General Release Agreement of Steven M. Grossman

        This General Release Agreement ( “Release Agreement” ) is entered into as of April 6, 2006, by Steven M. Grossman , residing at XX XXXXXXX XXXXXXXXX ( “Grossman” ).

        WHEREAS, Grossman and 4Kids Entertainment, Inc. ( “the Company” ) are parties to the Executive Employment Agreement dated June 30, 2005, by which Grossman was employed commencing September 1, 2005 ( “Agreement” or “Executive Employment Agreement” );

        WHEREAS, the employment of Grossman terminated effective as of April 6, 2006;

        WHEREAS, conditioned upon Grossman’s execution of this Release Agreement, the termination of Grossman’s employment will be deemed to be pursuant to Section 6.3 of the Executive Employment Agreement; and

        WHEREAS, Grossman has read and given due and knowing consideration to all provisions and recitals of this Release Agreement;

        NOW, THEREFORE, in consideration of the terms and conditions of his Agreement, Grossman hereby executes and delivers to the Company this Release Agreement, as follows:

     1.         General Release .

    (a)        In consideration of the terms and conditions of this Release Agreement, Grossman hereby irrevocably and unconditionally releases, waives and forever discharges the Company from any and all actions, causes of action, claims, demands, damages, rights, remedies and liabilities of whatsoever kind or character, in law or equity, suspected or unsuspected, past or present, that he has ever had, may now have or may later assert against the Company and any and all of its past and present directors, officers, shareholders, consultants, agents, representatives, attorneys, employees, employee benefit plans and plan fiduciaries and each of them (collectively, the “ Releasees ”), whether or not arising out of or related to Grossman’s employment by the Company or Grossman’s service on the Board of Directors of the Company or any of its subsidiaries or affiliates ( “the Board” ), or the performance of any services to or on behalf of the Company under the Executive Employment Agreement or the termination of that employment and those services or otherwise, (hereinafter referred to as “ Grossman’s Claims ”), from the beginning of time to the Effective Date hereof, including without limitation: (i) any claims arising out of or related to any federal, state and/or local labor or civil rights laws or securities laws or other laws, including, without limitation, the federal Civil Rights Acts of 1866, 1871, 1964 and 1991, the National Labor Relations Act, the Worker Adjustment and Retraining Notification Act, the Age Discrimination in Employment Act of 1967, as amended by, inter alia , the Older Workers Benefit Protection Act of 1990, the Family and Medical Leave Act of 1993, the Employee Retirement Income Security Act of 1974, the Consolidated Omnibus Budget Reconciliation Act of 1985, the Americans with Disabilities Act of 1990, the Fair Labor Standards Act of 1938, the Sarbanes-Oxley Act of 2002, the New York State Labor Law, New York State Wage and Hour Laws, the New York State Executive Law, the New York City Human Rights Law and Labor Laws; and (ii) any and all other of Grossman’s Claims arising out of or related to any contract, any and all other federal, state or local constitutions, statutes, rules or regulations, or under any common law right of any kind whatsoever, or under the laws of any country or political subdivision, or otherwise, including, without limitation, any of Grossman’s Claims for any kind of tortious conduct (including but not limited to any claim of defamation or distress), promissory or equitable estoppel, breach of the Company’s policies, rules, regulations, handbooks or manuals, breach of express or implied contract or covenants of good faith, wrongful discharge or dismissal, and/or failure to pay in whole or part any compensation, bonus, incentive compensation, overtime compensation, severance pay or any remuneration or benefits of any kind whatsoever, including but not limited to salary, bonus, business expenses, health, life or disability insurance, 401(k) plans, fringe benefits, automobile allowance, vacation days or pay, or stock options, front pay or any compensatory, special or consequential damages, punitive or liquidated damages, attorneys’ fees, costs, disbursements or expenses, or any other claims of any nature, except as expressly provided below in subparagraphs (xx) and (yy) of this Paragraph 1(a).

1

    (xx)        Notwithstanding the foregoing, the Indemnification Agreement dated November 9, 2005 currently in effect by and between 4Kids Entertainment Inc. and Steven M. Grossman shall remain in full force and effect.

    (yy)        Notwithstanding the foregoing, nothing in this Release Agreement shall be interpreted to affect the ability of Grossman to exercise stock options actually granted to him by the Company and vested prior to the Effective Date of this Release Agreement provided that he does so no later than the expiration date of any such stock options pursuant to and subject to the rights, obligations and limitations of the Company’s 2001 Stock Option Plan, 2002 Stock Option Plan, 2003 Stock Option Plan, 2004 Stock Option Plan and any Stock Option Agreements between Grossman and the Company or any of its subsidiaries or affiliates.

    (b)        To the fullest extent permitted by law, Grossman agrees not to lodge against the Company, the other Releasees, or any of them, any formal or informal complaint, claim, charge, action or proceeding in court or with any federal, state or local agency or any other forum, including without limitation arbitration in any jurisdiction, arising out of or related to Grossman’s Claims or Grossman’s employment by or performance of services to or on behalf of the Company or the termination of that employment or other services, or any Board service or action, or for any other reason. Grossman hereby represents and warrants that he has brought no complaint, claim, charge, action or proceeding against the Company or any of the other Releasees in any jurisdiction or forum. Grossman further represents and warrants that he has not in the past and will not in the future assign any of Grossman’s Claims to any person, corporation or other entity. Grossman further represents, warrants and agrees that he will not at any time in the future seek employment from or accept employment or any position, whether as an employee or as a consultant, with the Company or any of its subsidiaries or affiliates as they currently exist.

    (c)        Execution of this Release Agreement by Grossman operates as a complete bar and defense against any and all of Grossman’s Claims. If Grossman should hereafter assert any of Grossman’s Claims in any action, complaint, claim, charge, lawsuit, arbitration or proceeding, this Release Agreement shall be raised as and shall constitute a complete bar to any such charge, complaint, action, claim or proceeding and the Company shall be entitled to and shall recover from Grossman all costs and expenses incurred, including attorneys’ fees, in responding to or defending against any such action, complaint, claim, charge, lawsuit, arbitration or proceeding.

2

    (d)        Grossman represents, warrants and agrees that (i) Grossman is and shall continue to remain in compliance in all material respects with his obligations and representations pursuant to Section 6.3 and Section 6.7 of the Executive Employment Agreement as if his employment continued uninterrupted for the full duration of the Term (as defined below in Paragraph 6(d)), and (ii) the provisions of said Section 6.3 and Section 6.7 of the Executive Employment Agreement and of the sections referenced therein shall remain in full force and effect and are incorporated herein by reference. Grossman shall not take any action that is contrary to the Executive Employment Agreement or to this Release Agreement.

     2.         Sufficiency of Consideration . The Company is providing and Grossman is accepting this Release Agreement pursuant to Section 6.7 of the Agreement and in order to be eligible for the payments referenced in Section 6.3 of the Agreement, in full and complete satisfaction of all of Grossman’s Claims.