Document:

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                                                                   EXHIBIT 10.5

                            SHARE PURCHASE AGREEMENT

         This Share Purchase Agreement (this "AGREEMENT") is made and entered
into as of November 14, 2003 by and between Resolution Holdings B.V., a Dutch
corporation (the "SELLER") and Mitsubishi Chemical Corporation, a Japanese
corporation (the "PURCHASER," Seller and Purchaser hereinafter referred to each
as the "PARTY," and together as the "PARTIES").

                                   AGREEMENT

         The Parties hereby agree as follows:

         1.       TRANSFER AND SALE

         Subject to the terms and conditions of this Agreement, Seller agrees
to transfer and sell nine hundred sixty thousand (960,000) shares of common
stock (the "SHARES") of Japan Epoxy Resins Co., Ltd. (the "COMPANY") to
Purchaser, and Purchaser agrees to purchase the Shares from Seller, as of the
Closing Date (as defined below), and pay a purchase price of Two Billion Five
Hundred Million Japanese Yen ((Y)2,500,000,000) (the "PURCHASE PRICE") in
immediately available funds at the Closing (as defined below). The Purchase
Price shall be paid in Japanese Yen by wire transfer of immediately available
funds to the account specified in Exhibit A attached hereto on the Closing
Date.

         2.       CLOSING

                (a)      CONDITIONS TO CLOSING

         Unless waived by the Party requiring satisfaction of the condition,
the following shall be completed on or prior to the transfer and sale of the
Shares pursuant to this Agreement (the "CLOSING"):

                    (i) Purchaser and Seller shall have executed the new joint
venture agreement, in the form attached hereto as Exhibit B (the "2003 JVA");

                    (ii) Company and Resolution Research Nederland B.V., a
wholly owned subsidiary of Seller, ("RRN") shall have executed the new
technology license agreement, in the form attached hereto as Exhibit C (the
"2003 TECHNOLOGY LICENSE AGREEMENT") and the new trademark license agreement,
in the form attached hereto as Exhibit D (the "2003 TRADEMARK LICENSE
AGREEMENT");

                    (iii) Company and Resolution Japan K.K., a wholly owned
subsidiary of Seller, ("RJKK") shall have executed the new human resources
management service agreement, in the form attached hereto as Exhibit E (the
"2003 HR MANAGEMENT SERVICE AGREEMENT");

                    (iv) Purchaser, Seller and the Company shall have executed
an acknowledgement regarding (x) the Lease Agreements between Purchaser and the
Company dated June 30, 1979, August 1, 1979, July 1, 1982 and August 1, 1986,
and (y) the Services and Utilities Agreement between Purchaser and the Company
dated June 22, 1979, in the form attached hereto as Exhibit F (the
"ACKNOWLEDGEMENT");

                    (v) Purchaser, RJKK and the Company shall have executed
Amendment No. 4 to the Secondment Agreement among Purchaser, RJKK and the
Company dated May 24, 1979 as amended from time to time (the "SECONDMENT
Agreement") in the form attached hereto as Exhibit G ("AMENDMENT NO. 4 TO THE
SECONDMENT AGREEMENT");

                    (vi) Seller shall have caused all directors of the Company
nominated by Seller (Daisaku Higo, Kenji Kubo, Tsuyoshi Fujikawa and Takashi
Tanaka, collectively, the "RPP DIRECTORS") to sign (x) resignation letters in
the form attached hereto as Exhibit H (the "RESIGNATION LETTER") and (y)
secrecy declarations in the form attached hereto as Exhibit I (the "SECRECY
DECLARATIONS");
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                    (vii) Each of the representations and warranties of the
other Party contained in this Agreement shall be true in all material respects
when made and as of the Closing Date, with the same effect as though such
representations and warranties had been made on and as of the Closing Date
(except representations and warranties that are made as of a specific date need
be true in all material respects only as of such date); and

                    (viii) There shall not have been issued or be in effect (x)
any judgment, decree or order issued by any court of competent jurisdiction or
(y) any statute, rule or regulation enacted or promulgated by any legislative,
administrative or regulatory body of competent jurisdiction that prohibits the
consummation of the transactions contemplated hereby or makes such consummation
illegal.

               (b)      CLOSING DATE; DELIVERY

         Subject to Section 2(a) above, the Closing shall occur at the office
of the Purchaser at 33-8, Shiba 5-chome, Minato-ku, Tokyo, Japan on November
14, 2003 or such other location or date as may be agreed by the Parties (the
"CLOSING DATE"). At the Closing:

                    (i) Seller shall deliver to Purchaser a certificate or
certificates representing the Shares;

                    (ii) Seller shall deliver to Purchaser the Resignation
Letters and the Secrecy Declarations; and

                    (iii) Purchaser shall deliver to Seller a copy of a payment
order issued by the bank to which Purchaser has instructed the remittance of
the Purchase Price pursuant to Section 1 above.

               (c)      COVENANTS OF SELLER AND/OR PURCHASER

       On or before the Closing Date, Seller shall and shall cause RRN or RJKK
to, and Purchaser shall and shall cause the Company to execute the following
agreements necessary for the sale by Seller and purchase by Purchaser of the
Shares and the transfer of the Shares to Purchaser, as the case may be, and to
take any and all other actions required by applicable law:

                    (i) The 2003 JVA between Seller and Purchaser;

                    (ii) The 2003 Technology License Agreement and the 2003
Trademark License Agreement between the Company and RRN;

                    (iii) The 2003 HR Management Service Agreement between the
Company and RJKK;

                    (iv) The Acknowledgement among Seller, Purchaser and the
Company; and

                    (v) Amendment No. 4 to the Secondment Agreement among RJKK,
Purchaser and the Company.

         On or before the Closing Date, Seller shall cause the RPP Directors to
sign the Resignation Letters and Secrecy Declarations. Promptly after the
Closing, Purchaser shall cause the Company to file an amended Commercial
Registry of the Company reflecting the removal of the RPP Directors with the
appropriate Legal Affairs Bureau having jurisdiction over the Company.

         3.       REPRESENTATIONS AND WARRANTIES OF SELLER

         In connection with the transfer of the Shares to Purchaser, Seller
represents and warrants on the date hereof and on the Closing Date that:

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                  (a)      ORGANIZATION AND GOOD STANDING

         Each of Seller, RRN and RJKK (collectively, the "SELLER COMPANIES") is
a company duly organized and validly existing under the laws of its
jurisdiction of incorporation.

                  (b)      AUTHORIZATION

         Each of the Seller Companies has all requisite corporate power and
authority to execute, deliver and perform this Agreement, the 2003 JVA and any
other documents to be executed by any of the Seller Companies in connection
with the transactions contemplated hereby. The execution, delivery and
performance of this Agreement, the 2003 JVA and any other documents to be
executed by any of the Seller Companies in connection with the transactions
contemplated hereby have been duly and validly authorized by the board of
directors of each of the Seller Companies and by all other necessary corporate
action on the part of each of the Seller Companies. Each of this Agreement, the
2003 JVA and any other documents to be executed by any of the Seller Companies
in connection with the transactions contemplated hereby constitutes the legally
valid and binding obligation of each of the Seller Companies, enforceable
against each of the Seller Companies in accordance with its terms except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws and equitable principles relating to or
limiting creditors' rights generally.

                  (c)      NO CONFLICTS

         The execution, delivery and performance by each of the Seller
Companies of its obligations under this Agreement, the 2003 JVA and any other
documents to be executed by any of the Seller Companies in connection with the
transactions contemplated hereby will not (i) violate, or constitute a breach
or default under, any provision of its memorandum or articles of incorporation
or equivalent constitutional document; (ii) result in a breach of, or give any
third party a right to terminate or modify or result in the creation of any
encumbrance under, any agreement, license or other instrument or of any order,
judgment or decree of any court, governmental agency or regulatory body to
which it is a party or by which it is bound; or (iii) violate any law, statute
or regulation or any injunction, order or decree of any government entity or
court to which any of the Seller Companies is subject except to the extent, in
each case, that such violation would not prohibit or materially impair the
ability of any of the Seller Companies to perform its obligations under such
agreements.

                  (d)      CONSENTS AND APPROVALS

         Except as set forth in Schedule 3(d), the execution, delivery and
performance by any of the Seller Companies of this Agreement, the 2003 JVA and
any other documents to be executed by any of the Seller Companies in connection
with the transactions contemplated hereby will not require any consent, waiver,
authorization or approval of, or the making of any filing with or giving of
notice to, any person or entity, except for such consent, waivers,
authorizations or approvals which the failure to obtain could not reasonably be
expected to prohibit or have a material adverse effect on the ability of any of
the Seller Companies to perform its obligations under such agreements.

                  (e)      OWNERSHIP OF SHARES

         Seller is the sole record and beneficial owner of the Shares and the
Shares are free and clear of any liens or encumbrances (other than restrictions
on transfer under applicable Japanese laws, the Company's Articles of
Association and the Joint Venture Agreement dated as of September 10, 1999 by
and between the Seller and Purchaser).

                  (f)      NO OTHER REPRESENTATIONS OR WARRANTIES

         The sale of the Shares shall be without representation or warranty by
Seller, express or implied, except for the limited representations and
warranties expressly set forth herein. Except for the representations and
warranties contained in this Section 3, none of Seller, any affiliate of
Seller, or any other person or entity (the "SELLER Entities") makes or has been
authorized to make any express or implied representation or warranty, and
Seller Entities hereby disclaim any express or implied representation or
warranty, whether by any Seller Entity or any of their respective

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officers, directors, employees, agents, stockholders, subsidiaries (direct or
indirect), partners, advisors, or representatives or any other person or
entity, in connection with the delivery or disclosure to Purchaser or any of
its officers, directors, employees, agents, advisors or representatives or any
other person or entity of any documentation or other information regarding
Seller Entities or Company. Except for the representations and warranties
contained in Section 4 herein, Seller hereby acknowledges and agrees that
Purchaser makes no representations and warranties whatsoever, express or
implied, with respect to any matter relating to Company or Purchaser.

         4.       REPRESENTATIONS AND WARRANTIES OF PURCHASER

         In connection with the transfer of the Shares to Purchaser, Purchaser
represents and warrants on the date hereof and on the Closing Date that:

                  (a)      ORGANIZATION AND GOOD STANDING

         Purchaser is a company duly organized and validly existing under the
laws of its jurisdiction of incorporation.

                  (b)      AUTHORIZATION

         Purchaser has all requisite corporate power and authority to execute,
deliver and perform this Agreement, the 2003 JVA and any other documents to be
executed by Purchaser in connection with the transactions contemplated hereby.
The execution, delivery and performance of this Agreement, the 2003 JVA and any
other documents to be executed by Purchaser in connection with the transactions
contemplated hereby have been duly and validly authorized by the board of
directors of Purchaser and by all other necessary corporate action on the part
of Purchaser. Each of this Agreement, the 2003 JVA and any other documents to
be executed by Purchaser in connection with the transactions contemplated
hereby constitutes the legally valid and binding obligation of Purchaser,
enforceable against Purchaser in accordance with its terms except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws and equitable principles relating to or
limiting creditors' rights generally.

                  (c)      NO CONFLICTS

         The execution, delivery and performance by Purchaser of its
obligations under this Agreement, the 2003 JVA and any other documents to be
executed by Purchaser in connection with the transactions contemplated hereby
will not (i) violate, or constitute a breach or default under any provision of
its memorandum or articles of incorporation or equivalent constitutional
document; (ii) result in a breach of, or give any third party a right to
terminate or modify or result in the creation of any encumbrance under, any
agreement, license or other instrument or of any order, judgment or decree of
any court, governmental agency or regulatory body to which it is a party or by
which it is bound; or (iii) violate any law, statute or regulation or any
injunction, order or decree of any government entity or court to which
Purchaser is subject except to the extent, in each case, that such violation
would not prohibit or materially impair Purchaser's ability to perform its
obligations under such agreements.

                  (d)      CONSENTS AND APPROVALS

         Except as set forth in Schedule 4(d), the execution, delivery and
performance by Purchaser or Company of this Agreement, the 2003 JVA and any
other documents to be executed by Purchaser or Company in connection with the
transactions contemplated hereby will not require any consent, waiver,
authorization or approval of, or the making of any filing with or giving of
notice to, any person or entity, except for such consent, waivers,
authorizations or approvals which the failure to obtain could not reasonably be
expected to prohibit or have a material adverse effect on Purchaser or
Company's ability to perform its respective obligations under such agreements.

                  (e)      NO OTHER REPRESENTATIONS OR WARRANTIES

         Except for the representations and warranties contained in this
Section 4, none of Purchaser, any affiliate of Purchaser, or any other person
or entities (the "PURCHASER ENTITIES") makes or has been authorized to make any

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express or implied representation or warranty, and Purchaser Entities hereby
disclaim any express or implied representation or warranty, whether by any
Seller Entity or any of their respective officers, directors, employees,
agents, stockholders, subsidiaries (direct or indirect), partners, advisors, or
representatives or any other person or entity, in connection with the delivery
or disclosure to Seller or any of its officers, directors, employees, agents,
advisors or representatives or any other person or entity of any documentation
or other information regarding Purchaser Entities or Company. Except for the
representations and warranties contained in Section 3 herein, Purchaser hereby
acknowledges and agrees that Seller makes no representations and warranties
whatsoever, express or implied, with respect to any matter relating to Company
or Seller.

         5.       TERMINATION

                  (a) Anything herein to the contrary notwithstanding, this
Agreement and the transactions contemplated by this Agreement shall be
terminated at any time prior to the Closing: (i) by either Party, exercisable
by service of written notice of termination, if the Closing does not occur on
or before November 14, 2003 for any reason other than those stipulated in
Sections 5(a)(ii) and (iii) below; (ii) by Seller, exercisable by service of
written notice of termination, if Purchaser materially breaches any of its
representations, warranties, or obligations hereunder and such breach shall not
have been cured or waived and Purchaser has not provided assurance satisfactory
to Seller that such breach will be cured at or before the Closing; (iii) by
Purchaser, exercisable by service of written notice of termination, if Seller
materially breaches any of its representations, warranties, or obligations
hereunder and such breach shall not have been cured or waived and Seller has
not provided assurance satisfactory to Purchaser that such breach will be cured
at or before the Closing; and otherwise may be terminated or extended at any
time on or before the Closing by mutual consent in writing of Seller and
Purchaser.

                  (b) A termination under Section 5(a) shall not relieve any
Party of any liability for a breach of, or for any misrepresentation under this
Agreement, or be deemed to constitute a waiver of any available remedy
(including specific performance if available) for any such breach or
misrepresentation.

         6.       INDEMNIFICATION

         Each Party agrees to indemnify and hold harmless the other Party and
each of its affiliates, and their respective directors, officers, employees,
affiliates, agents and assigns from and against any and all losses, actions,
costs, damages, disbursements, expenses or liabilities of such other Party or
any of its affiliates, directly or indirectly, as a result of, or based upon or
arising from any breach of any of the representations, warranties or covenants
made by the Party in this Agreement.

         7.       MISCELLANEOUS

                  (a)      GOVERNING LAW AND GOVERNING LANGUAGE

         This Agreement and all acts and transactions pursuant hereto and the
rights and obligations of the Parties hereto shall be governed, construed and
interpreted in accordance with the laws of Japan, without giving effect to
principles of conflicts of law. This Agreement has been drafted and executed
only in English.

                  (b)      ENTIRE AGREEMENT; AMENDMENT

         Except as expressly set forth herein, this Agreement sets forth the
entire agreement and understanding of the Parties relating to the subject
matter herein and merges all prior discussions between them (including, but not
limited to, the Letter of Intent dated October 20, 2003 between the Parties).
No modification of or amendment to this Agreement, nor any waiver of any rights
under this Agreement, shall be effective unless in writing signed by the
Parties to this Agreement.

                  (c)      NOTICES

         Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient when delivered personally or sent by fax (as
evidenced by sender's confirmation receipt), international courier or certified

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or registered mail, with postage prepaid, and addressed to the Party to be
notified at such Party's address as set forth below or as subsequently modified
by written notice:

         If to Seller, to:

                        Attention:  Legal Counsel
                        Resolution Holdings B.V.
                        PO Box 606
                        3190 AN Hoogvliet Rt
                        The Netherlands
                        Facsimile:  +31-10-431-4649

         With a copy to:

                        Attention:  General Counsel
                        Resolution Performance Products Inc.
                        1600 Smith Street, 24th Floor
                        Houston, Texas  77002
                        U.S.A.
                        Facsimile:  +1(817) 375-2304

         If to Purchaser, to:

                        Attention:  General Manager, Amenity Life Division
                        Mitsubishi Chemical Corporation
                        Dai-ichi Tamachi Building
                        33-8, Shiba 5-chome
                        Minato-ku, Tokyo 108-0014
                        Japan
                        Facsimile:  +81(3)6414-3289

                  (d)      COUNTERPARTS

         This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original and all of which together shall constitute
one instrument.

                  (e)      FURTHER ASSURANCES

         In addition to the actions, documents, and instruments specially
required to be taken or delivered by this Agreement, whether on or from time to
time after the date hereof, and without further consideration, each Party shall
use commercially reasonable efforts to, and shall use their commercially
reasonable efforts to cause their respective affiliates to, take such other
actions, and execute and/or deliver such other documents, information and
instruments, as the other Party or its counsel may reasonably request in order
to effectuate and perfect the transactions contemplated by this Agreement and
the other documents required hereunder.

                  (f)      ARBITRATION

         All disputes arising in connection with this Agreement shall be
finally settled under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce by three (3) arbitrators appointed in
accordance with such Rules. The country of arbitration shall be Japan and the
place of arbitration shall be Tokyo. The language to be used in the arbitration
proceedings shall be English.

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                  (g)      EXPENSES

         Each Party shall bear its own taxes and expenses, including legal
fees, incurred by it in connection with this Agreement.

                  (h)      AMENDMENTS; WAIVERS

         This Agreement and any schedule or exhibit attached hereto may be
amended only by agreement in writing of both Parties. No waiver of any
provision nor consent to any exception to the terms of this Agreement shall be
effective unless in writing and signed by the Party to be bound and then only
to the specific purpose, extent and instance so provided.

                  (i)      SCHEDULES; EXHIBITS; INTEGRATION

         Each schedule and exhibit delivered pursuant to the terms of this
Agreement shall be in writing and shall constitute a part of this Agreement.

                  (j)      NO ASSIGNMENT

         Neither this Agreement nor any rights or obligations under it may be
assigned by either Party, by operation of law or otherwise.

                  (k)      CONFIDENTIALITY

                  All information disclosed in writing and designated in
writing as confidential by any Party or its affiliate, agent, advisor or
consultant or their respective directors, officers, partners and employees
whether before or after the date hereof, in connection with the transactions
contemplated by, or the discussions and negotiations preceding, this Agreement
to any other Party or its affiliate, agent, advisor or consultant or their
respective directors, officers, partners and employees shall be kept
confidential by such other Party and its affiliate, agent, advisor or
consultant or their respective directors, officers, partners and employees and
shall not be used by any such persons other than as contemplated by this
Agreement, except to the extent that such information (i) was known by the
recipient when received, (ii) it is or hereafter becomes lawfully obtainable
from other sources, (iii) is necessary or appropriate to disclose to a
governmental entity having jurisdiction over the Parties, (iv) as may otherwise
be required by law or (v) to the extent such duty as to confidentiality is
waived in writing by the other Party. If this Agreement is terminated in
accordance with its terms, each Party shall use all reasonable efforts to
return upon written request from the other Party all documents (and
reproductions thereof) received by it or its representatives from such other
Party (and, in the case of reproductions, all such reproductions made by the
receiving Party) that include information not within the exceptions contained
in the first sentence of this Section 6(k), unless the recipients provide
assurances reasonably satisfactory to the requesting Party that such documents
have been destroyed.

                  (l)      PUBLIC DISCLOSURE

         Each of the Parties to this Agreement hereby agrees with the other
Party hereto that, except as may be required to comply with the requirements of
applicable law, no press release or similar public announcement or
communication will be made or caused to be made concerning the execution or
performance of this Agreement unless specifically approved in advance by both
Parties hereto.

                  (m)      SEVERABILITY

         In case any provision contained in this Agreement should be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any
way be affected or impaired thereby.

                            [Signature Page Follows]

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         The Parties have executed this Share Purchase Agreement as of the date
first set forth above.

                               RESOLUTION HOLDINGS B.V.

                               By:    /s/Jeffrey M. Nodland
                                      ---------------------
                               Name:  Jeffrey M. Nodland
                               Title: Authorized Representative,
                                      President and Chief Operating Officer
                                      of Resolution Performance Products Inc.

                               MITSUBISHI CHEMICAL CORPORATION

                               By:    /s/Ryuichi Sato
                                      ---------------
                               Name:  Ryuichi Sato
                               Title: Managing Director and Chief Operating
                                      Officer of Performance Products Segment

                                      S-1<PAGE>

                                                                   EXHIBIT 10.35

                                NATCO GROUP INC.

                               SENIOR MANAGEMENT
                          CHANGE IN CONTROL AGREEMENT

         THIS AGREEMENT is entered into this 7th day of October, 2003 by and
between NATCO GROUP INC., a Delaware corporation (the "Company"), and Katherine
P. Ellis (the "Executive").

         WHEREAS, the Company's Board of Directors (the "Board") has determined
that it is in the best interests of the Company and its stockholders to ensure
that the Company and its affiliates will have the continued dedication of the
Executive, notwithstanding the possibility, threat or occurrence of a
termination of the Executive's employment in certain circumstances, including
following a Change in Control as defined herein. The Board believes it is
imperative to diminish the inevitable distraction of the Executive by virtue of
the personal uncertainties and risks created by a pending or threatened
termination of the Executive's employment in such circumstances and to provide
the Executive with compensation and benefits arrangements upon such a
termination which ensure that the compensation and benefits expectations of the
Executive will be satisfied and which are competitive with those of other
corporations who may seek to employ the Executive.

         NOW, THEREFORE, in order to accomplish these objectives, the Board has
caused the Company to enter into this Agreement with the Executive, and it is
hereby agreed as follows:

1.       Definitions. For purposes of this Agreement, the following terms will
have the following meanings unless otherwise expressly provided in this
Agreement:

         (a) Board. "Board" means the Board of Directors of the Company.

         (b)      Cause. "Cause" means:

                  (i)      the Executive's willful and continued failure to
                           substantially perform the Executive's duties with the
                           Company or its affiliates (other than any such
                           failure resulting from the Executive's incapacity due
                           to physical or mental illness), after a written
                           demand for substantial performance is delivered to
                           the Executive by the Company which specifically
                           identifies the manner in which the Company believes
                           that the Executive has not substantially performed
                           his or her duties;

                  (ii)     the final conviction of the Executive of, or an
                           entering of a guilty plea or a plea of no contest by
                           the Executive, to a felony or of a misdemeanor
                           involving moral turpitude; or

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<PAGE>

                  (iii)    the willful engaging by the Executive in illegal
                           conduct or gross misconduct which is materially and
                           demonstrably injurious to the Company.

                           For purposes of this definition, no act or failure to
                           act on the part of the Executive shall be considered
                           "willful" unless it is done, or omitted to be done,
                           by the Executive in bad faith or without a reasonable
                           belief that the action or omission was in the best
                           interests of the Company or its affiliates. Any act,
                           or failure to act, based on authority given pursuant
                           to a resolution duly adopted by the Board, the
                           instructions of a more senior officer of the Company
                           or the advice of counsel to the Company or its
                           affiliates will be conclusively presumed to be done,
                           or omitted to be done, by the Executive in good faith
                           and in the best interests of the Company and its
                           affiliates.

         (c) Change in Control. A "Change in Control" means the occurrence of
         any one of the following events:

                  (i)      the Company is not the surviving entity in any merger
                           or consolidation (or survives only as a subsidiary of
                           an entity);

                  (ii)     the Company sells, leases or exchanges or agrees to
                           sell, lease or exchange all or substantially all of
                           its assets to any other person or entity;

                  (iii)    the Company is to be dissolved and liquidated;

                  (iv)     any person or entity, including a "group" as
                           contemplated by Section 13(d)(3) of the Securities
                           Exchange Act of 1934, as amended, acquires or gains
                           ownership or control (including, without limitation,
                           power to vote) of more than 50% of the outstanding
                           shares of the Company's voting stock (based upon
                           voting power); or

                  (v)      as a result of or in connection with a contested
                           election of Directors, the persons who were Directors
                           of the Company before such election shall cease to
                           constitute a majority of the Board.

         (d)      Date of Termination means the date specified in a Notice of
         Termination pursuant to paragraph 3 hereof, or the Executive's last
         date as an active employee of the Company and its affiliates before a
         termination of employment due to death, Disability, or other reason, as
         the case may be.

         (e)      Director. "Director" means an individual elected to the Board
         by the stockholders of the Company or by the Board under applicable
         corporate law who is serving on the Board on the date of this Agreement
         or who is elected to the Board after such date.

                                       2
<PAGE>

         (f)      Disability. "Disability" means the Executive's total and
         permanent disability as defined under the terms of the Company's
         long-term disability plan in effect on the Date of Termination.

         (g)      Effective Period. The "Effective Period" means the 24-month
         period following any Change in Control.

         (h)      Good Reason. "Good Reason" means, unless the Executive has
         consented in writing thereto, the occurrence of any of the following:

                  (i)      the assignment to the Executive of any duties
                           inconsistent with the Executive's position, including
                           any material change in status, title, authority,
                           duties or responsibilities or any other action which
                           results in a material diminution in such status,
                           title, authority, duties or responsibilities,
                           excluding for this purpose an isolated, insubstantial
                           and inadvertent action not taken in bad faith and
                           which is remedied by the Company or the Executive's
                           employer promptly after receipt of notice thereof
                           given by the Executive;

                  (ii)     a reduction by the Company or the Executive's
                           employer of the Executive's base salary;

                  (iii)    the relocation of the Executive's office to a
                           location more than 35 miles from its location as of
                           the Commencement Date;

                  (iv)     following a Change in Control, unless a plan
                           providing a substantially similar compensation or
                           benefit is substituted, (A) the failure by the
                           Company or any of its affiliates or successors to
                           continue in effect any material fringe benefit or
                           compensation plan, retirement plan, life insurance
                           plan, health and accident plan or disability plan in
                           which the Executive is participating prior to the
                           Change in Control, or (B) the taking of any action by
                           the Company or any of its affiliates or successors
                           which would adversely affect the Executive's
                           participation in or materially reduce his benefits
                           under any of such plans or deprive him of any
                           material fringe benefit; or

                  (v)      following a Change in Control, the failure of the
                           Company or the affiliate of the Company by which the
                           Executive is employed, or any affiliate which
                           directly or indirectly owns or controls any affiliate
                           by which the Executive is employed, to obtain the
                           assumption in writing of the Company's obligation to
                           perform this Agreement by any successor to all or
                           substantially all of the assets of the Company or
                           such affiliate within fifteen (15) days after a
                           reorganization, merger, consolidation, sale or other
                           disposition of assets of the Company or such
                           affiliate.

                                       3
<PAGE>

                  (vi)     any purported termination of the Executive's
                           employment by the Company which is not effected
                           pursuant to a Notice of Termination satisfying the
                           requirements of paragraph 3 hereof; and for purposes
                           of this Agreement, no such purported termination
                           shall be effective.

                  For purposes of this Agreement, any determination of "Good
                  Reason" made by the Executive in good faith based upon his
                  reasonable belief and understanding shall be conclusive.

2.       Term. The term ("Term") of this Agreement shall commence on the date
first above written (the "Commencement Date") and, unless terminated earlier as
provided hereunder, shall continue through the third anniversary of the
Commencement Date (the "Termination Date"); provided, however, that commencing
on the anniversary of the Commencement Date (the "Extension Date") and on each
subsequent Extension Date each year thereafter, the term of this Agreement shall
automatically be extended for one additional year, unless at least 90 days prior
to such Extension Date, the Company shall have given notice that it does not
wish to extend this Agreement. Upon the occurrence of a Change in Control during
the term of this Agreement, including any extensions thereof, this Agreement
shall automatically be extended until the end of the Effective Period and may
not be terminated by the Company during such time.

3.       Notice of Termination.

         (a)      Any termination of the Executive's employment by the Company,
         or by any affiliate of the Company by which the Executive is employed,
         for Cause, or by the Executive for Good Reason shall be communicated by
         Notice of Termination to the other party hereto given in accordance
         with paragraph 11 of this Agreement. For purposes of this Agreement, a
         "Notice of Termination" for termination of employment for Cause or for
         Good Reason means a written notice which (i) is given at least thirty
         (30) days prior to the Date of Termination; (ii) indicates the specific
         termination provision in this Agreement relied upon, (iii) to the
         extent applicable, sets forth in reasonable detail the facts and
         circumstances claimed to provide a basis for termination of the
         Executive's employment under the provision so indicated, (iv) specifies
         the employment termination date; and (v) allows the recipient of the
         Notice of Termination at least thirty (30) days to cure the act or
         omission relied upon in the Notice of Termination. The failure to set
         forth in the Notice of Termination any fact or circumstance which
         contributes to a showing of Good Reason or Cause will not waive any
         right of the party giving the Notice of Termination hereunder or
         preclude such party from asserting such fact or circumstance in
         enforcing its rights hereunder.

         (b)      A Termination of Employment of the Executive will not be
         deemed to be for Cause unless and until there has been delivered to the
         Executive a copy of a resolution duly adopted by the affirmative vote
         of not less than three-quarters of the entire membership of the Board
         at a meeting of the Board called and held for such purpose (after
         reasonable notice is provided to the Executive and the Executive is
         given an opportunity, together with counsel, to be heard before the
         Board), finding that, in the

                                       4
<PAGE>

         good faith opinion of the Board, the Executive has engaged in the
         conduct described in paragraph 1(b) hereof, and specifying the
         particulars of such conduct.

         (c)      A Termination of Employment of the Executive will not be
         deemed to be for Good Reason unless the Executive gives the Notice of
         Termination provided for herein within twelve (12) months after the
         Executive has actual knowledge of the act or omission of the Company
         constituting such Good Reason.

4.       Obligations of the Company Upon Termination of Executive's Employment
         Following a Change in Control

         (a)      If, during the Effective Period, the Company terminates the
         Executive's employment other than for Cause or the Executive terminates
         employment with the Company for Good Reason, the Company will pay the
         following to the Executive as soon as practicable following the Date of
         Termination, but in no event later than thirty (30) days, or such
         period otherwise specifically provided, thereafter:

                  (i)      cash in the amount of the Executive's annual base
                           salary through the Date of Termination to the extent
                           not theretofore paid, including amounts due for
                           accrued but unused vacation time;

                  (ii)     cash in the amount of the annual bonus earned by the
                           Executive through the Date of Termination based on
                           the Company's performance through such date and
                           prorationed by multiplying such bonus amount by the
                           fraction obtained by dividing the number of days in
                           the year through the Date of Termination by 365,
                           payable no later than sixty (60) days following the
                           Date of Termination;

                  (iii)    cash in an amount equal to the product of two times
                           the Executive's annual base salary at the greater of
                           (A) the rate in effect at the time Notice of
                           Termination is given or (B) the rate in effect
                           immediately preceding the Change in Control, payable
                           in a lump sum;

                  (iv)     a lump sum cash amount equal to the product of two
                           times the target annual bonus at the greater of (A)
                           the target annual bonus in effect at the time Notice
                           of Termination is given or (B) the target annual
                           bonus in effect immediately preceding the Change in
                           Control;

                  (v)      the continuation of the provision of health
                           insurance, dental insurance and life insurance
                           benefits for a period of two years following the Date
                           of Termination to the Executive and the Executive's
                           family at least equal to and to the same extent as
                           those which would have been provided to them in
                           accordance with the plans, programs, practices and
                           policies of the Company as in effect and applicable
                           generally to other peer executives and their families
                           during the 90-day period immediately preceding the
                           Effective Period or on the Date of Termination, at
                           the election of the

                                       5
<PAGE>

                           Executive; provided, however, that if the Executive
                           becomes re-employed with another employer and is
                           eligible to receive medical or other welfare benefits
                           under another employer provided plan, the medical and
                           other welfare benefits described herein will be
                           secondary to those provided under such other plan
                           during such applicable period of eligibility.

         (b)      "Compensation" Under Retirement Plans. Any and all amounts
         paid under this Agreement in the amount of or otherwise in respect of
         the Executive's annual base salary and bonuses, whether or not deferred
         under a deferred compensation plan or program, are intended to be and
         will be "Compensation" for purposes of determining Compensation under
         any and all retirement plans sponsored or maintained by the Company or
         by any affiliate controlled by the Company.

         (c)      Deferred Bonus Under Natco Group Inc. Target Bonus Plan. The
         benefits provided under this paragraph 4 are intended to be in addition
         to and separate from any and all bonus compensation amounts earned
         under the Natco Group Inc. Target Bonus Plan ("Target Bonus Plan"), the
         payment of which has been deferred under the terms of the Target Bonus
         Plan. Any and all such deferred bonus compensation shall be payable at
         the time and in the manner provided for (or elected) under the terms of
         the Target Bonus Plan.

         (d)      Effect of Death or Disability. If the Executive's employment
         is terminated by reason of the Executive's death or Disability during
         the Term of this Agreement, this Agreement shall terminate
         automatically on the date of death or, in the event of Disability, on
         the Date of Termination. In the event of the Executive's death
         following the Executive's Date of Termination, but prior to the payment
         of the severance payments and benefits provided under paragraph 4
         hereof, if any, such payments and benefits will be paid to the
         Executive's surviving spouse, or if the Executive has no surviving
         spouse, then to the Executive's estate.

         (e)      Exclusivity of Severance. The severance payments and benefits
         provided for under this Agreement are separate and apart from and, to
         the extent they are actually paid, will be in lieu of any payment under
         any policy or plan of the Company or any of its affiliates regarding
         severance payments generally.

5.       Mitigation of Damages. The Executive will not be required to mitigate
damages or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise. Except as otherwise specifically provided
in this Agreement, the amount of any payment provided for under this Agreement
will not be reduced by any compensation earned by the Executive as the result of
self-employment or employment by another employer or otherwise.

6.       Stock Options. The benefits provided under paragraph 4 above are
intended to be in addition to the value of any options to acquire common stock
of the Company awarded under the Natco Group Inc. 2001 Stock Incentive Plan (the
"Stock Plan") and any other incentive or similar plan heretofore or hereafter
adopted by the Company. Notwithstanding the terms of the Stock Plan, any award
agreement entered into pursuant to the Stock Plan or any other incentive

                                       6
<PAGE>

plan or agreement, all outstanding stock options held by the Executive shall
fully vest as of the date of the Change in Control and become immediately
exercisable in accordance with their terms; provided, however, that if the
Company terminates the Executive's employment other than for Cause or the
Executive terminates employment with the Company for Good Reason during the
Effective Period, then such stock options shall be exercisable for the longer
period of (a) three months after the Executive's Date of Termination or (b)
eighteen months after the effective date of the Change in Control, unless the
term of the stock option expires before the end of such longer period, in which
case the stock option shall be exercisable until the expiration of its term.

7.       Limitation of Benefits.

         (a)      Anything in this Agreement to the contrary notwithstanding, in
         the event it shall be determined that any benefit, payment or
         distribution by the Company to or for the benefit of the Executive
         (whether payable or distributable pursuant to the terms of this
         Agreement or otherwise) (a "Payment") would, if paid, be subject to the
         excise tax imposed by Section 4999 of the Code (the "Excise Tax"), then
         the Payment shall be reduced to the extent necessary to avoid the
         imposition of the Excise Tax. The Executive may select the Payments to
         be limited or reduced.

         (b)      All determinations required to be made under this Section 7,
         including whether an Excise Tax would otherwise be imposed and the
         assumptions to be utilized in arriving at such determination, shall be
         made by Independent Tax Counsel which shall provide detailed supporting
         calculations both to the Company and the Executive within fifteen (15)
         business days of the receipt of notice from the Executive that a
         Payment is due to be made, or such earlier time as is requested by the
         Company. For purposes of this paragraph, "Independent Tax Counsel" will
         mean a lawyer, a certified public accountant with a nationally
         recognized accounting firm, or a compensation consultant with a
         nationally recognized actuarial and benefits consulting firm with
         expertise in the area of executive compensation, who will be selected
         by the Company and will be reasonably acceptable to the Executive, and
         whose fees and disbursements will be paid by the Company. Any
         determination by the Independent Tax Counsel shall be binding upon the
         Company and the Executive. If, as a result of any uncertainty in the
         application of Section 4999 of the Code at the time the initial
         determination is made by the Independent Tax Counsel hereunder,
         Payments hereunder have been unnecessarily limited by this Section 7
         ("Underpayment"), consistent with the calculations required to be made
         hereunder, then the Independent Tax Counsel shall determine the amount
         of the Underpayment that has occurred and any such Underpayment shall
         be properly paid by the Company to or for the benefit of the Executive.
         . If, however, Payments hereunder have not been sufficiently limited by
         this Section 7, consistent with the calculations required to be made
         hereunder, to prevent the imposition of an Excise Tax upon the
         Executive (the "Overpayment"), then the Executive shall notify the
         Company in writing within fifteen (15) days of any claim by the
         Internal Revenue Service, that, if successful, would require the
         payment by the Executive of any Excise Tax, and the Independent Tax
         Counsel shall determine the amount of Overpayment that has occurred and
         any such

                                       7
<PAGE>

         Overpayment shall be properly refunded by the Executive by or for the
         benefit of the Company so as to properly prevent the imposition of the
         Excise Tax.

8.       Confidential Information; Non-Solicitation. For the Term of this
Agreement, and for the period of time during which the Executive receives
benefits pursuant to paragraph 4(a)(v) hereof, the Executive covenants and
agrees as follows:

         (a)      To hold in a fiduciary capacity for the benefit of the Company
         and its affiliates all secret, proprietary or confidential material,
         knowledge, data or any other information relating to the Company or any
         of its affiliated companies and their respective businesses
         ("Confidential Information"), which has been obtained by the Executive
         during the Executive's employment by the Company or any of its
         affiliated companies and that has not been, is not now and hereafter
         does not become public knowledge (other than by acts by the Executive
         or representatives of the Executive in violation of this Agreement),
         and will not, without the prior written consent of the Company or as
         may otherwise be required by law or legal process, communicate or
         divulge any such information, knowledge or data to anyone other than
         the Company and those designated by it; the Executive further agrees to
         return to the Company any and all records and documents (and all copies
         thereof) and all other property belonging to the Company or relating to
         the Company, its affiliates or their businesses, upon termination of
         Executive's employment with the Company and its affiliates; and,

         (b)      Not to solicit or entice any other employee of the Company or
         its affiliates to leave the Company or its affiliates to go to work for
         any other business or organization which is in direct or indirect
         competition with the Company or any of its affiliates, nor request or
         advise a customer or client of the Company or its affiliates to curtail
         or cancel such customer's business relationship with the Company or its
         affiliates.

9.       Rights and Remedies Upon Breach.

         (a)      The Executive hereby acknowledges and agrees that the
         provisions contained in paragraph 8 of this Agreement (the "Restrictive
         Covenants"), are reasonable and valid in duration and in all other
         respects. If any court of competent jurisdiction determines that any of
         the Restrictive Covenants, or any part thereof, is invalid or
         unenforceable, the remainder of the Restrictive Covenants will not
         thereby be affected and will be given full effect without regard to the
         invalid portions.

         (b)      If the Executive breaches, or threatens to commit a breach of,
         any of the Restrictive Covenants, the Company will have the following
         rights and remedies, each of which rights and remedies will be
         independent of the others and severally enforceable, and each of which
         is in addition to, and not in lieu of, any other rights and remedies
         available to the Company under law or in equity:

                  (i)      Specific Performance. The right and remedy to have
                           the Restrictive Covenants specifically enforced by
                           any court of competent jurisdiction, it being agreed
                           that any breach or threatened breach of the
                           Restrictive

                                       8
<PAGE>

                           Covenants would cause irreparable injury to the
                           Company and that money damages would not provide an
                           adequate remedy to the Company.

                  (ii)     Accounting. The right and remedy to require the
                           Executive to account for and pay over to the Company
                           all compensation, profits, monies, accruals,
                           increments or other benefits derived or received by
                           the Executive as the result of any action
                           constituting a breach of the Restrictive Covenants.

                  (iii)    Cessation of Severance Benefits. The right and remedy
                           to cease any further severance, benefit or other
                           compensation payments under this Agreement to the
                           Executive or the Executive's beneficiary from and
                           after the commencement of such breach by the
                           Executive.

10.      Arbitration. The Company and Executive agree that any claim, dispute or
controversy arising under or in connection with this Agreement (including,
without limitation, any such claim, dispute or controversy arising under any
federal, state or local statute, regulation or ordinance or any of the Company's
employee benefit plans, policies or programs) shall be resolved solely and
exclusively by binding arbitration. The arbitration shall be held in the city of
Houston, Texas (or at such other location as shall be mutually agreed by the
parties). The arbitration shall be conducted in accordance with the Expedited
Employment Arbitration Rules (the "Rules") of the American Arbitration
Association (the "AAA") in effect at the time of the arbitration, except that
the arbitrator shall be selected by alternatively striking from a list of five
arbitrators supplied by the AAA. All fees and expenses of the arbitration,
including a transcript if either requests, shall be borne equally by the
parties. If Executive prevails as to any material issue presented to the
arbitrator, the entire cost of such proceedings (including, without limitation,
Executive's reasonable attorneys fees) shall be borne by the Company. If
Executive does not prevail as to any material issue, each party will pay for the
fees and expenses of its own attorneys, experts, witnesses, and preparation and
presentation of proofs and post-hearing briefs (unless the party prevails on a
claim for which attorney's fees are recoverable under the Rules). Any action to
enforce or vacate the arbitrator's award shall be governed by the Federal
Arbitration Act, if applicable, and otherwise by applicable state law. If either
the Company or Executive pursues any claim, dispute or controversy against the
other in a proceeding other than the arbitration provided for herein, the
responding party shall be entitled to dismissal or injunctive relief regarding
such action and recovery of all costs, losses and attorney's fees related to
such action. Notwithstanding the provisions of this paragraph, either party may
seek injunctive relief in a court of competent jurisdiction, whether or not the
case is then pending before the panel of arbitrators. Following the court's
determination of the injunction issue, the case shall continue in arbitration as
provided herein.

11.      Notices. Any notice provided for in this Agreement will be given in
writing and will be delivered personally, telegraphed, telexed, sent by
facsimile transmission or sent by certified, registered or express mail, postage
prepaid. Any such notice will be deemed given when so delivered personally,
telegraphed, telexed or sent by facsimile transmission, or, if mailed, on the
date of actual receipt thereof. Notices will be properly addressed to the
parties at their respective

                                       9
<PAGE>

addresses set forth below or to such other address as either party may later
specify by notice to the other in accordance with the provisions of this
paragraph:

         If to the Company:

         Natco Group Inc.
         Brookhollow Central III
         2950 North Loop West, Suite 750
         Houston, Texas  77092
         Attention:  Chief Executive Officer

         If to the Executive:
         Katherine P. Ellis
         4910 Kaylan Court
         Richmond, TX 77469

12.      Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with respect thereto, and any and all prior
employment or severance agreements and related amendments entered into between
the Company and the Executive.

13.      Waivers and Amendments. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms and conditions hereof may be
waived, only by a written instrument signed by the parties hereto or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder will operate as a
waiver thereof, nor will any waiver on the part of any party of any such right,
power or privilege hereunder, nor any single or partial exercise of any right,
power or privilege hereunder, preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder.

14.      Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the state of Texas (without giving effect to the
choice of law provisions thereof), where the employment of the Executive will be
deemed, in part, to be performed, and enforcement of this Agreement or any
action taken or held with respect to this Agreement will be taken in the courts
of appropriate jurisdiction in Houston, Texas.

15.      Assignment. This Agreement, and any rights and obligations hereunder,
may not be assigned by the Executive and may be assigned by the Company only to
any successor in interest, whether by merger, consolidation, acquisition or the
like, or to purchasers of substantially all of the assets of the Company.

16.      Binding Agreement. This Agreement will inure to the benefit of and be
binding upon the Company and its respective successors and assigns and the
Executive and his legal representatives.

                                       10
<PAGE>

17.      Counterparts. This Agreement may be executed in separate counterparts,
each of which when so executed and delivered will be deemed an original, but all
of which together will constitute one and the same instrument.

18.      Headings. The headings in this Agreement are for reference purposes
only and will not in any way affect the meaning or interpretation of this
Agreement.

19.      Authorization. The Company represents and warrants that the Board of
Directors of the Company has authorized the execution of this Agreement.

20.      Validity. The invalidity or unenforceability of any provisions of this
Agreement will not affect the validity or enforceability of any other provisions
of this Agreement, which will remain in full force and effect.

21.      Tax Withholding. The Company will have the right to deduct from all
benefits and/or payments made under this Agreement to the Executive any and all
taxes required by law to be paid or withheld with respect to such benefits or
payments.

22.      No Contract of Employment. Nothing contained in this Agreement will be
construed as a contract of employment between the Company or any of its
affiliates and the Executive, as a right of the Executive to be continued in the
employment of the Company or any of its affiliates, or as a limitation of the
right of the Company or any of its affiliates to discharge the Executive with or
without cause.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

The Company

NATCO GROUP INC.                                         THE EXECUTIVE

By       /s/ NATHANIEL A. GREGORY                        /s/ KATHERINE P. ELLIS
         ----------------------------                    -----------------------
Title:   Chief Executive Officer                         Katherine P. Ellis
NATCO

                                       11

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