Everlast Worldwide Inc. announced that it has entered into an Agreement with its Principal Preferred Stockholder, modifying its annual minimum redemptions.

Under the terms of the Agreement, in lieu of a cash payment for the redemption of a portion of their Series A Preferred Stock, $2,000,000 for each of the four years commencing December 14, 2003, through December 14, 2006,
will be converted into four term loans (“Loans”). The Loans shall be secured by four promissory notes from the Company which shall provide for the payment of interest only, in the sum of 9.5% per annum during the years 2004 through 2007 and 10% during 2008, upon the unpaid balance to this Principal Preferred Stockholder. The loans shall mature on December 14, 2008 and shall aggregate
$8,000,000. The Company shall have the right to pre-pay the promissory notes
in full, with no prepayment fees, prior to December 14, 2008 together with all
unpaid interest due at the time of pre-payment. There are no changes to the
existing preferred dividend formula currently being used on the outstanding
redeemable percentage of the Series A Preferred Stock.

In addition, as part of the Merger Agreement, the Company issued
342,000 shares of common stock as part of the purchase price consideration to
this Principal Preferred Stockholder.

Pursuant to the terms of the Merger Agreement, if the defined market price
levels of the Common Stock have not been achieved by October 24, 2005, the
Company is required to issue additional common shares or other consideration
(“Make-Whole Adjustment”). Pursuant to the terms of this Agreement, the
Principal Preferred Stockholder holder of these common shares has modified
their Make-Whole Adjustment to October 24, 2007.

“The restructuring of our Preferred Stock mandatory redemptions by
$8 million over the next four years and extension of the Make-Whole Adjustment
from 2005 to 2007 significantly improves our balance sheet, our cash position
and provides us with greater flexibility to execute our brand equity building
strategy within our growing licensing and apparel divisions,” said George Q
Horowitz, Chairman and Chief Executive Officer of Everlast Worldwide, Inc.

Mr. Horowitz concluded, “The restructuring of our financing is a
tremendous accomplishment for our company and will serve to enhance
shareholder value. This Agreement reconfirms the preferred Stockholders'
continued support and belief in our future and strategic objectives that we
have set for our company in the years to come. As a result of our restructured
balance sheet and the estimated $2.8 million in annual cost savings expected
in 2004 from the closure of our Bronx, New York manufacturing facility, we
will enter 2004 as a stronger company positioned to accelerate our strategic
growth plans which call for the signing of additional licensing agreements,
international expansion and the introduction of new products in our apparel
and boxing businesses.”