Revolving Credit Term Loan Agrmnt

THIRD AMENDMENT TO


REVOLVING CREDIT, TERM LOAN


AND


SECURITY AGREEMENT


BY AND AMONG


PNC BANK, NATIONAL ASSOCIATION
(AS LENDER, ADMINISTRATIVE AGENT AND LEAD ARRANGER),


JPMORGAN CHASE BANK
(AS LENDER AND SYNDICATION AGENT),


THE LENDERS,


AND


LESCO, INC.;
LESCO SERVICES, INC.;
LESCO TECHNOLOGIES, LLC;
AND
AIM LAWN & GARDEN PRODUCTS, INC.;
(BORROWERS)


July 26, 2002
THIRD AMENDMENT TO REVOLVING CREDIT,
TERM LOAN AND SECURITY AGREEMENT


THIS THIRD AMENDMENT TO REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT (the "Amendment") dated as of July 26, 2002, by and among LESCO, INC., a corporation organized under the laws of the State of Ohio ("LESCO"), LESCO SERVICES, INC., a corporation organized under the laws of the State of Ohio ("LSI"), LESCO TECHNOLOGIES, LLC, a limited liability company organized under the laws of the State of Nevada ("Technologies"), and AIM LAWN & GARDEN PRODUCTS, INC., a corporation organized under the laws of the State of Ohio ("AIM"), each a "Borrower" and collectively "Borrowers"), the financial institutions which are a party hereto (collectively, the "Lenders" and individually a "Lender"), PNC BANK, NATIONAL ASSOCIATION ("PNC"), as administrative agent for Lenders (PNC, in such capacity, the "Agent"), and JPMORGAN CHASE BANK ("JPMorgan Chase"), as syndication agent for the Lenders (JPMorgan Chase, in such capacity, the "Syndication Agent").


WITNESSETH:


WHEREAS, the Borrowers, the Lenders, the Agent and the Syndication Agent are parties to that certain Revolving Credit, Term Loan and Security Agreement dated as of January 14, 2002, as amended by a First Amendment thereto dated as of February 7, 2002, as further amended by a Second Amendment thereto dated as of February 25, 2002 (collectively, the "Agreement").


WHEREAS, the parties hereto desire to amend the terms of the Agreement as provided for herein.


NOW, THEREFORE, the parties hereto, in consideration of their mutual covenants and agreements hereinafter set forth and intending to be legally bound hereby, covenant and agree as follows:


1. Definitions.


(a) Except as otherwise amended by this Amendment, defined terms used herein shall have the meanings given to them in the Agreement.


(b) The following definition in Section 1.2 of the Agreement is hereby amended and restated as follows:


"Earnings Before Interest and Taxes" shall mean for any period the sum of (i) net income (or loss) of Borrowers on a consolidated basis for such period (excluding extraordinary gains and losses AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE), plus (ii) all interest expense of Borrowers on a consolidated basis for such period, plus (iii) all charges against income of Borrowers on a consolidated basis for such period for federal, state and local taxes.


(c) The following new definition is hereby inserted in Section 1.2 of the Agreement in alphabetical order:
"LESCO Restructuring Charges" shall mean for the six months ended June 30, 2002 either (i) reductions made by the Borrowers on the Borrowers' books and records with respect to the book value of certain assets, or (ii) charges incurred by the Borrower in connection with certain management and asset restructuring of the Borrowers, provided however, such amounts do not exceed either $23,351,000 in the aggregate, or the amounts set forth below for the enumerated items:


reductions in value of inventory $9,608,000
reductions in value of fixed assets 7,266,000
reduction in value of intangibles 1,952,000
provision for continuing lease
obligations on closed plants 1,253,000
employee severance and related costs
(including $2,000,000 incurred to date) 2,410,000
other miscellaneous restructuring costs 862,000
------------


Total $23,351,000


2. Subsection 5.5(c) of the Agreement is hereby amended and restated in its entirety as follows:


"(c) The consolidated and consolidating balance sheets of the Borrowers, their Subsidiaries and such other Persons described therein (including the accounts of all Subsidiaries for the respective periods during which a subsidiary relationship existed) as of December 31, 2000, and the related statements of income, changes in stockholder's equity, and changes in cash flow for the period ended on such date, THE CONSOLIDATED BALANCE SHEET AND CONSOLIDATED STATEMENTS being accompanied by reports thereon containing opinions without qualification by independent certified public accountants, copies of which have been delivered to Agent, have been prepared in accordance with GAAP, consistently applied (except for changes in application in which such accountants concur and present fairly the financial position of the Borrowers at such date and the results of their operations for such period. Except as set forth in the Projections, since September 30, 2001, there has been no change in the condition, financial or otherwise, of Borrowers as shown on the consolidated balance sheet as of such date and no change in the aggregate value of machinery, equipment and Real Property owned by Borrowers, except changes in the ordinary course of business, none of which individually or in the aggregate has been materially adverse."


3. Section 6.5 of the Agreement is hereby amended and restated in its entirety as follows:


"6.5. Net Worth. Commencing on JUNE 30, 2002, and at all times thereafter, Borrowers on a consolidated basis shall maintain a Net Worth in an amount not less than $70,000,000. Commencing on DECEMBER 31, 2002, and on the last day of each fiscal year thereafter, the minimum Net Worth requirement set forth above shall be increased by an amount


-2- equal to fifty percent (50%) of consolidated net income of Borrowers on a consolid ...