHAREHOLDER LOAN")
         dated 26 April 2001, as amended, for the purpose of financing the
         acquisition of Sanitec Oyj, an entity which has subsequently been
         merged with and into Sanitec.

(C)      Bayerische Hypo- und Vereinsbank AG (the "PIK LENDER") has granted a
         PIK loan to Pool Sub-Financing Helsinki Oy under a PIK Loan Agreement
         (the "PIK LOAN"), dated 17 December 2001, as amended, in the amount of
         (euro)60,000,000.

(D)      Pool Sub-Financing Helsinki Oy as borrower under a EUR 60,000,000 PIK
         On-Loan Agreement I (the "PIK ON-LOAN I"), has lent the proceeds of the
         PIK Loan to Pool Financing Helsinki Oy.

(E)      Pool Financing Helsinki Oy as borrower under a EUR 60,000,000 PIK
         On-Loan Agreement II (the "PIK ON-LOAN II") has lent the proceeds from
         the PIK On-Loan I to Sanitec for the purpose of partially refinancing
         existing debt of Sanitec.

(F)      On the date hereof, the Company will issue 9% Senior Notes due 2012
         pursuant to that certain indenture, dated as of the date hereof (the
         "INDENTURE"), by and

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         between the Company and the Trustee. In connection with the issuance of
         the Notes, it has been agreed that the claims of the Investors under
         the Shareholder Loan and the claims of the PIK Lender under the PIK
         Loan will be structurally subordinated to the claims of the Holders.

(G)      To achieve the subordination referred to in (F) above, the Investors,
         Sanitec, the Company and the Subordinated Lender have agreed by way of
         a Shareholder Loan Transfer and Assumption Agreement, dated as of 2 May
         2002, (the "SHAREHOLDER LOAN TRANSFER AND ASSUMPTION AGREEMENT") to
         establish a structure in which the loan currently made to Sanitec under
         the Shareholder Loan will be granted to the Subordinated Lender, then
         on-lent to the Company under a Luxembourg Shareholder Loan Facility
         Agreement (the "LUXEMBOURG SHAREHOLDER LOAN FACILITY AGREEMENT") and
         then on-lent to Sanitec under a Finnish Shareholder Loan Facility
         Agreement (the "FINNISH SHAREHOLDER LOAN FACILITY AGREEMENT").

(H)      To achieve the structural subordination referred to in (F) above, Pool
         Sub-Financing Helsinki Oy, Pool Financing Helsinki Oy, Sanitec Oy, the
         Company, the Subordinated Lender and the PIK Lender have agreed by way
         of a PIK On-Loan Transfer and Assumption Agreement, dated as of 2 May
         2002, (the "PIK ON-LOAN TRANSFER AND ASSUMPTION AGREEMENT") to
         establish a structure whereby the Subordinated Lender will be the
         initial borrower under the PIK Loan and the Company will be the
         borrower under the PIK On-Loan I and Sanitec the borrower under the PIK
         On-Loan II.

(I)      It has been agreed between the parties hereto that the repayment claims
         of the Subordinated Lender under the Luxembourg Shareholder Loan
         Facility Agreement and the PIK On-Loan I shall be regulated and/or
         subordinated in the manner set out herein.

NOW IT IS HEREBY AGREED as follows:

1.       INTERPRETATION

1.1      In this Agreement:

         "DISCHARGE DATE" means the date on which all Liabilities have been
         fully paid and discharged to the satisfaction of the Trustee (acting
         reasonably), whether or not as a result of an enforcement.

         "DISTRIBUTION" means, in respect of any Person, any payment (whether
         directly or by set-off or otherwise) by or distribution of assets of
         such Person, whether in cash,

                                       2
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         property, securities or otherwise.

         "EVENT OF DEFAULT" means any event of default (howsoever described)
         under the Senior Notes Documents.

         "HOLDERS" means a Person in whose name a Note is registered.

         "INSOLVENCY EVENT" means, in respect of the Company, that it is subject
         to a bankruptcy, insolvency, winding-up or administration order or a
         voluntary arrangement or that an administrative receiver has been
         appointed or that any event analogous with any of the foregoing has
         occurred under any applicable law.

         "LIABILITIES" means all present and future sums, liabilities and
         obligations payable or owing by the Company to any Holder (whether
         contractual or by operation of law) under, pursuant to or otherwise in
         connection with, the Senior Notes Documents.

         "NOTES" means the Company's 9% Senior Notes due 2012 issued pursuant to
         the Indenture, including the Initial Notes issued on the date hereof
         and any Additional Notes or Exchange Notes issued from time to time
         under the Indenture.

         "PROHIBITED PAYMENTS" means the repayment of all or, from time to time,
         any part of, or the refinancing or restructuring of, any Subordinated
         Liability.

         "SECURITY" means any encumbrance, hypothecation, guarantee, indemnity
         or other security or preferential arrangement, present or future,
         actual or contingent.

         "SENIOR NOTES DOCUMENTS" means the Indenture and the Senior Notes.

         "SUBORDINATED LIABILITIES" means all present and future sums,
         liabilities and obligations payable or owed by the Company to the
         Subordinated Lender under, pursuant to or in connection with the
         Luxembourg Shareholder Loan Facility Agreement and the PIK On-Loan I.

1.2      Terms and expressions defined in the Indenture shall have the same
         meaning in this Agreement except as otherwise defined herein.

1.3      Unless the context or the express provisions of this Agreement
         otherwise require, all references to a party include references to its
         permitted assignees and transferees and its successors in title and
         (where applicable) to any replacement or additional agent or Security
         Agent or Trustee.

                                       3
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1.4      Save where the contrary is indicated, any reference in this Agreement
         to:

         1.4.1    this Agreement or any other agreement or document shall be
                  construed as a reference to this Agreement or, as the case may
                  be, such other agreement or document as the same may have
                  been, or may from time to time be, amended, varied, novated or
                  supplemented;

         1.4.2    a statute shall be construed as a reference to such statute as
                  the same may have been, or may from time to time be, amended
                  or re-enacted.

1.5      Clause headings are for ease of reference only.

2.       SUBORDINATION OF SUBORDINATED LIABILITIES

2.1      In consideration of the purchase of the Notes by the Holders, the
         Subordinated Lender and the Company hereby agree with the Trustee (on
         behalf of, and for the benefit of, the Holders) and declare as follows:

2.2      Until the Discharge Date, the Subordinated Liabilities shall be
         irrevocably subordinated to all Liabilities and, except with respect to
         payments permitted by Clause 4, subject in right of payment to the
         extent and in the manner hereinafter set forth. The subordination
         effected hereunder shall also apply upon and after the application for
         the commencement of insolvency proceedings or any similar event in
         relation to the Company. The subordination shall continue to be
         effective upon any amendment, supplement, variation or novation of any
         Senior Notes Documents.

2.3      Until the Discharge Date, the Company will not make any prepayment or
         payment (whether in cash, by way of transfer of assets or otherwise) on
         account of, or grant or permit to subsist any Security in respect of,
         the Subordinated Liabilities nor shall the Subordinated Lender, as set
         forth in Clause 6 below, demand or receive any such payment or
         prepayment or Security or to commence any proceedings against the
         Company or take any action in respect of the Subordinated Liabilities
         or any part thereof (including, without limitation, the acceleration,
         termination or cancellation of the Subordinated Liabilities or the
         exercise of any right of set-off, counterclaim or lien or any action or
         step with a view to winding-up the Company).

2.4      In the event of payment, or prepayment (whether in cash, by way of
         transfer of assets or otherwise) being made to the Subordinated Lender,
         or any other action resulting in the receipt of funds by the
         Subordinated Lender with respect to Subordinated Liabilities, or
         Security being held by the Subordinated Lender in breach of Clause 2.3
         or Clause 6, the Subordinated Lender will forthwith pay to the Trustee
         for the benefit of the Holders any sum or other assets which

                                       4
<PAGE>

         shall have been received by it from the Company in consequence of such
         breach (which sum or other assets shall be deemed not to have reduced
         the liability of the Company to the Subordinated Lender) and until such
         payment or transfer the Subordinated Lender will hold such sums or
         other assets or such Security (as the case may be) on trust for the
         Company provided, however, that these provisions shall not constitute
         or create or be deemed to constitute or create any encumbrance or other
         security interest of any kind.

2.5      Neither the Subordinated Lender nor the Company shall knowingly take or
         omit to take any action whereby the subordination or any rights of the
         Trustee or Holders under this Agreement of the Subordinated Liabilities
         (or any part thereof) as contemplated in this Clause 2 might be
         terminated, impaired or adversely affected.

2.6      Upon an Insolvency Event occurring in respect of the Company:

         2.6.1    the claims of the Subordinated Lender in respect of the
                  Subordinated Liabilities shall be postponed in all respects to
                  the Liabilities;

         2.6.2    the Subordinated Lender shall not, unless otherwise directed
                  by the Trustee, provide for the Subordinated Liabilities until
                  the Liabilities have first been paid or discharged in full
                  (and for all purposes any Distribution from the Company or any
                  of its subsidiaries received by the Trustee shall only be
                  taken to discharge the Liabilities to the extent of the actual
                  amount received);

         2.6.3    if the Subordinated Lender is directed by the Trustee to prove
                  for the Subordinated Liabilities then it shall act in
                  accordance with such directions and shall procure that any
                  resultant Distributions shall be made by the liquidator of the
                  Company, or any other Person making the Distribution, to the
                  Trustee to the extent necessary to repay all the Liabilities
                  in full; and

         2.6.4    the Subordinated Lender hereby irrevocably authorises and
                  directs the Trustee to submit any proof and/or to instruct the
                  relevant liquidator or other Person to make Distributions in
                  respect of the Subordinated Liabilities in accordance with the
                  foregoing.

3.       COVENANTS OF THE SUBORDINATED CREDITORS

3.1      The Subordinated Lender hereby covenants with the Trustee (on behalf of
         and for the benefit of the Holders) that until the Discharge Date it
         will not, save to the extent permitted by Clause 4 (PROHIBITED
         PAYMENTS), (i) assign, pledge or otherwise dispose of the Subordinated
         Liabilities or any part thereof; (ii)

                                       5
<PAGE>

         purport to set off at any time any amount payable by it to the Company
         against any amount of the Subordinated Liabilities; and (iii) enforce
         any of the Subordinated Liabilities.

3.2      The Subordinated Lender and the Company hereby agree that the
         Subordinated Liabilities shall not be assignable except as otherwise
         expressly permitted by the Indenture.

3.3      The Subordinated Lender and the Company hereby agree not to amend,
         supplement, release, cancel or waive, any term of the Luxembourg
         Shareholder Loan Facility Agreement and the PIK On-Loan I except as
         otherwise expressly permitted by the Indenture.

4.       PROHIBITED PAYMENTS

         Prior to the Discharge Date, the Subordinated Lender shall not request
         a Prohibited Payment and the Company shall not make a Prohibited
         Payment except to the extent that such Payment is expressly permitted
         pursuant to, and is made in accordance with, the terms of the
         Indenture.

5.       SUBROGATION

         The Subordinated Lender hereby agrees, to the extent necessary for the
         Holder to realise the benefits of this Agreement, that the Trustee (on
         behalf of, and for the benefit of, the Holders) will be subrogated to
         the rights and claims under, and with respect of, the Subordinated
         Liabilities. The Subordinated Lender shall do all acts and things
         (including, without limitation, the execution of powers of attorney,
         assignments or other instruments) as are required to effect such
         subrogation.

6.       ENFORCEMENT

         If at any time before the Discharge Date there occurs an event or
         circumstance which entitles the Subordinated Lender to terminate or
         accelerate any Subordinated Liability, or any event giving rise to an
         obligation of the Company to repay any Subordinated Liability, the
         Subordinated Lender shall promptly notify the Trustee of such event but
         the Subordinated Lender shall not:

         (a)      terminate or accelerate any of the Subordinated Liabilities or
                  otherwise declare any of the Subordinated Liabilities
                  prematurely payable or due;

         (b)      enforce the Subordinated Liabilities by attachment, execution
                  or by initiating or supporting any insolvency proceedings;

                                       6
<PAGE>

         (c)      demand or receive any Security in respect of the Subordinated
                  Liabilities;

         (d)      commence any proceedings against the Company in respect of the
                  Subordinated Liabilities; or

         (e)      take any other enforcement action in respect of the
                  Subordinated Liabilities or any part thereof.

7.       OTHER SECURITY AND DEALINGS

         The Subordinated Lender and the Company hereby agree that the
         subordination hereby effected shall be in addition to and shall not
         prejudice or affect any Security or any right or remedy of the Holders
         in respect of the Liabilities whether from the Company or the
         Subordinated Lender (or either of them) or any other person nor shall
         the provisions hereof be prejudiced or affected by:

         (a)      any Security or right or remedy of the Holders in respect of
                  the Liabilities;

         (b)      any time or indulgence granted by the Holders to the Company
                  or to any other person;

         (c)      any variation, amendment, supplement or extension of the terms
                  of any Security in respect of the Liabilities;

         (d)      any arrangement or compromise made between the Holders or the
                  Trustee and any of the Company or any other person;

         (e)      any dealing with, exchange, release or invalidity of any
                  Security in respect of the Liabilities;

         (f)      any omission on the part of the Holders or the Trustee to
                  enforce any of their rights against any of the Company or any
                  other person or any Security in respect of the Liabilities;

         (g)      the filing for insolvency proceedings in relation to
                  Subordinated Lender and/or the Company; and

         (h)      any other fact or circumstance whatsoever whether or not
                  similar to any of the foregoing which could or might in any
                  way diminish the Subordinated Lender's or the Company's
                  obligations or the rights of the Trustee (for itself and for
                  the benefit of the Holders) under this Agreement.

8.       REALISATION OF DISTRIBUTIONS

                                       7
<PAGE>

         The Trustee may realise any Distribution in kind received in respect of
         the Subordinated Liabilities, and may convert any amount received in
         respect of the Subordinated Liabilities, into a currency in which the
         Company is liable at its spot rate, and the Liabilities shall not be
         deemed reduced by the Distribution or (as appropriate) conversion
         proceeds are available to be applied towards the Liabilities.

9.       SUCCESSION

         This Agreement is a contract for the benefit of the Holders. The
         Subordinated Lender and the Company each agree that upon any change in
         Trustee pursuant to the Indenture, the relevant successor to the
         Trustee shall become a party to this Agreement by acceding hereto
         without the need of any consent or action of any party hereto.

10.      NOTICES, AMENDMENTS, WAIVER

10.1     Each communication to be made hereunder shall be made in writing but,
         unless otherwise stated, may be made by facsimile or letter.

10.2     Any communication or document to be made or delivered by one person to
         another pursuant to this Agreement shall (unless that other person has
         by written notice to the other parties hereto specified another
         address) be made or delivered to that other person at the addresses as
         set out on the execution pages hereof.

10.3     All amendments or supplements to this Agreement or any waiver with
         regard to this Agreement (including this Clause 10.3) shall be made in
         writing and in accordance with, and in the manner provided for in, the
         Indenture.

11.      COUNTERPARTS

         This Agreement may be executed in any number of counterparts and by the
         different parties hereto on separate counterparts each of which, when
         so executed and delivered, shall be an original but all the
         counterparts shall together constitute but one and the same instrument.

12.      PARTIAL INVALIDITY; WAIVER

12.1     If at any time, one or more of the provisions hereof is or becomes
         invalid, illegal or unenforceable in any respect under the law of any
         jurisdiction, such provision shall as to such jurisdiction, be
         ineffective to the extent necessary without affecting or impairing the
         validity, legality and enforceability of the remaining provisions
         hereof or of such provisions in any other jurisdiction. The parties
         agree that such illegal, invalid or unenforceable provision shall be
         deemed replaced by such provision

                                       8
<PAGE>

         which comes as close as possible to the purpose of this Agreement.

12.2     No failure to exercise, nor any delay in exercising, on the part of the
         Security Agent or the Trustee, any right or remedy hereunder shall
         operate as a waiver thereof, nor shall any single or partial exercise
         of any right or remedy prevent any further or other exercise thereof or
         the exercise of any other right or remedy. The rights and remedies
         provided hereunder are cumulative and not exclusive of any rights or
         remedies provided by law.

13.      LAW

         This Agreement shall be governed by, and shall be construed in
         accordance with, the laws of England and Wales.

14.      THIRD PARTY RIGHTS

14.1     Subject to Clause 14.2 below, a person who is not a party to this
         Agreement has no right under the Contracts (Rights of Third Parties)
         Act 1999 to enjoy the benefit of, or enforce, any term of this
         Agreement.

14.2     Each Holder may enjoy the benefit of, and enforce, any term of this
         Agreement in accordance with the Contracts (Rights of Third Parties)
         Act 1999 and this Agreement may not be amended, terminated or rescinded
         in any manner adverse to the interests of the Holders without the
         consent of the Holders of 75% in principal amount of the Notes then
         outstanding.

15.      JURISDICTION

15.1     To the extent that the Company, the Subordinated Lender or any of their
         respective properties, assets or revenues may have or may hereafter
         become entitled to, or have attributed to it, any right of immunity, on
         the grounds of sovereignty or otherwise, from any legal action, suit or
         proceeding, from the giving of any relief in any such legal action,
         suit or proceeding, from set-off or counterclaim, from the competent
         jurisdiction of any court, from service of process, from attachment
         upon or prior to judgment, from attachment in aid of execution of
         judgment, or from execution of judgment, or other legal process or
         proceeding for the giving of any relief or for the enforcement of any
         judgment, in any competent jurisdiction in which proceedings may at any
         time be commenced, with respect to its obligations, liabilities or any
         other matter under or arising out of or in connection with this
         Agreement and the transactions contemplated hereby, each the Company
         and the Subordinated Lender hereby irrevocably and unconditionally
         waive, and agree not to plead or claim, any such immunity and consent
         to such relief and enforcement.

                                       9
<PAGE>

15.2     Each of the parties hereto irrevocably agrees that any suit, action or
         proceeding arising out of or based upon this Agreement shall be
         instituted in the courts of England and Wales; and irrevocably waives,
         to the fullest extent it may effectively do so, any objection which it
         may now or hereafter have to the laying of venue of any such
         proceeding; and irrevocably submits to the jurisdiction of the courts
         of England and Wales in any such suit, action or proceeding. However,
         the Trustee shall not be prevented from bringing proceedings in any
         other courts with jurisdiction. To the extent allowed by law, the
         Trustee may bring concurrent proceedings in any number of
         jurisdictions. The Company and the Subordinated Lender have each
         appointed Twyford Bathrooms as their respective authorised agent (the
         "UK AUTHORISED AGENT") upon whom process may be served in any such
         suit, action or proceeding arising out of or based upon this Agreement,
         which may be instituted in a court located in London, England (the "UK
         APPOINTMENT LETTER AGREEMENT"). The Company and the Subordinated Lender
         each expressly consent to the jurisdiction of the courts of England and
         Wales in respect of any such action and waive any other requirements of
         or objections to personal jurisdiction with respect thereto. Such
         appointment shall be irrevocable unless and until replaced by an agent
         reasonably acceptable to the Trustee. The Company and the Subordinated
         Lender each represent and warrant that the UK Authorised Agent has
         agreed to act as said agent for service of process, and the Company and
         the Subordinated Lender each agree to take any and all action,
         including the filing of any and all documents and instruments, that may
         be necessary to continue such appointment in full force and effect as
         aforesaid. Service of process upon the UK Authorised Agent and written
         notice of such service to the Company or the Subordinated Lender, as
         the case may be, shall be deemed, in every respect, effective service
         of process. If the appointment of the UK Authorised Agent ceases to be
         effective in respect of either the Company and/or the Subordinated
         Lender (whether as a result of a breach of the terms of this clause
         15.2 or otherwise), the Company and/or the Subordinated Lender, as the
         case may be, shall immediately appoint a further person in England
         reasonably acceptable to the Trustee to accept service of process on
         its behalf in England and, failing any such appointment within 15 days,
         the Trustee shall be entitled to appoint such a person by notice to the
         Company and/or the Subordinated Lender, as the case may be. Nothing
         contained herein shall affect the right to serve process in any other
         manner permitted by law.

16.      FURTHER ASSURANCE

         Each of the Company and the Subordinated Lender shall do all acts and
         things (including, without limitation, the execution of powers of
         attorney, assignments or other instruments) as are required to give
         effect to the purposes of this Agreement.

                                       10
<PAGE>

                            (SIGNATURE PAGE FOLLOWS.)

                                       11
<PAGE>

THIS AGREEMENT has been executed by the parties the day and year first above
written.

POOL ACQUISITION S.A.

By:      _____________________________
         Name:
         Title:

Address: 19-21 boulevard Prince Henri
         L-1724 Luxembourg
         RC Luxembourg 13 82 054

Fax:

Attention:        Dr. Manuel Frias

SANITEC INTERNATIONAL S.A.

By:      _____________________________
         Name:
         Title:

Address: 19-21 boulevard Prince Henri
         L-1724 Luxembourg
         RC Luxembourg 13 82 054

Fax:

Attention:        Dr. Rainer S. Simon

THE BANK OF NEW YORK, in its capacity as Trustee under the Indenture

By:      _____________________________
         Name:
         Title:

Address: One Canada Square
         London E14 5AL England

         Fax:     +44 (0) 207 964 6399

                                      S-1

<PAGE>

Attention:        Corporate Trust Administration

                                      S-2

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