EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT

AGREEMENT dated as of December 1, 2005 between 4Kids Entertainment Licensing, Inc. with offices at 1414 Avenue of the Americas, New York, New York 10019 (“Employer”), and Bruce R. Foster, 1414 Avenue of the Americas, New York, New York 10019 (“Employee”).

W I T N E S S E T H :

        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:

1.     Employment and Duties .

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

2.        Term of Employment .

(a)

The term of Employee’s employment hereunder (“Term”) shall commence on December 1, 2005 and shall continue until December 31, 2008 unless terminated as provided in Paragraph 10 of this Agreement.

(b)

At least three (3) months prior to the end of the Term, the Parties shall begin discussions with respect to the possible extension of the Term of this Agreement. If prior to December 31, 2008, Employer does not offer to extend the Term for at least one (1) year on the same terms and conditions as set forth herein and this Agreement terminates on December 31, 2008, Employer shall pay Employee his annual salary in effect for calendar year 2008 for one (1) year. Employer’s payment to Employee of his annual salary shall be made in accordance with the provisions of Paragraph 3(b) below.

3.        Compensation .

(a)

Salary . As compensation for Employee’s services during the Term, Employer shall pay Employee a salary at the rate Three Hundred Fifty Thousand ($350,000) per year. The CEO or the Compensation Committee of the Board of Directors of 4Kids (“Compensation Committee”) shall have the right, but not the obligation, to provide Employee with salary increases, from time to time, in the sole discretion of the Compensation Committee.

(b)

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.

(c)

Fringe Benefits . During the Term, Employee shall be entitled to participate in all insurance and other benefits as are now, or hereafter may be, established by Employer and affiliates for the benefit of all employees of Employer and affiliates, subject, however, to the provisions of the various benefit plans and programs in effect from time to time. Employee shall also be entitled to such additional benefits as may be made available to the senior executives of Employer and affiliates.

(d)

Vacation. Employee shall be entitled to accrued vacation at the rate of four (4) weeks per calendar year during the Term. Such vacation shall be taken at such times as shall be approved by the CEO or COO of 4Kids.

(e)

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.

(f)

Car Allowance . Commencing with calendar year 2006, Employee shall also receive an annual car allowance of $4,800 per year (“Car Allowance”). Such Car Allowance shall be paid in accordance with the payroll policies of Employer and shall be subject to the payment by Employee of applicable federal, state and local income taxes and to any applicable withholding taxes on such Car Allowance. Employee’s costs, if any, incurred in the leasing, insuring or operation of such automobile in excess of the Car Allowance shall be borne exclusively by Employee, and Employee, and not the Employer, shall be responsible and liable for the Employee’s leasing, insuring and operation of such automobile. Notwithstanding anything herein to the contrary, Employee shall not be required to submit expense reports with respect to the cost of leasing, insuring and operating an automobile for use in performing his duties hereunder.

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4.        Bonus Compensation .

(a)

For each full calendar year of the Term, Employee shall be eligible to participate in the bonus pool established by the Compensation Committee (the “Bonus Pool”), which Bonus Pool shall be based upon a percentage designated by the Compensation Committee of the profit before tax of 4Kids and subsidiaries. The Compensation Committee in conjunction with the CEO of 4Kids, in their sole and absolute discretion, shall determine the portion of the Bonus Pool, if any, to be awarded to Employee based upon Employee’s performance during the calendar year in question.

(b)

The portion of the Bonus Pool to be awarded to Employee shall be paid to Employee no later than ten (10) business days after completion of the annual audit of the financial statements of 4Kids which audit is generally completed by March 15th of the year immediately succeeding the year to which the Bonus Pool pertains.

(a)

Employee shall also be eligible to receive grants of stock options as determined in the sole discretion of the Compensation Committee. Employee shall also be eligible to participate in any other long term incentive plans (“LTIP”) adopted by the Compensation Committee for the senior executives of Employer. Any grants to Employee with respect to any LTIP’s shall be determined in the sole discretion of the Compensation Committee.

6.        Place of Employment . 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 and affiliates in connection with the performance of Employee’s duties hereunder.

7.        Non-Competition and Protection of Confidential Information .

(a)

Employee agrees that his position with Employer places him in a position of confidence and trust with the clients 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 of Employer’s clients and potential clients. Employee further acknowledges that the rendering of services to the clients of Employer necessarily requires the disclosure to Employee of confidential information and trade secrets of Employer and its clients (such as without limitation, marketing and licensing plans and business strategies). 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.

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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:

(i)

attempt in any manner to solicit from any client (except on behalf of Employer) business of the type performed by Employer or to persuade any client of Employer to cease to do business or to reduce the amount of business which any such client has customarily done or contemplates doing with Employer, whether or not the relationship between Employer and such client was originally established in whole or in part through Employee’s efforts;

(ii)

employ or attempt to employ or assist anyone else to employ any person who is then or at any time during the preceding year was in Employer’s employ:,

(iii)

render any services of the type rendered by Employer to its clients to or for any client of Employer unless such services are rendered as an employee or consultant of Employer.

Notwithstanding anything herein to the contrary, the term “Employer,” as used in this Paragraph 7, shall mean Employer and affiliates. The term “client” shall mean (i) anyone who was then a client of Employer; (ii) anyone who was a client of Employer at any time during the one (1) year period immediately preceding the date of termination of employment; and (iii) any prospective client to whom Employer has made a formal presentation (i.e., the actual presentation of a marketing plan, licensing strategy and/or media plan) within a one (1) year period immediately preceding the date of such termination.

(b)

Employee also agrees that either during the Term or at any other time thereafter, Employee shall not divulge to anyone (other than Employer or any perso