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
Agreement dated January 7, 2000, by and among E. Xxxxxx Xxxxxx, 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/ XXXXXX X. XXXXXXXXXX
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Xxxxxx X. Xxxxxxxxxx
CFO
MVII, LLC
By: /s/ E. XXXXXX XXXXXX
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E. Xxxxxx Xxxxxx
Manager
Acknowledged this _____ day of March, 2002.
SUNROCK CAPITAL CORP.
By: /s/ Y. XXXXX' HANNAH
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Name: Y. XXXXX' HANNAH
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Title: Account Executive
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