# **EXHIBIT10.72**

# ** **

# **MEMORANDUM OF REBORROWING OF PRINCIPAL**

 

This Memorandum ofReborrowing of Principal (“Memorandum”) is entered into as of the 10th day ofMarch, 2003, by and between DSI Toys, Inc. (“DSI”), a Texas corporation, andMVII, LLC (“MVII”), a California limited liability company.

 

## **RECITALS**

 

A.                                   APromissory Note dated January 7, 2000, in the original principal amount of$5,000,000.00 (the “Original Principal”) was executed by DSI payable to theorder of MVII (the “MVII Note”). The current principal balance of the MVII Noteis $4,650,000.00.

 

B.                                     DSIdesires to reborrow up to $350,000.00 of the Original Principal that has beenpaid on the MVII Note.  MVII desires tore-loan such amount to DSI.

 

C.                                     TheLoan and Security Agreement dated February 2, 1999, as amended from time totime, (the “Loan Agreement”) by and between DSI and Sunrock Capital Corp., aDelaware corporation (“Sunrock”) sets forth, in Section 9.9(c), that “Borrowershall be permitted to reborrow principal amounts paid on the MVII Note from timeto time, provided, that, the outstanding principal amount of theMVII Note shall not exceed the original principal amount of the MVII Note; provided,further,that, the stated interest rate of such indebtednessshall not be increased, the frequency of payments shall not be increased andthe principal amount of the MVII Note, as increased from time to time, shall bepayable no more frequently than monthly or in amounts greater than the amountspermitted by clause (ii) (B) above. Borrower shall promptly provide written notice to Lender of an increasein the outstanding principal amount of the MVII Note pursuant to the authoritygranted in this Section 9.9(c).”

 

NOW, THEREFORE, in consideration of the premisesherein contained and other good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged, the parties, intending to belegally bound, agree as follows:

 

1.                                       Asof March 10, 2003, DSI shall reborrow from MVII, and MVII shall re-loan to DSI,a sum up to $350,000.00 (the “Reborrowed Amount”), representing DSI’sreborrowing of a portion of the Original Principal that was previously paid byDSI to MVII in accordance with the MVII Note. The Reborrowed Amount is loanedpursuant to all the terms and obligations set forth in the MVII Note, and shallbe added to the existing principal balance of the MVII Note.

 

2.                                       Theparties acknowledge that the Reborrowed Amount is subject to the terms andconditions of the MVII Note, as well as all the terms and conditions of thatcertain Subordination 

 

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Agreement dated January7, 2000, by and among E. Thomas Martin, MVII and Sunrock, together with any andall amendments thereto.

 

3.                                       DSIrepresents and warrants to MVII that all conditions to DSI’s right to borrowthe Reborrowed Amount, including but not limited to those set forth in the LoanAgreement, have been satisfied.

 

4.                                       Theparties agree that they will execute such other instruments and documents asare or may become necessary to carry out the intent and purpose of thisMemorandum, and/or to evidence DSI’s indebtedness to MVII for the ReborrowedAmount.

 

IN WITNESS WHEREOF, this Memorandum has been dulyexecuted in triplicate originals as of the day and date first writtenhereinabove.

 

 
|                                        | **DSI TOYS, INC.**        |
|---------------------------------------------|---------------------------|
|                                        |                      |
|                                        | By:                       |   /s/ ROBERT L. WEISGARBER |   |
|                                        |                      | Robert L. Weisgarber |
|                                        |                      | CFO |
|                                        |                      |
|                                        |                      |
|                                        | **MVII, LLC**             |
|                                        |                      |
|                                        | By:                       | /s/ JOSEPH S. WHITAKER |   |
|                                        |                      | E. Thomas Martin |
|                                        |                      | Manager |
|                                        |                      |
|                                        |                      |
| Acknowledged  this 21st day of March, 2003. |                      |
|                                        |                      |
|                                        | **SUNROCK CAPITAL CORP.** |
|                                        |                      |
|                                        | By:                       |   /s/ JOHN ERWIN |   |
|                                        |                      |
|                                        | Name:                     |   John Erwin |   |
|                                        |                      |
|                                        | Title:                    |   E. V. P. |   |
|                                             |                           |  |  |  |  |

 

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