Third Amendment to Credit Agreement



 EXHIBIT 10.6 
  
 THIRD AMENDMENT TO CREDIT AGREEMENT 
  
 THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is dated as of this 31st day of March, 2005, by and between TREX COMPANY, INC., a Delaware corporation (sometimes hereinafter referred to herein
as “Trex Inc.”), and BRANCH BANKING AND TRUST COMPANY OF VIRGINIA, a Virginia state banking corporation (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 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 $20,000,000 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 increase the amount of the letter of credit subfacility and make certain other modifications to 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. 

 
 2. Section 2.01(d) of the Credit Agreement is hereby deleted in its
entirety and the following Section is substituted in its place: 
  
 (d) Letter of Credit Facility. Upon the terms and subject to the conditions contained in this Agreement and in the applicable Letter of Credit Applications, the Bank agrees to issue irrevocable letters of credit
(hereinafter with the Existing Letter of Credit shall collectively be referred to as the “Letters of Credit”) for the account of the Borrower from time to time during the period from the date of this Agreement through but excluding the
Revolving Credit Termination Date, provided that the amount available for drawing under all outstanding Letters of Credit plus the aggregate unpaid reimbursement obligations under the Letter of Credit Applications shall not exceed at any time
outstanding 








 
the least of (i) $10,000,000, (ii) the Revolving Commitment minus the aggregate principal amount of all outstanding Revolving Loans, and (iii) the Borrowing
Base minus the aggregate principal amount of all outstanding Revolving Loans. 
  
 3. Section 2.01(d)(2) of the Credit Agreement is hereby deleted in its entirety and the following Section is substituted in its place: 
  
 (2) Fees. For each Letter of Credit issued under the terms of this Agreement (other than the Existing
Letter of Credit), the Borrower will pay to the Bank at the time of issuance the fee as to which the Bank and the Borrower have agreed subject to any minimum fees that the Bank may impose. Such fee will be fully earned at the time such Letter of
Credit is issued and nonrefundable. The Borrower will also pay to the Bank when due its customary administrative fees as they may be established or altered from time to time for issuing Letters of Credit and for honoring drafts thereunder and, if
applicable, for transferring, amending or extending such Letters of Credit. Nothing contained herein, however, shall obligate the Bank to transfer, amend or extend beyond its original maturity date any Letter of Credit. 
  
 4. 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. 
  

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 (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). 
  
 (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 Loan Documents, and there is no basis known to the Borrower or any of its Subsidiaries for any such action, suit, proceeding or investigation. 
  
 5. 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 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. 
  
 6. 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. 
  
 7. 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. 
  
 8. This Amendment shall be construed in accordance with and governed by the
laws of the Commonwealth of Virginia. 
  
 9. Any Dispute arising
out of or related to this Amendment or any of the 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. 
  

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 10. 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. 
  
 11. 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. 
  
 12. 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 any other related documents, including but not limited to the fees and disbursements of counsel for the Bank. 
  
 13. 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/ Paul D. Fletcher

	 	(SEAL)
	Name:	 	Paul D. Fletcher	 	 
	Title:	 	 Senior Vice President and
 Chief Financial
Officer
	 	 
	
	BRANCH BANKING AND TRUST COMPANY OF VIRGINIA
			
	By:	 	 /s/ David A. Chandler

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


  

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