Legendary Boxing Company Everlast Makes Financial Announcement

Everlastâ Worldwide Inc. (Nasdaq: EVST), manufacturer, marketer and licensor of sporting goods and apparel under the Everlast brand name, today reported the entire redemption of its outstanding $20 million Series A Preferred Stock and related rights and privileges, including the elimination of the profit-sharing mechanism, the retirement of its two board of director seats, and the prepayment of its outstanding $6 million in notes payable to one of the former Series A preferred stockholders.

The redemptions and prepayment was accomplished by the Company, and all its wholly-owned subsidiaries, entering into a $25 million Senior Secured four-year Term Facility with Wells Fargo Century. Under the terms of the facility, the Company redeemed its Series A Preferred Stock and prepaid notes payable, and all rights and privileges thereof, for an aggregate amount of $22.7 million. The remaining $2.3 million of financing from the Term Facility was used to pay for financing and professional costs associated with the Term Facility.

The Term Facility requires quarterly principal installments of $635,000, commencing April 30, 2006, with a balloon of $15.5 million due December 31, 2009, along with monthly interest on the related outstanding principal at prime plus 1% (currently 8.25%). The Term Facility has customary covenants in place, including a minimum fixed-charge financial covenant ratio, and excess cash-flow recapture. The Term Facility is secured by all tangible and intangible assets of the Company and its wholly-owned subsidiaries, as defined.

“The strategic initiatives we have undertaken since 2004 have allowed us to refinance our debt and capital structure with a Term Facility under favorable terms, which is extremely accretive to the Company and our common shareholders,” said Seth Horowitz, Chairman and CEO. “I am excited we are able to complete and close this Term Facility with a great partner of Everlast for the past ten-plus years, Wells Fargo Century, Inc., a wholly-owned subsidiary of Wells Fargo Foothill and a Wells Fargo Company, who will continue to provide us with our working capital line of credit. Wells Fargo, a full-service financial institution ranked at the top in most all financial service categories, is the only Aaa rated United States bank by Moody’s rating service.

“I want to take this time to thank our Series A Preferred Stockholders, especially Ben Nadorf, for being a part of this transaction and for his many contributions to the Company over the years. With our recently announced licensing agreements complementing our existing licensing and sporting goods businesses, we have positioned the Company to succeed in its strategic plan of building the Everlast name into one the world’s preeminent brands.”

Mr. Gary Dailey, CFO added, “The announcement is an important development for our Company. The closing of this four-year Term Facility achieves one of the Company’s financial objectives by simplifying its previously complex capital structure and providing an immediate benefit to existing common shareholders with a gain on the extinguishment of the Series A Preferred Stock and notes payable in the aggregate of $2.0 million, or $0.53 per diluted share. The principal and interest debt service outlined in this Term Facility will additionally enhance the Company’s cash flows, especially in years 2007 and 2008, where our contractual obligations under the Preferred Stock redemption schedule and maturities of notes payable exceeded $19.5 million.”

Thomas V. Pizzo, President and CEO of Wells Fargo Century, commented, “We are very pleased to provide this additional financing to Everlast. Every client is different, and each situation is unique. We took an entrepreneurial view of Everlast’s opportunities and structured an appropriate solution.”