Exhibit 10.2

 

Settlement Agreement

 

This Settlement Agreement is entered into this 17th day of August 2009, by and
between THQ Inc. (“THQ”), with its principal place of business at 29903 Agoura
Road, Agoura Hills, CA 91301, and JAKKS Pacific, Inc. (“JAKKS”), with its
principal place of business at 22619 Pacific Coast Highway, Malibu, CA 90265
(collectively, JAKKS and THQ are “the Parties”).

 

WHEREAS, THQ and JAKKS are co-members of a limited liability company called
THQ/JAKKS Pacific, LLC (the “LLC”) and, accordingly, are parties to an LLC
operating agreement dated October 25, 1999, as amended (the “LLC Agreement”);

 

WHEREAS, pursuant to paragraph 5 of the LLC Agreement, the parties attempted but
were unable to agree on JAKKS’ “Preferred Return” for the period beginning
July 1, 2006 and ending December 31, 2009 (the “Current Distribution Period”);

 

WHEREAS, on March 20, 2009, the Court-appointed arbitrator, Pamela Weisberg,
conducted an arbitration hearing to determine JAKKS’ Preferred Return for the
period beginning July 1, 2006 and ending December 31, 2009;

 

WHEREAS, on July 24, 2009, the arbitrator submitted her decision accepting THQ’s
proposal that the Preferred Return for the Current Distribution Period should be
6% of Net Sales, as defined in the LLC Agreement, with a Base Amount of
$30 million (the “Decision”);

 

In consideration of the mutual promises and covenants set forth herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties agree as follows:

 

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1.     The Parties agree that the Decision setting the Preferred Return rate of
6% for the Current Distribution Period is in all aspects binding and final and
each of the Parties agrees not to seek to vacate the Decision.

 

2.     Pursuant to the Decision, THQ shall pay $32,759,372.00 to JAKKS by wire
transfer on August 20, 2009 in full satisfaction of the Preferred Return for the
period from July 1, 2006 through March 31, 2009.

 

3.  This agreement is not intended to waive, impair, release or otherwise affect
either Party’s rights and remedies in connection with the allegations contained
in (i) THQ’s cross-claims against JAKKS in World Wrestling
Entertainment, Inc. v. THQ Inc. and THQ/JAKKS Pacific, LLC, Connecticut Superior
Court Case No. X05-FST-CV-06-5002512; (ii) THQ’s claims against Jakks in THQ
Inc. v. JAKKS Pacific Inc., Los Angeles Superior Court Case No. SC 103763;
(iii) Jakks’ arbitration demand against THQ, AAA Case No. 13 180 Y 01782 09;
(iv) THQ’s arbitration demand against Jakks, AAA Case No. 72 117 675 09; or
(v) Jakks’ books-and-records claim now pending in JAKKS Pacific, Inc. v.
THQ/JAKKS Pacific, LLC, Delaware Supreme Court Case No. 314, 2009.

 

THQ Inc.

JAKKS Pacific, Inc.

 

 

 

 

By:

/s/ Brian J. Farrell

 

By:

/s/ Stephen Berman

 

 

 

Name:

Brian J. Farrell

 

Name:

Stephen Berman

 

Title:

President and CEO

 

Title:

Co-CEO

 

Date:

 

 

Date:

 

 

 

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