Shortly following the letter Aquamarine Capital Management sent, Everlast Worldwide's largest independent stockholder, Burlingame Asset Management, LLC sent a letter to the EVST's board of directors reiterating the case made by Aquamarine that the board had not maximized shareholder value in its negotiations to sell the company.


The letter in its entirety follows:

    July 25, 2007

    By Hand and FedEx

    Board of Directors of Everlast Worldwide Inc.
    1350 Broadway, Suite 2300
    New York, New York 10018

    Dear Sirs:

We, Burlingame Equity Investors, LP, Burlingame Equity Investors II, LP, and Burlingame Equity Investors (Offshore) Ltd., collectively own 14.3% of Everlast common shares. As your largest independent stockholder, we feel compelled to voice our concern over how the board has handled the proposed sale of the Company.

Gentlemen, you have only one fiduciary duty now that you have decided to sell the Company–to maximize value for all Everlast stockholders. Based on the publicly available information about your negotiations with Brands Holdings and the Hidary Group, we are unconvinced that you have discharged that duty.

Brands Holdings' offer stands at $33 per share in cash while Hidary Group's last offer was $31.25 in cash with an option for shareholders to roll over up to 50% of their interest into the surviving private entity. We believe that the Hidary Group offer may still be superior. In our view, the roll over option gives stockholders the ability to participate in the future successes of Everlast, while also deferring taxes on up to half of their gains. The tax deferral alone probably makes the Hidary proposal superior to stockholders; let alone what value they could ultimately receive by rolling over up to half their interests into the surviving private company.

Frankly, we are confused by your public disclosure to date about your reasons for finding the Brands Holdings deal superior.

As just one example, in the “Reasons for the Transactions” section of the preliminary proxy statement filed with the S.E.C. effective on July 11, 2007 (“Current Proxy”), you emphasize that the Brands Holdings merger is “all cash”, thus providing “stockholders certainty of value for their shares”. But as we understand it, the Hidary Group offer also allows any stockholder to get all cash, thus providing the same “certainty”, while giving stockholders who so elect the tax benefits of rolling over up to 50% of their holdings into the surviving private entity. How can this be a basis for deeming the Brands Holdings transaction superior? Isn't it in fact more accurate to say that both offers provide the same “certainty” to stockholders who want cash, while the Hidary Group offer provides greater flexibility to stockholders who wish to maintain some investment in the post-merger Everlast and/or to realize those tax benefits?

We believe all Everlast stockholders deserve a complete, detailed, convincing explanation as to why the Brands Holdings offer was and is superior, why you terminated discussions with the Hidary Group when you did instead of continuing talks, and how you maximized value for all stockholders. In our opinion you have not provided that explanation. We call upon you to do so without delay.

Never forget that your stockholders, not management, own Everlast. You were elected to serve those stockholders and their interests. Delaware law requires you to maximize value for those stockholders now that you have decided to sell the Company. Please prove to all stockholders that you have already done that. Alternatively, tell your stockholders what steps you plan to take to maximize value before it is too late.

We reserve all our rights with respect to the proposed transaction with Brands Holdings, including our right to vote against it.


    By: Burlingame Asset Management, LLC, as General Partner

    By: ___________________________________
         Blair E. Sanford, Managing Member

    By: Burlingame Asset Management, LLC, as General Partner

    By: ___________________________________
         Blair E. Sanford, Managing Member


    By: ___________________________________
         Blair E. Sanford, Director