Exhibit 10.1

ELEVENTH AMENDMENT TO CREDIT AGREEMENT

THIS ELEVENTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated and
effective as of December 31, 2007, by and between TREX COMPANY, INC., a Delaware
corporation (sometimes hereinafter referred to herein as “Trex Inc.”), and
BRANCH BANKING AND TRUST COMPANY, a North Carolina state banking corporation,
successor by merger to Branch Banking and Trust Company of Virginia (hereinafter
referred to herein as the “Bank”).

Trex Inc., TREX Company, LLC, a Delaware limited liability company (“TREX LLC”),
and the Bank are the original parties to that certain Credit Agreement dated as
of June 19, 2002, as amended by a First Amendment to Credit Agreement dated as
of August 29, 2003, as further amended by a Second Amendment to Credit Agreement
dated as of September 30, 2004, as further amended by a Third Amendment to
Credit Agreement dated as of March 31, 2005, as further amended by a Fourth
Amendment to Credit Agreement dated as of July 25, 2005, as further amended by a
Fifth Amendment to Credit Agreement dated as of December 31, 2005, as further
amended by a Sixth Amendment to Credit Agreement dated as of November 9, 2006,
as further amended by a Seventh Amendment to Credit Agreement dated as of
December 31, 2006, as further amended by an Eighth Amendment to Credit Agreement
dated as of March 16, 2007, as further amended by a Ninth Amendment to Credit
Agreement dated as of June 12, 2007 and effective as of June 18, 2007, as
further amended by a Tenth Amendment to Credit Agreement dated as of
December 21, 2007 (as so amended and as it may hereafter be amended, restated,
supplemented, replaced or otherwise modified from time to time, the “Credit
Agreement”). Subject to the terms and conditions contained in the Credit
Agreement, the Bank agreed to extend to Trex Inc. and TREX LLC (i) a revolving
credit facility, with a letter of credit subfacility, in the aggregate amount of
$70,000,000 for working capital financing of Trex Inc.’s and TREX LLC’s accounts
receivable and inventory, to purchase new equipment and/or for other general
corporate purposes of Trex Inc. and TREX LLC, (ii) a term loan facility in the
amount of $9,570,079.88 to refinance the Winchester Property (as defined in the
Credit Agreement), and (iii) a term loan facility in the amount of $3,029,920.12
to finance existing improvements to the Winchester Property. Effective
December 31, 2002, TREX LLC merged with and into Trex Inc., with Trex Inc. being
the surviving entity. As a result of such merger, Trex Inc. is the sole borrower
under the Credit Agreement and shall hereinafter sometimes be referred to in
this Amendment as the “Borrower.”

The Borrower has requested that the Bank modify certain financial covenants
contained in the Credit Agreement, and the Bank is willing to do so upon the
terms and conditions contained herein.

Accordingly, the Borrower and the Bank hereby agree as follows:

1. Capitalized terms used in this Amendment and not otherwise defined herein
shall have the meanings assigned thereto in the Credit Agreement.

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2. Section 6.01(c) of the Credit Agreement is hereby deleted in its entirety and
the following Section is substituted in its place:

(c) Periodic Financial Statements and Borrowing Base Certificates. As soon as
available and in any event within 15 Business Days after the end of each month:
(A) a Borrowing Base Certificate and (B) a financial report of accounts
receivable (including an aging of accounts receivable in an initial increment of
30 days, a second increment of 31-45 days, a third increment of 46-60 days and
in 30-day increments thereafter), inventory and production. For each calendar
month ending during the period commencing on January 1, 2008 to and including
December 31, 2008, as soon as available and in any event within 30 calendar days
after the end of each month, an internally prepared consolidated and, with
respect to Material Subsidiaries, consolidating balance sheet of the Borrower
and its Consolidated Subsidiaries and the related consolidated and, with respect
to Material Subsidiaries, consolidating statements of income and cash flows of
the Borrower and its Consolidated Subsidiaries for such month all in reasonable
detail and satisfactory in form to the Bank and all certified (subject to normal
year-end audit adjustments) as to fairness of presentation, GAAP and consistency
by the chief financial officer or chief accounting officer of the Borrower. As
soon as available and in any event within 15 Business Days after the end of the
first two months of each fiscal quarter commencing with the first two months of
the fiscal quarter ending March 31, 2009, an internally prepared consolidated
and, with respect to Material Subsidiaries, consolidating balance sheet of the
Borrower and its Consolidated Subsidiaries and the related consolidated and,
with respect to Material Subsidiaries, consolidating statements of income and
cash flows of the Borrower and its Consolidated Subsidiaries for such month all
in reasonable detail and satisfactory in form to the Bank and all certified
(subject to normal year-end audit adjustments) as to fairness of presentation,
GAAP and consistency by the chief financial officer or chief accounting officer
of the Borrower.

3. Section 6.10 of the Credit Agreement is hereby deleted in its entirety and
the following Section is substituted in its place:

Section 6.10 Total Consolidated Debt to Total Consolidated Capitalization Ratio.
The Borrower will not, as of the end of any fiscal quarter, permit the ratio of
Total Consolidated Debt to Total Consolidated Capitalization (the “Total
Consolidated Debt to Total Consolidated Capitalization Ratio”), as a percentage,
to exceed the following amounts for the following periods: (i) 70% for the
period commencing on the January 1, 2008 to and including March 31, 2008,
(ii) 62.5% for the period commencing on April 1, 2008 to and including June 30,
2008, (iii) 60% for the period commencing on July 1, 2008 to and including
September 30, 2008, (iv) 65% for the period commencing on October 1, 2008 to and
including December 31, 2008, (v) 60% for the period commencing on January 1,
2009 to and including March 31, 2009 and (vi) thereafter (A) 50% for

 

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each period commencing on April 1 of a calendar year to and including
September 30 of such calendar year and (B) 60% for each period commencing on
October 1 of a calendar year to and including March 31 of the immediately
succeeding calendar year.

4. Section 6.12 of the Credit Agreement is hereby deleted in its entirety and
the following Section is substituted in its place:

Section 6.12. Fixed Charge Coverage Ratio. The Borrower will not, as of the end
of any fiscal quarter, permit the Fixed Charge Coverage Ratio to be less than
the following amounts for the following periods: (i) 0.75 to 1 for the
one-quarter period ending on March 31, 2008, (ii) 0.85 to 1 for the two-quarter
period ending on June 30, 2008, (iii) 1.0 to 1 for the three-quarter period
ending on September 30, 2008, (iv) 0.60 to 1 for the four-quarter period ending
on December 31, 2008 and (v) 1.4 to 1 for the four-quarter period ending on each
fiscal quarter thereafter.

5. Section 6.13 of the Credit Agreement is hereby deleted in its entirety and
the following Section is substituted in its place:

Section 6.13. Minimum Tangible Net Worth. The Borrower will at all times
maintain Consolidated Tangible Net Worth at not less than the sum of
(i) $85,000,000, (ii) 100% of the Net Proceeds of all stock issued after
January 1, 2008, plus (iii) fifty percent (50%) of Consolidated Net Income after
December 31, 2007 (taken as one accounting period), but excluding from such
calculation of Consolidated Net Income for purposes of this clause (iii) any
quarter in which Consolidated Net Income is negative.

6. Section 6.15(b)(ii)(D) of the Credit Agreement is hereby deleted in its
entirety and the following Section is substituted in its place:

(D) (1) the Total Consolidated Debt to Total Consolidated Capitalization Ratio
both immediately prior to such proposed Acquisition and immediately after and
giving effect to such proposed Acquisition shall be at least three percentage
points lower than the maximum Total Consolidated Debt to Total Consolidated
Capitalization Ratio required by Section 6.10 on the date of such proposed
Acquisition (e.g., if the proposed Acquisition occurs during the period
commencing on January 1, 2009 to and including March 31, 2009, the Total
Consolidated Debt to Total Consolidated Capitalization Ratio both immediately
prior to such proposed Acquisition and immediately after and giving effect to
such proposed Acquisition shall not exceed 57%) and (2) the Pro Forma Total
Consolidated Senior Debt to Consolidated EBITDA Ratio shall be at least 0.5
lower than the maximum ratio of the Total Consolidated Senior Debt to
Consolidated EBITDA required by Section 6.11 on the date of the proposed
Acquisition (e.g., if the proposed Acquisition occurs during the period
commencing on January 1, 2009 to and including March 31, 2009, the Pro Forma
Total Consolidated Senior Debt to Consolidated EBITDA Ratio shall not exceed 2.5
to 1);

 

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7. The Bank hereby waives the Borrower’s compliance with (i) the Total
Consolidated Debt to Total Consolidated Capitalization Ratio covenant described
in Section 6.10 of the Credit Agreement for the fiscal quarter ending on
December 31, 2007; (ii) the Total Consolidated Senior Debt to Consolidated
EBITDA Ratio covenant described in Section 6.11 of the Credit Agreement for the
fiscal quarters ending on December 31, 2007, March 31, 2008, June 30,
2008, September 30, 2008 and December 31, 2008; (iii) the Fixed Charge Coverage
Ratio covenant described in Section 6.12 of the Credit Agreement for the fiscal
quarter ending on December 31, 2007; and (iv) the Minimum Tangible Net Worth
covenant described in Section 6.13 of the Credit Agreement for the fiscal
quarter ending on December 31, 2007.

8. The Borrower hereby represents and warrants to the Bank (which
representations and warranties shall survive the execution and delivery of this
Amendment) that:

(a) It is in compliance with all of the terms, covenants and conditions of the
Credit Agreement, as amended by this Amendment, and each of the other Loan
Documents.

(b) There exists no Default or Event of Default under the Credit Agreement, as
amended by this Amendment, and no event has occurred or condition exists which,
with the giving of notice or lapse of time, or both, would constitute such a
Default or Event of Default.

(c) The representations and warranties contained in Article V of the Credit
Agreement are, except to the extent that they relate solely to an earlier date
or except to the extent that they relate solely to TREX LLC, true in all
material respects with the same effect as though such representations and
warranties had been made on the date of this Amendment.

(d) The execution, delivery and performance by the Borrower of this Amendment
are within its corporate powers, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or filing with, any
governmental body, agency or official and do not contravene or constitute (with
or without the giving of notice or lapse of time or both) a default under any
provision of applicable law or of the organizational documents of the Borrower
or any Subsidiary or of any agreement, judgment, injunction, order, decree or
other instrument binding upon or affecting the Borrower or any Subsidiary or
result in the creation or imposition of any Lien on any asset of the Borrower or
any of its Subsidiaries other than a Lien in favor of the Bank as provided in
the Security Agreement.

(e) This Amendment constitutes the valid and binding agreement of the Borrower,
enforceable against the Borrower in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting creditors’ rights generally and by equitable principles of general
applicability (regardless of whether such enforceability is considered in a
proceeding in equity or at law).

 

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(f) Except as set forth on Schedule 5.05 to the Credit Agreement, there is no
material action, suit, proceeding or investigation pending against, or to the
knowledge of the Borrower threatened against, contemplated or affecting, the
Borrower or any of its Subsidiaries before any court, arbitrator or governmental
body, agency or official which has, or could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, or which in any
manner draws into question the validity or enforceability of this Amendment or
any of the other Loan Documents, and there is no basis known to the Borrower or
any of its Subsidiaries for any such action, suit, proceeding or investigation.

9. The Bank’s agreement to enter into this Amendment is subject to the following
conditions precedent:

(a) The Borrower shall have executed and delivered to the Bank this Amendment.

(b) The Borrower, JPMorgan Chase Bank, N.A., as issuing bank (the “Issuing
Bank”), and JPMorgan Chase Bank, N.A., as administrative agent (the
“Administrative Agent”), shall have executed and delivered an amendment to the
Chase Credit Agreement in form and substance acceptable to the Bank.

(c) The Bank shall have received a favorable opinion of counsel to the Borrower
addressed to the Bank, dated as of the date hereof and satisfactory in form and
substance to the Bank, as to the due authorization, execution, delivery and
enforceability of this Amendment and such other matters as the Bank shall
reasonably request.

(d) The Borrower shall have executed and delivered, or caused to be executed and
delivered, to the Bank such other and further documents, certificates, opinions
and other papers as the Bank shall reasonably request; and the Borrower shall
have paid all fees due to the Bank.

10. Except as expressly amended hereby, the terms of the Credit Agreement shall
remain in full force and effect in all respects, and the Borrower hereby
reaffirms its obligations under the Credit Agreement, as amended by this
Amendment, and each of the other Loan Documents. The Borrower hereby waives any
claim, cause of action, defense, counterclaim, setoff or recoupment of any kind
or nature that it may assert against the Bank arising from or in connection with
the Credit Agreement, as amended by this Amendment, any of the Loan Documents,
or the transactions contemplated thereby or hereby that exist on the date hereof
or arise from facts or actions occurring prior hereto or on the date hereof.
Nothing contained in this Amendment shall be construed to constitute a novation
with respect to the obligations described in the Credit Agreement.

11. All references to the Credit Agreement in any of the Loan Documents, or any
other documents or instruments that refer to the Credit Agreement, shall be
deemed to be references to the Credit Agreement as amended by this Amendment.

 

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12. This Amendment shall be construed in accordance with and governed by the
laws of the Commonwealth of Virginia.

13. Any Dispute arising out of or related to this Amendment or any of the other
Loan Documents shall be resolved by binding arbitration as provided in
Section 9.07 of the Credit Agreement. TO THE FULLEST EXTENT PERMITTED BY LAW,
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL WITH RESPECT TO ANY DISPUTE.

14. This Amendment may be executed in any number of counterparts, each of which
shall be an original, but all of which taken together shall constitute one and
the same instrument.

15. This Amendment shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. The Borrower shall not have
the right to assign any of its rights or obligations under or delegate any of
its duties under the Credit Agreement, as amended by this Amendment, or any of
the other Loan Documents.

16. The Borrower hereby agrees that it will pay on demand all out-of-pocket
expenses incurred by the Bank in connection with the preparation of this
Amendment and all other related documents, including but not limited to the fees
and disbursements of counsel for the Bank.

17. This Amendment represents the final agreement between the Borrower and the
Bank with respect to the subject matter hereof, and may not be contradicted,
modified or supplemented in any way by evidence of any prior or contemporaneous
written or oral agreements of the Borrower and the Bank.

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the Borrower and the Bank have caused this Amendment to be
executed by their duly authorized officers under seal as of the date first
written above.

 

TREX COMPANY, INC. By:  

/s/ William R. Gupp

  (SEAL) Name:   William R. Gupp   Title:   General Counsel   BRANCH BANKING AND
TRUST COMPANY By:  

/s/ David A. Chandler

  (SEAL) Name:   David A. Chandler   Title:   Senior Vice President  

 

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