Exhibit 10.6

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED UNDER ANY STATE SECURITIES LAWS. THIS NOTE 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.

F.A.O., INC.
FAO SCHWARZ, INC.
ZB COMPANY, INC.

EQUIPMENT NOTE

|$9,000,000
Note No. LC-021 |  | King of Prussia, Pennsylvania
August 15, 2002
|-------------------------- |  | ---------------------------------------------

FOR
VALUE RECEIVED, the undersigned, F.A.O., Inc., a California corporation ("Parent"), FAO Schwarz, Inc. ("Schwarz"), a Delaware corporation and ZB Company, Inc., a
Delaware corporation ("ZB", and, together with Parent and Schwarz, the "Co-Borrowers"), jointly and severally promise to pay to KAYNE
ANDERSON CAPITAL ADVISORS, L.P., as agent for the parties listed on Exhibit A, or registered assigns, the unpaid principal sum of NINE MILLION DOLLARS, or, if less, a sum equal to 85.7143%
multiplied by the aggregate sum of all amounts drawn under that certain Letter of Credit
dated as of August 15, 2002, in favor of Wells Fargo Retail Finance, LLC by order of Kayne Anderson Capital Advisors, L.P., as agent and Fortune Twenty-Fifth, Inc. (the "Letter of
Credit") plus any accrued and unpaid interest thereon as provided for herein on that date (the "Maturity Date") that is one year after the date that an amount has first been drawn on the Letter of
Credit ("Draw Date"). Payments are to be made to the address of the registered holder of this Note as set forth on the records of the Co-Borrowers in lawful money of the United States of
America. The Co-Borrowers jointly and severally promise to pay interest on the principal amount of this Note at a rate equal to the prime rate charged by Wells Fargo Bank, N.A. plus 3% per
annum from the Draw Date through the date of payment of the full principal amount of the Note. Interest on the Note will accrue from the most recent date to which interest has been paid or, if no
interest has been paid on the Note, from the Draw Date. Each of the Co-Borrowers agrees (to the extent it may lawfully do so) that it will not at any time insist upon, plead or in any
manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive the Co-Borrowers from paying all or a
portion of the principal of or interest on this Note as contemplated in this Note, wherever enacted, now or at any time later in force, or that may materially affect the covenants or the performance
of this Note in any manner inconsistent with its provisions. Each of the Co-Borrowers expressly waives all benefit or advantage of any such law, and will not hinder, delay or impede the
execution of any power granted to the Holder (as defined below), but will suffer and permit the execution of every such power as though no such law had been enacted. If a court of competent
jurisdiction prescribes that the Co-Borrowers may not waive their rights to take the benefit or advantage of any stay or extension law or any usury law or other law in accordance with the
prior sentence, then the obligation to pay interest on the Note shall be reduced to the maximum legal limit under applicable law governing the interest payable in connection with the Note, and any
amount of interest paid by the Co-Borrowers that is deemed illegal shall be deemed to have been a prepayment of principal (without penalty or premium) on the Note.

Interest
on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the Draw Date. Interest will be computed on the basis
of a 360-day year consisting of twelve 30-day months and compounded semi-annually. Interest shall be paid to the holder of record of this Note on the
Co-Borrowers' records (the "Holder") at the close of business on the Maturity Date. The Co-Borrowers shall pay principal of and interest on this Note in such coin or

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currency of the United States of America as at the time of payment shall be legal tender. The Co-Borrowers may, however, pay principal of this Note by wire transfer of federal funds, or
interest on this Note by its check payable in such legal tender.

If
any of the Co-Borrowers shall (i) fail to pay principal or interest when due, (ii) fail generally to pay its debts as they mature, (iii) have any
complaint, application, or petition filed by or against it initiating any matter in which the Co-Borrowers are or may be granted any relief from its debts pursuant to Title 11, U.S.C., as
amended from time to time, or any other insolvency statute or procedure (a "Bankruptcy Event"), or (iv) fail to comply with any other provision
of this Note which failure shall continue for five days after written notice thereof from the Holder (each, an "Event of Default"), the aggregate
outstanding amount of this Note, including any accrued and unpaid interest, shall be immediately due and payable, and in addition thereto, and not in substitution therefor, the Holder shall be
entitled to exercise any one or more of the rights and remedies provided by law. Failure to exercise any right or remedy under this Note or available under applicable law shall not constitute a waiver
of such option or such other remedies or of the right to exercise any of the same in the event of any subsequent Event of Default. The Co-Borrowers and all makers, sureties, guarantors,
endorsers and other persons assuming obligations pursuant to this Note hereby waive presentment, protest, demand, notice of dishonor and all other notices and all defenses and pleas on the grounds of
any extension or extension of the time of payments or the due dates hereof, in whole or in part, before or after maturity, with or without notice. No renewal or extension of this Note, no release of
any obligor and no delay in enforcement of this Note or in exercising any right or power hereunder shall affect the liability of any obligor hereunder.

1.Security.

This
instrument and the rights and obligations evidenced hereby are secured pursuant to that certain Security Agreement of even date herewith granting a first priority security interest
in the Co-Borrowers' "equipment", as such term is defined from time to time in the Uniform Commercial Code as in effect in the State of New York, fixtures and vehicles (including motor
vehicles) including all attachments, accessories, accessions, replacements, substitutions, additions, and improvements to any of the foregoing.

2.Transfer; Registration; Replacement.Upon surrender of this Note for registration of transfer or assignment,
duly endorsed, or accompanied by a written instrument of transfer or assignment duly executed, by the registered Holder hereof or such Holder's attorney duly authorized in writing, a new Note for a
like principal amount shall be issued to, and, at the option of the Holder, registered in the name of, the transferee or assignee. The Co-Borrowers may deem and treat the person in whose
name this Note is registered as the Holder and owner hereof for the purpose of receiving payments and for all other purposes whatsoever, and the Co-Borrowers shall not be affected by any
notice to the contrary.

3.Miscellaneous



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| | If to Holder:          |  | At its address set forth on the records of the Co-Borrowers which, until changed as set forth herein shall be:                                      
| | ---------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
| |                        |  | Kayne Anderson Capital Advisors, L.P.
1800 Avenue of the Stars, Second Floor
Los Angeles, California 90067
Fax: 310-284-6444                        
| | If to Co-Borrowers to: |  |                                                                                                                                                     
| |                        |  | c/o F.A.O., Inc.
2520 Renaissance Blvd.
King of Prussia, PA 19406
Attention: Legal
Tel: (610) 278-7800
Fax: (610) 278-7804                          
| |                        |  | with required copy to (which, in and of itself, shall not constitute notice):                                                                       
| |                        |  | Fulbright & Jaworski
865 South Figueroa Street, 25th Floor
Los Angeles, CA 90017
Attention: Victor Hsu, Esq.
Tel: (213) 892-9200
Fax: (213) 680-4518



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IN
WITNESS WHEREOF, the undersigned has caused this Equipment Note to be duly executed on its behalf as of the date first hereinabove set forth.

| |  | F.A.O., INC.     
| |  | -----------------
| |  | By:              
| |  | FAO SCHWARZ, INC.
| |  | By:              
| |  | ZB COMPANY, INC. 
| |  | By:              

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Exhibit A

|Party Name |  | Percentage Held
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