EMPLOYMENT AGREEMENT

AGREEMENT dated as of June 1, 2008 between 4Kids Ad Sales, Inc. with offices at 1414 Avenue of the Americas, New York, New York 10019 ("Employer"), and Daniel Barnathan, 15 West 72^nd Street, Apt. 19A, New York, New York 10023 ("Employee").

WHEREAS, Employer desires to retain the services of Employee and Employee desires to be employed by Employer upon the terms and conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the covenants herein contained, the parties hereto agree as follows:

(a) Employer hereby employs Employee and Employee hereby agrees to serve as President of Employer. Employee agrees to perform such services for Employer and affiliates consistent with Employee's position as shall, from time to time, be assigned to Employee by the Chief Executive Officer, (“CEO”), Chief Operating Officer (“COO”) and/or Board of Directors of Employer’s parent company, 4Kids Entertainment, Inc. (“4Kids”). Employee shall also perform such services customary to such office as are necessary for the operations of Employer. Employee shall use Employee's best efforts to promote the interests of Employer and shall devote Employee's full business time, energy and skill exclusively to the business and affairs of Employer during the Term set forth below in Paragraph 2.

(b)     Employee’s principal duties shall be to (i) sell advertising time on the Fox Saturday Morning 8 a.m.-12 p.m. block (“4Kids TV Block”) licensed by Employer from Fox Broadcasting Corporation (“Fox”) during the 2007 -- 2008 Broadcast Season and the 2008 -- 2009 Broadcast Season, (ii) sell advertising time on The CW Network Saturday Morning 7 a.m.-12 p.m. block (“ CW 4Kids TV Block”) licensed by Employer from The CW Network beginning with the 2008 -- 2009 Broadcast Season, (iii) sell advertising space on the websites owned, managed or controlled by 4Kids, including without limitation, 4Kids TV and YUGIOH.com, and on dvds distributed through 4Kids Entertainment Home Video, Inc. (iv) manage the advertising sales department, including, without limitation, any Vice Presidents of Sales, Inventory Managers, Directors of Research, Commercial Schedulers and Sales Administrators,

(v) work with the promotions department of Employer in connection with promotions for potential advertisers on and sponsors of the 4Kids TV Block and the CW 4Kids TV Block, and (v) assist, to the extent required by the CEO and COO of Employer, in the management of the business operations of Employer related to the 4Kids TV Block and the CW 4Kids TV Block.

2.        Term of Employment. (a)The term of Employee's employment hereunder ("Term") shall commence on June 1, 2008 and shall conclude on August 31, 2012 unless earlier terminated as provided in Paragraph 8 of this Agreement.           

(b)     Employer shall have the option of extending the Term for one (1) year concluding on August 31, 2013, which option may be exercised by Employer delivering a written notice of exercise to Employee by no later than June 30, 2013.

(a)       Salary. (i) As compensation for Employee's services during the Term, Employer shall pay Employee a salary at the rate of Four Hundred Fifty Thousand Dollars ($450,000) per year. The CEO and the Compensation Committee of the Board of Directors (“Compensation Committee”) of 4Kids shall have the right, but not the obligation, from time to time, to provide Employee with salary increases, in the sole and absolute discretion of the CEO and the Compensation Committee of 4Kids.

(ii) In the event that Employee’s annual salary has not been increased by the CEO and the Compensation Committee to $500,000 or more by January 1, 2010, then notwithstanding anything herein to the contrary, Employer shall pay Employee a salary at the rate of Five Hundred Thousand Dollars ($500,000) per year beginning with calendar year 2010.

(iii) In the event that Employee’s annual salary has not been increased by the CEO and the Compensation Committee to Five Hundred Fifty Thousand Dollars ($550,000) or more by January 1, 2012, then notwithstanding anything herein to the contrary, Employer shall pay Employee a salary at the rate of Five Hundred Fifty Thousand Dollars ($550,000) per year beginning with calendar year 2012.

(b)       Commencing with Employer’s 2008 fiscal year, in addition to the Salary specified in Paragraph 3 (a), Employee shall be eligible to receive an annual cash bonus (the “Bonus”) for each full fiscal year or portion of a fiscal year during the Term based upon such quantitative and qualitative criteria as shall be established by the Compensation Committee in its sole discretion.

(c)       Withholding. All payments of compensation shall be made in appropriate installments to conform with the regular payroll dates for salaried personnel of Employer. Employer shall be entitled to deduct from each salary payment, all

deductions as may be required by law, including, without limitation, deductions for federal, state and local income taxes and FICA.

(d)       Fringe Benefits. During the Term, Employee shall be entitled to participate in all insurance, and other benefits (collectively "Fringe Benefits") as are now, or hereafter may be, established by Employer for the benefit of all employees of Employer (exclusive of severance and life insurance), subject, however, to the provisions of the various benefit plans and programs in effect from time to time.

(e)       Vacation. Employee shall be entitled to accrued vacation at the rate of three (3) weeks per calendar year during the Term, which vacation shall only be taken at such times that will not materially interfere with the performance of Employee's duties and responsibilities hereunder. Any vacation days not used by Employee may not be accrued for future years. All vacation days must be utilized in accordance with the policy of Employer.

(f)        Expenses. Employer shall reimburse Employee in conformity with the expense reimbursement practices of Employer for the reasonable, ordinary and necessary business expenses incurred by Employee in the performance of Employee's duties hereunder. Employee shall submit all receipts, invoices and other such documents evidencing such expenses as may be required by the policy of Employer.

in such Long Term Incentive Plans as may be approved by the Board of Directors of 4Kids and approved by a majority of the shareholders of 4Kids. The CEO and the Compensation Committee shall have the right to decide on the amount of stock options, restricted stock and/or stock appreciation rights, if any, to be awarded to Employee.

During the Term, Employee shall be required to perform Employee's

duties at the principal office of Employer in the New York City metropolitan area. Employee shall undertake all reasonable travel required by Employer in connection with the performance of Employee's duties hereunder.

(a) Employee agrees that Employee's services hereunder are of a special, unique, extraordinary and intellectual character and his position with Employer places him in a position of confidence and trust with the clients (“s defined below) and employees of Employer. Employee acknowledges that inasmuch as the business of Employer is carried on in several states of the United States and that it is the intention of Employer to continue to expand the geographic area in which Employer engages in its business and marketing efforts and accordingly, it is reasonable that the restrictive covenants set forth below are not limited by specific geographic area but by the location

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of Employer's clients and potential clients. Employee further acknowledges that the rendering of services to the clients of Employer necessarily requires the disclosure of confidential information and trade secrets of Employer (such as, without limitation, marketing and licensing plans and strategies for the 4Kids TV Block, the CW 4Kids TV Block and for specific properties owned or represented by Employer and marketing budgets of clients and Employer). Employee and Employer agree that in the course of employment hereunder, Employee has and will continue to develop a personal acquaintanceship and relationship with Employer's clients, and knowledge of those clients' affairs and requirements. Employee acknowledges that Employer's relationships with its established clientele may therefore be placed in Employee's hands in confidence and trust. Employee consequently agrees that it is reasonable and necessary for the protection of the goodwill and business of Employer that Employee make the covenants contained herein.

Accordingly, Employee agrees that while he is in Employer's employ and for a period of one (1) year thereafter, Employee shall not directly or indirectly: