Document:

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                                                                  Exhibit 10.62

DAOHENGBANK

PRIVATE & CONFIDENTIAL

4 December 2001                                       Our Ref : D/P/CBD/0294/01

DSI  (HK)  Limited
Room 1401,  14/F.,
New T & T Centre,
Harbour City,
Tsim Sha Tsui,
Kowloon

Dear Sir(s) /Madam(s),

BANKING FACILITY (IES)

We refer to our recent discussions and are pleased to inform you that the
following facility(ies) (the "Facility") will be made available to you on the
specific terms and conditions outlined herein subject to our review from time to
time. The Facility would be deemed to be continued on the same terms and
conditions until and unless notice to the otherwise is advised to you.

<TABLE>
<CAPTION>
        FACILITY (IES)                LIMIT (S)               TERMS & CONDITIONS

<S>                                      <C>
1.      Negotiation of             USD6,  000,000.00
        Export Bills
        under LC with
        discrepancies +
        Packing Loan

1a.     within facility item 1,
        Packing Loan               (USD2, 100, 000.00)      Against lodgement of valid
                                                            export Letters of Credit
                                                            Issued by Banks acceptable to
                                                            us. Maximum advance will be
                                                            limited to 35% of the value of
                                                            each L/C and tenor within 90 days
                                                            or L/C expiry date, whichever
                                                            is earlier; and will be
                                                            repayable from the proceeds on
                                                            negotiation of the relative
                                                            export bills.
</TABLE>

OTHER TERMS AND CONDITIONS

Upon availability of the above Facility, debenture in favour of State Street
Bank & Trust Company must be released.

The Facility is for financing the FOB sales of DSI (HK) Limited only and not the
domestic sales of DSI Toys, Inc..

Arrangement fee for HKD10,000.00 will be charged, payable upon acceptance of
this letter. Thereafter, unless and until the Facility is terminated or as
otherwise advised to you, a review fee at the same amount or such other amount
as we may at our entire discretion determine will be charged on a yearly basis.

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The Facility is subject to our overriding right of withdrawal and repayment on
demand including the right to call for cash cover on demand for prospective and
contingent liabilities.

The nature and the amount of the Facility granted or to be granted by us may be
varied to such category(ies) and to such smaller or larger extent as we may at
our absolute discretion determine from time to time with or without notice to
you.

The rates of interest, fees and commission on the Facility is subject to
fluctuation at our absolute discretion determined from time to time with or
without notice to you and payable to the debit of your account with us. Late
payment/settlement of any loan/advance with specified due/repayment date will be
subject to an overdue interest charge at our then prevailing rate.

For the Facility adopting the prime rate, deposit rate or other specified
rate(s) as the basis of interest rate determination, in the event that the
prevailing interbank offer rate (HIBOR for Hong Kong Dollar loans, and LIBOR or
SIBOR for loans in other currencies) is higher than the prime rate, deposit rate
or other specified rate(s), we may at our entire discretion and without notice
to you adopt the prevailing interbank offer rate in lieu of the prime rate,
deposit rate or other specified rate(s) as the basis of interest rate
determination.

As security for the above Facility, we require a corporate guarantee for
USD6,000,000.00 from DSI Toys, Inc.. Please let us have the certified true
copy of extract from the minutes of a meeting of the board of directors of
DSI Toys, Inc. in relation to its extending the said guarantee to our Bank as
security for the Facility granted or to be granted to DSI (HK) Limited by our
Bank.

All legal costs and expenses incurred in connection with the preparation of
security documentation of the above security and all incidental attendances
thereto will be for your account.

By accepting this offer letter, you undertake and confirm that :

(a)   annual bills business of not less than USD10,000,000.00 to be enrouted
      to us,

(b)   at present, neither you nor any of the following parties have any
      relationship with the Bank's directors or employees:

      1)    in case you are a limited company, any of your shareholders and
            directors;

      2)    in case you are a partnership, any of your partners; or

      3)    in case the Facility is secured by guarantee(s) or security provided
            by other parties, any of such guarantor(s) or security provider(s);

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and that you will notify the Bank promptly in writing if you or any of the above
parties (if any) become so related.

Your company is required to submit the latest annual audited (and, at our
discretion, half yearly unaudited) financial statements for our records within
six months from the relevant year end or half year end date of your financial
year.

To signify your acceptance of the above terms and conditions as well as your
authorization to us to proceed as above indicated, please sign and return to us
the duplicate copy of this letter together with the enclosed documents as per
attached schedule supported by a certified true copy of extract from the minutes
of a meeting of your board of directors. The Facility will be available subject
to all security documents being executed to our satisfaction.

This offer expires on 21 days from the date hereof.

Yours faithfully,
for DAO HENG BANK LIMITED

/s/ ROGER WONG                            /s/ DORIS TAM
---------------------------------        ----------------------------------
Roger Wong                               Doris Tam
Manager                                  Senior Manager
Asset Risk Management Division           Corporate Banking

                                         The above Facility and terms and
                                         conditions are acknowledged and
                                         accepted by

                                         /s/ ALFRED CHAN
                                         --------------------------------------
                                         DSI (HK) Limited   ALFRED CHAN
                                                            MANAGING DIRECTOR

                                         Signature Verified  /s/ CHRIS K.W. MAK
                                                            -------------------
                                                      (AUTHORIZED SIGNATURE)
                                                       NAME OF BANK OFFICER
                                                      (CHRIS K.W. MAK)<Page>

                                                                  EXHIBIT 10.63

                     MEMORANDUM OF REBORROWING OF PRINCIPAL

     This Memorandum of Reborrowing of Principal ("Memorandum") is entered into
as of the 6th day of March, 2002, by and between DSI Toys, Inc. ("DSI"), a Texas
corporation, and MVII, LLC ("MVII"), a California limited liability company.

                                    RECITALS

A.   A Promissory Note dated January 7, 2000, in the original principal amount
     of $5,000,000.00 (the "Original Principal") was executed by DSI payable to
     the order of MVII (the "MVII Note"). The current principal balance of the
     MVII Note is $3,850,000.00.

B.   DSI desires to reborrow up to $600,000.00 of the Original Principal that
     has been paid on the MVII Note. MVII desires to re-loan such amount to DSI.

C.   The Loan and Security Agreement dated February 2, 1999, as amended from
     time to time, (the "Loan Agreement") by and between DSI and Sunrock Capital
     Corp., a Delaware corporation ("Sunrock") sets forth, in Section 9.9(c),
     that "Borrower shall be permitted to reborrow principal amounts paid on the
     MVII Note from time to time, PROVIDED, THAT, the outstanding principal
     amount of the MVII Note shall not exceed the original principal amount of
     the MVII Note; PROVIDED, FURTHER, THAT, the stated interest rate of such
     indebtedness shall not be increased, the frequency of payments shall not be
     increased and the principal amount of the MVII Note, as increased from time
     to time, shall be payable no more frequently than monthly or in amounts
     greater than the amounts permitted by clause (ii) (B) above. Borrower shall
     promptly provide written notice to Lender of an increase in the outstanding
     principal amount of the MVII Note pursuant to the authority granted in this
     SECTION 9.9(C)."

     NOW, THEREFORE, in consideration of the premises herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows:

1.   As of March 6, 2002, DSI shall reborrow from MVII, and MVII shall re-loan
     to DSI, a sum up to $600,000.00 (the "Reborrowed Amount"), representing
     DSI's reborrowing of a portion of the Original Principal that was
     previously paid by DSI to MVII in accordance with the MVII Note. The
     Reborrowed Amount is loaned pursuant to all the terms and obligations set
     forth in the MVII Note, and shall be added to the existing principal
     balance of the MVII Note.

2.   The parties acknowledge that the Reborrowed Amount is subject to the terms
     and conditions of the MVII Note, as well as all the terms and conditions of
     that certain Subordination

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     Agreement dated January 7, 2000, by and among E. Thomas Martin, MVII and
     Sunrock, together with any and all amendments thereto.

3.   DSI represents and warrants to MVII that all conditions to DSI's right to
     borrow the Reborrowed Amount, including but not limited to those set forth
     in the Loan Agreement, have been satisfied.

4.   The parties agree that they will execute such other instruments and
     documents as are or may become necessary to carry out the intent and
     purpose of this Memorandum, and/or to evidence DSI's indebtedness to MVII
     for the Reborrowed Amount.

     IN WITNESS WHEREOF, this Memorandum has been duly executed in triplicate
originals as of the day and date first written hereinabove.

                                               DSI TOYS, INC.

                                               By: /s/ ROBERT L. WEISGARBER
                                                  ---------------------------
                                                  Robert L. Weisgarber
                                                  CFO

                                               MVII, LLC

                                               By: /s/ E. THOMAS MARTIN
                                                  ---------------------------
                                                  E. Thomas Martin
                                                  Manager

     Acknowledged this _____ day of March, 2002.

                                               SUNROCK CAPITAL CORP.

                                               By: /s/ Y. RENEE' HANNAH
                                                  ---------------------------

                                               Name:   Y. RENEE' HANNAH
                                                    -------------------------

                                               Title:  Account Executive
                                                     ------------------------

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