First Amended Joint Reorganization Plan of Trend-Lines, Inc. and Official Committee of Unsecured Creditors

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Summary

This agreement is a reorganization plan filed in the U.S. Bankruptcy Court for the District of Massachusetts by Trend-Lines, Inc. and the Official Committee of Unsecured Creditors. It outlines how the company's assets will be managed, how claims from creditors will be classified and paid, and how the company will operate after bankruptcy. The plan details the treatment of various classes of claims, the issuance of new stock, and the cancellation of old equity interests, aiming to resolve outstanding debts and allow the company to continue operations under new terms.

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EX-2.2 4 b314391_x2-2.txt 1ST AMENDED JOINT REORGANIZATION PLAN UNITED STATES BANKRUPTCY COURT DISTRICT OF MASSACHUSETTS EASTERN DIVISION - - - - - - - - - - - - - - - - - - x In re: CHAPTER 11 TREND-LINES, INC., Case No. 00-15431-CJK A Massachusetts corporation Substantively Consolidated Estate Debtor. - - - - - - - - - - - - - - - - - - x - - - - - - - - - - - - - - - - - - x In re: POST TOOL, INC., Debtor. - - - - - - - - - - - - - - - - - - x FIRST AMENDED JOINT REORGANIZATION PLAN OF TREND-LINES, INC. AND THE OFFICIAL COMMITTEE OF UNSECURED CREDITORS
HANIFY & KING, P.C. KRONISH LIEB WEINER & HELLMAN LLP Harold B. Murphy, Esq. (BBO#362610) Lawrence C. Gottlieb, Esq. (No. 2565) Kathleen Cruickshank, Esq. (BBO#550675) Cathy Hershcopf, Esq. (No. 5875) Alex M. Rodolakis, Esq. (BBO#567781) Christopher A. Jarvinen, Esq. (No. 5461) One Federal Street 1114 Avenue of the Americas Boston, MA 02110 New York, New York 10036 ###-###-#### ###-###-#### Counsel for the Debtor and and Debtor in Possession FOLEY HOAG & ELIOT, LLP Andrew Z. Schwartz, Esq. (BBO#544653) Kenneth S. Leonetti, Esq. (BBO#629515) One Post Office Square Boston, MA 02109 ###-###-#### Co-Counsel for the Official Committee Of Unsecured Creditors
Dated: Boston, Massachusetts September 7, 2001 PLAN - i
Page ---- TABLE OF CONTENTS TABLE OF EXHIBITS.............................................................................................. vii INTRODUCTION..................................................................................................... 1 ARTICLE I DEFINITIONS, RULES OF INTERPRETATION, AND COMPUTATION OF TIME........................................................................ 1 A. Scope Of Definitions; Rules Of Construction.................................................... 1 B. Definitions.................................................................................... 1 C. Rules Of Interpretation....................................................................... 10 D. Computation Of Time........................................................................... 10 ARTICLE II CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS................................................. 11 A. Introduction.................................................................................. 11 B. Unclassified Claims (not entitled to vote on the Plan)........................................ 11 1. Administrative Claims................................................................ 11 2. Professional Fee Claims.............................................................. 11 3. Priority Tax Claims.................................................................. 11 C. Classified Claims............................................................................. 11 ARTICLE III TREATMENT OF ADMINISTRATIVE CLAIMS, PROFESSIONAL FEE CLAIMS AND PRIORITY TAX CLAIMS........... 12 A. Unclassified Claims........................................................................... 12 1. Administrative Claims................................................................ 12 2. Professional Fee Claims.............................................................. 12 3. Priority Tax Claims.................................................................. 12 ARTICLE IV TREATMENT OF CLAIMS AND EQUITY INTERESTS...................................................... 13 A. Class 1 - BofA Secured Claims................................................................. 13 1. Impairment and Voting................................................................ 13 2. Treatment............................................................................ 13 B. Class 2 - Other Secured Claims................................................................ 13 1. Impairment and Voting................................................................ 13 2. Treatment............................................................................ 13 C. Class 3 - Other Priority Claims............................................................... 14 1. Impairment and Voting................................................................ 14 2. Treatment............................................................................ 14 D. Class 4 - Convenience Claims.................................................................. 14 1. Impairment and Voting................................................................ 14 2. Treatment............................................................................ 14 E. Class 5 - General Unsecured Claims............................................................ 14 1. Impairment and Voting................................................................ 14
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Page ---- 2. Treatment............................................................................ 14 F. Class 6 - Common Stock Equity Interests And Claims............................................ 14 1. Impairment and Voting................................................................ 14 2. Treatment............................................................................ 14 3. Cancellation of Common Stock Equity Interests........................................ 14 ARTICLE V MEANS FOR IMPLEMENTATION OF THE PLAN.......................................................... 15 A. Corporate Governance Of Reorganized Trend-Lines............................................... 15 1. Certificate of Incorporation and Bylaws.............................................. 15 2. Control, Operation and Management.................................................... 15 3. Directors And Officers............................................................... 15 B. Cancellation Of Old Equity Securities......................................................... 15 C. Issuance And Reserve Of New Common Stock...................................................... 15 1. Issuance............................................................................. 15 2. Reserve.............................................................................. 16 D. Exit Financing Facility, Obtaining Cash for Plan Distributions................................ 16 E. Revesting Of Assets Of Reorganized Trend-Lines ............................................... 16 F. Preservation Of Rights Of Action.............................................................. 17 G. Effectuating Documents; Further Transactions.................................................. 17 H. Applicability Of Sections 1125 And 1145 Of The Bankruptcy Code................................ 17 I. Exemption From Certain Transfer Taxes......................................................... 17 J. Final Decree.................................................................................. 17 K. Listing New Common Stock...................................................................... 18 ARTICLE VI ACCEPTANCE OR REJECTION OF THE PLAN........................................................... 18 A. Classes Entitled To Vote...................................................................... 18 B. Acceptance By Impaired Classes................................................................ 18 C. Cramdown...................................................................................... 18 ARTICLE VII PROVISIONS GOVERNING DISTRIBUTIONS............................................................ 18 A. Distributions for Claims Allowed as of the Initial Distribution Date.......................... 18 B. Method of Distributions to Holders of Claims.................................................. 19 C. Compensation and Reimbursement for Services Related to Distributions.......................... 19 D. Delivery of Distributions and Undeliverable or Unclaimed Distributions........................ 19 1. Delivery of Distributions............................................................ 19 a. Generally................................................................... 19 2. Undeliverable Distributions.......................................................... 20 a. Holding of Undeliverable Distributions - Undelivered New Common Stock....... 20 b. After Distributions Become Deliverable...................................... 20 c. Failure to Claim Undeliverable Distributions................................ 20 E. Distribution Record Date...................................................................... 20 G. Timing and Calculation of Amounts to Be Distributed........................................... 21 1. Allowed Claims in Class 5............................................................ 21 2. Distributions of New Common Stock.................................................... 21 3. De Minimis Distributions............................................................. 21
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Page ---- 4. Compliance with Tax Requirements..................................................... 21 1. Funding of the Unsecured Claims Reserve.............................................. 22 2. Property Held in Unsecured Claims Reserve............................................ 22 a. Dividends and Distributions................................................. 22 b. Recourse.................................................................... 22 I. Setoffs....................................................................................... 22 J. Surrender of Canceled Instruments or Securities............................................... 23 1. Tender of Notes...................................................................... 23 2. Lost, Stolen, Mutilated or Destroyed Notes........................................... 23 ARTICLE VIII TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES.............................................................................. 23 A. Assumption And Rejection Of Executory Contracts And Leases.................................... 23 1. Agreements and Leases................................................................ 23 2. Effect of Assumption of Certain Contracts and Leases. .............................. 24 3. Effect of Confirmation Order on Assumptions and Rejections. ......................... 24 B. Payments Related To Assumption Of Executory Contracts And Leases.............................. 24 C. Bar To Rejection Damages...................................................................... 24 D. Employee Incentive Stock Plan................................................................. 24 E. Compensation And Benefit Plans................................................................ 25 ARTICLE IX PROCEDURES FOR RESOLVING DISPUTED,CONTINGENT AND UNLIQUIDATED CLAIMS.......................... 25 A. Prosecution of Objections to Claims........................................................... 25 1. Objections to Claims................................................................. 25 2. Authority to Prosecute Objections.................................................... 25 B. Treatment of Disputed Claims.................................................................. 25 C. Distributions on Account of Disputed Claims Once Allowed...................................... 26 ARTICLE X CONDITIONS PRECEDENT TO CONFIRMATION ANDEFFECTIVENESS OF THE PLAN............................. 26 A. Conditions To Confirmation.................................................................... 26 B. Conditions To Effectiveness................................................................... 26 C. Waiver Of Conditions.......................................................................... 27 ARTICLE XI MODIFICATIONS AND AMENDMENTS.................................................................. 27 ARTICLE XII RETENTION OF JURISDICTION..................................................................... 27 ARTICLE XIII MISCELLANEOUS PROVISIONS...................................................................... 29 A. Bar Dates For Certain Claims.................................................................. 29 1. Administrative Claims................................................................ 29 2. Professional Fee Claims.............................................................. 29 3. Other Claims......................................................................... 29 B. Payment Of Statutory Fees..................................................................... 30
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Page ---- C. Amendment And Severability Of Plan Provisions................................................. 30 D. Successors And Assigns........................................................................ 30 E. Discharge Of The Debtor And Injunction........................................................ 30 F. Releases...................................................................................... 31 G. Exculpation And Other Releases................................................................ 31 H. Termination Of Committee...................................................................... 32 I. Binding Effect................................................................................ 32 J. Revocation, Withdrawal Or Non-Occurrence Of Effective Date.................................... 32 K. Plan Supplement............................................................................... 32 L. Notices....................................................................................... 33 M. Indemnification Obligations................................................................... 34 N. Prepayment.................................................................................... 34 O. Term Of Injunctions Or Stays.................................................................. 34 P. Governing Law................................................................................. 35
PLAN - v TABLE OF EXHIBITS Exhibit Name ------- ---- PLAN - vi INTRODUCTION Trend-Lines, Inc., a Massachusetts corporation ("Trend-lines"), for itself (the "Debtor"), and the Official Committee of Unsecured Creditors (the "Committee") propose the following plan of reorganization (the "Plan") for the resolution of the Debtor's outstanding creditor Claims and Equity Interests. Reference is made to the Disclosure Statement, distributed contemporaneously herewith, for a discussion of the Debtor's history, businesses, properties, results of operations, projections for future operations, risk factors, a summary and analysis of the Plan, and certain related matters, including the New Equity Securities to be issued pursuant to the Plan. The Debtor and the Committee are the proponents of this Plan within the meaning of Section 1129 of the Bankruptcy Code. All holders of Claims and all holders of Equity Interests are encouraged to read this Plan and the Disclosure Statement in their entirety before voting to accept or reject this Plan. Subject to certain restrictions and requirements set forth in Section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019 and those restrictions or modifications set forth in Article XII of this Plan, the Debtor and the Committee reserve the right to alter, amend, modify, revoke, or withdraw this Plan prior to its substantial consummation. ARTICLE I DEFINITIONS, RULES OF INTERPRETATION, AND COMPUTATION OF TIME 1. Scope Of Definitions; Rules Of Construction For purposes of this Plan, except as expressly provided or unless the context otherwise requires, all capitalized terms not otherwise defined shall have the meanings ascribed to them in the Introduction or Article I of this Plan. Any term used in this Plan that is not defined herein, but is defined in the Bankruptcy Code or the Bankruptcy Rules, shall have the meaning ascribed to that term in the Bankruptcy Code or the Bankruptcy Rules. Whenever the context requires, such terms shall include the plural as well as the singular number, the masculine gender shall include the feminine, and the feminine gender shall include the masculine. 2. Definitions 1. 1.1. "Administrative Claim" means a Claim for payment of an administrative expense of a kind specified in Section 503(b), 507(b), or 1114(e)(2) of the Bankruptcy Code and entitled to priority pursuant to Section 507(a)(1) of the Bankruptcy Code, including, but not limited to, (i) the actual necessary costs and expenses, incurred after the Petition Date, of preserving the Estate and operating the businesses of the Debtor, including wages, salaries, or commissions for services rendered after the commencement of the Chapter 11 Cases, (ii) Professional Fee Claims, (iii) all fees and charges assessed against the Estate under Chapter 11 of title 28, United States Code, and (iv) all Allowed Claims that are entitled to be treated as Administrative Claims pursuant to a Final Order of the Court under Section 546(c)(2)(A) of the Bankruptcy Code. 1.2. "Administrative Claim Bar Date" means the date by which requests for Administrative Claims must be filed pursuant to Article III of the Plan. 1.3. "Allowed Claim" means a Claim or any portion thereof (i) as to which no objection to allowance or request for estimation has been interposed on or before the date provided for herein or the expiration of such other applicable period of limitation as may be fixed by the Bankruptcy Code, Bankruptcy Rules, or the Court, (ii) as to which any objection to its allowance has been settled, waived through payment, or withdrawn, or has been denied by a Final Order, (iii) that has been allowed by a Final Order, (iv) as to which the liability of the Debtor, and the amount thereof, are determined by Final Order of a court of competent jurisdiction other than the Court, or (v) that is expressly allowed in a liquidated amount in the Plan. 1.4. "Allowed Administrative Claim" means an Administrative Claim as to which a timely request for payment has been made in accordance with Article XIV.A.1 of this Plan (if such written request is required) or other Administrative Claim, in each case as to which the Debtor (a) has not interposed a timely objection or (b) has interposed a timely objection and such objection has been settled, waived through payment, or withdrawn, or has been denied by a Final Order. 1.5. "Allowed" means, when used in reference to a Claim or Equity Interest within a particular Class, an Allowed Claim or Allowed Equity Interest of the type described in such Class. 1.6. "Allowed Class . . . Claim" means an Allowed Claim in the particular Class described. 1.7. "Allowed Class . . . Equity Interest" means an Equity Interest (i) that has been allowed by a Final Order, (ii) for which (a) no objection to allowance has been filed within the periods of limitation set forth herein or such other periods fixed by the Bankruptcy Code, the Bankruptcy Rules or by any Final Order of the Court or (b) any objection to allowance has been settled or withdrawn, or has been denied by a Final Order or (iii) that is expressly allowed in the Plan. 1.8. "BofA" means Bank of America, N.A, as agent for a group of Lenders pursuant to the Lenders' Facility. 1.9. "BofA Allowed Secured Claim" means the Secured Claim of BofA in an amount equal to the value of the Collateral as valued (i) by agreement of the parties; or (ii) pursuant to Court order. 1.10. "Ballot" means each of the ballot forms distributed with the Disclosure Statement or the Summary Disclosure Statement to holders of Impaired Claims and Impaired Equity Interests entitled to vote under Article IV hereof in connection with the solicitation of acceptances of the Plan. 1.11. "Ballot Date " means the date set by the Court by which all completed Ballots must be received. 1.11. "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as codified in title 11 of the United States Code, 11 U. S. C. ss.ss. 101-1330, as now in effect or hereafter amended. PLAN - 2 1.12. "Bankruptcy Rules" means, collectively, the Federal Rules of Bankruptcy Procedure and the Official Bankruptcy Forms, as amended, and the Local Rules of the Court, as applicable to the Chapter 11 Cases or proceedings therein, as the case may be. 1.13. "Bar Date" means the date, if any, designated by the Court as the last date for filing proofs of Claim (including Administrative Claims other than Professional Fee Claims) against the Debtor. 1.14. "Board of Directors Designation" means the designation of the members of the post-Effective Date Board of Directors filed by the Debtors and the Creditors' Committee on or before ten days prior to the commencement of the Confirmation Hearing. 0.2. "By-laws" means the by-laws of Trend-Lines, in effect as of the date hereof. 1.15. "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in Boston, Massachusetts are authorized or obligated by federal or state law or executive order to close. 1.16. "Capital Lease Claims" means all obligations of the Debtor under or related to certain transactions for equipment. 1.17. "Case Interest Rate" means the federal judgment rate provided in 28 U.S.C. ss. 1961 in effect on the Petition Date compounded annually on each anniversary of the Petition Date. 1.18. "Cash" means legal tender of the United States of America or equivalents thereof. 1.19. "Cash Collateral Order" means any order entered, or to be entered, by the Court in the Debtor's Chapter 11 Case, pursuant to Sections 105 and/or 363 of the Bankruptcy Code, and Rules 2002, 4001, and/or 9014 of the Bankruptcy Rules, authorizing the Debtor's use of cash collateral and/or the use of inventory subject to reclamation claims. 1.20. "Cash Distribution Amount" means $2,000,000. 1.21. "Causes of Action" means the claims, rights of action, suits, or proceedings, whether in law or in equity, whether known or unknown, that the Debtor or its Estate may hold against any Person, which are to be retained by Reorganized Trend-Lines pursuant to Article V.E. hereof. 0.3. "Certificate of Incorporation" means the certificate of incorporation of Trend-Lines, as amended and in effect as of the date hereof. 1.22. "Chapter 11 Case" means the case under Chapter 11 of the Bankruptcy Code commenced by the Debtor, or substantively consolidated with the Debtor, styled In re Trend-Lines, Inc., Case No. 00-15431, currently pending in the Court. 0.4. "Claim" means a claim against the Debtor, whether or not asserted, as defined in Section 101(5) of the Bankruptcy Code. PLAN - 3 0.5. "Claims Objection Bar Date" means, for all Claims other than Rejections Claims, thirty (30) days after the Effective Date, and for Rejections Claims, the later of (a) ninety (90) days after the Effective Date; and (b) such other period of limitation as may be specifically fixed by the Plan, the Confirmation Order, the Bankruptcy Rules or a Final Order for objection to such Claim. 1.23. "Class" means a category of holders of Claims or Equity Interests, as described in Article II hereof. 1.24. "Class A Common Stock" means class A common stock of Trend-Lines, par value $.01 per share, authorized as of the Petition Date. 1.25. "Class B Common Stock" means class B common stock of Trend-Lines, par value [$__] per share, authorized as of the Petition Date. 1.26. "Collateral" means any property or interest in property of the Debtor's Estate subject to a Lien to secure the payment or performance of a Claim, which Lien is not subject to avoidance under the Bankruptcy Code or otherwise invalid under the Bankruptcy Code or applicable state law. 1.27. "Committee" means the official committee of unsecured creditors, appointed by the United States Trustee pursuant to Section 1102(a) of the Bankruptcy Code in the Chapter 11 Cases as amended from time to time. 1.28. "Common Stock" means collectively, the common stock, including Class A Common Stock and Class B Common Stock, of Trend-Lines authorized as of the Petition Date and any and all options, rights and warrants to convert into or purchase any of the foregoing. 1.29. "Common Stock Equity Interest and Claims" means any Equity Interest arising from or under the Common Stock, including all Claims arising in connection therewith, including, but not limited to, Claims arising from the recission of a purchase or sale of a security of the Debtor, for damages arising from the purchase or sale of such a security, or for reimbursement or contribution under Section 502 of the Bankruptcy Code on account of such Claim and attorney's fees associated therewith. 1.30. "Confirmation" means entry by the Clerk of the Court of the Confirmation Order. 1.31. "Confirmation Date" means the date of entry of the Confirmation Order by the Clerk of the Court. 1.32. "Confirmation Hearing" means the hearing to consider confirmation of the Plan under Section 1129 of the Bankruptcy Code. 1.33. "Confirmation Order" means the order of the Court confirming the Plan pursuant to Section 1129 of the Bankruptcy Code. 1.34. "Convenience Claim" means any Claim that otherwise would be a Class 4 Claim and that is (a) equal to or less than $2,000 or (b) reduced to $2,000 pursuant to the election by the holder of such Claim on the Class 4 ballot. PLAN - 4 1.35. "Court" means the United States District Court for the District of Massachusetts which has jurisdiction over the Chapter 11 Cases. 1.36. "Creditor" means any Person who holds a Claim against the Debtor. 1.37. "Cure" means the distribution of Cash, or such other property as may be agreed upon by the parties or ordered by the Court, with respect to the assumption of an executory contract or unexpired lease, pursuant to Section 365(b) of the Bankruptcy Code, in an amount equal to all unpaid monetary obligations, without interest, or such other amount as may be agreed upon by the parties or ordered by the Court, under such executory contract or unexpired lease, to the extent such obligations are enforceable under the Bankruptcy Code and applicable non-bankruptcy law. 1.38. "Debtor" means Trend-Lines, or substantively consolidated with Trend-Lines, in its capacity as debtor-in-possession pursuant to Sections 1107 and 1108 of the Bankruptcy Code. 1.39. "Disbursing Agent" means Reorganized Trend-Lines or any party designated by Reorganized Trend-Lines, in its sole discretion, to serve as a disbursing agent under the Plan. 0.6. "Disclosure Statement" means the disclosure statement relating to the Plan, dated July _, 2001, as amended, supplemented or modified from time to time, and that is prepared and distributed in accordance with Sections 1125 and 1126(b) of the Bankruptcy Code and Bankruptcy Rule 3018. 1.40. "Disputed Claim" means: a. if no proof of Claim has been Filed by the Bar Date or the Additional Bar Date or has otherwise been deemed timely Filed pursuant to an order of the Bankruptcy Court or under applicable law: (i) a Claim that is listed on a Debtor's Schedules as other than disputed, contingent, or unliquidated, but as to which the applicable Debtor, the Reorganized Debtor, or, prior to the Confirmation Date, any other party in interest, has Filed an objection by the Claims Objection Bar Date and such objection has not been withdrawn or denied by a Final Order, but in the case of a Disputed Claim, only to the extent disputed; and (ii) a Claim that is listed on a Debtor's Schedules as disputed, contingent, or unliquidated, but in the case of a Disputed Claim, only to the extent disputed; or b. if a proof of Claim or request for payment of an Administrative Claim has been Filed by the Administrative Claim Bar Date or has otherwise been deemed timely Filed under applicable law: (i) a Claim for which no corresponding Claim is listed on a Debtor's Schedules; (ii) a Claim for which a corresponding Claim is listed on a Debtor's Schedules as other than disputed, contingent, or unliquidated, but the nature or amount of the Claim as asserted in the proof of Claim varies from the nature and amount of such Claim as it is listed on the Schedules; (iii) a Claim for which a corresponding Claim is listed on a Debtor's Schedules as disputed, contingent or unliquidated; (iv) a Claim for which an objection has been Filed by the applicable Debtor, Reorganized Debtor, or, prior to the Confirmation Date, any other party in interest, by the Claims Objection Bar Date, and such objection has not been withdrawn or denied by a Final Order; and (v) with respect to a Claim in 1.44.b.(ii)-(iv), if a Disputed Claim, only to the extent disputed. PLAN - 5 1.41. "Distribution Date" means the date, occurring as soon as practicable after the Effective Date, upon which distributions are made by Reorganized Trend-Lines or the Disbursing Agent to holders of Allowed Administrative Claims, Allowed Priority Tax Claims, and Allowed Claims in Classes 1 through 5. 1.42. "Distribution Record Date" means the record date for purposes of making distributions under the Plan to holders of Allowed Claims, which date shall be the thirtieth (30th) Business Day following the Confirmation Date. 1.43. "Distribution Reserve" means the reserve, if any, established and maintained by Reorganized Trend-Lines, into which Reorganized Trend-Lines shall deposit the amount of Cash, New Common Stock, or other property that would have been distributed by Reorganized Trend-Lines on the Distribution Date to holders of (i) noncontingent liquidated Disputed Claims, pending (a) the allowance of such Claims, or (b) the estimation of such Claims for purposes of allowance and distribution, (ii) contingent liquidated Disputed Claims, if such Claims had been undisputed or noncontingent Claims on the Distribution Date, pending (a) the allowance of such Claims, (b) the estimation of such Claims for purposes of allowance and distribution, or (c) the realization of the contingencies, and (iii) unliquidated Disputed Claims, if such Claims had been liquidated on the Distribution Date, such amount to be estimated by the Court or agreed upon by the Debtor and the holders thereof as sufficient to satisfy such unliquidated Claim upon such Claim's (a) allowance, (b) estimation for purposes of allowance, or (c) liquidation, pending the occurrence of such estimation or liquidation. 1.44. "Effective Date" means the date on which the conditions specified in Article XI.B. of the Plan have been satisfied or waived as provided in Article XI.C hereof. 1.45. "Employment Agreements" means the employment agreements to be entered into between Reorganized Trend-Lines and certain of its employees. 1.46. "Employee Benefit Plans" means all employee benefit plans, policies, and programs sponsored by the Debtor, including, without limitation, all savings plans, health plans, disability plans, life insurance plans, deferred compensation plans, retirement plans, severance plans, and executive incentive plans. 1.47. "Equity Interest" means (i) the interest of any holder of equity securities of Trend-Lines represented by any issued and outstanding shares of Common Stock whether or not transferable and (ii) any option, warrant or right, contractual or otherwise, to acquire or receive any such interest. 1.48. "Equity Reserve" means the number of shares of New Common Stock which will be reserved pursuant to the Incentive Stock Option Plan, which will be set forth in the Plan Supplement. 1.49. "Estate" means the estate of the Debtor in the Chapter 11 Case created pursuant to Section 541 of the Bankruptcy Code. 1.50. "Exit Financing Facility" means a credit facility in a principal amount sufficient to provide Reorganized Trend-Lines with a revolving line of credit of not less than $35 million, or such other amount as may be agreed to by the Debtor and the Committee that will be entered into by the Debtor and the Exit Financing Facility Agent Bank on the Effective Date. 1.51. "Exit Financing Facility Agent Bank" means the agent bank under the Exit Financing Facility. PLAN - 6 1.52. " Facility" means an Amended and Restated Loan and Security Agreement dated February 23, 1999 entered into among BofA, the Lenders, and Trend-Lines. 1.53. "File," "Filed" or "Filing" means file, filed, or filing with the Bankruptcy Court or its authorized designee in the Reorganization Cases. 1.54. "Final Decree" means an order entered by the Court closing the Debtor's case after satisfaction of all obligations and duties of Reorganized Trend-Lines under this Plan. 1.55. "Final Order" means an order or judgment, the operation or effect of which has not been stayed or reversed, and as to which order or judgment the time to appeal or seek review or rehearing has expired and as to which no appeal or petition for review or rehearing was filed or, if filed, remains pending. 1.56. "General Unsecured Claim" means a Claim that is not a BofA Secured Claim, Other Secured Claim, Administrative Claim, Professional Fee Claim, Priority Tax Claim, Other Priority Claim, or a Convenience Claim. 1.57. "Impaired" means, when used with reference to a Claim or Equity Interest, a Claim or Equity Interest that is impaired within the meaning of Section 1124 of the Bankruptcy Code and will not be receiving payment in full of its Claim or Equity Interest pursuant to the Plan. 1.58. "Incentive Stock" means the New Common Stock of up to 12% of the issued New Common Stock to be issued by Reorganized Trend-Lines to the Incentive Stock Plan Participants pursuant to the provisions of the Incentive Stock Plan which shall be included in the Plan Supplement. 1.59. "Incentive Stock Plan" means the plan pursuant to which the Incentive Stock will be issued, substantially in the form of the plan to be included in the Plan Supplement, which Reorganized Trend-Lines is authorized but not directed to adopt pursuant to Article IX.E. hereof. 1.60. "Incentive Stock Plan Participants" means the employees of Reorganized Trend-Lines who will be participants in the Incentive Stock Plan. 1.61. "Initial Distribution Date" means as soon as practicable following the Effective Date but not later than thirty (30) days after the Effective Date. 1.62. " Lenders" means BofA, Foothill Capital Corporation, and Transamerica Business Credit Corporation. 1.63. "Lien" means a lien, security interest, mortgage, deed of trust, or other charge or encumbrance on or in any real or personal property to secure payment of a debt or performance of an obligation. 1.64. "National Securities Exchange" means any exchange registered pursuant to section 6(a) of the Exchange Act, including the National Association of Securities Dealers Automated Quotation System. PLAN - 7 1.65. "New Common Stock" means the 7.5 million shares of common stock of Reorganized Trend-Lines, $.0l par value per share, authorized under Reorganized Trend-Lines's certificate of incorporation. 1.66. "New Equity Securities" means, collectively, the New Common Stock and Incentive Stock Options. 1.67. "Old Equity Securities" mean, collectively, the Common Stock and any and all options, rights and warrants to convert into or purchase the foregoing. 1.68. "Other Priority Claim" means a Claim entitled to priority pursuant to Section 507(a) of the Bankruptcy Code, other than an Administrative Claim, Professional Fee Claim or Priority Tax Claim. 1.69. "Other Secured Claims" means, collectively, all Secured Claims other than BofA Secured Claims, including, but not limited to, Capital Lease Claims. 1.70. "Pension Plan" means the Trend-Lines 401(k) Plan, a tax qualified defined benefit pension plan covered by Title IV of the Employee Retirement Income Security Act ("ERISA"), as amended, 29 U.S.C. ss.ss. 1302 et seq. (1994 & Supp. III 1997). 1.71. "Person" means any individual, corporation, partnership, association, limited liability company, organization, joint stock company, joint venture, estate, trust, governmental unit or any subdivision thereof, official or unofficial committee, and any other entity. 1.72. "Petition Date" means August 11, 2000, the date on which the Debtor filed its petition for reorganization relief, commencing the Chapter 11 Cases. 1.73. "Plan" means this Chapter 11 plan of reorganization for Debtor and all exhibits annexed hereto or referenced herein, as the same may be amended, modified, or supplemented from time to time, and includes the Plan Supplement. 1.74. "Plan Supplement" means the compilation of documents and forms of documents specified in the Plan which will be filed with the Court on or before the date that is seven (7) days prior to the Confirmation Hearing. 1.75. "Prepetition 1999 Credit Facility" means that certain Credit Agreement among Trend-Lines, Inc. and Post Tool, Inc., as borrowers, and Bank of America, N.A., as agent for Foothill Capital Corporation, Transamerica Business Capital Corporation, as successor to Transamerica Business Credit Corporation and itself dated February 23, 1999 as it may have been subsequently amended and modified. 1.76. "Priority Tax Claim" means a Claim that is entitled to priority pursuant to Section 507(a)(8) of the Bankruptcy Code. 1.77. "Professional" means any professional employed in the Chapter 11 Cases pursuant to Sections 327, 328 or 1103 of the Bankruptcy Code. PLAN - 8 1.78. "Professional Fee Claim" means a Claim of a Professional for compensation or reimbursement of costs and expenses relating to services incurred after the Petition Date and prior to and including the Confirmation Date. 1.79. "Proponents" shall mean the Committee and the Debtor. 1.80. "Pro Rata" means, at any time, the proportion that the Face Amount of a Claim or Equity Interest in a particular Class bears to the aggregate Face Amount of all Claims or Equity Interests (including Disputed Claims and Equity Interests) in such Class, unless the Plan provides otherwise. 1.81. "Quarterly Distribution Date" means the last Business Day of the month following the end of the period three months after the Initial Distribution Date, and thereafter until all distributions required by the Plan have been made. 1.82. "Reinstated" or "Reinstatement" means, notwithstanding any contractual provision or applicable law that entitles the holder of a Claim to demand or receive accelerated payment of such Claim after the occurrence of a default, (i) curing any such default that occurred before or after the Petition Date, other than a default of a kind specified in Section 365(b)(2) of the Bankruptcy Code, (ii) reinstating the maturity of such Claim as such maturity existed before such default, (iii) compensating the holder of such Claim for any damages incurred as a result of any reasonable reliance by such holder on such contractual provision or such applicable law, and (iv) not otherwise altering the legal, equitable, or contractual rights to which such Claim entitles the holder of such Claim. 1.83. "Rejection Claims" means Claims arising from the rejection of an executory contract or lease of personal property or real property by a Debtor or the Reorganized Debtor. 1.84. "Related Parties" means with respect to any Person, such Person's then current officers, directors, shareholders, partners, successors, predecessors, employees, consultants, affiliates, attorneys, accountants, financial advisors and other representatives (in each case, solely in their capacity as such) who held or continues to hold such office, position or status on or after January 1, 2001. 1.85. "Reorganized Trend-Lines" means Trend-Lines on and after the Effective Date. 1.86. "Reserved Shares" means 5,280,000 shares of New Common Stock to be placed in the Unsecured Claims Reserve for distribution to holders of Allowed Claims in Class 5. 1.87. "Seabrook Property" means the Debtor's non-residential real property located at 1 Batchelder Road, Seabrook, New Hampshire and subject to a Lien in favor of BofA. 1.88. "Schedules" means the schedules of assets and liabilities and the statements of financial affairs, filed with the Court by the Debtor, as such schedules or statements may be amended or supplemented from time to time in accordance with Bankruptcy Rule 1009 or orders of the Court. PLAN - 9 1.89. "Secured Claim" means a Claim that is secured by a Lien upon property, or the proceeds of the sale of such property, in which the Debtor has an interest, to the extent of the value, as of the Effective Date or such later date as is established by the Court, of such Lien as determined by a Final Order of the Court pursuant to Section 506 of the Bankruptcy Code or as otherwise agreed upon in writing by the Debtor or Reorganized Trend-Lines and the holder of such Claim. 1.90. "Securities Act" means the Securities Act of 1933, 15 U.S.C. ss.ss. 77a-77aa, as now in effect or hereafter amended. 1.91. "Setoff Claim" means a Claim against the Debtor by a Creditor that has a valid right of setoff with respect to such Claim, which right is enforceable under Section 553 of the Bankruptcy Code as determined by a Final Order or as otherwise agreed to in writing by the Debtor with consent of the Committee, to the extent of the amount subject to such right of setoff. 0.7. "Unimpaired Claim" means a Claim that is not an Impaired Claim. 1.92. "Unsecured Claim" means any Claim against the Debtor, other than a BofA Secured Claim, Other Secured Claim, an Administrative Claim, a Professional Fee Claim, Priority Tax Claim or Other Priority Claim. 1.93. "Unsecured Claims Reserve" means the escrow for Reserved Shares established for Allowed Claims in Class 5, which will not constitute property of the Reorganized Debtor. 0.8. "Unsecured Deficiency Claim" means any portion of an Other Secured Claim to the extent that the value of the Collateral securing the Other Secured Claim is less than the amount of such Other Secured Claim, or to the extent that the amount of any such Other Secured Claim subject to a setoff is less than the amount of such Other Secured Claim, as determined pursuant to Section 506(a) of the Bankruptcy Code. 3. Rules Of Interpretation For purposes of the Plan (i) any reference in the Plan to a contract, instrument, release, or other agreement or document being in a particular form or on particular terms and conditions means that such document shall be substantially in such form or substantially on such terms and conditions, (ii) any reference in the Plan to an existing document or exhibit filed or to be filed means such document or exhibit as it may have been or may be amended, modified or supplemented, (iii) unless otherwise specified, all references in the Plan to Sections, Articles, Schedules and Exhibits are references to Sections, Articles, Schedules and Exhibits of or to the Plan, (iv) the words "herein" and "hereto" refer to the Plan in its entirety rather than to a particular portion of the Plan, (v) captions and headings to Articles and Sections are inserted for convenience of reference only and are not intended to be a part of or to affect the interpretation of the Plan, and (vi) the rules of construction set forth in Section 102 of the Bankruptcy Code and in the Bankruptcy Rules shall apply. 4. Computation Of Time In computing any period of time prescribed or allowed by the Plan, the provisions of Bankruptcy Rule 9006(a) shall apply. PLAN - 10 ARTICLE II CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS 5. Introduction All Claims and Equity Interests, except Administrative Claims, Professional Fee Claims and Priority Tax Claims, are placed in the Classes set forth below. In accordance with Section 1123(a)(1) of the Bankruptcy Code, Administrative Claims, Professional Fee Claims and Priority Tax Claims, as described below, have not been classified. A Claim or Equity Interest is placed in a particular Class only to the extent that the Claim or Equity Interest falls within the description of that Class, and is classified in other Classes to the extent that any portion of the Claim or Equity Interest falls within the description of such other Classes. A Claim is also placed in a particular Class for the purpose of receiving distributions pursuant to the Plan only to the extent that such Claim is an Allowed Claim in that Class and such Claim has not been paid, released or otherwise settled prior to the Effective Date. 6. Unclassified Claims (not entitled to vote on the Plan) 1. Administrative Claims 2. Professional Fee Claims 3. Priority Tax Claims 7. Classified Claims And Equity Interests Claims and Equity Interests, other than Administrative Claims, Professional Fee Claims and Priority Tax Claims, are classified for all purposes, including, where applicable, voting, confirmation and distribution pursuant to the Plan as follows: 1. Class 1 - BofA Secured Claims 2. Class 2 - Other Secured Claims 3. Class 3 - Other Priority Claims 4. Class 4 - Convenience Claims 5. Class 5 - General Unsecured Claims 6. Class 6 - Common Stock Equity Interests And Claims PLAN - 11 ARTICLE III TREATMENT OF ADMINISTRATIVE CLAIMS, PROFESSIONAL FEE CLAIMS AND PRIORITY TAX CLAIMS 8. Unclassified Claims 1. Administrative Claims. Except as otherwise provided for herein, and subject to the requirements of Article XIV.A. hereof, each holder of an Allowed Administrative Claim shall receive, in full satisfaction, settlement, release and discharge of, and in exchange for, such Allowed Administrative Claim, (i) Cash equal to the unpaid portion of such Allowed Administrative Claim or (ii) such other treatment as to which the Debtor and such holder shall have agreed upon in writing; provided, however, that Allowed Administrative Claims with respect to liabilities incurred by the Debtor in the ordinary course of business during the Chapter 11 Cases shall be paid in the ordinary course of business in accordance with the terms and conditions of any agreements relating thereto. On or before the Effective Date, the Debtor shall pay or have paid in Cash in full all Allowed Administrative Claims for fees payable pursuant to 28 U.S.C. ss. 1930 and fees payable to the Court, which are due and payable on or before the Effective Date. All fees payable pursuant to 28 U.S.C. ss. 1930 after the Effective Date shall be paid by Reorganized Trend-Lines. 10 Professional Fee Claims. All Persons that are awarded compensation or reimbursement of expenses by the Court in accordance with Section 330 or 331 of the Bankruptcy Code or entitled to the priorities established pursuant to Section 503(b)(2), 503(b)(3), 503(b)(4) or 503(b)(5) of the Bankruptcy Code, shall be paid in full, in Cash, the amounts allowed by the Court (a) on or as soon as reasonably practicable following the later to occur of (i) the Effective Date and (ii) the date on which the Court order allowing such Claim becomes a Final Order, or (b) upon such other terms as may be mutually agreed upon between such holder of an Allowed Professional Fee Claim and Reorganized Trend-Lines. 2. Priority Tax Claims. Each holder of an Allowed Priority Tax Claim shall receive, in full satisfaction, settlement, release and discharge of, and in exchange for, such Allowed Priority Tax Claim, one of the following (i) Cash equal to the unpaid portion of such Allowed Priority Tax Claim, (ii) in the sole discretion of the Debtor, deferred Cash payments over a period not exceeding six years after the date of assessment of such Allowed Priority Tax Claim in an aggregate principal amount equal to the amount of such Allowed Priority Tax Claim, plus interest on the unpaid portion thereof at the Case Interest Rate, (iii) in the sole discretion of the Debtor, deferred Cash payments in five (5) equal monthly payments, commencing within thirty (30) days of the Effective Date, in an aggregate principal amount equal to the amount of such Allowed Priority Tax Claim, plus interest on the unpaid portion thereof at the Case Interest Rate, or (iii) such other treatment as to which the Debtor and such holder shall have agreed upon in writing. The Debtor reserves the right to pay any Allowed Priority Tax Claim, or any remaining balance of any Allowed Priority Tax Claim, in full at any time on or after the Distribution Date without premium or penalty. Pending satisfaction of such Allowed Priority Tax Claims, each holder of an Allowed Priority Tax Claim shall be enjoined from asserting any claims or taking any actions to assess or recover from officers or directors of either the Debtor or Reorganized Trend-Lines. PLAN - 12 ARTICLE IV TREATMENT OF CLAIMS AND EQUITY INTERESTS 9. Class 1 - BofA Secured Claims 10 Impairment and Voting. Class 1 is impaired by the Plan. The holders of Claims in Class 1 are entitled to vote to accept or reject the Plan. 20 Treatment. On the Effective Date, the Allowed BofA Secured Claims, shall be paid as of the closing of the Exit Financing Facility in accordance with the commitment letter and term sheet attached as Exhibit H to the Disclosure Statement, or as otherwise agreed to by the Debtor and BofA. 10. Class 2 - Other Secured Claims 10 Impairment and Voting. Class 2 may be unimpaired by the Plan. The holders of Claims in Class 2 are entitled to vote to accept or reject the Plan. 20 Treatment. Prior to, or upon, the Effective Date at the option of the Debtor, with the consent of the Committee, such Allowed Other Secured Claims shall receive (a) some or all of the Collateral securing such Allowed Other Secured Claim, (b) Cash in an amount, not to exceed the allowed amount of such Claim, equal to the proceeds actually realized from the sale of any Collateral securing such Claim, as may be agreed upon by the Debtor and the holder of the Allowed Secured Claim, less the actual costs and expenses of disposing of such Collateral, or (c) such other treatment as may be agreed upon by the Debtor and the Committee and the holder of the Allowed Other Secured Claim. In the event that the Debtor and the Committee elect, pursuant to option (a) above, to distribute to the holder of the Allowed Other Secured Claim some of the Collateral securing such Claim, at the sole election of the Debtor, but with the Committee's consent, the Debtor may (i) attempt to sell the remaining Collateral securing the Allowed Other Secured Claim, or (ii) abandon such remaining Collateral. In the event that the Debtor sells Collateral securing such Allowed Other Secured Claim or abandon such Collateral, all expenses relating thereto, including but not limited to transportation, shipping, decommissioning and storage expenses, shall be borne by the holder of the Allowed Other Secured Claim. To the extent, if any, that the value of the Collateral securing a Class 2 Allowed Other Secured Claim is less than the total amount of such Claim, the difference shall be an Unsecured Deficiency Claim, and such Unsecured Deficiency Claim shall be treated as a Class 4 General Unsecured Claim under the Plan and the holder of such Claim shall be entitled to (i) vote to accept or reject the Plan as the holder of a Class 4 General Unsecured Claim, and (ii) receive the distribution otherwise made to holders of Allowed General Unsecured Claims that are classified in Class 4 under the Plan. In the event that a party to a Capital Lease Claim objects to the amendment of such Capital Lease Claim, Reorganized Trend-Lines expressly reserves the right to (i) move to reject any Capital Lease Claim or (ii) file a complaint seeking to recharacterize any Capital Lease Claim as a secured financing and not a true lease. PLAN - 13 3. Class 3 - Other Priority Claims 1. Impairment and Voting. Class 3 is unimpaired by the Plan. The holders of Claims in Class 3 are conclusively presumed to have accepted the Plan and holders of Class 3 Claims are not entitled to vote to accept or reject the Plan. 2. Treatment. Reorganized Trend-Lines shall pay to each holder of an Allowed Claim in Class 3 Cash in an amount equal to its Allowed Other Priority Claim on the later of the Effective Date or the date such Claim becomes an Allowed Other Priority Claim, or as soon thereafter as is practicable. 11. Class 4 - Convenience Claims 1. Impairment and Voting. Class 4 is impaired by the Plan. Each holder of an Allowed Convenience Claim in Class 4 is entitled to vote to accept or reject the Plan. 2. Treatment. Each holder of an Allowed Convenience Claim in Class 4 shall receive Cash in an amount equal to twenty-five percent (25%) of such Allowed Convenience Claim in full satisfaction, settlement, release and discharge of such Allowed Convenience Claim on the later of (a) the Effective Date, or (b) 30 days after the date on which such Claim becomes an Allowed Convenience Claim, or as soon thereafter as practicable. 4. Class 5 - General Unsecured Claims 1. Impairment and Voting. Class 5 is impaired by the Plan. Each holder of an Allowed General Unsecured Claim in Class 5 is entitled to vote to accept or reject the Plan. 2. Treatment. Each holder of an Allowed Claim in Class 5 will receive, in full satisfaction of such Allowed Claim, its pro rata share, based on the principal amount of each holder's Allowed Claim, of (i) the Cash Distribution Amount on January 15, 2002; and (ii) 5,280,000 shares of New Common Stock on the Effective Date. 5. Class 6 - Common Stock Equity Interests And Claims 1. Impairment and Voting. Class 6 is impaired by the Plan. The holders of Common Stock Equity Interests and/or Claims in Class 6 are deemed to reject the Plan, and accordingly, are not entitled to vote to accept or reject the Plan. 2. Treatment. The holders of Common Stock Equity Interests and/or Claims in Class 6 shall not receive or retain any interest or property under the Plan. 3. Cancellation of Common Stock Equity Interests. On the Effective Date, all Common Stock Equity Interests shall be extinguished and the certificates and all other documents representing such Common Stock Equity Interests shall be deemed cancelled and of no force or effect. PLAN - 14 ARTICLE V MEANS FOR IMPLEMENTATION OF THE PLAN 12. Corporate Governance Of Reorganized Trend-Lines 1. Certificate of Incorporation and Bylaws. Effective as of the Effective Date, the Certificate of Incorporation and By-laws of Reorganized Trend-Lines shall be amended and restated in substantially in the form annexed hereto as Exhibits B and C, respectively. The certificate of incorporation and by-laws of Reorganized Trend-Lines shall satisfy the requirements of the Plan and the Bankruptcy Code and shall include, among other things, pursuant to Section 1123(a)(6) of the Bankruptcy Code, a provision prohibiting the issuance of non-voting equity securities. Reorganized Trend-Lines shall change its name to Woodworker's Warehouse, Inc. and shall take such steps as are necessary to legally change its name. Exhibits B and C will be included in the Plan Supplement. 2. Control, Operation and Management. On the Effective Date, the management, control and operation of Reorganized Trend-Lines shall become the responsibility of the Board of Directors of Reorganized Trend-Lines, who shall thereafter have the responsibility for the management, control and operation of Reorganized Trend-Lines. 3. Directors And Officers. On the Effective Date, the term of the current Board of Directors of the Debtor shall expire. The Committee, upon consultation with the Debtor, will choose the Board of Directors. The Committee and the Debtor intend to file the Board of Directors Designation at least 10 days prior to the Confirmation Date. The Plan contemplates and is predicated upon Walt Spokowski being chosen as one of the members of the Board of Directors of the Reorganized Trend-Lines. 13. Cancellation Of Old Equity Securities On the Effective Date, except as otherwise provided for herein, (i) the Old Equity Securities, to the extent not already cancelled, shall be automatically cancelled without any further action by the Reorganized Trend-Lines, and (ii) the obligations of Trend-Lines and Post Tool, Inc. under the Old Equity Securities and under the Certificate of Incorporation, any agreements, indentures, or certificates of designations governing the Old Equity Securities or the rights of holders thereof shall be deemed discharged and extinguished. 14. Issuance And Reserve Of New Common Stock 1. Issuance The issuance by Reorganized Trend-Lines of all of the shares of the New Common Stock that are required to be distributed pro-rata to holders of Class 5 Claims pursuant to this Plan is hereby authorized without further act or action by the Board of Directors of Reorganized Trend-Lines and without further act or action under applicable law, regulation, order, or rule. The shares of New Common Stock to be issued under this Plan shall be deemed issued as of the Effective Date regardless of the date on which they are actually distributed and upon such issuance shall be fully paid and non-assessable. A description of the terms of the New Common Stock is annexed hereto as Exhibit A. PLAN - 15 2. Reserve Reorganized Trend-Lines is hereby authorized to reserve 1.5 million shares out of the total authorized New Common Stock of 7,500,000 shares without further act or action by the Board of Directors of Reorganized Trend-Lines and without further act or action under applicable law, regulation, order, or rule. 6. Exit Financing Facility, Obtaining Cash for Plan Distributions 3. Exit Financing Facility On the Effective Date, the Reorganized Debtor is authorized to execute and deliver those documents necessary or appropriate to obtain an Exit Financing Facility subject to closing of the Exit Financing Facility, BofA is granted and holds first priority perfected liens and security interests in and to all leases with respect to which the Reorganized Trend-Lines is a tenant (the "Leased Premises") and all leasehold interests of the Reorganized Trend-Lines and all proceeds thereof. The Reorganized Trend-Lines will take such actions as may be reasonably requested by BofA from time to time with respect to such liens and security interests. The liens and security interests granted pursuant to the Plan are automatically deemed perfected upon entry of the Confirmation Order without the necessity of BofA taking possession, filing financing statements, mortgages, leasehold mortgages, or other documents. No person, as defined in Section 101(41) of the Bankruptcy Code, will be permitted to secure a lien or security interest which is equal to or senior to the liens and security interests of BofA, any title, landlord's lien, right of distraint or levy, security interest or other interest that any landlord or mortgagee may have in any personalty of the Reorganized Trend-Lines located on such Leased Premises, to the extent that same is not void or voidable under Section 545 of the Bankruptcy Code, is hereby expressly subordinated to the lien of BofA in such personalty. 4. Cash for Distribution All cash necessary for the Reorganized Debtor to make payments pursuant to the Plan will be obtained from the Reorganized Debtor's cash balances and operations and/or the Exit Financing Facility Cash payments to be made pursuant to the Plan will be made by the Reorganized Debtor. 15. Revesting Of Assets Of Reorganized Trend-Lines The property of the Estate of Trend-Lines, together with any property of Trend-Lines that is not property of its Estate and that is not specifically disposed of pursuant to the Plan, shall revest in Reorganized Trend-Lines on the Confirmation Date. Thereafter, the Reorganized Trend-Lines may operate its business and may use, acquire, and dispose of any and all such property free of any restrictions of the Bankruptcy Code, the Bankruptcy Rules, and the Court. As of the Confirmation Date, all property of the Reorganized Trend-Lines shall be free and clear of all Claims and Equity Interests, except as specifically provided in the Plan or the Confirmation Order. Without limiting the generality of the foregoing, the Reorganized Trend-Lines may, without application to or approval by the Court, pay professional fees and expenses that it may incur after the Confirmation Date. 16. Preservation Of Rights Of Action Except as otherwise provided in this Plan or the Confirmation Order, or in any contract, instrument, release, indenture, or other agreement entered into in connection with the Plan, in accordance with Section 1123(b) of the Bankruptcy Code, the Reorganized Trend-Lines shall retain and may enforce, sue PLAN - 16 on, settle, or compromise (or decline to do any of the foregoing) all claims, rights, causes of action, suits or proceedings, whether in law or in equity, whether known or unknown, that the Debtor or the Estate may hold against any Person (the "Retained Causes of Action) except that the Debtor expressly waives any and all claims or causes of action arising under Section 547 of the Bankruptcy Code. The Debtor also has determined, in its business judgment , not to object to any Unsecured Claims on the basis of cooperative advertising claims. The Reorganized Trend-Lines or its successor(s) or the Committee may pursue such Retained Causes of Action. 17. Effectuating Documents; Further Transactions The chairman of the board of directors, chief executive officer, president, chief operating officer, chief financial officer or any other appropriate officer of the Debtor, Reorganized Trend-Lines, as the case may be, shall be authorized to execute, deliver, file, or record such contracts, instruments, releases, indentures, and other agreements or documents, and take such actions, as may be necessary or appropriate to effectuate and further evidence the terms and conditions of the Plan. The secretary or assistant secretary of the Debtor or Reorganized Trend-Lines shall be authorized to certify or attest to any of the foregoing actions. 18. Applicability Of Sections 1125 And 1145 Of The Bankruptcy Code. The protection afforded by Section 1125(e) of the Bankruptcy Code with regard to the solicitation of acceptances or rejections of the Plan and with regard to the offer, issuance, sale or purchase of the New Common Stock, shall apply to the full extent provided by law, and the entry of the Confirmation Order shall constitute the determination by the Bankruptcy Court that the Debtor and the Committee and each of their respective officers, directors, partners, employees, members, agents, attorneys, accountants, or other professionals, shall have acted in good faith and in compliance with the applicable provisions of the Bankruptcy Code pursuant to Section 1125(e) of the Bankruptcy Code. In addition, the exemption from the requirements of Section 5 of the Securities Act of 1933, 15 U.S.C. ss. 77e, and any state or local law requiring registration for the offer or sale of a security provided for in Section 1145 of the Bankruptcy Code shall apply to the New Common Stock. 19. Exemption From Certain Transfer Taxes Pursuant to Section 1146(c) of the Bankruptcy Code, any transfers either pre or post Confirmation from the Debtor or the Reorganized Trend-Lines to any Person or entity or to Reorganized Trend-Lines, pursuant to the Plan shall not be subject to any document recording tax, stamp tax, conveyance fee, intangibles or similar tax, mortgage tax, stamp act, real estate transfer tax, mortgage recording tax, or other similar tax or governmental assessment, and the Confirmation Order shall direct the appropriate state or local governmental officials or agents to forego the collection of any such tax or governmental assessment and to accept for filing and recordation any of the foregoing instruments or other documents without the payment of any such tax or governmental assessment. 7. Final Decree After the distribution of New Common Stock to holders of Allowed Class 5 Claims, the resolution of any objections to Claims in the Chapter 11 Case, and the resolution of any Causes of Action in the Court, the Disbursing Agent shall file a report with the Bankruptcy Court and seek the entry of a Final Decree. PLAN - 17 8. Listing New Common Stock The Debtor and Reorganized Debtor shall take all reasonable measures to have the New Common Stock listed on any National Securities Exchange. ARTICLE VI ACCEPTANCE OR REJECTION OF THE PLAN 20. Classes Entitled To Vote Each Impaired Class of Claims that may receive or retain property or any interest in property under the Plan (i.e., Classes 1, 4 and 5) shall be entitled to vote to accept or reject the Plan. By operation of law, each Unimpaired Class of Claims is deemed to have accepted the Plan and, therefore, is not entitled to vote to accept or reject the Plan. Because holders of Class 6 are not entitled to receive or retain any property under the Plan, Class 6 is presumed to have rejected the Plan and, therefore, shall not be entitled to vote on the Plan. 21. Acceptance By Impaired Classes An Impaired Class of Claims shall have accepted the Plan if (i) the holders (other than any holder designated under Section 1126(e) of the Bankruptcy Code) of at least two-thirds in amount of the Allowed Claims actually voting in such Class have voted to accept the Plan and (ii) the holders (other than any holder designated under Section 1126(e) of the Bankruptcy Code) of more than one-half in number of the Allowed Claims actually voting in such Class have voted to accept the Plan. 22. Cramdown To the extent necessary, the Proponents, shall request Confirmation of the Plan, as it may be modified from time to time, under Section 1129(b) of the Bankruptcy Code. Debtor and the Committee reserve the right to modify the Plan to the extent, if any, that Confirmation pursuant to Section 1129(b) of the Bankruptcy Code requires modification. ARTICLE VII PROVISIONS GOVERNING DISTRIBUTIONS A. Distributions for Claims Allowed as of the Initial Distribution Date Except as otherwise provided in this Article VI, distributions of cash or New Common Stock to be made on the Initial Distribution Date to holders of Claims that are allowed as of the Initial Distribution Date will be deemed made on the Initial Distribution Date or as promptly thereafter as practicable, but in any event no later than: (a) thirty days after the Effective Date or (b) such later date when the applicable conditions of Section VIII.B (regarding cure PLAN - 18 payments for Executory Contracts and Unexpired Leases being assumed), Section VII.D.2 (regarding undeliverable distributions) or Section VII.J (regarding surrender of canceled instruments and securities) are satisfied. Distributions on account of Claims that become Allowed Claims after the Initial Distribution Date will be made pursuant to Sections VII.G and X.C. B. Method of Distributions to Holders of Claims The Reorganized Debtor, or such Disbursing Agent as the Reorganized Debtor may employ in its sole discretion, will make all distributions required under the Plan. Any Disbursing Agent will serve without bond, and any Disbursing Agent may employ or contract with other entities to assist in or make the distributions required by the Plan. The Reorganized Debtor may, at its option, employ an Indenture(s) Trustee to act as the Third Party Disbursing Agent in respect of certain Claims subject to Indentures. The Reorganized Debtor shall be authorized to implement such procedures as it deems necessary to distribute New Common Stock to Class 5, so as to efficiently and economically assure prompt and proportionate distribution of such consideration, including arranging for reservation of New Common Stock or retiring New Common Stock held in reserve. C. Compensation and Reimbursement for Services Related to Distributions Each third party Disbursing Agent providing services related to distributions pursuant to the Plan will receive from the Reorganized Debtor, without further Bankruptcy Court approval, reasonable compensation for such services and reimbursement of reasonable out-of-pocket expenses incurred in connection with such services. These payments will be made on terms agreed to with the Reorganized Debtor and will not be deducted from distributions to be made pursuant to the Plan to holders of Allowed Claims receiving distributions from a third party Disbursing Agent. D. Delivery of Distributions and Undeliverable or Unclaimed Distributions 1. Delivery of Distributions a. Generally Except as provided in Section VII.D.2, distributions to holders of Allowed Claims will be made by the Reorganized Debtor or Disbursing Agent (a) at the addresses set forth on the respective proofs of Claim Filed by holders of such Claims; (b) at the addresses set forth in any written certification of address change delivered to the Disbursing Agent (including pursuant to a letter of transmittal delivered to a Disbursing Agent) after the date of Filing of any related proof of Claim; or (c) at the addresses reflected in the applicable Debtor's Schedules if no proof of Claim has been Filed and the Disbursing Agent has not received a written notice of a change of address. 2. Undeliverable Distributions a. Holding of Undeliverable Distributions - Undelivered New Common Stock i. If any distribution to a holder of an Allowed Claim is returned to a Disbursing Agent as undeliverable, no further distributions will be made to such holder unless and until the applicable Disbursing Agent is notified by written certification of such holder's then-current address. PLAN - 19 ii. Pending the distribution of any New Common Stock, the Reorganized Debtor or Disbursing Agent will cause all of the New Common Stock held by it to be (A) represented in person or by proxy at each meeting of the stockholders of the Reorganized Debtor, (B) voted in any election of directors of the Reorganized Debtor for the nominees recommended by the board of directors of the Reorganized Debtor and (C) voted with respect to any other matter as recommended by the board of directors of the Reorganized Debtor. b. After Distributions Become Deliverable On each Quarterly Distribution Date, the Reorganized Debtor or applicable Disbursing Agent will make all distributions that become deliverable to holders of Disputed Claims that became Allowed Claims during the preceding three months. c. Failure to Claim Undeliverable Distributions Any holder of an Allowed Claim that does not assert a Claim pursuant to the Plan for an undeliverable distribution to be made by the Reorganized Debtor or a Disbursing Agent within one year after the later of (i) the Effective Date and (ii) the last date on which a distribution was deliverable to such holder will have its Claim for such undeliverable distribution discharged and will be forever barred from asserting any such Claim against the Reorganized Debtor or its respective property. Unclaimed cash will be distributed Pro Rata to the remaining Allowed Class 5 Claims. Unclaimed shares will be retired. Nothing contained in the Plan will require any Debtor, the Reorganized Debtor, or any Disbursing Agent to attempt to locate any holder of an Allowed Claim. E. Distribution Record Date 1. As of the close of business on the Distribution Record Date, the respective transfer registers for the Old Common Stock of Trend-Lines and the Old Common Stock of Post Tool, Inc., as maintained by the Debtors, will be closed. The Reorganized Debtor or any applicable Disbursing Agent will have no obligation to recognize the transfer or sale of any Claims or shares of Old Common Stock that occur after the close of business on the Distribution Record Date and will be entitled for all purposes herein to recognize and make distributions only to those holders of Claims who are holders of such Claims as of the close of business on the Distribution Record Date. 2. Except as otherwise provided in a Final Order of the Bankruptcy Court, the transferees of Claims in Class 5 that are transferred pursuant to Bankruptcy Rule 3001 on or prior to the Distribution Record Date will be treated as the holders of such Claims for all purposes, notwithstanding that any period provided by Bankruptcy Rule 3001 for objecting to such transfer has not expired by the Distribution Record Date. F. Means of Cash Payments Except as otherwise specified herein, cash payments made pursuant to the Plan will be in currency of the United States by checks drawn on a domestic bank selected by the Reorganized Debtor or, at the option of the Reorganized Debtor, by wire transfer from a domestic bank. PLAN - 20 G. Timing and Calculation of Amounts to Be Distributed 1. Allowed Claims in Class 5 The Initial Distribution Date shall occur as soon as practicable after the Effective Date, but in no event later than thirty (30) days following the Effective Date. On the Initial Distribution Date, distributions made to holders of Allowed Claims on account of such Claims will be calculated as if each Disputed Claim were an Allowed Claim in its face amount. On each Quarterly Distribution Date, distributions also will be made, pursuant to Section IX.C, to the extent allowed, to holders of Disputed Claims in each Class that were allowed during the preceding three (3) months. Such quarterly distributions also will be calculated pursuant to the provisions set forth in this Section. 2. Distributions of New Common Stock Notwithstanding any other provision of the Plan, only whole numbers of shares of New Common Stock will be issued. When any distribution on account of an Allowed Claim would otherwise result in the issuance of a number of shares of New Common Stock that is not a whole number, the actual distribution of shares of such stock will be rounded to the next higher or lower whole number as follows: (a) fractions equal to or greater than 1/2 will be rounded to the next higher whole number and (b) fractions less than 1/2 will be rounded to the next lower whole number. The total number of shares of New Common Stock to be distributed on account of Allowed Claims will be adjusted as necessary to account for the rounding, provided for in this Section VII.G.2. No consideration will be provided in lieu of fractional shares that are rounded down. 3. De Minimis Distributions No cash will be distributed to the holder of an Allowed Claim in any Class if the amount of cash to be distributed on account of such Claim is less than $25. Any holder of an Allowed Claim on account of which the amount of cash to be distributed is less than $25 will have its Claim for such distribution discharged and will be forever barred from asserting any such Claim against the Reorganized Debtor, or its respective property. Any cash not distributed pursuant to this Section will be the property of the Reorganized Debtor, free of any restrictions thereon, and any such cash held by a third party Disbursing Agent will be returned to the Reorganized Debtor. 4. Compliance with Tax Requirements a. In connection with the Plan, to the extent applicable, the Reorganized Debtor or any Disbursing Agent will comply with all Tax withholding and reporting requirements imposed on it by any governmental unit, and all distributions pursuant to the Plan will be subject to such withholding and reporting requirements. b. Notwithstanding any other provision of the Plan, each entity receiving a distribution of cash or New Common Stock pursuant to the Plan will have sole and exclusive responsibility for the satisfaction and payment of any Tax obligations imposed on it by any governmental unit on account of such distribution, including income, withholding and other Tax obligations. PLAN - 21 H. Provisions Governing the Unsecured Claims Reserve 1. Funding of the Unsecured Claims Reserve On the Effective Date, the Reserved Shares will be placed in the Unsecured Claims Reserve for the benefit of holders of Allowed Claims in Class 5. 2. Property Held in Unsecured Claims Reserve a. Dividends and Distributions Cash dividends and other distributions on account of New Common Stock held in the Unsecured Claims Reserve will be transferred to the Unsecured Claims Reserve concurrently with the transfer of such dividends and other distributions to other holders of New Common Stock. Cash held in the Unsecured Claims Reserve as a result of such dividends and other distributions (i) will be deposited in a segregated bank account in the name of the applicable Disbursing Agent and held in trust pending distribution by the Disbursing Agent for the benefit of holders of Class 5 Claims, (ii) will be accounted for separately and (iii) will not constitute property of the Reorganized Debtor. The Disbursing Agent will invest the cash held in the Unsecured Claims Reserve in a manner consistent with the Reorganized Debtor's investment and deposit guidelines. The Disbursing Agent also will place in the Unsecured Claims Reserve the cash investment yield from such investment of cash b. Recourse Each holder of an Allowed Claim (or a Disputed Claim that ultimately becomes an Allowed Claim) in Class 5 will have recourse only to be undistributed cash and New Common Stock held in the Unsecured Claims Reserve for satisfaction of the distributions to which holders of Allowed Class 5 Claims are entitled under the Plan, and not the Reorganized Debtor, its property or any assets previously distributed on account of any Allowed Claim. I. Setoffs Except with respect to Claims of a Debtor or the Reorganized Debtor released pursuant to the Plan or any contract, instrument, release or other agreement or document entered into or delivered in connection with the Plan, the Reorganized Debtor or, as instructed by the Reorganized Debtor or a third party Disbursing Agent may, pursuant to section 553 of the Bankruptcy Code or applicable nonbankruptcy law, set off against any Allowed Claim and the distributions to be made pursuant to the Plan on account of such Claim (before any distribution is made on account of such Claim) the claims, rights and causes of action of any nature that the Reorganized Debtor may hold against the holder of such Allowed Claim; provided, however, that neither the failure to effect a setoff nor the allowance of any Claim hereunder will constitute a waiver or release by the Reorganized Debtor of any claims, rights and causes of action that any Debtor or the Reorganized Debtor may possess against such a Claim holder. PLAN - 22 J. Surrender of Canceled Instruments or Securities As a condition precedent to receiving any distribution pursuant to the Plan on account of an Allowed Claim evidenced by the Notes, contracts, instruments, securities or other documentation canceled pursuant to Section V.F, the holder of such Claim (or other appropriate parties which hold such Notes, contracts, instruments, securities or other documentation on their behalf) must tender, as specified in this Section VII.J, the applicable instruments, securities or other documentation evidencing such Claim to the applicable Disbursing Agent, together with any letter of transmittal required by the Reorganized Debtor or Disbursing Agent. Pending such surrender, any distributions pursuant to the Plan on account of any such Claim will be treated as an undeliverable distribution pursuant to Section VII.D.2. 1. Tender of Notes Except as provided in Section VII.J.2 for lost, stolen, mutilated or, destroyed Notes or instruments, each holder of an Allowed Notes Claim or Claim evidenced by an instrument must tender the applicable Note or Instrument to the applicable Reorganized Debtor, Reorganized Debtor Subsidiary Entity or Disbursing Agent in accordance with a letter of transmittal to be provided to such holders by the Reorganized Debtor or Disbursing Agent as promptly as practicable following the Effective Date. The letter of transmittal will include, among other provisions, customary provisions with respect to the authority of the holder of the applicable Notes to act and the authenticity of any signatures required thereon. All surrendered Notes and other instruments will be marked as canceled and delivered to the Reorganized Debtor. 2. Lost, Stolen, Mutilated or Destroyed Notes Any holder of Notes or instruments which have been lost, stolen, mutilated or destroyed must, in lieu of surrendering such Note, deliver to the applicable Disbursing Agent: (a) evidence satisfactory to the Disbursing Agent of the loss, theft, mutilation or destruction and (b) such security or indemnity as may be required by the Disbursing Agent to hold the Disbursing Agent and the Reorganized Debtor, as applicable, harmless from any damages, liabilities or costs incurred in treating such individual as a holder of Note. Upon compliance with this Section VII.J.2 by a holder of an Allowed Note Claim, such holder will, for all purposes under the Plan, be deemed to have surrendered the applicable Note. ARTICLE VIII TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES 23. Assumption And Rejection Of Executory Contracts And Leases 1. Agreements and Leases. Except as otherwise provided in the Plan or in any contract, instrument, release, indenture, or other agreement or document entered into in connection with the Plan, as of the Effective Date the Debtor shall be deemed to have rejected each executory contract and unexpired lease to which it is a party, unless such contract or lease: (i) was previously assumed or rejected by PLAN - 23 the Debtor, (ii) previously expired or terminated pursuant to its own terms, (iii) is the subject of a motion to assume filed on or before the Confirmation Date, (iv) is identified as an assumed executory contract or an assumed unexpired lease, as applicable, in the Plan Supplement or (v) is assumed pursuant to another Section of this Article VIII. 2. Effect of Assumption of Certain Contracts and Leases. Each executory contract and unexpired lease that is assumed and relates to the use, ability to acquire, or occupancy of real property shall include (i) all modifications, amendments, supplements, restatements, or other agreements made directly or indirectly by any agreement, instrument, or other document that in any manner affects such executory contract or unexpired lease and (ii) all executory contracts or unexpired leases appurtenant to the premises, including all easements, licenses, permits, rights, privileges, immunities, options, rights of first refusal, powers, uses, reciprocal easement agreements, vaults, tunnel or bridge agreements or franchises, and any other interests in real estate or rights in rem related to such premises, unless any of the foregoing agreements has been rejected pursuant to an order of the Court. 3. Effect of Confirmation Order on Assumptions and Rejections. The Confirmation Order shall constitute an order of the Court under Section 365 of the Bankruptcy Code approving the contract and lease assumptions and rejections described above, as of the Effective Date. 24. Payments Related To Assumption Of Executory Contracts And Leases Any monetary amounts by which each executory contract and unexpired lease to be assumed pursuant to the Plan is in default shall be satisfied, under Section 365(b)(1) of the Bankruptcy Code, at the option of the Debtor party to the executory contract or lease or the assignee of the Debtor party assuming such contract or lease, by Cure, or by such other treatment as to which each Debtor and such non-Debtor Party to th executory contract or unexpired lease shall have agreed in writing. If there is a dispute regarding (i) the nature or amount of any Cure, (ii) the ability of any of Reorganized Trend-Lines or any assignee to provide "adequate assurance of future performance" (within the meaning of Section 365 of the Bankruptcy Code) under the contract or lease to be assumed, or (iii) any other matter pertaining to assumption, Cure shall occur within 30 days following the entry of a Final Order resolving the dispute and approving the assumption or assumption and assignment, as the case may be. 25. Bar To Rejection Damages If the rejection by the Debtor, pursuant to the Plan or otherwise, of an executory contract or unexpired lease results in a Claim that is not theretofore evidenced by a timely filed proof of Claim or a proof of Claim that is deemed to be timely filed under applicable law, then such Claim shall be forever barred and shall not be enforceable against the Debtor, the Reorganized Trend-Lines or its respective properties, unless a proof of Claim is filed with the Clerk of the Court and served upon counsel for the Debtor within thirty (30) days of entry of the Confirmation Order. 26. Employee Incentive Stock Plan Reorganized Trend-Lines shall adopt an Employee Incentive Stock Plan which will allow Reorganized Trend-Lines to grant New Common Stock to officers, directors and employees of the Reorganized Trend-Lines as the board of directors of Reorganized Trend-Lines may from time to time determine subject to the terms and conditions of the Employee Incentive Stock Plan. PLAN - 24 27. Compensation And Benefit Plans Except as and to the extent previously assumed by an order of the Court or subject to a motion to assume pending before the Court, on the Confirmation Date, all employee compensation and Employee Benefit Plans of the Debtor, including programs subject to Sections 1114 and 1129(a)(13) of the Bankruptcy Code, entered into before or after the Petition Date and not since terminated, shall be deemed to be, and shall be treated as if they were, executory contracts that are rejected and shall not survive confirmation of this Plan. Notwithstanding the foregoing, Employment Agreements entered into on the Confirmation Date, if any, shall amend and supersede any other employment agreements, stock incentive plans, and severance plans with or for the benefit of those employees who are parties to the Employment Agreements. ARTICLE IX PROCEDURES FOR RESOLVING DISPUTED, CONTINGENT AND UNLIQUIDATED CLAIMS A. Prosecution of Objections to Claims 1. Objections to Claims All objections to Claims must be Filed and served on the holders of such Claims by the Claims Objection Bar Date, and, if Filed prior to the Effective Date, such objections will be served on the parties on the then-applicable service list in the Chapter 11 Cases, including the Committee. If an objection has not been Filed to a proof of Claim or a scheduled Claim by the Claims Objection Bar Date, the Claim to which the proof of Claim or scheduled Claim relates will be treated as an Allowed Claim if such Claim has not been allowed earlier. 2. Authority to Prosecute Objections After the Confirmation Date, only the Reorganized Debtor or the Committee will have the authority to File, settle, compromise, withdraw or litigate to judgment objections to Claims. After the Effective Date, on ten (10) days advance notice to the Committee or the Reorganized Debtor as the case may be, the Reorganized Debtor or the Committee, as the case may be, may settle or compromise any Disputed Claim without approval of the Bankruptcy Court. B. Treatment of Disputed Claims Notwithstanding any other provisions of the Plan, no payments or distributions will be made on account of a Disputed Claim but only as to the disputed portion until such Claim becomes an Allowed Claim. PLAN - 25 C. Distributions on Account of Disputed Claims Once Allowed On each Quarterly Distribution Date, the Reorganized Debtor or the Disbursing Agent will make distributions on account of any Disputed Claim but only to the extent of the portion that has become an Allowed Claim during the two preceding calendar quarters. Such distributions will be made pursuant to the provisions of the Plan governing the applicable Class. ARTICLE X CONDITIONS PRECEDENT TO CONFIRMATION AND EFFECTIVENESS OF THE PLAN 28. Conditions To Confirmation The following are conditions precedent to confirmation of the Plan that must be satisfied or waived in accordance with Article X.C. below: 1. The Court shall have entered the Confirmation Order in form and substance satisfactory to the Debtor and the Committee. 2. The Confirmation Order entered by the Court shall approve an Exit Financing Facility if requested to by the Debtor and the Committee. 3. Walt Spokowski and Ron Franklin shall have entered into Employment Agreements with the Reorganized Trend-Lines in a form satisfactory to the Committee, the terms of which will be summarized in the Plan Supplement. 4. Reorganized Trend-Lines shall have received Commitments for the provision of trade credit on terms and in amounts satisfactory to the Proponents. 29. Conditions To Effectiveness The following are conditions precedent to the occurrence of the Effective Date, each of which must be satisfied or waived in accordance with Article X.C. below: 1. The Confirmation Order shall have become a Final Order. 2. The Reorganized Trend-Lines shall have immediate availability to borrow under the Exit Financing Facility. 3. All authorizations, consents and regulatory approvals, if any, required in connection with the effectiveness of the Plan shall have been obtained. PLAN - 26 4. The following documents, in form and substance satisfactory to the Debtor and the Committee, shall have been adopted by Reorganized Trend-Lines, and all conditions precedent thereto shall have been satisfied: 1. The certificates of incorporation of the Reorganized Trend-Lines; 2. The by-laws of the Reorganized Trend-Lines. 5. All other actions, documents and agreements necessary to implement the Plan pursuant to Article V shall have been effected or executed. 30. Waiver Of Conditions Each of the conditions set forth in Articles X.A and X.B above, other than those set forth in Article X.A., 1., 2., and 3. and Article X.B.1. may be waived in whole or in part by the Debtor or the Reorganized Trend-Lines, as the case may be, with the consent of the Committee without any notice to parties in interest or the Court and without a hearing. The failure to satisfy or waive any condition to the Effective Date may be asserted by the Debtor or the Reorganized Trend-Lines or the Committee regardless of the circumstances giving rise to the failure of such condition to be satisfied (including any action or inaction by the Debtor or Reorganized Trend-Lines). The failure of the Debtor, the Reorganized Trend-Lines or the Committee to exercise any of the foregoing rights shall not be deemed a waiver of any other rights, and each such right shall be deemed an ongoing right that may be asserted at any time. ARTICLE XI MODIFICATIONS AND AMENDMENTS With the consent of the Committee, the Debtor may alter, amend, or modify this Plan, the Plan Supplement or any Exhibits hereto under Section 1127(a) of the Bankruptcy Code at any time prior to the Confirmation Date. After the Confirmation Date and prior to substantial consummation of the Plan, as defined in Section 1101(2) of the Bankruptcy Code, the Debtor may, under Section 1127(b) of the Bankruptcy Code, institute proceedings in the Court to remedy any defect or omission or reconcile any inconsistencies in the Plan, the Disclosure Statement or the Confirmation Order, and to accomplish such matters as may be necessary to carry out the purposes and effects of the Plan so long as such proceedings do not materially adversely affect the treatment of holders of Claims or Equity Interests under the Plan; provided, however, that prior notice of such proceedings shall be served in accordance with the Bankruptcy Rules or order of the Court. ARTICLE XII RETENTION OF JURISDICTION Under Sections 105(a) and 1142 of the Bankruptcy Code, and notwithstanding entry of the Confirmation Order and occurrence of the Effective Date, the Court shall retain exclusive jurisdiction over all matters arising out of, and related to, the Chapter 11 Cases and the Plan to the fullest extent permitted by law, including, among other things, jurisdiction to: PLAN - 27 1. Allow, disallow, determine, liquidate, classify, estimate, or establish the priority or secured or unsecured status of any Claim or Equity Interest, including the resolution of any request for payment of any Administrative Claim and the resolution of any objections to the allowance or priority of Claims or Equity Interests; 2. Hear and determine all applications for compensation and reimbursement of expenses of Professionals under the Plan or under Sections 330, 331, 503(b), 1103, and 1129(a)(4) of the Bankruptcy Code; provided, however, that from and after the Effective Date, the payment of the fees and expenses of the retained Professionals of the Reorganized Trend-Lines and the Committee shall be made in the ordinary course of business and shall not be subject to the approval of the Court; 3. Hear and determine all matters with respect to the assumption or rejection of any executory contract or unexpired lease to which the Debtor are a party or with respect to which the Debtor may be liable, including, if necessary, the nature or amount of any required Cure or the liquidation or allowance of any Claims arising therefrom; 4. Effectuate performance of and payments under the provisions of the Plan; 5. Hear and determine any and all adversary proceedings including those proceedings, if any, instituted pursuant to Chapter 5 of the Bankruptcy Code, motions, applications, and contested or litigated matters arising out of, under, or related to, the Chapter 11 Cases; 6. Enter such orders as may be necessary or appropriate to execute, implement or consummate the provisions of the Plan and all contracts, instruments, releases, and other agreements or documents created in connection with the Plan, the Disclosure Statement, or the Confirmation Order; 7. Hear and determine disputes arising in connection with the interpretation, implementation, consummation or enforcement of the Plan, including disputes arising under agreements, documents or instruments executed in connection with the Plan; 8. Consider any modifications of the Plan, cure any defect or omission, or reconcile any inconsistency in any order of the Court, including, without limitation, the Confirmation Order; 9. Issue injunctions, enter and implement other orders, or take such other actions as may be necessary or appropriate to restrain interference by any entity with implementation, consummation or enforcement of the Plan or the Confirmation Order; 10. Enter and implement such orders as may be necessary or appropriate if the Confirmation Order is for any reason reversed, stayed, revoked, modified or vacated, or if distributions pursuant to the Plan are enjoined or stayed; PLAN - 28 11. Hear and determine any matters arising in connection with or relating to the Plan, the Disclosure Statement, the Confirmation Order or any contract, instrument, release, or other agreement or document created in connection with the Plan, the Disclosure Statement or the Confirmation Order; 12. Enforce all orders, judgments, injunctions, releases, exculpations, indemnifications and rulings entered in connection with the Chapter 11 Case; 13. Recover all assets of the Debtor and property of the Debtor's Estate, wherever located; 14. Hear and determine matters concerning federal, state and local taxes in accordance with Sections 346, 505, and 1146 of the Bankruptcy Code; 15. Hear and determine all disputes involving the existence, nature or scope of the Debtor's discharge; 16. Hear and determine such other matters as may be provided in the Confirmation Order or as may be authorized under, or not inconsistent with, provisions of the Bankruptcy Code; and 17. Enter a final decree closing the Chapter 11 Cases. ARTICLE XIII MISCELLANEOUS PROVISIONS 31. Bar Dates For Certain Claims 1. Administrative Claims. The Confirmation Order will establish a Bar Date for the filing of all Administrative Claims (not including Professional Fee Claims or the expenses of the members of the Committee), which date shall be 30 days after the Confirmation Date. Holders of asserted Administrative Claims, other than Professional Fee Claims, United States Trustee fees, or the expenses of the members of the Committee, not paid prior to the Confirmation Date must submit proofs of Administrative Claim on or before such Administrative Claims Bar Date or forever be barred from doing so. The notice of Confirmation to be delivered pursuant to Bankruptcy Rule 3020(c) and 2002(f) will set forth such date and constitute notice of this Administrative Claims Bar Date. The Debtor or Reorganized Trend-Lines, as the case may be, shall have 30 days (or such shorter period as may be allowed by order of the Court) following the Administrative Claims Bar Date to review and object to such Administrative Claims. If no objection is made then Reorganized Trend-Lines shall pay such Administrative Claim as soon as practicable 2. Professional Fee Claims. All final requests for compensation or reimbursement of Professionals pursuant to Sections 327, 328, 330, 331, 503(b), or 1103 of the Bankruptcy Code for services rendered to the Debtor or Committee prior to the Effective Date must be filed and served on Reorganized Trend-Lines, its counsel and the Committee's counsel no later than 45 days after the Confirmation Date, unless otherwise ordered by the Court. Objections to applications of such Professionals or other entities for compensation or reimbursement of expenses must be filed and served on Reorganized Trend-Lines PLAN - 29 and its counsel and the requesting Professional or other Person no later than 20 days (or such shorter period as may be allowed by order of the Court) after the date on which the applicable application for compensation or reimbursement was served. 3. Other Claims. By Order dated March 16, 2001, the Court entered an order (the "Bar Date Order") setting April 30, 2001 (the "Bar Date") as the last date for the filing of proofs of Claim against the Debtor on account of any Claim, as defined in Section 101(5) of the Bankruptcy Code, against the Debtor, which arose prior to the Petition Date. Pursuant to the Bar Date Order and Bankruptcy Rule 3003(c)(2), any Person that was required to file a timely proof of Claim in the form and manner specified by the Bar Date Order and that failed to do so on or before the Bar Date (or, in the case of a Claim based upon the Debtor's rejection of an unexpired lease or executory contract, before the Rejection Damages Bar Date, as defined in the Bar Date Order), shall not be entitled to vote on the Plan and shall not receive or retain, or be entitled to receive or retain, any property or any payment or distribution of property from the Debtor or its successors or assigns with respect to such Claim. 32. Payment Of Statutory Fees On or before the Effective Date, the Debtor shall pay or have paid in Cash in full all allowed Administrative Claims for fees payable pursuant to 28 U.S.C. ss. 1930 and fees payable to the Court, which are due and payable on or before the Effective Date. All fees payable pursuant to 28 U.S.C. ss. 1930 after the Effective Date will be paid by the Reorganized Trend-Lines. 33. Amendment And Severability Of Plan Provisions The Debtor may, with the consent of the Committee, alter, amend or modify the treatment of any Claim provided for under the Plan. If, prior to Confirmation, any term or provision of the Plan is held by the Court to be invalid, void or unenforceable, the Court, at the request of the Debtor, shall have the power to alter and interpret such term or provision to make it valid or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void or unenforceable, and such term or provision shall then be applicable as altered or interpreted. Notwithstanding any such holding, alteration or interpretation, the remainder of the terms and provisions of the Plan shall remain in full force and effect and shall in no way be affected, impaired or invalidated by such holding, alteration or interpretation. The Confirmation Order shall constitute a judicial determination and shall provide that each term and provision of the Plan, as it may have been altered or interpreted in accordance with the foregoing, is valid and enforceable pursuant to its terms. 34. Successors And Assigns The rights, benefits and obligations of any Person named or referred to in the Plan shall be binding upon, and shall inure to the benefit of, any heir, executor, administrator, successor or assign of such Person. 35. Discharge Of The Debtor And Injunction All consideration distributed under the Plan shall be in exchange for, and in complete satisfaction, settlement, discharge and release of, all Claims against the Debtor of any nature whatsoever or against any of the Debtor's assets or properties. Except as otherwise expressly provided in the Plan, entry of the Confirmation Order acts as a discharge of all Claims against and Liens on the Debtor, the Debtor's assets, and the Debtor's properties, arising at any time before the entry of the Confirmation Order, regardless of whether a proof PLAN - 30 of Claim therefor was filed, whether the Claim is Allowed, or whether the holder thereof votes to accept the Plan or is entitled to receive a distribution thereunder, subject to the occurrence of the Distribution Date. Upon entry of the Confirmation Order, and subject to the occurrence of the Distribution Date, any holder of such discharged Claim or Equity Interest shall be precluded from asserting against the Debtor, any of the Reorganized Trend-Lines, any of its successors or any of its respective assets or properties any other or further Claim or Equity Interest based upon any document, instrument, act, omission, transaction or other activity of any kind or nature that occurred before the date of entry of the Confirmation Order. The Confirmation Order shall be a judicial determination of discharge of all liabilities of the Debtor, subject to the occurrence of the Distribution Date. In accordance with Section 524 of the Bankruptcy Code, the discharge provided by this Section and Section 1141 of the Bankruptcy Code shall act as an injunction against the commencement or continuation of any action, employment of process, or act to collect, offset or recover the Claims discharged hereby. Except as otherwise expressly provided in the Plan or the Confirmation Order, all Persons who have held, hold, or may hold Claims against the Debtor will be permanently enjoined and precluded permanently, on and after the Effective Date, subject to the occurrence of the Distribution Date, from (i) commencing or continuing in any manner any action or other proceeding of any kind with respect to any such Claim against the Debtor, the Reorganized Trend-Lines, or any of its respective successors or Related Parties, (ii) the enforcement, attachment, collection or recovery by any manner or means of any judgment, award, decree or order against the Debtor, the Reorganized Trend-Lines, or any of its respective successors or Related Parties on account of any such Claim, (iii) creating, perfecting or enforcing any encumbrance of any kind against any of the Debtor, the Reorganized Trend-Lines or against its respective property or interests in property on account of any such Claim, and (iv) asserting any right of setoff, subrogation or recoupment of any kind against any obligation due to the Debtor, any of the Reorganized Trend-Lines or against its respective property or interests in property on account of any such Claim. The foregoing injunction will extend to successors of the Debtor (including, without limitation, Reorganized Trend-Lines) and its respective properties and interests in property. 36. Releases From and after the Effective Date none of the Debtor, Reorganized Trend-Lines, the Reorganized Trend-Lines, nor the Committee, and none of their respective present or former directors, officers, employees, members, attorneys, consultants, advisors and agents (acting in such capacity), shall have or incur any liability to any Person, including holders of Claims or Equity Interests, for any act taken or omitted to be taken in connection with or related to the formulation, preparation, dissemination, implementation, confirmation or consummation of the Plan (other than an action in contravention of the Plan or its confirmation), the Disclosure Statement related thereto or any contract, instrument, release or agreement or document created or entered into, or any other act taken or omitted to be taken in connection with the Plan; provided, however, that the foregoing shall not affect the liability that otherwise would result from any such act or omission to the extent that such act or omission is determined by a Final Order to have constituted gross negligence or willful misconduct. Any of the foregoing parties in all respects shall be entitled to rely upon the advice of counsel with respect to their duties and responsibilities under the Plan. PLAN - 31 37. Exculpation And Other Releases Except as otherwise provided in the Plan or in the Confirmation Order, on the Effective Date, the Debtor shall unconditionally release (a) the Debtor's Related Parties, and (b) the Committee, each of its members and its respective Related Parties, from any and all claims, obligations, rights, causes of action and liabilities which the Debtor, the Reorganized Trend-Lines or any holder of a Claim against the Debtor may be entitled to assert, whether for tort, fraud, contract, violations of federal or state securities laws, or otherwise, whether known or unknown, foreseen or unforeseen, existing or hereafter arising, based in whole or in part upon any act or omission, transaction, or other occurrence taking place on or before the Effective Date in any way relating to the Chapter 11 Cases or the Plan; provided, however, that nothing herein shall release any Person from any claims, obligations, rights, causes of action or liabilities based upon any act or omission in connection with, relating to, or arising out of, the Chapter 11 Cases, the solicitation of acceptances of the Plan, the pursuit of Confirmation of the Plan, the Effectiveness of the Plan, the administration of the Plan, or the property to be distributed under the Plan arising out of such Person's gross negligence or willful misconduct. 38. Termination Of Committee Except as otherwise provided in this Article, effective [20 days] after the Distribution Date, the Committee shall cease to exist, and its members and employees or agents (including, without limitation, attorneys, investment bankers, financial advisors, accountants and other professionals) will be released and discharged from any further authority, duties, responsibilities and obligations relating to, arising from, or in connection with their service on the Committee. The Committee will continue to exist after such date solely with respect to (i) applications filed pursuant to Section 330 and 331 of the Bankruptcy Code seeking payment of fees and expenses incurred by any professional, (ii) any post-confirmation modifications to, or motions seeking the enforcement of, the Plan or the Confirmation Order, (iii) monitoring distributions, (iv) objecting to and monitoring objections to Claims, and (v) any matters pending as of the Effective Date in the Chapter 11 Cases, until such matters are finally resolved. 39. Binding Effect The Plan shall be binding upon and inure to the benefit of the Debtor, all present and former holders of Claims against and Equity Interests in the Debtor, and their respective successors and assigns, including, but not limited to, Reorganized Trend-Lines, and all other parties in interest in these Chapter 11 Cases. 40. Revocation, Withdrawal Or Non-Occurrence Of Effective Date The Debtor or the Committee reserve the right to revoke or withdraw the Plan at any time prior to the Confirmation Date and to file other plans of reorganization subject to the consent of the Committee. If either the Debtor or the Committee revokes or withdraws the Plan or if Confirmation or the Effective Date of the Plan does not occur, then (i) the Plan shall be null and void in all respects, (ii) any settlement or compromise embodied in the Plan (including the fixing or limiting to an amount certain for any Claim or Class of Claims), assumption or rejection of executory contracts or leases effected by the Plan, and any document or agreement executed pursuant to the Plan shall be deemed null and void, and (iii) nothing contained in the Plan, and no acts taken in preparation for confirmation of the Plan, shall (a) constitute or be deemed to constitute a waiver or release of any Claims by or against, or any Equity Interests in, the Debtor or any other Person, (b) prejudice in any manner the rights of the Debtor or any Person in any further proceedings involving the Debtor, or (c) constitute an admission of any sort by the Debtor or any other Person. PLAN - 32 41. Plan Supplement Any and all exhibits, lists or schedules not filed with the Plan shall be contained in the Plan Supplement or Plan Supplements, as the case may be, and filed with the Clerk of the Court seven days prior to the date set for the Confirmation Hearing. Upon its filing with the Court, the Plan Supplement may be inspected in the office of the Clerk of the Court during normal court hours or may be viewed on the Court's website at www.mab.uscourts.gov. Holders of Claims may obtain a copy of the Plan Supplement upon written request to the Debtor in accordance with Article XIII.K hereof. 42. Notices Any notice, request, or demand required or permitted to be made or provided to or upon the Debtor, Reorganized Trend-Lines, or the Committee hereunder shall be (i) in writing, (ii) served by (a) certified mail, return receipt requested, (b) hand delivery, (c) overnight delivery service, (d) first class mail, or (e) facsimile transmission, however, if said notice, request or demand is made by facsimile transmission then in that event the written notice, request or demand must also be served by first class mail, and (iii) deemed to have been duly given or made when actually delivered or, in the case of notice by facsimile transmission, when received and telephonically confirmed, addressed as follows: TREND-LINES, INC. 126 Oxford Street Lynn, MA 02840 Attn: Walt Spokowski, CEO Telephone: (___) ___-____ Facsimile: (___) ___-____ with a copy to: HANIFY & KING, P.C. One Federal Street Boston, MA 02110 Attn: Harold B. Murphy, Esq. Telephone: (617) 423-0400 Facsimile: (617) 556-8985 Counsel for the Debtor and Debtor in Possession -and- PLAN - 33 KRONISH LIEB WEINER & HELLMAN LLP 1114 Avenue of the Americas New York, New York 10036 Attn: Lawrence C. Gottlieb, Esq. Telephone: (212) 479-6000 Facsimile: (212) 479-6257 -and- FOLEY HOAG & ELIOT, LLP One Post Office Square Boston, MA 02109 Attn: Andrew Z. Schwartz, Esq. Telephone: (617) 832-1000 Facsimile: (617) 832-7000 Counsel to the Committee 43. Indemnification Obligations Except as otherwise specifically limited in this Plan, any obligations or rights of the Debtor, or the Reorganized Trend-Lines to defend, indemnify, reimburse or limit the liability of its present and former directors, officers, partners or employees pursuant to the Debtor, or the Reorganized Trend-Lines' respective certificates of incorporation, by-laws or policies of providing employee indemnification, applicable state law or specific agreement in respect of any claims, demands, suits, causes of action or proceedings against such directors, officers, or employees based upon any act or omission related to such present and former directors', officers', partners' or employees' service with, for, or on behalf of the Debtor prior to the Effective Date, shall survive confirmation of this Plan and remain unaffected thereby, and shall not be discharged, irrespective of whether such defense, indemnification, reimbursement, or limitation of liability is owed in connection with an occurrence before or after the Petition Date. 44. Prepayment Except as otherwise provided in this Plan or the Confirmation Order, the Debtor shall have the right to prepay, without penalty, all or any portion of any Allowed Claim at any time; provided, however, that any such prepayment shall not be violative to or otherwise prejudice, the relative priorities and parities among the Classes of Claims. 45. Term Of Injunctions Or Stays Unless otherwise provided herein or in the Confirmation Order, all injunctions or stays provided for in the Chapter 11 Cases under Sections 105 or 362 of the Bankruptcy Code or otherwise, and extant on the Confirmation Date (excluding any injunctions or stays contained in this Plan or the Confirmation Order), shall remain in full force and effect until the Effective Date. PLAN - 34 46. Governing Law Unless a rule of law or procedure is supplied by federal law (including the Bankruptcy Code and Bankruptcy Rules), the laws of (i) the State of Massachusetts shall govern the construction and implementation of the Plan and any agreements, documents, and instruments executed in connection with this Plan and (ii) the laws of the State of Massachusetts shall govern corporate governance matters with respect to the Debtor, in either case without giving effect to the principles of conflicts of law thereof. Dated: Boston, Massachusetts September 7, 2001 TREND-LINES, INC., By: -------------------------------- Name: Walt Spokowski Title: Chief Executive Officer OFFICIAL COMMITTEE OF UNSECURED CREDITORS OF TREND-LINES, INC., et al. By: -------------------------------- Name: John Eberhardt Title: Chairman HANIFY & KING, P.C. Counsel for Trend-Lines, Inc. By: ----------------------------------- Harold B. Murphy, Esq. (BBO#362610) One Federal Street Boston, MA 02110 ###-###-#### PLAN - 35 KRONISH LIEB WEINER & HELLMAN LLP Counsel for the Official Committee of Unsecured Creditors of Trend-Lines, Inc., et al. By: ------------------------------------ Lawrence C. Gottlieb, Esq. (No. 2565) 1114 Avenue of the Americas New York, N.Y. 10036 ###-###-#### FOLEY HOAG & ELIOT, LLP Local Counsel for the Official Committee of Unsecured Creditors of Trend-Lines, Inc., et al. By: ------------------------------------ Andrew Z. Schwartz, Esq. One Post Office Square Boston, MA 02109 ###-###-#### PLAN - 36 EXHIBIT A TO REORGANIZATION PLAN OF TREND-LINES, INC. DESCRIPTION OF NEW COMMON STOCK TREND-LINES, INC. DESCRIPTION OF NEW COMMON STOCK The principal terms of the New Common Stock to be issued by Reorganized Trend-Lines under the Plan shall be as follows: Authorization: 7,500,000 Initial Issuance: 6,000,000 (Estimated) Par Value: $.01 Voting Rights: One vote per share Preemptive Rights: None Dividends: Payable at the discretion of the Board of Directors of Reorganized Trend-Lines EXHIBIT B TREND-LINES, INC. POST PETITION INCOME STATEMENT July 6, 2001
PRORATED TOTAL 8/11 TO 8/26 Sep-00 Oct-00 Nov-00 Dec-00 Jan-01 Feb-01 Mar-01 Apr-01 May-01 11-Aug-00 to 11-May-01 WOODWORKERS WAREHOUSE SALES 4,148 9,278 7,881 7,999 15,125 8,028 9,070 9,922 7,589 6,921 85,963 GROSS PROFIT $ 899 2,592 2,548 2,169 4,437 2,290 2,516 2,956 2,110 1,893 24,410 PAYROLL 434 892 772 788 1,039 812 931 987 816 787 8,259 ADVERTISING 146 445 560 144 977 482 312 425 354 317 4,163 VENDOR REBATES -37 -161 -323 -648 -791 295 -113 -465 -373 -259 -2,876 OCCUPANCY 209 346 203 312 320 354 383 320 308 273 3,027 RENT 334 583 585 585 584 576 572 582 579 579 5,558 OTHER 144 237 221 221 355 223 431 283 228 211 2,553 TOTAL DIRECT EXPENSE 1,229 2,341 2,017 1,402 2,482 2,742 2,516 2,132 1,912 1,909 20,684 OPERATING PROFIT - WWW -330 250 530 767 1,955 -453 0 824 198 -16 3,726 WWW CATALOG - OP PROFIT 15 26 -45 -294 279 -228 148 155 83 58 198 INTERNET/MEMBERSHIP SALES 49 188 143 207 284 207 169 163 127 109 1,646 GROSS PROFIT $ 32 97 97 125 181 139 123 122 103 92 1,110 PAYROLL 11 6 8 8 6 4 2 2 2 2 49 ADVERTISING 4 8 9 9 11 11 11 11 10 7 89 VENDOR REBATES 0 0 0 0 0 0 0 0 0 0 0 OCCUPANCY 0 0 0 0 0 0 0 0 0 0 0 RENT 0 0 0 0 0 0 0 0 0 0 0 OTHER 3 21 13 18 24 24 11 11 5 4 134 TOTAL DIRECT EXPENSE 18 35 29 35 40 39 24 23 17 13 273 OPERATING PROFIT - NET/MBR 14 63 68 90 141 100 100 98 86 79 837 INDIRECT OPERATING EXPENSES DISTRIBUTION CENTER 169 412 456 450 586 413 412 498 382 342 4,120 DISTRICT 51 59 85 73 73 66 57 67 63 43 636 GENERAL AND ADMINISTRATION PAYROLL 264 510 387 371 465 215 312 332 265 260 3,384 CUSTOMER SERVICE PAYROLL 27 77 44 43 54 43 24 32 22 18 384 ADMINISTRATION 1,119 488 446 321 449 456 614 382 425 380 5,079 INDIRECT EXPENSE - WWW/NET/MBRSHP 1,630 1,547 1,418 1,258 1,627 1,192 1,419 1,311 1,157 1,043 13,603 INTEREST EXPENSE 406 657 563 570 575 446 414 312 275 263 4,481 NIBT - ONGOING BUSINESS -2,336 -1,865 -1,428 -1,266 172 -2,220 -1,585 -545 -1,065 -1,185 -13,324 DISCONTINUED OPERATIONS GOLF DAY -334 59 110 -1 -27 61 -121 -33 -13 -3 -303 GOLF DAY CAT/NET -37 73 11 2 36 -3 12 17 1 11 122 POST TOOL -198 -116 -152 -152 -61 -345 -272 -400 -171 -9 -1,876 DISPOSAL -12,621 -12 0 28 -5 -138 361 -34 -165 -52 -12,639 REORG -276 0 0 -94 -29 -119 -1,555 -162 -1,881 -129 -4,247 GOODWILL - GOLF DAY 521 TOTAL NET INCOME -15,281 -1,861 -1,460 -1,484 86 -2,765 -3,160 -1,159 -3,295 -1,366 -31,746 SALES SUMMARY WW RETAIL 4,148 9,278 7,881 7,999 15,125 8,028 9,070 9,922 7,589 79,041 TL CATALOG 478 1,249 911 1,205 1,596 885 631 558 314 263 8,093 NET/MEMBERSHIP 49 188 143 207 284 207 169 163 127 1,537 TOTAL TOOLS 4,676 10,715 8,935 9,412 17,005 9,120 9,870 10,643 8,031 88,407
EXHIBIT C FEES OF PROFESSIONALS AUTHORIZED AND PAID TO DATE Hanify & King, Bankruptcy Counsel to Trend-Lines $420,766.64 Deloitte & Touche, Trend-Lines' Reorganization Consultants $244,290.14(3) (Second application for $21,860.50 in fees and $36.20 in expenses is pending.) Arthur Anderson, Accountants to Trend-Lines $ 0.00 (Application for fees of $148,864.50 and expenses of $331.32 was filed in June 2001. Arthur Anderson is holding a retainer of $100,000) Keen Realty LLC, Real Estate Consultants to Trend-Lines $ 42,464.81 Duane, Morris, & Hecksher, Counsel to Post Tool & Special counsel to Trend-Lines $233,816.04 Robinson & Cole, Special Counsel to Trend-Lines $ 9,721.40 Kronish Lieb Weiner & Heller, Counsel to the Committee of Trend-Lines $137,925.74 Foley Hoag LLP, Local Counsel to Committee of Trend-Lines $ 34,691.24 Members of Committee of Unsecured Creditors Expenses $ 13,576.40 KPMG, Financial Consultant to Committee $131,778.00 Pepe & Hazard, Counsel to former Post Tool Committee of Unsecured Creditors $ 0.00 (Pepe & Hazard has a pending fee application for $24,646.50 in fees and $1,382.77 in expenses. The court has deferred ruling on the fee application until confirmation.)
---------- (3) Does not include $175,000 in fees paid by Hilco for Specific Inventory Related Services. Trend-lines Inc. Dated 08/29/2001
Adjusted Liquidation A/0 Book Value Basis Value =============================================== Current Assets Cash 28-Jul 14,595,500 100.0% 14,595,500 ----------------------------------- Total Cash 14,595,500 100.0% 14,595,500 Accounts Receivable Trade (Eligible) 28-Jul 371,600 85.0% 315,860 Post-Petition Co-op 28-Jul 1,526,000 85.0% 1,297,100 Credit Card (Eligible) 28-Jul 586,600 100.0% 586,600 Other 28-Jul 1,267,300 85.0% 1,077,205 ----------------------------------- Total Accounts Receivable 3,751,500 87.3% 3,276,765 Inventory(Eligible): Trendlines 28-Jul 35,096,000 62.5% 21,935,000 In-Transit 28-Jul 1,880,000 62.5% 1,175,000 ----------------------------------- Total Inventory 36,976,000 23,110,000 Less: Unreimbursed GOB Expenses (1,750,000) --------------------- Net Inventory Proceeds 57.8% 21,360,000 Other Current Assets 28-Jul 1,702,900 5.0% 85,145 ----------------------------------- Total Other Current Assets 1,702,900 85,145 ----------------------------------- Total Current Assets $57,025,900 68.9% $ 39,317,410 Property, Plant & Equipment Equipment - Net of Depreciation 28-Jul 6,103,500 5.0% 305,175 Capital Lease Assets - Net of Depreciation 28-Jul 460,100 10.0% 46,010 Leasehold Improvements - Net of Amortization 28-Jul 3,553,100 0.0% 0 SeaBrook NH - Net of Depreciation 28-Jul 752,200 79.8% 600,000 ----------------------------------- Net PP&E 10,868,900 8.8% 951,185 Other Assets Leases-WW (99) & Other assets 28-Jul 225,000 100.0% 225,000 Lease-Revere Facility 28-Jul 3,500,000 100.0% 3,500,000 Security Deposits 28-Jul 965,500 0.0% 0 Other 28-Jul 122,400 0.0% 0 Net Estimated Preference Recovery 28-Jul 2,500,000 100.0% 2,500,000 ----------------------------------- Total Intangible Assets 7,312,900 85.1% 6,225,000 ----------------------------------- Total Asset Liquidation Value 75,207,700 61.8% 46,493,595 Less: Trustee, Professional, and Other Liquidation Fees ($1,200,000) ----------- Subtotal Available for Distribution 60.2% $45,293,595 =====================
Trend-lines Inc. Dated 08/29/2001 Subtotal Available for Distribution $45,293,595 Secured Claims Estimate: ------------------------ BOA et al 28-Jul 40,773,200 100.0% 40,773,200(1) Other Secured Creditors - Estimate 28-Jul 4,600,000 15.0% 690,000 ------------------------------------ Secured Debt Estimate: $45,373,200 $41,463,200 Subtotal Available after Secured Claims 3,830,395 Administrative Claims: ---------------------- Post-Petition A/P 28-Jul 410,900 410,900 Post-Petition Sales Tax 28-Jul 141,000 141,000 Post-Petition Accrued Payroll/Taxes 28-Jul 269,000 269,000 Post-Petition Accrued Vacation 28-Jul 350,000 350,000 KERP estimate 28-1u1 720,000 720,000 Professional Fees after 1st fee app 1/01-10/01 28-Jul 1,200,000 1,200,000 Estimate for other unknown liabilities 28-Jul 250,000 250,000 ------------------------------------ Total Administrative/Priority Claims: $ 3,340,900 $3,340,900 Net Available for Priority Unsecured Claims $489,495 Pre-petition Sales Tax Liability 1,076,800 Net Available for Unsecured Claims ($587,305) Unsecured Claims: ----------------- Pre-petition Trade Accounts Payable 28-Jul 49,504,423 49,504,423 Net Estimated Preference Recovery 28-Jul 2,500,000 2,500,000 Unsecured Portion of Other Secured Creditors-estimate 28-Jul 3,910,000 3,910,000 Real Estate Lease claims from rejection-Tools 28-Jul 2,320,200 2,320,200 Real Estate Lease claims from rejection-Golf 28-Jul 4,879,800 4,879,800 ------------------------------------ $63,114,423 $63,114,423
NOTES: 1) Amount is computed using average of $44,474,800 (Bank Group balance as of 7/28 borrowing base of $42,628,800 plus $709,000 L & A Fees plus $1,137,000 Default Interest) and $37,071,518 (the 42,628,800 less 5,557,282 in Post Petition interest paid) TREND-LINES THREE YEAR PROJECTION MARCH 2001 THROUGH FEBRUARY 2004
99 STORES @ 85% ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL 99 STORES 99 STORES 99 STORES FY 2001 Mar-01 Apr-01 May-01 Jun-01 Jul-01 Aug-01 Sep-01 Oct-01 --------------------------------------------------------------------------------------------------------------------------------- SALES WOODWORKERS WAREHOUSE 9,922 7,589 6,921 8,434 6,808 7,534 9,592 8,462 INTERNET/MEMBERSHIP/LIST 163 127 109 115 99 85 181 127 CATALOG 575 315 274 303 451 45 21 26 ---------------------------------------------------------------------------- TOTAL 10,660 8,032 7,305 8,852 7,358 7,664 9,794 8,615 ============================================================================ GROSS PROFIT $ WOODWORKERS WAREHOUSE 2,956 2,110 1,893 2,425 1,929 2,260 2,878 2,539 INTERNET/MEMBERSHIP 122 103 92 92 83 58 91 72 CATALOG 273 151 128 146 238 19 9 11 ---------------------------------------------------------------------------- TOTAL 3,351 2,364 2,113 2,664 2,249 2,337 2,977 2,621 ============================================================================ PAYROLL WOODWORKERS WAREHOUSE 987 816 787 968 772 724 930 765 INTERNET/MEMBERSHIP 2 2 2 2 2 0 0 0 CATALOG (Outside Call Center) 16 10 12 15 15 1 1 1 ---------------------------------------------------------------------------- TOTAL 1,006 828 801 985 789 726 931 765 ============================================================================ ADVERTISING WOODWORKERS WAREHOUSE 425 354 317 406 247 233 350 426 INTERNET/MEMBERSHIP 11 10 7 4 4 0 0 0 CATALOG 0 0 0 0 36 10 5 6 ---------------------------------------------------------------------------- TOTAL 436 364 325 409 287 243 355 432 ============================================================================ VENDOR REBATES/COOP WOODWORKERS WAREHOUSE -465 -373 -259 -384 -232 -432 -551 -486 INTERNET/MEMBERSHIP 0 0 0 0 0 0 0 0 CATALOG -26 -15 -10 -14 -10 -2 -1 -1 ---------------------------------------------------------------------------- TOTAL -491 -388 -269 -397 -242 -435 -552 -487 ============================================================================
[RESTUBBED TABLE]
99 STORES @ 85% 99 STORES 99 STORES 99 STORES 99 STORES Total FY 2001 Nov-01 Dec-01 Jan-02 Feb-02 FY 2001 -------------------------------------------------------------------------------------------------------------- SALES WOODWORKERS WAREHOUSE 9,562 18,101 8,616 9,234 110,775 INTERNET/MEMBERSHIP/LIST 168 258 174 173 1,781 CATALOG 582 755 363 109 3,819 ---------------------------------------------------------- TOTAL 10,313 19,113 9,153 9,516 116,375 ========================================================== GROSS PROFIT $ WOODWORKERS WAREHOUSE 2,869 5,430 2,585 2,770 32,644 INTERNET/MEMBERSHIP 77 124 91 93 1,097 CATALOG 245 317 152 46 1,734 ---------------------------------------------------------- TOTAL 3,190 5,872 2,828 2,909 35,475 ========================================================== PAYROLL WOODWORKERS WAREHOUSE 806 1,101 836 800 10,294 INTERNET/MEMBERSHIP 0 0 0 0 9 CATALOG (Outside Call Center) 17 22 11 3 125 ---------------------------------------------------------- TOTAL 823 1,124 847 803 10,428 ========================================================== ADVERTISING WOODWORKERS WAREHOUSE 378 504 294 397 4,332 INTERNET/MEMBERSHIP 0 0 0 0 35 CATALOG 129 167 80 24 456 ---------------------------------------------------------- TOTAL 507 670 375 421 4,823 ========================================================== VENDOR REBATES/COOP WOODWORKERS WAREHOUSE -549 -1,039 -495 -545 -5,809 INTERNET/MEMBERSHIP 0 0 0 0 0 CATALOG -28 -36 -17 -5 -165 ---------------------------------------------------------- TOTAL -577 -1,075 -512 -551 -5,974 ==========================================================
TREND-LINES THREE YEAR PROJECTION MARCH 2001 THROUGH FEBRUARY 2004
99 STORES @ 85% ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL 99 STORES 99 STORES 99 STORES FY 2001 Mar-01 Apr-01 May-01 Jun-01 Jul-01 Aug-01 Sep-01 Oct-01 --------------------------------------------------------------------------------------------------------------------------------- OCCUPANCY WOODWORKERS WAREHOUSE 320 308 273 284 266 272 275 275 INTERNET/MEMBERSHIP 0 0 0 0 0 0 0 0 CATALOG 3 3 3 3 3 0 0 0 ---------------------------------------------------------------------------- TOTAL 323 311 276 287 269 272 275 275 ============================================================================ RENT WOODWORKERS WAREHOUSE 582 579 579 582 552 506 516 516 CATALOG/INTERNET 0 0 0 0 0 0 0 0 HQ & DISTRIBUTION CENTER 79 79 67 67 84 18 35 35 ---------------------------------------------------------------------------- TOTAL 661 659 646 649 636 523 551 551 ============================================================================ OTHER WOODWORKERS WAREHOUSE 283 228 211 196 203 224 285 239 INTERNET/MEMBERSHIP 11 5 4 6 3 0 0 0 CATALOG 102 66 51 57 62 29 25 26 ---------------------------------------------------------------------------- TOTAL 395 300 266 259 268 253 311 265 ============================================================================ INDIRECT OPERATING EXPENSE DISTRIBUTION CENTER 418 303 275 366 285 244 277 262 DISTRICT 67 63 43 46 42 44 57 46 ---------------------------------------------------------------------------- 486 366 318 412 328 289 335 308 ============================================================================ GENERAL AND ADMINISTRATION PAYROLL 332 265 260 308 256 240 308 247 CUSTOMER SERVICE PAYROLL 37 26 21 25 20 23 30 24 ADMINISTRATION 382 425 380 -30 411 346 432 346 ---------------------------------------------------------------------------- 751 716 661 303 687 609 770 617 ============================================================================ EBITDA 55 -519 -641 26 -510 99 262 136 DEPRECIATION (INCLUDED ABOVE IN OCCUPANCY) FIXED ASSETS 256 255 253 252 246 227 242 226 AMORTIZATION 16 16 16 16 16 15 19 15 ---------------------------------------------------------------------------- 272 271 269 268 263 242 261 241 ============================================================================ EBIT (Operating Income) -217 -790 -910 -243 -773 -143 1 -105 ============================================================================
[RESTUBBED TABLE] TREND-LINES THREE YEAR PROJECTION MARCH 2001 THROUGH FEBRUARY 2004
99 STORES @ 85% 99 STORES 99 STORES 99 STORES 99 STORES Total FY 2001 Nov-01 Dec-01 Jan-02 Feb-02 FY 2001 ------------------------------------------------------------------------------------------------------------ OCCUPANCY WOODWORKERS WAREHOUSE 275 275 274 273 3,370 INTERNET/MEMBERSHIP 0 0 0 0 0 CATALOG 0 0 0 0 16 ------------------------------------------------------- TOTAL 275 275 274 273 3,385 ======================================================= RENT WOODWORKERS WAREHOUSE 516 516 516 516 6,475 CATALOG/INTERNET 0 0 0 0 0 HQ & DISTRIBUTION CENTER 35 35 35 35 607 0 ------------------------------------------------------- TOTAL 551 551 551 551 7,081 ======================================================= OTHER WOODWORKERS WAREHOUSE 254 402 241 250 3,017 INTERNET/MEMBERSHIP 0 0 0 0 29 CATALOG 109 135 76 39 777 ------------------------------------------------------- TOTAL 363 536 318 288 3,823 ======================================================= INDIRECT OPERATING EXPENSE DISTRIBUTION CENTER 274 380 261 267 3,614 DISTRICT 46 57 46 46 603 ------------------------------------------------------- 320 437 307 313 4,217 ======================================================= GENERAL AND ADMINISTRATION PAYROLL 247 308 247 247 3,263 CUSTOMER SERVICE PAYROLL 24 30 24 24 308 ADMINISTRATION 360 490 357 357 4,255 ------------------------------------------------------- 631 828 627 627 7,826 ======================================================= EBITDA 535 2,826 274 413 2,955 DEPRECIATION (INCLUDED ABOVE IN OCCUPANCY) FIXED ASSETS 224 238 221 219 2,858 AMORTIZATION 15 63 12 12 232 ------------------------------------------------------- 239 301 232 231 3,090 ======================================================= EBIT (Operating Income) 296 2,524 42 182 -135 =======================================================
TREND-LINES THREE YEAR PROJECTION MARCH 2001 THROUGH FEBRUARY 2004
99 STORES @ 85% ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL 99 STORES 99 STORES 99 STORES FY 2001 Mar-01 Apr-01 May-01 Jun-01 Jul-01 Aug-01 Sep-01 Oct-01 --------------------------------------------------------------------------------------------------------------------------------- EXTRAORDINARY ITEMS LOSS ON DISPOSITION OF 7 PT STORES 0 0 SALE OF REVERE LEASE 0.0 -3,500 RELOCATION (AS RESULT OF REVERE LEASE) 0.0 0 150 150 150 (GAIN)/LOSS SALE OF SEABROOK FACILITY 260 BOA LEGAL FEES 0 0 LEASE CURE 0 0 560 KERP PAYMENTS 0 720 ADMIN. CONVENIENCE CLASS 0 PROFESSIONAL FEES 0 600 GAINS ON COD INCOME 0 -37,552 REVOLVER CLOSING 0 0 0 0 0 0 0 0 COLLATERAL MONITORING FEES 0 0 0 0 0 0 0 0 INVENTORY APPRAISALS 0 0 0 0 0 0 0 0 UNUSED COMITTMENT FEES 0 0 0 0 0 0 0 2 TOTAL EXTRAORDINARY ITEMS 0 0 0 0 0 -3,350 870 -35,979 INTEREST EXPENSE CAPITAL LEASE 0 0 0 0 0 5 5 5 BOA OVER ADVANCE 0 0 0 0 0 0 0 24 LINE OF CREDIT (1) 312 275 263 247 248 266 217 146 ---------------------------------------------------------------------------- 312 275 263 247 248 271 222 174 ============================================================================ EBT (EARNINGS BEFORE TAXES & Discont.)) -529 -1,064 -1,173 -489 -1,020 2,936 -1,091 35,700 ============================================================================ TOTAL POST TOOL -400 -171 -9 57 14 TOTAL GOLF DAY -33 -13 -3 -1 -1 TOTAL REORGANIZATION -162 -1,881 -129 -31 -542 TOTAL DISPOSAL -34 -165 -52 -9 -94 EBT (EARNINGS BEFORE TAXES & Discont.)) -1,159 -3,295 -1,366 -474 -1,644 2,936 -1,091 35,700 -529 -1,064 -1,173 -489 -1,020 -414 -221 -279 PROVISION FOR INCOME TAX INCOME TAX RATE 39.05% 39.05% 39.05% 39.00% 39.00% 39.00% 39.00% 39.00% PROVISION FOR INCOME TAX 0 0 0 0 0 0 0 0 ============================================================================ NET INCOME -1,159 -3,295 -1,366 -474 -1,644 2,936 -1,091 35,700 ============================================================================
[RESTUBBED TABLE] TREND-LINES THREE YEAR PROJECTION MARCH 2001 THROUGH FEBRUARY 2004
99 STORES @ 85% 99 STORES 99 STORES 99 STORES 99 STORES Total FY 2001 Nov-01 Dec-01 Jan-02 Feb-02 FY 2001 ------------------------------------------------------------------------------------------------------------- EXTRAORDINARY ITEMS LOSS ON DISPOSITION OF 7 PT STORES 0 SALE OF REVERE LEASE -3,500 RELOCATION (AS RESULT OF REVERE LEASE) 450 (GAIN)/LOSS SALE OF SEABROOK FACILITY 260 BOA LEGAL FEES 428 191 191 809 LEASE CURE 560 KERP PAYMENTS 720 ADMIN. CONVENIENCE CLASS 0 PROFESSIONAL FEES 600 1,200 GAINS ON COD INCOME -37,552 REVOLVER CLOSING 0 0 0 0 0 COLLATERAL MONITORING FEES 4 4 4 4 17 INVENTORY APPRAISALS 0 0 0 0 0 UNUSED COMITTMENT FEES 1 0 2 3 8 TOTAL EXTRAORDINARY ITEMS 1,033 195 197 7 -37,028 INTEREST EXPENSE CAPITAL LEASE 5 5 5 5 35 BOA OVER ADVANCE 0 12 0 0 36 LINE OF CREDIT (1) 176 180 152 140 2,622 ------------------------------------------------------- 181 197 157 145 2,693 ======================================================= EBT (EARNINGS BEFORE TAXES & Discont.)) -917 2,133 -312 29 34,200 ======================================================= TOTAL POST TOOL -509 TOTAL GOLF DAY -52 TOTAL REORGANIZATION -2,747 TOTAL DISPOSAL -354 EBT (EARNINGS BEFORE TAXES & Discont.)) -917 2,133 -312 29 30,539 115 2,328 -116 36 -2,828 PROVISION FOR INCOME TAX INCOME TAX RATE 39.00% 39.00% 39.00% 39.00% 39.00% PROVISION FOR INCOME TAX 0 0 0 0 0 ======================================================= NET INCOME -917 2,133 -312 29 30,539 ======================================================= Line of Credit interest expense based on following loan balances: >$15MM at PRIME plus 1.00% (1) Line of Credit interest expense based on following loan balances: $15MM at 30-day LIBOR plus 3.25% (2) BOA Over Advance interest expense based on PRIME plus 3.00% 7.75% June 01 through August 01 6.99% September 01 through February 04 9.75% REVOLVER BALANCE PER B/S 47,566 42,566 42,566 42,629 42,629 42,629 35,129 24,000 28,739 29,298 25,060 23,187 BOA OVER ADVANCE USED 0 0 0 0 0 0 2,947 0 1,485 0 0
TREND-LINES THREE YEAR PROJECTION MARCH 2001 THROUGH FEBRUARY 2004
99 STORES 99 STORES 99 STORES 99 STORES 99 STORES 99 STORES 99 STORES FY 2002 Mar-02 Apr-02 May-02 Jun-02 Jul-02 Aug-02 Sep-02 -------------------------------------------------------------------------------------------------------------------------------- SALES WOODWORKERS WAREHOUSE 10,983 7,840 7,415 9,343 7,342 7,910 10,071 INTERNET/MEMBERSHIP 140 174 161 180 131 81 183 CATALOG 484 328 295 290 220 217 387 -------------------------------------------------------------------------------- TOTAL 11,606 8,342 7,871 9,813 7,693 8,208 10,641 ================================================================================ GROSS PROFIT $ WOODWORKERS WAREHOUSE 3,317 2,368 2,239 2,822 2,217 2,389 3,042 INTERNET/MEMBERSHIP 92 100 92 109 80 52 90 CATALOG 219 149 134 131 100 98 175 -------------------------------------------------------------------------------- TOTAL 3,628 2,616 2,465 3,062 2,397 2,539 3,307 ================================================================================ PAYROLL WOODWORKERS WAREHOUSE 971 777 764 946 755 745 957 INTERNET/MEMBERSHIP 0 0 0 0 0 0 0 CATALOG (Outside Call Center) 14 10 9 9 7 6 12 -------------------------------------------------------------------------------- TOTAL 985 787 773 954 761 752 969 ================================================================================ ADVERTISING WOODWORKERS WAREHOUSE 403 303 272 343 269 290 369 INTERNET/MEMBERSHIP 0 0 0 0 0 0 0 CATALOG 97 66 59 58 44 44 78 -------------------------------------------------------------------------------- TOTAL 500 369 331 401 313 334 447 ================================================================================ VENDOR REBATES/COOP WOODWORKERS WAREHOUSE -629 -449 -424 -535 -420 -453 -576 INTERNET/MEMBERSHIP 0 0 0 0 0 0 0 CATALOG -22 -15 -13 -13 -10 -10 -17 -------------------------------------------------------------------------------- TOTAL -650 -463 -438 -548 -430 -462 -594 ================================================================================
[RESTUBBED TABLE]
99 STORES 99 STORES 99 STORES 99 STORES 99 STORES Total FY 2002 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 FY 2002 -------------------------------------------------------------------------------------------------------------------- SALES WOODWORKERS WAREHOUSE 8,885 10,040 19,006 9,047 9,696 117,579 INTERNET/MEMBERSHIP 127 170 262 176 175 1,960 CATALOG 343 642 679 490 625 5,000 -------------------------------------------------------------------- TOTAL 9,356 10,852 19,947 9,712 10,497 124,539 ==================================================================== GROSS PROFIT $ WOODWORKERS WAREHOUSE 2,683 3,032 5,740 2,732 2,928 35,509 INTERNET/MEMBERSHIP 71 77 124 91 92 1,070 CATALOG 156 291 308 222 283 2,265 -------------------------------------------------------------------- TOTAL 2,910 3,399 6,172 3,045 3,304 38,844 ==================================================================== PAYROLL WOODWORKERS WAREHOUSE 787 829 1,133 860 823 10,347 INTERNET/MEMBERSHIP 0 0 0 0 0 0 CATALOG (Outside Call Center) 10 19 20 15 19 149 -------------------------------------------------------------------- TOTAL 797 848 1,153 875 842 10,496 ==================================================================== ADVERTISING WOODWORKERS WAREHOUSE 326 368 697 332 355 4,326 INTERNET/MEMBERSHIP 0 0 0 0 0 0 CATALOG 69 129 136 98 126 1,004 -------------------------------------------------------------------- TOTAL 395 497 833 430 481 5,331 ==================================================================== VENDOR REBATES/COOP WOODWORKERS WAREHOUSE -509 -575 -1,088 -518 -555 -6,730 INTERNET/MEMBERSHIP 0 0 0 0 0 0 CATALOG -15 -29 -30 -22 -28 -224 -------------------------------------------------------------------- TOTAL -524 -603 -1,118 -540 -583 -6,954 ====================================================================
TREND-LINES THREE YEAR PROJECTION MARCH 2001 THROUGH FEBRUARY 2004
99 STORES 99 STORES 99 STORES 99 STORES 99 STORES 99 STORES 99 STORES FY 2002 Mar-02 Apr-02 May-02 Jun-02 Jul-02 Aug-02 Sep-02 ------------------------------------------------------------------------------------------------------------------------------- OCCUPANCY WOODWORKERS WAREHOUSE 273 273 273 273 273 273 278 INTERNET/MEMBERSHIP 0 0 0 0 0 0 0 CATALOG 0 0 0 0 0 0 0 ------------------------------------------------------------------------------- TOTAL 273 273 273 273 273 273 278 =============================================================================== RENT WOODWORKERS WAREHOUSE 516 516 516 516 516 516 526 CATALOG/INTERNET 0 0 0 0 0 0 0 HQ & DISTRIBUTION CENTER 35 35 35 35 35 35 35 ------------------------------------------------------------------------------- TOTAL 551 551 551 551 551 551 562 =============================================================================== OTHER WOODWORKERS WAREHOUSE 304 231 225 282 224 232 295 INTERNET/MEMBERSHIP 0 0 0 0 0 0 0 CATALOG 84 58 52 51 40 39 67 ------------------------------------------------------------------------------- TOTAL 388 288 277 333 263 271 362 =============================================================================== INDIRECT OPERATING EXPENSE DISTRIBUTION CENTER 290 251 245 269 243 249 281 DISTRICT 63 51 51 63 46 46 59 ------------------------------------------------------------------------------- 353 301 296 332 289 295 340 =============================================================================== GENERAL AND ADMINISTRATION PAYROLL 307 246 246 307 246 246 317 CUSTOMER SERVICE PAYROLL 30 24 24 30 24 24 31 ADMINISTRATION 447 362 362 447 362 362 447 ------------------------------------------------------------------------------- 784 631 631 784 631 631 796 =============================================================================== EBITDA 713 144 35 246 2 133 403 DEPRECIATION (INCLUDED ABOVE IN OCCUPANCY) FIXED ASSETS 256 255 253 252 246 227 242 AMORTIZATION 14 12 12 14 12 12 14 ------------------------------------------------------------------------------- 270 266 264 266 258 239 256 =============================================================================== EBIT (Operating Income) 442 -122 -230 -20 -256 -105 147 ===============================================================================
[RESTUBBED TABLE]
99 STORES 99 STORES 99 STORES 99 STORES 99 STORES Total FY 2002 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 FY 2002 ------------------------------------------------------------------------------------------------------------------- OCCUPANCY WOODWORKERS WAREHOUSE 278 278 279 279 279 3,312 INTERNET/MEMBERSHIP 0 0 0 0 0 0 CATALOG 0 0 0 0 0 0 ------------------------------------------------------------------- TOTAL 278 278 279 279 279 3,312 =================================================================== RENT WOODWORKERS WAREHOUSE 526 526 526 526 526 6,252 CATALOG/INTERNET 0 0 0 0 0 HQ & DISTRIBUTION CENTER 35 35 35 35 35 425 0 ------------------------------------------------------------------- TOTAL 562 562 562 562 562 6,677 =================================================================== OTHER WOODWORKERS WAREHOUSE 247 263 417 250 258 3,228 INTERNET/MEMBERSHIP 0 0 0 0 0 0 CATALOG 60 110 116 85 107 869 ------------------------------------------------------------------- TOTAL 308 373 533 334 366 4,097 =================================================================== INDIRECT OPERATING EXPENSE DISTRIBUTION CENTER 265 283 393 269 278 3,316 DISTRICT 47 47 59 47 47 625 ------------------------------------------------------------------- 312 330 452 316 326 3,941 =================================================================== GENERAL AND ADMINISTRATION PAYROLL 254 254 317 254 254 3,248 CUSTOMER SERVICE PAYROLL 25 25 31 25 25 316 ADMINISTRATION 362 362 447 362 362 4,683 ------------------------------------------------------------------- 640 640 796 640 640 8,246 =================================================================== EBITDA 380 710 2,935 381 623 6,707 DEPRECIATION (INCLUDED ABOVE IN OCCUPANCY) FIXED ASSETS 226 224 238 221 219 2,858 AMORTIZATION 12 12 14 12 12 150 ------------------------------------------------------------------- 237 235 253 232 231 3,008 =================================================================== EBIT (Operating Income) 143 475 2,683 149 392 3,699 ===================================================================
TREND-LINES THREE YEAR PROJECTION MARCH 2001 THROUGH FEBRUARY 2004
99 STORES 99 STORES 99 STORES 99 STORES 99 STORES 99 STORES 99 STORES FY 2002 Mar-02 Apr-02 May-02 Jun-02 Jul-02 Aug-02 Sep-02 -------------------------------------------------------------------------------------------------------------------------------- EXTRAORDINARY ITEMS LOSS ON DISPOSITION OF 7 PT STORES SALE OF REVERE LEASE RELOCATION (AS RESULT OF REVERE LEASE) SALE OF SEABROOK FACILITY BOA LEGAL FEES LEASE SETTLEMENTS KERP PAYMENTS RECLAMATION EXPENSE PROFESSIONAL FEES GAINS ON COD INCOME REVOLVER CLOSING 0 0 0 0 0 0 0 COLLATERAL MONITORING FEES 4 4 4 4 4 4 4 INVENTORY APPRAISALS 25 0 0 0 0 0 0 UNUSED COMITTMENT FEES 3 3 4 3 4 4 3 TOTAL EXTRAORDINARY ITEMS 32 8 8 8 8 8 8 INTEREST EXPENSE CAPITAL LEASE 5 5 5 5 5 5 5 BOA OVER ADVANCE 0 0 0 0 0 0 0 LINE OF CREDIT (1) 137 132 129 130 128 129 131 -------------------------------------------------------------------------------- 142 137 134 135 133 134 136 ================================================================================ EBT (EARNINGS BEFORE TAXES) 268 -266 -372 -163 -396 -247 3 ================================================================================ TOTAL POST TOOL 0 0 TOTAL GOLF DAY 0 0 TOTAL REORGANIZATION 0 0 TOTAL DISPOSAL 0 0 0 EBT (EARNINGS BEFORE TAXES & Discont.)) 268 -266 -372 -163 -396 -247 3 0 0 300 -259 -364 -156 -389 PROVISION FOR INCOME TAX INCOME TAX RATE 39.05% 39.05% 39.05% 39.00% 39.00% 39.00% 39.00% PROVISION FOR INCOME TAX 0 0 0 0 0 0 0 ================================================================================ NET INCOME 268 -266 -372 -163 -396 -247 3 ================================================================================
[RESTUBBED TABLE] TREND-LINES THREE YEAR PROJECTION MARCH 2001 THROUGH FEBRUARY 2004
99 STORES 99 STORES 99 STORES 99 STORES 99 STORES Total FY 2002 Oct-02 Nov-02 Dec-02 Jan-03 Feb-03 FY 2002 -------------------------------------------------------------------------------------------------------------------- EXTRAORDINARY ITEMS LOSS ON DISPOSITION OF 7 PT STORES 0 SALE OF REVERE LEASE 0 RELOCATION (AS RESULT OF REVERE LEASE) 0 SALE OF SEABROOK FACILITY 0 BOA LEGAL FEES 0 LEASE SETTLEMENTS 0 KERP PAYMENTS 0 RECLAMATION EXPENSE 0 PROFESSIONAL FEES 0 GAINS ON COD INCOME 0 REVOLVER CLOSING 0 0 0 0 0 0 COLLATERAL MONITORING FEES 4 4 4 4 4 50 INVENTORY APPRAISALS 0 0 0 0 0 25 UNUSED COMITTMENT FEES 3 2 2 4 5 40 TOTAL EXTRAORDINARY ITEMS 7 6 6 8 9 115 INTEREST EXPENSE CAPITAL LEASE 5 5 5 5 5 60 BOA OVER ADVANCE 0 0 0 0 0 0 LINE OF CREDIT (1) 137 156 158 120 110 1,598 -------------------------------------------------------------------- 142 161 163 125 115 1,658 ==================================================================== EBT (EARNINGS BEFORE TAXES) -6 308 2,514 16 268 1,926 ==================================================================== TOTAL POST TOOL 0 TOTAL GOLF DAY 0 TOTAL REORGANIZATION 0 TOTAL DISPOSAL 0 EBT (EARNINGS BEFORE TAXES & Discont.)) -6 308 2,514 16 268 1,926 -240 11 1 PROVISION FOR INCOME TAX INCOME TAX RATE 39.00% 39.00% 39.00% 39.00% 39.00% PROVISION FOR INCOME TAX 0 0 0 0 0 0 ==================================================================== NET INCOME -6 308 2,514 16 268 1,926 ==================================================================== Line of Credit interest expense based on following loan balances: >$15MM at PRIME plus 1.00% (1) Line of Credit interest expense based on following loan balances: $15MM at 30-day LIBOR plus 3.25% (2) BOA Over Advance interest expense based on PRIME plus 3.00% 7.75% June 01 through August 01 6.99% September 01 through February 04 9.75% REVOLVER BALANCE PER B/S 22,705 21,916 21,470 21,674 21,288 21,479 21,801 22,664 25,644 25,878 20,063 18,467 BOA OVER ADVANCE USED 0 0 0 0 0 0 0 0 0 0 0 0
TREND-LINES THREE YEAR PROJECTION MARCH 2001 THROUGH FEBRUARY 2004
99 STORES 99 STORES 99 STORES 99 STORES 99 STORES 99 STORES 99 STORES FY 2003 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 --------------------------------------------------------------------------------------------------------------------------------- SALES WOODWORKERS WAREHOUSE 11,642 8,311 7,860 9,904 7,783 8,385 10,676 INTERNET/MEMBERSHIP 146 181 167 187 137 85 190 CATALOG 968 656 590 580 440 434 773 ------------------------------------------------------------------------------- TOTAL 12,755 9,147 8,618 10,671 8,359 8,903 11,639 =============================================================================== GROSS PROFIT $ WOODWORKERS WAREHOUSE 3,539 2,526 2,389 3,011 2,366 2,549 3,245 INTERNET/MEMBERSHIP 96 105 97 114 84 55 94 CATALOG 441 299 269 265 201 198 353 ------------------------------------------------------------------------------- TOTAL 4,077 2,930 2,755 3,390 2,651 2,802 3,692 =============================================================================== PAYROLL WOODWORKERS WAREHOUSE 999 800 786 973 776 767 985 INTERNET/MEMBERSHIP 0 0 0 0 0 0 0 CATALOG (Outside Call Center) 29 20 18 17 13 13 23 ------------------------------------------------------------------------------- TOTAL 1,028 819 803 990 789 779 1,008 =============================================================================== ADVERTISING WOODWORKERS WAREHOUSE 427 305 288 363 285 307 391 INTERNET/MEMBERSHIP 0 0 0 0 0 0 0 CATALOG 194 132 119 117 88 87 155 ------------------------------------------------------------------------------- TOTAL 621 436 407 480 374 395 547 =============================================================================== VENDOR REBATES/COOP WOODWORKERS WAREHOUSE -664 -474 -449 -565 -444 -479 -609 INTERNET/MEMBERSHIP 0 0 0 0 0 0 0 CATALOG -43 -29 -26 -26 -20 -19 -34 ------------------------------------------------------------------------------- TOTAL -708 -504 -475 -591 -464 -498 -644 ===============================================================================
[RESTUBBED TABLE]
99 STORES 99 STORES 99 STORES 99 STORES 99 STORES Total FY 2003 Oct-03 Nov-03 Dec-03 Jan-04 Feb-04 FY 2003 ---------------------------------------------------------------------------------------------------------------------- SALES WOODWORKERS WAREHOUSE 9,418 10,643 20,146 9,590 10,278 124,634 INTERNET/MEMBERSHIP 133 177 271 183 182 2,038 CATALOG 687 1,283 1,358 979 1,251 10,000 -------------------------------------------------------------------- TOTAL 10,238 12,103 21,776 10,752 11,710 136,672 ==================================================================== GROSS PROFIT $ WOODWORKERS WAREHOUSE 2,863 3,235 6,124 2,915 3,124 37,889 INTERNET/MEMBERSHIP 75 80 130 95 97 1,122 CATALOG 313 585 619 447 570 4,560 -------------------------------------------------------------------- TOTAL 3,251 3,901 6,874 3,457 3,791 43,571 ==================================================================== PAYROLL WOODWORKERS WAREHOUSE 809 853 1,166 885 847 10,645 INTERNET/MEMBERSHIP 0 0 0 0 0 0 CATALOG (Outside Call Center) 20 38 40 29 37 298 -------------------------------------------------------------------- TOTAL 830 891 1,207 914 884 10,943 ==================================================================== ADVERTISING WOODWORKERS WAREHOUSE 345 390 739 352 377 4,569 INTERNET/MEMBERSHIP 0 0 0 0 0 0 CATALOG 138 258 273 197 251 2,009 -------------------------------------------------------------------- TOTAL 483 648 1,011 548 628 6,578 ==================================================================== VENDOR REBATES/COOP WOODWORKERS WAREHOUSE -538 -607 -1,150 -547 -587 -7,113 INTERNET/MEMBERSHIP 0 0 0 0 0 0 CATALOG -31 -57 -61 -44 -56 -446 -------------------------------------------------------------------- TOTAL -568 -665 -1,210 -591 -642 -7,559 ====================================================================
TREND-LINES THREE YEAR PROJECTION MARCH 2001 THROUGH FEBRUARY 2004
99 STORES 99 STORES 99 STORES 99 STORES 99 STORES 99 STORES 99 STORES FY 2003 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 --------------------------------------------------------------------------------------------------------------------------------- OCCUPANCY WOODWORKERS WAREHOUSE 279 279 280 280 280 280 285 INTERNET/MEMBERSHIP 0 0 0 0 0 0 0 CATALOG 0 0 0 0 0 0 0 ------------------------------------------------------------------------------- TOTAL 279 279 280 280 280 280 285 =============================================================================== RENT WOODWORKERS WAREHOUSE 526 526 526 526 526 526 537 CATALOG/INTERNET 0 0 0 0 0 0 0 HQ & DISTRIBUTION CENTER 35 35 35 35 35 36 38 ------------------------------------------------------------------------------- TOTAL 562 562 562 562 562 563 574 =============================================================================== OTHER WOODWORKERS WAREHOUSE 317 240 233 293 232 241 306 INTERNET/MEMBERSHIP 0 0 0 0 0 0 0 CATALOG 164 112 101 100 76 75 132 ------------------------------------------------------------------------------- TOTAL 481 352 335 392 309 316 438 =============================================================================== INDIRECT OPERATING EXPENSE DISTRIBUTION CENTER 306 262 256 281 253 260 298 DISTRICT 65 52 52 65 47 47 61 ------------------------------------------------------------------------------- 371 314 308 346 300 307 359 =============================================================================== GENERAL AND ADMINISTRATION PAYROLL 316 253 253 316 253 253 327 CUSTOMER SERVICE PAYROLL 31 25 25 31 25 25 32 ADMINISTRATION 450 364 364 450 364 364 450 ------------------------------------------------------------------------------- 797 641 641 797 641 641 809 =============================================================================== EBITDA 916 296 160 400 118 258 573 DEPRECIATION (INCLUDED ABOVE IN OCCUPANCY) FIXED ASSETS 256 255 253 252 246 227 242 AMORTIZATION 14 12 12 14 12 12 14 ------------------------------------------------------------------------------- 270 266 264 266 258 239 256 =============================================================================== EBIT (Operating Income) 646 30 -105 134 -140 19 317 ===============================================================================
[RESTUBBED TABLE]
99 STORES 99 STORES 99 STORES 99 STORES 99 STORES Total FY 2003 Oct-03 Nov-03 Dec-03 Jan-04 Feb-04 FY 2003 ---------------------------------------------------------------------------------------------------------------------- OCCUPANCY WOODWORKERS WAREHOUSE 285 285 286 286 286 3,390 INTERNET/MEMBERSHIP 0 0 0 0 0 0 CATALOG 0 0 0 0 0 0 --------------------------------------------------------------------- TOTAL 285 285 286 286 286 3,390 ===================================================================== RENT WOODWORKERS WAREHOUSE 537 537 537 537 537 6,377 CATALOG/INTERNET 0 0 0 0 0 HQ & DISTRIBUTION CENTER 38 38 38 38 38 439 0 --------------------------------------------------------------------- TOTAL 574 574 574 574 574 6,816 ===================================================================== OTHER WOODWORKERS WAREHOUSE 257 274 436 260 269 3,357 INTERNET/MEMBERSHIP 0 0 0 0 0 0 CATALOG 117 217 229 166 211 1,701 --------------------------------------------------------------------- TOTAL 375 491 665 426 480 5,058 ===================================================================== INDIRECT OPERATING EXPENSE DISTRIBUTION CENTER 280 303 424 287 298 3,508 DISTRICT 49 49 61 49 49 644 --------------------------------------------------------------------- 329 352 485 335 347 4,152 ===================================================================== GENERAL AND ADMINISTRATION PAYROLL 262 262 327 262 262 3,345 CUSTOMER SERVICE PAYROLL 25 25 32 25 25 325 ADMINISTRATION 364 364 451 364 364 4,712 --------------------------------------------------------------------- 651 651 809 651 651 8,382 ===================================================================== EBITDA 530 909 3,286 534 802 8,781 DEPRECIATION (INCLUDED ABOVE IN OCCUPANCY) FIXED ASSETS 226 224 238 221 219 2,858 AMORTIZATION 12 12 0 0 0 113 --------------------------------------------------------------------- 237 235 238 221 219 2,971 ===================================================================== EBIT (Operating Income) 293 673 3,048 313 583 5,811 =====================================================================
TREND-LINES THREE YEAR PROJECTION MARCH 2001 THROUGH FEBRUARY 2004
99 STORES 99 STORES 99 STORES 99 STORES 99 STORES 99 STORES 99 STORES FY 2003 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 ---------------------------------------------------------------------------------------------------------------------------------- EXTRAORDINARY ITEMS LOSS ON DISPOSITION OF 7 PT STORES SALE OF REVERE LEASE RELOCATION (AS RESULT OF REVERE LEASE) SALE OF SEABROOK FACILITY BOA LEGAL FEES LEASE SETTLEMENTS KERP PAYMENTS RECLAMATION EXPENSE PROFESSIONAL FEES GAINS ON COD INCOME REVOLVER CLOSING 0 0 0 0 0 0 0 COLLATERAL MONITORING FEES 4 4 4 4 4 4 4 INVENTORY APPRAISALS 0 0 0 0 0 0 0 UNUSED COMITTMENT FEES 4 4 5 5 5 5 5 TOTAL EXTRAORDINARY ITEMS 8 8 9 9 9 9 9 INTEREST EXPENSE CAPITAL LEASE 5 5 5 5 5 5 5 BOA OVER ADVANCE 0 0 0 0 0 0 0 LINE OF CREDIT (1) 125 118 114 114 110 111 113 -------------------------------------------------------------------------------- 130 123 119 119 115 116 118 ================================================================================ EBT (EARNINGS BEFORE TAXES) 508 -102 -232 5 -264 -106 190 ================================================================================ TOTAL POST TOOL 0 0 TOTAL GOLF DAY 0 0 TOTAL REORGANIZATION 0 0 TOTAL DISPOSAL 0 0 0 EBT (EARNINGS BEFORE TAXES & Discont.)) 508 -102 -232 5 -264 -106 190 PROVISION FOR INCOME TAX INCOME TAX RATE 39.05% 39.05% 39.05% 39.00% 39.00% 39.00% 39.00% PROVISION FOR INCOME TAX 0 0 0 0 0 0 0 ================================================================================ NET INCOME 508 -102 -232 5 -264 -106 190 ================================================================================
TREND-LINES THREE YEAR PROJECTION MARCH 2001 THROUGH FEBRUARY 2004
99 STORES 99 STORES 99 STORES 99 STORES 99 STORES Total FY 2003 Oct-03 Nov-03 Dec-03 Jan-04 Feb-04 FY 2003 ---------------------------------------------------------------------------------------------------------------------- EXTRAORDINARY ITEMS LOSS ON DISPOSITION OF 7 PT STORES 0 SALE OF REVERE LEASE 0 RELOCATION (AS RESULT OF REVERE LEASE) 0 SALE OF SEABROOK FACILITY 0 BOA LEGAL FEES 0 LEASE SETTLEMENTS 0 KERP PAYMENTS 0 RECLAMATION EXPENSE 0 PROFESSIONAL FEES 0 GAINS ON COD INCOME 0 REVOLVER CLOSING 0 0 0 0 0 0 COLLATERAL MONITORING FEES 4 4 4 4 4 50 INVENTORY APPRAISALS 0 0 0 0 0 0 UNUSED COMITTMENT FEES 4 3 3 6 6 54 TOTAL EXTRAORDINARY ITEMS 8 7 7 10 11 104 INTEREST EXPENSE CAPITAL LEASE 5 5 5 5 5 60 BOA OVER ADVANCE 0 0 0 0 0 0 LINE OF CREDIT (1) 117 138 140 97 85 1,381 -------------------------------------------------------------------- 122 143 145 102 90 1,441 ==================================================================== EBT (EARNINGS BEFORE TAXES) 162 523 2,896 202 483 4,266 ==================================================================== TOTAL POST TOOL 0 TOTAL GOLF DAY 0 TOTAL REORGANIZATION 0 TOTAL DISPOSAL 0 EBT (EARNINGS BEFORE TAXES & Discont.)) 162 523 2,896 202 483 4,266 PROVISION FOR INCOME TAX INCOME TAX RATE 39.00% 39.00% 39.00% 39.00% 39.00% PROVISION FOR INCOME TAX 0 0 0 0 0 0 ==================================================================== NET INCOME 162 523 2,896 202 483 4,266 ==================================================================== Line of Credit interest expense based on following loan balances: >$15MM at PRIME plus 1.00% (1) Line of Credit interest expense based on following loan balances: $15MM at 30-day LIBOR plus 3.25% (2) BOA Over Advance interest expense based on PRIME plus 3.00% 7.75% June 01 through August 01 6.99% September 01 through February 04 9.75% REVOLVER BALANCE PER B/S 20,751 19,762 19,079 19,197 18,580 18,648 18,907 19,653 22,843 23,088 16,450 14,575 BOA OVER ADVANCE USED 0 0 0 0 0 0 0 0 0 0 0 0
TREND-LINES, INC. STATEMENT OF PROJECTED CASH FLOWS FISCAL YEARS: 2001 THROUGH 2003 WITH PAYMENT TERMS BANK
------------------------------------------------------------------------------------------------------------------------------------ FIRST QUARTER SECOND QUARTER --------------------------------------- ------------------------------------ MARCH APRIL MAY JUNE JULY AUGUST 2001 2001 2001 2001 2001 2001 --------------------------------------- ------------------------------------ CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME (LOSS) ($528,944) ($1,064,465) ($1,173,429) ($489,804) ($1,021,039) ($414,309) GAIN/(LOSS) ON EXTRAORDINARY ITEMS ($629,847) ($2,230,630) ($797,892) $15,198 ($623,057) $3,350,000 ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) T0 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES-- DEPRECIATION AND AMORTIZATION 271,102 (860,796) 269,153 268,203 262,532 242,037 CHANGES IN CURRENT ASSETS AND LIABILITIES ACCOUNTS RECEIVABLE 1,085,921 (1,332,898) 1,774,830 182,295 103,110 10,934,556 DEFERRED INCOME TAXES 0 0 0 0 0 0 INVENTORIES 1,072,665 2,930,757 583,522 1,902,732 1,597,958 (167,663) PREPAID EXPENSE AND OTHER CURRENT ASSETS (894,641) 941,190 121,721 (47,236) (26,260) 0 ACCOUNTS PAYABLE (364,562) 383,377 (242,403) (541,005) 276,505 (11,172,455) ACCRUED EXPENSE (1,468,017) (570,254) (196,457) 177,504 (155,022) 29,579 --------------------------------------- ------------------------------------ NET CASH (USED IN) OPERATING ACTIVITIES (1,456,323) (1,803,719) 339,045 1,467,887 414,727 2,801,745 CASH FLOWS FROM INVESTING ACTIVITIES: PURCHASES OF PROPERTY AND EQUIPMENT (20,608) 2,008,910 (17,940) (3,391) 1,978 0 INCREASE IN OTHER ASSETS 45,372 44,416 15,467 2,830 (345,324) (0) --------------------------------------- ------------------------------------ NET CASH (USED IN) INVESTING ACTIVITIES 24,764 2,053,326 (2,473) (561) (343,346) (0) CASH FLOWS FROM FINANCING ACTIVITIES: NET BORROWING UNDER REVOLVER FACILITY 0 (5,000,000) (0) 62,750 0 0 NET BORROWING UNDER TRAUNCH B 0 0 0 0 0 0 PAYMENTS ON CAPITAL LEASE OBLIGATIONS (26,284) (25,448) (27,483) (26,566) (26,770) 0 PROCEEDS FROM EXERCISE OF STOCK OPTIONS 0 0 0 0 0 0 PROCEEDS FROM ADDITIONAL PAID IN CAPITAL 0 0 0 0 0 0 PURCHASES OF TREASURY STOCK 0 0 0 0 0 0 --------------------------------------- ------------------------------------ NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (26,284) (5,025,448) (27,483) 36,184 (26,770) 0 NET (DECREASE) IN CASH AND CASH EQUIVALENTS (1,457,843) (4,775,841) 309,088 1,503,510 44,611 2,801,745 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 18,366,997 16,909,155 12,133,314 13,047,320 14,550,830 14,595,441 --------------------------------------- ------------------------------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $16,909,154 $12,133,314 $12,442,402 $14,550,830 $14,595,441 $17,397,186 ====================================== ====================================== ------------------------------------------------------------------------------------------------------------------------------------
TREND-LINES, INC. STATEMENT OF PROJECTED CASH FLOWS FISCAL YEARS: 2001 THROUGH 2003 WITH PAYMENT TERMS BANK
------------------------------------------------------------------------------------------------------------------------------------ THIRD QUARTER FOURTH QUARTER --------------------------------------- ------------------------------------- SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY 2001 2001 2001 2001 2002 2002 --------------------------------------- ------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME (LOSS) ($221,210) ($279,470) $115,362 $2,327,702 ($115,505) $36,404 GAIN/(LOSS) ON EXTRAORDINARY ITEMS ($870,000) $35,979,249 ($1,032,692) ($194,959) ($196,725) ($7,005) ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) T0 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES-- DEPRECIATION AND AMORTIZATION 260,578 143,103 238,812 301,479 232,444 231,017 CHANGES IN CURRENT ASSETS AND LIABILITIES ACCOUNTS RECEIVABLE (1,298,381) 603,751 (924,028) (4,031,964) 3,753,724 (204,642) DEFERRED INCOME TAXES 0 0 0 0 0 0 INVENTORIES (392,609) (1,211,036) (1,926,385) 887,376 3,428,882 2,027,866 PREPAID EXPENSE AND OTHER CURRENT ASSETS 0 0 0 0 0 0 ACCOUNTS PAYABLE 0 (34,702,000) 1,750,000 (2,000,000) 0 0 ACCRUED EXPENSE 508,977 (594,247) (12,975) 966,389 (1,379,351) (211,143) --------------------------------------- ------------------------------------ NET CASH (USED IN) OPERATING ACTIVITIES (2,012,646) (60,650) (1,791,906) (1,743,977) 5,723,469 1,872,497 CASH FLOWS FROM INVESTING ACTIVITIES: PURCHASES OF PROPERTY AND EQUIPMENT 0 857,856 0 0 0 0 INCREASE IN OTHER ASSETS 0 (0) (0) (300,000) (0) (0) --------------------------------------- ------------------------------------ NET CASH (USED IN) INVESTING ACTIVITIES 0 857,856 (0) (300,000) (0) (0) CASH FLOWS FROM FINANCING ACTIVITIES: NET BORROWING UNDER REVOLVER FACILITY (7,500,000) (11,128,848) 4,739,010 558,663 (4,238,155) (1,872,497) NET BORROWING UNDER TRAUNCH B 0 2,947,103 (2,947,103) 1,485,314 (1,485,314) 0 PAYMENTS ON CAPITAL LEASE OBLIGATIONS 0 0 0 0 0 0 PROCEEDS FROM EXERCISE OF STOCK OPTIONS 0 0 0 0 0 0 PROCEEDS FROM ADDITIONAL PAID IN CAPITAL 0 0 0 0 0 0 PURCHASES OF TREASURY STOCK 0 0 0 0 0 0 --------------------------------------- ------------------------------------ NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (7,500,000) (8,181,745) 1,791,906 2,043,977 (5,723,469) (1,872,497) NET (DECREASE) IN CASH AND CASH EQUIVALENTS (9,512,646) (7,384,539) 0 (0) 0 (0) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 17,397,186 7,884,539 500,000 500,000 500,000 500,000 --------------------------------------- ------------------------------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $7,884,539 $500,000 $500,000 $500,000 $500,000 $500,000 ======================================= ===================================== ------------------------------------------------------------------------------------------------------------------------------------
TREND-LINES, INC. STATEMENT OF PROJECTED CASH FLOWS FISCAL YEARS: 2001 THROUGH 2003 WITH PAYMENT TERMS BANK
------------------------------------------------------------------------------------------------------------------------------------ FIRST QUARTER SECOND QUARTER ------------------------------------ ------------------------------------- MARCH APRIL MAY JUNE JULY AUGUST 2002 2002 2002 2002 2002 2002 ------------------------------------- ------------------------------------ CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME (LOSS) $300,209 ($258,864) ($363,782) ($155,531) ($388,542) ($239,504) GAIN/(LOSS) ON EXTRAORDINARY ITEMS ($32,206) ($7,535) ($7,721) ($7,636) ($7,797) ($7,717) ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) T0 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES-- DEPRECIATION AND AMORTIZATION 270,276 266,145 264,411 266,346 257,790 238,548 CHANGES IN CURRENT ASSETS AND LIABILITIES ACCOUNTS RECEIVABLE (812,089) 1,375,328 607,755 (754,808) 1,011,745 (214,384) DEFERRED INCOME TAXES 0 0 0 0 0 0 INVENTORIES 288,195 0 0 0 0 0 PREPAID EXPENSE AND OTHER CURRENT ASSETS 0 0 0 0 0 0 ACCOUNTS PAYABLE 0 0 0 0 0 0 ACCRUED EXPENSE 468,420 (586,127) (54,841) 447,128 (487,282) 32,516 ------------------------------------- ------------------------------------ NET CASH (USED IN) OPERATING ACTIVITIES 482,806 788,948 445,822 (204,500) 385,915 (190,542) CASH FLOWS FROM INVESTING ACTIVITIES: PURCHASES OF PROPERTY AND EQUIPMENT 0 0 0 0 0 0 INCREASE IN OTHER ASSETS 0 (0) (0) 0 (0) (0) ------------------------------------- ------------------------------------ NET CASH (USED IN) INVESTING ACTIVITIES 0 (0) (0) 0 (0) (0) CASH FLOWS FROM FINANCING ACTIVITIES: NET BORROWING UNDER REVOLVER FACILITY (482,806) (788,948) (445,822) 204,500 (385,915) 190,542 NET BORROWING UNDER TRAUNCH B 0 0 0 0 0 0 PAYMENTS ON CAPITAL LEASE OBLIGATIONS 0 0 0 0 0 0 PROCEEDS FROM EXERCISE OF STOCK OPTIONS 0 0 0 0 0 0 PROCEEDS FROM ADDITIONAL PAID IN CAPITAL 0 0 0 0 0 0 PURCHASES OF TREASURY STOCK 0 0 0 0 0 0 ------------------------------------- ------------------------------------ NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (482,806) (788,948) (445,822) 204,500 (385,915) 190,542 NET (DECREASE) IN CASH AND CASH EQUIVALENTS 0 (0) (0) 0 (0) (0) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 500,000 500,000 500,000 500,000 500,000 500,000 ------------------------------------- ------------------------------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $500,000 $500,000 $500,000 $500,000 $500,000 $500,000 ===================================== ==================================== ------------------------------------------------------------------------------------------------------------------------------------
(RESTUBBED TABLE)
------------------------------------------------------------------------------------------------------------------------------------ THIRD QUARTER FOURTH QUARTER ------------------------------------- ------------------------------------ SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY 2002 2002 2002 2002 2003 2003 ------------------------------------- ------------------------------------ CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME (LOSS) $10,921 $1,042 $313,567 $2,520,151 $23,893 $277,211 GAIN/(LOSS) ON EXTRAORDINARY ITEMS ($7,583) ($7,223) ($5,982) ($5,884) ($8,307) ($8,972) ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) T0 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES-- DEPRECIATION AND AMORTIZATION 256,217 237,219 235,323 252,639 232,444 231,017 CHANGES IN CURRENT ASSETS AND LIABILITIES ACCOUNTS RECEIVABLE (1,139,495) 579,091 (756,037) (4,161,616) 3,986,689 (361,666) DEFERRED INCOME TAXES 0 0 0 0 0 0 INVENTORIES 0 (1,289,216) (2,981,213) 0 2,843,114 1,410,487 PREPAID EXPENSE AND OTHER CURRENT ASSETS 0 0 0 0 0 0 ACCOUNTS PAYABLE 0 0 0 0 0 0 ACCRUED EXPENSE 557,928 (384,319) 214,492 1,160,494 (1,262,895) 47,933 ------------------------------------- ------------------------------------ NET CASH (USED IN) OPERATING ACTIVITIES (322,013) (863,407) (2,979,851) (234,216) 5,814,937 1,596,011 CASH FLOWS FROM INVESTING ACTIVITIES: PURCHASES OF PROPERTY AND EQUIPMENT 0 0 0 0 0 0 INCREASE IN OTHER ASSETS 0 (0) (0) 0 (0) (0) ------------------------------------- ------------------------------------ NET CASH (USED IN) INVESTING ACTIVITIES 0 (0) (0) 0 (0) (0) CASH FLOWS FROM FINANCING ACTIVITIES: NET BORROWING UNDER REVOLVER FACILITY 322,013 863,407 2,979,851 234,216 (5,814,937) (1,596,011) NET BORROWING UNDER TRAUNCH B 0 0 0 0 0 0 PAYMENTS ON CAPITAL LEASE OBLIGATIONS 0 0 0 0 0 0 PROCEEDS FROM EXERCISE OF STOCK OPTIONS 0 0 0 0 0 0 PROCEEDS FROM ADDITIONAL PAID IN CAPITAL 0 0 0 0 0 0 PURCHASES OF TREASURY STOCK 0 0 0 0 0 0 ------------------------------------- ------------------------------------ NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 322,013 863,407 2,979,851 234,216 (5,814,937) (1,596,011) NET (DECREASE) IN CASH AND CASH EQUIVALENTS 0 (0) (0) 0 (0) (0) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 500,000 500,000 500,000 500,000 500,000 500,000 ------------------------------------- ------------------------------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $500,000 $500,000 $500,000 $500,000 $500,000 $500,000 ===================================== ==================================== ------------------------------------------------------------------------------------------------------------------------------------
TREND-LINES, INC. STATEMENT OF PROJECTED CASH FLOWS FISCAL YEARS: 2001 THROUGH 2003 WITH PAYMENT TERMS BANK
------------------------------------------------------------------------------------------------------------------------------------ FIRST QUARTER SECOND QUARTER ------------------------------------ ---------------------------------- MARCH APRIL MAY JUNE JULY AUGUST 2003 2003 2003 2003 2003 2003 ------------------------------------ ---------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME (LOSS) $516,152 ($93,149) $223,625) $14,131 ($255,161) ($96,903) GAIN/(LOSS) ON EXTRAORDINARY ITEMS ($8,021) ($8,432) ($8,717) ($8,668) ($8,925) ($8,897) ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) T0 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES-- DEPRECIATION AND AMORTIZATION 270,276 266,145 264,411 266,346 257,790 238,548 CHANGES IN CURRENT ASSETS AND LIABILITIES ACCOUNTS RECEIVABLE (964,968) 1,474,278 719,622 (851,207) 1,142,254 (236,881) DEFERRED INCOME TAXES 0 0 0 0 0 0 INVENTORIES (2,625,778) 0 0 0 0 0 PREPAID EXPENSE AND OTHER CURRENT ASSETS 0 0 0 0 0 0 ACCOUNTS PAYABLE 0 0 0 0 0 0 ACCRUED EXPENSE 529,073 (650,587) (68,170) 460,925 (518,820) 36,302 ------------------------------------ ---------------------------------- NET CASH (USED IN) OPERATING ACTIVITIES (2,283,265) 988,256 683,522 (118,473) 617,139 (67,831) CASH FLOWS FROM INVESTING ACTIVITIES: PURCHASES OF PROPERTY AND EQUIPMENT 0 0 0 0 0 0 INCREASE IN OTHER ASSETS 0 (0) (0) (0) (0) (0) ------------------------------------ ---------------------------------- NET CASH (USED IN) INVESTING ACTIVITIES 0 (0) (0) (0) (0) (0) CASH FLOWS FROM FINANCING ACTIVITIES: NET BORROWING UNDER REVOLVER FACILITY 2,283,265 (988,256) (683,522) 118,473 (617,139) 67,831 NET BORROWING UNDER TRAUNCH B 0 0 0 0 0 0 PAYMENTS ON CAPITAL LEASE OBLIGATIONS 0 0 0 0 0 0 PROCEEDS FROM EXERCISE OF STOCK OPTIONS 0 0 0 0 0 0 PROCEEDS FROM ADDITIONAL PAID IN CAPITAL 0 0 0 0 0 0 PURCHASES OF TREASURY STOCK 0 0 0 0 0 0 ------------------------------------ ---------------------------------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 2,283,265 (988,256) (683,522) 118,473 (617,139) 67,831 NET (DECREASE) IN CASH AND CASH EQUIVALENTS (0) (0) 0 0 0 0 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 500,000 500,000 500,000 500,000 500,000 500,000 ------------------------------------ ---------------------------------- CASH AND CASH EQUIVALENTS, END OF PERIOD $500,000 $500,000 $500,000 $500,000 $500,000 $500,000 ==================================== ================================== ------------------------------------------------------------------------------------------------------------------------------------
(RESTUBBED TABLE)
------------------------------------------------------------------------------------------------------------------------------------ THIRD QUARTER FOURTH QUARTER ------------------------------------ ------------------------------------ SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY 2003 2003 2003 2003 2004 2004 ------------------------------------ ------------------------------------ CASH FLOWS FROM OPERATING ACTIVITIES: NET INCOME (LOSS) $199,017 $170,645 $530,242 $2,902,940 $211,753 $493,245 GAIN/(LOSS) ON EXTRAORDINARY ITEMS ($8,789) ($8,478) ($7,149) ($7,047) ($9,812) ($10,594) ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) T0 NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES-- DEPRECIATION AND AMORTIZATION 256,217 237,219 235,323 238,216 220,905 219,479 CHANGES IN CURRENT ASSETS AND LIABILITIES ACCOUNTS RECEIVABLE (1,323,209) 661,596 (959,456) (4,606,948) 4,475,214 (460,151) DEFERRED INCOME TAXES 0 0 0 0 0 0 INVENTORIES 0 (1,397,372) (3,280,857) 0 3,110,520 1,552,920 PREPAID EXPENSE AND OTHER CURRENT ASSETS 0 0 0 0 0 0 ACCOUNTS PAYABLE 0 0 0 0 0 0 ACCRUED EXPENSE 618,058 (409,641) 291,407 1,227,882 (1,370,772) 80,777 ------------------------------------ ------------------------------------ NET CASH (USED IN) OPERATING ACTIVITIES (258,706) (746,031) (3,190,490) (244,956) 6,637,808 1,875,677 CASH FLOWS FROM INVESTING ACTIVITIES: PURCHASES OF PROPERTY AND EQUIPMENT 0 0 0 0 0 0 INCREASE IN OTHER ASSETS (0) (0) (0) 0 0 0 ------------------------------------ ------------------------------------ NET CASH (USED IN) INVESTING ACTIVITIES (0) (0) (0) 0 0 0 CASH FLOWS FROM FINANCING ACTIVITIES: NET BORROWING UNDER REVOLVER FACILITY 258,706 746,031 3,190,490 244,956 (6,637,808) (1,875,677) NET BORROWING UNDER TRAUNCH B 0 0 0 0 0 0 PAYMENTS ON CAPITAL LEASE OBLIGATIONS 0 0 0 0 0 0 PROCEEDS FROM EXERCISE OF STOCK OPTIONS 0 0 0 0 0 0 PROCEEDS FROM ADDITIONAL PAID IN CAPITAL 0 0 0 0 0 0 PURCHASES OF TREASURY STOCK 0 0 0 0 0 0 ------------------------------------ ------------------------------------ NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 258,706 746,031 3,190,490 244,956 (6,637,808) (1,875,677) NET (DECREASE) IN CASH AND CASH EQUIVALENTS (0) (0) 0 (0) 0 (0) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 500,000 500,000 500,000 500,000 500,000 500,000 ------------------------------------ ------------------------------------ CASH AND CASH EQUIVALENTS, END OF PERIOD $500,000 $500,000 $500,000 $500,000 $500,000 $500,000 ==================================== ==================================== ------------------------------------------------------------------------------------------------------------------------------------
TREND-LINES, INC. BALANCE SHEET PROJECTION FISCAL YEARS: 2001 THROUGH 2003 WITH PAYABLE TERMS BANK
-------------------------------------------------------------------------------------------------------------------------------- FIRST QUARTER SECOND QUARTER ---------------------------------------------------------------------------------------- MARCH APRIL MAY JUNE JULY AUGUST 2001 2001 2001 2001 2001 2001 -------------------------------------------------------------------------------------------------------------------------------- ASSETS ACTUAL ACTUAL ACTUAL ACTUAL ACTUAL CASH STORES $16,909,155 $12,133,314 $13,047,320 $14,550,830 $14,595,441 $17,397,186 ACCOUNTS RECEIVABLE TRADE 701,050 658,413 586,891 565,751 549,603 555,967 COOP 12,528,254 12,564,321 12,273,298 12,173,152 11,960,088 1,027,265 CREDIT CARD 702,123 766,849 668,937 541,312 690,666 611,928 OTHER 1,543,227 2,817,969 1,503,643 1,570,259 1,563,363 1,634,004 RGA's 57,659 57,659 57,612 57,612 0 0 INCOME TAX RECEIVABLE 103,063 103,063 103,063 103,063 103,063 103,063 ALLOWANCE FOR DOUBTFUL ACCOUNTS (440,380) (440,380) (440,380) (440,380) (399,124) (399,124) ----------------------------------------------------------------------------------------- TOTAL 15,194,996 16,527,894 14,753,064 14,570,769 14,467,659 3,533,103 INVENTORY Sales at Cost 0 (5,192,450) (6,187,956) (5,109,101) (5,327,538) Purchases at Cost 0 4,904,255 5,899,761 2,483,323 5,039,343 13 Store Amortization (and normalization) 0 0 0 0 0 455,858 TREND-LINES 37,601,755 37,089,551 36,794,224 35,179,687 36,207,507 36,663,365 GOLF DAY 0 0 0 0 0 0 POST TOOL 5,620,721 3,202,168 2,913,973 2,625,778 0 (288,195) ----------------------------------------------------------------------------------------- TOTAL 43,222,476 40,291,719 39,708,197 37,805,465 36,207,507 36,375,170 OTHER AND PREPAID ASSETS TREND-LINES 2,692,291 1,751,101 1,629,380 1,676,616 1,702,876 1,702,876 ----------------------------------------------------------------------------------------- TOTAL 2,692,291 1,751,101 1,629,380 1,676,616 1,702,876 1,702,876 ----------------------------------------------------------------------------------------- TOTAL CURRENT ASSETS 78,018,918 70,704,028 69,137,961 68,603,680 66,973,483 59,008,335 PROPERTY AND EQUIPMENT 29,827,845 27,818,935 27,836,875 27,840,266 27,838,288 27,838,288 LESS: ACCUMULATED DEPRECIATION (17,079,127) (16,218,331) (16,471,205) (16,723,128) (16,969,379) (17,196,388) ----------------------------------------------------------------------------------------- PROPERTY AND EQUIPMENT, NET 12,748,718 11,600,604 11,365,670 11,117,138 10,868,909 10,641,900 860,796 INTANGIBLE ASSETS, NET 0 0 0 0 0 0 OTHER ASSETS OTHER ASSETS 854,082 809,666 777,919 758,809 1,087,853 1,072,825 ----------------------------------------------------------------------------------------- TOTAL 854,082 809,666 777,919 758,809 1,087,853 1,072,825 TOTAL ASSETS $91,621,718 $83,114,298 $81,281,550 $80,479,627 $78,930,245 $70,723,060 ========================================================================================= -----------------------------------------------------------------------------------------------------------------------------------
[RESTUBBED TABLE]
---------------------------------------------------------------------------------------------------------------------------------- THIRD QUARTER FOURTH QUARTER -------------------------------------------------------------------------------------------- SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY 2001 2001 2001 2001 2002 2002 ---------------------------------------------------------------------------------------------------------------------------------- ASSETS CASH STORES $7,884,539 $500,000 $500,000 $500,000 $500,000 $500,000 ACCOUNTS RECEIVABLE TRADE 728,480 627,946 738,493 1,398,418 667,802 694,855 COOP 1,309,700 1,399,475 1,734,309 2,374,632 2,334,901 2,398,602 CREDIT CARD 819,163 700,547 820,415 1,591,645 749,337 781,683 OTHER 2,270,203 1,795,827 2,154,605 4,115,091 1,974,022 2,055,564 RGA's 0 0 0 0 0 0 INCOME TAX RECEIVABLE 103,063 103,063 103,063 103,063 103,063 103,063 ALLOWANCE FOR DOUBTFUL ACCOUNTS (399,124) (399,124) (399,124) (399,124) (399,124) (399,124) -------------------------------------------------------------------------------------------- TOTAL 4,831,485 4,227,734 5,151,761 9,183,725 5,430,001 5,634,643 INVENTORY Sales at Cost (6,816,710) (5,993,137) (7,122,678) (13,241,864) (6,324,486) (6,607,574) Purchases at Cost 6,528,515 6,807,505 9,555,468 12,857,604 3,339,530 5,023,633 13 Store Amortization (and normalization) 680,804 396,668 (506,404) (503,116) (443,926) (443,926) TREND-LINES 37,344,170 38,939,466 41,282,133 40,779,017 37,638,331 35,898,660 GOLF DAY 0 0 0 0 0 0 POST TOOL (576,390) (960,650) (1,376,932) (1,761,192) (2,049,388) (2,337,583) -------------------------------------------------------------------------------------------- TOTAL 36,767,780 37,978,815 39,905,201 39,017,825 35,588,943 33,561,077 OTHER AND PREPAID ASSETS TREND-LINES 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 -------------------------------------------------------------------------------------------- TOTAL 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 -------------------------------------------------------------------------------------------- TOTAL CURRENT ASSETS 51,186,679 44,409,425 47,259,838 50,404,426 43,221,820 41,398,596 PROPERTY AND EQUIPMENT 27,838,288 26,980,432 26,980,432 26,980,432 26,980,432 26,980,432 LESS: ACCUMULATED DEPRECIATION (17,438,182) (17,566,257) (17,790,041) (18,028,257) (18,249,162) (18,468,641) -------------------------------------------------------------------------------------------- PROPERTY AND EQUIPMENT, NET 10,400,106 9,414,175 9,190,391 8,952,175 8,731,270 8,511,791 INTANGIBLE ASSETS, NET 0 0 0 0 0 0 OTHER ASSETS OTHER ASSETS 1,054,041 1,039,013 1,023,985 1,260,722 1,249,184 1,237,645 -------------------------------------------------------------------------------------------- TOTAL 1,054,041 1,039,013 1,023,985 1,260,722 1,249,184 1,237,645 TOTAL ASSETS $62,640,826 $54,862,613 $57,474,214 $60,617,323 $53,202,274 $51,148,033 ============================================================================================ ------------------------------------------------------------------------------------------------------------------------------------
TREND-LINES, INC. BALANCE SHEET PROJECTION FISCAL YEARS: 2001 THROUGH 2003 WITH PAYABLE TERMS BANK
------------------------------------------------------------------------------------------------------------------------------------ FIRST QUARTER SECOND QUARTER -------------------------------------------------------------------------------- MARCH APRIL MAY JUNE JULY AUGUST 2001 2001 2001 2001 2001 2001 ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES AND STOCKHOLDER'S EQUITY LIABILITIES OBLIGATION UNDER CAPITAL LEASE - CURRENT PORTION $192,207 $166,759 $139,276 $112,710 $85,940 $85,940 NOTE PAYABLE - OFFICER $3,500,000 $3,500,000 $3,500,000 $3,500,000 $3,500,000 $0 ACCOUNTS PAYABLE - PRE-PETITION TREND-LINES 30,984,204 30,984,204 30,984,204 30,984,204 30,984,204 30,984,204 GOLF DAY 13,406,680 13,406,680 13,406,680 13,406,680 13,406,680 13,406,680 POST TOOL 4,962,473 4,962,473 4,962,473 4,962,473 4,962,473 4,962,473 ADDITION FROM NOTE PAYABLE -OFFICER 0 0 3,500,000 TRANSFER FROM CO-OP RECEIVABLE 0 0 0 0 0 (10,979,177) -------------------------------------------------------------------------------- SETTLEMENTS AGAINST PRE-PETITION 0 0 0 0 0 0 SETTLEMENTS AGAINST PRE-PETITION 0 0 0 0 0 0 -------------------------------------------------------------------------------- TOTAL - PRE-PETITION (Sales Tax = $900K) 49,353,357 49,353,357 49,353,357 49,353,357 49,353,357 41,874,180 ACCOUNTS PAYABLE - POST-PETITION INVENTORY PURCHASES 0 0 4,904,255 5,899,761 2,483,323 5,039,343 LESS TERMED AMOUNT 0 0 0 0 0 0 PLUS PRIOR MONTH TERMED AMOUNT 0 0 0 0 0 0 TREND-LINES 472,663 875,275 633,186 106,299 382,681 382,681 GOLF DAY 218,809 215,326 212,925 209,882 211,580 (1,345) POST TOOL (5,982) (21,734) (19,647) (30,722) (32,297) (12,650) ACCOUNTS PAYABLE LAG 0 0 0 0 0 0 -------------------------------------------------------------------------------- TOTAL - POST-PETITION 685,490 1,068,867 826,464 285,459 561,964 368,686 TOTAL ACCOUNTS PAYABLE 50,038,847 50,422,224 50,179,821 49,638,816 49,915,321 42,242,866 ACCRUED EXPENSES ACCRUED EXPENSES 1,691,202 1,514,206 1,428,028 1,039,764 988,856 1,076,964 ACCRUED PAYROLL AND TAXES 692,160 561,305 538,810 270,244 268,976 268,976 REORG/RESTRUCTURE 3,809,232 3,682,273 3,740,605 4,788,724 4,745,961 4,745,961 DEFERRED RENT 198,816 187,939 175,410 0 0 0 PREPAID SALES 61,337 78,211 9,221 3,915 19,605 31,286 DEFERRED TAX LIABILITY 0 0 0 0 0 0 DEFERRED W/C LIABILITY 718,391 701,042 673,765 667,682 650,334 566,636 DEFERRED MEMBERSHIP LIAB 830,476 781,955 772,142 765,802 753,883 753,883 GIFT CERTIFICATE LIAB 705,730 637,337 587,078 574,218 523,228 549,771 CUSTOMER REFUNDS PAYABLE 3,867 3,867 2,618 2,970 2,911 2,948 CUSTOMER LIAB - SPEC ORDERS 34,725 45,335 48,016 55,430 56,712 43,620 OTHER CURRENT LIABILITIES 1,338,475 1,317,876 1,315,856 1,296,791 1,297,241 1,297,241 ACCRUED INCOME TAXES 677,191 680,002 703,341 706,855 709,666 709,666 -------------------------------------------------------------------------------- TOTAL 10,761,602 10,191,348 9,994,891 10,172,395 10,017,373 10,046,952 ADMIN. CONVENIENCE CLAIMS 0 0 0 0 0 0 -------------------------------------------------------------------------------- TOTAL CURRENT LIABILITIES 64,492,656 64,280,331 63,813,988 63,423,921 63,518,634 52,375,758 REVOLVER LINE 47,566,440 42,566,440 42,566,440 42,629,190 42,629,190 42,629,190 BOA $3.0M OVER-ADVANCE 0 0 0 NOTE PAYABLE - FUTURE DIVIDEND DEFERRED INCOME TAXES 0 0 0 0 0 0 OBLIGATION UNDER CAPITAL LEASE - LONG-TERM PORTION 0 0 0 0 0 0 -------------------------------------------------------------------------------- TOTAL 47,566,440 42,566,440 42,566,440 42,629,190 42,629,190 42,629,190 ------------------------------------------------------------------------------------------------------------------------------------
[RESTUBBED TABLE]
------------------------------------------------------------------------------------------------------------------------------------ THIRD QUARTER FOURTH QUARTER --------------------------------------------------------------------------------- SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY 2001 2001 2001 2001 2002 2002 ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES AND STOCKHOLDER'S EQUITY LIABILITIES OBLIGATION UNDER CAPITAL LEASE - CURRENT PORTION $85,940 $85,940 $85,940 $85,940 $85,940 $85,940 NOTE PAYABLE - OFFICER $0 $0 $0 $0 $0 $0 ACCOUNTS PAYABLE - PRE-PETITION TREND-LINES 30,984,204 30,984,204 30,984,204 30,984,204 30,984,204 30,984,204 GOLF DAY 13,406,680 13,406,680 13,406,680 13,406,680 13,406,680 13,406,680 POST TOOL 4,962,473 4,962,473 4,962,473 4,962,473 4,962,473 4,962,473 ADDITION FROM NOTE PAYABLE -OFFICER 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 TRANSFER FROM CO-OP RECEIVABLE (10,979,177) (10,979,177) (10,979,177) (10,979,177) (10,979,177) (10,979,177) --------------------------------------------------------------------------------- SETTLEMENTS AGAINST PRE-PETITION (150,000) (41,874,418) (41,874,418) (41,874,418) (41,874,418) (41,874,418) SETTLEMENTS AGAINST PRE-PETITION (150,000) (41,874,418) (41,874,418) (41,874,418) (41,874,418) (41,874,418) --------------------------------------------------------------------------------- TOTAL - PRE-PETITION (Sales Tax = $900K) 41,724,180 (238) (238) (238) (238) (238) ACCOUNTS PAYABLE - POST-PETITION INVENTORY PURCHASES 6,528,515 6,807,505 9,555,468 12,857,604 3,339,530 5,023,633 LESS TERMED AMOUNT 0 (3,000,000) (4,750,000) (4,750,000) (4,750,000) (4,750,000) PLUS PRIOR MONTH TERMED AMOUNT 0 0 3,000,000 4,750,000 4,750,000 4,750,000 TREND-LINES 382,681 3,382,681 5,132,681 5,132,681 5,132,681 5,132,681 GOLF DAY (1,345) (1,345) (1,345) (1,345) (1,345) (1,345) POST TOOL (12,650) (12,650) (12,650) (12,650) (12,650) (12,650) ACCOUNTS PAYABLE LAG 0 0 0 0 0 0 --------------------------------------------------------------------------------- TOTAL - POST-PETITION 368,686 3,368,686 5,118,686 5,118,686 5,118,686 5,118,686 TOTAL ACCOUNTS PAYABLE 42,092,866 3,368,448 5,118,448 5,118,448 5,118,448 5,118,448 ACCRUED EXPENSES ACCRUED EXPENSES 1,217,364 1,065,427 1,084,883 1,267,245 1,086,986 1,049,328 ACCRUED PAYROLL AND TAXES 268,976 268,976 268,976 268,976 268,976 268,976 REORG/RESTRUCTURE 4,745,961 4,745,961 4,745,961 4,745,961 4,745,961 4,745,961 DEFERRED RENT 0 0 0 0 0 0 PREPAID SALES 35,527 20,931 27,138 58,762 28,637 28,554 DEFERRED TAX LIABILITY 0 0 0 0 0 0 DEFERRED W/C LIABILITY 744,024 599,906 622,210 849,891 645,100 622,143 DEFERRED MEMBERSHIP LIAB 753,883 753,883 753,883 753,883 753,883 753,883 GIFT CERTIFICATE LIAB 717,243 620,555 728,071 1,371,493 657,549 683,796 CUSTOMER REFUNDS PAYABLE 3,825 3,211 3,869 7,325 3,493 3,627 CUSTOMER LIAB - SPEC ORDERS 62,221 55,926 66,809 124,653 58,254 61,428 OTHER CURRENT LIABILITIES 1,297,241 1,117,241 937,241 757,241 577,241 397,241 ACCRUED INCOME TAXES 709,666 709,666 709,666 709,666 709,666 709,666 --------------------------------------------------------------------------------- TOTAL 10,555,929 9,961,682 9,948,707 10,915,096 9,535,746 9,324,603 ADMIN. CONVENIENCE CLAIMS 150,000 0 0 0 0 0 --------------------------------------------------------------------------------- TOTAL CURRENT LIABILITIES 52,884,735 13,416,070 15,153,095 16,119,484 14,740,134 14,528,991 REVOLVER LINE 35,129,190 24,000,342 28,739,351 29,298,014 25,059,860 23,187,363 BOA $3.0M OVER-ADVANCE 0 2,947,103 0 1,485,314 0 0 NOTE PAYABLE - FUTURE DIVIDEND 0 4,172,418 4,172,418 2,172,418 2,172,418 2,172,418 DEFERRED INCOME TAXES 0 0 0 0 0 0 OBLIGATION UNDER CAPITAL LEASE - LONG-TERM PORTION 0 0 0 0 0 0 --------------------------------------------------------------------------------- TOTAL 35,129,190 31,119,863 32,911,769 32,955,747 27,232,278 25,359,781 ------------------------------------------------------------------------------------------------------------------------------------
TREND-LINES, INC. BALANCE SHEET PROJECTION FISCAL YEARS: 2001 THROUGH 2003 WITH PAYABLE TERMS BANK
FIRST QUARTER SECOND QUARTER ---------------------------------------------------------------------------------- MARCH APRIL MAY JUNE JULY AUGUST 2001 2001 2001 2001 2001 2001 ---------------------------------------------------------------------------------------------------------------------------------- STOCKHOLDER'S EQUITY COMMON STOCK - CLASS A 64,589 64,589 64,589 64,589 64,589 64,589 COMMON STOCK - CLASS B 46,410 46,410 46,410 46,410 46,410 46,410 ADDITIONAL PAID IN CAPITAL 41,626,278 41,626,278 41,626,278 41,626,278 41,626,278 41,626,278 ADDITIONAL PAID IN CAPITAL - NEW INVESTMENT 0 0 0 0 0 0 RETAINED EARNINGS (Net Inc Impact) (59,714,682) (63,009,777) (64,426,180) (64,850,789) (66,494,883) (66,909,192) RETAINED EARNINGS (Extraordinary Impact)) 0 0 0 0 3,350,000 LESS: TREASURY STOCK (2,459,973) (2,459,973) (2,459,973) (2,459,973) (2,459,973) (2,459,973) ---------------------------------------------------------------------------------- TOTAL STOCKHOLDER'S EQUITY (20,437,378) (23,732,473) (25,148,876) (25,573,485) (27,217,579) (24,281,888) TOTAL LIABILITES AND STOCKHOLDER'S EQUITY $91,621,718 $83,114,298 $81,231,552 $80,479,626 $78,930,245 $70,723,060 ================================================================================== ----------------------------------------------------------------------------------------------------------------------------------
[RESTUBBED TABLE]
THIRD QUARTER FOURTH QUARTER ----------------------------------------------------------------------------------- SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY 2001 2001 2001 2001 2002 2002 ----------------------------------------------------------------------------------------------------------------------------------- STOCKHOLDER'S EQUITY COMMON STOCK - CLASS A 64,589 64,589 64,589 64,589 64,589 64,589 COMMON STOCK - CLASS B 46,410 46,410 46,410 46,410 46,410 46,410 ADDITIONAL PAID IN CAPITAL 41,626,278 41,626,278 41,626,278 41,626,278 41,626,278 41,626,278 ADDITIONAL PAID IN CAPITAL - NEW INVESTMENT 0 0 0 0 0 0 RETAINED EARNINGS (Net Inc Impact) (67,130,403) (67,409,873) (67,294,511) (64,966,810) (65,082,315) (65,045,910) RETAINED EARNINGS (Extraordinary Impact)) 2,480,000 38,459,249 37,426,557 37,231,598 37,034,873 37,027,868 LESS: TREASURY STOCK (2,459,973) (2,459,973) (2,459,973) (2,459,973) (2,459,973) (2,459,973) ----------------------------------------------------------------------------------- TOTAL STOCKHOLDER'S EQUITY (25,373,099) 10,326,680 9,409,350 11,542,093 11,229,862 11,259,261 TOTAL LIABILITES AND STOCKHOLDER'S EQUITY $62,640,826 $54,862,613 $57,474,214 $60,617,323 $53,202,274 $51,148,033 =================================================================================== -----------------------------------------------------------------------------------------------------------------------------------
TREND-LINES, INC. BALANCE SHEET PROJECTION FISCAL YEARS: 2001 THROUGH 2003 WITH PAYABLE TERMS BANK
----------------------------------------------------------------------------------------------------------------------------------- FIRST QUARTER SECOND QUARTER --------------------------------------------------------------------------------------------- MARCH APRIL MAY JUNE JULY AUGUST 2002 2002 2002 2002 2002 2002 ----------------------------------------------------------------------------------------------------------------------------------- ASSETS CASH STORES $500,000 $500,000 $500,000 $500,000 $500,000 $500,000 ACCOUNTS RECEIVABLE TRADE 844,731 607,033 574,384 715,344 560,705 597,985 COOP 2,472,336 1,860,901 1,786,730 1,783,864 1,563,649 1,562,663 CREDIT CARD 950,358 683,765 648,546 805,033 631,364 673,474 OTHER 2,475,367 2,215,766 1,750,050 2,210,278 1,747,055 1,883,035 RGA's 0 0 0 0 0 0 INCOME TAX RECEIVABLE 103,063 103,063 103,063 103,063 103,063 103,063 ALLOWANCE FOR DOUBTFUL ACCOUNTS (399,124) (399,124) (399,124) (399,124) (399,124) (399,124) --------------------------------------------------------------------------------------------- TOTAL 6,446,732 5,071,404 4,463,649 5,218,457 4,206,712 4,421,096 INVENTORY Sales at Cost (7,978,630) (5,725,739) (5,405,727) (6,751,192) (5,295,886) (5,668,632) Purchases at Cost 7,978,630 5,725,739 5,405,727 6,751,192 5,295,886 5,668,632 13 Store Amortization 0 0 0 0 0 0 TREND-LINES 35,898,660 35,898,660 35,898,660 35,898,660 35,898,660 35,898,660 GOLF DAY 0 0 0 0 0 0 POST TOOL (2,625,778) (2,625,778) (2,625,778) (2,625,778) (2,625,778) (2,625,778) --------------------------------------------------------------------------------------------- TOTAL 33,272,882 33,272,882 33,272,882 33,272,882 33,272,882 33,272,882 OTHER AND PREPAID ASSETS TREND-LINES 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 --------------------------------------------------------------------------------------------- TOTAL 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 --------------------------------------------------------------------------------------------- TOTAL CURRENT ASSETS 41,922,490 40,547,162 39,939,407 40,694,215 39,682,470 39,896,854 PROPERTY AND EQUIPMENT 26,980,432 26,980,432 26,980,432 26,980,432 26,980,432 26,980,432 LESS: ACCUMULATED DEPRECIATION (18,724,494) (18,979,101) (19,231,974) (19,483,897) (19,730,149) (19,957,158) --------------------------------------------------------------------------------------------- PROPERTY AND EQUIPMENT, NET 8,255,938 8,001,331 7,748,458 7,496,535 7,250,283 7,023,274 INTANGIBLE ASSETS, NET 0 0 0 0 0 0 OTHER ASSETS OTHER ASSETS 1,223,222 1,211,684 1,200,145 1,185,722 1,174,184 1,162,645 --------------------------------------------------------------------------------------------- TOTAL 1,223,222 1,211,684 1,200,145 1,185,722 1,174,184 1,162,645 TOTAL ASSETS $51,401,650 $49,760,177 $48,888,011 $49,376,473 $48,106,937 $48,082,774 ============================================================================================= -----------------------------------------------------------------------------------------------------------------------------------
[RESTUBBED TABLE]
------------------------------------------------------------------------------------------------------------------------------- THIRD QUARTER FOURTH QUARTER ------------------------------------------------------------------------------------------ SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY 2002 2002 2002 2002 2003 2003 ------------------------------------------------------------------------------------------------------------------------------- ASSETS CASH STORES $500,000 $500,000 $500,000 $500,000 $500,000 $500,000 ACCOUNTS RECEIVABLE TRADE 775,461 682,004 790,929 1,453,672 707,817 764,988 COOP 1,718,808 1,694,979 1,868,325 2,524,130 2,470,097 2,529,144 CREDIT CARD 873,612 768,348 890,719 1,637,321 797,268 861,678 OTHER 2,488,771 2,132,230 2,483,626 4,580,091 2,233,343 2,414,382 RGA's 0 0 0 0 0 0 INCOME TAX RECEIVABLE 103,063 103,063 103,063 103,063 103,063 103,063 ALLOWANCE FOR DOUBTFUL ACCOUNTS (399,124) (399,124) (399,124) (399,124) (399,124) (399,124) ------------------------------------------------------------------------------------------ TOTAL 5,560,591 4,981,500 5,737,538 9,899,154 5,912,465 6,274,131 INVENTORY Sales at Cost (7,334,582) (6,446,079) (7,453,032) (13,774,936) (6,667,717) (7,192,693) Purchases at Cost 7,334,582 7,735,295 10,434,245 13,774,936 3,824,602 5,782,206 13 Store Amortization 0 0 0 0 0 0 TREND-LINES 35,898,660 37,187,876 40,169,088 40,169,088 37,325,974 35,915,487 GOLF DAY 0 0 0 0 0 0 POST TOOL (2,625,778) (2,625,778) (2,625,778) (2,625,778) (2,625,778) (2,625,778) ------------------------------------------------------------------------------------------ TOTAL 33,272,882 34,562,098 37,543,311 37,543,311 34,700,196 33,289,709 OTHER AND PREPAID ASSETS TREND-LINES 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 ------------------------------------------------------------------------------------------ TOTAL 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 ------------------------------------------------------------------------------------------ TOTAL CURRENT ASSETS 41,036,349 41,746,474 45,483,724 49,645,340 42,815,537 41,766,716 PROPERTY AND EQUIPMENT 26,980,432 26,980,432 26,980,432 26,980,432 26,980,432 26,980,432 LESS: ACCUMULATED DEPRECIATION (20,198,951) (20,424,631) (20,648,415) (20,886,632) (21,107,537) (21,327,015) ------------------------------------------------------------------------------------------ PROPERTY AND EQUIPMENT, NET 6,781,481 6,555,801 6,332,017 6,093,800 5,872,895 5,653,417 INTANGIBLE ASSETS, NET 0 0 0 0 0 0 OTHER ASSETS OTHER ASSETS 1,148,222 1,136,684 1,125,145 1,110,722 1,099,184 1,087,645 ------------------------------------------------------------------------------------------ TOTAL 1,148,222 1,136,684 1,125,145 1,110,722 1,099,184 1,087,645 TOTAL ASSETS $48,966,052 $49,438,959 $52,940,886 $56,849,863 $49,787,616 $48,507,778 ========================================================================================== -------------------------------------------------------------------------------------------------------------------------------
TREND-LINES, INC. BALANCE SHEET PROJECTION FISCAL YEARS: 2001 THROUGH 2003 WITH PAYABLE TERMS BANK
------------------------------------------------------------------------------------------------------------------------------------ FIRST QUARTER SECOND QUARTER ---------------------------------------------------------------------------------- MARCH APRIL MAY JUNE JULY AUGUST 2002 2002 2002 2002 2002 2002 ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES AND STOCKHOLDER'S EQUITY LIABILITIES OBLIGATION UNDER CAPITAL LEASE - CURRENT PORTION $85,940 $85,940 $85,940 $85,940 $85,940 $85,940 NOTE PAYABLE - OFFICER $0 $0 $0 $0 $0 $0 ACCOUNTS PAYABLE - PRE-PETITION TREND-LINES 30,984,204 30,984,204 30,984,204 30,984,204 30,984,204 30,984,204 GOLF DAY 13,406,680 13,406,680 13,406,680 13,406,680 13,406,680 13,406,680 POST TOOL 4,962,473 4,962,473 4,962,473 4,962,473 4,962,473 4,962,473 ADDITION FROM NOTE PAYABLE -OFFICER 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 TRANSFER FROM CO-OP RECEIVABLE (10,979,177) (10,979,177) (10,979,177) (10,979,177) (10,979,177) (10,979,177) ---------------------------------------------------------------------------------- SETTLEMENTS AGAINST PRE-PETITION (41,874,418) (41,874,418) (41,874,418) (41,874,418) (41,874,418) (41,874,418) SETTLEMENTS AGAINST PRE-PETITION (41,874,418) (41,874,418) (41,874,418) (41,874,418) (41,874,418) (41,874,418) ---------------------------------------------------------------------------------- TOTAL - PRE-PETITION (Sales Tax = $900K) (238) (238) (238) (238) (238) (238) ACCOUNTS PAYABLE - POST-PETITION INVENTORY PURCHASES 7,978,630 5,725,739 5,405,727 6,751,192 5,295,886 5,668,632 LESS TERMED AMOUNT (4,750,000) (4,750,000) (4,750,000) (4,750,000) (4,750,000) (4,750,000) PLUS PRIOR MONTH TERMED AMOUNT 4,750,000 4,750,000 4,750,000 4,750,000 4,750,000 4,750,000 TREND-LINES 5,132,681 5,132,681 5,132,681 5,132,681 5,132,681 5,132,681 GOLF DAY (1,345) (1,345) (1,345) (1,345) (1,345) (1,345) POST TOOL (12,650) (12,650) (12,650) (12,650) (12,650) (12,650) ACCOUNTS PAYABLE LAG 0 0 0 0 0 0 ---------------------------------------------------------------------------------- TOTAL - POST-PETITION 5,118,686 5,118,686 5,118,686 5,118,686 5,118,686 5,118,686 TOTAL ACCOUNTS PAYABLE 5,118,448 5,118,448 5,118,448 5,118,448 5,118,448 5,118,448 ACCRUED EXPENSES ACCRUED EXPENSES 1,205,003 1,038,577 1,026,602 1,171,614 1,011,645 1,007,900 ACCRUED PAYROLL AND TAXES 268,976 268,976 268,976 268,976 268,976 268,976 REORG/RESTRUCTURE 4,745,961 4,745,961 4,745,961 4,745,961 4,745,961 4,745,961 DEFERRED RENT 0 0 0 0 0 0 PREPAID SALES 33,568 24,685 23,751 29,383 22,834 24,306 DEFERRED TAX LIABILITY 0 0 0 0 0 0 DEFERRED W/C LIABILITY 767,983 613,812 607,469 751,666 597,483 592,114 DEFERRED MEMBERSHIP LIAB 753,883 753,883 753,883 753,883 753,883 753,883 GIFT CERTIFICATE LIAB 831,213 596,948 564,589 703,795 551,567 588,191 CUSTOMER REFUNDS PAYABLE 4,405 3,175 3,003 3,737 2,928 3,123 CUSTOMER LIAB - SPEC ORDERS 75,124 53,974 50,914 63,262 49,718 53,057 OTHER CURRENT LIABILITIES 397,241 397,241 397,241 397,241 397,241 397,241 ACCRUED INCOME TAXES 709,666 709,666 709,666 709,666 709,666 709,666 ---------------------------------------------------------------------------------- TOTAL 9,793,023 9,206,897 9,152,056 9,599,184 9,111,903 9,144,419 OTHER CURRENT LIABILITIES 0 0 0 0 0 0 ---------------------------------------------------------------------------------- TOTAL CURRENT LIABILITIES 14,997,411 14,411,285 14,356,444 14,803,572 14,316,291 14,348,807 REVOLVER LINE 22,704,557 21,915,609 21,469,787 21,674,287 21,288,372 21,478,914 BOA $3.0M OVER-ADVANCE 0 0 0 0 0 0 NOTE PAYABLE - FUTURE DIVIDEND 2,172,418 2,172,418 2,172,418 2,172,418 2,172,418 2,172,418 DEFERRED INCOME TAXES 0 0 0 0 0 0 OBLIGATION UNDER CAPITAL LEASE - LONG-TERM PORTION 0 0 0 0 0 0 ---------------------------------------------------------------------------------- TOTAL 24,876,975 24,088,027 23,642,205 23,846,705 23,460,790 23,651,332 ------------------------------------------------------------------------------------------------------------------------------------
[RESTUBBED TABLE]
----------------------------------------------------------------------------------------------------------------------------------- THIRD QUARTER FOURTH QUARTER --------------------------------------------------------------------------------- SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY 2002 2002 2002 2002 2003 2003 ----------------------------------------------------------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDER'S EQUITY LIABILITIES OBLIGATION UNDER CAPITAL LEASE - CURRENT PORTION $85,940 $85,940 $85,940 $85,940 $85,940 $85,940 NOTE PAYABLE - OFFICER $0 $0 $0 $0 $0 $0 ACCOUNTS PAYABLE - PRE-PETITION TREND-LINES 30,984,204 30,984,204 30,984,204 30,984,204 30,984,204 30,984,204 GOLF DAY 13,406,680 13,406,680 13,406,680 13,406,680 13,406,680 13,406,680 POST TOOL 4,962,473 4,962,473 4,962,473 4,962,473 4,962,473 4,962,473 ADDITION FROM NOTE PAYABLE -OFFICER 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 TRANSFER FROM CO-OP RECEIVABLE (10,979,177) (10,979,177) (10,979,177) (10,979,177) (10,979,177) (10,979,177) --------------------------------------------------------------------------------- SETTLEMENTS AGAINST PRE-PETITION (41,874,418) (41,874,418) (41,874,418) (41,874,418) (41,874,418) (41,874,418) SETTLEMENTS AGAINST PRE-PETITION (41,874,418) (41,874,418) (41,874,418) (41,874,418) (41,874,418) (41,874,418) --------------------------------------------------------------------------------- TOTAL - PRE-PETITION (Sales Tax = $900K) (238) (238) (238) (238) (238) (238) ACCOUNTS PAYABLE - POST-PETITION INVENTORY PURCHASES 7,334,582 7,735,295 10,434,245 13,774,936 3,824,602 5,782,206 LESS TERMED AMOUNT (4,750,000) (4,750,000) (4,750,000) (4,750,000) (4,750,000) (4,750,000) PLUS PRIOR MONTH TERMED AMOUNT 4,750,000 4,750,000 4,750,000 4,750,000 4,750,000 4,750,000 TREND-LINES 5,132,681 5,132,681 5,132,681 5,132,681 5,132,681 5,132,681 GOLF DAY (1,345) (1,345) (1,345) (1,345) (1,345) (1,345) POST TOOL (12,650) (12,650) (12,650) (12,650) (12,650) (12,650) ACCOUNTS PAYABLE LAG 0 0 0 0 0 0 --------------------------------------------------------------------------------- TOTAL - POST-PETITION 5,118,686 5,118,686 5,118,686 5,118,686 5,118,686 5,118,686 TOTAL ACCOUNTS PAYABLE 5,118,448 5,118,448 5,118,448 5,118,448 5,118,448 5,118,448 ACCRUED EXPENSES ACCRUED EXPENSES 1,195,761 1,056,381 1,120,764 1,325,567 1,096,528 1,098,756 ACCRUED PAYROLL AND TAXES 268,976 268,976 268,976 268,976 268,976 268,976 REORG/RESTRUCTURE 4,745,961 4,745,961 4,745,961 4,745,961 4,745,961 4,745,961 DEFERRED RENT 0 0 0 0 0 0 PREPAID SALES 31,714 27,922 32,325 59,349 28,908 31,263 DEFERRED TAX LIABILITY 0 0 0 0 0 0 DEFERRED W/C LIABILITY 763,652 623,212 651,485 866,062 666,304 648,065 DEFERRED MEMBERSHIP LIAB 753,883 753,883 753,883 753,883 753,883 753,883 GIFT CERTIFICATE LIAB 762,680 670,780 777,993 1,429,833 696,200 752,429 CUSTOMER REFUNDS PAYABLE 4,052 3,563 4,132 7,594 3,698 3,997 CUSTOMER LIAB - SPEC ORDERS 68,760 60,442 70,092 128,881 62,753 67,815 OTHER CURRENT LIABILITIES 397,241 397,241 397,241 397,241 397,241 397,241 ACCRUED INCOME TAXES 709,666 709,666 709,666 709,666 709,666 709,666 --------------------------------------------------------------------------------- TOTAL 9,702,346 9,318,027 9,532,519 10,693,013 9,430,118 9,478,051 OTHER CURRENT LIABILITIES 0 0 0 0 0 0 --------------------------------------------------------------------------------- TOTAL CURRENT LIABILITIES 14,906,734 14,522,415 14,736,907 15,897,401 14,634,506 14,682,439 REVOLVER LINE 21,800,927 22,664,334 25,644,184 25,878,401 20,063,464 18,467,453 BOA $3.0M OVER-ADVANCE 0 0 0 0 0 0 NOTE PAYABLE - FUTURE DIVIDEND 2,172,418 2,172,418 2,172,418 2,172,418 2,172,418 2,172,418 DEFERRED INCOME TAXES 0 0 0 0 0 0 OBLIGATION UNDER CAPITAL LEASE - LONG-TERM PORTION 0 0 0 0 0 0 --------------------------------------------------------------------------------- TOTAL 23,973,345 24,836,752 27,816,602 28,050,819 22,235,882 20,639,871 -----------------------------------------------------------------------------------------------------------------------------------
TREND-LINES, INC. BALANCE SHEET PROJECTION FISCAL YEARS: 2001 THROUGH 2003 WITH PAYABLE TERMS BANK
---------------------------------------------------------------------------------------------------------------------------------- FIRST QUARTER SECOND QUARTER ------------------------------------------------------------------------------------ MARCH APRIL MAY JUNE JULY AUGUST 2002 2002 2002 2002 2002 2002 ---------------------------------------------------------------------------------------------------------------------------------- STOCKHOLDER'S EQUITY COMMON STOCK - CLASS A 64,589 64,589 64,589 64,589 64,589 64,589 COMMON STOCK - CLASS B 46,410 46,410 46,410 46,410 46,410 46,410 ADDITIONAL PAID IN CAPITAL 41,626,278 41,626,278 41,626,278 41,626,278 41,626,278 41,626,278 ADDITIONAL PAID IN CAPITAL - NEW INVESTMENT 0 0 0 0 0 0 RETAINED EARNINGS (Net Inc Impact) (64,745,701) (65,004,565) (65,368,347) (65,523,878) (65,912,420) (66,151,925) RETAINED EARNINGS (Extraordinary Impact)) 36,995,661 36,988,126 36,980,405 36,972,769 36,964,973 36,957,256 LESS: TREASURY STOCK (2,459,973) (2,459,973) (2,459,973) (2,459,973) (2,459,973) (2,459,973) ------------------------------------------------------------------------------------ TOTAL STOCKHOLDER'S EQUITY 11,527,264 11,260,865 10,889,362 10,726,196 10,329,857 10,082,635 TOTAL LIABILITES AND STOCKHOLDER'S EQUITY $51,401,650 $49,760,177 $48,888,011 $49,376,473 $48,106,937 $48,082,774 ====================================================================================
[RESTUBBED TABLE]
----------------------------------------------------------------------------------------------------------------------------- THIRD QUARTER ------------------------------------------------------------------------------- SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY 2002 2002 2002 2002 2003 2003 ----------------------------------------------------------------------------------------------------------------------------- STOCKHOLDER'S EQUITY COMMON STOCK - CLASS A 64,589 64,589 64,589 64,589 64,589 64,589 COMMON STOCK - CLASS B 46,410 46,410 46,410 46,410 46,410 46,410 ADDITIONAL PAID IN CAPITAL 41,626,278 41,626,278 41,626,278 41,626,278 41,626,278 41,626,278 ADDITIONAL PAID IN CAPITAL - NEW INVESTMENT 0 0 0 0 0 0 RETAINED EARNINGS (Net Inc Impact) (66,141,004) (66,139,962) (65,826,395) (63,306,245) (63,282,352) (63,005,141) RETAINED EARNINGS (Extraordinary Impact)) 36,949,673 36,942,450 36,936,468 36,930,584 36,922,277 36,913,305 LESS: TREASURY STOCK (2,459,973) (2,459,973) (2,459,973) (2,459,973) (2,459,973) (2,459,973) ------------------------------------------------------------------------------- TOTAL STOCKHOLDER'S EQUITY 10,085,973 10,079,792 10,387,377 12,901,643 12,917,229 13,185,468 TOTAL LIABILITES AND STOCKHOLDER'S EQUITY $48,966,052 $49,438,959 $52,940,886 $56,849,863 $49,787,616 $48,507,778 =============================================================================== -----------------------------------------------------------------------------------------------------------------------------
TREND-LINES, INC. BALANCE SHEET PROJECTION FISCAL YEARS: 2001 THROUGH 2003 WITH PAYABLE TERMS BANK
----------------------------------------------------------------------------------------------------------------------------- FIRST QUARTER SECOND QUARTER ---------------------------------------------------------------------------------- MARCH APRIL MAY JUNE JULY AUGUST 2003 2003 2003 2003 2003 2003 ----------------------------------------------------------------------------------------------------------------------------- ASSETS CASH STORES $500,000 $500,000 $500,000 $500,000 $500,000 $500,000 ACCOUNTS RECEIVABLE TRADE 929,605 666,648 628,039 777,726 609,230 648,881 COOP 2,633,284 2,018,575 1,953,735 1,961,855 1,718,073 1,712,390 CREDIT CARD 1,047,073 750,865 707,396 876,003 686,214 730,871 OTHER 2,925,198 2,624,794 2,052,089 2,576,883 2,036,696 2,194,951 RGA's 0 0 0 0 0 0 INCOME TAX RECEIVABLE 103,063 103,063 103,063 103,063 103,063 103,063 ALLOWANCE FOR DOUBTFUL ACCOUNTS (399,124) (399,124) (399,124) (399,124) (399,124) (399,124) ---------------------------------------------------------------------------------- TOTAL 7,239,099 5,764,821 5,045,199 5,896,406 4,754,151 4,991,033 INVENTORY Sales at Cost (8,678,486) (6,217,107) (5,862,321) (7,281,828) (5,708,427) (6,101,364) Purchases at Cost 8,678,486 6,217,107 5,862,321 7,281,828 5,708,427 6,101,364 13 Store Amortization 0 0 0 0 0 0 TREND-LINES 35,915,487 35,915,487 35,915,487 35,915,487 35,915,487 35,915,487 GOLF DAY 0 0 0 0 0 0 POST TOOL 0 0 0 0 0 0 ---------------------------------------------------------------------------------- TOTAL 35,915,487 35,915,487 35,915,487 35,915,487 35,915,487 35,915,487 OTHER AND PREPAID ASSETS TREND-LINES 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 ---------------------------------------------------------------------------------- TOTAL 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 ---------------------------------------------------------------------------------- TOTAL CURRENT ASSETS 45,357,462 43,883,184 43,163,561 44,014,769 42,872,514 43,109,395 PROPERTY AND EQUIPMENT 26,980,432 26,980,432 26,980,432 26,980,432 26,980,432 26,980,432 LESS: ACCUMULATED DEPRECIATION (21,582,868) (21,837,475) (22,090,348) (22,342,271)(22,588,523) (22,815,532) ---------------------------------------------------------------------------------- PROPERTY AND EQUIPMENT, NET 5,397,564 5,142,957 4,890,084 4,638,161 4,391,909 4,164,900 INTANGIBLE ASSETS, NET 0 0 0 0 0 0 OTHER ASSETS OTHER ASSETS 1,073,222 1,061,684 1,050,145 1,035,722 1,024,184 1,012,645 ---------------------------------------------------------------------------------- TOTAL 1,073,222 1,061,684 1,050,145 1,035,722 1,024,184 1,012,645 TOTAL ASSETS $51,828,248 $50,087,824 $49,103,791 $49,688,652 $48,288,607 $48,286,940 ================================================================================== -----------------------------------------------------------------------------------------------------------------------------
[RESTUBBED TABLE]
----------------------------------------------------------------------------------------------------------------------------- THIRD QUARTER FOURTH QUARTER -------------------------------------------------------------------------------- SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY 2003 2003 2003 2003 2004 2004 ----------------------------------------------------------------------------------------------------------------------------- ASSETS CASH STORES $500,000 $500,000 $500,000 $500,000 $500,000 $500,000 ACCOUNTS RECEIVABLE TRADE 848,278 746,138 882,061 1,587,015 783,578 853,452 COOP 1,881,253 1,858,292 2,059,130 2,771,609 2,718,800 2,792,997 CREDIT CARD 955,461 840,419 993,517 1,787,546 882,589 961,291 OTHER 2,925,311 2,503,857 2,973,455 5,368,939 2,654,929 2,892,307 RGA's 0 0 0 0 0 0 INCOME TAX RECEIVABLE 103,063 103,063 103,063 103,063 103,063 103,063 ALLOWANCE FOR DOUBTFUL ACCOUNTS (399,124) (399,124) (399,124) (399,124) (399,124) (399,124) -------------------------------------------------------------------------------- TOTAL 6,314,241 5,652,645 6,612,101 11,219,049 6,743,835 7,203,986 INVENTORY Sales at Cost (7,947,017) (6,986,858) (8,202,143) (14,902,069) (7,294,840) (7,919,022) Purchases at Cost 7,947,017 8,384,230 11,483,000 14,902,069 4,184,320 6,366,102 13 Store Amortization 0 0 0 0 0 0 TREND-LINES 35,915,487 37,312,858 40,593,716 40,593,716 37,483,196 35,930,275 GOLF DAY 0 0 0 0 0 0 POST TOOL 0 0 0 0 0 0 -------------------------------------------------------------------------------- TOTAL 35,915,487 37,312,858 40,593,716 40,593,716 37,483,196 35,930,275 OTHER AND PREPAID ASSETS TREND-LINES 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 -------------------------------------------------------------------------------- TOTAL 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 1,702,876 -------------------------------------------------------------------------------- TOTAL CURRENT ASSETS 44,432,604 45,168,380 49,408,693 54,015,641 46,429,907 45,337,137 PROPERTY AND EQUIPMENT 26,980,432 26,980,432 26,980,432 26,980,432 26,980,432 26,980,432 LESS: ACCUMULATED DEPRECIATION (23,057,326) (23,283,006) (23,506,790) (23,745,006) (23,965,911) (24,185,390) -------------------------------------------------------------------------------- PROPERTY AND EQUIPMENT, NET 3,923,106 3,697,426 3,473,642 3,235,426 3,014,521 2,795,042 INTANGIBLE ASSETS, NET 0 0 0 0 0 0 OTHER ASSETS OTHER ASSETS 998,222 986,684 975,145 975,145 975,145 975,145 -------------------------------------------------------------------------------- TOTAL 998,222 986,684 975,145 975,145 975,145 975,145 TOTAL ASSETS $49,353,933 $49,852,490 $53,857,480 $58,226,212 $50,419,573 $49,107,325 ================================================================================ ------------------------------------------------------------------------------------------------------------------------------
TREND-LINES, INC. BALANCE SHEET PROJECTION FISCAL YEARS: 2001 THROUGH 2003 WITH PAYABLE TERMS BANK
----------------------------------------------------------------------------------------------------------------------------------- FIRST QUARTER SECOND QUARTER ----------------------------------------------------------------------------- MARCH APRIL MAY JUNE JULY AUGUST 2003 2003 2003 2003 2003 2003 ----------------------------------------------------------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDER'S EQUITY LIABILITIES OBLIGATION UNDER CAPITAL LEASE - CURRENT PORTION $85,940 $85,940 $85,940 $85,940 $85,940 $85,940 NOTE PAYABLE - OFFICER $0 $0 $0 $0 $0 $0 ACCOUNTS PAYABLE - PRE-PETITION TREND-LINES 30,984,204 30,984,204 30,984,204 30,984,204 30,984,204 30,984,204 GOLF DAY 13,406,680 13,406,680 13,406,680 13,406,680 13,406,680 13,406,680 POST TOOL 4,962,473 4,962,473 4,962,473 4,962,473 4,962,473 4,962,473 ADDITION FROM NOTE PAYABLE -OFFICER 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 TRANSFER FROM CO-OP RECEIVABLE (10,979,177) (10,979,177) (10,979,177) (10,979,177) (10,979,177) (10,979,177) ----------------------------------------------------------------------------- SETTLEMENTS AGAINST PRE-PETITION (41,874,418) (41,874,418) (41,874,418) (41,874,418) (41,874,418) (41,874,418) SETTLEMENTS AGAINST PRE-PETITION (41,874,418) (41,874,418) (41,874,418) (41,874,418) (41,874,418) (41,874,418) ----------------------------------------------------------------------------- TOTAL - PRE-PETITION (Sales Tax = $900K) (238) (238) (238) (238) (238) (238) ACCOUNTS PAYABLE - POST-PETITION INVENTORY PURCHASES 8,678,486 6,217,107 5,862,321 7,281,828 5,708,427 6,101,364 LESS TERMED AMOUNT (4,750,000) (4,750,000) (4,750,000) (4,750,000) (4,750,000) (4,750,000) PLUS PRIOR MONTH TERMED AMOUNT 4,750,000 4,750,000 4,750,000 4,750,000 4,750,000 4,750,000 TREND-LINES 5,132,681 5,132,681 5,132,681 5,132,681 5,132,681 5,132,681 GOLF DAY (1,345) (1,345) (1,345) (1,345) (1,345) (1,345) POST TOOL (12,650) (12,650) (12,650) (12,650) (12,650) (12,650) ACCOUNTS PAYABLE LAG 0 0 0 0 0 0 ----------------------------------------------------------------------------- TOTAL - POST-PETITION 5,118,686 5,118,686 5,118,686 5,118,686 5,118,686 5,118,686 TOTAL ACCOUNTS PAYABLE 5,118,448 5,118,448 5,118,448 5,118,448 5,118,448 5,118,448 ACCRUED EXPENSES ACCRUED EXPENSES 1,292,697 1,097,650 1,081,422 1,225,409 1,055,052 1,052,474 ACCRUED PAYROLL AND TAXES 268,976 268,976 268,976 268,976 268,976 268,976 REORG/RESTRUCTURE 4,745,961 4,745,961 4,745,961 4,745,961 4,745,961 4,745,961 DEFERRED RENT 0 0 0 0 0 0 PREPAID SALES 37,985 27,232 25,653 31,773 24,891 26,510 DEFERRED TAX LIABILITY 0 0 0 0 0 0 DEFERRED W/C LIABILITY 799,100 637,632 628,871 778,410 618,378 612,916 DEFERRED MEMBERSHIP LIAB 753,883 753,883 753,883 753,883 753,883 753,883 GIFT CERTIFICATE LIAB 914,354 655,716 617,736 764,965 599,234 638,236 CUSTOMER REFUNDS PAYABLE 4,856 3,483 3,281 4,063 3,183 3,390 CUSTOMER LIAB - SPEC ORDERS 82,404 59,097 55,677 68,945 54,007 57,522 OTHER CURRENT LIABILITIES 397,241 397,241 397,241 397,241 397,241 397,241 ACCRUED INCOME TAXES 709,666 709,666 709,666 709,666 709,666 709,666 ----------------------------------------------------------------------------- TOTAL 10,007,124 9,356,537 9,288,367 9,749,292 9,230,472 9,266,775 OTHER CURRENT LIABILITIES 0 0 0 0 0 0 ----------------------------------------------------------------------------- TOTAL CURRENT LIABILITIES 15,211,512 14,560,925 14,492,755 14,953,680 14,434,860 14,471,163 REVOLVER LINE 20,750,718 19,762,462 19,078,940 19,197,413 18,580,274 18,648,105 BOA $3.0M OVER-ADVANCE 0 0 0 0 0 0 NOTE PAYABLE - FUTURE DIVIDEND 2,172,418 2,172,418 2,172,418 2,172,418 2,172,418 2,172,418 DEFERRED INCOME TAXES 0 0 0 0 0 0 OBLIGATION UNDER CAPITAL LEASE - LONG-TERM PORTION 0 0 0 0 0 0 ----------------------------------------------------------------------------- TOTAL 22,923,136 21,934,880 21,251,358 21,369,831 20,752,692 20,820,523 ----------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------------------------
[RESTUBBED TABLE]
------------------------------------------------------------------------------------------------------------------------------------ THIRD QUARTER FOURTH QUARTER ------------------------------------------------------------------------------- SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY 2003 2003 2003 2003 2004 2004 ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES AND STOCKHOLDER'S EQUITY LIABILITIES OBLIGATION UNDER CAPITAL LEASE - CURRENT PORTION $85,940 $85,940 $85,940 $85,940 $85,940 $85,940 NOTE PAYABLE - OFFICER $0 $0 $0 $0 $0 $0 ACCOUNTS PAYABLE - PRE-PETITION TREND-LINES 30,984,204 30,984,204 30,984,204 30,984,204 30,984,204 30,984,204 GOLF DAY 13,406,680 13,406,680 13,406,680 13,406,680 13,406,680 13,406,680 POST TOOL 4,962,473 4,962,473 4,962,473 4,962,473 4,962,473 4,962,473 ADDITION FROM NOTE PAYABLE -OFFICER 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 3,500,000 TRANSFER FROM CO-OP RECEIVABLE (10,979,177) (10,979,177) (10,979,177) (10,979,177) (10,979,177) (10,979,177) ------------------------------------------------------------------------------- SETTLEMENTS AGAINST PRE-PETITION (41,874,418) (41,874,418) (41,874,418) (41,874,418) (41,874,418) (41,874,418) SETTLEMENTS AGAINST PRE-PETITION (41,874,418) (41,874,418) (41,874,418) (41,874,418) (41,874,418) (41,874,418) ------------------------------------------------------------------------------- TOTAL - PRE-PETITION (Sales Tax = $900K) (238) (238) (238) (238) (238) (238) ACCOUNTS PAYABLE - POST-PETITION INVENTORY PURCHASES 7,947,017 8,384,230 11,483,000 14,902,069 4,184,320 6,366,102 LESS TERMED AMOUNT (4,750,000) (4,750,000) (4,750,000) (4,750,000) (4,750,000) (4,750,000) PLUS PRIOR MONTH TERMED AMOUNT 4,750,000 4,750,000 4,750,000 4,750,000 4,750,000 4,750,000 TREND-LINES 5,132,681 5,132,681 5,132,681 5,132,681 5,132,681 5,132,681 GOLF DAY (1,345) (1,345) (1,345) (1,345) (1,345) (1,345) POST TOOL (12,650) (12,650) (12,650) (12,650) (12,650) (12,650) ACCOUNTS PAYABLE LAG 0 0 0 0 0 0 ------------------------------------------------------------------------------- TOTAL - POST-PETITION 5,118,686 5,118,686 5,118,686 5,118,686 5,118,686 5,118,686 TOTAL ACCOUNTS PAYABLE 5,118,448 5,118,448 5,118,448 5,118,448 5,118,448 5,118,448 ACCRUED EXPENSES ACCRUED EXPENSES 1,268,269 1,118,336 1,223,674 1,441,588 1,178,112 1,197,379 ACCRUED PAYROLL AND TAXES 268,976 268,976 268,976 268,976 268,976 268,976 REORG/RESTRUCTURE 4,745,961 4,745,961 4,745,961 4,745,961 4,745,961 4,745,961 DEFERRED RENT 0 0 0 0 0 0 PREPAID SALES 34,654 30,482 36,035 64,835 32,012 34,866 DEFERRED TAX LIABILITY 0 0 0 0 0 0 DEFERRED W/C LIABILITY 792,191 646,707 680,771 902,374 693,578 676,947 DEFERRED MEMBERSHIP LIAB 753,883 753,883 753,883 753,883 753,883 753,883 GIFT CERTIFICATE LIAB 834,362 733,897 867,589 1,560,979 770,723 839,450 CUSTOMER REFUNDS PAYABLE 4,432 3,898 4,608 8,291 4,094 4,459 CUSTOMER LIAB - SPEC ORDERS 75,199 66,145 78,194 140,687 69,463 75,658 OTHER CURRENT LIABILITIES 397,241 397,241 397,241 397,241 397,241 397,241 ACCRUED INCOME TAXES 709,666 709,666 709,666 709,666 709,666 709,666 ------------------------------------------------------------------------------- TOTAL 9,884,833 9,475,192 9,766,599 10,994,481 9,623,709 9,704,486 OTHER CURRENT LIABILITIES 0 0 0 0 0 0 ------------------------------------------------------------------------------- TOTAL CURRENT LIABILITIES 15,089,221 14,679,580 14,970,987 16,198,869 14,828,097 14,908,874 REVOLVER LINE 18,906,811 19,652,842 22,843,332 23,088,288 16,450,480 14,574,803 BOA $3.0M OVER-ADVANCE 0 0 0 0 0 0 NOTE PAYABLE - FUTURE DIVIDEND 2,172,418 2,172,418 2,172,418 2,172,418 2,172,418 2,172,418 DEFERRED INCOME TAXES 0 0 0 0 0 0 OBLIGATION UNDER CAPITAL LEASE - LONG-TERM PORTION 0 0 0 0 0 0 ------------------------------------------------------------------------------- TOTAL 21,079,229 21,825,260 25,015,750 25,260,706 18,622,898 16,747,221 ------------------------------------------------------------------------------- ------------------------------------------------------------------------------------------------------------------------------------
TREND-LINES, INC. BALANCE SHEET PROJECTION FISCAL YEARS: 2001 THROUGH 2003 WITH PAYABLE TERMS BANK
----------------------------------------------------------------------------------------------------------------------------------- FIRST QUARTER SECOND QUARTER ----------------------------------------------------------------------------------- MARCH APRIL MAY JUNE JULY AUGUST 2003 2003 2003 2003 2003 2003 ----------------------------------------------------------------------------------------------------------------------------------- STOCKHOLDER'S EQUITY COMMON STOCK - CLASS A 64,589 64,589 64,589 64,589 64,589 64,589 COMMON STOCK - CLASS B 46,410 46,410 46,410 46,410 46,410 46,410 ADDITIONAL PAID IN CAPITAL 41,626,278 41,626,278 41,626,278 41,626,278 41,626,278 41,626,278 ADDITIONAL PAID IN CAPITAL - NEW INVESTMENT 0 0 0 0 0 0 RETAINED EARNINGS (Net Inc Impact) (62,488,989) (62,582,137) (62,805,762) (62,791,631) (63,046,792) (63,143,695) RETAINED EARNINGS (Extraordinary Impact)) 36,905,285 36,896,852 36,888,135 36,879,468 36,870,543 36,861,646 LESS: TREASURY STOCK (2,459,973) (2,459,973) (2,459,973) (2,459,973) (2,459,973) (2,459,973) ----------------------------------------------------------------------------------- TOTAL STOCKHOLDER'S EQUITY 13,693,600 13,592,019 13,359,677 13,365,141 13,101,055 12,995,255 TOTAL LIABILITES AND STOCKHOLDER'S EQUITY $51,828,248 $50,087,824 $49,103,791 $49,688,652 $48,288,607 $48,286,940 ===================================================================================
[RESTUBBED TABLE]
-------------------------------------------------------------------------------------------------------------------------------- THIRD QUARTER FOURTH QUARTER --------------------------------------------------------------------------------- SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY 2003 2003 2003 2003 2004 2004 -------------------------------------------------------------------------------------------------------------------------------- STOCKHOLDER'S EQUITY COMMON STOCK - CLASS A 64,589 64,589 64,589 64,589 64,589 64,589 COMMON STOCK - CLASS B 46,410 46,410 46,410 46,410 46,410 46,410 ADDITIONAL PAID IN CAPITAL 41,626,278 41,626,278 41,626,278 41,626,278 41,626,278 41,626,278 ADDITIONAL PAID IN CAPITAL - NEW INVESTMENT 0 0 0 0 0 0 RETAINED EARNINGS (Net Inc Impact) (62,944,679) (62,774,034) (62,243,792) (59,340,851) (59,129,098) (58,635,852) RETAINED EARNINGS (Extraordinary Impact)) 36,852,857 36,844,379 36,837,231 36,830,184 36,820,372 36,809,778 LESS: TREASURY STOCK (2,459,973) (2,459,973) (2,459,973) (2,459,973) (2,459,973) (2,459,973) -------------------------------------------------------------------------------- TOTAL STOCKHOLDER'S EQUITY 13,185,483 13,347,650 13,870,743 16,766,637 16,968,578 17,451,230 TOTAL LIABILITES AND STOCKHOLDER'S EQUITY $49,353,933 $49,852,490 $53,857,480 $58,226,212 $50,419,573 $49,107,325 ================================================================================ -------------------------------------------------------------------------------------------------------------------------------
Trend-lines, Inc.- Sources and Uses Forecast through August 2003 Updated 8/28/01 pm
Oct-01 Nov-01 Dec-01 Jan-02 Feb-02 ------ ------ ------ ------ ------ Revolver Loan Balance- Beginning: $35,065,729 $25,427,505 $26,462,409 $25,620,811 $22,951,716 Availability- Beginning $0 $0 $0 $0 $0 Inventory @65% $35,065,729 $25,427,505 $26,462,409 $25,620,811 $22,951,716 AR (Trade& Credit Card) at 85% $38,762 -$354,173 -$2,629,181 -$116,938 -$267,421 Cash profit(loss) from Operations -$38,762 $354,173 $2,629,181 $116,938 $267,421 Other Sources of Cash Cash Applied to Revolver $9,380,522 Post Tools- Disposition Sale of Seabrook $500,000 $0 $0 $0 $0 Revere Lease $0 $0 $0 $0 $0 Trade Credit (Note #1) $3,000,000 $1,750,000 $0 $0 $0 Total Other Sources of Cash $12,880,522 $1,750,000 $0 $0 $0 Other Uses of Cash Closing Costs @ $500K (Note #2) $0 $0 -$300,000 $0 $0 Revere- Move related costs -$150,000 $0 $0 $0 $0 Professional Fees- Debtor/Creditor Cmmt -$600,000 -$600,000 $0 $0 $0 BOA Legal Fees $0 -$428,000 -$190,500 -$190,500 $0 KERP Plan $0 $0 $0 $0 $0 Sales Tax- PrePetition -$180,000 -$180,000 -$180,000 -$180,000 -$180,000 Lease Cure Costs -$560,000 0 $0 $0 $0 Admin. Convenience Costs -$150,000 0 $0 $0 $0 Collateral Monitoring, Appraisal Fees, & Unused Line Fees -$2,500 -$4,692 -$4,459 -$6,225 -$7,005 Dividend to Unsecured Creditors $0 0 -$2,000,000 $0 $0 Inventory (Build) Reduction -$1,211,036 -$1,926,385 $887,376 $3,428,882 $2,027,866 Other -$350,000 $0 $0 -$500,000 $0 Total Other Uses of Cash -$3,203,535 -$3,139,077 -$1,787,583 $2,552,157 $1,840,861 Revolver Loan Balance $25,427,505 $26,462,409 $25,620,811 $22,951,716 $20,843,434 ------------------------------------------------------------------------------------------------------------------------------------ Availability Calculation Cash On Hand- Working Capital $500,000 $500,000 $500,000 $500,000 $500,000 Inventory Gross $39,937,195 $41,863,581 $40,976,205 $37,547,323 $35,519,457 (Less) Ineligibles -$1,198,116 -$1,255,907 -$1,229,286 -$1,126,420 -$1,065,584 @65% advance $25,180,402 $26,394,988 $25,835,497 $23,673,587 $22,395,018 AR - Trade/CC Gross $1,328,493 $1,558,908 $2,990,063 $1,417,139 $1,476,538 @85% advance on eligibles $800,000 $800,000 $800,000 $800,000 $800,000 Total Collateral in Formula at Advance Rates $26,480,402 $27,694,988 $27,135,497 $24,973,587 $23,695,018 Total Revolver Loan Outstanding: Beginning $35,065,729 $25,427,505 $26,462,409 $25,620,811 $22,951,716 Less Cash Applied -$9,380,522 $0 $0 $0 $0 Cash Loss (Profit) From Operations $38,762 -$354,173 -$2,629,181 -$116,938 -$267,421 Cash (Source) Use extraordinary & Invty chg -$296,465 $1,389,077 $1,787,583 -$2,552,157 -$1,840,861 ----------- ----------- ----------- ----------- ----------- Total Revolver Loan Outstanding: Ending $25,427,505 $26,462,409 $25,620,811 $22,951,716 $20,843,434 Availability: (Under) Excess Ending (Before Over Advance) $1,052,897 $1,232,579 $1,514,686 $2,021,871 $2,851,583 Agreed 3.0M Overadvance (Note #3) $3,000,000 $3,000,000 $2,500,000 $2,000,000 $1,833,333 Availability: (Under) Excess Ending (After Over Advance) $4,052,897 $4,232,579 $4,014,686 $4,021,871 $4,684,917 ------------------------------------------------------------------------------------------------------------------------------------
[RESTUBBED TABLE]
Mar-02 Apr-02 May-02 Jun-02 Jul-02 ------ ------ ------ ------ ------ Revolver Loan Balance- Beginning: $20,843,434 $20,016,960 $20,317,214 $20,424,306 $20,321,126 Availability- Beginning $0 $0 $0 $0 $0 Inventory @65% $20,843,434 $20,016,960 $20,317,214 $20,424,306 $20,321,126 AR (Trade& Credit Card) at 85% -$570,485 -$7,282 $99,371 -$110,815 $130,752 Cash profit(loss) from Operations $570,485 $7,282 -$99,371 $110,815 -$130,752 Other Sources of Cash Cash Applied to Revolver Post Tools- Disposition Sale of Seabrook Revere Lease $0 Trade Credit (Note #1) Total Other Sources of Cash $0 $0 $0 $0 $0 Other Uses of Cash Closing Costs @ $500K (Note #2) $0 $0 $0 $0 $0 Revere- Move related costs Professional Fees- Debtor/Creditor Cmmt BOA Legal Fees $0 $0 $0 $0 $0 KERP Plan Sales Tax- PrePetition Lease Cure Costs Admin. Convenience Costs Collateral Monitoring, Appraisal Fees, & Unused Line Fees -$32,206 -$7,535 -$7,721 -$7,636 -$7,797 Dividend to Unsecured Creditors $0 $0 Inventory (Build) Reduction $288,195 $0 $0 $0 $0 Other $0 -$300,000 $0 $0 -$300,000 Total Other Uses of Cash $255,989 -$307,535 -$7,721 -$7,636 -$307,797 Revolver Loan Balance $20,016,960 $20,317,214 $20,424,306 $20,321,126 $20,759,674 ------------------------------------------------------------------------------------------------------------------------------------ Availability Calculation Cash On Hand- Working Capital $500,000 $500,000 $500,000 $500,000 $500,000 Inventory Gross $35,231,262 $35,231,262 $35,231,262 $35,231,262 $35,231,262 (Less) Ineligibles -$1,056,938 -$1,056,938 -$1,056,938 -$1,056,938 -$1,056,938 @65% advance $22,213,311 $22,213,311 $22,213,311 $22,213,311 $22,213,311 AR - Trade/CC Gross $1,795,089 $1,290,798 $1,222,930 $1,520,377 $1,192,069 @85% advance on eligibles $800,000 $800,000 $800,000 $800,000 $800,000 Total Collateral in Formula at Advance Rates $23,513,311 $23,513,311 $23,513,311 $23,513,311 $23,513,311 Total Revolver Loan Outstanding: Beginning $20,843,434 $20,016,960 $20,317,214 $20,424,306 $20,321,126 Less Cash Applied $0 $0 $0 $0 $0 Cash Loss (Profit) From Operations -$570,485 -$7,282 $99,371 -$110,815 $130,752 Cash (Source) Use extraordinary & Invty chg -$255,989 $307,535 $7,721 $7,636 $307,797 ----------- ----------- ----------- ----------- ----------- Total Revolver Loan Outstanding: Ending $20,016,960 $20,317,214 $20,424,306 $20,321,126 $20,759,674 Availability: (Under) Excess Ending (Before Over Advance) $3,496,350 $3,196,097 $3,089,005 $3,192,185 $2,753,636 Agreed 3.0M Overadvance (Note #3) $1,666,667 $1,500,000 $1,333,333 $1,166,667 $1,000,000 Availability: (Under) Excess Ending (After Over Advance) $5,163,017 $4,696,097 $4,422,338 $4,358,851 $3,753,636 ------------------------------------------------------------------------------------------------------------------------------------
[RESTUBBED TABLE]
Aug-02 Total ------ ----- Revolver Loan Balance- Beginning: $20,759,674 $42,565,729 Availability- Beginning $0 Inventory @65% $20,759,674 $20,759,674 AR (Trade& Credit Card) at 85% $957 $957 Cash profit(loss) from Operations -$957 $3,825,822 Other Sources of Cash Cash Applied to Revolver $16,880,522 Post Tools- Disposition $0 Sale of Seabrook $500,000 Revere Lease $0 Trade Credit (Note #1) $4,750,000 Total Other Sources of Cash $0 $22,130,522 Other Uses of Cash Closing Costs @ $500K (Note #2) $0 -$300,000 Revere- Move related costs -$300,000 Professional Fees- Debtor/Creditor Cmmt -$1,200,000 BOA Legal Fees $0 -$809,000 KERP Plan -$720,000 Sales Tax- PrePetition -$900,000 Lease Cure Costs -$560,000 Admin. Convenience Costs -$150,000 Collateral Monitoring, Appraisal Fees, & Unused Line Fees -$7,717 -$95,493 Dividend to Unsecured Creditors -$2,000,000 Inventory (Build) Reduction $0 $3,102,288 Other $0 -$1,450,000 Total Other Uses of Cash -$7,717 -$5,382,205 Revolver Loan Balance $20,768,348 $21,991,590 ---------------------------------------------------------------------------------------- Availability Calculation Cash On Hand- Working Capital $500,000 Inventory Gross $35,231,262 (Less) Ineligibles -$1,056,938 @65% advance $22,213,311 AR - Trade/CC Gross $1,271,459 @85% advance on eligibles $800,000 Total Collateral in Formula at Advance Rates $23,513,311 Total Revolver Loan Outstanding: Beginning $20,759,674 Less Cash Applied $0 Cash Loss (Profit) From Operations $957 Cash (Source) Use extraordinary & Invty chg $7,717 ----------- Total Revolver Loan Outstanding: Ending $20,768,348 Availability: (Under) Excess Ending (Before Over Advance) $2,744,962 Agreed 3.0M Overadvance (Note #3) $833,333 Availability: (Under) Excess Ending (After Over Advance) $3,578,296 ----------------------------------------------------------------------------------------
Note#1: Assume trade provides credit after confirmation (Major vendors to ship upon confirmation date) Note#2: Assume Bank Facility closes October 2001, and Closing Costs Payable in December 2001 Note#3: BofA Over Draft at maximum of $3.0M in Oct and Nov, $2.5M in Dec & Jan, Amortizing thereafter over 12 Months Note#4: Assume Confirmation October 2001 Note#5: Debtor may identify retail locations that are under or non-performing which will be closed (including 13 stores to close during July) Note#6: BOA default interest not included in this analysis Note#7: Inventory balances include "Intransit Inventory". Trend-lines, Inc.- Sources and Uses Forecast through August 2003 Updated 8/28/01 pm
Sep-02 Oct-02 Nov-02 Dec-02 Jan-03 ------ ------ ------ ------ ------ Revolver Loan Balance- Beginning: $20,768,348 $20,508,794 $21,866,972 $24,305,277 $21,538,372 Availability- Beginning $0 $0 $0 $0 $0 Inventory @65% $20,768,348 $20,508,794 $21,866,972 $24,305,277 $21,538,372 AR (Trade& Credit Card) at 85% -$267,138 -$238,260 -$548,889 -$2,772,790 -$256,336 Cash profit(loss) from Operations $267,138 $238,260 $548,889 $2,772,790 $256,336 Other Sources of Cash Cash Applied to Revolver Post Tools- Disposition Sale of Seabrook Revere Lease Trade Credit (Note #1) Total Other Sources of Cash $0 $0 $0 $0 $0 Other Uses of Cash Closing Costs @ $500K (Note #2) Revere- Move related costs Professional Fees- Debtor/Creditor Cmmt BOA Legal Fees 0 0 0 0 0 KERP Plan Sales Tax- PrePetition Lease Cure Costs Admin. Convenience Costs Collateral Monitoring, Appraisal Fees, & Unused Line Fees -7,583 -7,223 -5,982 -5,884 -8,307 Dividend to Unsecured Creditors Inventory (Build) Reduction $0 -$1,289,216 -$2,981,213 $0 $2,843,114 Other 0 -$300,000 $0 $0 -$300,000 Total Other Uses of Cash -$7,583 -$1,596,439 -$2,987,194 -$5,884 $2,534,807 Revolver Loan Balance $20,508,794 $21,866,972 $24,305,277 $21,538,372 $18,747,228 ---------------------------------------------------------------------------------------------------------------------------------- Availability Calculation Cash On Hand- Working Capital $500,000 $500,000 $500,000 $500,000 $500,000 Inventory Gross $35,231,262 $36,520,478 $39,501,691 $39,501,691 $36,658,576 (Less) Ineligibles -$1,056,938 -$1,095,614 -$1,185,051 -$1,185,051 -$1,099,757 @65% advance $22,213,311 $23,026,161 $24,905,816 $24,905,816 $23,113,232 AR - Trade/CC Gross $1,290,798 $1,222,930 $1,520,377 $1,192,069 $1,271,459 @85% advance on eligibles $800,000 $800,000 $800,000 $800,000 $800,000 Total Collateral in Formula at Advance Rates $23,513,311 $24,326,161 $26,205,816 $26,205,816 $24,413,232 Total Revolver Loan Outstanding: Beginning $20,768,348 $20,508,794 $21,866,972 $24,305,277 $21,538,372 Less Cash Applied $0 $0 $0 $0 $0 Cash Loss (Profit) From Operations -$267,138 -$238,260 -$548,889 -$2,772,790 -$256,336 Cash (Source) Use extraordinary & Invty chg $7,583 $1,596,439 $2,987,194 $5,884 -$2,534,807 ----------- ----------- ----------- ----------- ----------- Total Revolver Loan Outstanding: Ending $20,508,794 $21,866,972 $24,305,277 $21,538,372 $18,747,228 Availability: (Under) Excess Ending (Before Over Advance) $3,004,517 $2,459,189 $1,900,538 $4,667,444 $5,666,004 Agreed 3.0M Overadvance (Note #3) $666,667 $500,000 $333,333 $166,667 $0 Availability: (Under) Excess Ending (After Over Advance) $3,671,184 $2,959,189 $2,233,872 $4,834,111 $5,666,004 ------------------------------------------------------------------------------------------------------------------------------------
(RESTUBBED TABLE)
Feb-03 Mar-03 Apr-03 May-03 Jun-03 ------ ------ ------ ------ ------ Revolver Loan Balance- Beginning: $18,747,228 $16,837,485 $18,684,855 $18,820,290 $18,788,221 Availability- Beginning $0 $0 $0 $0 $0 Inventory @65% $18,747,228 $16,837,485 $18,684,855 $18,820,290 $18,788,221 AR (Trade& Credit Card) at 85% -$508,228 -$786,429 -$172,997 -$40,787 -$280,477 Cash profit(loss) from Operations $508,228 $786,429 $172,997 $40,787 $280,477 Other Sources of Cash Cash Applied to Revolver Post Tools- Disposition Sale of Seabrook Revere Lease Trade Credit (Note #1) Total Other Sources of Cash $0 $0 $0 $0 $0 Other Uses of Cash Closing Costs @ $500K (Note #2) Revere- Move related costs Professional Fees- Debtor/Creditor Cmmt BOA Legal Fees 0 0 0 0 0 KERP Plan Sales Tax- PrePetition Lease Cure Costs Admin. Convenience Costs Collateral Monitoring, Appraisal Fees, & Unused Line Fees -8,972 -8,021 -8,432 -8,717 -8,668 Dividend to Unsecured Creditors Inventory (Build) Reduction $1,410,487 -$2,625,778 $0 $0 $0 Other $0 $0 -$300,000 $0 $0 Total Other Uses of Cash $1,401,515 -$2,633,798 -$308,432 -$8,717 -$8,668 Revolver Loan Balance $16,837,485 $18,684,855 $18,820,290 $18,788,221 $18,516,411 ------------------------------------------------------------------------------------------------------------------------------------ Availability Calculation Cash On Hand- Working Capital $500,000 $500,000 $500,000 $500,000 $500,000 Inventory Gross $35,248,089 $37,873,867 $37,873,867 $37,873,867 $37,873,867 (Less) Ineligibles -$1,057,443 -$1,136,216 -$1,136,216 -$1,136,216 -$1,136,216 @65% advance $22,223,920 $23,879,473 $23,879,473 $23,879,473 $23,879,473 AR - Trade/CC Gross $1,649,073 $1,976,678 $1,417,513 $1,335,435 $1,653,729 @85% advance on eligibles $800,000 $800,000 $800,000 $800,000 $800,000 Total Collateral in Formula at Advance Rates $23,523,920 $25,179,473 $25,179,473 $25,179,473 $25,179,473 Total Revolver Loan Outstanding: Beginning $18,747,228 $16,837,485 $18,684,855 $18,820,290 $18,788,221 Less Cash Applied $0 $0 $0 $0 $0 Cash Loss (Profit) From Operations -$508,228 -$786,429 -$172,997 -$40,787 -$280,477 Cash (Source) Use extraordinary & Invty chg -$1,401,515 $2,633,798 $308,432 $8,717 $8,668 ----------- ----------- ----------- ----------- ----------- Total Revolver Loan Outstanding: Ending $16,837,485 $18,684,855 $18,820,290 $18,788,221 $18,516,411 Availability: (Under) Excess Ending (Before Over Advance) $6,686,435 $6,494,618 $6,359,183 $6,391,252 $6,663,062 Agreed 3.0M Overadvance (Note #3) $0 $0 $0 $0 $0 Availability: (Under) Excess Ending (After Over Advance) $6,686,435 $6,494,618 $6,359,183 $6,391,252 $6,663,062 ------------------------------------------------------------------------------------------------------------------------------------
(RESTUBBED TABLE)
Jul-03 Aug-03 Total ------ ------ ----- Revolver Loan Balance- Beginning: $18,516,411 $18,822,706 $20,768,348 Availability- Beginning $0 $0 Inventory @65% $18,516,411 $18,822,706 $18,822,706 AR (Trade& Credit Card) at 85% -$2,630 -$141,644 -$141,644 Cash profit(loss) from Operations $2,630 $141,644 $6,016,604 Other Sources of Cash Cash Applied to Revolver $0 Post Tools- Disposition $0 Sale of Seabrook $0 Revere Lease $0 Trade Credit (Note #1) $0 Total Other Sources of Cash $0 $0 $0 Other Uses of Cash Closing Costs @ $500K (Note #2) $0 Revere- Move related costs $0 Professional Fees- Debtor/Creditor Cmmt $0 BOA Legal Fees 0 0 $0 KERP Plan $0 Sales Tax- PrePetition $0 Lease Cure Costs $0 Admin. Convenience Costs $0 Collateral Monitoring, Appraisal Fees, & Unused Line Fees -8,925 -8,897 -$95,610 Dividend to Unsecured Creditors $0 Inventory (Build) Reduction $0 $0 -$2,642,605 Other -$300,000 $0 -$1,200,000 Total Other Uses of Cash -$308,925 -$8,897 -$3,938,215 Revolver Loan Balance $18,822,706 $18,689,959 $18,689,959 ------------------------------------------------------------------------------------------------------------------------------------ Availability Calculation Cash On Hand- Working Capital $500,000 $500,000 Inventory Gross $37,873,867 $37,873,867 (Less) Ineligibles -$1,136,216 -$1,136,216 @65% advance $23,879,473 $23,879,473 AR - Trade/CC Gross $1,295,444 $1,379,753 @85% advance on eligibles $800,000 $800,000 Total Collateral in Formula at Advance Rates $25,179,473 $25,179,473 Total Revolver Loan Outstanding: Beginning $18,516,411 $18,822,706 Less Cash Applied $0 $0 Cash Loss (Profit) From Operations -$2,630 -$141,644 Cash (Source) Use extraordinary & Invty chg $308,925 $8,897 ----------- ----------- Total Revolver Loan Outstanding: Ending $18,822,706 $18,689,959 Availability: (Under) Excess Ending (Before Over Advance) $6,356,767 $6,489,514 Agreed 3.0M Overadvance (Note #3) $0 $0 Availability: (Under) Excess Ending (After Over Advance) $6,356,767 $6,489,514 ------------------------------------------------------------------------------------------------------------------------------------
Note#1: Assume trade provides credit after confirmation (Major vendors to ship upon confirmation date) Note#2: Assume Bank Facility closes October 2001, and Closing Costs Payable in December 2001 Note#3: BofA Over Draft at maximum of $3.0M in Oct and Nov, $2.5M in Dec & Jan, Amortizing thereafter over 12 Months Note#4: Assume Confirmation October 2001 Note#5: Debtor may identify retail locations that are under or non-performing which will be closed (including 13 stores to close during July) Note#6: BOA default interest not included in this analysis Note#7: Inventory balances include "Intransit Inventory". Bank of America {LOGO] Bank of America Commercial Finance 335 Madison Avenue, 6th flow August 78, 2001 New York, NY 70017 Mr. Ron Franklin Tel: 717 ###-###-#### Vice President Fax: 222 ###-###-#### Finance and Administration Trend-Lines, Inc. 126 Oxford Street Lynn, Massachusetts ###-###-#### Re: Commitment for Senior Secured Revolving Credit Facility Dear Mr. Franklin: Bank of America, N.A. ("Bank" or "Agent") is pleased to offer to be the sole and exclusive administrative agent for a $30,000,000 senior secured revolving credit facility (the "Senior Credit Facility") to Trend-Lines, Inc., a Massachusetts corporation, ("Borrower") for purposes of a plan of reorganization (the "POR") to be confirmed is Case No. 00-15341-CJK, substantively consolidated estate (the "Bankruptcy Case") commenced under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Massachusetts (the "Bankruptcy Court"). Prior to the effective date of the POR, which shall be no later than the earlier of November 12, 2001 or ten (10) days after confirmation of the POR (the "Effective Date"), Borrower's name shall be changed to Woodworkers Warehouse, Inc. Bank is pleased to offer its commitment to lend up to $15,000,000 of the Senior Credit Facility, upon and subject to the terms and conditions of this letter and the Summary of Terms and Conditions attached hereto as Exhibit A (the "Term Sheet"). Agent is pleased to further advise the Borrower that Foothill Capital Corporation and Transamerica Business Capital Corporation (together with Bank, "Lenders") are willing to be co-lenders for up to $7,500,000 each upon and subject to the terms and conditions of this letter and the Term Sheet. Agent will act as sole and exclusive administrative agent for the Senior Credit Facility. No additional agents, co-agents or arrangers will be appointed and no other titles will be awarded without Agent's prior written approval. It is understood and agreed that neither Agent nor any Lender participating in the Senior Credit Facility will receive compensation from Borrower in order to obtain its commitment, except on the terms contained herein and in the Term Sheet. USA [LOGO] [LOGO] RECYCLED PAPER Trend-Lines, Inc. August 28, 2001 Page 2 The commitment of Bank hereunder and the agreement of Agent to provide the services described herein are subject to the satisfaction of each of the following conditions precedent in a manner acceptable to Agent and Lenders in their sole discretion: (a) each of the terms and conditions set forth herein and in the Term Sheet; (b) the absence of a material breach of any representation, warranty or agreement of Borrower set forth herein; (c) the negotiation, execution and delivery of definitive documentation for the Senior Credit Facility consistent with the Term Sheet and otherwise satisfactory to Agent and Lenders; (d) no change, occurrence or development that could, in Agent's or any Lender's opinion, have a material adverse effect on the business, assets, liabilities (actual or contingent), operations, condition (financial or otherwise) or prospects of Borrower and its subsidiaries taken as a whole shall have occurred or become known to Agent or any Lender; and (e) neither Agent nor any Lender becoming aware after the date hereof of any information or other matter which in Agent's or any Lender's judgment is inconsistent in a material and adverse manner with any information or other matter disclosed to Agent and Lenders prior to the date hereof with respect to Borrower, its business or financial condition, or the transactions contemplated in connection with the Senior Credit Facility (in which case Agent and Lenders may, in their sole discretion, suggest alternative financing amounts or structures that ensure adequate protection for Lenders or terminate this letter and any commitment or undertaking hereunder). Borrower hereby represents, warrants and covenants that (a) all information, other than Projections (defined below), which has been or is hereafter made available to Agent or Lenders by Borrower or any of Borrower's representatives in connection with the transactions contemplated hereby (the "Information") is and will be complete and correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading, and (b) all financial projections concerning Borrower and its subsidiaries that have been or are hereafter made available to Agent or Lenders by Borrower or any of Borrower's representatives (the "Projections") have been or will be prepared in good faith based upon assumptions Borrower believes to be reasonable, Borrower agrees to furnish Agent and Lenders with such Information and Projections as Agent or any Lender may reasonably request and to supplement the Information and the Projections from time to time until the closing date for the Senior Credit Facility so that the representations, warranties and covenants in the preceding sentence are correct on such closing date, Borrower understands that Agent and Lenders will be using and relying on the Information and the Projections without independent verification thereof. By acceptance of this offer, Borrower agrees to pay all costs and expenses of Agent described in the Term Sheet (the "Reimbursable Expenses"). Trend-Lines, Inc. August 28, 2001 Page 3 Borrower agrees to indemnify and hold harmless Agent, each Lender and each of their affiliates and their directors, officers, employees, advisors and agents (each, an "Indemnified Party") from and against (and will reimburse each Indemnified Party as the same are incurred) any and all losses, claims, damages, liabilities, and expenses (including, without limitation, the reasonable fees and expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or by reason of (including, without limitation, in connection with any investigation, litigation or proceeding or preparation of a defense in connection therewith) any matters contemplated by this letter, the Senior Credit Facility or any use made or proposed to be made with the proceeds thereof, unless and only to the extent that, as to any Indemnified Party, it shall be determined in a final, nonapplicable judgment by a court of competent jurisdiction that such losses, claims, damages, liabilities or expenses resulted primarily from the gross negligence or willful misconduct of such Indemnified Party. Borrower agrees that no Indemnified Party shall have any liability for any indirect or consequential damages in connection with the Senior Credit Facility. In connection with the Senior Credit Facility, Borrower agrees to provide to Agent, in a reasonably prompt manner and in any event at or before such time as Agent or any Lender may deem necessary for a complete and satisfactory review by Agent and Lenders, all such documents, reports, agreements, financial and other information, environmental reports and other items as Agent or its counsel or any Lender may reasonably request with respect to Borrower and its business. Please deliver to Agent on or before September 30, 2001 a copy of an order entered by the Bankruptcy Court in the Bankruptcy Case, in form and substance satisfactory to Agent and Lenders, authorizing Borrower's acceptance of and incurrence of its obligations under this letter, which order shill specifically provide that Agent's right to receive the reimbursement of all costs and expenses outlined herein shall be entitled by the collateral in which Agent and Lenders claim to have security interests and liens and shall be entitled to priority as administrative expense claims under Section 503(b)(1) of the Bankruptcy Code, whether or not the Senior Credit Facility closes. The terms of this letter and the Term Sheet are confidential and, except for disclosure after execution of this letter by Borrower or prior thereto on a confidential basis to accountants, attorneys and other professional advisors retained by Borrower or by the Official Committee of Unsecured Creditors appointed in the Bankruptcy Case in connection with the Senior Credit Trend-Lines, Inc. Bank of America [LOGO] August 27, 2001 Page 4 Unsecured Creditors appointed in the Bankruptcy Case in connection with the Senior Credit Facility or as may be required by law, may not be disclosed in whole or in part to any other person or entity without Agent's and Lenders' prior written consent. In the event Borrower breaches any of its obligations or agreements set forth in this letter, at Agent's and Lenders' option this letter and Lenders' commitment hereunder shall terminate. This letter and the Team Sheet shall be governed by laws of the State of New York. Each of Borrower, Agent and Lenders hereby irrevocably waives all right to trial by jury in any action, proceeding or counterclaim (whether based on contract, tort or otherwise) arising out of or relating to this letter, the Term Sheet, the transactions contemplated hereby and thereby or the actions of Agent or Lenders in the negotiation, performance or enforcement hereof. This letter, together with the Term Sheet, set forth the entire understanding of Borrower, Agent and Lenders with respect to the Senior Credit Facility. This letter may be modified or amended only by the written agreement of Borrower, Agent and Lenders. This letter is not assignable by Borrower without Agent's and Lenders' prior written consent and is intended to be solely for the benefit of Borrower, Agent, Lenders and the Indemnified Parties. This offer will expire at 5:00 p.m., E.S.T. on August 28, 2001 unless Borrower executes this letter and returns it to Agent prior to that time (which may be by facsimile transmission). This undertaking and commitment will expire on November 12, 2001 unless definitive documentation for the Senior Credit Facility is executed and delivered prior to such date. We look forward to working with you in the weeks ahead. Very truly yours, BANK OF AMERICA, N.A., As Agent and a Leader By: /s/ ------------------------------ Title: Vice President Trend-Lines, Inc. August 21, 2001 Page 5 FOOTHILL CAPITAL CORPORATION, As a Lender By: /s/ --------------------------------------- Title: Assistant Vice President TRANSAMERICA BUSINESS CAPITAL CORPORATION, As a Lender By: --------------------------------------- Title: Accepted and Agreed to, subject to Bankruptcy Court approval, as of ________________________, 2001: Trend-Lines, Inc. By: --------------------------------------- Title: Trend-Lines, Inc. August 28, 2001 Page 5 FOOTHILL CAPITAL CORPORATION, As a Lender By: --------------------------------------- Title: TRANSAMERICA BUSINESS CAPITAL CORPORATION, As a Lender By: /s/ --------------------------------------- Title: EXECUTIVE VICE PRESIDENT Accepted and Agreed to, subject to Bankruptcy Court approval, as of ________________________, 2001: Trend-Lines, Inc. By: --------------------------------------- Title: PRESIDENT & CEO EXHIBIT A SUMMARY OF TERMS AND CONDITIONS Woodworkers Warehouse, Inc. Emergence Facility Agent: Bank of America, N.A. (to hold 50% of this facility) Borrower: Woodworkers Warehouse, Inc. ("WW") Credit Facility: Senior Secured Revolving Credit Facility (the "Facility") of up to $30,000,000 which WW may borrow, repay, and re-borrow subject to the borrowing base Co-Lenders: Foothill Capital Corporation and Transamerica Business Capital Corporation (to each hold 25% of the facility) Purpose: Bankruptcy emergence and working capital Tenor: Maturity to be two years from confirmation date of POR Letters of Credit: $2,000,000 sub-limit for Standby L/C's (100% reserved against availability) and Merchandise L/C's (100% reserved against availability) Borrowing Base: From closing, which shall occur on the Effective Date, though 3/31/02 WW may borrow the sum of sixty-five (65%) percent of the cost value of eligible store and warehouse inventory; plus 50% of the value of eligible inventory covered by Merchandise Letters of Credit; plus 85% of the value of eligible Credit Card and Trade Accounts Receivable; plus $500,000 against the value of WW's Seabrook, NH facility until that facility is sold; plus the amount (the "Additional Availabi1ity") as follows: o $3,000,000 for sixty (60) days following closing, which shall be on the Effective Date o $2,500,000 for the next thirty (30) days o $2,000,000 thereafter with amortization of $166,667 per month beginning 2/28/02 From 3/31/02 and thereafter WW may borrow the lesser of sixty-five (65%) percent of the cost value of eligible store and warehouse inventory or 85% of the OLV value of the inventory from an appraiser acceptable to Agent; plus 50% of the value of eligible inventory covered by Merchandise Letters of Credit; plus 85% of the value of eligible Credit 1 Card and Trade Accounts Receivable; plus $500,000 against the value of WW's Seabrook, NII facility until that facility is sold Interest: o LIBOR plus 3.25% or Bank of America Reference Rate plus 1.00% on advances, not including Loans drawn under the Additional Availability o Bank of America Reference Rate plus 3.00% on Loans drawn under the Additional Availability o Default Rate: 3% above contractual rates o All interest will be calculated on the basis of actual number of days elapsed in a year of 360 days, Fees: Closing Fee: $500,000 reduced to S300,000 conditioned upon allowance of Court of Agent's professional fees and expenses in the amounts referred to herein; such closing fee to be earned at closing, which shall occur on the Effective Date, but payable 12/15/01 Letter of Credit Fee: 3% of face value of letter of credit, payable monthly in arrears (calculated on the basis of actual number of days elapsed in a year of 360 days) and issuer's charges and Agent's customary fees and charges in connection with all amendments, extensions, draws and other actions with respect to letters of credit. Collateral Management Fee: $50,000 annually, payable monthly in equal installments with the first installment to be paid upon agreement between Agent and WW, but in no event later than November 30, 2001 Unused Line Fee: .50% on unused commitment payable monthly in arrears (calculated on the basis of actual number of days elapsed in a year of 360 days) Financial Covenants: To be determined based upon an updated operating budget Other Covenants: o Maintain insurance with insurance carriers (acceptable to Agent) against such risks and in such amounts as is customary for similar businesses, naming Agent as mortgagee/loss payee. o Restrictions on, among other things, distributions and dividends (except distributions under the POR subject to availability conditions set forth below) acquisitions and investments, indebtedness, liens, affiliated transactions and capital expenses. Conditions o Loan availability plus the trade credit anticipated to be granted within thirty (30) days of the Effective Date (satisfactory evidence of which 2 must be provided to Lenders) to be $4,000,000 at closing on the Effective Date o $3,500,000 balance due with respect to assignment of Revere Lease to be received by Borrower prior to closing o Minimum unused availability after dividend payment to the Unsecured Creditors to be $3,000,000 o Lenders' satisfaction with WW's POR and order confirming POR (the "Confirmation Under") and other pleadings and orders relating thereto o Confirmation Order shall not have been stayed by the Bankruptcy Court or by any other court having jurisdiction to issue any such stay and shall be in full force and effect o Refinancing/payment in full at closing on the Effective Date of all principal and interest at the non-default rate due Lenders; Agent and Lenders shall waive the incremental amount of interest due in connection with the default rate of interest; and Borrower to approve claim of Agent and Lenders as filed and acknowledge no defenses thereto o Payment of professional fees and expenses incurred by Agent during Bankruptcy Case and also payment of professional fees and expenses incurred by Agent in connection With the Facility; fees and expenses incurred through July 31, 2001 not to exceed $709,000, of which $428,000 has been added to the loan balance and the remaining amounts will be paid as mutually agreed between WW and Agent, and fees and expenses incurred after July 31, 2001 which are estimated to be $100,000 through closing, will also be paid as mutually agreed between WW and Agent o Upon execution of commitment letter, WW to file a motion, in form and substance acceptable to Agent and Lenders, with the Bankruptcy Court to pay down its existing indebtedness to Lenders by $7,500,000 o Upon acceptance of commitment by mutual agreement, all existing litigation between Borrower and Agent to be stayed and to be withdrawn with prejudice or dismissed with prejudice at closing o Walt Spokowski to remain CEO upon the Effective Date o Cash management system to be acceptable to Agent and Agent to have full cash dominion by means of lockboxes and blocked account agreements o Execution and delivery, in form and substance acceptable to Agent, Lenders and their counsel, of Agent's customary agreements, documents, instruments, financing statements, consents, landlord waivers, documents indicating compliance with all applicable federal and state environmental laws and regulations, evidences of corporate authority, opinions of counsel and such other writings to confirm and effectuate the Facility as may be required by Agent, Lenders and their counsel Reporting Periodic financial and collateral reporting including annual audited financial statements, monthly and quarterly internally prepared financial statements, annual financial projections, twice weekly borrowing base 3 certification (on Tuesday and Friday of each week) and periodic receivables agings and inventory reports Collateral: First priority security interests and liens on all assets of Borrower, including without limitation leasehold interests and right upon occurrence of an event of default to use the leasehold premises to conduct going out-of-business sales Representations and: Warranties: Customary and appropriate for financings of this type, including without limitation due organization and authorization, enforceability, compliance with laws and court orders, perfection and priority of liens securing the Facility, full disclosure, and the accuracy of all representations and warranties in the definitive transaction documents. Remedies: Customary and appropriate for financings of this type This Term Sheet is intended as an outline only and does not purport to summarize all the conditions, covenants, representations, warranties and other provisions which will be contained in definitive legal documentation for the Facility contemplated hereby. 4