<PAGE>
                                                                   EXHIBIT 10.17

                        FIRST AMENDMENT TO LOAN AGREEMENT

         THIS FIRST AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made and
entered into as of September 17, 2001 (the "Amendment Effective Date") by and
among NATCO GROUP INC., a Delaware corporation (the "U.S. Borrower"); NATCO
CANADA, LTD., a corporation formed under the laws of the Province of Ontario
(the "Canadian Borrower"); AXSIA GROUP LIMITED, a company incorporated in
England and Wales under the Companies Act of the United Kingdom (the "U.K.
Borrower"); each of the lenders which is or may from time to time become a party
to the Loan Agreement (as defined below) (individually, a "Lender" and,
collectively, the "Lenders"), THE CHASE MANHATTAN BANK, acting as agent for the
U.S. Lenders (in such capacity, together with its successors in such capacity,
the "U.S. Agent"); ROYAL BANK OF CANADA, acting as agent for the Canadian
Lenders (in such capacity, together with its successors in such capacity, the
"Canadian Agent"), and CHASE MANHATTAN INTERNATIONAL LIMITED, acting as agent
for the U.K. Lenders (in such capacity, together with its successors in such
capacity, the "U.K. Agent"). The U.S. Borrower, the Canadian Borrower and the
U.K. Borrower are herein collectively called the "Borrowers" and the U.S. Agent,
the Canadian Agent and the U.K. Agent are herein collectively called the
"Agents".

                                    RECITALS

         A. The Borrowers, the Lenders and the Agents executed and delivered
that certain Loan Agreement (as amended, the "Loan Agreement") dated as of March
16, 2001. Any capitalized term used in this Amendment and not otherwise defined
shall have the meaning ascribed to it in the Loan Agreement.

         B. The Borrowers, the Lenders and the Agents desire to amend the Loan
Agreement in certain respects.

         NOW, THEREFORE, in consideration of the premises and the mutual
agreements, representations and warranties herein set forth, and further good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrowers, the Lenders and the Agents do hereby agree as
follows:

         SECTION 1. Amendments to Loan Agreement. On and after the Amendment
Effective Date, the Loan Agreement is hereby amended as follows:

         (a) The definition of "Borrowed Money Indebtedness" set forth in
Section 1.1 of the Loan Agreement is hereby amended to read in its entirety as
follows:

                  Borrowed Money Indebtedness means, with respect to any Person,
         without duplication, (i) all obligations of such Person for borrowed
         money, (ii) all obligations of such Person evidenced by bonds,
         debentures, notes or similar instruments evidencing borrowed money,
         (iii) all obligations of such Person under conditional sale or other
         title retention agreements relating to Property purchased by such
         Person, (iv) all obligations of such Person issued or assumed as the
         deferred purchase price of Property or services (excluding obligations
         of such Person to creditors for raw materials, inventory, services and
         supplies and deferred payments for services to employees and former
         employees incurred in the ordinary course of such

<PAGE>

         Person's business), (v) all lease obligations of such Person which
         have been capitalized on the balance sheet of such Person in
         accordance with GAAP, (vi) all obligations of others secured by any
         Lien on Property owned or acquired by such Person, whether or not the
         obligations secured thereby have been assumed, equal to the lesser of
         the amount of such obligation or the fair market value of such
         Property, (vii) Interest Rate Risk Indebtedness of such Person, (viii)
         all obligations of such Person in respect of outstanding surety bonds
         or letters of credit issued for the account of such Person (or for
         which such Person is primarily liable) or bankers' acceptances drawn
         by such Person and (ix) all guarantees of such Person.

         (b) The next to the last sentence of the definition of "Eligible
Accounts" set forth in Section 1.1 of the Loan Agreement is hereby amended to
read in its entirety as follows:

         Accounts for progress payments which are due under contracts entered
         into in the ordinary course of business and that otherwise satisfy all
         of the above criteria shall constitute Eligible Accounts (net of all
         amounts relating to advance billings) for purposes of the Canadian
         Borrowing Base and the U.K. Borrowing Base; provided, however, that the
         aggregate amount of such Accounts included in the U.K. Borrowing Base
         at any given time shall not exceed fifty percent (50%) of the U.K.
         Borrowing Base.

         (c) The definition of "Permitted Investments" set forth in Section 1.1
of the Loan Agreement is hereby amended to read in its entirety as follows:

                  Permitted Investments means: (a) readily marketable securities
         issued or fully guaranteed by the full faith and credit of the United
         States of America or of Canada or of the United Kingdom with maturities
         of not more than one year; (b) commercial paper rated "Prime 1" by
         Moody's Investors Service, Inc. or "A-1" by Standard and Poor's Ratings
         Services or the equivalent thereof by Dominion Bond Rating Service
         Limited with maturities of not more than 180 days; (c) certificates of
         deposit or repurchase obligations issued by any U.S., Canadian or
         United Kingdom domestic bank having capital surplus of at least
         $100,000,000 or by any other financial institution acceptable to the
         Majority Lenders, all of the foregoing not having a maturity of more
         than one year from the date of issuance thereof; (d) loans to Nat
         Gregory not to exceed $3,600,000 at any one time outstanding, and (e)
         the purchase of Equity Interests in and to U.S. Borrower on or after
         September 17, 2001 but prior to September 22, 2001 for aggregate
         consideration not exceeding $1,000,000.

         (d) The following language is hereby added to the end of Section 2.1(b)
of the Loan Agreement:

         Notwithstanding anything else contained in Sections 3.1, 4.3 and 5.2,
         the Canadian Borrower may borrow Canadian Dollars by way of overdraft
         and any such Borrowings shall be deemed:

               (a)  to be an advance of and be outstanding as a Canadian Prime
                    Loan from the date such overdraft is honored; and

               (b)  to be a representation and warranty by the Canadian Borrower
                    that at the time any such overdraft is honored all of the
                    conditions contained in Section 5.2 (other than paragraph
                    (b) thereof) have been satisfied.

                                       2

<PAGE>

         (e) Section 6.6 of the Loan Agreement is hereby amended to read in its
entirety as follows:

                  6.6 Title. Each Obligor has good and defensible title to the
         Collateral, if any, pledged (or purported to be pledged) by such
         Obligor pursuant to the Security Documents, free and clear of all Liens
         (except Liens permitted under Section 8.2 hereof).

         (f) Section 8.1 of the Loan Agreement is hereby amended to read in its
entirety as follows:

                  8.1 Borrowed Money Indebtedness. Create, incur, suffer or
         permit to exist, or assume or guarantee, directly or indirectly, or
         become or remain liable with respect to any Borrowed Money
         Indebtedness, whether direct, indirect, absolute, contingent or
         otherwise, except the following: (a) Borrowed Money Indebtedness under
         this Agreement and the other Loan Documents and Borrowed Money
         Indebtedness secured by Liens permitted by Section 8.2 hereof; (b) the
         liabilities existing on the date of this Agreement and disclosed in the
         financial statements delivered on or prior to the Effective Date
         pursuant to Section 6.2 hereof, and subject to Section 8.10 hereof, all
         renewals, extensions and replacements (but not increases) of any of the
         foregoing; (c) the Interest Rate Risk Indebtedness; (d) purchase money
         indebtedness to acquire Equipment obtained by U.S. Borrower or any of
         its Subsidiaries in the ordinary course of business not exceeding
         $3,000,000 at any one time outstanding, in the aggregate for all such
         indebtedness; (e) Borrowed Money Indebtedness of National Tank Company
         and its Subsidiaries under the EXIM Facility; (f) Borrowed Money
         Indebtedness created under leases which, in accordance with GAAP have
         been recorded or should be recorded as capital leases, in an aggregate
         amount not to exceed $2,000,000 at any one time outstanding; (g)
         pre-existing Borrowed Money Indebtedness, not to exceed $2,000,000 in
         the aggregate at any one time outstanding, secured by Liens upon assets
         which are acquired after the date hereof or owing by Persons which
         become Subsidiaries of U.S. Borrower by acquisition after the date
         hereof (provided, however, that no such Borrowed Money Indebtedness was
         incurred at the instigation of U.S. Borrower in contemplation of such
         acquisition), and (h) without limitation of any other part of this
         Section, (1) contingent Borrowed Money Indebtedness of U.S. Borrower or
         any of its Subsidiaries in respect of surety bonds created, incurred or
         assumed after the Effective Date, in an aggregate amount not to exceed
         $12,500,000 at any one time outstanding and (2) other Borrowed Money
         Indebtedness of U.S. Borrower or any of its Subsidiaries created,
         incurred or assumed after the Effective Date, in an aggregate amount
         not to exceed $10,000,000 at any one time outstanding.

         SECTION 2. Reduction of U.S. Commitments. The aggregate amount of the
U.S. Commitments is hereby reduced by $5,000,000. The reduced U.S. Commitments
of the respective U.S. Lenders shall be in the following amounts:

<Table>
<Caption>
                  U.S. Lender                               U.S. Commitment
                  -----------                               ---------------
<S>                                                         <C>
         The Chase Manhattan Bank                           $3,235,294.11
         Wells Fargo Bank Texas, National Association       $8,235,294.12
         Bank One, NA (Main Office Chicago, Illinois)       $8,235,294.12
         Arab Banking Corporation B.S.C.                    $4,117,647.06
         Bankers Trust Company                              $4,117,647.06
         MidFirst Bank                                      $2,058,823.53
</Table>

                                       3

<PAGE>

         SECTION 3. Increase of U.K. Commitments. The aggregate amount of the
U.K. Commitments is hereby increased by $5,000,000. The increased U.K.
Commitments of the respective U.K. Lenders shall be in the following amounts:

<Table>
<Caption>
                  U.K. Lender                               U.K. Commitment
                  -----------                               ---------------
<S>                                                         <C>
         The Chase Manhattan Bank                           $10,000,000
</Table>

         SECTION 4. Additional Real Property. Borrower currently intends to
acquire certain real Property situated at 26535 FM 2978 in Magnolia, Texas for a
purchase price not exceeding $2,000,000. Borrower intends to finance such
acquisition, in part, using purchase money indebtedness secured by a Lien upon
the real Property so acquired. Lenders agree that, notwithstanding anything to
the contrary set forth in the Loan Agreement, Borrower shall not be required to
grant a Lien upon such Property as additional collateral for any of the
Obligations.

         SECTION 5. Ratification. Except as expressly amended by this Amendment,
the Loan Agreement and the other Loan Documents shall remain in full force and
effect. None of the rights, title and interests existing and to exist under the
Loan Agreement are hereby released, diminished or impaired, and the Borrowers
hereby reaffirm all covenants, representations and warranties in the Loan
Agreement.

         SECTION 6. Expenses. The Borrowers shall pay to the Agents all
reasonable fees and expenses of their respective legal counsel (pursuant to
Section 11.3 of the Loan Agreement) incurred in connection with the execution of
this Amendment.

         SECTION 7. Certifications. The Borrowers hereby certify that (a) no
event which could reasonably be expected to have a Material Adverse Effect has
occurred and is continuing and (b) no Default or Event of Default has occurred
and is continuing or will occur as a result of this Amendment.

         SECTION 8. Miscellaneous. This Amendment (a) shall be binding upon and
inure to the benefit of the Borrowers, the Lenders and the Agents and their
respective successors, assigns, receivers and trustees; (b) may be modified or
amended only by a writing signed by the required parties; (c) shall be governed
by and construed in accordance with the laws of the State of Texas and the
United States of America; (d) may be executed in several counterparts by the
parties hereto on separate counterparts, and each counterpart, when so executed
and delivered, shall constitute an original agreement, and all such separate
counterparts shall constitute but one and the same agreement and (e) together
with the other Loan Documents, embodies the entire agreement and understanding
between the parties with respect to the subject matter hereof and supersedes all
prior agreements,

                                       4

<PAGE>

consents and understandings relating to such subject matter. The headings herein
shall be accorded no significance in interpreting this Amendment.

            NOTICE PURSUANT TO TEX. BUS. & COMM. CODE SECTION 26.02

         THE LOAN AGREEMENT, AS AMENDED BY THIS AMENDMENT, AND ALL OTHER LOAN
DOCUMENTS EXECUTED BY ANY OF THE PARTIES PRIOR HERETO OR SUBSTANTIALLY
CONCURRENTLY HEREWITH CONSTITUTE A WRITTEN LOAN AGREEMENT WHICH REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         IN WITNESS WHEREOF, the Borrowers, the Lenders and the Agents have
caused this Amendment to be signed by their respective duly authorized officers,
effective as of the date first above written.

                                                NATCO GROUP INC,
                                                a Delaware corporation


                                                By: /s/ J. MICHAEL MAYER
                                                   -----------------------------
                                                   J. Michael Mayer, Senior Vice
                                                   President and Chief Financial
                                                   Officer


                                                NATCO CANADA, LTD., a
                                                corporation formed under the
                                                laws of the Province of Ontario

                                                By: /s/ J. MICHAEL MAYER
                                                   -----------------------------
                                                   J. Michael Mayer,
                                                   Vice President


                                                AXSIA GROUP LIMITED, a
                                                company incorporated in
                                                England and Wales under the
                                                Companies Act of the United
                                                Kingdom

                                                By: /s/ J. MICHAEL MAYER
                                                   -----------------------------
                                                   J. Michael Mayer, Director

                                       5

<PAGE>

                                        THE CHASE MANHATTAN BANK, as U.S. Agent,
                                        Issuer of U.S. Letters of Credit and a
                                        U.S. Lender

                                        By: /s/ MONA M. FOCH
                                           -------------------------------------
                                        Name: Mona M. Foch
                                             -----------------------------------
                                        Title: Managing Director
                                              ----------------------------------

                                       6

<PAGE>

                                        CHASE MANHATTAN INTERNATIONAL LIMITED,
                                        as U.K. Agent

                                        By: /s/ KATHRYN JEPSON
                                           -------------------------------------
                                        Name: Kathryn Jepson
                                             -----------------------------------
                                        Title: Vice President
                                              ----------------------------------


                                       7
<PAGE>

                                        THE CHASE MANHATTAN BANK,
                                        as Issuer of  U.K. Letters of Credit
                                        and a U.K. Lender


                                        By: /s/ KATHRYN JEPSON
                                           -------------------------------------
                                        Name: Kathryn Jepson
                                             -----------------------------------
                                        Title: Vice President
                                              ----------------------------------

                                       8

<PAGE>

                                        ROYAL BANK OF CANADA, as Canadian Agent,
                                        Issuer of Canadian Letters of Credit
                                        and a Canadian Lender

                                        By: /s/ LORNE GARTNER
                                           -------------------------------------
                                        Name: Lorne Gartner
                                             -----------------------------------
                                        Title: Vice President
                                              ----------------------------------

                                       9

<PAGE>

                                        WELLS FARGO BANK TEXAS, NATIONAL
                                        ASSOCIATION

                                        By: /s/ SCOTT GILDEA
                                           -------------------------------------
                                        Name: Scott Gildea
                                             -----------------------------------
                                        Title: Assistant Vice President
                                              ----------------------------------

                                       10

<PAGE>

                                        BANK ONE, NA (MAIN OFFICE CHICAGO,
                                        ILLINOIS), as Syndications Agent and a
                                        U.S. Lender


                                        By: /s/ BRANDI MOLAISON
                                           -------------------------------------
                                        Name: Brandi Molaison
                                             -----------------------------------
                                        Title: Vice President
                                              ----------------------------------


                                       11

<PAGE>

                                        ARAB BANKING CORPORATION B.S.C.


                                        By: /s/ BARBARA C. SANDERSON
                                           -------------------------------------
                                        Name: Barbara C. Sanderson
                                             -----------------------------------
                                        Title: Vice President Head of Credit
                                              ----------------------------------

                                       12

<PAGE>

                                        BANKERS TRUST COMPANY


                                        By: /s/ MARCUS M. TARKINGTON
                                           -------------------------------------
                                        Name: Marcus M. Tarkington
                                             -----------------------------------
                                        Title: Director
                                              ----------------------------------

                                       13

<PAGE>

                                        MIDFIRST BANK

                                        By: /s/ W. THOMAS PORTMAN
                                           -------------------------------------
                                        Name: W. Thomas Portman
                                             -----------------------------------
                                        Title: Vice President/Syndications
                                              ----------------------------------


                                       14

<PAGE>

         The undersigned hereby join in this Amendment to evidence their consent
to execution by Borrowers of this Amendment, to confirm that each Loan Document
now or previously executed by the undersigned applies and shall continue to
apply to the Loan Agreement, as amended hereby, to acknowledge that without such
consent and confirmation, Lender would not execute this Amendment and to join in
the notice pursuant to Tex. Bus. & Comm. Code Section 26.02 set forth above.


                                  NATIONAL TANK COMPANY, a Delaware corporation,
                                  TOTAL ENGINEERING SERVICES TEAM, INC., a
                                  Louisiana corporation,  and NATCO LONDON,
                                  INC., a Delaware corporation



                                  By:  /s/ J. MICHAEL MAYER
                                      ------------------------------------------
                                      J. Michael Mayer, Vice President and
                                      Treasurer



                                  STARFISH ACQUISITION LIMITED, a company
                                  incorporated in England and Wales under the
                                  Companies Act of the United Kingdom, and
                                  AXSIA GROUP LIMITED, a company incorporated
                                  in England and Wales under the Companies Act
                                  of the United Kingdom


                                  By:  /s/ J. MICHAEL MAYER
                                      ------------------------------------------
                                  Name:  J. Michael Mayer
                                        ----------------------------------------
                                  Title: Director
                                        ----------------------------------------

                                       15

<PAGE>

                                  AXSIA LIMITED, a company incorporated in
                                  England and Wales under the Companies Act of
                                  the United Kingdom, AXSIA SERCK BAKER LIMITED,
                                  a company incorporated in England and Wales
                                  under the Companies Act of the United Kingdom,
                                  AXSIA HOWMAR LIMITED, a company incorporated
                                  in England and Wales under the Companies Act
                                  of the United Kingdom, and RICHARD MOZLEY
                                  LIMITED, company incorporated in England
                                  and Wales under the Companies Act of the
                                  United Kingdom


                                  By:     /s/ J. MICHAEL MAYER
                                     -------------------------------------------
                                  Name:       J. Michael Mayer
                                       -----------------------------------------
                                  Title:      Director
                                        ----------------------------------------



                                       16