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Sample Business Contracts

Business Loan Agreement - Pioneer Citizens Bank of Nevada and Trex Co. LLC

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[LOGO OF PIONEER CITIZENS APPEARS HERE]


                            BUSINESS LOAN AGREEMENT


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  Principal         Loan Date         Maturity       Loan No     Call     Collateral     Account     Officer    Initials
$2,070,710.00       12-02-1998       09-05-1999     860004131     170        0055        176436        055
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  References in the shaded area are for Lender's use only and do not limit the applicability of this document to any particular
    loan or item
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BORROWER:      TREX COMPANY, LLC A DELAWARE LIMITED         LENDER:   PIONEER CITIZENS BANK OF NEVADA
               LIABILITY COMPANY                                      REAL ESTATE DEPARTMENT
               20 S. CAMERON ST. STE. 300                             ONE WEST LIBERTY
               WINCHESTER, VA 22601                                   BOX 2351
                                                                      RENO, NY 89505
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THIS BUSINESS LOAN AGREEMENT between TREX COMPANY, LLC A DELAWARE LIMITED
LIABILITY COMPANY ("Borrower") and PIONEER CITIZENS BANK OF NEVADA ("Lender") is
made and executed on the following terms and conditions. Borrower has received
prior commercial loans from Lender or has applied to Lender for a commercial
loan or loans and other financial accommodations, including those which may be
described on any exhibit or schedule attached to this Agreement. All such loans
and financial accommodations, together with all future loans and financial
accommodations from Lender to Borrower, are referred to in this Agreement
individually as the "Loan" and collectively as the "Loans." Borrower understands
and agrees that: (a) in granting, renewing, or extending any Loan, Lender is
relying upon Borrower's representations, warranties, and agreements, as set
forth in this Agreement; (b) the granting, renewing, or extending of any Loan by
Lender at all times shall be subject to Lender's sole judgment and discretion;
and (c) all such Loans shall be and shall remain subject to the following terms
and conditions of this Agreement.

TERM. This Agreement shall be effective as of December 2, 1998, and shall
continue thereafter until all indebtedness of Borrower to Lender has been
performed in full and the parties terminate this Agreement in writing.

DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code. All references
to dollar amounts shall mean amounts in lawful money of the United States of
America.

     AGREEMENT. The word "Agreement" means this Business Loan Agreement, as this
     Business Loan Agreement may be amended or modified from time to time,
     together with all exhibits and schedules attached to this Business Loan
     Agreement from time to time.

     BORROWER. The word "Borrower" means TREX COMPANY, LLC A DELAWARE LIMITED
     LIABILITY COMPANY. The word "Borrower" also includes, as applicable, all
     subsidiaries and affiliates of Borrower as provided below in the paragraph
     titled "Subsidiaries and Affiliates."

     CERCLA. The word "CERCLA" means the Comprehensive Environmental Response,
     Compensation, and Liability Act of 1980, as amended.

     COLLATERAL. The word "Collateral" means and includes without limitation all
     property and assets granted as collateral security for a Loan, whether
     real or personal property, whether granted directly or indirectly, whether
     granted now or in the future, and whether granted in the form of a security
     interest, mortgage, deed of trust, assignment, pledge, chattel mortgage,
     chattel trust, factor's lien, equipment trust, conditional sale, trust
     receipt lien, charge, lien or title retention contract, lease or
     consignment intended as a security device, or any other security or lien
     interest whatsoever, whether created by law, contract, or otherwise.

     ERISA. The word "ERISA" means the Employee Retirement Income Security Act
     of 1974, as amended.

     EVENT OF DEFAULT. The words "Event of Default" mean and include without
     limitation any of the Events of Default set forth below in the section
     titled "EVENTS OF DEFAULT."

     GRANTOR. The word "Grantor" means and includes without limitation each and
     all of the persons or entities granting a Security Interest in and
     Collateral for the Indebtedness, including without limitation all Borrowers
     granting such a Security Interest.

     GUARANTOR. The word "Guarantor" means and includes without limitation each
     and all of the guarantors, sureties, and accommodation parties in
     connection with any Indebtedness

     INDEBTEDNESS. The word "Indebtedness" means and includes without limitation
     all Loans, together with all other obligations, debts and liabilities of
     Borrower to Lender, or any one or more of them, as well as all claims by
     Lender against Borrower, or any one or more of them; whether now or
     hereafter existing, voluntary or involuntary, due or not due, absolute or
     contingent, liquidated or unliquidated; whether Borrower may be liable
     individually or jointly with others; whether Borrower may be obligated as a

<PAGE>


     guarantor, surety, or otherwise; whether recovery upon such Indebtedness
     may be or hereafter may become barred by any statute of limitations; and
     whether such indebtedness may be or hereafter may become otherwise
     unenforceable.

     LENDER. The word "Lender" means PIONEER CITIZENS BANK OF NEVADA, its
     successors and assigns.

     LOAN. The word "Loan" or "Loans" means and includes without limitation any
     and all commercial loans and financial accommodations from Lender to
     Borrower, whether now or hereafter existing, and however evidenced,
     including without limitation those loans and financial accommodations
     described herein or described on any exhibit or schedule attached to this
     Agreement from time to time.

     NOTE. The word "Note" means and includes without limitation Borrower's
     promissory note or notes, if any, evidencing Borrower's Loan obligations in
     favor of Lender, as well as any substitute, replacement or refinancing note
     or notes therefor.

     PERMITTED LIENS. The words "Permitted Liens" mean: (a) liens and security
     interests securing indebtedness owned by Borrower to Lender; (b) liens for
     taxes, assessments, or similar charges either not yet due or being
     contested in good faith; (c) liens of materialmen, mechanics, warehousemen,
     or carriers, or other like liens arising in the ordinary course of business
     and securing obligations which are not yet delinquent; (d) purchase money
     liens or purchase money security interests upon or in any properly acquired
     or held by Borrower in the ordinary course of business to secure
     indebtedness outstanding on the date of this Agreement or permitted to be
     incurred under the paragraph of this Agreement titled "Indebtedness and
     Liens"; (e) liens and security interests which, as of the date of this
     Agreement, have been disclosed to and approved by the Lender in writing;
     and (f) those liens and security interests which in the aggregate
     constitute an immaterial and insignificant monetary amount with respect to
     the net value of Borrower's assets.

     RELATED DOCUMENTS. The words "Related Documents" mean and include without
     limitation all promissory notes, credit agreements, loan agreements,
     environmental agreements, guaranties, security agreements, mortgages, deeds
     of trust, and all other instruments, agreements and documents, whether now
     or hereafter existing, executed in connection with the indebtedness.
    
     SECURITY AGREEMENT. The words "Security Agreement" mean and include without
     limitation any agreements, promises, covenants, arrangements,
     understandings or other agreements, whether created by law, contract, or
     otherwise, evidencing, governing, representing, or creating a Security
     Interest.

     SECURITY INTEREST. The words "Security Interest" mean and include without
     limitation any type of collateral security, whether in the form of a lien,
     charge, mortgage, deed of trust, assignment, pledge, chattel mortgage,
     chattel trust, factor's lien, equipment trust, conditional sale, trust
     receipt, lien or title retention contract, lease or consignment intended
     as a security device, or any other security or lien interest whatsoever,
     whether created by law, contract, or otherwise.

     SARA. The word "SARA" means the Superfund Amendments and Reauthorization
     Act of 1986 as now or hereafter amended.

CONDITIONS PRECEDENT TO EACH ADVANCE. Lender's obligation to make the initial
Loan Advance and each subsequent Loan Advance under this Agreement shall be
subject to the fulfillment to Lender's satisfaction of all of the conditions set
forth in this Agreement and in the Related Documents.

     LOAN DOCUMENTS. Borrower shall provide to Lender in form satisfactory to
     Lender the following documents for the Loan: (a) the Note, (b) Security
     Agreements granting to Lender security interests in the Collateral, (c)
     Financing Statements perfecting Lender's Security Interests; (d) evidence
     of Insurance as required below; and (e) any other documents required under
     this Agreement or by Lender or its counsel.

     BORROWER'S AUTHORIZATION. Borrower shall have provided in form and
     substance satisfactory to Lender properly certified resolutions; duly
     authorizing the execution and delivery of this Agreement, the Note and the
     Related Documents, and such other authorizations and other documents and
     instruments as Lender or its counsel, in their sole discretion, may
     require.


<PAGE>

                                                                          PAGE 2

                            BUSINESS LOAN AGREEMENT
                                  (Continued)
================================================================================

   PAYMENT OF FEES AND EXPENSES. Borrower shall have paid to Lender all fees,
   charges, and other expenses which are then due and payable and specified in
   this Agreement or any Related Document.

   REPRESENTATIONS AND WARRANTIES. The representations and warranties set forth
   in this Agreement, in the Related Documents, and in any document or
   certificate delivered to Lender under this Agreement are true and correct.

   NO EVENT OF DEFAULT. There shall not exist at the time of any advance a
   condition which would constitute an Event of Default under this Agreement.

REPRESENTATIONS AND WARRANTIES. Borrower represents and warrants to Lender, as
of the date of this Agreement, as of the date of each disbursement of Loan
proceeds, as of the date of any renewal, extension or modification of any Loan,
and at all times any indebtedness exists:

   ORGANIZATION. Borrower is a limited liability company which is duly
   organized, validly existing, and in good standing under the laws of the State
   of Delaware and is validly existing and in good standing in all states in
   which Borrower is doing business. Borrower has the full power and authority
   to own its properties and to transact the businesses in which it is presently
   engaged or presently proposes to engage. Borrower also is duly qualified as a
   foreign limited liability company and is in good standing in all states in
   which the failure to so qualify would have a material adverse effect on its
   businesses or financial condition.

   AUTHORIZATION. The execution, delivery, and performance of this Agreement and
   all Related Documents by Borrower, to the extent to be executed, delivered or
   performed by Borrower, have been duly authorized by all necessary action by
   Borrower; do not require the consent or approval of any other person,
   regulatory authority or governmental body; and do not conflict with, result
   in a violation of, or constitute a default under (a) any provision of its
   articles of organization, operating agreement, or any other agreement or
   other instrument binding upon Borrower or (b) any law, governmental
   regulation, court decree, or order applicable to Borrower.

   FINANCIAL INFORMATION. Each financial statement of Borrower supplied to
   Lender truly and completely disclosed Borrower's financial condition as of
   the date of the statement, and there has been no material adverse change in
   Borrower's financial condition subsequent to the date of the most recent
   financial statement supplied to Lender. Borrower has no material contingent
   obligations except as disclosed in such financial statements.

   LEGAL EFFECT. This Agreement constitutes, and any instrument or agreement
   required hereunder to be given by Borrower when delivered will constitute,
   legal, valid and binding obligations of Borrower enforceable against Borrower
   in accordance with their respective terms.

   PROPERTIES. Except as contemplated by this Agreement or as previously
   disclosed in Borrower's financial statements or in writing to Lender and as
   accepted by Lender, and except for property tax liens for taxes not presently
   due and payable, Borrower owns and has good title to all of Borrower's
   properties free and clear of all Security Interests, and has not executed any
   security documents or financing statements relating to such properties. All
   of Borrower's properties are titled in Borrower's legal name, and Borrower
   has not used, or filed a financing statement under, any other name for at
   least the last five (5) years.

   HAZARDOUS SUBSTANCES. The terms "hazardous substance," "disposal,""release,"
   and "threatened release," as used in this Agreement, shall have the same
   meanings as set forth in the "CERCLA" "SARA," the Hazardous Materials
   Transportation Act, 49 U.S.C. Section 1801, et seq., the Resource
   Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., or other
   applicable state or Federal laws, rules, or regulations adopted pursuant to
   any of the foregoing. Except as disclosed to and acknowledged by Lender in
   writing, Borrower represents and warrants that: (a) During the period of
   Borrower's ownership of the properties, there has been no use, generation,
   manufacture, storage, treatment, disposal, release or threatened release of
   any hazardous waste or substance by any person on, under, about or from any
   of the properties. (b) Borrower has no knowledge of, or reason to believe
   that there has been (i) any use, generation, manufacture, storage, treatment,
   disposal, release, or threatened release of any hazardous waste or substance
   on, under, about or from the properties by any prior owners or occupants of
   any of the properties, or (ii) any actual or threatened litigation or claims
   of any kind by any person relating to such matters. (c) Neither Borrower nor
   any tenant, contractor, agent or other authorized user of any of the
   properties shall use, generate, manufacture, store, treat, dispose of, or
   release any hazardous waste or substance on, under, about or from any of the
   properties; and any such activity shall be conducted in compliance with all
   applicable federal, state, and local laws, regulations, and ordinances,
   including without limitation those laws, regulations and ordinances described
   above. Borrower authorizes Lender and its agents to enter upon the properties
   to make such inspections and tests as Lender may deem appropriate to
   determine compliance of the properties with this section of the Agreement.
   Any inspections or tests made by Lender shall be at Borrower's expense and
   for Lender's purposes only and shall not be construed to create any
   responsibility or liability on the part of Lender to Borrower or to any other
   person. The representations and warranties contained herein are based on
   Borrower's due diligence in investigating the properties for hazardous waste
   and hazardous substances. Borrower hereby (a) releases and waives any future
   claims against Lender for indemnity or contribution in the event Borrower
   becomes liable for cleanup or other costs under any such laws, and (b) agrees
   to indemnify and hold harmless Lender against any and all claims, losses,
   liabilities, damages, penalties, and expenses which Lender may directly or
   indirectly sustain or suffer resulting from a breach of this section of the
   Agreement or as a consequence of any use, generation, manufacture, storage,
   disposal, release or threatened release of a hazardous waste or substance on
   the properties. The provisions of this section of the Agreement, including
   the obligation to indemnify, shall survive the payment of the indebtedness
   and the termination or expiration of this Agreement and shall not be affected
   by Lender's acquisition of any interest in any of the properties, whether by
   foreclosure or otherwise.

   LITIGATION AND CLAIMS. No litigation, claim, investigation, administrative
   proceeding or similar action (including those for unpaid taxes) against
   Borrower is pending or threatened, and no other event has occurred which may
   materially adversely affect Borrower's financial condition or properties,
   other than litigation, claims, or other events, if any, that have been
   disclosed to and acknowledged by Lender in writing.

   TAXES. To the best of Borrower's knowledge, all tax returns and reports of
   Borrower that are or were required to be filed, have been filed, and all
   taxes, assessments and other governmental charges have been paid in full,
   except those presently being or to be contested by Borrower in good faith in
   the ordinary course of business and for which adequate reserves have been
   provided.

   LIEN PRIORITY. Unless otherwise previously disclosed to Lender in writing,
   Borrower has not entered into or granted any Security Agreements, or
   permitted the filing or attachment of any Security Interests on or affecting
   any of the Collateral directly or indirectly securing repayment of Borrower's
   Loan and Note, that would be prior or that may in any way be superior to
   Lender's Security interests and rights in and to such Collateral.

   BINDING EFFECT. This Agreement, the Note, all Security Agreements directly or
   indirectly securing repayment of Borrower's Loan and Note and all of the
   Related Documents are binding upon Borrower as well as upon Borrower's
   successors, representatives and assigns, and are legally enforceable in
   accordance with their respective terms.
  
   COMMERCIAL PURPOSES. Borrower intends to use the Loan proceeds solely for
   business or commercial related purposes.

   EMPLOYEE BENEFIT PLANS. Each employee benefit plan as to which Borrower may
   have any liability complies in all material respects with all applicable
   requirements of law and regulations, and (i) no Reportable Event nor
   Prohibited Transaction (as defined in ERISA) has occurred with respect to any
   such plan, (ii) Borrower has not withdrawn from any such plan or initiated
   steps to do so, (iii) no steps have been taken to terminate any such plan,
   and (iv) there are no unfunded liabilities other than those previously
   disclosed to Lender in writing.

   INVESTMENT COMPANY ACT. Borrower is not an "investment company" or a company
   "controlled" by an "investment company", within the meaning of the Investment
   Company Act of 1940, as amended.

   PUBLIC UTILITY HOLDING COMPANY ACT. Borrower is not a "holding company", or a
   "subsidiary company" of a "holding company", or an "affiliate" of a "holding
   company" or of a "subsidiary company" of a "holding company", within the
   meaning of the Public Utility Holding Company Act of 1935, as amended.

   REGULATIONS G, T AND U. Borrower is not engaged principally, or as one of its
   important activities, in the business of extending credit for the purpose of
   purchasing or carrying margin stock (within the meaning of Regulations G, T
   and U of the Board of Governors of the Federal Reserve System).

   LOCATION OF BORROWER'S OFFICES AND RECORDS. Borrower's place of business, or
   Borrower's Chief executive office, if Borrower has more than one place of
   business, is located at 20 S. CAMERON ST. STE. 300, WINCHESTER, VA 22601.
   Unless Borrower has designated otherwise in writing this location is also the
   office or offices where Borrower keeps its records concerning the Collateral.

   INFORMATION. All information heretofore or contemporaneously herewith
   furnished by Borrower to Lender for the purposes of or in connection with
   this Agreement or any transaction contemplated hereby is, and all information
   hereafter furnished by or on behalf of Borrower to Lender will be, true and
   accurate in every material respect on the date as of which such information
   is dated or certified; and none of such information is or will be incomplete
   by omitting to state any material fact necessary to make such information not
   misleading.

   CLAIMS AND DEFENSES. There are no defenses or counterclaims, offsets or other
   adverse claims, demands or actions of any kind, personal or otherwise, that
   Borrower, Grantor, or any Guarantor could assert with respect to the Note,
   Loan, Indebtedness, this Agreement, or the Related Documents.

   SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Borrower understands and agrees
   that Lender, without independent investigation, is relying upon the above
   representations and warranties in making the above referenced Loan to
   Borrower. Borrower further agrees that the foregoing representations and
   warranties shall be continuing in nature and shall remain in full force and
   effect until such time as Borrower's Indebtedness shall be paid in full, or
   until this Agreement shall be terminated in the manner provided above,
   whichever is the last to occur.


<PAGE>

                                                                         PAGE 3

                            BUSINESS LOAN AGREEMENT
                                  (Continued)
================================================================================

AFFIRMATIVE COVENANTS. Borrower covenants and agrees with Lender that, while
this Agreement is in effect, Borrower will:

     LITIGATION. Promptly Inform Lender in writing of (a) all material adverse
     changes in Borrower's financial condition, and (b) all existing and all
     threatened litigation, claims, investigations, administrative proceedings
     or similar actions affecting Borrower or any Guarantor which could
     materially affect the financial condition of Borrower or the financial
     condition of any Guarantor.

     FINANCIAL RECORDS. Maintain its books and records in accordance with
     generally accepted accounting principles, applied on a consistent basis and
     permit Lender to examine and audit Borrower's books and records at all
     reasonable times.

     ADDITIONAL INFORMATION. Furnish such additional information and statements,
     lists of assets and liabilities, agings of receivables and payables
     inventory schedules, budgets, forecasts, tax returns, and other reports
     with respect to Borrower's financial condition and business operations as
     Lender may request from time to time.

     INSURANCE. Maintain fire and other risk insurance, public liability
     insurance, and such other insurance as Lender may require with respect to
     Borrower's properties and operations, in form, amounts, coverages and with
     insurance companies reasonably acceptable to Lender. Borrower upon request
     of Lender, will deliver to Lender from time to time the policies or
     certificates of insurance in form satisfactory to Lender, including
     stipulations that coverages will not be cancelled or diminished without at
     least ten (10) days' prior written notice to Lender. Each insurance policy
     also shall include an endorsement providing that coverage in favor of
     Lender will not be impaired in any way by any act, omission or default of
     Borrower or any other person.  In connection with all policies covering
     assets in which Lender holds or is offered a security interest for the
     Loans, Borrower will provide Lender with such loss payable or other
     endorsements as Lender may require.

     INSURANCE REPORTS. Furnish to Lender, upon request of Lender, reports on
     each existing insurance policy showing such information as Lender may
     reasonably request, including without limitation the following: (a) the
     name of the insurer; (b) the risks insured; (c) the amount of the policy;
     (d) the properties insured; (e) the then current property values on the
     basis of which insurance has been obtained, and the manner of determining
     those values; and (f) the expiration date of the policy. In addition, upon
     request of Lender (however not more often than annually), Borrower will
     have an independent appraiser satisfactory to Lender determine, as
     applicable, the actual cash value or replacement cost of any Collateral.
     The cost of such appraisal shall be paid by Borrower.

     OTHER AGREEMENTS. Comply with all terms and conditions of all other
     agreements, whether now or hereafter existing, between Borrower and any
     other party and notify Lender immediately in writing of any default in
     connection with any other such agreements.

     LOAN PROCEEDS. Use all Loan proceeds solely for Borrower's business
     operations, unless specifically consented to the contrary by Lender in
     writing.

     TAXES, CHARGES AND LIENS. Pay and discharge when due all of its
     indebtedness and obligations, including without limitation all-assessments,
     taxes, governmental charges, levies and liens, of every kind and nature,
     imposed upon Borrower or its properties, income, or profits, prior to the
     date on which penalties would attach, and all lawful claims that, if
     unpaid, might become a lien or charge upon any of Borrower's properties,
     income, or profits. Provided however, Borrower will not be required to pay
     and discharge any such assessment, tax, charge, levy, lien or claim so long
     as (a) the legality of the same shall be contested in good faith by
     appropriate proceedings, and (b) Borrower shall have established on its
     books adequate reserves with respect to such contested assessment, tax,
     charge, levy, lien, or claim in accordance with generally accepted
     accounting practices. Borrower, upon demand of Lender, will furnish to
     Lender evidence of payment of the assessments, taxes, charges, levies,
     liens and claims and will authorize the appropriate governmental official
     to deliver to Lender at any time a written statement of any assessments,
     taxes, charges, levies, liens and claims against Borrower's properties,
     income, or profits.

     PERFORMANCE. Perform and comply with all terms, conditions, and provisions
     set forth in this Agreement and in the Related Documents in a timely
     manner, and promptly notify Lender if Borrower learns of the occurrence of
     any event which constitutes an Event of Default under this Agreement or
     under any of the Related Documents.

     OPERATIONS. Maintain executive and management personnel with substantially
     the same qualifications and experience as the present executive and
     management personnel; provide written notice to Lender of any change in
     executive and management personnel; conduct its business affairs in a
     reasonable and prudent manner and in compliance with all applicable
     federal, state and municipal laws, ordinances, rules and regulations
     respecting its properties, charters, businesses and operations, including
     without limitation, compliance with the Americans With Disabilities Act and
     with all minimum funding standards and other requirements of ERISA and
     other laws applicable to Borrower's employee benefit plans.

     ENVIRONMENTAL STUDIES. Promptly conduct and complete, at Borrower's
     expense, all such investigations, studies, samplings and testings as may be
     requested by Lender or any governmental authority relative to any substance
     defined as toxic or a hazardous substance under any applicable federal,
     state, or local law, rule, regulation, order or directive, or any waste or
     by-product thereof, at or affecting any property or any facility owned,
     leased or used by Borrower.

     INSPECTION. Permit employees or agents of Lender at any reasonable time to
     inspect any and all Collateral for the Loan or Loans and Borrower's other
     properties and to examine or audit Borrower's books, accounts, and records
     and to make copies and memoranda of Borrower's books, accounts, and
     records. If Borrower now or at any time hereafter maintains any records
     (including without limitation computer generated records and computer
     software programs for the generation of such records) in the possession of
     a third party, Borrower, upon request of Lender, shall notify such party to
     permit Lender free access to such records at all reasonable times and to
     provide Lender with copies of any records it may request, all at Borrower's
     expense.

     COMPLIANCE CERTIFICATE. Unless waived in writing by Lender, provide Lender
     at least annually and at the time of each disbursement of Loan proceeds
     with a certificate executed by Borrower's chief financial officer, or other
     officer or person acceptable to Lender, certifying that the representations
     and warranties set forth in this Agreement are true and correct as of the
     date of the certificate and further certifying that, as of the date of the
     certificate, no Event of Default exists under this Agreement.

     ENVIRONMENTAL COMPLIANCE AND REPORTS. Borrower shall comply in all respects
     with all environmental protection federal, state and local laws, statutes,
     regulations and ordinances; not cause or permit to exist, as a result of an
     intentional or unintentional action or omission on its part or on the part
     of any third party, on property owned and/or occupied by Borrower, any
     environmental activity where damage may result to the environment, unless
     such environmental activity is pursuant to and in compliance with the
     conditions of a permit issued by the appropriate federal, state or local
     governmental authorities; shall furnish to Lender promptly and in any event
     within thirty (30) days after receipt thereof a copy of any notice,
     summons, lien, citation, directive, letter or other communication from any
     governmental agency or instrumentality concerning any intentional or
     unintentional action or omission on Borrower's part in connection with any
     environmental activity whether or not there is damage to the environment
     and/or other natural resources.

     ADDITIONAL ASSURANCES. Make, execute and deliver to Lender such promissory
     notes, mortgages, deeds of trust, security agreements, financing
     statements, instruments, documents and other agreements as Lender or its
     attorneys may reasonably request to evidence and secure the Loans and to
     perfect all Security Interests.

NEGATIVE COVENANTS. Borrower covenants and agrees with Lender that while this
Agreement is in effect, Borrower shall not, without the prior written consent of
Lender:

     INDEBTEDNESS AND LIENS. (a) Except for trade debt incurred in the normal
     course of business and indebtedness to Lender contemplated by this
     Agreement, create, incur or assume indebtedness for borrowed money,
     including capital leases, (b) except as allowed as a Permitted Lien, sell,
     transfer, mortgage, assign, pledge, lease, grant a security interest in, or
     encumber any of Borrower's assets, or (c) sell with recourse any of
     Borrower's accounts, except to Lender.

     CONTINUITY OF OPERATIONS. (a) Engage in any business activities
     substantially different than those in which Borrower is presently engaged,
     (b) cease operations, liquidate, merge, transfer, acquire or consolidate
     with any other entity, change ownership, change its name, dissolve or
     transfer or sell Collateral out of the ordinary course of business, or (c)
     make any distribution with respect to any capital account, whether by
     reduction or capital or otherwise.

     LOANS, ACQUISITIONS AND GUARANTIES. (a) Loan, invest in or advance money or
     assets, (b) purchase, create or acquire any interest in any other
     enterprise or entity, or (c) incur any obligation as surety or guarantor
     other than in the ordinary course of business.

CESSATION OF ADVANCES. If Lender has made any commitment to make any Loan to
Borrower, whether under this Agreement or under any other agreement, Lender
shall have no obligation to make Loan Advances or to disburse Loan proceeds if:
(a) Borrower or any Guarantor is in default under the terms of this Agreement or
any of the Related Documents or any other agreement that Borrower or any
Guarantor has with Lender; (b) Borrower or any Guarantor becomes insolvent,
files a petition in bankruptcy or similar proceedings, or is adjudged a
bankrupt; (c) there occurs a material adverse change in Borrower's financial
condition, in the financial condition of any Guarantor, or in the value of any
Collateral securing any Loan; or (d) any Guarantor seeks, claims or otherwise
attempts to limit, modify or revoke such Guarantor's guaranty of the Loan or any
other loan with Lender.

AJC   X ADDITIONAL PROVISION.
------
TWENTY-FIVE PERCENT (25%) OF THE LOAN FEE IS TO BE APPLIED TOWARDS THE
CONSTRUCTION LOAN IF PROVIDED BY PIONEER CITIZENS BANK OF NEVADA.

RIGHT OF SETOFF. Borrower grants to Lender a contractual security interest in,
and hereby assigns, conveys, delivers, pledges, and transfers to

<PAGE>

                                                                          PAGE 4

                           BUSINESS LOAN AGREEMENT 
                                  (Continued)
================================================================================

Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA and Keogh accounts,
and all trust accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on the Indebtedness against
any and all such accounts.

EVENTS OF DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:

   DEFAULT ON INDEBTEDNESS. Failure of Borrower to make any payment when due on
   the Loans.

   OTHER DEFAULTS. Failure of Borrower or any Grantor to comply with or to
   perform when due any other term, obligation, covenant or condition contained
   in this Agreement or in any of the Related Documents, or failure of Borrower
   to comply with or to perform any other term, obligation, covenant or
   condition contained in any other agreement between Lender and Borrower.

   ENVIRONMENTAL DEFAULT. Failure of any party to comply with or perform when
   due any term, obligation, covenant or condition contained in an environmental
   agreement executed in connection with any Loan.

   DEFAULT IN FAVOR OF THIRD PARTIES. Should Borrower or any Grantor default
   under any loan, extension of credit, security agreement, purchase or sales
   agreement, or any other agreement, in favor of any other creditor or person
   that may materially affect any of Borrower's property or Borrower's or any
   Grantor's ability to repay the Loans or perform their respective obligations
   under this Agreement or any of the Related Documents.

   FALSE STATEMENTS. Any warranty, representation or statement made or furnished
   to Lender by or on behalf of Borrower or any Grantor under this Agreement or
   the Related Documents is false or misleading in any material respect at the
   time made or furnished, or becomes false or misleading at any time
   thereafter.

   DEFECTIVE COLLATERALIZATION. This Agreement or any of the Related Documents
   ceases to be in full force and effect (including failure of any Security
   Agreement to create a valid and perfected Security Interest) at any time and
   for any reason.

   DEATH OR INSOLVENCY. The dissolution (regardless of whether election to
   continue is made), any member withdraws from Borrower, or any other
   termination of Borrower's existence as a going business or the death of any
   member, the Insolvency of Borrower, the appointment of a receiver for any
   part of Borrower's property, any assignment for the benefit of creditors, any
   type of creditor workout, or the commencement of any proceeding under any
   bankruptcy or insolvency laws by or against Borrower.

   CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or forfeiture
   proceedings, whether by judicial proceeding, self-help, repossession or any
   other method, by any creditor of Borrower, any creditor of any Grantor
   against any collateral securing the Indebtedness, or by any governmental
   agency. This includes a garnishment, attachment, or levy on or of any of
   Borrower's deposit accounts with Lender. However, this Event of Default shall
   not apply if there is a good faith dispute by Borrower or Grantor, as the
   case may be, as to the validity or reasonableness of the claim which is the
   basis of the creditor or forfeiture proceeding, and if Borrower or Grantor
   gives Lender written notice of the creditor or forfeiture proceeding and
   furnishes reserves or a surety bond for the creditor or forfeiture proceeding
   satisfactory to Lender.

   EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with respect
   to any Guarantor of any of the Indebtedness or any Guarantor dies or becomes
   incompetent, or revokes or disputes the validity of, or liability under, any
   Guaranty of the Indebtedness. Lender, at its option, may, but shall not be
   required to, permit the Guarantor's estate to assume unconditionally the
   obligations arising under the guaranty in a manner satisfactory to Lender,
   and, in doing so, cure the Event of Default.

   ADVERSE CHANGE. A material adverse change occurs in Borrower's financial
   condition, or Lender believes the prospect of payment or performance of the
   Indebtedness is impaired.

   RIGHT TO CURE. If any default, other than a Default on Indebtedness, is
   curable and if Borrower or Grantor, as the case may be, has not been given a
   notice of a similar default within the preceding twelve (12) months, it may
   be cured (and no Event of Default will have occurred) if Borrower or Grantor,
   as the case may be, after receiving written notice from Lender demanding cure
   of such default: (a) cures the default within thirty (30) days; or (b) if the
   cure requires more than thirty (30) days, immediately initiates steps which
   Lender deems in Lender's sole discretion to be sufficient to cure the default
   and thereafter continues and completes all reasonable and necessary steps
   sufficient to produce compliance as soon as reasonably practical.

EFFECT OF AN EVENT OF DEFAULT. If any Event of Default shall occur, except where
otherwise provided in this Agreement or the Related Documents, all commitments
and obligations of Lender under this Agreement or the Related Documents or any
other agreement immediately will terminate and, at Lender's option, all
Indebtedness immediately will become due and payable, all without notice of any
kind to Borrower, except that in the case of an Event of Default of the type
described in the "Insolvency" subsection above, such acceleration shall be
automatic and not optional. In addition, Lender shall have all the rights and
remedies provided in the Related Documents or available at law, in equity, or
otherwise. Except as may be prohibited by applicable law, all of Lender's rights
and remedies shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not exclude pursuit
of any other remedy, and an election to make expenditures or to take action to
perform an obligation of Borrower or of any Grantor shall not affect Lender's
right to declare a default and to exercise its rights and remedies.

MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement:

   AMENDMENTS. This Agreement, together with any Related Documents, constitutes
   the entire understanding and agreement of the parties as to the matters set
   forth in this Agreement. No alteration of or amendment to this Agreement
   shall be effective unless given in writing and signed by the party or parties
   sought to be charged or bound by the alteration or amendment.

   APPLICABLE LAW. This Agreement has been delivered to Lender and accepted by
   Lender in the State of Nevada. If there is a lawsuit, Borrower agrees upon
   Lender's request to submit to the jurisdiction of the courts of WASHOE
   County, the State of Nevada (Initial Here AJC). This Agreement shall be
                                             ---
   governed by and construed in accordance with the laws of the State of Nevada.

   CAPTION HEADINGS. Caption headings in this Agreement are for convenience
   purposes only and are not to be used to Interpret or define the provisions of
   this Agreement.

   CONSENT TO LOAN PARTICIPATION. Borrower agrees and consents to Lender's sale
   or transfer, whether now or later, of one or more participation interests in
   the Loans to one or more purchasers, whether related or unrelated to Lender.
   Lender may provide, without any limitation whatsoever, to any one or more
   purchasers, or potential purchasers, any information or knowledge Lender may
   have about Borrower or about any other matter relating to the Loan, and
   Borrower hereby waives any rights to privacy it may have with respect to such
   matters. Borrower additionally waives any and all notices of sale of
   participation interests, as well as all notices of any repurchase of such
   participation interests. Borrower also agrees that the purchasers of any such
   participation interests will be considered as the absolute owners of such
   interests in the Loans and will have all the rights granted under the
   participation agreement or agreements governing the sale of such
   participation interests. Borrower further waives all rights of offset or
   counterclaim that it may have now or later against Lender or against any
   purchaser of such a participation interest and unconditionally agrees that
   either Lender or such purchaser may enforce Borrower's obligation under the
   Loans irrespective of the failure or insolvency of any holder of any
   interest in the Loans. Borrower further agrees that the purchaser of any
   such participation interests may enforce its interests irrespective of any
   personal claims or defenses that Borrower may have against Lender.

   BORROWER INFORMATION. Borrower consents to the release of information on or
   about Borrower by Lender in accordance with any court order, law or
   regulation and in response to credit inquiries concerning Borrower.

   NON-LIABILITY OF LENDER. The relationship between Borrower and Lender is a
   debtor and creditor relationship and not fiduciary in nature, nor is the
   relationship to be construed as creating any partnership or joint venture
   between Lender and Borrower. Borrower is exercising its own judgment with
   respect to Borrower's business. All information supplied to Lender is for
   Lender's protection only and no other party is entitled to rely on such
   information. There is no duty for Lender to review, inspect, supervise, or
   inform Borrower of any matter with respect to Borrower's business. Lender and
   Borrower intend that Lender may reasonably rely on all information supplied
   by Borrower to Lender, together with all representations and warranties given
   by Borrower to Lender, without investigation or confirmation by Lender and
   that any investigation or failure to investigate will not diminish Lender's
   right to so rely.

   NOTICE OF LENDER'S BREACH. Borrower must notify Lender in writing of any
   breach of this Agreement or the Related Documents by Lender and any other
   claim, cause of action or offset against Lender within thirty (30) days after
   the occurrence of such breach or after the accrual of such claim, cause of
   action or offset. Borrower waives any claim, cause of action or offset for
   which notice is not given in accordance with this paragraph. Lender is
   entitled to rely on any failure to give such notice.

   BORROWER INDEMNIFICATION. Borrower shall Indemnify and hold Lender harmless
   from and against all claims, costs, expenses, losses, damages, and
   liabilities of any kind, including but not limited to attorneys' fees and
   expenses, arising out of any matter relating directly or indirectly to the
   Indebtedness, whether resulting from internal disputes of the Borrower,
   disputes between Borrower and any Guarantor, or whether involving any third
   parties, or out of any other matter whatsoever related to this Agreement or
   the Related Documents, but excluding any claim or liability which arises as a
   direct result of Lender's gross negligence or willful misconduct. This
   Indemnity shall survive full repayment and satisfaction of the Indebtedness
   and termination of this Agreement.

   COUNTERPARTS. This Agreement may be executed in multiple counterparts, each
   of which, when so executed, shall be deemed an original, but all such
   counterparts, taken together, shall constitute one and the same Agreement.



<PAGE>

                                                                          PAGE 5

                            BUSINESS LOAN AGREEMENT
                                  (Continued)
================================================================================

     COSTS AND EXPENSES. Borrower agrees to pay upon demand all of Lender's
     expenses, including without limitation attorneys' fees, incurred connection
     with the preparation, execution, enforcement, modification and collection
     of this Agreement or in connection with the Loans made pursuant to this
     Agreement. Lender may pay someone else to help collect the Loans and to
     enforce this Agreement, and Borrower will pay it's amount. This includes,
     subject to any limits under applicable law, Lender's attorneys' fees and
     Lender's legal expenses, whether or not there is a lawsuit, including
     attorneys' fees for bankruptcy proceedings (including efforts to modify or
     vacate any automatic stay or injunction), appeals, and any anticipated
     post-judgment collection services. Borrower also will pay any court costs,
     in addition to all other sums provided by law.

     NOTICES. All notices required to be given under this Agreement shall be
     given in writing, may be sent by telefacsimile (unless otherwise required
     by law), and shall be effective when actually delivered or when deposited
     with a nationally recognized overnight courier or deposited in the United
     States mail, first class, postage prepaid, addressed to the party to whom
     the notice is to be given at the address shown above. Any party may change
     its address for notices under this Agreement by giving formal written
     notice to the other parties, specifying that the purpose of the notice to
     change the party's address. To the extent permitted by applicable law, if
     there is more than one Borrower, notice to any Borrower will constitute
     notice to all Borrowers. For notice purposes, Borrower will keep Lender
     informed at all times of Borrower's current address(es).

     SEVERABILITY. If a court of competent jurisdiction finds any provision of
     this Agreement to be invalid or unenforceable as to any person
     circumstance, such finding shall not render that provision invalid or
     unenforceable as to any other persons or circumstances. If feasible, any
     such offending provision shall be deemed to be modified to be within the
     limits of enforceability or validity; however, if the offending provision
     cannot be so modified, it shall be stricken and all other provisions of
     this Agreement in all other respects shall remain valid and enforceable.

     SUBSIDIARIES AND AFFILIATES OF BORROWER. To the extent the context of any
     provisions of this Agreement makes it appropriate, including without
     limitation any representation, warranty or covenant, the word "Borrower" as
     used herein shall include all subsidiaries and affiliates of Borrowers
     Notwithstanding the foregoing however, under no circumstances shall this
     Agreement be construed to require Lender to make any Loan or other
     financial accommodation to any subsidiary or affiliate of Borrower.

     SUCCESSORS AND ASSIGNS. All covenants and agreements contained by or on
     behalf of Borrower shall bind its successors and assigns and shall inure
     to the benefit of Lender, its successors and assigns. Borrower shall not,
     however, have the right to assign its rights under this Agreement or any
     interest therein, without the prior written consent of Lender.

     SURVIVAL. All warranties, representations, covenants made by Borrower in
     this Agreement or in any certificate or other instrument delivered by
     Borrower to Lender under this Agreement shall be considered to have been
     relied upon by Lender and will survive the making of the Loan and delivery
     to Lender of the Related Documents, regardless of any investigation made by
     Lender or on Lender's behalf.

     TIME IS OF THE ESSENCE. Time is of the essence in the performance of this
     Agreement.

     WAIVER. Lender shall not be deemed to have waived any rights under this
     Agreement unless such waiver is given in writing and signed by Lender. No
     delay or omission on the part of Lender in exercising any right shall
     operate as a waiver of such right or any other right. A waiver by Lender
     of a provision of this Agreement shall not prejudice or constitute a waiver
     of Lender's right otherwise to demand strict compliance with that provision
     or any other provision of this Agreement. No prior waiver by Lender, nor
     any course of dealing between Lender and Borrower, or between Lender and
     any Grantor, shall constitute a waiver of any of Lender's rights or of any
     obligations of Borrower or of any Grantor as to any future transactions.
     Whenever the consent of Lender is required under this Agreement, the
     granting of such consent by Lender in any instance shall not constitute
     continuing consent in subsequent instances where such consent is required,
     and in all cases such consent may be granted or withheld in the sole
     discretion of Lender.

BORROWER ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS BUSINESS LOAN
AGREEMENT, AND BORROWER AGREES TO ITS TERMS. THIS AGREEMENT IS DATED AS OF
DECEMBER 2, 1998.

BORROWER:

TREX COMPANY, LLC A DELAWARE LIMITED LIABILITY COMPANY

By: /s/ Anthony J. Cavanna
   ---------------------------------------------
   ANTHONY J. CAVANNA, C.E.O./C.F.O., Member


LENDER:

PIONEER CITIZENS BANK OF NEVADA

By: /s/ Richard Deglman
   ---------------------------------------------
   Authorized Officer

================================================================================

               THE ATTACHED ADDENDUM TO BUSINESS LOAN AGREEMENT, CONSISTING OF 2
               PAGES IS INCORPORATED BY REFERENCE HEREIN