Exhibit 10.5

AMENDED AND RESTATED INTERIM OPERATING AGREEMENT

THIS AMENDED AND RESTATED INTERIM OPERATING AGREEMENT is made as of December 16, 2002 (this "Agreement") by
and among FAO SCHWARZ, INC. f/k/a Toy Soldier, Inc., a Delaware corporation ("Buyer"), FAO, INC., f/k/a The Right
Start, Inc., a Delaware corporation ("Parent"), KBB RETAIL ASSETS CORP., f/k/a F.A.O. Schwarz, a New York corporation
("Seller"), and ROYAL VENDEX KBB N.V., a Netherlands corporation ("Shareholder"). All capitalized terms
contained herein and not otherwise defined in this Agreement shall have those meanings ascribed to them in the Purchase Agreement (as defined below).



1. PROVISION OF SERVICES



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2. LANDLORD NEGOTIATIONS



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3. PERSONNEL



4. INVENTORIES



5. MONTH-END RECONCILIATION



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6. LICENSE OF FAO NAMES



7. DISPOSITION OF THE CHICAGO STORE





8. TERMINATION



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9. COVENANTS, LIABILITY AND INDEMNITY



10. RELATIONSHIP OF PARTIES



11. NOTICES



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| |  | To Seller or Shareholder:                                                                                                                                                                         |  | 
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
| |  |                                                                                                                                                                                                   |  | 
| |  | Royal Vendex KBB N.V.
De Klencke 6, NL-1083
Postbus 7997, 1008 AD
Amsterdam, The Netherlands
Attention: Drs. Jan de Planque (RA)                                                                  |  | 
| |  |                                                                                                                                                                                                   |  | 
| |  | with a mandatory copy to:                                                                                                                                                                         |  | 
| |  |                                                                                                                                                                                                   |  | 
| |  | Kronish Lieb Weiner & Hellman LLP
1114 Avenue of the Americas
New York, NY 10036
Attention: Mark Lipschutz, Esq.
Fax no.: (212) 479-6275
E-mail address:mlipschutz@kronishlieb.com                |  | 
| |  |                                                                                                                                                                                                   |  | 
| |  | To Buyer or Parent:                                                                                                                                                                               |  | 
| |  |                                                                                                                                                                                                   |  | 
| |  | FAO, Inc.
2520 Renaissance Boulevard
King of Prussia, PA 19406
Attention: Jerry Welch/Legal
Fax no.: (610) 278-7804
E-mail address:jgroner@faoinc.com
                          kroyer@faoinc.com |  | 
| |  |                                                                                                                                                                                                   |  | 
| |  | with a mandatory copy to:                                                                                                                                                                         |  | 
| |  |                                                                                                                                                                                                   |  | 
| |  | Fulbright & Jaworski L.L.P.
865 South Figueroa Street, 29th Floor
Los Angeles, CA 90017
Attention: Victor Hsu
Fax no.: (213) 680-4518
E-mail address:vhsu@fulbright.com                           |  | 

12. GOVERNING LAW; SUBMISSION TO JURISDICTION; SERVICE OF PROCESS



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13. SPECIFIC PERFORMANCE



14. MISCELLANEOUS



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[Remainder
of Page Intentionally Left Blank]

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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written.

| |  | KBB RETAIL ASSETS CORP.           
| |  | ----------------------------------
| |  | By:                               
| |  |                                   
| |  |                                   
| |  |                                   
| |  | ROYAL VENDEX KBB N.V.             
| |  |                                   
| |  | By:                               
| |  |                                   
| |  |                                   
| |  |                                   
| |  | QUALITY FULFILLMENT SERVICES, INC.
| |  |                                   
| |  | By:                               
| |  |                                   
| |  |                                   
| |  |                                   
| |  | FAO SCHWARZ, INC.                 
| |  |                                   
| |  | By:                               
| |  |                                   
| |  |                                   
| |  |                                   
| |  | FAO, INC.                         
| |  |                                   
| |  | By:                               
| |  |                                   
| |  |                                   

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