EXHIBIT 99.1

F.A.O., INC.

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COMMON STOCK PURCHASE AGREEMENT

Dated as of May 24, 2002

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TABLE OF CONTENTS

|                                                                                 |               |    |                                                            | Page
|-------------------------------------------------------------------------------- | ------------- | -- | ---------------------------------------------------------- | ----
|Section 1.    ISSUANCE OF SECURITIES                                             |               | 1 
|                                                                                 | Section 1.1.  |    | Authorization                                              |     
|                                                                                 | Section 1.2.  |    | Purchase and Sale of Securities; the Closing               |     
|                                                                                 | Section 1.3.  |    | Representations of the Purchaser                           |     
|Section 2.    REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY           |               | 4 
|                                                                                 | Section 2.1.  |    | Organization and Authority of the Company                  |     
|                                                                                 | Section 2.2.  |    | Information Regarding the Company                          |     
|                                                                                 | Section 2.3.  |    | Capital Stock                                              |     
|                                                                                 | Section 2.4.  |    | Litigation; Observance of Statutes, Regulations and Orders |     
|                                                                                 | Section 2.5.  |    | Compliance with Laws and Other Instruments of the Company  |     
|                                                                                 | Section 2.6.  |    | Governmental Authorizations                                |     
|                                                                                 | Section 2.7.  |    | Valid Issuance of Common Stock                             |     
|                                                                                 | Section 2.8.  |    | Securities Laws                                            |     
|                                                                                 | Section 2.9.  |    | Intellectual Property                                      |     
|                                                                                 | Section 2.10. |    | Properties                                                 |     
|                                                                                 | Section 2.11. |    | Investment Company                                         |     
|                                                                                 | Section 2.12. |    | Taxes                                                      |     
|                                                                                 | Section 2.13. |    | Nasdaq Compliance                                          |     
|                                                                                 | Section 2.14. |    | Contracts                                                  |     
|                                                                                 | Section 2.15. |    | Listing                                                    |     
|                                                                                 | Section 2.16. |    | Compliance                                                 |     
|                                                                                 | Section 2.17. |    | Private Placement Status                                   |     
|                                                                                 | Section 2.18. |    | Additional Issuances of Equity                             |     
|                                                                                 | Section 2.19. |    | Rule 144                                                   |     
|Section 3.    CONDITIONS OF CLOSING                                              |               | 8 
|                                                                                 | Section 3.1.  |    | Proceedings Satisfactory                                   |     
|                                                                                 | Section 3.2.  |    | Representations True                                       |     
|                                                                                 | Section 3.3.  |    | Purchase Permitted by Applicable Laws                      |     
|                                                                                 | Section 3.4.  |    | Securities                                                 |     
|                                                                                 | Section 3.5.  |    | Registration Rights Agreement                              |     
|                                                                                 | Section 3.6.  |    | Third-Party Consents                                       |     
|Section 4.    DEFINITIONS                                                        |               | 9 
|                                                                                 | Section 4.1.  |    | Definitions                                                |     
|                                                                                 | Section 4.2.  |    | Accounting Terms                                           |     
|Section 5.    REGISTRATION, TRANSFER AND EXCHANGE OF SECURITIES; LOST SECURITIES |               | 10
|Section 6.    TAXES                                                              |               | 11
|Section 7.    MISCELLANEOUS                                                      |               | 11
|                                                                                 | Section 7.1.  |    | Expenses                                                   |     
|                                                                                 | Section 7.2.  |    | Amendments, Waiver and Consents                            |     
|                                                                                 | Section 7.3.  |    | Indemnity                                                  |     
|                                                                                 | Section 7.4.  |    | Successors and Assigns                                     |     
|                                                                                 | Section 7.5.  |    | Notices                                                    |     
|                                                                                 | Section 7.6.  |    | Counterparts                                               |     
|                                                                                 | Section 7.7.  |    | Governing Law                                              |     
|                                                                                 | Section 7.8.  |    | Waiver of Jury Trial                                       |     
|                                                                                 | Section 7.9.  |    | Entire Agreement                                           |     

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Exhibits

EXHIBIT A
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Form of Stock CertificateEXHIBIT B
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Form of Registration Rights AgreementEXHIBIT C
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Form of Notice


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F.A.O., INC.        COMMON STOCK PURCHASE AGREEMENT  Dated as of May 24, 2002

Vardon Focus Fund, LP
Richard W. Shea, Jr.
850 3rd Aveneue, 8th Floor
New York, NY 10022
Attn: Lisa Gutierrez

Ladies
and Gentlemen:

F.A.O., Inc.,
a California corporation (the "Company"), hereby agrees with the Purchaser as follows:

Section 1.ISSUANCE OF SECURITIES.

Section 1.1.Authorization.

The
Company has duly authorized the issuance of up to 4.5 million shares (the "Securities") of its common stock, no par value
("Common Stock").

Section 1.2.Purchase and Sale of Securities; the Closing.The Company shall sell to the Purchaser and,
subject to the terms and conditions hereof, the Purchaser shall purchase from the Company 500 shares of the Securities, at an aggregate purchase price equal to $3,000.00.

The
closing (the "Closing") of such purchase of the Securities shall be held at 10:00 a.m., Los Angeles time, on May 24,
2002 (the "Closing Date"), at the offices of the Company, or at such other time or place as the parties hereto may mutually agree.

On
the Closing Date or such other date as the Company and the Purchaser shall agree, the Company shall deliver to the Purchaser one or more certificates representing the Securities,
registered in the Purchaser's name or in the name of the Purchaser's designee in any denominations, all as the Purchaser may specify by notice in the form attached hereto as Exhibit C,
delivered to the Company at least two days prior to the Closing Date (or, in the absence of such notice, one certificate representing the Securities, registered in the Purchaser's name), duly executed
and dated the Closing Date, against the Purchaser's delivery to the Company of immediately available funds in the amount of the purchase price. On the Closing Date or such other date as the Company
and the Purchaser shall agree, the Purchaser shall deliver immediately available funds to the Company in accordance with the wire transfer instructions set forth below:

|Bank name:      |  | First Union National Bank
1 South Broad Street
Philadelphia, PA
|--------------- |  | ---------------------------------------------------------------
|ABA:            |  | 031201467                                                      
|Account name:   |  | Fao, Inc. dba Zany Brainy Cash Concentration                   
|Account number: |  | 2014190205314                                                  

Section 1.3.Representations of the Purchaser.The Purchaser represents and warrants to the Company that:



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Section 2.REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.    The Company represents, warrants and
covenants to the Purchaser as of the date hereof and as of the Closing Date that:

Section 2.1.Organization and Authority of the Company.



Section 2.2.Information Regarding the Company.



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Section 2.3.Capital Stock.



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Section 2.4.Litigation; Observance of Statutes, Regulations and Orders.



Section 2.5.Compliance with Laws and Other Instruments of the Company.(a) The consummation of
the transactions contemplated by this Agreement and the issuance of the Securities and execution, delivery and performance of the terms and provisions of this Agreement, the Registration Rights
Agreement or any other document or agreement contemplated hereby or thereby will not (i) contravene, result in any breach of, or constitute a default under, or result in the creation of any
lien in respect of any property of the Company or its Subsidiaries under, any material indenture, mortgage, deed of trust, bank loan or credit agreement, corporate charter or by-laws to which the
Company or any of such Subsidiaries is a party or by which the Company or any of its Subsidiaries or their respective properties may be bound or affected, (ii) conflict with or result in a
breach of any of the terms, conditions or provisions of any Order of any court, arbitrator or Governmental Body applicable to the Company or any of its Subsidiaries (including the Nasdaq Marketplace
Rules), (iii) violate any provision of any statute or other rule or regulation of any Governmental Body applicable to the Company or any of its Subsidiaries; providedthat no representation is made
with respect to statutes or other rules or regulations of Governmental Bodies applicable solely to the Purchaser
or (iv) result in the creation or imposition of any lien, encumbrance, claim, security interest or restriction or any kind upon any of the properties or assets of the Company or any of its
Subsidiaries, in each case assuming the accuracy of the representations and warranties of the Purchaser (but only to the extent that inaccuracy would affect this representation of the Company).



Section 2.6.Governmental Authorizations.Assuming the accuracy of the Purchaser's representations, no
consent, approval or authorization of, or registration, filing or declaration with, any Governmental Body is required for the issuance of the Securities or the valid execution and delivery of

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the Securities or for the performance by the Company of this Agreement, the Securities, and any other documents or agreements contemplated hereby and thereby (other than as contemplated by the
Registration Rights Agreement).

Section 2.7.Valid Issuance of Common Stock.The Common Stock that is being purchased by the Purchaser
under this Agreement, when issued, sold, and delivered in accordance with the terms of this
Agreement for the consideration expressed herein, will be duly and validly issued, fully paid, and nonassessable, and will be free of restrictions on transfer other than restrictions on transfer under
this Agreement and under applicable state and federal securities laws.

Section 2.8.Securities Laws.Assuming the accuracy of the representations made to the Company by
purchasers of the Securities and the agents that introduced such purchasers to the Company, the offer, sale and issuance of the Securities as contemplated by this Agreement are exempt from the
registration requirements of the Securities Act and the registration or qualification requirements of the laws of any applicable state or United States jurisdiction in which registration or
qualification will not be made or obtained.

Section 2.9.Intellectual Property.Except as otherwise specifically disclosed in the SEC Reports, to the
best of its knowledge, the Company and its Subsidiaries: (i) own, or have obtained licenses or rights to use their material intellectual property; (ii) have not received written notice
from any third party who has asserted any ownership rights to any such material intellectual property; (iii) are not aware of sales of any products that would constitute an infringement by
third parties of any such material intellectual property; (iv) are aware of no pending or threatened action, suit, proceeding or claim by a third party challenging the ownership rights in,
validity or scope of, such material intellectual property which has had or is reasonably likely to have a Material Adverse Effect; and (v) are not aware of any pending or threatened action,
suit, proceeding or claim by a third party asserting that the Company or any of its Subsidiaries infringe or otherwise violate any patent, trademark, copyright, trade secret or other proprietary right
of such third party, in each case or collectively, as would reasonably be expected to result in a Material Adverse Effect.

Section 2.10.Properties.Unless failure would not be reasonably likely to result in a Material Adverse
Effect (i) the Company and its Subsidiaries have good and marketable title to all properties and assets reflected as owned on the Financial Statements, subject to no lien, mortgage, pledge,
charge or encumbrance except as disclosed in the SEC Reports, (ii) the Company and its Subsidiaries hold their leased properties under valid and binding leases and (iii) except as
disclosed in the SEC Reports, the Company and its Subsidiaries own or lease all such properties as are necessary to their respective operations as now conducted.

Section 2.11.Investment Company.The Company is not now, and, after the sale of the Securities and
application of the proceeds therefrom, will not be, an "investment company" within the meaning of the Investment Company Act of 1940, as amended.

Section 2.12.Taxes.Except as would not be reasonably likely to result in a Material Adverse Effect, the
Company and its Subsidiaries have filed all necessary federal, state and foreign income and franchise tax returns and have paid all accrued taxes shown due thereon, and the Company has no knowledge of
any tax deficiency which has been or might be asserted or threatened against the Company or its Subsidiaries.

Section 2.13.Nasdaq Compliance.The Company's Common Stock is registered pursuant to
Section 12(g) of the Exchange Act and is listed on the Nasdaq National Market. The Company has taken no action designed to, or which to its knowledge is reasonably likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or delisting of the Common Stock from the Nasdaq National Market. The issuance of the Securities does not require shareholder
approval pursuant to the Nasdaq Marketplace Rules.

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Section 2.14.Contracts.Except for matters that would not be reasonably likely to have a Material
Adverse Effect, (i) the contracts listed as exhibits to the SEC Reports, other than those contracts that are substantially or fully performed or expired by their terms, are in full force and
effect as of the Closing Date, and (ii) none of the Company, its Subsidiaries nor, to the Company's knowledge, any other party to such contracts, is in breach of or default under any such
contracts.

Section 2.15.Listing.The Company will use commercially reasonable efforts have the Securities listed on
the Nasdaq National Market on or before the first date that the Registration Statement is declared effective.

Section 2.16.Compliance.The Company and its Subsidiaries have not been advised, and have no reason to
believe, that they are not conducting their business in compliance with all applicable laws, rules and regulations of the jurisdictions in which they are conducting business, except to the extent that
failure would not be reasonably likely to result in a Material Adverse Effect.

Section 2.17.Private Placement Status.Assuming the accuracy of the representations of the purchasers of
the Securities, the Company will not, and will instruct all Persons acting on the Company's behalf not to, do or cause to be done (or omit to do or cause to be done) any act, that would result in the
issuance of the Securities to be required to be registered under Section 5 of the Securities Act or would require filing, notification or reporting under any state securities laws.

Section 2.18.Additional Issuances of Equity.From January 6, 2002, to the date prior to the
Closing Date, the Company has not issued any Common Stock or any capital stock or securities exercisable for, or convertible or exchangeable into, Common Stock and from and including the Closing Date
through the date that the Registration Statement is declared effective, the Company will not (a) issue or agree to issue any Common Stock or any capital stock or securities exercisable for, or
convertible or exchangeable into, Common Stock at any price or on terms that are more favorable to a purchaser than the terms of this Agreement (unless the Purchaser has a reasonable opportunity to
purchase at least its pro rata share of such securities based upon the number of Securities it has purchased under this Agreement relative to the total number of shares of Common Stock then
outstanding), or (b) purchase, redeem or otherwise acquire its capital stock;providedthat this Section shall not limit, or be otherwise
applicable to grants of options or issuances of Common Stock pursuant to its currently
outstanding option plans or other conversions, exercises or exchanges of its currently outstanding convertible or exchangeable securities.

Section 2.19.Rule 144.The Company covenants that it will file the reports required to be filed
by it under the Securities Act and the Exchange Act and the rules and regulations promulgated thereunder and take such further actions as the Purchaser may reasonably request to the extent required
from time to time to enable the Purchaser to sell Securities without registration under the exemptions provided by (a) Rule 144 promulgated under the Securities Act, as it may be amended
from time to time, or (b) an similar rule or regulation hereafter adopted by the SEC. Upon the request of the Purchaser, the Company will deliver to the Purchaser a written statement as to
whether it has complied with such informational requirements.

Section 3.CONDITIONS OF CLOSING.    Purchaser's obligation to purchase and pay for the Securities to be
purchased by the Purchaser on the Closing Date shall be subject to the satisfaction on or before the Closing Date of the conditions hereinafter set forth.

Section 3.1.Proceedings Satisfactory.All proceedings taken on or prior to the Closing Date in
connection with the issuance of the Securities and the consummation of the transactions contemplated hereby and all documents and papers relating thereto shall be reasonably satisfactory in form and
substance to the Purchaser, and the Purchaser shall have received copies of such documents and papers, all in form and substance reasonably satisfactory to the Purchaser and its special counsel, as
they may reasonably request in connection therewith.

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Section 3.2.Representations True.All representations and warranties of the Company contained in Section 2shall be true, in each case on and as of the Closing Date with the same effect as though such representations and warranties had been
made on and as of the Closing Date; the Company shall have performed all agreements on its part required to be performed under this Agreement on or prior to the Closing Date.

Section 3.3.Purchase Permitted by Applicable Laws.The sale by the Company and the payment for the
Securities to be purchased by the Purchaser (i) shall not be prohibited by any applicable law or governmental regulation, release, interpretation or opinion, (ii) shall not subject the
Purchaser to any penalty under or pursuant to any applicable law or governmental regulation, and (iii) shall be permitted by the laws and regulations of the jurisdictions to which the Purchaser
is subject.

Section 3.4.Securities.The Securities shall have been duly executed and in the form attached as Exhibit Ahereto, and all
governmental charges payable in connection therewith shall have been paid (or payment shall have been provided for) in
full, and shall be in full force and effect and no term or condition thereof shall have been amended, modified or waived without the Purchaser's prior written consent.

Section 3.5.Registration Rights Agreement.The Company and the Purchaser shall have entered into the
Registration Rights Agreement substantially in the form set forth asExhibit Bhereto.

Section 3.6.Third-Party Consents.The Company shall have received all third party and governmental
consents and waivers necessary to permit consummation of the transactions contemplated hereunder.

Section 4.DEFINITIONS.

Section 4.1.Definitions.Except as otherwise specified or as the context may otherwise require, the
following terms shall have the respective meanings set forth below whenever used in this Agreement:

"Act" means the Securities Act of 1933, as amended.

"Agreement" has the meaning ascribed thereto inSection 1.1.

"Board of Directors" means either the Board of Directors of the Company or any duly authorized committee of that board.

"Capital Lease" means any lease of property that, in accordance with GAAP, should be capitalized on the lessee's balance sheet or for
which the amount of the asset and liability thereunder, if so capitalized, should be disclosed in a note to such balance sheet; and "Capital Lease
Obligation" means the amount of the liability with respect to a Capital Lease that should be so capitalized or disclosed.

"Closing" has the meaning ascribed thereto inSection 1.2.

"Closing Date" has the meaning ascribed thereto inSection 1.2.

"Commission" means 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" has the meaning ascribed thereto inSection 1.1.

"Company" means F.A.O., Inc., a California corporation.

"Coinciding
Private Transactions" has the meaning ascribed thereto in Section 2.3.

"Exchange Act" means the Securities 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.

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"Financial Statements" has the meaning ascribed thereto inSection 2.2.

"GAAP" means generally accepted accounting principles as in effect at the time of application to the provisions hereof.

"Governmental Body" means any federal, state, municipal or other governmental department, commission, board, bureau, agency or
instrumentality, foreign or domestic.

"Holder" means the Purchaser and any other Person that becomes a registered holder of any of the Securities as registered on the books of
the Company.

"Material Adverse Effect" means, with respect to any Person, a material adverse effect on the business, properties, condition (financial
or otherwise) or operations of such Person and its Subsidiaries taken as a whole.

"Order" means any order, writ, injunction, decree, judgment, award, determination, direction or demand.

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

"Purchaser" means the Purchaser signing this Agreement and its successors and assigns.

"SEC" means the United States Securities and Exchange Commission.

"Securities" has the meaning ascribed thereto inSection 1.1.

"Securities Act" means 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.

"Subsidiary" of a Person means another Person of which the first Person directly or indirectly owns or controls the shares of stock or
other ownership interest having ordinary voting power to elect a majority of the board of directors (or other governing body) of such other Person.

Section 4.2.Accounting Terms.All accounting terms used herein which are not expressly defined in this
Agreement have the meanings respectively given to them in accordance with GAAP, all computations made pursuant to this Agreement shall be made in accordance with GAAP, and all balance sheets and other
financial statements shall be prepared in accordance with GAAP, except in the case of unaudited financial statements which are subject to year-end audit adjustments and the absence of footnotes.

Section 5.REGISTRATION, TRANSFER AND EXCHANGE OF SECURITIES; LOST SECURITIES.

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.

The
Company and any agent of the Company may treat the Person in whose name any Security is registered as the owner of such Security for the purpose of receiving payment of the dividends
and for all other purposes whatsoever.

Upon
receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of any Security, and (in case of loss, theft or destruction) of indemnity
reasonably satisfactory to it, upon surrender and cancellation of such Security or receipt of such indemnity, the Company shall make and deliver in lieu of such Security a new Security in the same
denomination.

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Notwithstanding
the foregoing provisions of this Section, if any Security of which any Purchaser or any other institutional Holder is the owner is lost, stolen or destroyed, then the
affidavit of the Purchaser or such Holder's Treasurer or Assistant Treasurer (or other responsible official), setting forth the name of the owner of such Security and the circumstances with respect to
such loss, theft or destruction, shall be accepted as satisfactory evidence thereof, and no indemnity shall be required as a condition to the execution and delivery by the Company of a new Security in
lieu of such Security (or as a condition to the payment thereof, if due and payable) other than a Purchaser's or such Holder's written agreement to indemnify the Company.

Section 6.TAXES.    The Company shall pay all taxes (including interest and penalties), other than taxes
imposed on the income of the Purchaser, which may be payable in respect of the execution and
delivery of this Agreement or of the execution and delivery of any of the Securities or of any amendment of, or waiver or consent under or with respect to, this Agreement or any of the Securities and
shall save the Purchaser harmless against any loss or liability resulting from nonpayment or delay in payment of any such tax.

Section 7.MISCELLANEOUS.

Section 7.1.Expenses; Commissions.The Company and Purchaser each agrees to pay all its own costs and
expenses in connection with the preparation, execution and delivery of this Agreement, the Securities and other instruments and documents to be delivered hereunder. The Company may pay commissions of
up to 3% of the aggregate purchase price for the Securities under this Agreement to Persons involved in arranging the transaction contemplated by this Agreement. Neither the Company nor the Purchaser
is responsible for any other commission, fee or other compensation that may be asserted by a third party and each agrees to indemnify and hold the other harmless against claims for compensation for
which the indemnifying party is responsible.

Section 7.2.Amendments, Waiver and Consents.Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and the
Holder.

Section 7.3.Indemnity.The Company shall indemnify the Purchaser, its officers, directors, managers,
trustees, partners, employees, equity holders, advisors and each person who controls the Purchaser (within the meaning of the Securities Act) against any loss, cost or damages (including reasonable
attorney's fees) incurred as a result of such party's breach of any representation, warranty, covenant or agreement in this Agreement.

Section 7.4.Successors and Assigns.This Agreement shall bind and inure to the benefit of and be
enforceable by the Company, the Purchaser, and the Purchaser's successors and assigns, and, in addition, shall inure to the benefit of and be enforceable by each Person who shall from time to time be
a Holder of any of the Securities. The Company may not assign its rights under this Agreement.

Section 7.5.Notices.All notices and other communications provided for in this Agreement shall be in
writing and delivered, telecopied or mailed, first class postage prepaid, addressed:



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Any
such notice or communication shall be deemed to have been duly given when delivered, telecopied or mailed as aforesaid. Each party may designate by notice in writing a new address to
which any notice, demand, request or communication may thereafter be so given, served or sent. Each notice, demand, request, or communication which shall be mailed, delivered or transmitted in the
manner described above shall be deemed sufficiently given, served, sent and received for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt,
the affidavit of messenger or (with respect to a telex) the answer back being deemed conclusive (but not exclusive) evidence of such delivery) or at such time as delivery is refused by the addressee
upon presentation.

Section 7.6.Counterparts.To facilitate execution, this Agreement may be executed in as many
counterparts as may be required; and it shall not be necessary that the signatures of each party appear on each counterpart; but it shall be sufficient that the signature of each party appear on one
or more of the counterparts. All counterparts shall collectively constitute a single agreement. It shall not be necessary in making proof of this Agreement to produce or account for more than a number
of counterparts containing the respective signatures of all of the parties hereto. Signatures pages may be delivered with original signatures or by facsimile, and the delivery of a signature by
facsimile shall have the same effect as the delivery of an original signature.

Section 7.7.Governing Law.This Agreement and the Securities and (unless otherwise provided) all
amendments, supplements, waivers and consents relating hereto or thereto shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflicts of laws
rules.

Section 7.8.Waiver of Jury Trial.THE PURCHASER, EACH HOLDER, BY ITS ACCEPTANCE OF ANY OF THE
SECURITIES, AND THE COMPANY, EACH HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE SECURITIES, OR ANY OTHER
AGREEMENTS RELATING TO THE SECURITIES OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION AND THE RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver is
intended to be all-encompassing of any and all disputes that may be filed in any court and that relate to the subject matter of this transaction, including without limitation, contract claims, tort
claims, breach of duty claims and all other common law and statutory claims. The Purchaser and the Company each acknowledge that this waiver is a material inducement to enter into a the transactions
contemplated by this Agreement, that each has already relied on the waiver in entering into this Agreement, and that each shall continue to rely on the waiver in their related future dealings. The
Purchaser and the Company further represent and warrant that each has reviewed this waiver with its legal counsel, and that each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THE WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, THE SECURITIES, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO

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THE SECURITIES. In the event of litigation, this Agreement may be filed as a written consent to a trial by the Court.

Section 7.9.Entire Agreement.This Agreement, together with the Registration Rights Agreement,
constitutes the entire agreement of the parties with respect to the transactions contemplated hereby and shall not be contradicted or qualified by any other agreement, representation or warranty, oral
or written, before the Closing Date.

[Remainder
of page intentionally left blank]

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The
Purchaser is requested to sign the form of acceptance in the space provided below whereupon this Agreement shall become a binding agreement between the Purchaser and the Company.

| |  | Very truly yours, |                                                         | 
| |  | ----------------- | ------------------------------------------------------- | 
| |  | F.A.O., Inc.      |                                                         | 
| |  | By:               | /s/JERRY R. WELCHJerry R. Welch Chief Executive Officer | 

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The
foregoing Agreement is hereby accepted as of the date first above written:

| |  | PURCHASER             |                                                                                                                                                                                                     | 
| |  | --------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
| |  | Vardon Focus Fund, LP |                                                                                                                                                                                                     | 
| |  | By:                   | /s/RICHARD W. SHEA, JR.Richard W. Shea, Jr.
850 3rd Aveneue, 8th Floor
New York, NY 10022
Attn: Lisa Gutierrez
212.331.6486
212.331.6566 FAX
rshea@vardonpartners.com
lgutierrez@vardonpartners.com | 

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EXHIBIT A

"NAME CHANGED TO F.A.O., INC."
CERTIFICATE IS RESTRICTED FROM
TRANSFER AS INDICATED ON REVERSE SIDE

INCORPORATED UNDER THE LAWS
OF THE STATE OF CALIFORNIA

|NUMBER |  |                       |  | SHARES                             
|------ |  | --------------------- |  | -----------------------------------
|       |  | THE RIGHT START, INC. |  |                                    
|       |  |                       |  | SEE REVERSE FOR CERTAIN DEFINITIONS
|       |  | CUSIP #30240s 10 5    |  |                                    

THIS
CERTIFIES THAT

IS
THE OWNER OF
of THE RIGHT START, INC., transferable on the share register of the Corporation by the holder hereof in person or by duly authorized attorney upon surrender of this Certificate properly
endorsed. This Certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar.



|SECRETARY |  | PRESIDENT
|--------- |  | ---------

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[REVERSE]

The
following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or
regulations:

|TEN COM |  | as tenants in common                                                         |  | UNIF GIFT MIN ACT |  | (Cust.)                               | Custodian              | (Minor)
|------- | - | ---------------------------------------------------------------------------- |  | ----------------- | - | ------------------------------------- | ---------------------- | -------
|TEN ENT |  | as tenants by the entireties                                                 |  |                   |   | under Uniform Gifts to Minors Act     | (State)               
|JT TEN  |  | as joint tenants with the right of survivorship and not as tenants in common |  | UNIF TRF MIN ACT  |  |                                       | Custodian (until age ) | (Minor)
|        |   |                                                                              |  |                   |   | under Uniform Transfers to Minors Act | (State)               

Additional
abbreviations may also be used though not in the above list.

|For Value Received
 hereby sell, assign and transfer unto                                                                         
|----------------------------------------------------------------------------------------------------------------------------------
|PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE                                                             
|PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE                                                                            
|                                                                                                                                  
|represented by the within Certificate and do hereby irrevocably constitute and appoint                                            
|                                                                                                                                  
|to transfer the said shares on the share register of the within-name Corporation, with full power of substitution in the premises.
|Dated  19                                                                                                                         
|                                                                                                                                  
|                                                                                                                                  
|SIGNATURE(S) GUARANTEED                                                                                                           
|                                                                                                                                  

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.

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EXHIBIT B        REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of May 24, 2002 between
F.A.O., Inc., a California corporation (the "Company"),
and                        (the "Purchaser").

WHEREAS,
the Company and the Purchaser have entered into a Common Stock Purchase Agreement dated as of May 24, 2002 (the "Purchase
Agreement") pursuant to which the Purchaser purchased shares (the "Registrable Securities) of the Company's common stock, no par
value;

WHEREAS,
pursuant to the Purchase Agreement, the Company and the Purchaser desire to enter into this Agreement to provide the Purchaser with certain registration rights and to address
related matters;

NOW,
THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements set forth herein, the parties agree as follows:

1.1Covenant to Register; Suspension.



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1.2Piggyback Registration Rights.



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1.3Registration Procedures.

The
Company shall have no obligation to file a Shelf Registration Statement pursuant to Section 1.1 hereof, nor to include Registrable Securities in a registration statement
pursuant to Section 1.2 hereof, unless and until the Purchaser shall have furnished the Company with all information and statements about or pertaining to the Selling Holder in such reasonable
detail and on such timely basis as is reasonably requested by the Company in connection with the preparation of such registration statement;provided,
however, that any such information shall be given or made by a Selling Holder without representation or warranty of any kind whatsoever, except with respect to the identity of such Selling Holder,
such Selling Holder's Registrable Securities and such Selling Holder's intended method of distribution or any other representation required by applicable law. In connection with the filing of any
registration statement hereunder, the Company shall use commercially reasonable efforts, as expeditiously as possible, to:



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1.4Registration Expenses.

The
Company will pay all Registration Expenses of all registrations made under this Agreement. For purposes of this Section, the term "Registration
Expenses" means all expenses incurred by the Company in complying with this Agreement, including, without limitation, all registration and filing fees (other than National
Association of Securities Dealers, Inc. filing fees pursuant to an underwritten offering), exchange listing fees, printing expenses, fees and expenses of counsel and accountants for the Company
and the reasonable fees and expenses of one firm or counsel selected by the Purchaser, state Blue Sky fees and expenses, and the expense of any special audits incident to or required by any such
registration, but excluding underwriting discounts and selling commissions and transfer taxes, if any, which shall be paid by the Selling Holders pro rata, based on the number of shares sold by each
Selling Holder under the applicable registration statement.

1.5Preparation; Reasonable Investigation.

In
connection with the preparation and filing of each registration statement under the Act pursuant to this Agreement, the Company will give the Selling Holders with respect to such
registration statement and their counsel the opportunity to participate in the preparation of such registration statement and each prospectus included therein or filed with the Commission, and each
amendment thereof or supplement thereto, and will give each of them such reasonable access to its books and records and such opportunities to discuss the business of the Company with its officers and
the independent public accountants who have certified its financial statements as shall be necessary, in the opinion of the Selling Holders' counsel, to conduct a reasonable investigation within the
meaning of the Act.

1.6Indemnity.



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2.Miscellaneous.

2.1Additional Actions and Documents.

Each
of the parties hereto hereby agrees to use commercially reasonable efforts to take or cause to be taken such further actions, to execute, deliver and file or cause to be executed,
delivered and filed such further documents and instruments, and to obtain such consents, as may be necessary or as

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may be reasonably requested in order to fully effectuate the purposes, terms and conditions of this Agreement.

2.2Assignment.

Any
Holder may assign its rights under this Agreement to any assignee of the Registrable Securities.

2.3Entire Agreement; Amendment and Waiver.

This
Agreement, including the other writings referred to herein or delivered pursuant hereto, constitutes the entire agreement among the parties hereto with respect to the transactions
contemplated herein, and it supersedes all prior oral or written agreements, commitments or understandings with respect to the matters provided for herein. No amendment, modification or discharge of
this Agreement shall be valid or binding unless set forth in writing and duly executed by a party against whom enforcement of the amendment, modification, or discharge is sought. No course of dealing
or the failure of any party to enforce any of the provisions of this Agreement shall in any way operate as a waiver of such provisions and shall not affect the right of such party thereafter to
enforce each and every provision of this Agreement in accordance with its terms.

2.4Limitation on Benefits.

Except
as provided for elsewhere herein, it is the explicit intention of the parties hereto that no person or entity other than the parties hereto (and their respective successors and
assigns) is or shall be entitled to bring any action to enforce any provision of this Agreement against any of the parties hereto, and the covenants, undertakings and agreements set forth in this
Agreement shall be solely for the benefit of, and shall be enforceable only by, the parties hereto or their respective successors and assigns.

2.5Binding Effect.

This
Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. The respective indemnities, agreements,
representations, warranties
and other provisions set forth in this Agreement or made pursuant hereto shall remain in full force and effect following any sale of Registrable Securities as contemplated hereby and regardless of any
investigation (or statement as to the results thereof) made by or on behalf of any Holder or any representative of any Holder.

2.6Governing Law.

This
Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in accordance with the laws of the State
of New York, without regard to conflicts of laws principles.

2.7Notices.

All
notices and other communications provided for in this Agreement shall be in writing and delivered, telecopied or mailed, first class postage prepaid, addressed:



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Any
such notice or communication shall be deemed to have been duly given when delivered, telecopied or mailed as aforesaid. Each party may designate by notice in writing a new address to
which any notice, demand, request or communication may thereafter be so given, served or sent. Each notice, demand, request, or communication which shall be mailed, delivered or transmitted in the
manner described above shall be deemed sufficiently given, served, sent and received for all purposes at such time as it is delivered to the addressee (with the return receipt, the delivery receipt or
the affidavit of messenger being deemed conclusive (but not exclusive) evidence of such delivery) or at such time as delivery is refused by the addressee upon presentation.

2.8Headings.

Article
and Section headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose, and shall not
in any way define or affect the meaning, construction or scope of any of the provisions hereof.

2.9Execution in Counterparts.

To
facilitate execution, this Agreement may be executed in as many counterparts as may be required; and it shall not be necessary that the signatures of each party appear on each
counterpart; but it shall be sufficient that the signature of each party appear on one or more of the counterparts. All counterparts shall collectively constitute a single agreement. It shall not be
necessary in making proof of this Agreement to produce or account for more than a number of counterparts containing the respective signatures of all of the parties hereto. Signatures pages may be
delivered with original signatures or by facsimile, and the delivery of a signature by facsimile shall have the same effect as the delivery of an original signature.

2.10Remedies.

The
Purchaser, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this
Agreement. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Agreement and hereby agrees to waive
the defense in any action for specific performance that a remedy at law would be adequate.

2.11Illegality.

If
any term or provision of this Agreement or any application thereof shall be declared or held invalid, illegal or unenforceable, in whole or in part, whether generally or in any
particular jurisdiction, such provision shall be deemed amended to the extent, but only to the extent, necessary to cure such invalidity, illegality or unenforceability, and the validity, legality and
enforceability of the remaining provisions, both generally and in every other jurisdiction, shall not in any way be affected or impaired thereby.

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2.12Inspection.

For
so long as this Agreement shall be in effect, this Agreement shall be made available for inspection and copying on any business day after reasonable notice to the Company by the
Purchaser at the offices of the Company at the address thereof set forth in Section 2.7 above.

2.13No Inconsistent Agreements.

The
Company has not entered into (except, with the respect to 500,000 shares then held by Albert O. Nicholas and Primerica Life Insurance Company under the Registration Rights Agreement
dated as of August 3, 1995 between them, the Company and certain of the shareholders of the Company, which to the best knowledge of the Company do not currently have rights inconsistent with
the rights granted hereby), and will not hereafter enter into, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders of Registrable Securities in
this Agreement. Without limiting the generality of the foregoing, the Company will not hereafter grant to any holder of the Company's securities registration rights that are senior to or that would
have the effect of blocking or delaying the rights of any of the Holders herein.

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IN
WITNESS WHEREOF, each of the parties hereto has caused this Registration Rights Agreement to be duly executed on its behalf as of the date first above written.

| |  | F.A.O., INC.
| |  | ------------
| |  | By:         
| |  | Purchaser   
| |  | By:         

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Exhibit C        Notice from Purchaser

This notice is given under Section 1.1 of that certain Common Stock Purchase Agreement, dated as of May 24, 2002, by and between the undersigned and
F.A.O., Inc., a California corporation (the "Purchase Agreement"; capitalized terms used in this notice without definition have the meanings ascribed to such terms in the Purchase Agreement).
Please register the Securities we are purchasing from the Company as follows:

|Name(s) that should appear on certificate(s) |  | Address for delivery (unless Purchaser will be present at the Closing) |  | No. of shares of Common Stock
|-------------------------------------------- |  | ---------------------------------------------------------------------- |  | -----------------------------
|                                             |  |                                                                        |  |                              
|                                             |  |                                                                        |  |                              
|                                             |  |                                                                        |  |                              

| |  | Sincerely,
| |  | ----------
| |  |           
| |  | By:       
| |  | Title:    

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