Document:

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                                                                    Exhibit 10.3

                                 October 5, 2004

Mr. Nathaniel A. Gregory
C/o Capricorn Management LLC
30 East Elm Street
Greenwich, CT 06830

Dear Nat:

Reference is made to the Separation Agreement dated July 28, 2004 between NATCO
Group Inc. and you. Capitalized terms used but not defined in this letter are
used as defined in the Separation Agreement.

Section 4(c) of the Separation Agreement provides in part that Individual shall
be entitled to receive the bonus otherwise payable to him under the Company's
2004 Bonus Plan, based on his period of employment during 2004 and that the
financial component of Individual's bonus shall be based on the period January
1, 2004 through the Separation Date, shall be determined by the Board on or
prior to October 7, 2004, and shall be payable to Individual on that date. The
Parties acknowledge and agree that an October 7 date for payment of this portion
of Individual's bonus will not permit sufficient time to review and calculate
the payment, and that the portion of the payment due on October 7 that relates
to the financial portion of the 2004 bonus payable to Individual shall not be
due and payable until November 7, 2004.

Nothing in this letter alters any other provision of the Separation Agreement,
including but not limited to the Company's obligation to pay to Individual on or
before October 7, 2004, cash in the amount of $989,389.25, subject to all
required payroll, income and other tax withholdings and all other required
deductions, but the Company will use reasonable efforts, consistent with
applicable law, to minimize the amount of withholding, which remains in full
force and effect.

Please signify your agreement with the terms of this letter by signing below and
returning a copy to the undersigned by fax to 713-812-6654.

                                                Sincerely yours,

                                                /s/ John U. Clarke

                                                John U. Clarke
                                                Chairman and Interim Chief
                                                Executive Officer

Accepted and agreed, this __ day of
October 2004:

/s/ Nathaniel A. Gregory

Nathaniel A. Gregory<PAGE>

                                                                    Exhibit 10.4

                        FIRST AMENDMENT TO LOAN AGREEMENT

      THIS FIRST AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made and
entered into as of March 15, 2004 (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"), WELLS FARGO BANK, NATIONAL ASSOCIATION, acting as agent for the U.S.
Lenders (in such capacity, together with its successors in such capacity, the
"U.S. Agent"); HSBC BANK CANADA, acting as agent for the Canadian Lenders (in
such capacity, together with its successors in such capacity, the "Canadian
Agent"), and HSBC BANK PLC, 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 15,
2004. 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. Amendment to Loan Agreement. On and after the Amendment
Effective Date, clause (l) of the definition of "Permitted Liens" set forth in
Section 1.1 of the Loan Agreement is hereby amended to read in its entirety as
follows:

            (l) Liens securing the Export/Import Credit Facilities, subordinated
      to the Liens securing the Obligations in a manner acceptable to U.S.
      Agent, covering personal Property of the U.S. Borrower and its
      Subsidiaries covered by the Security Documents (other than equity
      interests in and to Subsidiaries of the U.S. Borrower and the SACROC
      Facility)

      SECTION 2. 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

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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 3. 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 4. 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 5. 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, 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.

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      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/ Richard W. FitzGerald
                                            ------------------------------------
                                                Richard W. FitzGerald, Senior
                                                Vice President and Chief
                                                Financial Officer

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

                                        By: /s/ Richard W. FitzGerald
                                            ------------------------------------
                                                Richard W. FitzGerald, Vice
                                                President

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

                                        By: /s/ Richard W. FitzGerald
                                            ------------------------------------
                                                Richard W. FitzGerald,
                                                Authorized Signatory

                                        WELLS FARGO BANK, NATIONAL
                                        ASSOCIATION, as U.S. Agent, Issuer
                                        of U.S. Letters of Credit, and a U.S.
                                        Lender

                                        By: /s/ Scott Gildea
                                            ------------------------------------
                                        Name: Scott Gildea
                                        Title: Vice President

                                        COMERICA BANK

                                        By: /s/ Mona M. Foch
                                            ------------------------------------
                                        Name: Mona M. Foch
                                        Title: Senior Vice President -
                                               Texas Division

                                        HSBC BANK PLC,
                                        as U.K. Agent

                                        By: /s/ DPS Hawkey
                                            ------------------------------------
                                        Name: David Peter Stanley Hawkey
                                        Title: Commercial Banking Manager

<PAGE>

                                        HSBC BANK CANADA,
                                        as Canadian Agent

                                        By: /s/ Malcolm Tensley
                                            ------------------------------------
                                        Name: Malcolm Tensley
                                        Title: AVP, Commercial Banking

                                        By: /s/ Perry Englot
                                            ------------------------------------
                                        Name: Perry Englot
                                        Title: Vice President and Manager

                                        SOUTHWEST BANK OF TEXAS, N.A.

                                        By: /s/ Carmen Dunmire
                                            ------------------------------------
                                        Name: Carmen Dunmire
                                        Title: Senior Vice President

                                        BANK OF AMERICA, N.A.

                                        By: /s/ David A. Batson
                                            ------------------------------------
                                        Name: David A. Batson
                                        Title: VP

                                        COMPASS BANK

                                        By: /s/ R R Newman
                                            ------------------------------------
                                        Name: R. R. Newman
                                        Title: VP

<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, and TOTAL ENGINEERING SERVICES
                                    TEAM, INC., a Louisiana corporation

                                    By: /s/ Richard W. FitzGerald
                                        ---------------------------------------
                                            Richard W. FitzGerald,
                                            Senior Vice President and Treasurer

                                    AXSIA HOLDINGS LIMITED (formerly known as
                                    Starfish Acquisition Limited), a company
                                    incorporated in England and Wales under the
                                    Companies Act of the United Kingdom, 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/ Richard W. FitzGerald
                                        ---------------------------------------
                                            Richard W. FitzGerald,
                                            Authorized Signatory

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