FAO Inc., the King of Prussia, Pa.-based owner of FAO Schwarz and Zany Brainy, said Monday it is in default of its loan agreement. The company said Monday that it was notified of the default on Friday, Nov. 7. The notification said that "lenders would no longer consider themselves obligated to make further loans or extend letters of credit, that outstanding loans would bear interest at the default rate under the loan agreement until defaults were cured or waived and that additional extensions of credit would be subject to a 5 percent funding fee," according to FAO. FAO said it...