Document:

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                                                                Exhibit 10.26

                   THIRD AMENDMENT TO POWER PURCHASE AGREEMENT

     THIS THIRD AMENDMENT TO POWER PURCHASE AGREEMENT, dated as of August 9,
2000, is entered into between LSP Energy Limited Partnership, a Delaware
limited partnership ("Seller") and Virginia Electric and Power Company, a
Virginia public service corporation ("Purchaser") (each, a "Party" and
collectively, the "Parties") (the "Third Amendment").

                                  RECITALS

     WHEREAS, Seller and Purchaser have entered into Power Purchase Agreement
dated as of May 18, 1998, as amended by the First Amendment to the Power
Purchase Agreement dated as of July 22, 1998, and as amended by the Second
Amendment to the Power Purchase Agreement dated as of August 11, 1998 (the
"Power Purchase Agreement");

     WHEREAS, Seller and Purchaser desire to amend the Power Purchase
Agreement as set forth in this Third Amendment;

     NOW, THEREFORE, in consideration of the foregoing premises, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the Parties agree as follows:

     SECTION 1.  DEFINITIONS. Unless the context otherwise requires,
capitalized terms used but not otherwise defined in this Third Amendment
shall have the meanings given to them in the Power Purchase Agreement.

     SECTION 2.  AMENDMENTS TO THE POWER PURCHASE AGREEMENT.

(a)  For the period from the Commercial Operation Date through November 30,
     2000, Section 5.2 shall be amended by adding the following:

         (d) In addition to the Scheduled Maintenance Outages provided for in
     Section 5.2(b) and 5.2(c), Seller shall be entitled to an additional 120
     hours of Scheduled Maintenance Outages during Off Peak Hours, or during
     Peak Hours if mutually agreed upon between the Parties, for the period
     between the Commercial Operation Date and November 30, 2000 with one
     Day's prior notice to Purchaser of each such additional Scheduled
     Maintenance Period. Seller shall use Commercially Reasonable Efforts to
     minimize the period of any Scheduled Maintenance Outage. Purchaser may
     request changes to such schedules as long as such changes do not create
     a condition which places safety and reliability of the Dedicated Units in
     question. If Purchaser requests such schedule changes, Seller shall abide
     by Purchaser's requested

                                 Page 1
                  Third Amendment to Power Purchase Agreement
<PAGE>

     changes, If, however, additional costs to Seller would result from
     Purchaser's requested changes, Seller shall notify Purchaser of such
     additional costs. Upon receipt of such notification from Seller, if
     Purchaser wishes for Seller to proceed with such changed schedule,
     Purchaser shall so notify Seller and shall reimburse Seller for such
     additional costs as were described in Seller's notice to Purchaser. If
     Purchaser does not notify Seller of its decision within five Business
     Days, then Seller shall proceed with its own schedule.

(b)  On the Commercial Operation Date and continuing until the Summer
     Condition Standard Capacity is re-determined pursuant to the next
     sentence, the Summer Condition Standard Capacity shall be deemed to
     be equal to 243 MW. By no later than September 30, 2000, Seller shall
     re-determine the Summer Condition Standard Capacity in the manner set
     forth in Appendix B and such re-determined Summer Condition Standard
     Capacity shall become the Summer Condition Standard Capacity from that
     time forward as set forth in Section 11.1(b) and Appendix B.

(c)  On the Commercial Operation Date and continuing until the Summer
     Condition Supplemental Capacity is re-determined  pursuant to the next
     sentence, the Summer Condition Supplemental Capacity shall be deemed to
     be equal to 38 MW. By no later than November 30, 2000, Seller shall
     re-determine the Summer Condition Supplemental Capacity in the manner
     set forth in Appendix B and such re-determined  Summer Condition
     Supplemental Capacity shall become the Summer Condition Supplemental
     Capacity from that time forward as set forth in Section 11.1(b) and
     Appendix B.

(d)  For the period from the Commercial Operation Date through November 30,
     2000, the definition of Forced Outage shall be changed by adding the
     following sentence at the end of the definition for Forced Outage.

     Notwithstanding the foregoing, for each Dedicated Unit the first 132
     hours during the period between the Commercial Operation Date and
     November 30, 2000 that would otherwise constitute a Forced Outage in
     accordance with the preceding sentence shall not be deemed a Forced
     Outage.

(e)  For the period for the Commercial Operation Date and continuing until
     the end of the calendar year 2000, the first sentence of section 11.1(b)
     shall be changed to allow the Seller to redetermine the Contract
     Capacity of the Dedicated Units up to five times per calendar year as
     follows:

          (b)  No more than five times in any calendar year, Seller shall
     have the right to redetermine the Contract Capacity of a Dedicated
     Unit...

                                     Page 2
                   Third Amendment to Power Purchase Agreement

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(f)  Seller and Purchaser agree to work together to coordinate the
     establishment of the Fuel arrangements and the implementation of the
     operating procedures for the Lateral Pipelines as described within
     Section 5.5.

     SECTION 3.  EFFECTIVENESS. This Third Amendment shall be effective as of
August 9, 2000, on the condition that the Commercial Operation Date occurs
prior to 1 p.m. CPT August 10, 2000.

     SECTION 4.  MISCELLANEOUS.

(a)  This Third Amendment may be executed in more than one counterpart, each
     of which shall be deemed to be an original and all of which when taken
     together shall be deemed to constitute one and the same instrument. The
     Parties may execute this Third Amendment by signing any such counterpart
     and the signature pages may be detached from multiple counterparts and
     attached to a single counterpart so that all signatures are physically
     attached to the same document.

(b)  This Third Amendment shall be governed by, and construed in accordance
     with, the laws of the State of New York, exclusive of conflicts of laws
     provisions.

(c)  Except as expressly provided in this Third Amendment, the Power Purchase
     Agreement shall continue and remain in full force and effect in all
     respects.

                                     Page 3
                   Third Amendment to Power Purchase Agreement

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     IN WITNESS WHEREOF, the Parties have caused this third Amendment to be
executed by their respective duly authorized officers as of the first date
above written.

LSP ENERGY LIMITED PARTNERSHIP

By:  LSP Energy, Inc., its General Partner

Name:  /s/ Michael P. Witzing
      --------------------------------------
Title: Vice President
      --------------------------------------
       Michael P. Witzing

VIRGINIA ELECTRIC AND POWER COMPANY

By:  /s/ R. T. Thatcher
   ----------------------------------------
Name: R. T. Thatcher
      ----------------------------------------
Title: Vice President
      ----------------------------------------

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                      Third Amendment to Power Purchase Agreement<PAGE>

                                                                    Exhibit 10.1

                            FIRST AMENDMENT AGREEMENT

                           Dated as of August 10, 2000

                                      among

                                  LYDALL, INC.

                        LYDALL DEUTSCHLAND HOLDING, GMBH

                            The LENDERS Party Hereto

                            THE CHASE MANHATTAN BANK,
                             as Administrative Agent

                                       and

                              FLEET NATIONAL BANK,
                             as Documentation Agent

<PAGE>

         FIRST AMENDMENT AGREEMENT, dated as of August 10, 2000, among LYDALL,
INC., a Delaware corporation (the "Borrower"), LYDALL DEUTSCHLAND HOLDING, GMBH,
a German corporation (the "Subsidiary Borrower"), the LENDERS party hereto, THE
CHASE MANHATTAN BANK, as Administrative Agent, and FLEET NATIONAL BANK, as
Documentation Agent.

         WHEREAS, the Borrower, the Subsidiary Borrower, the Lenders, the
Administrative Agent and the Documentation Agent have entered into that certain
Credit Agreement dated as of July 14, 1999 (as in effect prior to the
effectiveness of this Agreement, the "Existing Credit Agreement," and, as
amended by this Agreement, the "Amended Credit Agreement"), pursuant to which
the Lenders have agreed, subject to the terms and conditions therein set forth,
to make or participate in Loans to, and to issue or participate in Letters of
Credit for the account of, the Borrower and the Subsidiary Borrower;

         WHEREAS, the Borrower, the Subsidiary Borrower, the Lenders, the
Administrative Agent and the Documentation Agent have agreed to enter into this
Agreement to provide for, among other things, the modification of certain
covenants and the addition of Charter Medical, Ltd., a Delaware corporation
("Charter Medical"), as a Guarantor; and

         WHEREAS, the Loan Documents, as amended and supplemented by this
Agreement and the Guarantee to be delivered by Charter Medical and as each may
be amended or supplemented from time to time, are referred to herein as the
"Amended Loan Documents";

         NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

                                    ARTICLE I

                    AMENDMENTS TO EXISTING CREDIT AGREEMENT.

         Each of the Borrower and the Subsidiary Borrower and, subject to the
satisfaction of the conditions set forth in Article III, the Lenders hereby
consent and agree to the amendments to the Existing Credit Agreement set forth
below:

         (a) The definition of "subsidiary" contained in Section 1.01 of the
Existing Credit Agreement is hereby amended to delete the last sentence thereof.

         (b) Section 6.01 of the Existing Credit Agreement is hereby amended to
(i) delete the word "and" at the end of clause (d), (ii) substitute "; and" in
place of "." at the end of clause (e) and (iii) add a new clause (f) to read as
follows:

                  (f) Indebtedness of Axohm Industries, Inc. incurred to finance
         its working capital requirements; provided that aggregate principal
         amount of Indebtedness permitted by this clause (f) shall not exceed
         $2,000,000 at any time outstanding.

<PAGE>

         (c)      Section 6.12 of the Existing Credit Agreement is hereby
amended and restated to read as follows:

                  SECTION 6.12. FIXED CHARGE COVERAGE RATIO. The Borrower will
         not permit the Fixed Charge Coverage Ratio as determined as of the end
         of each fiscal quarter of the Borrower to be less than (a) if such
         fiscal quarter ends on or prior to December 31, 2000, 1.10 to 1.00; (b)
         if such fiscal quarter ends after December 31, 2000 and on or prior to
         June 30, 2001, 1.15 to 1.00; and (c) if such fiscal quarter ends
         thereafter, 1.20 to 1.00.

         (d) Section 6.13 of the Existing Credit Agreement is hereby amended to
substitute "2.50" in place of "3.00."

                                   ARTICLE II

                         REPRESENTATIONS AND WARRANTIES

         The Borrower hereby represents and warrants that as of the Effective
Date (as defined in Article III of this Agreement):

         Section 2.01. EXISTING REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties contained in Article III of the Existing Credit
Agreement and in each of the other Loan Documents is true and correct, except
that any representation or warranty limited by its terms to a specific date
shall be true and correct as of such specific date.

         Section 2.02. NO DEFAULTS. Except Defaults and Events of Default which
have been waived, no event has occurred and no condition exists which would
constitute a Default or an Event of Default as defined in the Existing Credit
Agreement, and no event has occurred and no condition exists which would
constitute a Default or an Event of Default as defined in the Amended Credit
Agreement.

         Section 2.03. POWER AND AUTHORITY; NO CONFLICTS. The execution,
delivery and performance by each of the Loan Parties that are parties to this
Agreement of the Amended Loan Documents to which it is a party are within such
party's corporate, partnership or limited liability company powers and have been
duly authorized by all necessary corporate, partnership or limited liability
company and, if required, stockholder, partner or member action. Each Amended
Loan Document to which any Loan Parties that are party to this Agreement is a
party has been duly executed and delivered by such party and constitutes a
legal, valid and binding obligation of such party, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.

                                       2

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         Section 2.04. GOVERNMENTAL APPROVALS; NO CONFLICTS. The execution,
delivery and performance by each of the Loan Parties of the Amended Loan
Documents to which it is a party (a) do not require the Borrower or any
Subsidiary to obtain or make any consent or approval of, registration or filing
with, or other action by, any Governmental Authority, except such as have been
obtained or made and are in full force and effect or that could not reasonably
be expected, individually or in the aggregate, to result in a Material Adverse
Effect, (b) will not violate any law or regulation applicable to the Borrower or
any Subsidiary, or the charter, by-laws or other organizational documents of any
Loan Party, or any Subsidiary, or any order of any Governmental Authority,
except as to any law, regulation or order the violation of which could not
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Borrower or any
Significant Subsidiary or their respective assets, or give rise to a right
thereunder to require any payment to be made by the Borrower or any Significant
Subsidiary, except for any such violations, defaults or rights to require
payment that could not reasonably be expected, individually or in the aggregate,
to result in a Material Adverse Effect, and (d) will not result in the creation
or imposition of any Lien (other than a Permitted Encumbrance) on any asset of
the Borrower or any of its Subsidiaries.

         Section 2.05. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE. (a) The
Borrower has heretofore furnished to the Lenders the consolidated and
consolidating balance sheets of the Borrower and its consolidated Subsidiaries
and the related statements of income, stockholders equity and cash flows (i) as
of and for the fiscal years ended December 31, 1997, December 31, 1998 and
December 31, 1999, such consolidated financial statements being reported on by
PricewaterhouseCoopers, LLP, independent public accountants, and (ii) as of and
for the fiscal quarter and the portion of the fiscal year ended June 30, 2000.
Such financial statements present fairly, in all material respects, the
financial condition and results of operations and cash flows of the Borrower and
its consolidated Subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments and the absence of
footnotes in the case of the statements referred to in clause (ii) above.

                  (b) Since June 30, 2000, there has been no material adverse
change in the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and the Subsidiaries, taken as a whole.

                                   ARTICLE III

                              CONDITIONS PRECEDENT

         The effectiveness of this Agreement is subject to the condition
precedent that the Administrative Agent, the Documentation Agent and the Lenders
shall have received on or before August 10, 2000 (the "Effective Date") each of
the following, in form and substance satisfactory to the Administrative Agent,
the Documentation Agent and the Required Lenders:

                                       3

<PAGE>

          (a) counterparts of this Agreement executed by each of the Borrower,
the Subsidiary Borrower, the Required Lenders, the Administrative Agent and the
Documentation Agent;

          (b) counterparts of a Guarantee executed by Charter Medical;

          (c) favorable written opinion (addressed to the Administrative Agent
and the Lenders and dated the Effective Date) of Mary A. Tremblay, substantially
in the form of Exhibit A; the Borrower and the Subsidiary Borrower hereby
request such counsel to deliver such opinion;

          (d) such documents and certificates as the Administrative Agent or its
counsel may reasonably request relating to the organization, existence and good
standing of Charter Medical and the authorization of the Transactions by the
Borrower, the Subsidiary Borrower and Charter Medical;

          (e) evidence that Charter Medical shall have repaid in full all loans
to First Union National Bank and shall have terminated all commitments
thereunder; and

          (f) certified copies of the audited financial statements (where
available) referred to in Section 2.05 of this Agreement.

                                   ARTICLE IV

                                  MISCELLANEOUS

         Section 4.01. DEFINED TERMS. The terms used herein and not defined
herein shall have the meanings assigned to such terms in the Existing Credit
Agreement.

         Section 4.02. NONWAIVER. The terms of this Agreement shall not operate
as a waiver by the Administrative Agent, the Issuing Bank or any Lender or
otherwise prejudice the rights, remedies or powers of the Administrative Agent,
the Issuing Bank or any Lender under the Amended Credit Agreement, under any
other Amended Loan Document or under applicable law. Except as set forth in
Article I: (x) no terms and provisions of the Loan Documents are modified or
changed by this Agreement; and (y) the terms and provisions of the Loan
Documents shall continue in full force and effect.

         Section 4.03. WAIVERS; AMENDMENTS. Any provision of this Agreement may
be amended or modified only by an agreement or agreements in writing signed by
the Borrower and the Required Lenders, or by the Borrower and the Administrative
Agent acting with the consent of the Required Lenders.

         Section 4.04. EXPENSES. The Borrower shall pay all reasonable
documented out-of-pocket expenses incurred by the Administrative Agent,
including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent, in connection with the preparation

                                       4

<PAGE>

and administration of this Agreement, the other Amended Loan Documents or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated).

         Section 4.05. NOTICES. All notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopy in
accordance with the terms of the Amended Credit Agreement.

         Section 4.06. HEADINGS. Article and Section headings used herein are
for convenience of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in interpreting, this
Agreement.

         Section 4.07. SEVERABILITY. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.

         Section 4.08. COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. The Amended Loan Documents
and the separate letter agreements with respect to fees payable to the
Administrative Agent and the Documentation Agent constitute the entire contract
among the parties relating to the subject matter thereof and supersede any and
all previous agreements and understandings, oral or written, relating to the
subject matter hereof. Subject to the satisfaction of the conditions set forth
in Article III, this Agreement shall become effective when it shall have been
executed by the Administrative Agent and when the Administrative Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of the Required Lenders, and thereafter shall be binding upon and
inure to the benefit of the parties to the Existing Credit Agreement and their
respective successors and assigns. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.

         Section 4.09. GOVERNING LAW. This Agreement shall be construed in
accordance with and governed by the law of the State of New York.

                                       5

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

                               LYDALL, INC., a Delaware corporation

                               By
                                  -------------------------------------
                                     Name:
                                     Title:

                               LYDALL DEUTSCHLAND HOLDING GMBH,
                               a German limited liability company

                               By
                                  -------------------------------------
                                     Name:
                                     Title:

                               THE CHASE MANHATTAN BANK,  individually and as
                               Administrative Agent

                               By
                                  -------------------------------------
                                     Name:
                                     Title:

                               FLEET NATIONAL BANK, individually and as
                               Documentation Agent

                               By
                                  -------------------------------------
                                     Name:
                                     Title:

<PAGE>

                               FIRST UNION NATIONAL BANK

                               By
                                  -------------------------------------
                                     Name:
                                     Title:

                               WACHOVIA BANK, N.A.

                               By
                                  -------------------------------------
                                     Name:
                                     Title:

                               THE BANK OF NEW YORK

                               By
                                  -------------------------------------
                                     Name:
                                     Title:

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