FIRST AMENDMENT TO LOAN AGREEMENT

Exhibit 10.1

FIRST AMENDMENT TO LOAN AGREEMENT

THIS FIRST AMENDMENT TO LOAN AGREEMENT (this “Amendment”) is executed as of December 23, 2008 (the “First 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 dated as of July 12, 2006 (as amended, the “Loan Agreement”). 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 First Amendment Effective Date, the Loan Agreement is amended as follows:

(a) The definition of “Commitment Fee Percentage” set forth in Section 1.1 of the Loan Agreement is hereby amended to read in its entirety as follows:

Commitment Fee Percentage means the applicable per annum percentage set forth at the appropriate intersection in the table shown below, based on the Funded Debt to EBITDA Ratio as of the last day of the most recently ended fiscal quarter of U.S. Borrower calculated by U.S. Agent as soon as practicable after receipt by U.S. Agent of

all financial reports required under this Agreement with respect to such fiscal quarter (including a Compliance Certificate) (provided, however, that if the Commitment Fee Percentage is increased as a result of the reported Funded Debt to EBITDA Ratio, such increase shall be retroactive to the date that U.S. Borrower was obligated to deliver such financial reports to U.S. Agent pursuant to the terms of this Agreement and provided further, however, that if the Commitment Fee Percentage is decreased as a result of the reported Funded Debt to EBITDA Ratio, and such financial reports are delivered to U.S. Agent not more than ten (10) calendar days after the date required to be delivered pursuant to the terms of this Agreement, such decrease shall be retroactive to the date that U.S. Borrower was obligated to deliver such financial reports to U.S. Agent pursuant to the terms of this Agreement):

(b) A new definition of “Defaulting U.S. Lender” is hereby added to Section 1.1 of the Loan Agreement, such new definition to read in its entirety as follows:

“Defaulting U.S. Lender” shall mean any U.S. Lender that (a) has failed (which failure has not been cured within one Business Day of the date required to be funded by it hereunder), or has notified the U.S. Agent and/or any Borrower that it does not intend, to fund any portion of the Loans or participations in the Letter of Credit Liabilities required to be funded by it hereunder on the date required to be funded by it hereunder, (b) has otherwise failed to pay to the U.S. Agent or any other Lender any other amount required to be paid by it hereunder on the date when due and such failure continues uncured for a period of one Business Day after notice thereof, unless such failure is the subject of a good faith dispute, or (c) (i) become or is insolvent or has a parent company that has become or is insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or

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has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment or has a parent company that has become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee or custodian appointed for it, or has taken any action in furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or appointment.

(c) The definition of “Margin Percentage” set forth in Section 1.1 of the Loan Agreement is hereby amended to read in its entirety as follows:

Margin Percentage means the applicable per annum percentage set forth at the appropriate intersection in the table shown below, based on the Funded Debt to EBITDA Ratio as of the last day of the then most recently ended fiscal quarter of U.S. Borrower calculated by U.S. Agent as soon as practicable after receipt by U.S. Agent of all financial reports required under this Agreement with respect to such fiscal quarter (including a Compliance Certificate) (provided, however, that if the Margin Percentage is increased as a result of the reported Funded Debt to EBITDA Ratio, such increase shall be retroactive to the date that U.S. Borrower was obligated to deliver such financial reports to U.S. Agent pursuant to the terms of this Agreement and provided further, however, that if the Margin Percentage is decreased as a result of the reported Funded Debt to EBITDA Ratio, and such financial reports are delivered to U.S. Agent not more than ten (10) calendar days after the date required to be delivered pursuant to the terms of this Agreement, such decrease shall be retroactive to the date that U.S. Borrower was obligated to deliver such financial reports to U.S. Agent pursuant to the terms of this Agreement):

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(d) A new definition of “Maximum U.S. Letter of Credit Amount” is hereby added to Section 1.1 of the Loan Agreement, such new definition to read in its entirety as follows:

“Maximum U.S. Letter of Credit Amount” shall mean, as of any date, $100,000,000 minus the aggregate amount of the U.S. Commitments of any Defaulting U.S. Lenders as of such date.

(e) The reference to $50,000,000” in the first sentence of Section 2.2(a) of the Loan Agreement is hereby amended to read “the Maximum U.S. Letter of Credit Amount”.

(f) Section 2.4(c) of the Loan Agreement is hereby amended to read in its entirety as follows:

(c) Optional Increase. At any time after December 23, 2008 and so long as no Default or Event of Default shall have occurred which is continuing, U.S. Borrower shall have the right to increase the U.S. Commitments by an amount not exceeding $22,350,000, in the aggregate, provided that (i) the U.S. Borrower shall give notice of each such increase to the U.S. Agent as provided in Section 4.3 hereof, (ii) no Lender shall be required to increase its U.S. Commitment unless it shall have expressly agreed to such increase in writing (but otherwise, no notice to or consent by any Lender shall be required, notwithstanding anything to the contrary set forth in Section 11.5 hereof), (iii) the addition of new U.S. Lenders shall be subject to the terms and provisions of Section 11.6 hereof as if such new U.S. Lenders were acquiring an interest in the U.S. Revolving Loans by assignment from an existing U.S. Lenders (to the extent applicable, i.e. required approvals, minimum amounts, execution of new U.S. Revolving Notes and the like), (iv) the U.S. Borrower shall execute and deliver such additional or replacement U.S. Revolving Notes and such other documentation (including evidence of proper authorization) as may be reasonably requested by the U.S. Agent, any new U.S. Lenders or any U.S. Lenders which is increasing its Commitment and (v) each such increase shall be in an aggregate amount of at least $3,000,000. If the U.S. Borrower shall terminate or reduce the U.S. Commitments pursuant to Section 2.4(b) hereof, it shall have no further right to increase the U.S. Commitments pursuant to this Section. U.S. Borrower shall be required to pay (or to reimburse each applicable U.S. Lender for) any breakage costs incurred by any U.S. Lender in connection with the need to reallocate existing U.S. Revolving Loans among the U.S. Lenders following any increase in the U.S. Commitments pursuant to this provision.

(g) A new Section 4.6 is hereby added to the Loan Agreement, such new Section to read in its entirety as follows:

4.6. Defaulting U.S. Lender. Notwithstanding any provision of this Agreement to the contrary, if any U.S. Lender becomes a Defaulting U.S. Lender, then the following provisions shall apply for so long as such U.S. Lender is a Defaulting U.S. Lender:

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(h) Schedule 1.1B to the Loan Agreement is hereby amended to be identical to Schedule 1.1B attached hereto.

SECTION 2. Increase of Revolving Commitments. The U.S. Borrower has heretofore requested pursuant to Section 2.4(c) of the Loan Agreement (as in effect prior to the First Amendment Effective Date) that the aggregate amount of the U.S. Commitments be increased by $52,650,000. Pursuant thereto, effective on the First Amendment Effective Date: (a) the aggregate amount of the U.S. Commitments shall be increased to $117,650,000; (b) the U.S. Commitment of each Lender shall, without any further action, be the Commitment specified for such Lender on the attached Exhibit A; and (c) HSBC Bank USA, National Association (the “New U.S. Lender”) shall become a U.S. Lender under the Loan Agreement with a U.S. Commitment as specified on the attached Exhibit A. Without limiting the foregoing, the New U.S. Lender hereby acknowledges, agrees and confirms, by its execution of this Amendment, that the New U.S. Lender (x) will be deemed to be a “Lender” under the Collateral Agency Agreement and shall have all of the obligations of a “Lender” thereunder as if it had executed the Collateral Agency Agreement and (y) will be deemed to be a “U.S. Lender” under that certain Intercreditor Agreement dated as of July 12, 2006 executed by and among the U.S. Agent, the U.K. Agent, the Canadian Agent and certain financial institutions therein named, and shall have all of the obligations of a “U.S. Lender” thereunder as if it had executed said Intercreditor Agreement.

SECTION 3. Conditions. This Amendment shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with the Loan Agreement): (a) the U.S. Agent (or its counsel) has received from Obligors and all of the Required Lenders either (1) a counterpart of this Amendment signed on behalf of such party or (2) written evidence satisfactory to the U.S. Agent (which may include telecopy or e-mail transmission of a signed signature page of this Amendment) that such party has signed counterparts of this Amendment; (b) the U.S. Borrower has executed and delivered to the U.S. Agent for each U.S. Lender a new U.S. Revolving Note in the maximum principal amount of such Lender’s U.S. Commitment and substantially in the form of Exhibit C-1 to the Loan Agreement, and (c) the U.S. Agent shall have received such opinions, documents and certificates as the U.S. Agent or its counsel may reasonably request relating to the organization, existence and good standing of the U.S. Borrower, the authorization of the execution, delivery and performance of this Amendment and the new U.S. Revolving Notes by the U.S. Borrower and any other legal matters relating to this Amendment. The U.S. Agent shall give, or cause to be given, prompt notice to the U.S. Borrower and the Lenders as to whether the conditions specified in the immediately preceding sentence have been satisfied by the deadline set forth therein; such notice may be oral, telephonic, written (including telecopied) or by e-mail. Promptly after this Amendment shall become effective, each U.S. Lender shall deliver to U.S. Agent (for delivery to U.S. Borrower) the prior U.S. Revolving Note which has been replaced by a new U.S. Revolving Note in connection with the closing of this First Amendment.

SECTION 4. 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.

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SECTION 5. Amendment Fee. As a condition precedent to the effectiveness of this Amendment, the Borrowers shall pay to the Agent (for payment to the applicable Lenders) a fee equal to 0.50% times the amount of any increased or new U.S. Commitment after giving effect to this Amendment.

SECTION 6. Expenses. The Borrowers shall pay to the U.S. Agent all reasonable fees and expenses of its 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, consents and understandings relating to such subject matter. The headings herein shall be accorded no significance in interpreting this Amendment.

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NOTICE PURSUANT TO TEX. BUS. & COMM. CODE §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.

Exhibit A – U.S. Commitments

Schedule 1.1B – Excluded Real Property

[Signature Page to First Amendment]

[Signature Page to First Amendment]

[Signature Page to First Amendment]

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 §26.02 set forth above.

[Signature Page to First Amendment]

EXHIBIT A

Schedule 1.1B

Excluded Real Property