Exhibit 10.61

 

April 22, 2003

 

Hancock Park Capital II, LP
10323 Santa Monica Blvd. Suite 101
Los Angeles, CA 90025

 

Ladies and Gentlemen:

 

Re: 5,000 shares of FAO, Inc. Series I Convertible Preferred Stock (the
“Shares”)

 

Ladies and Gentlemen:

 

This letter agreement constitutes the agreement of FAO, Inc. (“FAO”) that, so
long as Hancock Park Capital II LP (“Hancock”) and its affiliates own not less
than 3,000 Shares or the shares of FAO Common Stock into which such Shares have
been converted, Hancock shall have the right to designate one person for
election to FAO’s Board of Directors (the “Designee”).   FAO agrees that it
shall (A) nominate the Designee for election to FAO’s Board of Directors, and
take all related actions as may reasonably be necessary to cause such
nomination, on the same basis as FAO nominates all other directors for election
and (B) use its best efforts to cause FAO shareholders to elect the Designee to
FAO’s Board of Directors.  It shall constitute best efforts if FAO (1) includes
the Designee in its annual proxy statement and proxy card for the election of
directors; provided that Hancock has delivered the information necessary for
such inclusion as required under the Securities Exchange Act of 1934, as
amended, and (2) uses the same form and amount of resources (including without
limitation proxy solicitors and other solicitation resources) to cause the
Designee’s election as FAO uses to cause the election of each of its other
directors.

 

FAO represents that the execution, delivery and performance of this letter
agreement has been duly authorized and approved by FAO’s Board of Directors and
its Special Committee of Independent Directors, and this letter agreement is the
valid and binding obligation of FAO and enforceable against FAO in accordance
with its terms.

 

 

 

Sincerely,

 

 

 

 /s/ R. P. Springer

 

Raymond P. Springer
Executive Vice President

 

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April 22, 2003
Director Letter Agreement

 

 

Agreed

 

Hancock Park Capital II LP

 

By: Hancock Park Associates III, LLC

       its general partner

 

By:

  /s/ Brian McDermott

 

An Authorized Signatory

 

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