PROMISSORY NOTE

$16,000,000.00          August 13, 2001

FOR VALUE RECEIVED, the undersigned, Joe Boxer Licensing, LLC (“Maker”), hereby promises to pay to Kmart Corporation (“Payee”), at 3100 West Big Beaver Road, Troy, Michigan 48084 or at such other address of which Maker is notified, the principal sum of Sixteen Million Dollars ($16,000,000), lawful money of the United States, to be paid, together with interest per annum on the unpaid principal balance at a rate equivalent to the lowest allowable federal rate for a loan of the term of this Note as of the date hereof (i.e., 5.12%), in five (5) equal annual installments, on a self-liquidating basis, on the last day of each year commencing on December 31, 2003 and continuing through December 31, 2007.

1.   It is hereby expressly agreed that the then unpaid portion of the said principal sum evidenced by this Note and any accrued and unpaid interest shall become due at the option of Payee if Maker defaults in the payment of any sums due hereunder and such default continues uncured for a period of thirty (30) business days after notice to Maker.

2.   Maker may prepay this Note, in whole or in part, at any time and from time to time, without penalty and with interest only to the date of payment.

3.   Maker hereby agrees to pay all expenses, including reasonable attorneys’ fees, which Payee may incur in effecting collection of this Note upon an uncured default in payment.

4.   This Note shall be construed and interpreted in accordance with the laws of the State of Michigan applicable to agreements made and to be performed in such state a