Promissory Note

Exhibit 10.31

    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 and
      may
      not be modified, discharged or terminated, nor may any of the provisions hereof
      be waived, orally.

     

    5. The
      loan
      evidenced by this Note is being made by Payee in consideration of Maker’s
      agreement to enter into that certain license agreement of even date herewith
      between Maker, as licensor, and Payee, as licensee (the “License Agreement”).
      Accordingly and notwithstanding anything to the contrary herein, the amount
      of
      any installment due under this Note (including interest) at any time due and
      payable (whether during the term of the License Agreement or after the
      termination thereof) shall be reduced (and, to the extent reduced, satisfied)
      by
      the aggregate of any “Minimum Royalty” or “Sales Royalty” (as such terms are
      defined in the License Agreement) or other sum concurrently or otherwise then
      due and payable or otherwise owing by Payee to Maker under the License Agreement
      or in connection therewith. Also, Payee may not assign or otherwise transfer
      this Note other than to an assignee of the License Agreement permitted in
      accordance with the terms of the License Agreement and Payee shall be required
      to assign this Note to such an assignee of the License Agreement together with
      the assignment of the License Agreement.

     

    


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


     

    6. All
      notices and other communications hereunder shall be in writing and shall be
      deemed to be duly given if personally delivered, if mailed (by certified or
      registered mail, return receipt requested) or if sent by nationally-recognized
      overnight mail or courier service, to the party concerned at its address set
      forth on page 1 of the License Agreement (or at such other address as a party
      may specify by notice to the other). Notices to Maker shall be sent to the
      attention of William Sweedler. A copy of all notices to Maker also shall be
      sent
      to Andrew Tarshis, Esq., c/o Maker, to Duval & Stachenfeld LLP, 300 East
      42nd Street, New York, New York 10017, Attn: Patrick Duval, Esq., and to
      Phillips Nizer Benjamin Krim & Ballon LLP, 666 Fifth Avenue, New York, New
      York 10103, Attn: Jonathan R. Tillem, Esq. Notices to Payee shall be sent to
      the
      attention of General Counsel, with a copy to Kmart of Michigan Inc., 3250 West
      Big Beaver Road, Troy, Michigan 48084, Attn: Intellectual Property
      Counsel.

     

    JOE
      BOXER
      LICENSING, LLC

    


    


    By:
      _/s/
      Jay Shaw_____________________

    Jay
      Shaw,
      Chief Operating Officer