Exhibit 10.6
Application for confidential treatment for a portion of this document has been
submitted to the Securities and Exchange Commission pursuant to Rule 24b-2 under
the Securities Exchange Act of 1934.
This document omits the information
subject to the confidentiality request.
Omissions are designated by the symbol
"**".
A complete version of this document has been filed separately with the
Securities and Exchange Commission.
TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT (the "Agreement") is dated as of April 30, 2008 (the
"Effective Date"), by and between Heeling Sports Limited, a Texas limited
partnership (the "Company"), Trotwood Import/Export (the "Distributor"),
Trotwood Investments Ltd., a Monaco company and the sole owner of the
Distributor ("Shareholder")
and David Stanley and Margarete Stanley, the sole
owners of the
Shareholder (the "Owners").
The Company, Distributor,
Shareholder
and Owners are sometimes collectively referred to herein as the
"Parties" and individually as a "Party."
WHEREAS, the Company and the Distributor entered into that certain International
Distributor Agreement, dated as of February 21, 2007 (the "Distributor
Agreement"); and
WHEREAS, the Parties desire to terminate the Distributor Agreement and to
evidence their agreement to certain other matters as set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties hereby agree as follows:
1.
Defined Terms.
Capitalized terms used
but not defined herein and defined in the Distributor Agreement shall have the
meanings ascribed to such terms in the Distributor Agreement.
2.
Termination.
(a)
Subject to Section 2(b), the Distributor
Agreement shall terminate in all respects on the Effective Date and thereafter
have no further force and effect.
(b)
Notwithstanding Section 2(a):
(i)
the Parties agree that the covenants and
obligations set forth in Sections 3(f), 3(m), 3(n), 3(p), 3(s), 3(t), 3(u), 5,
6, 7, 8, 9, 10, 11, 12, 13 and 14 of the Distributor Agreement shall survive the
termination of the Distributor Agreement; and
(ii)
Distributor shall provide the Company with
Distributor's current and prospective customer lists that would be useful to the
Company in developing the Heelys brand and distribution business in the
Territory.
It is expressly understood that the Company has declined to purchase
the Distributor as part of this Agreement
and that Company consequently relinquishes all immaterial assets and goodwill
belonging to Distributor.
(c)
On the Effective Date, the Company shall
pay Distributor (or at Distributors election the Shareholder or the Owner) ** by
bank transfer to the account of designated by the Distributor.
3.
Product/Inventory Re-Purchase and
Payment.
Upon execution hereof, the Company shall purchase from Distributor,
and Distributor shall sell, assign, transfer, convey, and make available
to the
Company, free and clear of any and all liens, claims and encumbrances, all of
Distributor's unsold Heelys Products, including those which may be in transit at
the "Effective Date" at Distributor's "Landed Cost" (which means the
Distributor's purchase price plus Distributor's costs of transport and handling
from the Company's factory to Distributor's normal warehouse including all taxes