Document:

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                                                                    Exhibit 10.5

This Instrument Prepared By:      GPIN: Frederick County Tax Map Number 63-A-110
Thomas E. duB. Fauls                  City of Winchester Tax Map Number 371-01-1
Troutman Sanders LLP
Post Office Box 1122
Richmond, Virginia 23218-1122

                            CREDIT LINE DEED OF TRUST

                              dated June 19, 2002,

                                  by and among

                               TREX COMPANY, LLC,
                                   as Grantor,

                     BB&T-VA COLLATERAL SERVICE CORPORATION
                                   as Trustee,

                                       and

                BRANCH BANKING AND TRUST COMPANY OF VIRGINIA and
                        BRANCH BANKING AND TRUST COMPANY,
                                  as Noteholder

THIS IS A CREDIT LINE DEED OF TRUST within the meaning of Section 55-58.2 of the
Code of Virginia (1950), as amended. For the purposes of and to the extent
required by such Section, (i) the name of the noteholder secured by this Deed of
Trust is Branch Banking and Trust Company of Virginia and Branch Banking and
Trust Company, (ii) the address at which communications may be mailed or
delivered to such noteholder is 110 South Stratford Road, Suite 301,
Winston-Salem, North Carolina 27104, Attention: Cory Boyte, and (iii) the
maximum aggregate amount of principal to be secured at any one time is
$12,600,000.

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This Instrument Prepared By:      GPIN: Frederick County Tax Map Number 63-A-110
Thomas E. duB. Fauls                  City of Winchester Tax Map Number 371-01-1
Troutman Sanders LLP
Post Office Box 1122
Richmond, Virginia 23218-1122

                       THIS IS A CREDIT LINE DEED OF TRUST

     THIS CREDIT LINE DEED OF TRUST (this "Deed of Trust"), dated this 19th day
of June, 2002, by and among TREX COMPANY, LLC, a Delaware limited liability
company (hereinafter referred to as the "Grantor"), as grantor, the first party;
BB&T-VA COLLATERAL SERVICE CORPORATION, a Virginia corporation whose address is
823 East Main Street, 11th Floor, Richmond, Virginia 23219, as trustee
(hereinafter referred to as the "Trustee"), as grantee, the second party; and
BRANCH BANKING AND TRUST COMPANY OF VIRGINIA, a Virginia banking corporation,
and BRANCH BANKING AND TRUST COMPANY, a North Carolina banking corporation
(hereinafter collectively referred to as the "Noteholder"), as beneficiaries,
the third party;

          The Noteholder's address to which any notice or communication
          permitted to be given pursuant to the provisions of ss. 55-58.2 of the
          Code of Virginia of 1950, as amended, may be mailed or delivered is
          Branch Banking and Trust Company of Virginia and Branch Banking and
          Trust Company, 110 South Stratford Road, Suite 301, Winston-Salem,
          North Carolina 27104, Attention: Cory Boyte.

                              W I T N E S S E T H:

     The Grantor does hereby grant and convey, with General Warranty and English
Covenants of Title, unto the Trustee, the property described in SCHEDULE A
attached hereto and by this reference made a part hereof; subject however to
Permitted Exceptions, as hereinafter defined;

     TOGETHER with (i) all buildings and improvements now or hereafter
constructed thereon; (ii) all the estate and rights, if any, of the Grantor in
and to all land lying in public and private streets, roads and alleyways
abutting the above-described property; (iii) all easements, rights of way,
privileges and appurtenances now or hereafter belonging to or in any way related
to the above-described property; (iv) except for the Excluded Property (as
hereinafter defined), all fixtures, machinery, equipment, building materials and
other personal property of every nature whatsoever owned by the Grantor now or
hereafter located in, or on, or used, or intended to be used, in connection with
the operation of the above-described property, including, but without
limitation, heating, air conditioning, cooking, refrigerating, plumbing, and
electrical apparatus and equipment, boilers, engines, motors, dynamos,
generating equipment, piping and plumbing fixtures, ventilating and vacuum
cleaning systems, fire extinguishing apparatus, gas and electric fixtures,
elevators, escalators, partitions, mantels, built-in mirrors, disposals,
washers, dryers, window shades, blinds, screens, storm sashes, storm doors,
awnings, carpeting, underpadding, drapes, plants and shrubbery, furniture, and
furnishings of public spaces, halls and lobbies, all of which personal property,
including replacements thereof and additions thereto, shall be deemed part of
the realty hereby

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conveyed (and the Grantor does hereby declare such personal property to be part
of said realty, whether attached thereto or not, and subject to the lien hereby
created); and (v) all proceeds of the conversion, whether voluntary or
involuntary, of any of the above-described property into cash or other liquid
claims, including, without limitation, all awards, payments or proceeds,
including interest thereon, and the right to receive same, which may be made as
a result of any casualty, any exercise of the right of eminent domain or deed in
lieu thereof, the alteration of the grade of any street and any injury to or
decrease in the value of the above-described property, together with all costs
and expenses incurred by the Noteholder in connection with the collection of
such awards, payments and proceeds, including, without limitation, reasonable
attorneys' fees.

     All the above-described real and personal property, and each part thereof,
is hereinafter sometimes referred to as the "Property."

     "Permitted Exceptions" shall mean, as of any particular time (a) liens for
ad valorem taxes and special assessments not then delinquent, (b) this Deed of
Trust and any liens created hereby, (c) the matters listed on SCHEDULE B
attached hereto as a part hereof, and (d) Permitted Liens (as defined in the
Credit Agreement dated as of June 19, 2002, by and among the Grantor, Trex
Company, Inc. and Branch Banking and Trust Company of Virginia, as amended,
restated, supplemented or otherwise modified from time to time (the "Credit
Agreement")).

     "Excluded Property" shall mean all property of the Grantor, whether now
owned or hereafter acquired, that constitutes inventory (as defined in the
Uniform Commercial Code as adopted in the Commonwealth of Virginia (the "UCC"))
or equipment (as defined in the UCC) other than Excluded Fixtures (as
hereinafter defined), whether now or hereafter located in, or on, or used, or
intended to be used, in connection with the operation of the Property, together
with all cash and non-cash proceeds thereof. For purposes hereof, "Excluded
Fixtures" shall mean all fixtures (as defined in the UCC) other than
manufacturing or production equipment of the Grantor.

     IN TRUST to secure to the Noteholder the following:

     (a)   (i) the payment and performance of all principal of and interest
     (including, without limitation, any interest which accrues after the
     commencement of any case, proceeding or other action relating to the
     bankruptcy, insolvency or reorganization of the Borrower, whether or not
     allowed or allowable as a claim in any such proceeding) on Real Estate Term
     Loans 1, 2, 3 & 4 (as each such term is defined in the Credit Agreement),
     fees payable or reimbursement obligations under, Real Estate Term Loan 1,
     Real Estate Term Loan 2, Real Estate Term Loan 3, or Real Estate Term Loan
     4 (as each such term is defined in the Credit Agreement);

           (ii) all other amounts now or hereafter payable by the Borrower and
     all other obligations or liabilities now existing or hereafter arising or
     incurred (including, without limitation, any amounts which accrue after the
     commencement of any case, proceeding or other action relating to the
     bankruptcy, insolvency or reorganization of the Borrower, whether or not
     allowed or allowable as a claim in any such proceeding) on the part of the
     Borrower pursuant to Real Estate Term Loan 1, Real Estate Term Loan 2, Real
     Estate Term Loan 3, or Real Estate Term Loan 4;

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           (iii) all Derivatives Obligations (as defined in the Credit
     Agreement)(including, without limitation, all amounts payable with respect
     to the ISDA Master Agreement (as defined in the Credit Agreement) and any
     amounts which accrue after the commencement of any case, proceeding or
     other action relating to the bankruptcy, insolvency or reorganization of
     the Borrower, whether or not allowed or allowable as a claim in any such
     proceeding) of the Borrower to Branch Banking and Trust Company;

           (iv)  all other indebtedness, obligations and liabilities of the
     Borrower to Branch Banking and Trust Company of Virginia or Branch Banking
     and Trust Company, now existing or hereafter arising or incurred, whether
     or not evidenced by notes or other instruments, and whether such
     indebtedness, obligations and liabilities are direct or indirect, fixed or
     contingent, liquidated or unliquidated, due or to become due, secured or
     unsecured, joint, several or joint and several, but excluding the Revolving
     Credit Loan Obligations (as defined in the Credit Agreement);

           (v)   all renewals, modifications, consolidations or extensions
     of or to each of the obligations described in clauses (a)(i) to and
     including (a)(iv) above (the obligations described in clauses (a)(i) to and
     including (a)(v) shall collectively be referred to herein as the "Real
     Estate Term Loan Obligations"); and

           (vi)  all reasonable costs and expenses, including, without
     limitation, reasonable attorneys' fees incurred by the Noteholder for taxes
     and/or insurance relating to, or maintenance or preservation of, the
     Property and any other collateral securing the Real Estate Term Loan
     Obligations or incurred by the Noteholder in the collection or enforcement
     of the Real Estate Term Loan Obligations, including, without limitation,
     any such collection or enforcement of the Real Estate Term Loan Obligations
     owing to the Noteholder by any action or participation in, or in connection
     with, a case or proceeding under Chapter 7 or Chapter 11 of the U.S.
     Bankruptcy Code or any successor statute; all of which obligations
     described in clauses (a)(i) to and including (a)(vi) shall not exceed, at
     any one time, the aggregate principal amount of TWELVE MILLION SIX HUNDRED
     THOUSAND AND NO/100 DOLLARS ($12,600,000.00), together with interest
     thereon as provided in the Credit Agreement; and

     (b)   the performance of, and compliance with, all of the covenants,
     duties, obligations and conditions of the Grantor contained in this Deed of
     Trust.

           The above-described indebtedness, liabilities, obligations,
     covenants, duties and conditions are hereinafter referred to collectively
     as the "Secured Obligations."

     The Grantor does also hereby irrevocably assign and convey unto the
Noteholder, and hereby grants to the Noteholder a security interest in, all
leases now or hereafter existing on any part of the Property and any guaranties
thereof and all rents from the Property to secure additionally the Secured
Obligations. The Grantor does hereby irrevocably appoint the Noteholder as its
attorney-in-fact to do all things which the Grantor might otherwise do with
respect to the leasing of the Property, including, without limitation, (i)
collecting such rents with or without suit and applying

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the same, less expenses of collection, to any of the Secured Obligations in such
manner as may be determined by the Noteholder, or at the option of the
Noteholder, holding the same as security for the payment of all of the Secured
Obligations, (ii) leasing, in the name of the Grantor, the whole or any part of
the Property which may become vacant, and (iii) employing agents therefor and
paying such agents reasonable compensation for their services; provided,
however, that until there be an Event of Default (as hereinafter defined), the
Grantor may continue to collect and enjoy such rents in the ordinary course of
business as the rents become due and payable without accountability to the
Noteholder. The curing of such Event of Default, however, shall not entitle the
Grantor to do any such things which the Grantor might otherwise do with respect
to the Property and the leases thereon or again to collect such rents unless
consented to in writing by the Noteholder. The powers and rights granted in this
paragraph shall be in addition to the other remedies herein provided for upon
the occurrence of an Event of Default and may be exercised independently of or
concurrently with any of such remedies. Nothing in the foregoing shall be
construed to impose any obligation upon the Noteholder to exercise any power or
right granted in this paragraph or to assume any liability under any lease of
any part of the Property, and no liability shall attach to the Noteholder for
failure or inability to collect any rents under any such lease. The Grantor
covenants and warrants that (i) it will comply with all terms and conditions of
all leases now existing or that may hereafter come into existence in respect of
the Property or of any part thereof; (ii) all leases with respect to the
Property now or hereafter in effect are and shall be valid and subsisting
leases; (iii) it has not sold, assigned, transferred, mortgaged or pledged, and
will not sell, assign, transfer, mortgage or pledge, without the Noteholder's
prior written consent, the rents, issues or profits from the Property and leases
thereof to any person other than the Noteholder; (iv) no rents, issues or
profits derived from the Property and leases, and becoming due subsequent to the
date hereof, have been collected or anticipated in advance of their due date by
more than thirty (30) days; (v) it will not reduce the rental due under any
lease of all or any part of the Property without the Noteholder's prior written
consent; and (vi) upon request of the Noteholder, it will serve such written
notice or notices as the Noteholder may from time to time require upon the
tenant(s) under such leases or occupant(s) of the Property or any part thereof,
it will execute and deliver to the Noteholder such other instruments or
documents reasonably requested by the Noteholder for the purpose of securing or
exercising its rights herein and it will provide to the Noteholder true copies
or originals of such leases and all amendments, supplements, renewals or
correspondence related thereto. All leases and renewals and extensions of
existing leases shall be subject in all respects to the Noteholder's advance
written approval. Whenever in this paragraph there is a reference to "leases,"
such reference shall also apply to subleases and any other forms of agreement
for the use of the Property or any part thereof.

     So long as no Event of Default exists under this Deed of Trust, and except
as specifically provided herein to the contrary, the Grantor shall remain in
quiet use, possession and management of the Property, and in the enjoyment of
the income, revenue and profits therefrom.

     So long as any part of the Secured Obligations remains outstanding, the
Grantor covenants and agrees as follows:

     1.   TAXES AND ASSESSMENTS. The Grantor will pay, promptly when due, all
taxes, assessments and public charges upon the Property, except for those being
contested in good faith, by appropriate proceedings, and for which adequate
reserves have been established (in accordance with GAAP (as defined in the
Credit Agreement)), and immediately thereafter will

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forward to the Noteholder official receipts evidencing such payments; or in
the alternative and at the option of the Noteholder, exercisable at any time
upon the occurrence and during the continuance of an Event of Default, will
deposit with the Noteholder, at such time or times as the Noteholder directs,
such amounts as are necessary, in the sole and absolute discretion of the
Noteholder, to enable the Noteholder to make timely payment of such taxes,
assessments and charges. Such amounts so deposited shall bear no interest and
may be commingled with other funds held by the Noteholder. If, at any time, the
Noteholder determines in its sole and absolute discretion that a deficiency
exists between the amounts deposited and the actual amount required to be paid
with respect to taxes, assessments and charges, then the Grantor shall
immediately pay such deficiency upon notification thereof by the Noteholder. The
Grantor does hereby grant to the Noteholder a security interest in the funds it
receives under this paragraph 1 to secure the payment of the Secured
Obligations.

     2.   INSURANCE; DAMAGE TO PROPERTY.

          a.   The Grantor will continuously insure the Property with a
responsible company or companies reasonably satisfactory to the Noteholder
against fire (with extended coverage) in the full insurable value of the
Property, and against such other casualties and in such amounts as required by
the Noteholder pursuant to the Credit Agreement. The insurance policy (or
policies) will have attached thereto a standard mortgagee clause, without
contribution, in favor of the Noteholder, as its interest may appear, and will
otherwise be in form reasonably acceptable to the Noteholder, and the Grantor
will cause such policy (or policies) to provide that it (they) may not be
canceled without thirty (30) days' prior written notice to the Noteholder. The
Grantor will deliver to the Noteholder certificates evidencing that the
Noteholder has been named as loss payee and additional insured on all such
insurance, and certificates of insurance at least fifteen (15) days prior to the
renewal of such insurance policy (or policies). The Noteholder shall have the
right, exercisable at any time upon the occurrence and during the continuance of
an Event of Default, to require the Grantor to deposit with the Noteholder, at
such time or times as the Noteholder directs, such amounts as are necessary, in
the sole and absolute discretion of the Noteholder, to enable the Noteholder to
make timely payment of the premiums on such policy or policies. Such amounts so
deposited shall bear no interest and may be commingled with other funds held by
the Noteholder. If, at any time, the Noteholder determines in its sole and
absolute discretion that a deficiency exists between the amounts deposited and
the actual amount required to be paid with respect to such premiums, then the
Grantor shall immediately pay such deficiency upon notification thereof by the
Noteholder. The Grantor does hereby grant to the Noteholder for the benefit of
the Noteholder a security interest in the funds it receives under this paragraph
2 to secure the payment of the Secured Obligations. As to such insurance, upon
the occurrence and during the continuance of an Event of Default, the Noteholder
may, after ten (10) days' written notice mailed to the Grantor at its last known
address, change any or all of the coverages, terms, amounts or insurers, cause
any policy to name the Noteholder as insured as its interest may appear,
surrender existing policies for cancellation, obtain any cancellation, obtain
any additional insurance it so desires, pay any required premiums and receive
premium refunds, and in any such event any premium adjustments shall be charged
against or credited to the Secured Obligations. In the event any claim for loss
covered by such insurance is not settled within one hundred twenty (120) days
after the occurrence of such loss, the Noteholder may negotiate with any
insurance companies involved and make a reasonable settlement of such claim, and
the Noteholder and such insurance companies, upon such settlement

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being made, shall not be liable in any manner to the Grantor with respect to
such claim and settlement.

          b.   The Grantor shall promptly notify the Noteholder of any damage to
or destruction of the Property or any part thereof having an aggregate fair
market value in excess of $250,000. In case of any damage to or destruction of
the Property or any part thereof, the Grantor, whether or not the insurance
proceeds, if any, received on account of such damage or destruction shall be
sufficient for the purpose, at the Grantor's expense, will promptly commence and
complete the restoration, replacement or rebuilding of the Property as nearly as
possible to its value, condition and character immediately prior to such damage
or destruction. Insurance proceeds received by the Noteholder in the aggregate
amount of less than $1,000,000 in any fiscal year of the Grantor under any
policy or policies covering the Property or any part thereof shall be remitted
to the Grantor, provided that (i) no Default (as defined in the Credit
Agreement) or Event of Default then exists and (ii) the Grantor restores that
portion of the Property so damaged or destroyed within 360 days of the
occurrence of such damage or destruction. Insurance proceeds received by the
Noteholder in the aggregate amount of more than $1,000,000 in any fiscal year of
the Grantor under any policy or policies of insurance covering the Property or
any part thereof shall first be applied toward the payment of the amount owing
on the Secured Obligations in such order of application as the Noteholder may
elect whether or not the same may then be due or be otherwise adequately
secured; provided, however, that such proceeds shall be made available for the
restoration of the portion of the Property damaged or destroyed if written
application for such use is made within thirty (30) calendar days of receipt of
such proceeds and the following conditions are satisfied: (i) the Grantor has in
effect business interruption insurance in the amounts required by the Credit
Agreement; (ii) no Default or Event of Default exists (and if an Event of
Default shall occur during restoration the Noteholder may, at its election,
apply any insurance proceeds then remaining in its hands to the reduction of the
Secured Obligations); (iii) the Grantor shall have submitted to the Noteholder
plans and specifications for the restoration which shall be reasonably
satisfactory to it; (iv) the Grantor shall submit to the Noteholder fixed price
contracts with good and responsible contractors and materialmen covering all
work and materials necessary to complete restoration and providing for a total
completion price not in excess of the amount of insurance proceeds available for
restoration, or, if a deficiency shall exist, the Grantor shall have deposited
the amount of such deficiency with the Noteholder; and (v) the Grantor shall
have provided to the Noteholder a written release from each insurer under such
policies of insurance to the effect that all such proceeds are paid without any
reservation of rights and that such insurer has no cause of action, right of
set-off or other claim against the Grantor or the insured under such policies.
Any insurance proceeds to be released pursuant to the foregoing provisions may
at the option of the Noteholder be disbursed from time to time as restoration
progresses to pay for restoration work completed and in place and such
disbursements may at the Noteholder's option be made directly to the Grantor or
to or through any contractor or materialman to whom payment is due or to or
through a construction escrow to be maintained by a title insurer acceptable to
the Noteholder. The Noteholder may impose such further conditions upon the
release of insurance proceeds (including the receipt of title insurance) as are
customarily imposed by prudent construction lenders to insure the completion of
the restoration work free and clear of all liens or claims for liens. All title
insurance charges and other costs and expenses paid to or for the account of the
Grantor in connection with the release of such insurance proceeds shall
constitute so much additional indebtedness hereby secured to be payable upon
demand with interest at the rate

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applicable to Real Estate Term Loans 1, 2, 3 & 4 at the time such costs or
expenses are incurred. The Noteholder may deduct any such costs and expenses
from insurance proceeds at any time standing in its hands. If the Grantor fails
to request that insurance proceeds be applied to the restoration of the Property
or if the Grantor makes such a request but fails to complete restoration within
twelve (12) months of the occurrence of the damage or destruction of the
Property giving rise to payment of such insurance proceeds, the Noteholder shall
have the right, but not the duty, to release the proceeds thereof for use in
restoring the Property or any part thereof for or on behalf of the Grantor in
lieu of applying said proceeds to the Secured Obligations and for such purpose
may do all acts necessary to complete such restoration, including advancing
additional funds, and any additional funds so advanced shall constitute part of
the indebtedness hereby secured and shall be payable on demand with interest at
the Default Rate applicable to Real Estate Term Loans 1, 2, 3 & 4.
Notwithstanding the foregoing, if, despite the exercise of reasonable diligence,
the Grantor is unable to complete the restoration of the Property within twelve
(12) months of the occurrence of the damage or destruction of the Property
giving rise to the payment of insurance proceeds, the Grantor shall have not
more than three (3) additional months (the "Extended Restoration Period") to
complete such restoration, provided that (i) no Default or Event of Default
shall have occurred and be continuing at the commencement of or at any time
during the Extended Restoration Period and (ii) the Noteholder remains satisfied
during the Extended Restoration Period that the Grantor is pursuing such
completion with reasonable diligence at all times.

     3.   PRESERVATION AND MAINTENANCE OF PROPERTY. Except as otherwise may be
permitted in the Credit Agreement, the Grantor will keep the Property (including
any private roads on or over which the Grantor has any easement or right
appurtenant to the Property) in good order and repair, including the making of
such replacements as may be necessary for that purpose, and the Grantor will
promptly restore any part of the Property which may be damaged by fire or other
casualty as required by paragraph 2 hereof.

     4.   WASTE. The Grantor will not permit, suffer or commit any material
waste, impairment or deterioration of, nor allow any material nuisance to exist
upon, the Property or any part thereof.

     5.   ASSURANCES OF TITLE. The Grantor will execute, or cause to be
executed, such further assurances of title to the Property, and will take, and
cause to be taken, such steps, including legal proceedings, as may at any time
be reasonably necessary to perfect the title to the Property in the Trustee.

     6.   CONTRACTS. The Grantor will keep and maintain at its principal place
of business copies of all written contracts, leases and other instruments which
affect the Property. Such contracts, leases and other instruments shall be
subject to examination and inspection by the Noteholder at any reasonable time
and from time to time, and, if no Event of Default has occurred, upon reasonable
prior notice.

     7.   LIENS AND ENCUMBRANCES. The Grantor will not, without the prior
written consent of the Noteholder, permit or suffer to exist any lien or
encumbrance on the Property, or interest therein (legal or equitable), or any
part thereof, either inferior or superior in right to the lien of this Deed of
Trust, other than Permitted Exceptions.

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     8.   WAIVER OF EXEMPTIONS. The Grantor will not set up or claim the benefit
of any homestead or other exemption of law, or any other law or rule of law
intended for its advantage or protection as an obligor under any note evidencing
the Secured Obligations (collectively, the "Notes"), under the ISDA Master
Agreement or under this Deed of Trust or providing for its release or discharge
from any liability under the Notes, the ISDA Master Agreement or this Deed of
Trust on account of any facts or circumstances other than full and complete
payment of all amounts due under the Notes, the ISDA Master Agreement and this
Deed of Trust, all of such exemptions and benefits being hereby expressly
waived.

     9.   EMINENT DOMAIN. The Grantor covenants and agrees to give prompt
written notice to the Noteholder by certified mail, postage prepaid, return
receipt requested, of any taking or condemnation, or any threatened or pending
proceedings for the taking or condemnation, of any part of the Property under
any power of eminent domain; and in the event that title to, or possession of,
the Property or any portion thereof, is taken or condemned under any power of
eminent domain, then the Grantor will (and hereby does) assign to the
Noteholder, and will forthwith upon receipt pay to the Noteholder, the proceeds
and consideration resulting from taking or condemnation, not to exceed the
unpaid balance of the Secured Obligations, such proceeds so paid to be applied
to the Secured Obligations.

     10.  TRANSFER OF PROPERTY. The Grantor will not, without the prior written
consent of the Noteholder, lease, bargain, sell, transfer, assign or convey the
Property, or any portion thereof, or any legal or equitable interest therein.

NOTICE -- THE DEBT SECURED HEREBY IS SUBJECT TO CALL IN FULL OR THE TERMS
THEREOF BEING MODIFIED IN THE EVENT OF SALE OR CONVEYANCE OF THE PROPERTY
CONVEYED.

     11.  USE OF PROPERTY. The Grantor will not, without the prior written
consent of the Noteholder, (a) change, or permit any material changes in, the
general use for which all or any part of the Property was intended at the time
of the execution of this Deed of Trust, or (b) initiate or acquiesce in a change
in the zoning classification of the Property.

     12.  ENTRY; PROTECTION OF THE NOTEHOLDER'S SECURITY. The Grantor does
hereby grant to the Noteholder, the Trustee and their designees the right to
enter, examine and inspect the Property, and to do such other things as are
permitted under this Deed of Trust, at any reasonable time and from time to
time, and if no Event of Default has occurred, upon reasonable prior notice. In
the event (a) the Grantor fails to perform any of its covenants or agreements
herein contained, or (b) any action or proceeding is commenced or threatened
which affects the Property or title thereto or the interest of the Trustee or
the Noteholder therein, including, without limitation, eminent domain,
insolvency, arrangements or proceedings involving a bankrupt or decedent, then,
in any of such events, the Noteholder may, at its option, make such appearances,
disburse such amount and take such action as the Noteholder deems necessary, in
its reasonable discretion, to protect its interest, including, without
limitation, (i) the employment of attorneys and disbursement of attorneys' fees,
(ii) the entry upon the Property to make repairs, (iii) the procurement of
insurance as provided in paragraph 2 hereof, and (iv) if the Property is subject
to another deed of trust or lien, whether inferior or superior hereto, the
curing of any default in the performance of any of the terms and provisions
thereof, or if the indebtedness thereby secured is

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accelerated, the purchase or payment in full of such indebtedness, all on such
terms as the Noteholder shall, in its sole and absolute discretion, deem
necessary or advisable. Any amounts disbursed by the Noteholder pursuant to the
provisions of this paragraph 12 shall be added to, and deemed a part of, the
Secured Obligations, shall be secured in the same manner as the Notes and the
other Real Estate Term Loan Obligations are secured, shall bear interest from
the date of the disbursement thereof at a fluctuating rate of interest equal to
the Default Rate (as defined in the Credit Agreement) applicable to Real Estate
Term Loans 1, 2, 3 & 4, and shall, together with the interest thereon, be
repayable by the Grantor on demand.

     13.  ESTOPPEL CERTIFICATE. The Grantor will, within ten (10) days of being
requested in writing by the Noteholder so to do, furnish a written statement to
the Noteholder, duly acknowledged, setting forth in detail the Secured
Obligations and any right of setoff, counterclaim or other defense which exists
against the payment or performance thereof.

     14.  ENVIRONMENTAL PROTECTION. The Grantor covenants and agrees as follows:

          a.   The Grantor warrants and represents that it has investigated or
caused to be investigated the previous ownership and uses of the Property, in a
manner consistent with good commercial practices, to determine whether
activities have been conducted which might involve the use, manufacturing,
storage or disposal of Hazardous Substances (as defined in the Credit
Agreement), and this investigation has revealed no fact which would indicate
that the Property has been involved in the use, manufacturing, storage or
disposal of Hazardous Substances other than in accordance with all applicable
Environmental Laws (as defined in the Credit Agreement). This investigation has
taken into account, among other factors, (i) the relationship of the purchase
price to the value of the Property if uncontaminated when originally purchased
by the Grantor, (ii) commonly known or reasonably ascertainable information
about the Property, and (iii) the obviousness of the presence or likely presence
of contamination at the Property.

          b.   The Grantor warrants and represents to the best of its knowledge
after due investigation that it has disclosed to the Noteholder all pending or
threatened litigation and all orders, rulings, notices, permits or
investigations regarding Hazardous Substances on the Property.

          c.   The Grantor and any other parties, including, but not limited to,
tenants, licensees and occupants, will not be involved in any activity at or
near the Property, which activity is likely to involve or lead to (i) the use,
manufacture, storage or disposal of Hazardous Substances except in accordance
with all applicable Environmental Laws and all other laws, ordinances and
regulations, or (ii) the imposition of liability on the Grantor or any other
subsequent or former owner of the Property or the creation of a lien on the
Property under any Environmental Laws.

          d.   The Grantor will comply in all material respects with the
requirements of all Environmental Laws and shall promptly notify the Noteholder
in the event of the discovery of Hazardous Substances at the Property which are
not in compliance with applicable Environmental Laws. Further, the Grantor will
promptly forward to the Noteholder copies of all orders, notices, permits,
applications and other communications and reports in connection with any
discharge, spillage, use or discovery of Hazardous Substances on the Property
which constitutes or is alleged to constitute a violation of any Environmental
Law. Grantor will not permit any other party,

                                        9

<PAGE>

including, but not limited to, tenants, licensees and occupants to conduct any
such discharge, spillage or use of any Hazardous Substances except in compliance
with all applicable Environmental Laws and shall take immediate action to stop
any such activity and to correct any violations resulting therefrom.

          e.   The Grantor agrees that if at any time the Noteholder has
reasonable cause to believe there are Hazardous Substances upon the Property
that are being used, stored, manufactured or disposed of other than in
accordance with all applicable Environmental Laws, the Noteholder may with prior
notice to Grantor obtain, at Grantor's cost, an environmental site assessment or
environmental audit report of reasonable scope under the circumstances from a
firm acceptable to the Noteholder, to assess with a reasonable degree of
certainty (i) the presence of any such Hazardous Substances and (ii) the cost in
connection with the abatement, cleanup or removal of such.

          f.   The Grantor agrees that in the event of the presence of any
Hazardous Substances upon the Property which is not in compliance with all
applicable Environmental Laws, whether or not the same originates or emanates
from the Property, or if Grantor shall fail to comply with all requirements of
all applicable Environmental Laws, the Noteholder may at its election, but
without the obligation to do so, (i) give such notices as are required by
applicable Environmental Laws, (ii) cause such work to be performed at the
Property or (iii) take any and all other actions as the Noteholder shall deem
necessary or advisable in order to abate, remove and clean up the Hazardous
Substances or otherwise cure the Grantor's noncompliance.

          g.   The Grantor shall be liable for all reasonable costs and expenses
incurred by or asserted against the Noteholder arising under this paragraph even
if said costs and expenses exceed the amount of the loans secured by this Deed
of Trust.

          h.   Any amounts disbursed by the Noteholder pursuant to the
provisions of this paragraph 14 shall be added to, and deemed a part of, the
Secured Obligations, shall be secured in the same manner as the Notes and the
other Real Estate Term Loan Obligations are secured, shall bear interest from
the date of the disbursement thereof at a fluctuating rate of interest equal to
the Default Rate (as defined in the Credit Agreement) applicable to Real Estate
Term Loans 1, 2, 3 & 4, and shall, together with the interest thereon, be
repayable by the Grantor on demand.

     15.  COMPLIANCE WITH LAWS. Except as otherwise may be permitted in the
Credit Agreement, the Grantor shall comply with all applicable laws, ordinances,
rules, regulations and judicial or administrative orders (collectively, "Laws")
now in force or hereafter enacted or promulgated relating to the construction,
maintenance, operation and use of the Property, or any part thereof, including,
but not limited to, Environmental Laws. Without limiting the generality of the
foregoing, the Grantor shall apply for, obtain, keep in force and comply with
all governmental permits, licenses and approvals (collectively, "Permits") now
or hereafter at any time required in connection with the construction,
maintenance, operation and use of the Property, or any part thereof, except
where the failure to apply for, obtain, keep in force and comply with all
Permits could not reasonably be expected to have a Material Adverse Effect (as
defined in the Credit Agreement). The Grantor represents and warrants that, as
of the date hereof, its activities and the Property are in compliance with all
Laws in all material respects and that all Permits are in full force and effect
in all material respects. To the extent required under the Credit Agreement, the
Grantor

                                       10

<PAGE>

covenants and agrees to give prompt written notice to the Noteholder by
certified mail, postage prepaid, return receipt requested, of any present or
future pending or threatened litigation and any orders, rulings, notices,
permits or investigations with respect to Laws and/or Permits if such
litigation, orders, rulings, notices, permits or investigations with respect to
the Property.

     16.  EVENTS OF DEFAULT AND FORECLOSURE. If any one or more of the following
events (herein sometimes referred to as "Events of Default") shall occur:

          a.   An Event of Default as defined in the Credit Agreement or any
renewal, extension or modification thereof or any substitution or replacement
therefor; or

          b.   Default under any other lien or encumbrance placed on the
Property, or any interest therein (legal or equitable), or any part thereof,
either inferior or superior in right to the lien of this Deed of Trust, and such
default shall continue beyond any applicable grace period; or

          c.   The termination of, or occurrence of any event affecting, the
validity of this Deed of Trust or the priority of this Deed of Trust as to all
outstanding or future advances intended to be secured hereby; or

          d.   The passage after the date of this Deed of Trust of any law of
the Commonwealth of Virginia deducting from the value of the land, for the
purposes of taxation, any lien thereon, or providing for, or changing in any way
the laws relating to, the taxation of deeds of trust or the notes or debts
secured by deeds of trust for state or local purposes, or the manner of the
collection of any such taxes, so as to impair the lien of this Deed of Trust or
the security afforded hereunder, unless the Grantor is permitted by law to pay
the whole of such tax imposed upon this Deed of Trust and/or the Secured
Obligations (in addition to all other payments required hereunder) and the
Grantor pays such tax and agrees to pay and thereafter pay such tax whenever
levied; or

          e.   The passage of any law or the decision of any court rendering or
declaring any material covenant or agreement set out in any Note, the ISDA
Master Agreement, any agreement evidencing or securing any of the other Real
Estate Term Loan Obligations, or in this Deed of Trust to be legally
unenforceable, inoperative, void or voidable;

then, in any of such events, the Trustee and the Noteholder shall, in addition
to any other rights and remedies provided in the Credit Agreement, or by law or
in equity, have the following rights and remedies, any one or more of which
shall be exercisable from time to time at the Noteholder's option and without
notice to the Grantor:

               (i)   The Noteholder may declare the Notes, or any of them, and
     all of the other Secured Obligations immediately due and payable, without
     demand;

               (ii)  The Noteholder may dispossess the Grantor of the Property
     and exercise any right or remedy provided in this Deed of Trust with
     respect to taking possession of the Property and collecting the rents
     relating thereto;

               (iii) The Noteholder may apply for and obtain the appointment of
     a receiver for the Property, with the power to collect the rents, issues
     and profits therefrom, without regard to the value of the Property or of
     the solvency of any person or persons liable

                                       11

<PAGE>

     for the payment of the Secured Obligations, and the Grantor does hereby
     waive any and all defenses to the application for appointment of such
     receiver and consent to the appointment of such receiver without notice,
     but reserves the right to apply for vacation of any order of appointment of
     such receiver, or for any other appropriate relief, upon showing that none
     of the foregoing events of default occurred prior to application for the
     appointment of such receiver or during the pendency of such application in
     court; and

               (iv)  The Trustee may foreclose by a sale of the Property as
     follows:

                     (A)  The Trustee may take possession of the Property and
          proceed to sell the same at auction at the premises or at such other
          place in the city or county in which the Property or the greater part
          thereof lies, or in the corporate limits of any city surrounded by or
          contiguous to such county, or in the case of annexed land, in the
          county of which the land was formerly a part, as the Trustee may
          select upon such terms and conditions as the Trustee may deem best,
          after first advertising the time, place and terms of sale in at least
          three (3) consecutive issues (which may be on consecutive days), in
          advance of the date of such sale, of a newspaper published or having
          general circulation in the county or city in which the Property or
          some portion thereof is located.

                     (B)  The power of sale above granted may be exercised at
          different times as to different portions of the Property, and if for
          any reason any executory contract of sale shall not be performed, then
          new contracts may be made with respect to the same portion of the
          Property (with or without other portions). If the Trustee deems it
          best for any reason to postpone or continue the sale at any time or
          from time to time, they may do so.

                     (C)  Full power and authority is hereby expressly granted
          and conferred upon the Trustee to make, execute, and deliver all
          necessary deeds of conveyance for the purpose of vesting in the
          purchaser or purchasers complete and entire legal and equitable title
          to the Property, or the portion thereof so sold, and the recitals
          therein shall be received in all courts of law and equity as prima
          facie evidence of the matters therein stated; and at such sale the
          Noteholder may become a purchaser, and no purchaser shall be required
          to see to the proper application of the purchase money.

                     (D)  The proceeds of such sale shall be applied, first, to
          discharge the expenses of executing their Deed of Trust, including a
          commission to the Trustee of three percent (3%) of the gross proceeds
          of sale; next, to discharge all taxes, levies, and assessments on the
          Property, with costs and interest, including a proper proration
          thereof for the current year; next, to reimburse the Trustee and the
          Noteholder for all amounts expended by them or any of them pursuant to
          the provisions of this Deed of Trust, with interest thereon; next, to
          pay the accrued interest on the unpaid principal balance due under the
          Notes and under the other Secured Obligations; next, to pay such
          unpaid principal balance of the Notes and the other Secured
          Obligations; next to pay any remaining Secured Obligations; next, to
          pay any indebtedness secured by any lien of record inferior to the
          lien of this Deed

                                       12

<PAGE>

          of Trust; and any residue of such proceeds shall be paid to the
          Grantor provided, however, that the Trustee as to such residue shall
          not be bound by any inheritance, devise, conveyance, assignment or
          lien of or upon the Grantor's equity, without actual notice thereof
          prior to distribution.

     17.  [Reserved.]

     18.  NONWAIVER. No delay, act or failure to act, by the Trustee and the
Noteholder, or any of them, however long continued, shall be construed as a
waiver of any of their rights hereunder or of any default by the Grantor.

     19.  NO LIABILITY OR OBLIGATION ON THE TRUSTEE OR THE NOTEHOLDER. Nothing
in this Deed of Trust shall be construed to impose any obligation upon the
Noteholder or the Trustee to expend any money or to take any other discretionary
act herein permitted, and neither the Noteholder nor the Trustee shall have any
liability or obligation for any delay or failure to take any discretionary act.
The Trustee shall not be required to see that this Deed of Trust is recorded and
shall not be liable for the default or misconduct of the Noteholder or any agent
or attorney appointed by them in pursuance hereof, or for anything whatever in
connection with this Deed of Trust, except willful misconduct or gross
negligence. The Trustee may act upon any instrument or paper believed by it in
good faith to be genuine and to be signed by the proper party or parties, and
shall be fully protected for any action taken or suffered by them in reliance
thereon.

     20.  RELEASE UPON FULL PAYMENT. Upon full payment of all sums due under the
Notes, the ISDA Master Agreement, this Deed of Trust and the other Secured
Obligations, the Trustee shall, upon the request of, and at the cost of, the
Grantor, execute a proper release of this Deed of Trust.

     21.  SUBSTITUTION OF THE TRUSTEE. Notwithstanding anything herein contained
to the contrary, if the Trustee fails, refuses, or becomes unable to act, or if
for any reason the Noteholder, in its sole and absolute discretion, deems it
advisable, the Noteholder is hereby authorized and empowered to appoint, by an
instrument recorded wherever this Deed of Trust is recorded, one or more other
Trustees, in the place and stead of the Trustee named herein, which substitute
Trustee or Trustees shall have all rights, powers, and authority and be charged
with all the duties that are conferred or charged upon the Trustee named herein;
and if more than one Trustee is so named, any one or more of such Trustees may
act hereunder without the joinder of any other Trustee or Trustees and any act
taken hereunder by any one or more Trustees shall be as effective as if taken by
all Trustees.

     22.  ADVANCES AND FUTURE ADVANCES. It is understood and agreed that the
Noteholder reserves the right, but shall have no obligation, to make additional
advances of proceeds in connection with the Real Estate Term Loan Obligations
from time to time, including the advance of the proceeds of Real Estate Term
Loan 4 (as defined in the Credit Agreement) and the readvance of any sums
previously repaid on the Notes.

     23.  INDEMNIFICATION BY THE GRANTOR. The Grantor shall protect and
indemnify the Trustee and the Noteholder from and against all liabilities,
obligations, claims,

                                       13

<PAGE>

damages, penalties, causes of action, costs and expenses (including, without
limitation, reasonable attorneys' fees and disbursements), imposed upon or
incurred by or asserted against the Trustee, the Noteholder or the directors,
officers or employees of the Noteholder by reason of (a) ownership of the
Property or any interest therein, or receipt of any rent or other sum therefrom,
(b) any accident to, injury to or death of persons or loss of or damage to
property occurring on or about the Property or the adjoining sidewalks, curbs,
vaults or vault space, if any, streets or ways, (c) any use, nonuse or condition
of the Property or the adjoining sidewalks, curbs, vaults or vault space, if
any, streets or ways, (d) any failure on the part of the Grantor to perform or
comply with any of the terms, covenants, conditions and agreements set forth in
this Deed of Trust, any of the Notes, the ISDA Master Agreement, or any other
agreements executed by the Grantor or any other persons liable for the payment
of the Secured Obligations, (e) performance of any labor or services or the
furnishing of any materials or other property in respect of the Property or any
part thereof for construction or maintenance or otherwise, (f) any action
brought against the Trustee or the Noteholder, or any of them, attacking the
validity, priority or enforceability of this Deed of Trust, any Note, the ISDA
Master Agreement, or any other agreements executed by the Grantor or any other
persons liable for the payment of the Secured Obligations, and/or (g) the
presence of Hazardous Substances on the Property; provided, however, that the
Grantor shall not be obligated to indemnify the Trustee or the Noteholder from
any loss, damage, cost or expense directly attributable to their or any of their
gross negligence or willful misconduct. Any amounts payable to the Trustee or
the Noteholder under this paragraph 23 which are not paid within ten (10) days
after written demand therefor by the Trustee or the Noteholder shall be added
to, and deemed a part of, the Secured Obligations, shall be secured in the same
manner as the Notes and the other Real Estate Term Loan Obligations are secured,
shall bear interest from the date of the disbursement thereof at a fluctuating
rate of interest equal to the Default Rate (as defined in the Credit Agreement)
applicable to Real Estate Term Loans 1, 2, 3 & 4, and shall, together with the
interest thereon, be repayable by the Grantor on demand. In the event any
action, suit or proceeding is brought against the Trustee, the Noteholder or the
directors, officers, agents of employees of the Noteholder by reason of any such
occurrence, the Grantor, upon the request of the Trustee or the Noteholder and
at the Grantor's expense, shall resist and defend such action, suit or
proceeding or cause the same to be resisted and defended by counsel designated
by the Grantor and approved by the Trustee and/or the Noteholder. Such
obligations under this paragraph 23 shall survive the termination, satisfaction
or release of this Deed of Trust.

     24.  RELEASE. The Grantor agrees that the Noteholder, without notice to or
further consent of the Grantor, may release or discharge any maker of any Note,
or any other persons who are or may become liable for the Secured Obligations or
release or discharge any other collateral for the Secured Obligations, and that
any such release or discharge shall not alter, modify, release or limit the
liability of the Grantor hereunder or the validity and enforceability of this
Deed of Trust.

     25.  HEADINGS. The headings of the paragraphs of this Deed of Trust are for
the convenience of reference only and are not to be considered a part hereof and
shall not limit or otherwise affect any of the terms hereof.

     26.  NUMBER AND GENDER. The pronouns and verbs set forth herein shall be
construed as being of such number and gender as the context may require.

     27.  SUCCESSORS AND ASSIGNS. This Deed of Trust shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective heirs,
personal representatives,

                                       14

<PAGE>

successors and assigns, and any descriptive term used herein shall include such
heirs, personal representatives, successors and assigns.

     28.  PERSONS. The use of the word "persons" in this Deed of Trust includes
individuals, corporations, partnerships, and all other entities.

     IN WITNESS WHEREOF the Grantor has caused this Credit Line Deed of Trust to
be executed in its name and on its behalf by its duly authorized officers
pursuant to due authorization.

                                         TREX COMPANY, LLC

                                         By: /s/ Anthony J. Cavanna
                                            ____________________________________
                                         Name: Anthony J. Cavanna
                                         Title: Executive Vice President and
                                                  Chief Financial Officer

COMMONWEALTH OF VIRGINIA

CITY OF RICHMOND, to-wit:

     The foregoing instrument was duly acknowledged before me in my jurisdiction
aforesaid this 19th day of June, 2002, by Anthony J. Cavanna who is Executive
Vice President and Chief Financial Officer of TREX Company, LLC, a Delaware
limited liability company, on behalf of the company.

[AFFIX NOTARIAL SEAL]

                                                    /s/ Trudi Brown
                                              ________________________________
                                                      (Notary Public)

My commission expires:  May 31, 2003
                       ___________________________

                                       15<PAGE>

                                                                    EXHIBIT 10.1

                 SEPARATION AGREEMENT AND MUTUAL LIMITED RELEASE

         THIS SEPARATION AGREEMENT AND MUTUAL LIMITED RELEASE (hereinafter
referred to as this "Agreement") is made and entered into by and between Paul
Rampel (hereinafter referred to as "Employee") and LEVEL 8 SYSTEMS, INC.
(hereinafter referred to as the "Company").

STATEMENT OF TERMS

         Employee and the Company have agreed that as of the Effective Date,
Employee's employment with the Company, including his position as President of
the Company, will end; provided, however, that Employee shall remain a member of
the Company's Board of Directors in accordance with the Bylaws of the Company
and further provided that the Company shall use its reasonable best efforts to
remove employee as an officer and director in any foreign subsidiaries of the
Company as soon as reasonably practicable. Subject to withholding for applicable
payroll taxes for such payments and for payments pursuant to Paragraph 4, if
necessary, the Company, on the Effective Date, shall pay to Employee salary and
benefits through such date. Employee and Company desire to accept this
Agreement, including, without limitation, additional consideration in return for
the limited release and other agreements set forth below. In addition, Employee
and the Company want to settle fully and finally certain differences and
disputes between them, including, but in no way limited to, any differences and
disputes that might arise, or have arisen, out of Employee's employment with and
separation from the Company.

         In consideration of the premises and mutual promises herein contained,
it is agreed as follows:

1.       NON-ADMISSION OF LIABILITY OR WRONGFUL CONDUCT

         a. This Agreement shall not in any way be construed as an admission by
the Company that it has acted wrongfully with respect to Employee or any other
person, or that Employee has any rights whatsoever against the Company. The
Company specifically disclaims any liability to or wrongful acts against
Employee or any other person, on the part of itself, its employees, its members
or its agents.

         b. This Agreement shall not in any way be construed as an admission by
the Employee that he has acted wrongfully with respect to the Company or any
other person, or that the Company has any rights whatsoever against the
Employee. Employee specifically disclaims any liability to or wrongful acts
against the Company or any other person.

2.       EFFECTIVE DATE

         The Effective Date of this Agreement shall be the eighth (8th) day
after the date on which Employee signs this Agreement.

<PAGE>

3.       NO CLAIMS

         Employee and the Company represent that they have not filed, nor
assigned to others the right to file, nor are there pending to their knowledge,
any administrative complaints or lawsuits against the other with any federal,
state or local governmental agency or any court. Employee and the Company
represent that as of the Effective Date of this Agreement, they have no
knowledge of any claim, or any basis for a claim, against the other, arising
prior to Employee's employment with the Company.

4.       CONSIDERATION

         In full consideration and as material inducement for Employee to
execute this Agreement the Company will:

         a.       As of the Effective Date, forgive the remaining $32,500 of
                  indebtedness remaining under that certain promissory note
                  dated January 27, 2001, made by Employee in favor of the
                  Company. Employee's tax liability on the forgiveness of
                  indebtedness shall be withheld from payments made pursuant to
                  (b) and (d) below.

         b.       As of the Effective Date, pay Employee $7,044.23 for unused,
                  accrued vacation days less applicable withholdings.

         c.       Immediately upon execution of this Agreement, vest all
                  Employees' outstanding but currently unvested stock options
                  held under the 1997 Level 8 Systems, Inc. Stock Option Plan.
                  Employee shall have twelve (12) months from the Effective Date
                  of this Agreement to exercise 204,300 stock options at the
                  original exercise price of $1.74. The shares of common stock
                  issuable upon exercise of such options will be registered for
                  resale under Form S-8 and pursuant to the Securities Act of
                  1933, as amended (the "Securities Act") and the issuance of
                  such shares by the Company to employee will be exempt (and the
                  options were exempt) from the provisions of Section 16(b) of
                  the Securities Exchange Act of 1934, as amended (the "Exchange
                  Act"), under Rule 16b-3 promulgated under the Exchange Act by
                  the U.S. Securities and Exchange Commission (the "SEC").
                  Employee's additional 310,000 stock options at exercise prices
                  of $5.87 and $6.10 shall be forfeited to the Company at the
                  Effective Date of this Agreement.

         d.       Within fourteen (14) days of the Effective Date, issue to
                  Employee 100,000 shares of the Company's common stock, $.001
                  par value per share, less applicable withholdings of shares.
                  Such shares shall be issued pursuant to the Company's 1995
                  Stock Option Plan and be, at the time of issuance, registered
                  for resale under Form S-8 and pursuant to the Securities Act.
                  The issuance of such shares by the Company to employee are
                  exempt from the provisions of Section 16(b) of the Exchange
                  Act, under Rule 16b-3 promulgated under the Exchange Act by
                  the SEC.

                                       -2-

<PAGE>

         e.       The Company shall reimburse Employee, in accordance with the
                  Company's standard policies and procedures for reimbursement,
                  for Employee's business expenses incurred through the
                  Effective Date

5.       EMPLOYMENT AGREEMENT

         Employee understands and agrees that the covenants contained in
Sections 10 (Non-Disclosure of Proprietary Information), 11 (Non-Solicitation
Covenants), 12 (Existing Restrictive Covenants), 13 (Return of Proprietary
Information), and 14 (Proprietary Rights) of that certain Employment Agreement
dated January 1, 2002, by and between Employee and the Company (the "Employment
Agreement"), attached hereto as Exhibit A, shall survive the termination of
Employee's employment and Employment Agreement. Notwithstanding anything to the
contrary contained herein or in the Employment Agreement, to the extent that the
survival of the covenants contained in the Employment Agreement conflict or are
inconsistent with Employee's or any of Employee's affiliates' rights, interest
and title in and to the Assets (as defined in the Asset Purchase Agreement) or
Employee's ability to solicit clients/customers, vendors and employees
associated with the Assets, the provisions of this Paragraph 5 and the
Employment Agreement shall not apply.

6.       NON-DISPARAGEMENT; PRESS RELEASE

         The parties agree that they will not make or issue, or procure any
person, firm, or entity to make or issue, any statement in any form to any
person or entity if such statement is harmful to or disparaging of the other
party, or, in the case of the Company, its affiliates, any of their employees,
officers, directors, agents, or representatives, or, in the case of Employee,
Starquest Ventures, Inc., its affiliates, any of their employees, officers,
directors, agents, or representatives. The parties further expressly agree not
to permit, and to be liable for, any statements made by an executive officer of
the Company or its affiliates (in the case of the Company) or by an executive
officer of Starquest Ventures, Inc. or its affiliates (in the case of Employee)
in any form to any person or entity if such statement is harmful to or
disparaging of the other party. The parties agree to issue the press release
attached hereto as Exhibit B on the Effective Date or at such date thereafter as
agreed by the parties.

7.       MUTUAL LIMITED RELEASE

         a. As a material inducement to the Company and Employee to enter into
this Agreement, Employee hereby irrevocably and unconditionally releases,
acquits, forever discharges and covenants not to sue the Company and each of the
owners, stockholders, predecessors, successors, assigns, agents, directors,
officers, employees, representatives, attorneys, parent companies, divisions,
subsidiaries and affiliates of the Company (and agents, directors, officers,
employees, representatives and attorneys of such parent companies, divisions,
subsidiaries and affiliates), and all persons acting by, through, under or in
concert with any of them (collectively the "Company Releasees," and, excluding
the Company, the "Additional Releasees"), or any of them, from any and all
charges, complaints, claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits, rights, demands,
costs, losses, debts and expenses (including attorneys' fees and costs actually
incurred) of any

                                       -3-

<PAGE>

nature whatsoever, known or unknown, suspected or unsuspected, from the date of
Employee's initial employment with the Company through the Effective Date of
this Agreement, including, but not limited to, rights arising out of alleged
violations or breaches of any contracts, express or implied, or any tort or any
federal, state or other governmental statute, regulation, or ordinance,
including, without limitation: (1) Title VII of the Civil Rights Act of 1964, as
amended by the Civil Rights Act of 1991 (race, color, religion, sex, and
national origin discrimination); (2) the Employee Retirement Income Security Act
("ERISA"); (3) 42 U.S.C. (S) 1981 (discrimination); (4) the Americans with
Disabilities Act (disability discrimination); (5) the Age Discrimination in
Employment Act; (6) the Older Workers Benefit Protection Act; (7) the Equal Pay
Act; (8) Executive Order 11246 (race, color, religion, sex, and national origin
discrimination); (9) Executive Order 11141 (age discrimination); (10) Section
503 of the Rehabilitation Act of 1973 (disability discrimination); (11)
negligence; (12) negligent hiring and/or negligent retention; (13) intentional
or negligent infliction of emotional distress or outrage; (14) defamation; (15)
interference with employment; (16) wrongful discharge; (17) invasion of privacy;
or (18) violation of any other legal or contractual duty arising under the laws
of the State of North Carolina, the laws of the State of California, the laws of
any other state(s), or the laws of the United States, which Employee now has,
owns or holds, or claims to have, own or hold, or which Employee at any time
heretofore had, owned or held, or claimed to have, at any time up to and
including the Effective Date of this Agreement; provided, however, Employee does
not release and this Paragraph 7 does not apply to any rights of Employee (i)
under this Agreement, (ii) under the Asset Purchase Agreement by and among
Company, Level 8 Technologies, Inc. and Starquest Ventures, Inc. (the "Asset
Purchase Agreement"), (iii) or Employee's affiliate, Tobacco Road LLC, with
respect to that certain promissory note issued by the Company in favor of
Tobacco Road on December 16, 2001, (iv) to indemnification by the Company under
the Company's Certificate of Incoporation and Bylaws or applicable law, (v)
against any Additional Releasee if such Additional Releasee was not entitled to
indemnification from the Company, or (vi) to receive benefits under COBRA.

         b. As a material inducement to the Company and Employee to enter into
this Agreement, the Company hereby irrevocably and unconditionally releases,
acquits, forever discharges and covenants not to sue Employee and his heirs,
administrators, executors, personal representatives, attorneys, beneficiaries,
or assigns (collectively the "Employee Releasees") from any and all charges,
complaints, claims, liabilities, obligations, promises, agreements,
controversies, damages, actions, causes of action, suits, rights, demands,
costs, losses, debts and expenses (including attorneys' fees and costs actually
incurred) of any nature whatsoever, known or unknown, suspected or unsuspected,
from the date of Employee's initial employment with the Company through the
Effective Date of this Agreement, including, but not limited to, rights arising
out of alleged violations or breaches of any contracts, express or implied, or
any tort or any federal, state or other governmental statute, regulation, or
ordinance, including, without limitation: (1) negligence; (2) intentional or
negligent infliction of emotional distress or outrage; (3) defamation; (4)
invasion of privacy; or (5) violation of any other legal or contractual duty
arising under the laws of the State of North Carolina, the laws of the State of
California, the laws of any other state(s), or the laws of the United States,
which the Company now has, owns or holds, or claims to have, own or hold, or
which the Company at any time heretofore had, owned or held, or claimed to have,
at any time up to and including the Effective Date of this Agreement;

                                       -4-

<PAGE>

provided, however, Company does not release and this Paragraph 7 does not apply
to any rights of Company under (i) this Agreement or (ii) the Asset Purchase
Agreement.

         The Company will indemnify and hold harmless the Employee for, and will
pay and reimburse the Employee the amount of, any loss, liability, claim,
damage, expense (including costs of investigation and defense and reasonable
attorneys' expenses and fees) or diminution of value, whether or not involving a
third-party claim, arising, directly or indirectly, from or in connection with
Employee's continued service as an officer or director of any foreign subsidiary
of the Company. Any request for indemnification under this Agreement shall
follow the procedure set forth in Section 7.5 of the Asset Purchase Agreement.

8.       OLDER WORKERS BENEFIT PROTECTION ACT

         Employee represents that he has read all the terms of this Agreement
and has had an opportunity to discuss it with individuals of his own choice who
are not associated with the Company. Employee understands that, to the extent
described in Paragraph 7 above, this Agreement releases forever the Company, its
parent, subsidiaries and affiliated corporations and each of their respective
stockholders, officers, directors, employees, agents, heirs, legal
representatives, predecessors, successors, assigns and transferees from any
legal action arising from Employee's employment with and the termination of his
employment by the Company. Employee signs this Agreement of his own free will in
exchange for the consideration to be given to Employee pursuant to Paragraph 4
of this Agreement and the Company's release pursuant to Paragraph 7 of this
Agreement, which Employee acknowledges is adequate and satisfactory. Employee
agrees that neither the Company nor its agents, representatives, or employees
have made any representations to Employee concerning the terms or effect of this
Agreement, other than those contained in this Agreement.

         Employee hereby acknowledges and agrees that this Agreement and the
termination of his Employment and all actions taken in connection therewith are
in compliance with the Age Discrimination in Employment Act and the Older
Workers Benefit Protection Act and that the releases set forth in Paragraph 7
hereof shall be applicable, without limitation, to any claims brought under
these Acts. Employee further acknowledges and agrees that:

         a. The release given by Employee in this Agreement is given solely in
exchange for the consideration set forth in Paragraph 4 of this Agreement and
the Company's release set forth in Paragraph 7 of this Agreement and such
consideration is in addition to anything of value which Employee received prior
to entering into this Agreement;

         b. By  entering into this Agreement, Employee does not waive rights or
claims that may arise after the date this Agreement is executed;

         c. Employee has been advised to consult an attorney prior to entering
into this Agreement, and this provision of this Agreement satisfies the
requirement of the Older Workers Benefit Protection Act that he be so advised in
writing;

                                       -5-

<PAGE>

         d. Employee has been offered twenty-one (21) days from the date he
received this Agreement within which to consider this Agreement; and

         e. For a period of seven (7) days following execution of this
Agreement, Employee may revoke this Agreement and this Agreement shall not
become effective or enforceable until such seven (7) day period has expired.
However, Employee's entitlement to the payments specified in Paragraph 4 and the
Company's release in Paragraph 7 shall not become binding against the Company
until after the seven (7) day period has expired.

9.       NO OTHER REPRESENTATIONS

         a. Employee acknowledges that in executing this Agreement, he does not
rely and has not relied upon any representation or statement not set forth
herein made by any of the Company Releasees or by any of the Company Releasees'
agents, representatives, or attorneys with regard to the subject matter, basis
or effect of this Agreement or otherwise.

         b. The Company acknowledges that in executing this Agreement, it does
not rely and has not relied upon any representation or statement not set forth
herein made by any of the Employee Releasees or by any of the Employee
Releasees' agents, representatives, or attorneys with regard to the subject
matter, basis or effect of this Agreement or otherwise.

10.      SOLE AND ENTIRE AGREEMENT

         This Agreement, the Asset Purchase Agreement and the Employment
Agreement (with respect to the sections thereof referenced herein) including all
exhibits hereto, sets forth the entire agreement between the parties, and fully
supersedes any and all prior agreements or understandings between them,
pertaining to the subject matter hereof.

11.      GOVERNING LAW; DISPUTE RESOLUTION

         This Agreement shall be governed by and construed in accordance with
the laws of the State of California. In the event of a dispute that cannot be
resolved amicably between the parties, the dispute shall be resolved through
binding arbitration, conducted in Berkeley, California by a sole arbitrator in
accordance with the rules of the American Arbitration Association. The sole
arbitrator shall be appointed by agreement of the parties. In the event the
parties fail to agree upon the appointment of the sole arbitrator within thirty
(30) days after a notice of arbitration is given by either party to the other,
then the arbitrator shall be selected and appointed by the American Arbitration
Association. The arbitration award and/or determination shall be final and
binding and judgment may be entered thereon in any court of competent
jurisdiction. The prevailing party in arbitration shall be entitled to
reasonable attorney's fees.

12.      NO MITIGATION, REDUCTION, OR OFFSET

         Employee shall not be required to mitigate the amount of any severance
payment provided for in this Agreement by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for in this Agreement be
reduced by any compensation or income received.

                                       -6-

<PAGE>

13.      SEVERABILITY

         The provisions of this Agreement are severable, and if any part of it
is found to be unenforceable, the other paragraphs shall remain fully valid and
enforceable. It is the intent of the parties that this Agreement be enforced to
the maximum extent permitted by law.

14.      HEADINGS AND CAPTIONS

         The headings and captions used in this Agreement are for convenience of
reference only, and shall in no way define, limit, expand or otherwise affect
the meaning or construction of any provision of this Agreement.

15.      MODIFICATION

         No provision of this Agreement may be changed, altered, modified or
waived except in writing signed by Employee and an officer of the Company, which
writing shall specifically reference this Agreement and the provision which the
parties intend to waive or modify.

16.      AUTHORITY TO BIND THE COMPANY

         The Company represents and warrants that the person signing this
Agreement on its behalf has the power and authority to bind the Company hereto.

17.      FULL AND CAREFUL CONSIDERATION

         The parties represent and agree that they have read and fully
understand the contents and effect of this Agreement. Employee may take up to
twenty-one (21) days to decide whether he wants to accept and sign this
Agreement. Also, if Employee signs this Agreement, he will then have an
additional seven (7) days in which to revoke his acceptance of this Agreement.
This Agreement will not be effective or enforceable, nor will any consideration
be paid, until after the seven (7) day revocation period has expired. The
parties are free, and encouraged, to discuss the contents and advisability of
signing this Agreement with an attorney.

              [REMAINDER OF PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

                                       -7-

<PAGE>

PLEASE READ CAREFULLY, THIS AGREEMENT INCLUDES A MUTUAL LIMITED RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS.

Executed as of this 7th day of June 2002.

                                            ___________________________
                                            Paul Rampel

Executed as of this 7th day of June 2002.

                                            ___________________________
                                            for LEVEL 8 SYSTEMS
                                            John P. Broderick,
                                            Chief Financial Officer,
                                            Treasurer and Corporate Secretary

Effective Date of Agreement: June 14, 2002.

                                       -8-

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