April 22, 2003

Exhibit 99.1

Xxxxx 00, 0000

Xxxxxxx Xxxx Xxxxxxx XX, XX
00000 Xxxxx Xxxxxx Xxxx. Xxxxx 000
Xxx Xxxxxxx, XX 00000

Ladies and Gentlemen:

               Re: Agreement Regarding Certain Matters

Ladies and Gentlemen:

               In consideration of the purchase by Xxxxxxx Park Capital II, L.P. (“Xxxxxxx”) of 5,000 shares of FAO, Inc. Class I Convertible Preferred Stock (the “Shares”), and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, this letter constitutes the following agreement:

	1.		Xxxxx Xxxxxxxx Capital Advisors LP, Woodacre LLC, Fortune Twenty-Fifth, Inc., Xxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxx Xxxxxx, and Xxx Xxxxxx hereby agree that, so long as Xxxxxxx and its affiliates own not less than 3,000 Shares or the shares of FAO, Inc. (“FAO”) Common Stock into which such Shares have been converted, each of them shall cause all shares of Class I Convertible Preferred Stock, Class J Convertible Preferred Stock, and Common Stock owned by them to be voted so as to elect the designee of Xxxxxxx to FAO’s Board of Directors.
	2.		Xxxx Xxxxx and Xxxxxxx Xxxxx hereby agree that with respect to all FAO, Inc., FAO Xxxxxxxx, Inc., and ZB Company, Inc. Equipment Notes dated on or about April 22, 2003 (the “Notes”) beneficially owned by either of them (including, but not limited to, those held by Fortune Twenty-Fifth, Inc.), they will not exercise the conversion right contained in such Notes at any time prior to January 12, 2004.
	3.		Each party to this agreement severally represents that (i) such party has full capacity to execute, deliver and perform this letter agreement; (ii) this letter agreement has been duly authorized and approved, if applicable; and (iii) this letter agreement is the valid and binding obligation of such party and enforceable against such party in accordance with its terms.

April 22, 2003
Letter Agreement

Sincerely,

XXXXX XXXXXXXX CAPITAL ADVISORS, LP,

a California limited partnership

By Xxxxx Xxxxxxxx Investment Management, Inc.

     a Nevada corporation

By

Xxxxx Xxxxxxxxxx
General Counsel

XXXX XXXXX,

an Individual

By

XXXXXXX XXXXX,

an Individual

By

WOODACRES LLC

By

Its:

XXXXXXX XXXXXX,

an Individual

By

XXX XXXXXX,

an Individual

By

April 22, 2003
Letter Agreement

FORTUNE TWENTY-FIFTH, INC.

By

Its:

Accepted and Agreed:

XXXXXXX PARK CAPITAL II L.P.,

a Delaware limited partnership

By: Xxxxxxx Park Associates III, LLC,

a Delaware limited liability company

By:

An authorized signatory