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Exhibit 10.2

No. of Stock Units: 150,893   Warrant No. LC2-4A

AMENDED AND RESTATED
WARRANT

to Purchase Common Stock of

FAO, Inc.

THIS IS TO CERTIFY THAT FORTUNE TWENTY-FIFTH, INC. or registered assigns, is
entitled, to purchase from FAO, Inc., a Delaware corporation (the "Company"), at
any time and from time to time after November 21, 2002 (the "Initial
Exercisability Date"), but not later than 5:00 p.m., Pacific Standard time, on
October 8, 2007 (the "Expiration Date"), 150,893 Stock Units, in whole or in
part, at a purchase price per Stock Unit of $2.40 all on the terms and
conditions hereinbelow.

This Warrant has been issued in connection with the issuance of that the certain
Amended and Restated Equipment Note dated as of November 21, 2002 (the "Note"),
in the aggregate principal amount of $1,857,143.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS THE PROPOSED TRANSACTION DOES NOT REQUIRE REGISTRATION OR
QUALIFICATION UNDER FEDERAL OR STATE SECURITIES LAWS, OR UNLESS THE PROPOSED
TRANSACTION IS REGISTERED OR QUALIFIED AS REQUIRED.

        Section 1. Certain Definitions. As used in this Warrant, unless the
context otherwise requires:

        "Affiliate" of any Person means a Person (1) that directly or indirectly
controls, or is controlled by, or is under common control with, such other
Person, (2) that beneficially owns ten percent (10%) or more of the Voting Stock
of such other Person, or (3) ten percent (10%) or more of the Voting Stock (or
in the case of a Person which is not a corporation, ten percent (10%) or more of
the equity interest) of which is owned by such other Person. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.

        "Appraised Value" shall mean the fair market value of all outstanding
shares of Common Stock (on a fully diluted basis including any fractional shares
and assuming the exercise in full of all then-outstanding options, warrants or
other rights to purchase shares of Common Stock that are then currently
exercisable at exercise prices less than the Current Market Price), as
determined by the Board of Directors or, if the holders of Warrants object to
such appraisal, by a written appraisal prepared by an appraiser acceptable to
the Company and the holders of Warrants. "Fair market value" is defined for this
purpose as the price in a single transaction determined on a going-concern basis
that would be agreed upon by the most likely hypothetical buyer for a 100%
controlling interest in the equity capital of the Company (on a fully diluted
basis including any fractional shares and assuming the exercise in full of all
then-outstanding options, warrants or other rights to purchase shares of Common
Stock that are then currently exercisable at exercise prices less than the
Current Market Price), with consideration given to the effect of all noncompete
covenants signed by the seller and employment agreements signed by key
management personnel of the Company (and of its subsidiaries), each extending
for a period of time considered sufficient by all parties to effect the transfer
of goodwill from the seller to the buyer and disregarding any discounts for
nonmarketability of Common Stock of the Company. In the event that the Company
and said holders cannot, in good faith, agree upon an appraiser, then the
Company,

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on the one hand, and said holders, on the other hand, shall each select an
appraiser, the two appraisers so selected shall select a third appraiser who
shall be directed to prepare such a written appraisal (the "Appraisal") and the
term Appraised Value shall mean the appraised value set forth in the Appraisal
prepared in accordance with this definition. The fees and expenses of any
appraisers shall be paid by the Company, except in the case in which the
valuation of any appraiser who renders an Appraisal is within ten percent (10%)
of the value originally determined by the Board of Directors, in which case the
holders shall pay the fees and expenses of any appraisers. In the event that the
Company bears the cost of the appraisal process, such cost shall be deemed an
account payable of the Company and shall be considered in the determination of
the Appraised Value.

        "Board of Directors" shall mean either the board of directors of the
Company or any duly authorized committee of that board.

        "Business Day" shall mean any day other than a Saturday, Sunday or a day
on which banks in the State of New York are required or permitted to close.

        "Commission" shall mean the Securities and Exchange Commission and any
other similar or successor agency of the federal government administering the
Securities Act and the Exchange Act.

        "Common Stock" shall mean the Company's authorized Common Stock, $0.001
par value per share, irrespective of class unless otherwise specified, as
constituted on the date of original issuance of this Warrant, and any stock into
which such Common Stock may thereafter be changed, and shall also include stock
of the Company of any other class, which is not preferred as to dividends or
assets over any other class of stock of the Company issued to the holders of
shares of stock upon any reclassification thereof.

        "Current Market Price" per share of Common Stock for the purposes of any
provision of this Warrant at the date herein specified, shall be deemed to be
the price determined pursuant to the first applicable of the following methods:

        (i)    If the Common Stock is traded on a national securities exchange
or is traded in the over-the-counter market, the Current Market Price per share
of Common Stock shall be deemed to be the average of the daily market prices for
20 consecutive Trading Days commencing 20 Trading Days before such date. The
market price for each such Trading Day shall be (a) if the Common Stock is
traded on a national securities exchange or in the over-the-counter market, its
last sale price on the preceding Trading Day on such national securities
exchange or over-the-counter market or, if there was no sale on that day, the
last sale price on the next preceding Trading Day on which there was a sale, all
as made available over the Consolidated Last Sale Reporting System of the CTA
Plan (the "CLSRS") or, if the Common Stock is not then eligible for reporting
over the CLSRS, its last reported sale price on the preceding Trading Day on
such national securities exchange or, if there was no sale on that day, on the
next preceding Trading Day on which there was a sale reported on such exchange
or (b) if the principal market for the Common Stock is the over-the-counter
market, but the Common Stock is not then eligible for reporting over the CLSRS,
but the Common Stock is quoted on The Nasdaq Stock Market, Inc. ("Nasdaq"), the
last sale price reported on Nasdaq on the preceding Trading Day or, if the
Common Stock is an issue for which last sale prices are not reported on Nasdaq,
the closing bid quotation on such day, but, in each of the next preceding two
cases, if the relevant Nasdaq price or quotation did not exist on such day, then
the price or quotation on the next preceding Trading Day in which there was such
a price or quotation.

        (ii)  If the Current Market Price per share of Common Stock cannot be
ascertained by any of the methods set forth in paragraph (i) immediately above,
the Current Market Price per share of Common Stock shall be deemed to be the
price equal to the quotient determined by dividing the Appraised Value by the
number of outstanding shares of Common Stock (on a fully diluted basis

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including any fractional shares and assuming the exercise in full of all
then-outstanding options, warrants or other rights to purchase shares of Common
Stock that are then currently exercisable at exercise prices equal to or less
than the Current Market Price).

        "Current Warrant Price" per share of Common Stock, for the purpose of
any provision of this Warrant at the date herein specified, shall mean the
amount equal to the quotient resulting from dividing the Exercise Price in
effect on such date by the number of shares (including any fractional share) of
Common Stock comprising a Stock Unit on such date.

        "Exchange Act" shall mean the Securities and Exchange Act of 1934, as
amended, and any similar or successor federal statute, and the rules and
regulations of the Commission thereunder, all as the same shall be in effect at
any applicable time.

        "Exercise Price" shall mean the purchase price per Stock Unit as set
forth on the first page of this Warrant on the Issuance Date and thereafter
shall mean such dollar amount as shall result from the adjustments specified in
Section 4.

        "Holder" means, initially, FORTUNE TWENTY-FIFTH, INC., and thereafter
any Person that is or Persons that are the registered holder(s) of the Warrant
or Warrant Stock as registered on the books of the Company.

        "Issuance Date" shall mean the date of issuance of this Warrant.

        "Nonpreferred Stock" shall mean the Common Stock and shall also include
stock of the Company of any other class which is not preferred as to dividends
or assets over any other class of stock of the Company and which is not subject
to redemption.

        "Person" shall include a natural person, limited partnership, a
corporation, an association, a partnership, a limited liability company, a trust
or estate, a government, foreign or domestic, and any agency or political
subdivision thereof, or any other entity.

        "Restricted Certificate" shall mean a certificate for Common Stock or a
Warrant bearing the restrictive legend set forth in the preamble.

        "Restricted Securities" shall mean Restricted Stock and the Restricted
Warrant.

        "Restricted Stock" shall mean Common Stock evidenced by a Restricted
Certificate.

        "Restricted Warrant" shall mean a Warrant evidenced by a Restricted
Certificate.

        "Securities" shall mean the Warrant issued to the Holder, and the
certificates and other instruments from time to time evidencing the same.

        "Securities Act" shall mean the Securities Act of 1933, as amended, and
any similar or successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at any applicable
time.

        "Stock Unit" shall constitute one share of Common Stock, as such Common
Stock was constituted on the date hereof and thereafter shall constitute such
number of shares (including any fractional shares) of Common Stock as shall
result from the adjustments specified in Section 4.

        "Trading Day" shall mean a day on which the national securities
exchanges were open for trading.

        "Voting Stock" shall mean any equity security entitling the holder of
such security to vote at meetings of shareholders except an equity security
which entitles the holder of such security to vote only upon the occurrence of
some contingency, unless that contingency shall have occurred and be continuing.

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        "Warrant" shall mean this Warrant to purchase an aggregate of 150,893
Stock Units accruing as set forth herein initially issued to FORTUNE
TWENTY-FIFTH, INC., and all Warrants issued upon transfer, division or
combination of, or in substitution therefor.

        "Warrant Stock" shall mean the shares of Common Stock purchasable by the
holder of any Warrants upon the exercise thereof.

        Section 2. Exercise of Warrant. The holder of this Warrant may, at any
time on and after the Initial Exercisability Date, but not later than the
Expiration Date, exercise this Warrant in whole or in part at any time and from
time to time for the number of Stock Units which such holder is then entitled to
purchase hereunder. The Holder may exercise this Warrant, in whole or in part,
by any of the following methods (or a combination thereof or as otherwise
determined by the Company's Board of Directors):

(a)the Holder may deliver to the Company at its office maintained pursuant to
Section 13 for such purpose (i) a written notice of such Holder's election to
exercise this Warrant, which notice shall specify the number of Stock Units to
be purchased, (ii) this Warrant and (iii) a sum equal to the aggregate Exercise
Price therefor in immediately available funds; or

(b)to the extent permitted by applicable law, the Holder may also exercise this
Warrant, in whole or in part, in a "cashless" or "net issue" exercise by
delivering to the Company at its office maintained pursuant to Section 13 for
such purpose (i) a written notice of such Holder's election to exercise this
Warrant, which notice shall specify the number of Stock Units to be delivered to
such Holder and the number of Stock Units with respect to which this Warrant is
being surrendered in payment of the aggregate Exercise Price for the Stock Units
to be delivered to the Holder, and (ii) this Warrant. For purposes of this
subparagraph (b), each Stock Unit as to which this Warrant is surrendered will
be attributed a value equal to the product of (x) the Current Market Price per
share of Common Stock minus the Current Warrant Price per share of Common Stock,
multiplied by (y) the number of shares of Common Stock then comprising a Stock
Unit; or

(c)the Holder may also exercise this Warrant, in whole or in part, by delivering
to the Company at its office maintained pursuant to Section 13 for such purpose
written notice accompanying the surrender of this Warrant at the time of such
exercise, instructing the Company to apply to the Exercise Price all or any part
of the unpaid principal amount of any one or more Notes at the time held by the
Holder, in which case the Company will accept the principal amount specified in
such notice in satisfaction of a like amount of such payment. Upon any partial
application of a Note, the Company at its expense shall forthwith issue and
deliver to or upon the order of the Holder a new Note or Notes in principal
amount of such surrendered Note which has not been applied against such payment,
such new Note or Notes to be dated and to bear interest from the date to which
interest has been paid on such surrendered Note. Within two Business Days after
receipt of any such notice, in the manner provided in the Notes, all unpaid
interest on the principal amount so specified in such notice, accrued to the
date of the exercise of such Warrant.

        Any notice required under this Section 2 may be in the form of a
subscription set out at the end of this Warrant. Upon delivery thereof, the
Company shall as promptly as practicable, and in any event, subject to
compliance with Section 9, within 10 Business Days thereof, cause to be issued
in the name of and delivered to such Holder or, subject to Section 9, as Holder
may direct, a certificate or certificates representing the aggregate number of
duly authorized, validly issued, fully-paid and nonassessable shares of Common
Stock issuable upon such exercise and, in case such exercise is in part only, a
new Warrant or Warrants of like tenor, as further described below.

        The stock certificate or certificates for Warrant Stock so delivered
shall be in such denominations as may be specified in said notice and shall be
registered in the name of such Holder or, subject to

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Section 9, such other name or names as shall be designated in said notice. Such
certificate or certificates shall be deemed to have been issued and such Holder
or any other Person so designated to be named therein shall be deemed to have
become a holder of record of such shares, with, to the extent permitted by law,
the right to vote such shares or to consent or to receive notice as a
stockholder, as of the time said notice is delivered to the Company as
aforesaid. If this Warrant shall have been exercised only in part, the Company
shall, at the time of delivery of said certificate or certificates, deliver to
such Holder a new Warrant dated the date it is issued, evidencing the rights of
such Holder to purchase the remaining Stock Units called for by this Warrant,
which new Warrant shall in all other respects be identical with this Warrant.

        The Company shall pay all expenses, taxes (other than federal, state,
local or foreign income taxes) and other charges payable in connection with the
preparation, issue and delivery of stock certificates and new Warrants under
this Section 2.

        All shares of Common Stock issuable upon the exercise of this Warrant
shall be duly authorized, validly issued, fully paid and nonassessable, and free
from all liens and other encumbrances thereon. The Company will from time to
time take all such action as may be necessary to assure that the par value per
share of the unissued Common Stock acquirable upon exercise of this Warrant is
at all times equal to or less than the Exercise Price then in effect.

        The Company shall not issue certificates for fractional shares of Common
Stock upon any exercise of this Warrant whenever, in order to implement the
provisions of this Warrant, the issuance of such fractional shares is required.
Instead, the Company shall pay cash in lieu of such fractional shares upon such
exercise.

        Section 3. Transfer, Division and Combination. Subject to Section 9,
this Warrant and all rights hereunder are transferable, in whole or in part, on
the books of the Company to be maintained for such purpose, upon surrender of
this Warrant at the office of the Company maintained for such purpose pursuant
to Section 13, together with (a) a written assignment in the form set out at the
end of this Warrant duly executed by the Holder hereof or its agent or attorney
and (b) payment of funds sufficient to pay any stock transfer taxes payable upon
the making of such transfer. Upon such surrender, execution and payment, the
Company shall, subject to Section 9, execute and deliver a new Warrant or
Warrants in the name of the assignee or assignees and in the denominations
specified in such instrument of assignment, and this Warrant shall promptly be
canceled. If and when this Warrant is assigned in blank (in case the
restrictions on transferability in Section 9 shall have been terminated), the
Company may (but shall not be obliged to) treat the bearer hereof as the
absolute owner of this Warrant for all purposes and the Company shall not be
affected by any notice to the contrary. This Warrant, if properly assigned in
compliance with this Section 3 and Section 9, may be exercised by an assignee
for the purchase of shares of Common Stock without having a new Warrant issued.

        This Warrant may, subject to Section 9, be divided upon presentation at
the aforesaid office of the Company, together with a written notice specifying
the names and denominations in which new Warrants are to be issued, signed by
the holder hereof or its agent or attorney. Subject to compliance with the
preceding paragraph and with Section 9, as to any transfer which may be involved
in such division or combination, the Company shall execute and deliver a new
Warrant or Warrants in exchange for the Warrant to be divided or combined in
accordance with such notice.

        The Company shall pay all expenses, taxes (other than federal, state,
local or foreign income taxes) and other charges incurred by the Company in the
performance of its obligations in connection with the preparation, issue and
delivery of Warrants under this Section 3.

        The Company agrees to maintain at its aforesaid office books for the
registration and transfer of the Warrants.

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        Section 4. Adjustment of Stock Unit or Exercise Price. The number of
shares of Common Stock comprising a Stock Unit, and the Exercise Price per Stock
Unit, shall be subject to adjustment from time to time as set forth in this
Section 4 and in Section 5. The Company will not take any action with respect to
its Nonpreferred Stock of any class requiring an adjustment pursuant to any of
the following Subsections 4.1 or 4.3 without at the same time taking like action
with respect to its Nonpreferred Stock of each other class.

        4.1. Stock Dividends, Subdivisions and Combinations. In case at any time
or from time to time the Company shall:

        (a)  take a record of the holders of its Nonpreferred Stock for the
purpose of entitling them to receive a dividend payable in, or other
distribution of, Nonpreferred Stock, or

        (b)  subdivide its outstanding shares of Nonpreferred Stock into a
larger number of shares of Nonpreferred Stock, or

        (c)  combine its outstanding shares of Nonpreferred Stock into a smaller
number of shares of Nonpreferred Stock,

then the number of shares of Common Stock comprising a Stock Unit immediately
after the happening of any such event shall be adjusted so as to consist of the
number of shares of Common Stock which a record holder of the number of shares
of Common Stock comprising a Stock Unit immediately prior to the happening of
such event would own or be entitled to receive after the happening of such
event.

        4.2. Other Provisions Applicable to Adjustments. The following
provisions shall be applicable to the making of adjustments of the number of
shares of Common Stock comprising a Stock Unit hereinbefore provided for in this
Section 4:

        (a)  When Adjustments to Be Made. The adjustments required by
Section 4.1 shall be made whenever and as often as any specified event requiring
an adjustment shall occur. For the purpose of any adjustment, any specified
event shall be deemed to have occurred at the close of business on the date of
its occurrence.

        (b)  Fractional Interests. In computing adjustments under this
Section 4, fractional interests in Nonpreferred Stock shall be taken into
account to the nearest one-thousandth of a share.

        (c)  When Adjustment Not Required. If the Company shall take a record of
the holders of its Nonpreferred Stock for the purpose of entitling them to
receive a dividend or distribution and shall, thereafter and before the
distribution thereof to shareholders, abandon its plan to pay or deliver such
dividend or distribution, then thereafter no adjustment shall be required by
reason of the taking of such record and any such adjustment previously made in
respect thereof shall be rescinded and annulled.

        4.3. Merger, Consolidation Etc. In case the Company shall (a) merge into
or consolidate with another Person and shall not be the continuing or surviving
Person of such merger or consolidation, (b) shall permit any other Person to
merge into or consolidate with the Company and the Company shall be the
continuing or surviving Person, but, in connection with such merger or
consolidation, the Common Stock shall be changed into or exchanged for stock or
other securities of any other Person or cash or any other any other property,
(c) shall sell, transfer or otherwise dispose of all or substantially all of its
property, assets or business to another Person or (d) effect a capital
reorganization or reclassification of the Common Stock (other than a capital
reorganization or reclassification for which an adjustment is provided by
Section 4.1) and pursuant to the terms of such merger, consolidation,
disposition, capital reorganization or reclassification, shares of common stock
of a successor or acquiring Person are to be received by or distributed to the
holders of Nonpreferred Stock of the Company, then each holder of a Warrant
shall have the right thereafter to receive, upon exercise of such Warrant, Stock
Units each comprising the number of shares of common stock of such successor or

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acquiring Person receivable upon or as a result of such merger, consolidation,
disposition, capital reorganization or reclassification by a holder of the
number of shares of Nonpreferred Stock comprising a Stock Unit immediately prior
to such event. If, pursuant to the terms of such merger, consolidation,
disposition, capital reorganization or reclassification, any cash, shares of
stock, other securities or property or warrants or other subscription or
purchase rights or property of any nature whatsoever are to be received by or
distributed to the holders of Nonpreferred Stock of the Company, there shall be
either, at the Holder's option, (i) a reduction of the Exercise Price equal to
the amount applicable to the number of shares of Common Stock then comprising a
Stock Unit of any such cash and of the fair value of any and all such shares of
stock or of other securities or property to be received by or distributed to the
holders of Nonpreferred Stock of the Company, or (ii) such Holder shall have the
right to receive, upon exercise of its Warrant, such cash, shares of stock or
other securities or property of any nature as a holder of the number of shares
of Nonpreferred Stock underlying a Stock Unit would have been entitled to
receive upon the occurrence of such event. Such fair value shall be determined
in good faith by the Board of Directors of the Company, provided that if such
determination is objected to by the holders of Warrants, such determination
shall be made by an independent appraiser selected by the Company and said
holders. In the event that the Company and said holders cannot, in good faith,
agree upon an appraiser, then the Company, on the one hand, and said holders, on
the other hand, shall each select an appraiser, the two appraisers so selected
shall select a third appraiser who shall be directed to prepare such a written
appraisal which shall be conclusive and binding on the parties. The fees and
expenses of any appraisers shall be paid by the Company, except in the case
where the valuation of any appraiser who renders an Appraisal is within ten
percent (10%) of the value originally determined by the Board of Directors, in
which case the holders shall pay the fees and expenses of any appraisers. In
case of any such merger, consolidation, disposition, capital reorganization or
reclassification, the successor or acquiring Person shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all of
the obligations and liabilities hereunder, subject to such modification as shall
be necessary to provide for adjustments of Stock Units which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section 4. For
the purposes of this Section 4 "common stock of the successor or acquiring
Person" shall include stock of such corporation of any class, that is not
preferred as to dividends or assets over any other class of stock of such
corporation and that is not subject to redemption, and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event, and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Subsection 4.3 shall similarly apply to successive
mergers, consolidations, dispositions, capital reorganizations or
reclassifications.

        4.4 No Impairment. The Company will not, by amendment of its certificate
of incorporation or through a consolidation, merger, reorganization, transfer of
assets, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder of this Warrant against
impairment. Without limiting the generality of the foregoing, the Company
(a) shall obtain the consent of the original Holder to any merger, consolidation
or sale of all or substantially all of the Company's assets to which the Company
is a party and any equity issuance by the Company (other than as a result of the
conversion or exchange of, or exercise of rights or issuance of pay-in-kind
securities with respect to, outstanding securities of the Company or the
issuance of securities in connection with the acquisition of the assets of
F.A.O. Schwarz and its online affiliate) until such time as the Company shall
have obtained approval from its shareholders to authorize sufficient additional
shares of Common Stock to permit exercise of this Warrant, (b) will not permit
the par value of any shares of stock receivable upon the exercise of this
Warrant to exceed the amount

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payable therefor upon such exercise, (c) will take all such action as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of stock on the exercise of the Warrants
from time to time outstanding, and (d) will not take any action that results in
any adjustment of the Exercise Price if the total number of shares of Common
Stock (or other securities) issuable after the action upon exercise of all of
the Warrants would exceed the total number of shares of Common Stock (or other
securities) then authorized by the Company's certificate of incorporation and
available for the purpose of issue upon such exercise.

        Section 5. Notice to Warrant Holders.

        5.1. Notice of Adjustment of Stock Unit or Exercise Price. Whenever the
number of shares of Common Stock comprising a Stock Unit, or the price at which
a Stock Unit may be purchased upon exercise of the Warrants, shall be adjusted
pursuant to Section 4, the Company shall forthwith obtain a certificate signed
by independent accountants, of recognized national standing, selected by the
Company and reasonably acceptable to the Holder(s) of the Warrants, setting
forth, in reasonable detail, the event requiring the adjustment and the method
by which such adjustment was calculated (including a statement of the fair
value, as determined by the Board of Directors of the Company or by appraisal
(if applicable), of any evidences of indebtedness, shares of stock, other
securities or property or warrants or other subscription or purchase rights or
property of any nature whatsoever referred to in Section 4.3) and specifying the
number of shares of Common Stock comprising a Stock Unit and (if such adjustment
was made pursuant to Section 4.3) describing the number and kind of any other
shares of stock comprising a Stock Unit, and any change in the purchase price or
prices thereof, after giving effect to such adjustment or change. The Company
shall promptly, and in any case within three days after the making of such
adjustment, cause a signed copy of such certificate to be delivered to each
holder of a Warrant in accordance with Section 14. The Company shall keep at its
office or agency, maintained for the purpose pursuant to Section 13, copies of
all such certificates and cause the same to be available for inspection at said
office during normal business hours by any holder of a Warrant or any
prospective purchaser of a Warrant designated by a holder thereof.

        5.2. Notice of Certain Corporate Action. In case the Company shall
propose (a) to pay any dividend to the holders of any class of securities or to
make any other distribution to the holders of any class of securities (other
than a regular, periodic cash dividend in an amount not exceeding the amount of
the immediately preceding cash dividend for the immediately preceding period) or
to grant any right to subscribe for, purchase or otherwise acquire any shares of
stock of any class or any other securities or property, or to receive any other
right or (b) to effect any consolidation, merger or sale, capital
reorganization, reclassification or recapitalization of the capital stock
organic change, transfer or other disposition of all or substantially all of its
property, assets or business, voluntary or involuntary dissolution, liquidation
or winding-up of the Company, then in each such case, the Company shall deliver
to each holder of a Warrant, in accordance with Section 14, a notice of such
proposed action, which shall specify the date on which a record is to be taken
for the purposes of, and expected date of consummation of, such dividend,
distribution or rights, consolidation, merger, sale, capital reorganization,
reclassification or recapitalization of the capital stock, organic change,
transfer or voluntary or involuntary dissolution, liquidation or winding-up of
the Company or transfer is to take place and the date of any participation
therein by the holders of Nonpreferred Stock, if any such date is to be fixed,
and shall also set forth such facts with respect thereto as shall be reasonably
necessary to indicate the effect of such action on the Nonpreferred Stock and
the number and kind of any other shares of stock which will comprise a Stock
Unit, and the purchase price or prices thereof, after giving effect to any
adjustment which will be required as a result of such action. Such notice shall
be so delivered as promptly as reasonably possible and, in any event, at least
10 days prior to the date therein specified.

        Section 6. Reservation and Authorization of Common Stock. The Company
shall at all times reserve and keep available for solely issue upon the exercise
of Warrants such number of its authorized but

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unissued shares of Common Stock as will be sufficient to permit the exercise in
full of all outstanding Warrants. All shares of Common Stock which shall be so
issuable, when issued upon exercise of any Warrant or upon such exercise, as the
case may be, shall be duly and validly authorized and issued, fully-paid and
nonassessable.

        Section 7. Taking of Record; Stock and Warrant Transfer Books. In the
case of all dividends or other distributions by the Company to the holders of
its Nonpreferred Stock with respect to which any provision of Section 4 refers
to the taking of a record of such holders, the Company will in each such case
take such record as of the close of business on a Business Day. The Company will
not at any time, except upon dissolution, liquidation or winding up or as
otherwise may be required by law, close its stock transfer books or Warrant
transfer books so as to result in preventing or delaying the exercise or
transfer of any Warrant.

        Section 8. Taxes. The Company will pay all taxes (other than federal,
state, local or foreign income taxes) which may be payable in connection with
the execution and delivery of this Warrant or the issuance and sale of the
Restricted Securities hereunder or in connection with any modification of the
Restricted Securities and will save the Holder harmless without limitation as to
time against any and all liabilities with respect to or resulting from any delay
in paying, or omission to pay, such taxes. The obligations of the Company under
this Section 8 shall survive any redemption, repurchase or acquisition of
Restricted Securities by the Company.

        Section 9. Restrictions on Transferability. The Restricted Securities
shall not be transferable except upon the conditions specified in this
Section 9.

        9.1 Transfer to an Affiliate. The Holder shall have the right to
transfer any Restricted Securities to any Affiliate of the Holder, in each case
without complying with the restrictions imposed by this Section 9 other than the
requirement as to the legending of the certificates for such Restricted
Securities specified in Section 9.3. No opinion of counsel shall be required for
a transfer of Restricted Securities to an Affiliate of the Holder.

        9.2 Transfer to a Non-Affiliate. The Holder and his or her or her
subsequent transferees shall have the right to transfer any Restricted
Securities to a non-Affiliate of the Holder as follows:

        (a)  Prior to any transfer or attempted transfer of any Restricted
Securities to a non-Affiliate of the Holder, the holder of such Restricted
Certificate shall give written notice to the Company of such Holder's intention
to effect such transfer. Each such notice shall describe the manner and
circumstances of the proposed transfer in reasonable detail.

        (b)  Upon receipt of such notice, the Company may request an opinion of
counsel of the transferring Holder to the effect that such proposed transfer may
be effected without registration under the Securities Act. Upon receipt of such
opinion, or if the Company does not request such an opinion, within five
(5) Business Days after receiving notice of the proposed transfer, the Company
shall, as promptly as practicable, so notify the Holder of such Restricted
Certificate and the Holder shall thereupon be entitled to transfer such
Restricted Securities in accordance with the terms of the notice delivered by
the Holder to the Company. Each certificate evidencing the Restricted Securities
thus to be transferred (and each certificate evidencing any untransferred
balance of the Restricted Securities evidenced by such Restricted Certificate)
shall bear the restrictive legend set forth in Section 9.3, unless in the
opinion of the Company or the opinion of such counsel, if requested, pursuant to
Rule 144(k) of the Securities Act or otherwise, such legend is not required in
order to ensure compliance with the Securities Act. The fees and expenses of
counsel for any such opinion shall be paid by the Company.

        9.3 Restrictive Legend. Unless and until the Restricted Securities have
been registered under the Securities Act, this Warrant, each Warrant issued to
any transferee of the Holder, each certificate for any Warrant Stock issued upon
exercise of any Warrant and each certificate for any Warrant Stock

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issued to any transferee of any such certificate, shall be stamped or otherwise
imprinted with a legend in substantially the following form:

"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS THE PROPOSED TRANSACTION DOES NOT REQUIRE REGISTRATION OR
QUALIFICATION UNDER FEDERAL OR STATE SECURITIES LAWS, OR UNLESS THE PROPOSED
TRANSACTION IS REGISTERED OR QUALIFIED AS REQUIRED."

Whenever such restriction shall cease and terminate as to any Restricted
Securities, the Holder shall be entitled to receive from the Company, without
expense (other than applicable transfer taxes, if any), new securities of like
tenor not bearing the legend required by this Subsection 9.3 upon delivery of
satisfactory evidence to the Company of such cessation and termination
(including an opinion of counsel reasonably satisfactory to the Company).

        Section 10. Limitation of Liability. No provision hereof, in the absence
of affirmative action by the Holder to purchase shares of Common Stock, and no
mere enumeration herein of the rights or privileges of the Holder, shall give
rise to any liability of the Holder for the purchase price of the Warrant Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.

        Section 11. Loss or Destruction of Warrant Certificates. Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of any Warrant and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security in an amount reasonably
satisfactory to the Company (the original Holder's or any other institutional
Holder's indemnity being satisfactory indemnity in the event of loss, theft or
destruction of any Warrant owned by such institutional Holder), or, in the case
of any such mutilation, upon surrender and cancellation of such Warrant, the
Company will at its own expense execute and deliver, in lieu of such lost,
stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and
representing the right to purchase the same aggregate number of shares of Common
Stock.

        Section 12. Amendments. The terms of this Warrant may be amended, and
the observance of any term therein may be waived, but only with the unanimous
written consent of the holders of Warrants subject to such amendment.

        Section 13. Office of the Company. So long as any Warrant remains
outstanding, the Company shall maintain an office where the Warrants may be
presented for exercise, transfer, division or combination as in this Warrant
provided. Such office shall be at 2520 Renaissance Boulevard, King of Prussia,
Pennsylvania, 19406 FAX: (610) 278-7804, unless and until the Company shall
designate and maintain some other office for such purposes and deliver written
notice thereof to the holders of all outstanding Warrants.

        Section 14. Notices Generally.

        14.1. All communications (including all required or permitted notices)
pursuant to the provisions hereof shall be in writing and shall be sent, to any
registered Holder of any Warrants or Warrant Stock, to the address of such
Holder as it appears in the stock or warrant ledger of the Company or at such
other address as such Holder may have furnished in writing to the Company.

        14.2. Any notice shall be deemed to have been duly delivered when
delivered by hand, if personally delivered, and if sent by mail to a party whose
address is in the same country as the sender, two Business Days after being
deposited in the mail, postage prepaid, and if sent by recognized international
courier, freight prepaid, with a copy sent by telecopier, to a party whose
address is not in

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the same country as the sender, three Business Days after the later of (a) being
telecopied and (b) delivery to such courier.

        Section 15. Registration Rights. The Company agrees, upon request of the
holders of Warrants, to register the Common Stock issuable upon exercise of this
Warrant on substantially the same terms it agreed to provide registration rights
to Athanor Holdings, LLC in connection with its investment in the Company's
Series E Contingent Convertible Preferred Stock; provided that this Section
shall not require registration on any form if the Commission would not permit
registration of such Common Stock on that form.

        Section 16. Governing Law. This Warrant shall be governed by and
construed in accordance with the laws of the State of New York (without regard
to conflicts of law provisions thereof).

        Section 17. Remedies. The Company stipulates that the remedies at law of
the Holder in the event of any default or threatened default by the Company in
the performance of or compliance with any of the terms of this Warrant are not
and will not be adequate and that, to the fullest extent permitted by law, such
terms may be specifically enforced by a decree for the specific performance of
any agreement contained herein or by an injunction against a violation of any of
the terms hereof or otherwise.

[Remainder of Page Intentionally Left Blank]

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        IN WITNESS WHEREOF, the Company has caused this Warrant to be signed in
its name by its President or a Vice President and attested by its Secretary or
an Assistant Secretary.

Dated as of: November 21, 2002      
 
 
FAO, INC.
 
 
By:
/s/  RAYMOND P. SPRINGER      

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Raymond P. Springer
Its: Executive Vice President and Chief Financial Officer        

ATTEST:         By: /s/  KENDRICK F. ROYER      

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  Name: Kendrick F. Royer
Title: Secretary  
AGREED AND CONSENTED TO:
 
FORTUNE TWENTY-FIFTH, INC.
 
By:
/s/  FRED KAYNE      

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Name: Fred Kayne
Title: President
       

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SUBSCRIPTION FORM
(to be executed only upon exercise of Warrant)

        The undersigned registered owner of this Warrant irrevocably exercises
this Warrant for and purchases Stock Units of FAO, Inc., a Delaware corporation,
purchasable with this Warrant, and herewith makes payment therefor (by check in
the amount of $            ), or hereby tenders                        Stock
Units as payment therefor, all at the price and on the terms and conditions
specified in this Warrant and requests that certificates for the shares of
Common Stock hereby purchased (and any securities or other property issuable
upon such exercise) be issued in the name of and delivered
to                        whose address
is                                    and, if such Stock Units shall not include
all of the Stock Units issuable as provided in this Warrant that a new Warrant
of like tenor and date for the balance of the Stock Units issuable thereunder be
delivered to the undersigned.

Dated:            ,            

        

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(Signature of Registered Owner)                                         

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(Street Address)             

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(City)           

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(State)           

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(Zip Code)

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ASSIGNMENT FORM

        FOR VALUE RECEIVED the undersigned registered owner of this Warrant
hereby sells, assigns and transfers unto the Assignee named below all of the
rights of the undersigned under this Warrant, with respect to the number of
Stock Units set forth below:

Number of Stock Units

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  Name and Address of Assignee

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and does hereby irrevocably constitute and
appoint                                    Attorney to make sure transfer occurs
on the books of FAO, Inc., a Delaware corporation, maintained for the purpose,
with full power of substitution in the premises.

Dated:    

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Signature    

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Witness  

NOTICE: The signature to the assignment must correspond with the name as written
upon the face of the Warrant in every particular instance, without alteration or
enlargement or any change whatsoever.

        The signature to this assignment must be guaranteed by a bank or trust
company having an office or correspondent in New York, New York or by a firm
having membership on the New York Stock Exchange.

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QuickLinks

Exhibit 10.2