Exhibit 10.6
[FIRST UNION LOGO]
AMENDED AND RESTATED
PROMISSORY NOTE
$1,035,000.00
September 30, 2001
Trex Company, LLC
160 Exeter Drive
Winchester, Virginia 22603-8605
Trex Company, Inc.
160 Exeter Drive
Winchester, Virginia 22603-8605
(Individually and collectively "Borrower")
First Union National Bank
301 South College Street, DC-5
One First Union -- 5th Floor
Charlotte, NC 28288-0760
(Hereinafter referred to as "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 One Million, Thirty-Five Thousand and No/100 Dollars
($1,035,000.00) or such sum as may be advanced and outstanding as shown on the
attached Schedule A under the Original Promissory Note (as hereinafter defined),
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").
LOAN AGREEMENT. This Note is subject to the provisions of that certain Second
Amended and Restated Credit Agreement of even date herewith between Bank and
Borrower as modified from time to time (the "Credit Agreement"). Borrower
represents and warrants that the provisions of Article V of the Credit Agreement
are true and correct as of the date of the Note; and at all times, Borrower
shall comply with all of the provisions of the Credit Agreement. Borrower's
obligation to comply with the provisions of the Credit Agreement shall continue
notwithstanding the satisfaction in full of all Obligations referred to in the
Credit Agreement.
RENEWAL/MODIFICATION. This Note renews, extends and/or modifies that certain
Promissory Note dated November 20, 1998 (the "Original Promissory Note"),
evidencing an original principal amount of $1,035,000.00. This Note is not a
novation.
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 Modified Deed of Trust of even date
herewith for certain real property in the City of Winchester and Frederick
County, Virginia; Deed of Trust of even date herewith for certain real property
in Lyon County, Nevada; and personal property collateral described in that
certain Security Agreement of even date herewith.
INTEREST RATE. Interest shall accrue on the unpaid principal balance of this
Note from (i) the date hereof through June 30, 2002 at 1-month LIBOR plus 3.00%;
and (ii) from and after July 1, 2002 at 1-month LIBOR plus 4.00% (collectively,
the "Interest 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; provided, the first Interest Period shall commence on the date
of this Note and end on the first date thereafter that interest is due. Each
Interest Rate shall remain in effect for the entire Interest
Period until redetermined for the next successive Interest Period. "LIBOR" is
the rate for U.S. dollar deposits with a maturity equal to the number of months
specified above, 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).
INDEMNIFICATION. Borrower shall indemnify 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 (as defined herein) occurs and as long as a Default continues, all
outstanding Obligations shall bear interest at the Interest Rate plus 2%
("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
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 January 31, 2005.
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.
DEFINITIONS. Loan Documents. The term "Loan Documents" used in this Note and the
other Loan Documents refers to all documents executed in connection with or
related to the loan evidenced by this Note and any prior notes which evidence
all or any portion of the loan evidenced by this Note, and any letters of credit
issued pursuant to any loan agreement to which this Note is subject, any
applications for such letters of credit and any other documents executed in
connection therewith or related thereto, and may include, without limitation, a
commitment letter that survives closing, a loan agreement, this Note, the Credit
Agreement, guaranty agreements, security agreements, security instruments,
financing statements, mortgage instruments, any renewals or modifications,
whenever any of the foregoing are executed (as defined in 11 U.S.C. ss. 101).
Obligations. The term "Obligations" used in this Note refers
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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. ss. 101) between Borrower and Bank whenever
executed including the ISDA Master Agreement dated March 20, 1998 between
Borrower and Bank. Certain Other Terms. All terms that are used but not
otherwise defined in any of the Loan Documents shall have the definitions
provided in the Uniform Commercial Code.
LATE CHARGE. If any payments are not timely made, Borrower shall also pay to
Bank a late charge equal to 5% of each payment past due for 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.
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. If at any time the effective interest rate under this Note would, but for
this paragraph, exceed the maximum lawful rate, the effective interest rate
under this Note shall be the maximum lawful rate, and any amount received by
Bank in excess of such rate shall be applied to principal and then to fees and
expenses, or, if no such amounts are owing, returned to Borrower.
DEFAULT. If an Event of Default exists under the Credit Agreement, a default
shall exist under this Note ("Default").
REMEDIES UPON DEFAULT. If a Default occurs under this Note, the Credit Agreement
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, at Bank's option, any or all other Obligations, whereupon this
Note and the accelerated Obligations shall be immediately due and payable.
Cumulative. Exercise any rights and remedies as provided under the Note, the
Credit Agreement 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.
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 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
other 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 any other Loan Document and without affecting the liability of Borrower or
any person who may be liable under this Note or any other Loan Document.
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MISCELLANEOUS PROVISIONS. Assignment. This Note and the 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 the other Loan Documents are freely
assignable, in whole or in part, by Bank. In addition, nothing in this Note or
any of the other Loan Documents shall prohibit Bank from pledging or assigning
this Note or any of the other 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 the other Loan Documents shall be governed by
and construed under the laws of the Commonwealth of Virginia without regard to
that state's conflict of laws principles. If the terms of this Note should
conflict with the terms of the Credit Agreement or any commitment letter that
survives closing, the terms of this Note shall control. Borrower's Accounts.
Except as prohibited by law, Borrower grants Bank a security interest in all of
Borrower's accounts with Bank and any of its affiliates. Jurisdiction. Borrower
irrevocably agrees to non-exclusive personal jurisdiction in the Commonwealth of
Virginia. 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 Borrower changes Borrower's address at any time prior to the date the
Obligations are paid in full, Borrower agrees to promptly give written notice of
said 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. Advances. Bank may, in its sole
discretion, make other advances which shall be deemed to be advances under this
Note, even though the stated principal amount of this Note may be exceeded as a
result thereof. 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. Each person who signs this Note as a Borrower (as defined herein)
is jointly and severally obligated. 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 claim or controversy arising out of
or relating to the Loan Documents between parties hereto (a "Dispute") shall be
resolved by binding arbitration conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA") and the Federal Arbitration Act. Disputes
may include, without limitation, tort claims, counterclaims, a dispute as to
whether a matter is subject to arbitration, claims brought as class actions, or
claims arising from documents executed in the future. A judgment upon the award
may be entered in any court having jurisdiction. Notwithstanding the foregoing,
this arbitration provision does not apply to disputes under or related to swap
agreements. Special Rules. All arbitration hearings shall be conducted in the
city named in the address of Bank first stated above. A hearing shall begin
within 90 days of demand for arbitration and all hearings shall conclude within
120 days of demand for arbitration. These time limitations may not be extended
unless a party shows cause for extension and then for no more than a total of 60
days. 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. Arbitrators
shall be licensed attorneys selected from the Commercial Financial Dispute
Arbitration Panel of the AAA. The parties do not waive applicable Federal or
state substantive law except as provided herein. Preservation and Limitation of
Remedies. Notwithstanding the preceding binding arbitration provisions, the
parties agree to preserve, without diminution, certain remedies that any party
may exercise before or after an arbitration proceeding
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is brought. The parties 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 or under applicable law by judicial
foreclosure 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; and (iii)
obtaining provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and filing an
involuntary bankruptcy proceeding. Any claim or controversy with regard to any
party's entitlement to such remedies is a Dispute. Waiver of Exemplary Damages.
The parties agree that they shall not have a remedy of punitive or exemplary
damages against other parties 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. Waiver of Jury Trial. THE PARTIES ACKNOWLEDGE THAT BY AGREEING TO
BINDING ARBITRATION THEY HAVE IRREVOCABLY WAIVED ANY RIGHT THEY MAY HAVE TO JURY
TRIAL WITH REGARD TO A DISPUTE.
IN WITNESS WHEREOF, Borrower, on the day and year first above written, has
caused this Note to be executed under seal.
PLACE OF EXECUTION AND DELIVERY. Borrower hereby certifies that this Note, the
Credit Agreement and the other Loan Documents were executed in the Commonwealth
of Virginia and delivered to Bank in the Commonwealth of Virginia.
[SIGNATURES ON FOLLOWING PAGE]
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TREX Company, LLC
Taxpayer Identification Number:
54-1810859
By /s/ Anthony J. Cavanna (SEAL)
---------------------------------------
Anthony J. Cavanna, Executive Vice President;
Chief Financial Officer; Treasurer
Trex Company, Inc.
Taxpayer Identification Number:
54-1910453
By: /s/ Robert G. Matheny (SEAL)
--------------------------------------
Robert G. Matheny, President
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