Exhibit
10.1


 


CAUSE NO. 08-4526


 


	
  CARL DICK, 

   

  Plaintiff,
  

   

  v.
  

   

  HEELYS, INC., et al. 

   

  Defendants.

  	
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  §

  §

  §

  §

  §

  §

  §

  	
  IN
  THE COUNTY COURT 

   

   

   

  AT
  LAW NO. 1 

   

   

   

   

  DALLAS
  COUNTY, TEXAS

  



 


COMPROMISE AND SETTLEMENT AGREEMENT


 


ON THIS DAY, Plaintiff Carl
Dick has agreed with Defendants Heelys, Inc. (“Heelys”), Michael G.
Staffaroni, Michael W. Hessong, Patrick F. Hamner, Roger R. Adams, Richard E.
Middlekauff, Samuel B. Ligon, the estate of William R. Thomas, James T.
Kindley, Jeffrey G. Peterson, Capital Southwest Corporation, Capital Southwest
Venture Corporation, Bear, Stearns & Co., Inc. n/k/a J.P Morgan
Securities Inc., Wachovia Capital Markets, L.L.C. n/k/a Wells Fargo Securities,
LLC, J.P. Morgan Securities, Inc., and CIBC World Markets Corp
(collectively, “Defendants;” Dick and Defendants are collectively the “Parties”)
for the compromise and settlement of all disputes and claims between them, as
follows:


 


1.             Carl Dick and Defendants hereby compromise and
settle all disputes and claims between them, including without limitation the
claims asserted in the above-titled lawsuit (the “Lawsuit”), on the terms and
conditions set out in this Compromise and Settlement Agreement (the “Agreement”).


 


2.             The releases and covenants not to sue contained in
this Agreement shall, on behalf of each party to this Agreement, include its,
or his, respective past, present, and former directors, officers, shareholders,
agents, employees, attorneys, servants, parents, subsidiaries, partners,
managers, owners, affiliates, investors, interest owners, other
representatives, successors, 


 


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assigns, and all other persons and entities acting on behalf of or by,
through, or under one or more of them.


 


3.             Defendants shall, within seven days of the execution
of this Compromise and Settlement Agreement, pay to Carl Dick the sum of
$2,500,000 by wire transfer to the designated trust account of Hutchinson Law
Firm LLC.


 


4.             On or before December 1, 2009, Defendants shall
pay to Carl Dick the sum of $2,750,000 by the delivery of such sum by wire
transfer to the designated trust account of Hutchinson Law Firm LLC.


 


5.             As consideration for the payment described in
Paragraphs 3 and 4 above, Carl Dick releases all claims that were asserted or
could have been asserted against Defendants in the above-titled suit and all
claims or causes of action (known or unknown) based upon federal or state or
any other applicable law arising in any way out of the purchase, sale, or
holding of any Heelys stock or Heelys security by Carl Dick.  All litigation between Carl Dick and
Defendants, including claims that have been brought or could have been brought,
will be dismissed with prejudice.  Within
three days of receipt of the payment set forth in paragraph 3 above, Carl Dick
shall file with the Court the appropriate papers to dismiss the Lawsuit with
prejudice.


 


6.             Each party to this Agreement hereby covenants,
represents and warrants to each other party that:


 


(a)           Such party is correctly
described and named in this Agreement.


 


(b)           Before executing this
Agreement, such party became fully informed of the terms, contents, provision,
and effect of this Agreement and any exhibits to either or both of them.


 


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(c)           The signatory to this
Agreement signing on behalf of a party is fully authorized and legally
competent to execute this Agreement as the legal, valid and binding act and
deed of such party.


 


(d)           This Agreement is fully and
forever binding on and enforceable against, such party in accordance with its
terms.


 


(e)           The execution and delivery
of this Agreement and any other documents, agreements or instruments executed
or delivered by such Party pursuant hereto and the consummation of the
transactions herein or therein contemplated does not conflict with or result in
a breach of any of the terms or provisions of, or constitute a default under,
any material agreement or instrument to which such party is a party or any
provision of law, statute, rule or regulation applicable to such party or
any judicial or administrative order or decree by which such party is bound.


 


(f)            Such party has made an
investigation to such party’s satisfaction of all facts and reasons why such
party should enter into this Agreement and agrees, based upon such party’s
knowledge, experience, investigation, and consultation with counsel that this
Agreement is fair and just.


 


(g)           Such party represents that
he, or it, as the case may be, has not relied upon and will not rely upon, any
statements, acts or omissions by any other party, other than as set out in this
Agreement in making its decision to enter into this Agreement.


 


(h)           Such party acknowledges that
its aforesaid representations are a material inducement to every other party to
enter into this Agreement.


 


(i)            Each party, and each person
signing this Agreement, owns and controls all claims released in this Agreement
and has not assigned or hypothecated any of such claims.


 


7.             Carl Dick and Defendants shall each be individually
responsible for their own fees and expenses incurred in connection with this
and all other actions and claims being released.


 


8.             Carl Dick and Defendants agree to execute such
further instruments and documents as may be reasonably necessary to carry out
and effectuate the terms, conditions and intention of this Agreement.


 


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9.             This Agreement constitutes the entire agreement
between the Parties and supersedes all prior arrangements, agreements and
understandings with respect to this Compromise and Settlement Agreement,
whether written or oral.


 


10.           The Parties acknowledge that bona fide disputes and
controversies exist between them, and it is understood and agreed that this
Agreement is a compromise of disputed claims, and that nothing contained herein
shall be construed as an admission of liability by or on behalf of any party,
all such liability being expressly denied. 
In this regard, the Parties understand and agree that the facts with
respect to which this Agreement is given may hereafter prove to be different
from the facts now known or believed by them and they hereby accept and assume
the risk thereof and agree that this Agreement shall remain in all respects
effective and not subject to termination or rescission by reason of any such
differences in facts.  Defendants
expressly deny that the settlement consideration represents or, in any way,
reflects the value of the claims against it, and rather state that they are
settling to avoid the expense and inconvenience of ongoing litigation.


 


11.           This Agreement binds and inures to the benefit of
each Party to this Agreement, including its, or his, respective past, present,
and former directors, officers, shareholders, agents, employees, servants,
parents, subsidiaries, partners, managers, owners, affiliates, investors,
interest owners, other representatives, successors, assigns, and all other
persons and entities acting on behalf of or by, through, or under one or more
of them.


 


12.           This Agreement may be executed in any number of
counterparts, each of which is an original for all purposes, and all of which
together constitute one agreement.  Faxed
copies bearing signatures of the parties shall be regarded as original
counterparts.


 


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13.           The
Parties acknowledge that disbursement of the Settlement Proceeds, as described
above, and the covenants and recitals in this Agreement, provide good and
sufficient consideration for every promise, duty, release, obligation, and
right contained in this Agreement.


 


14.           Neither
this Agreement, nor any of its terms, may be changed, waived, discharged, or
terminated orally, but only by written agreement signed by all of the Parties
hereto.


 


15.           The
Parties agree that this Agreement has been mutually drafted and authored by all
the Parties and that it shall not be construed against any one Party.


 


16.           This
Agreement has been duly authorized and constitutes a legal, valid and binding
obligation of each party hereto, and is enforceable against each of them in
accordance with its terms.  To the extent
that any part of this Agreement is subsequently declared by any court of
competent jurisdiction, or by any other body having authority to do so, to be
void or otherwise unenforceable, the remaining provisions of this Agreement
shall continue in full force and effect.


 


17.           The
Parties shall keep this Agreement, its terms, and the negotiation thereof
confidential except that (a) Carl Dick may disclose the Agreement and its
terms to his lawyers, accountants and/or investment advisors to the extent
necessary for tax or investment purposes; (b) Carl Dick may disclose the
Agreement and its terms to any third party other than a public media so long as
that disclosure includes only the facts, terms, and details of any Defendant’s  public filings with the Securities and
Exchange Commission; and (c) Defendants may disclose the Agreement and its
terms, to the extent Defendants deem such disclosure necessary, (i) to
their insurers, lawyers, accountants and advisors, (ii) to their
shareholders, (iii) in public filings with the Securities and Exchange
Commission, and (iv) in response to inquiries by any court of 


 


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law.  Carl Dick agrees not to
discuss the Lawsuit or this Agreement with, through, or by any public
media.  The names of any insurers funding
any portion of this settlement shall not be publicly disclosed.


 


18.           Carl
Dick shall timely file the appropriate papers to opt out of any settlement
class and shall not participate or file any claim form in any other litigation
concerning Heelys securities, including without limitation Rines v.
Heelys, Inc., et al., Civil Action No. 3:07-cv-01468-K;  in the United States District Court for the
Northern District of Texas, Dallas Division.


 


19.           This
Agreement shall be interpreted, construed and enforced under the laws of the
State of Texas.  Exclusive jurisdiction
and venue of any dispute regarding, concerning, or in any way arising out of,
this Agreement shall be within the courts of the State of Texas for Dallas
County, Texas or courts for the United States of America located in the
Northern District of Texas.


 


20.           This
agreement is effective as of August 21, 2009.


 


[signatures appear on following page]


 


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DATED:  August 21, 2009.


 


	
   

  	
  /s/ CARL DICK

  
	
   

  	
  CARL DICK

  
	
   

  	
   

   

  
	
   

  	
  HEELYS, INC,

  
	
   

  	
   

  /s/ LISA PETERSON

  
	
   

  	
  By: LISA PETERSON

  
	
   

  	
  Title: CHIEF
  FINANCIAL OFFICER

  
	
   

  	
   

  
	
   

  	
  /s/ ROGER ADAMS

  
	
   

  	
  ROGER ADAMS

  
	
   

  	
   

  /s/ PATRICK F. HAMNER

  
	
   

  	
  PATRICK F. HAMNER

  
	
   

  	
   

  /s/ MICHAEL W. HESSONG

  
	
   

  	
  MICHAEL W. HESSONG

  
	
   

  	
   

  /s/ RICHARD E. MIDDLEKAUFF

  
	
   

  	
  RICHARD E. MIDDLEKAUFF

  
	
   

  	
   

  /s/ MICHAEL G. STAFFARONI

  
	
   

  	
  MICHAEL G. STAFFARONI

  
	
   

  	
   

  /s/ SAMUEL B. LIGON

  
	
   

  	
  SAMUEL B. LIGON

  
	
   

  	
   

  /s/ WILLIAM R. THOMAS II,
  EXECUTOR

  
	
   

  	
  THE ESTATE OF WILLIAM R. THOMAS

  
	
   

  	
   

  /s/ JAMES T. KINDLEY

  
	
   

  	
  JAMES T. KINDLEY

  



 


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  /s/ JEFFREY G.
  PETERSON

  
	
   

  	
  JEFFREY G. PETERSON

  
	
   

  	
   

   

  
	
   

  	
  CAPITAL
  SOUTHWEST VENTURE CORPORATION

  
	
   

  	
   

  
	
   

  	
  /s/ GARY L. MARTIN

  
	
   

  	
  By:
  GARY L. MARTIN

  
	
   

  	
  Title:
  PRESIDENT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CAPITAL
  SOUTHEST CORPORATION

  
	
   

  	
   

  
	
   

  	
  /s/ GARY L. MARTIN

  
	
   

  	
  By:
  GARY L. MARTIN

  
	
   

  	
  Title:
  PRESIDENT

  
	
   

  	
   

   

  
	
   

  	
  BEAR STEARNS &
  CO., INC., n/k/a

  
	
   

  	
  J.P. MORGAN SECURITIES
  INC.

  
	
   

  	
   

  /s/ ORMAN ANDERSON

  
	
   

  	
  By: ORMAN ANDERSON

  
	
   

  	
  Title: EXECUTIVE DIRECTOR

  
	
   

  	
   

   

  
	
   

  	
  WACHOVIA CAPITAL MARKETS,
  L.L.C.

  
	
   

  	
  n/k/a WELLS FARGO
  SECURITIES, LLC

  
	
   

  	
   

  
	
   

  	
  /s/ DAVID RICE

  
	
   

  	
  By: DAVID RICE

  
	
   

  	
  Title: VICE PRESIDENT
  ASSISTANT GENERAL COUNSEL

  
	
   

  	
   

   

  
	
   

  	
  J.P. MORGAN SECURITIES
  INC.

  
	
   

  	
   

  /s/ ORMAN ANDERSON

  
	
   

  	
  By: ORMAN ANDERSON

  
	
   

  	
  Title: Executive Director

  



 


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  CIBC WORLD MARKETS CORP.

  
	
   

  	
   

  /s/ IAN D. KATZ

  
	
   

  	
  By:
  IAN D. KATZ

  
	
   

  	
  Title:
  EXECUTIVE DIRECTOR/SENIOR COUNSEL

  



 


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