Waiver letter


 Exhibit 10.2 
  
 [Chase] 
  
 October 17, 2005 
  
 Lydall, Inc. 
 Lydall Deutschland Holding GmbH 
 One Colonial Road 
 Manchester, Connecticut 06045 
  

	Re:	Credit Agreement / Waiver. 

  
 Ladies and Gentlemen: 
  
 Reference is made to that certain Credit Agreement dated as of July 14, 1999 (as amended and restated as of May 13, 2002, as amended and restated as of
August 29, 2003, as amended as of July 27, 2004 and as amended as of February 1, 2005, the “Credit Agreement”) among Lydall, Inc., a Delaware corporation (the “Borrower”); Lydall Deutschland Holding GmbH (the
“Subsidiary Borrower”); each of the financial institutions which is a signatory thereto as a “Lender” (the “Lenders”); JPMorgan Chase Bank, as administrative agent for the Lenders (the “Administrative Agent”);
and Bank of New York, as documentation agent for the Lenders (the “Documentation Agent”). All terms used herein and not defined herein shall have the meanings ascribed to them in the Credit Agreement. 
  
 Until the Borrower delivers financial statements to the Lenders for the fiscal quarter ending
December 31, 2005 and certifies that no Default has occurred, the Borrower agrees not to make, or permit any Subsidiary to make, any Restricted Payment otherwise permitted by Section 6.06(a)(iii) of the Credit Agreement. Subject to the
foregoing, each of the Lenders waives noncompliance by the Borrower with Section 6.16(b) of the Credit Agreement for the fiscal quarter ended September 30, 2005, provided that the Consolidated EBITDA to be reported under section 5.01(b,d)
for the fiscal quarter ended September 30, 2005 is not less than $20,000,000. 
  
 Except as specifically set forth herein, the terms of this letter shall not operate as a waiver by the Administrative Agent, the Documentation Agent or the Lenders of any affirmative, negative or financial covenant contained in the Credit
Agreement or otherwise prejudice the rights, remedies or powers of the Administrative Agent, the Documentation Agent or any Lender under the Credit Agreement, the other Loan Documents or applicable law. Except as expressly provided herein:
(i) no terms and provisions of the Loan Documents are modified or changed by this letter; and (ii) the terms and provisions of the Loan Documents shall continue in full force and effect. 







			
	 Very truly yours,

	
	JPMORGAN CHASE BANK, N.A. individually and as Administrative Agent
	 	 	 
	 By
	 	/S/ PETER M. KILLEA
	 	 	

	 	 	Name: Peter M. Killea
	 	 	 Title: Vice President



  
  

			
	THE BANK OF NEW YORK, individually and as Documentation Agent
	 	 	 
	 By
	 	/S/ SCOTT BOGNAR
	 	 	

	 	 	 Name: Scott Bognar

	 	 	 Title: Vice President



  
  

			
	WEBSTER BANK
	 	 	 
	 By
	 	/S/ MATTHEW O. RILEY
	 	 	

	 	 	 Name: Matthew O. Riley

	 	 	 Title: Senior Vice President



  
  

			
	BROWN BROTHERS HARRIMAN & CO.
	 	 	 
	 By
	 	/S/ JOHN D. ROGERS
	 	 	

	 	 	 Name: John D. Rogers

	 	 	 Title: Senior Vice President



  
  

			
	 WACHOVIA BANK, N.A.

	 	 	 
	 By
	 	/S/ PATRICIA S. GAUDREAU
	 	 	

	 	 	 Name: Patricia S. Gaudreau

	 	 	 Title: Senior Vice President



  
  
 ACKNOWLEDGED AND AGREED: 
  

			
	LYDALL, INC.
	 	 	 
	 By
	 	/S/ THOMAS P. SMITH
	 	 	

	 	 	 Name: Thomas P. Smith

	 	 	 Title: Vice President, CFO and Treasurer


  
  

			
	LYDALL DEUTSCHLAND HOLDING GMBH
	 	 	 
	 By
	 	/S/ DAVID FREEMAN
	 	 	

	 	 	 Name: David Freeman

	 	 	 Title: President and Chief Executive Officer