EXHIBIT 10.2
STANDING LOAN AGREEMENT
(NEVADA)
STANDING LOAN AGREEMENT
(NEVADA)
TABLE OF CONTENTS
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Page
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I. LOAN TERMS............................................... 1
1.1 Amount and Purpose.................................. 1
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1.2 Intended Use of the Property........................ 1
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1.3 Documentation....................................... 1
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1.4 Disbursement of Loan Proceeds....................... 2
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1.5 Repayment........................................... 2
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II. COVENANTS OF THE BORROWER................................ 2
2.1 Compliance with Law................................. 2
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2.2 Site Visits......................................... 2
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2.3 Insurance........................................... 3
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2.4 Payment of Expenses................................. 3
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2.5 Financial and Other Information..................... 4
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2.6 Notices............................................. 4
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2.7 Indemnity........................................... 4
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2.8 Preservation of Rights; Maintenance of Properties... 4
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2.9 Negative Covenants.................................. 4
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2.10 Performance of Acts................................. 5
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2.11 Consolidated Debt to Consolidated Capitalization.... 5
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2.12 Fixed Charge Ratio.................................. 5
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III. PARTIAL RECONVEYANCE..................................... 6
IV. HAZARDOUS SUBSTANCES..................................... 7
V. REPRESENTATIONS AND WARRANTIES........................... 7
5.1 Authority........................................... 7
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5.2 Compliance.......................................... 7
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5.3 Enforceability...................................... 8
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5.4 Borrower Not a "Foreign Person"..................... 8
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5.5 No Claims........................................... 8
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5.6 Accuracy............................................ 8
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5.7 Taxes. ............................................. 8
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5.8 Year 2000........................................... 8
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VI. DEFAULT AND REMEDIES..................................... 9
6.1 Events of Default................................... 9
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6.2 Remedies............................................ 10
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6.3 Concurrent Notice and Cure Periods.................. 10
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VII. ARBITRATION.............................................. 10
7.1 Arbitration......................................... 10
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VIII.MISCELLANEOUS PROVISIONS................................. 11
8.1 No Waiver; Consents................................. 11
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8.2 No Third Parties Benefitted......................... 12
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8.3 Joint and Several Liability......................... 12
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8.4 Notices............................................. 12
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8.5 Attorneys' Fees..................................... 12
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8.6 Intentionally Omitted............................... 12
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8.7 Applicable Law...................................... 12
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8.8 Heirs, Successors and Assigns....................... 12
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8.9 Severability........................................ 12
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8.10 Interpretation...................................... 12
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8.11 Amendments.......................................... 13
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8.12 Time of Essence..................................... 13
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8.13 Integration and Relation to Loan Commitment......... 13
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8.14 Counterparts........................................ 13
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8.15 Language of Agreement............................... 13
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8.16 Headings............................................ 13
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8.17 Information Sharing Notice.......................... 13
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EXHIBIT A - Property Description
EXHIBIT B - Confidentiality Agreement
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STANDING LOAN AGREEMENT
(Nevada)
This Standing Loan Agreement ("Agreement"), dated as of September 28, 1999,
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is by and between Trex Company, LLC, a Delaware Limited Liability Company
("Borrower") and BANK OF AMERICA, N.A. ("Bank").
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Agreement
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I. LOAN TERMS
1.1 Amount and Purpose.
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(a) Bank shall make a loan to Borrower in the original principal
amount of Six Million Seven Hundred Twenty-Eight Thousand Dollars ($6,728,000)
(the "Loan") to be used for the following purpose: refinancing certain
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property.
(b) The Loan will be evidenced by a promissory note (the "Note")
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payable to Bank in the original principal amount of the Loan secured by a Deed
of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing,
(the "Deed of Trust") covering certain real property commonly described on
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Exhibit A, attached hereto and made a part hereof as if fully set forth
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(together with all improvements now or hereafter located thereon, collectively
the "Property") and other collateral.
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(c) Trex Company, Inc., a Delaware corporation ("Guarantor") will
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guaranty (the "Guaranty") Borrower's obligations under this Agreement.
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This Agreement, the Note, the Deed of Trust, the Guaranty, and all other
documents evidencing, securing or otherwise pertaining to the Loan will be
collectively referred to as the "Loan Documents".
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1.2 Intended Use of the Property. Borrower, or an affiliated entity of
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Borrower (the "Affiliate") shall occupy all or a substantial portion of the
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Property. If the Property is to be occupied by an Affiliate, all references in
this Agreement to Borrower shall be understood to include such Affiliate as well
as, or in lieu of, Borrower, as the context may require. For example, any
covenant by Borrower to comply with laws respecting its business shall include a
covenant to cause the Affiliate to comply as well. Likewise, any representation
regarding Borrower's business shall also be a representation regarding the
Affiliate's business, and any condition or Event of Default (as later defined)
that involves Borrower's financial condition or activities shall also include
the Affiliate's financial condition or activities.
1.3 Documentation. At the closing of this transaction, Borrower will
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deliver the following documents and other items, executed and acknowledged as
appropriate, all in form and substance satisfactory to Bank:
(a) this Agreement;
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(b) the Note;
(c) the Deed of Trust;
(d) UCC-l Financing Statements;
(e) Guaranty;
(f) the indemnity (referred to in Article IV) along with a completed
Bank form Environmental Questionnaire and Disclosure Statement;
(g) an ALTA survey of the Property acceptable to Bank if necessary
for the issuance of the title policy described below;
(h) an ALTA title insurance policy insuring Bank that the Deed of
Trust constitutes a valid and enforceable lien on the Property subject and
subordinate only to such liens or other matters as Bank has approved in writing;
(i) evidence of the casualty and other insurance coverage required
under this Agreement;
(j) evidence of Borrower's due formation and good standing, as well
as due authorization and execution of the Loan Documents; and
(k) such other documents and assurances as Bank may reasonably
require.
1.4 Disbursement of Loan Proceeds. Upon the satisfaction of all the
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conditions precedent set forth in this Agreement, Bank will disburse the Loan
proceeds through escrow to pay any debts presently encumbering the Property,
with the balance after payment of applicable reasonable costs and expenses to
the Borrower.
1.5 Repayment. Repayment of the Loan shall be made in accordance with the
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terms of the Note executed by Borrower to the order of Bank.
II. COVENANTS OF THE BORROWER
Borrower promises to keep each of the following covenants:
2.1 Compliance with Law. Borrower shall comply with all existing and
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future laws, regulations, orders, building restrictions and requirements of, and
all agreements with and commitments to, all governmental, judicial or legal
authorities having jurisdiction over the Property and Borrower's business.
2.2 Site Visits.
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(a) Bank and its agents and representatives shall have the right at
any reasonable time to enter and visit the Property (i) for the purposes of
performing an appraisal, (ii) inspecting the Property, (iii) taking soil or
groundwater samples, and (iv)
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conducting tests, among other things, to investigate for the presence of
Hazardous Substances, as defined in Article IV. Bank shall also have the right
to examine, copy and audit its books, records, accounting date and other
documents of Borrower which relate to the Property. In each instance the Bank
shall give Borrower reasonable notice before entering the Property. Bank shall
make an effort to avoid interfering with Borrower's use of the Property when
exercising any of the rights granted in this Section 2.2. Prior to any visit,
Bank shall enter into (if it has not already done so) a confidentiality
agreement, if requested by Borrower, in the form attached hereto as Exhibit B.
(b) Bank is under no duty to visit or observe the Property, or to
examine any books or records. Any site visit, observation or examination by Bank
shall be solely for the purpose of protecting Bank's security and preserving
Bank's rights under the Loan Documents. Bank owes no duty of care to protect
Borrower or any other party against, or to inform Borrower or any other party
of, any adverse condition affecting the Property, including any defects in the
design or construction of any improvements on the Property or the presence of
any Hazardous Substances on the Property.
2.3 Insurance. Borrower shall maintain the following insurance coverage:
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(a) All risk property damage insurance on the Property, with a policy
limit equal to the greater of the outstanding loan balance and the full
replacement cost of improvements and personal property, including tenant
improvements, if any. The policy shall include a replacement cost endorsement,
a stipulated value or agreed amount endorsement (deleting any co-insurance
requirement) and a business interruption endorsement in the amount of 12 months,
principal and interest payments, taxes and insurance premiums. This policy
shall also include a lender's loss payable endorsement (438 BFU) in favor of
Bank.
(b) Comprehensive General Liability coverage with such limits as Bank
may require. This policy shall include an additional insured endorsement in
favor of Bank. Coverage shall be written on an occurrence basis, not claims
made.
(c) Such other insurance as Bank may require, which may include flood
insurance, if located in a designated flood zone.
All policies of insurance reasonably required by Bank must be issued
by companies approved by Bank and otherwise be acceptable to Bank as to amounts,
forms, risk coverages and deductibles. In addition, each policy (except
workers, compensation or liability) must provide Bank at least thirty (30)
days, prior notice of cancellation, non-renewal or modification. If Borrower
fails to keep any such coverage in effect while the Loan is outstanding, Bank
may, but shall not be obligated to, procure such coverage at Borrower's expense.
Borrower shall reimburse Bank, on demand, for all premiums advanced by Bank,
which advances shall be considered to be additional loans to Borrower secured by
the Deed of Trust and shall bear interest at the default rate provided in the
Note until paid including all unpaid and accrued interest thereon.
2.4 Payment of Expenses. Borrower shall pay all reasonable costs and
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expenses incurred by Bank in connection with the making, disbursement and
administration of the Loan, as well as any revisions, extensions, renewals or
"workouts" of the Loan, and in the
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exercise of any of Bank's rights or remedies under this Agreement. Such costs
and expenses include title insurance, recording and escrow charges, fees for
appraisal, reasonable legal fees and expenses of Bank's counsel and any other
reasonable fees and costs for services. Borrower acknowledges that the Loan fee
does not include amounts payable by Borrower under this section. All such sums
incurred by Bank and not immediately reimbursed by Borrower, upon notice of
same, shall be considered an additional loan to Borrower and shall bear interest
at the default rate provided in the Note and secured by the Deed of Trust until
paid including all unpaid and accrued interest.
2.5 Financial and Other Information. Borrower shall provide Bank, within
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(120) days of the end of each fiscal year, its and each Guarantor's annual
report (10-K) and compliance certificate. Borrower also shall provide to Bank,
within 45 days of the end of each quarter, copies of Borrower's and each
Guarantor's quarterly report (10-Q). Within 120 days of the Borrower's fiscal
year end, Borrower shall also provide Bank with its consolidated/consolidating
annual financial statement, which shall be audited and shall include Guarantor's
financial information. On request, Borrower shall promptly provide Bank with
any other financial or other information concerning its and each Guarantor's
affairs and properties as Bank may reasonably request.
2.6 Notices. Borrower shall promptly notify Bank in writing of:
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(a) any notice that the Property or Borrower's business fails in any
material respect to comply with any applicable law, regulation or court order;
and
(b) any material adverse change in the physical condition of the
Property or Borrower's or any Guarantor's financial condition or operations or
other circumstance that materially adversely affects Borrower's intended use of
the Property or Borrower's ability to repay the Loan.
2.7 Indemnity. Borrower agrees to indemnify and hold Bank harmless from
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and against all liabilities, claims, actions, damages, costs and expenses
(including all legal fees and expenses of Bank's counsel including without
limitation Bank's in-house counsel) arising out of or resulting from the
ownership, operation, or use of the Property, whether such claims are based on
theories of derivative liability, comparative negligence or otherwise.
Notwithstanding anything to the contrary in any other Loan Document, the
provisions of this Section 2.7 shall not be secured by the Deed of Trust, and
shall survive the termination of this Agreement, repayment of the Loan or
foreclosure of the Deed of Trust or proceedings in lieu thereof.
2.8 Preservation of Rights; Maintenance of Properties. Borrower shall
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preserve all rights, privileges and franchises desirable for the conduct of
Borrower's business. Borrower shall maintain all its properties in good
condition.
2.9 Negative Covenants. Without Bank's prior written consent, which
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consent shall not be unreasonably withheld, conditioned, or delayed, Borrower
shall not:
(a) engage in any business activities substantially different from
borrower's present business;
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(b) liquidate or dissolve Borrower's business;
(c) enter into any consolidation, merger, pool, joint venture,
syndicate or other combination in excess of Ten Million and 00/100 Dollars
($10,000,000) (except that a merger between Borrower and Guarantor shall be
allowed subject to the provisions of Section 19 of the Note); or
(d) lease or dispose of all or a substantial part of Borrower's
business or Borrower's assets.
2.10 Performance of Acts. Upon request by Bank, Borrower shall perform all
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reasonable acts which may be necessary or advisable to perfect any lien or
security interest provided for in this Agreement or to carry out the intent of
this Agreement. After closing of the Loan, Bank shall be responsible for the
filing costs of any necessary filing to perfect any such lien or security
interest, except to the extent same are a result of a default or breach by
Borrower under the Loan Documents.
2.11 Consolidated Debt to Consolidated Capitalization. The Borrower and
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any of its subsidiaries (but excluding its parent), on a consolidated basis as
reported in its public filings, shall not at any time during any four (4) fiscal
quarters, permit its ratio of Total Consolidated Debt to Total Consolidated
Capitalization to exceed 0.50 to 1.0. Total Consolidated Debt means the total
of all debt of the Borrower and its subsidiaries (but excluding its parent),
including, without duplication, (a) all indebtedness for borrowed money; (b) all
obligations issued, undertaken or assumed as the deferred purchase price of
property or services (other than trade payables entered into in the ordinary
course of business pursuant to ordinary terms); (c) all reimbursement
obligations with respect to surety bonds, letters of credit, bankers'
acceptances and similar instruments (in each case, to the extent material or
non-contingent); (d) all obligations evidenced by notes, bonds, debentures or
similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses; (e) all indebtedness
created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to property
acquired by the person (even though the rights and remedies of the seller or
bank under such agreement in the event of default are limited to repossession or
sale of such property); (f) all capital lease obligations; (g) all net
obligations with respect to interest rate contracts; and (h) all guaranty
obligations in respect of indebtedness or obligations of others of the kinds
referred to in clauses (a) through (g) above. "Total Consolidated
Capitalization" is defined as the sum of Total Consolidated Debt and
Consolidated Net Worth. "Consolidated Net Worth" means members' equity as
determined in accordance with generally accepted accounting principles.
Compliance with the foregoing shall be established via delivery to Bank
quarterly of such financial information as is necessary to evidence same to the
satisfaction of Bank.
2.12 Fixed Charge Ratio. Borrower shall maintain an Fixed Charge Ratio of
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at least 2.5:1.0 beginning September 30, 1999. "Fixed Charge Ratio" means the
ratio of Consolidated Income Available for Fixed Charges (EBITDA) divided by
Interest Charges and Lease Charges. "Consolidated Income Available for Fixed
Charges (EBITDA)" means the sum of (a) the net income (or net loss) plus (b) all
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amounts treated as expenses for depreciation and interest and the amortization
of intangibles of any kind to the extent
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included in the determination of such net income (or loss), plus (c) all accrued
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taxes on or measured by income to the extent included in the determination of
such net income (or loss), plus (d) non charges in the amount of $3,700,000
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through the quarter ending June 30, 2000; provided, however, that net income (or
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loss) shall be computed for these purposes without giving effect to
extraordinary losses or extraordinary gains. Interest Charges means the interest
payments under the Loan. Lease Charges means the payment obligations of Borrower
as lessee, tenant or license under leases or licenses to which Borrower is a
party. Compliance with the foregoing shall be established via delivery to Bank
quarterly of such financial information as is necessary to evidence same to the
satisfaction of Bank. The foregoing ratio shall be calculated and maintained on
a rolling four-quarter basis during the term of the Loan.
III. PARTIAL RECONVEYANCE
Bank agrees that it will cause the trustee under the Deed of Trust to
release a portion or portions of the real property encumbered by the Deed of
Trust (the "Released Property") upon the occurrence of the following:
(a) Bank receives a written request from Borrower to release the
Released Property;
(b) Borrower causes all Guarantors to reaffirm their guarantees and
consent to such a reconveyance;
(c) Borrower provides to Bank a survey reasonably acceptable to Bank
of the "Remainder Property" (being the real property to remain encumbered by the
Deed of Trust and not to be released) and legal descriptions for the Released
Property and the Remainder Property acceptable to Bank;
(d) Borrower provides to Bank a zoning letter from the applicable
governmental authorities evidencing that the Remainder Property has sufficient
parking and other entitlements for the buildings built on such property, as
required by all Requirements (as defined in Section 5.2);
(e) Borrower provides to Bank evidence that the Remainder Property is
comprised of a separate tax parcel or parcels and a separate legal parcel or
parcels (created by recordation of a commercial subdivision map or other legal
means) that comply with NRS Chapter 278;
(f) Borrower provides evidence that all utilities are provided and
separately metered which are necessary to develop, occupy and operate the
Remainder Property, including written assurances from such utility companies as
Bank may reasonably require;
(g) If applicable, Borrower shall have caused to be recorded a
reciprocal easement agreement (which agreement shall have been consented to by
all parties having an interest in the real property encumbered by the Deed of
Trust) in form acceptable to Bank establishing, among other things, the rights
and obligations of property owners and tenants with respect to the use,
maintenance, repair, marketing, management, and sharing
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of costs, of the utilities, buildings, easements, signs, pylons, parking and
common area of such property;
(h) Borrower pays all fees (including reasonable attorney's fees),
costs, charges for title insurance endorsements reasonably requested by Bank in
conjunction with such reconveyance (including endorsements insuring the
continued priority of the Deed of Trust on the Remainder Property, continued
access to public streets, and such other matters as Bank requests), and other
sums owing to Bank and the Deed of Trust trustee incurred in conjunction with
the partial release;
(i) The release of the Released Property shall not cause the Borrower
to be in default under any Loan Documents; and
(j) The ratio of the total committed amount of the Loan to the
prospective market value to a single purchaser of the Remainder Property shall
not exceed eighty percent (80%) (the "Maximum Loan-to-Value Ratio"). For
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purposes of this Section, Bank shall determine the prospective market value of
the Property using a methodology which (a) conforms to then-current regulatory
requirements and Bank's normal and customary appraisal practices, (b) is
considered by Bank to be appropriate under the circumstances, (c) takes into
account current market conditions, and (d) is based on an appraisal from an
appraiser which is on the Bank's approved list of appraisers, all as reasonably
determined by Bank.
IV. HAZARDOUS SUBSTANCES
As an express condition precedent to the Agreement and the funding of the
Loan, Borrower shall execute and deliver to Bank a Secured Indemnity Agreement
relating to hazardous substances on Bank's form (the "Indemnity").
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Notwithstanding any provision in the Deed of Trust or any other Loan
Document, the provisions of this Article IV shall survive termination of this
Agreement and repayment of the Loan, and shall also survive after any
acquisition by Bank of the Property or any part of it by foreclosure or any
other means.
V. REPRESENTATIONS AND WARRANTIES
Borrower promises that each representation and warranty set forth below is
true, accurate and correct as of the date of this Agreement and will be true as
of .the date of any request for disbursement of Loan proceeds.
5.1 Authority. Borrower is authorized to execute, deliver and perform its
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obligations under each of the Loan Documents.
5.2 Compliance. Borrower is familiar and has complied with all of the
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Requirements (defined as all laws, regulations, orders, ordinances, policies,
standards, reports, building codes, covenants, restrictions and requirements
that apply or pertain to, and all agreements with and commitments to all
governmental, judicial or legal authorities having jurisdiction over, the
Property), as well as all other applicable laws, regulations and ordinances,
including without limitation, Equal Opportunity For Individuals With
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Disabilities Act (ADA), 42 U.S.C. 12101 and the regulations promulgated and set
forth at 28 CFR 36.401 et. seq. Borrower has properly obtained all permits,
licenses and approvals necessary to own, occupy and operate the Property in
accordance with all Requirements, including those pertaining to zoning, and
Borrower has delivered true and correct copies of them to Bank.
5.3 Enforceability. Borrower is authorized to execute, deliver and
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perform under the Loan Documents. Those documents are valid and binding
obligations of Borrower.
5.4 Borrower Not a "Foreign Person". Borrower is not a "foreign person"
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within the meaning of Section 1445(f)(3) of the Internal Revenue Code of 1986,
as amended from time to time.
5.5 No Claims. There are no claims, actions, proceedings or
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investigations pending against Borrower, or affecting the Property, except for
those previously disclosed by Borrower to Bank in writing. To the best of
Borrower's knowledge, there has been no threat of any such claim, action,
proceeding or investigation, except for those previously disclosed by Borrower
to Bank in writing.
5.6 Accuracy. All reports, documents, instruments, information and forms
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of evidence which have been delivered to Bank concerning the Loan or required by
the Loan Documents are accurate, correct and sufficiently complete to give Bank
true and accurate knowledge of their subject matter. None of them contains any
misrepresentation or omission.
5.7 Taxes. Borrower has filed all required state, federal and local
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income tax returns and has paid all taxes which are due and payable. Borrower
knows of no basis for any additional assessment of taxes.
5.8 Year 2000. On the basis of a comprehensive review and assessment of
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Borrower's systems and equipment and inquiry made of Borrower's material
suppliers, vendors and customers, Borrower's management is of the reasonable
view that the "Year 2000 problem" (that is, the inability of computers, as well
as embedded microchips in non-computing devices, to perform properly date-
sensitive functions with respect to certain dates prior to and after December
31, 1999), including costs of remediation, will not result in a material adverse
change in the operations, business, properties, condition (financial or
otherwise) of Borrower. Borrower has developed reasonable feasible contingency
plans adequate to ensure uninterrupted and unimpaired business operation in the
event of failure of its own or a third party's systems or equipment due to the
Year 2000 problem, including those of vendors, customers, and suppliers, as well
as a general failure of, or interruption in, its communications and delivery
infrastructure. As relates to Bank, Borrower acknowledges receipt of a copy of
Bank's "Year 2000 Preparedness at Bank of America" disclosure dated July 22,
1999. Bank acknowledges a copy of Borrower's Year 2000 disclosure as provided in
Borrower's 10Q Statement and that same demonstrates to Bank's satisfaction the
Borrower's compliance with the first two sentences of this paragraph. As
relates to Bank, Borrower acknowledges receipt of a copy of Bank's "Year 2000
Preparedness at Bank of America" disclosure dated July 22, 1999.
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VI. DEFAULT AND REMEDIES
6.1 Events of Default. Borrower will be in default under this Agreement
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upon the occurrence of any one or more of the following events (some or all
collectively, "Events of Default"; any one singly, an "Event of Default"):
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(a) Borrower fails to make any payment of principal or interest under
the Note within thirty (30) days after written notice from Bank that same is
due, or fails to make any payment demanded by Bank under this Agreement within
thirty (30) days of such demand; or
(b) Borrower fails to comply with any covenant contained in this
Agreement other than those referred to in this Section 6.1, and does not either
cure that failure within thirty (30) days after written notice from Bank, or, if
the default cannot be cured in thirty days, within a reasonable time as agreed
by Bank, but in no event more than ninety (90) days after the initial written
notice from Bank; or
(c) An assignment for the benefit of creditors is made by, or any
bankruptcy, reorganization, receivership, moratorium or other debtor-relief
proceedings are commenced by or against, Borrower or any Guarantor and same is
not dismissed within 60 days thereof; or
(d) Borrower or any Guarantor becomes insolvent, dissolves or
liquidates; or
(e) Any representation or warranty made or given in any of the Loan
Documents proves to be false or misleading in any material respect; or
(f) Any Guarantor revokes its Guaranty or any Guaranty becomes
ineffective for any reason; or
(g) Under any of the Loan Documents, an Event of Default (as defined
therein) occurs; or
(h) Bank fails to have an enforceable first lien on the Property
given as security for the Loan (except for prior liens approved by Bank in
writing); or
(i) Borrower, any Guarantor or any person affiliated with Borrower or
any Guarantor, within 30 days of written notice from Bank, fails to meet the
conditions of, or fails to perform any obligation under, any other agreement
Borrower has with Bank or any affiliate of Bank. For the purposes of this
section, "affiliated with" means in control of, controlled by or under common
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control with; or
(j) There is a material adverse change in Borrower's or any
Guarantor's financial condition, or event or condition that materially impairs
Borrower's intended use of the Property or Borrower's or any Guarantor's ability
to repay the Loan and same is not remedied to Bank's reasonable satisfaction
within 30 days of written notice thereof to Borrower from Bank.
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6.2 Remedies. If an Event of Default occurs under this Agreement:
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(a) Bank may exercise any right or remedy which it has under any of
the Loan Documents, or which is otherwise available at law or in equity or by
statute, and all of Bank's rights and remedies shall be cumulative. All of
Borrower's obligations under the Loan Documents shall become immediately due and
payable without notice of default, presentment or demand for payment, protest or
notice of nonpayment or dishonor, or other notices or demands of any kind or
character, all at Bank's option, exercisable in its sole discretion.
(b) Bank shall have the right in its sole discretion to enter the
Property and take possession of it, whether in person, by agent or by court-
appointed receiver, collect rents and otherwise protect its collateral. If Bank
exercises any of the rights or remedies provided in this clause (b), that
exercise shall not make Bank, or cause Bank to be deemed to be, a partner or
joint venturer of Borrower. All sums which are expended by Bank in preserving
its collateral shall be considered an additional loan to Borrower bearing
interest at the default rate provided in the Note and secured by the Deed of
Trust.
(c) Bank's failure to exercise its rights under this Section 6.2
shall not constitute a waiver of any default or Event of Default or future
default or Event of Default.
6.3 Concurrent Notice and Cure Periods. All notice and cure periods
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provided in this Agreement or in any Loan Document shall run concurrently with
any notice or cure periods provided by law. Without limiting the foregoing,
Bank shall be entitled to exercise its remedies under the Deed of Trust if any
event occurs which, with the giving of notice or the passage of time, or both,
would constitute an Event of Default under this Agreement or would entitle Bank
to accelerate the indebtedness evidenced by the Note. Furthermore, the
recording and mailing to Borrower of a notice of breach and election to sell
shall constitute notice of such failure to perform pursuant to this Agreement,
the Deed of Trust or any other Loan Document.
VII. ARBITRATION
7.1 Arbitration.
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(a) This paragraph concerns the resolution of any controversies or
claims between the Borrower and the Bank, including, but not limited to, those
that arise from:
(i) This Agreement (including any renewals, extensions, or
modifications of this Agreement);
(ii) Any document, agreement, or procedure related to or
delivered in connection with this Agreement;
(iii) Any violation of this Agreement; or
(iv) Any claims for damages resulting from any business
conducted between the Borrower and the Bank, including claims for injury to
persons, property, or business interests (torts).
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(b) At the request of the Borrower or the Bank, any such
controversies or claims will be settled by arbitration in accordance with the
United States Arbitration Act. The United States Arbitration Act will apply even
though this Agreement provides that it is governed by Nevada law.
(c) Arbitration proceedings will be administered by the American
Arbitration Association and will be subject to its commercial rules of
arbitration. The arbitration will be conducted within Lyon County, Nevada.
(d) For purposes of the application of the statute of limitations,
the filing of an arbitration pursuant to this paragraph is the equivalent of the
filing of a lawsuit, and any claim or controversy which may be arbitrated under
this paragraph is subject to any applicable statute of limitations. The
arbitrators will have the authority to decide whether any such claim or
controversy is barred by the statute of limitations and, if so, to dismiss the
arbitration on that basis.
(e) If there is a dispute as to whether an issue is arbitrable, the
arbitrators will have the authority to resolve any such dispute.
(f) The decision that results from an arbitration proceeding may be
submitted to any authorized court of law to be confirmed and enforced.
(g) This provision does not limit the right of the Borrower or the
Bank to:
(i) exercise self-help remedies such as setoff;
(ii) foreclose against or sell any real or personal property
collateral; or
(iii) act in a court of law, before, during or after the
arbitration proceeding to obtain:
(A) an interim remedy; and/or
(B) additional or supplementary remedies.
(h) The pursuit of, or a successful action for interim, additional or
supplementary remedies, or the filing of a court action, does not constitute a
waiver of the right of the Borrower or the Bank, including the suing party, to
submit the controversy or claim to arbitration if the other party contests the
lawsuit.
(i) If the Bank forecloses against any real property securing this
Agreement, the Bank has the option to exercise the power of sale under the deed
of trust or mortgage, or to proceed by judicial foreclosure.
VIII. MISCELLANEOUS PROVISIONS
8.1 No Waiver; Consents. Each waiver by Bank must be in writing, and no
-------------------
waiver shall be construed as a continuing waiver. No waiver shall be implied
from any
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delay or failure by Bank to take action on account of any default of Borrower.
Consent by Bank to any act or omission by Borrower shall not be construed as a
consent to any other or subsequent act or omission.
8.2 No Third Parties Benefitted. This Agreement is made and entered into
---------------------------
for the sole protection and benefit of Bank and Borrower and their successors
and assigns. No trust fund is created by this Agreement and no other persons
or entities shall have any right or action under this Agreement or any right to
the Loan funds.
8.3 Joint and Several Liability. If Borrower consists of more than one
---------------------------
person or entity, each shall be jointly and severally liable to Bank for the
faithful performance of this Agreement.
8.4 Notices. All notices required under this Agreement shall be
-------
personally delivered or sent by first class mail, postage prepaid, to the
addresses set forth on the signature page of this Agreement, or to such other
addresses as the Bank and the Borrower may specify from time to time in writing.
8.5 Attorneys' Fees. In the event of a lawsuit or arbitration proceeding,
---------------
the prevailing party is entitled to recover costs and reasonable attorneys' fees
incurred in connection with the lawsuit or arbitration proceeding, as determined
by the court or arbitrator.
8.6 Intentionally Omitted
---------------------
8.7 Applicable Law. This Agreement is governed by the laws of the State
--------------
of Nevada, without regard to the choice of law rules of that State.
8.8 Heirs, Successors and Assigns. The terms of this Agreement shall bind
-----------------------------
and benefit the heirs, legal representatives, successors and assigns of the
parties; provided, however, that Borrower may not assign this Agreement without
the prior written consent of Bank. Bank shall have the right to transfer the
Loan to any other persons or entities without the consent of Borrower. Bank
shall notify Borrower if it transfers the Loan of the name and address of the
transferee. Any transferee of the Loan, by accepting the Loan, shall be bound
by the confidentiality agreement as set forth in Exhibit B and if requested by
Bank or Borrower, shall enter into a Confidentiality Agreement in the form of
Exhibit B. Bank shall also obtain a confidentiality agreement in the form of
Exhibit B from each potential transferee of the Loan or purchaser of an interest
in the Loan before disclosing any Confidential Information (as defined in
Exhibit B) to such party. Without the consent of or notice to Borrower, Bank
may disclose to any prospective purchaser of any securities issued by Bank, and
to any prospective or actual purchaser of any interest in the Loan or any other
loans made by Bank to Borrower, any financial or other information relating to
Borrower, the Loan or the Property.
8.9 Severability. The invalidity or unenforceability of any one or more
------------
provisions of this Agreement shall in no way affect any other provision.
8.10 Interpretation. The language of this Agreement shall be construed as
--------------
a whole according to its fair meaning, and not strictly for or against any
party. The word
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"include(s)" means "include(s), without limitation", and the word "including"
---------- ------------------------------ ---------
means "including, but not limited to." Whenever Borrower is obligated to pay or
-----------------------------
reimburse Bank for any attorneys' fees, those fees shall include the allocated
costs for services of in-house counsel.
8.11 Amendments. This Agreement may not be modified or amended except by a
----------
written agreement signed by the parties.
8.12 Time of Essence. Time is of the essence in the performance of this
---------------
Agreement by Borrower.
8.13 Integration and Relation to Loan Commitment. The Loan Documents fully
-------------------------------------------
state all of the terms and conditions of the parties' agreement regarding the
matters mentioned in or incidental to this Agreement. The Loan Documents
supersede all oral negotiations and prior writing concerning the subject matter
of the Loan Documents, including Bank's loan commitment to Borrower.
8.14 Counterparts. This Agreement may be executed in as many counterparts
------------
as necessary or convenient, and by the different parties on separate
counterparts each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same agreement.
8.15 Language of Agreement. The language of this Agreement shall be
---------------------
construed as a whole according to its fair meaning, and not strictly for or
against any party.
8.16 Headings. Article and paragraph headings are for reference only and
--------
shall not affect the interpretation or meaning of any provisions of this
Agreement.
8.17 Information Sharing Notice. Bank is made up of a number of companies,
--------------------------
all working together to serve Borrower. One of Bank's most important goals is
to make it easier for Borrower to manage its money by offering Borrower a wide
selection of services. To further this goal Bank may share information about
Borrower's accounts with one of Bank's affiliates (subject to the terms of the
Confidentiality Agreement set forth in Exhibit B). The information Bank may
share within Bank's company comes from three sources: (i) information Bank may
have regarding Borrower's accounts with Bank; (ii) information Bank may receive
from Borrower applications, and (iii) information from outside sources such as
credit bureaus. Borrower has the right to direct Bank not to share information
from its applications and outside sources. If Borrower does not want Bank to
share this information among Bank's companies, Borrower may send a written
request to:
Bank of America
Attn: Data Integrity
P.O. Box 27025
Richmond, VA 23261-7025
with a copy to:
Bank of America
P.O. Box 20000
13
Reno, Nevada 89520-0025
Attn: Mark McVeigh,
mail code NV2-117-02-12
To complete the request, Borrower should type or print its name, address,
phone number, account number(s) and social security number on its written
request.
Dated as of: September 28, 1999.
Trex Company, LLC, BANK OF AMERICA, N.A.
a Delaware Limited Liability Company
By: /s/ Anthony J. Cavanna By: /s/ Mark McVeigh
-------------------------- ---------------------------------
Anthony J. Cavanna Mark McVeigh, Vice President
Executive VP and CFO
Borrower Address: Bank Address:
BANK OF AMERICA, N.A.
20 South Cameron Street P.O. Box 20000
Suite 200 Reno, Nevada 89520-0025
Winchester, Virginia 22601 Attn: Mark McVeigh,
mail code NV2-117-02-12
Borrower: Trex Company, LLC, a Delaware Limited Liability Company
Loan No.: ______________________
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