Exhibit 10.27

PROMISSORY NOTE

(Revolving Note)

 

$100,000,000.00           December 31, 2006

Trex Company, Inc.

160 Exeter Drive

Winchester, Virginia 22603-8605

(hereinafter referred to as “Borrower”)

Branch Banking and Trust Company,

successor by merger to Branch Banking and

Trust Company of Virginia,

115 North Cameron Street

Winchester, Virginia 22601

(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 Hundred Million and No/100s Dollars ($100,000,000.00) or
such lesser sum as may be advanced with respect to the Revolving Loans (as
defined in that certain Credit Agreement dated as of June 19, 2002 between
Borrower and Bank, 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 dated as of November 9, 2006, and as further
amended by a Seventh Amendment dated of even date herewith (as so amended and as
hereafter amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”)) and remains unpaid on the Revolving Credit
Termination Date (as defined in the Credit Agreement), and to pay interest on
the unpaid principal balance of such sum from the date hereof 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 the Credit Agreement.
Borrower’s obligation to comply with the provisions of the Credit Agreement
shall continue notwithstanding the satisfaction in full of Borrower’s
obligations under this Note.

INTEREST RATE. Interest shall accrue on the unpaid principal balance of this
Note from and after the date hereof at a rate per annum (the “Interest Rate”)
equal to LIBOR (as defined in the Credit Agreement) plus the Applicable
Revolving Loan Margin (as defined in the Credit Agreement), with such rate to
change as provided in the Credit Agreement.

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, the
unpaid principal balance of this Note shall bear interest at the Interest Rate
plus 2.50% (the “Default Rate”). The Default Rate shall also apply from
acceleration until this Note or any judgment hereon is paid in full.

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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.

Interest Only Until Revolving Credit Termination Date. Accrued interest on
(i) the outstanding principal balance of the Prior Note (as hereinafter defined)
for the period December 1, 2006 to and including December 31, 2006 shall be due
and payable on January 1, 2007 and (ii) the outstanding principal balance of
this Note as it exists from time to time shall be due and payable on the first
Business Day (as defined in the Credit Agreement) of each month, commencing on
February 1, 2007, on any date on which this Note is paid in full and on the
Revolving Credit Termination Date (as defined in the Credit Agreement). On the
Revolving Credit Termination Date, the entire outstanding principal balance of
this Note together with all interest accrued hereon will be immediately due and
payable in full.

Revolving Note. Subject to the terms and conditions contained in the Credit
Agreement, Borrower may borrow, repay and reborrow hereunder, up to a maximum
aggregate amount outstanding at any one time equal to the lesser of (i) the
available Borrowing Base (as defined in the Credit Agreement) minus the Letter
of Credit Obligations (as defined in the Credit Agreement) and (ii) the
Revolving Commitment (as defined in the Credit Agreement) minus the Letter of
Credit Obligations. Bank shall incur no liability for its refusal to advance
funds based upon its determination that any conditions of such further advances
have not been met. Bank records of the amounts borrowed from time to time shall
be conclusive proof thereof.

Prepayment; Adjustment of Revolving Commitment. This Note is subject to
prepayment, and the Revolving Commitment is subject to adjustment, under the
terms and subject to the conditions set forth in the Credit Agreement.

Prior Note. This Note amends and restates the $70,000,000 Promissory Note of
Borrower dated November 9, 2006, payable to Bank (the “Prior Note”), and this
Note is executed and delivered to Bank as a replacement of and in substitution
for the Prior Note. The execution and delivery of this Note shall not constitute
a novation of the debt originally evidenced by the Prior Note.

APPLICATION OF PAYMENTS. Monies received by Bank from any source for application
toward payment of this Note shall be applied to accrued interest and then to
principal; provided that if the Bank has elected to have the Services Agreement
(as defined in the Credit Agreement) apply to the Revolving Loans, monies
received by Bank for application toward payment of this Note shall be applied as
set forth in the Services Agreement; provided, further, that after the
occurrence of a Default, monies may be applied to Borrower’s obligations under
this Note in any manner or order deemed appropriate by Bank. If any payment
received by Bank under this Note or the other Loan Documents (as defined in the
Credit Agreement, and hereinafter, the “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 the other Loan Documents as though such
payment had not been made.

LATE CHARGE. If any payments due hereunder 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.

 

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ATTORNEYS’ FEES AND OTHER COLLECTION COSTS. Borrower shall pay all of Bank’s
reasonable expenses incurred to enforce or collect any amount owed under this
Note, 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 under this Note, or, if no such amounts are owing, returned to
Borrower.

DEFAULT. The occurrence of an Event of Default under the Credit Agreement shall
constitute a default under this Note (a “Default”).

REMEDIES UPON DEFAULT. If a Default occurs, Bank may at any time thereafter,
take the following actions:

Accelerate Upon Default. Accelerate the maturity of this Note, whereupon this
Note shall be immediately due and payable.

Set Off. At any time and from time to time, without presentment, demand, protest
or other notice of any kind (all of which rights being hereby expressly waived),
set off and appropriate and apply any and all deposits and any other
indebtedness at any time held or owing by Bank to or for the credit or the
account of Borrower against obligations and liabilities of Borrower to Bank
hereunder or the other Loan Documents.

Cumulative. Exercise any rights and remedies as provided under the Note, the
Credit Agreement and the other Loan Documents, or as provided by law or equity.

WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of this Note or
the 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 the 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.

Borrower or each 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 Borrower or any person liable
under this Note or any other Loan Document, all without notice to or consent of
Borrower or any 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 shall have the right to assign or
otherwise transfer any of its rights or interests in this Note and the other
Loan Documents, in whole or in part, as provided in the Credit Agreement.
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 its obligations under this Note.

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, the
terms of this Note shall control.

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 or Bank shall be sufficiently given if
delivered in the manner and to the address or addresses specified in the Credit
Agreement. In the event that Borrower changes Borrower’s address at any time
prior to the date this Note is 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.

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.

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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IN WITNESS WHEREOF, Borrower, on the day and year first above written, has
caused this Note to be executed under seal.

 

TREX COMPANY, INC. By:  

/s/ Paul D. Fletcher

  (SEAL) Name:   Paul D. Fletcher   Title:   Senior Vice President and Chief
Financial Officer  

 

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