Sample Business Contracts

Promissory Note - Trex Co. LLC and First Union National Bank

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                                PROMISSORY NOTE

$3,780,000.00                                                     June 15, 1998

(Individually and collectively, "Borrower")

(Hereinafter referred to as the "Bank")

Borrower promises to pay to the order of Bank, in lawful money of the United
States of America, at its office indicated above or wherever else Bank may
specify, the sum of Three Million Seven Hundred Eighty Thousand Dollars and No
Cents ($3,780,000.00) or such sum as may be advanced and outstanding from time
to time, with interest on the unpaid principal balance at the rate and on the
terms provided in this Promissory Note (including all renewals, extensions or
modifications hereof, this "Note").

SECURITY.  Borrower has granted Bank a security interest in the collateral
described in the Loan Documents including, but not limited to, real property
collateral described in that certain Deed of Trust of even date herewith.


LIBOR.  1-Month LIBOR Rate plus (100 basis points) ("LIBOR-Based Rate"). "LIBOR"
is the rate for U.S. dollar deposits of that many months maturity as reported on
Telerate page 3750 as of 11:00 a.m., London time, on the second London business
day before the relevant Interest Period begins (or if not so reported, then as
determined by the Bank from another recognized source or interbank quotation).


INTEREST RATE. Subject to the provisions hereof, the unpaid principal balance of
this Note shall bear interest from the date hereof at the LIBOR-Based Rate, as
determined by Bank prior to the commencement of each consecutive interest period
of 1 month (each, an "Interest Period") during the term of the Note. Upon
determination by Bank of the LIBOR-Based Rate for any Interest Period, such
LIBOR-Based Rate shall remain in effect, subject to the provisions hereof, for
the entire Interest Period until redetermined as provided above for the next
successive Interest Period.

INDEMNIFICATION.  Borrower indemnifies Bank against Bank's loss or expense in
employing deposits as a consequence of (a) Borrower's failure to make any
payment when due under this Note, or (b) any payment, prepayment or conversion
of any loan on a date other than the last day of the Interest Period
("Indemnified Loss or Expense"). The amount of such Indemnified Loss or Expense
shall be determined by Bank based upon the assumption that Bank funded 100% of
that portion of the loan in the London interbank market.

DEFAULT RATE.  In addition to all other rights contained in this Note, if a
Default (defined herein) occurs and as long as a Default continues, all
outstanding Obligations shall bear interest at the LIBOR-Based Rate plus 3%
("Default Rate"). The Default Rate shall also apply from acceleration until the
Obligations or any judgment thereon is paid in full.

INTEREST AND FEE(S) COMPUTATION (ACTUAL/360) . Interest and fees, if any, shall
be computed on the basis of a 360-day year for the actual number of days in the
applicable period ("Actual/360 Computation"). The Actual/360

Computation determines the annual effective yield by taking the stated (nominal)
rate for a year's period and then dividing said rate by 360 to determine the
daily periodic rate to be applied for each day in the applicable period.
Application of the Actual/360 Computation produces an annualized effective
interest rate exceeding that of the nominal rate.

REPAYMENT TERMS. This Note shall be due and payable as set forth in the
Repayment Schedule attached hereto and made a part hereof. All remaining
principal and interest shall be due and payable on June 16, 2008.

SCHEDULED PAYMENT ADJUSTMENT.  At Bank's option and with notice to Borrower, the
scheduled payment amount will increase as is necessary (i) to pay all accruals
of interest for the period and previous periods and (ii) to maintain principal
repayment according to the amortization that would have occurred if the Interest
Rate in effect on the date of this Note had remained constant. The increased
payment amount shall remain in effect for as long as the original scheduled
payment amount is insufficient to pay accrued interest and principal and shall
be further adjusted upward or downward to reflect changes in the variable
interest rate. The scheduled payment amount will not be reduced below the
original scheduled payment amount.

APPLICATION OF PAYMENTS. Monies received by Bank from any source for application
toward payment of the Obligations shall be applied to accrued interest and then
to principal. If a Default occurs, monies may be applied to the Obligations in
any manner or order deemed appropriate by Bank.

If any payment received by Bank under this Note or other Loan Documents is
rescinded, avoided or for any reason returned by Bank because of any adverse
claim or threatened action, the returned payment shall remain payable as an
obligation of all persons liable under this Note or other Loan Documents as
though such payment had not been made.

LOAN DOCUMENTS AND OBLIGATIONS. The term "Loan Documents" used in this Note and
other Loan Documents refers to all documents executed in connection with the
loan evidenced by this Note and any prior notes which evidence all or any
portion of the loan evidenced by this Note, and may include, without limitation,
a commitment letter that survives closing, a loan agreement, this Note, guaranty
agreements, security agreements, security instruments, financing statements,
mortgage instruments, letters of credit and any renewals or modifications,
whenever any of the foregoing are executed, but does not include swap agreements
(as defined in 11 U.S.C.(S)101).

The term "Obligations" used in this Note refers to any and all indebtedness and
other obligations under this Note, all other obligations under any other loan
Document(s), and all obligations under any swap agreements as defined in 11
U.S.C.(S)101 between Borrower and Bank whenever executed including the ISDA
Master Agreement dated March 20, 1998 between Bank and Borrower.

LATE CHARGE. If any payments are not timely made, Borrower shall also pay to
Bank a late charge equal to five percent (5%) of each payment past due for eight
(8) or more days.

Acceptance by Bank of any late payment without an accompanying late charge shall
not be deemed a waiver of Bank's right to collect such late charge or to collect
a late charge for any subsequent late payment received.

If this Note is secured by owner-occupied residential real property located
outside the state in which the office of Bank first shown above is located, the
late charge laws of the state where the real property is located shall apply to
this Note and the late charge shall be the highest amount allowable under such
laws. If no amount is stated thereunder, the late charge shall be five percent
(5%) of each payment past due for ten (10) or more days.

ATTORNEYS' FEES AND OTHER COLLECTION COSTS. Borrower shall pay all of Bank's
reasonable expenses incurred to enforce or collect any of the Obligations,
including, without limitation, reasonable arbitration, paralegals', attorneys'
and experts' fees and expenses, whether incurred without the commencement of a
suit, in any trial, arbitration, or administrative proceeding, or in any
appellate or bankruptcy proceeding.

USURY. Regardless of any other provision of this Note or other Loan Documents,
if for any reason the effective interest should exceed the maximum lawful
interest, the effective interest shall be deemed reduced to, and shall be, such
maximum lawful interest, and (i) the amount which would be excessive interest
shall be deemed applied to the reduction of the principal balance of this Note
and not to the payment of interest, and (ii) if the loan evidenced by this Note
has been or is thereby paid in full, the excess shall be returned to the party
paying same, such application to the principal balance of this Note or the
refunding of excess to be a complete settlement and acquittance thereof.

DEFAULT. If any of the following occurs a default ("Default") under this Note
shall exist: NONPAYMENT; NONPERFORMANCE. The failure of timely payment or
performance of the Obligations or Default under this Note or any other Loan
Documents. FALSE WARRANTY. A warranty or representation made deemed made in the
Loan Documents or furnished Bank in connection with the loan evidenced by this
Note proves materially false, or if of a continuing nature, becomes materially
false. CROSS DEFAULT. At Bank's option, any default in payment or performance of
any obligation under any other loans, contracts or agreements of Borrower, any
Subsidiary or Affiliate of Borrower, any general partner of or the holder(s) of
the majority ownership interests of Borrower with Bank or its affiliates
("Affiliate" shall have the meaning as defined in 11 U.S.C.(S)101, except that
the term "debtor" therein shall be substituted by the term "Borrower" herein;
"Subsidiary" shall mean any corporation of which more than 50% of the issued or
outstanding voting stock is owned directly or indirectly by Borrower).
CESSATION; BANKRUPTCY. The death of, appointment of guardian for, dissolution
of, termination of existence of, loss of good standing status by, appointment of
a receiver for, assignment for the benefit of creditors of, or commencement of
any bankruptcy or insolvency proceeding by or against Borrower, its Subsidiaries
or Affiliates, if any, or any general partner of or the holder(s) of the
majority ownership interests of Borrower, or any party to the Loan Documents.
of Bank, (i) a material alteration in the kind or type of Borrower's business or
that of Borrower's Subsidiaries or Affiliates, if any; (ii) the sale of more
than 50% of the Borrower's outstanding stock or voting power of or in a single
transaction or a series of transactions; (iii) the acquisition of substantially
all of the business or assets or more than 50% of the outstanding stock or
voting power of any other entity; or (iv) should any Borrower, or any of
Borrower's Subsidiaries or Affiliates, or any guarantor enter into any merger or

REMEDIES UPON DEFAULT. If a Default occurs under this Note or any Loan
Documents, Bank may at any time thereafter, take the following actions: BANK
LIEN. Foreclose its security interest or lien against Borrower's accounts
without notice. ACCELERATION UPON DEFAULT. Accelerate the maturity of this Note
and all other of the Obligations shall be immediately due and payable.
CUMULATIVE. Exercise any rights and remedies as provided under the Note and
other Loan Documents, or as provided by law or equity.

FINANCIAL AND OTHER INFORMATION. Borrower shall deliver to Bank such information
as Bank may reasonably request from time to time, including without limitation,
financial statements and information pertaining to Borrower's financial
condition. Such information shall be true, complete, and accurate.

YEAR 2000 COMPATIBILITY. Borrower shall take all action necessary to assure that
Borrower's computer based systems are able to operate and effectively process
data including dates on and after January 1, 2000. At the request of Bank,
Borrower shall provide Bank assurance acceptable to Bank of Borrower's Year 2000

LOAN AGREEMENT. Borrower represents and warrants that the provisions of Article
IV (excluding Sections 4.04 and 4.05) of the Credit Agreement between Bank and
Borrower dated December 10, 1996, and all modifications and amendments thereof
(the "Credit Agreement") are true and correct as of the date of the Note; and at
all times, Borrower shall comply with the provisions of Article V of the Credit
Agreement. Borrower's obligation to comply with such provisions shall continue
notwithstanding the satisfaction in full of all obligations referred to in the
Credit Agreement.

WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of this Note and
other Loan Documents shall be valid unless in writing and signed by an officer
of Bank. No waiver by Bank of any Default shall operate as a waiver of any other
Default or the same Default on a future occasion. Neither the failure nor any
delay on the part of Bank in exercising any right, power, or remedy under this
Note and other Loan Documents shall operate as a waiver thereof, nor shall a
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.

Each Borrower or any other person liable under this Note waives presentment,
protest, notice of dishonor, demand for payment, notice of intention to
accelerate maturity, notice of acceleration of maturity, notice of sale and all
other notices of any kind. Further, each agrees that Bank may extend, modify or
renew this Note or make a novation of the loan evidenced by this Note for any
period and grant any releases, compromises or indulgences with respect to any
collateral securing this Note, or with respect to any other Borrower or any
person liable under this Note or other Loan Documents, all without notice to or
consent of each Borrower or each person who may be liable under this Note or
other Loan Documents and without affecting the liability of Borrower or any
person who may be liable under this Note or other Loan Documents.

MISCELLANEOUS PROVISIONS. ASSIGNMENT. This Note and other Loan Documents shall
inure to the benefit of and be binding upon the parties and their respective
heirs, legal representatives, successors and assigns. Bank's interests in and
rights under this Note and other Loan Documents are freely assignable, in whole
or in part, by Bank. In addition, nothing in

this Note or any of the Loan Documents shall prohibit Bank from pledging or
assigning this Note or any of the Loan Documents or any interest therein to any
Federal Reserve Bank. Borrower shall not assign its rights and interest
hereunder without the prior written consent of Bank, and any attempt by Borrower
to assign without Bank's prior written consent is null and void. Any assignment
shall not release Borrower from the Obligations. APPLICABLE LAW; CONFLICT
BETWEEN DOCUMENTS. This Note and other Loan Documents shall be governed by and
construed under the laws of the state named in Bank's address shown above
without regard to that state's conflict of laws principles. If the terms of this
Note should conflict with the terms of the Loan Agreement or any commitment
letter that survives closing, the terms of this Note shall control.
JURISDICTION. Borrower irrevocably agrees to non-exclusive personal jurisdiction
in the state named in Bank's address shown above. SEVERABILITY. If any provision
of this Note or of the other Loan Documents shall be prohibited or invalid under
applicable law, such provision shall be ineffective but only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Note or other such document.
NOTICES. Any notices to Borrower shall be sufficiently given, if in writing and
mailed or delivered to the Borrower's address shown above or such other address
as provided hereunder; and to Bank, if in writing and mailed or delivered to
Bank's office address shown above or such other address as Bank may specify in
writing from time to time. In the event that either party hereto changes address
at any time prior to the date the Obligations are paid in full, that party shall
promptly give written notice of such change of address by registered or
certified mail, return receipt requested, all charges prepaid. PLURAL; CAPTIONS.
All references in the Loan Documents to Borrower, guarantor, person, document or
other nouns of reference mean both the singular and plural form, as the case may
be, and the term "person" shall mean any individual, person or entity. The
captions contained in the Loan Documents are inserted for convenience only and
shall not affect the meaning or interpretation of the Loan Documents. BINDING
CONTRACT. Borrower by execution of and Bank by acceptance of this Note agree
that each party is bound to all terms and provisions of this Note. ADVANCES.
Bank in its sole discretion may make other Advances under this Note pursuant
hereto. POSTING OF PAYMENTS. All payments received during normal banking hours
after 2:00 p.m. local time at the office of Bank first shown above shall be
deemed received at the opening of the next banking day. JOINT AND SEVERAL
OBLIGATIONS. Borrower is jointly and severally obligated under this Note. FEES
AND TAXES. Borrower shall promptly pay all documentary, intangible recordation
and/or similar taxes on this transaction whether assessed at closing or arising
from time to time.

ARBITRATION. Upon demand of any party hereto, whether made before or after
institution of any judicial proceeding, any dispute, claim or controversy
arising out of, connected with or relating to this Note and any other Loan
Documents ("Disputes") between or among parties to this Note and any other Loan
Documents shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include, without limitation,
tort claims, counterclaims, disputes as to whether a matter is subject to
arbitration, claims brought as class actions, claims arising from Loan Documents
executed in the future, or claims arising out of or connected with the
transaction reflected by this Note.

Arbitration shall be conducted under and governed by the Commercial Financial
Disputes Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association (the "AAA") and Title 9 of the U.S. Code. All arbitration hearings
shall be conducted in the city in which the office of Bank first stated above is
located. The expedited procedures set forth in Rule 51 et seq. of the
                                                       -- ---
Arbitration Rules shall be applicable to claims of less than $1,000,000.00. All
applicable statutes of limitation shall apply to any Dispute. A judgment upon
the award may be entered in any court having jurisdiction. The panel from which
all arbitrators are selected shall be comprised of licensed attorneys. The
single arbitrator selected for expedited procedure shall be a retired judge from
the highest court of general jurisdiction, state or federal, of the state where
the hearing will be conducted or if such person is not available to serve, the
single arbitrator may be a licensed attorney. Notwithstanding the foregoing,
this arbitration provision does not apply to disputes under or related to swap

PRESERVATION AND LIMITATION OF REMEDIES. Notwithstanding the preceding binding
arbitration provisions, Bank and Borrower agree to preserve, without diminution,
certain remedies that any party hereto may employ or exercise freely,
independently or in connection with an arbitration proceeding or after an
arbitration action is brought. Bank and Borrower shall have the right to proceed
in any court of proper jurisdiction or by self-help to exercise or prosecute the
following remedies, as applicable: (i) all rights to foreclose against any real
or personal property or other security by exercising a power of sale granted
under the Loan Documents or under applicable law or by judicial foreclosure and
sale, including a proceeding to confirm the sale; (ii) all rights of self-help
including peaceful occupation of real property and collection of rents, set-off,
and peaceful possession of personal property; (iii) obtaining provisional or
ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and filing an involuntary bankruptcy
proceeding; and (iv) when applicable, a judgment by confession of judgment.
Preservation of these remedies does not limit the power of an arbitrator to
grant similar remedies that may be requested by a party in a Dispute.

Borrower and Bank agree that they shall not have a remedy of punitive and
exemplary damages against the other in any Dispute and hereby waive any right or
claim to punitive or exemplary damages they have now or which may arise in the
future in connection with any Dispute whether the Dispute is resolved by
arbitration or judicially.

IN WITNESS WHEREOF, Borrower, on the day and year first above written, has
caused this Note to be executed under seal, AND THIS NOTE IS DEEMED EFFECTIVE AS
OF JUNE 15, 1998.

                         TREX COMPANY, LLC

                   By:  /s/ A.J. Cavanna                          (SEAL)
                       Anthony J. Cavanna, Chief Executive Officer