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Exhibit 10.13  

 
 

AMENDED AND RESTATED
  EMPLOYMENT AGREEMENT, INCLUDING AGREEMENT TO
  ARBITRATE, NONCOMPETITION AGREEMENT AND
  NONDISCLOSURE AGREEMENT    
    

        This Agreement is made and entered into on November 16, 2006 (effective as of May 19, 2006), by and between Roger R. Adams ("Employee") and Heeling
Sports Limited, a Texas limited partnership (the "Company"). 

 
 

R E C I T A L S    
    

        A.    Employee
is currently serving as Director of Research and Development of the Company pursuant to an Employment Agreement dated as of May 26, 2000 (the "Prior
Agreement"). 

        B.    Employee
and the Company want to amend and restate the Prior Agreement in its entirety. 

        C.    In
the course of Employee's employment with the Company, Employee has and will continue to gain access to Confidential Information, as hereinafter defined, relating to
the business of the Company. 

        D.    Company
and Employee desire a speedy, economical and impartial dispute resolution procedure. 

        E.    Employee's
performance of services to the Company may result in Discoveries, as hereinafter defined. 

        F.     The
parties hereto desire to enter into this Agreement in order to amend and restate the Prior Agreement and to set forth the respective rights, limitations and
obligations of both the Company and Employee with respect to Employee's employment with the Company, the Confidential Information, the Discoveries, arbitration and the other matters set forth herein. 

        NOW,
THEREFORE, in consideration of the employment of Employee by the Company, the compensation paid to Employee, and the Company continuing to provide Confidential Information to
Employee, as well as the other mutual promises hereinafter contained, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 

        1.    EMPLOYMENT.    The Company agrees to continue to employ Employee
and Employee hereby accepts such continued employment from the Company upon the terms and conditions set forth in this Agreement for the period which begins on the date hereof and continuing through
December 31, 2007 ("Employment Period") which shall be automatically renewable in one year increments at the end of such period and each anniversary date thereafter, unless terminated by either
party in writing at least 90 days prior to the end of such term or terminated earlier in accordance with Section 5 hereof. 

        2.    SERVICES.    During the Employment Period, Employee will render
the services to the Company as Director of Research and Development and/or such other position as agreed to by the Board of Directors and Employee. Employee covenants that he will devote his best
efforts, knowledge, skill and entire productive time and attention (except for vacation or other leave periods) to the business of the Company and will faithfully and diligently carry out such duties
and have such responsibilities as are customary for persons employed in a substantially similar capacity for similar companies. Employee shall also use his best efforts to initiate, preserve and
maintain the favorable relationships of the Company with its customers, suppliers and stockholders. During the Employment Period, Employee shall not render services of a business, professional or 

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commercial
nature to any other entity or person without the written consent of the board of directors (the "Board of Directors") of Heelys, Inc., successor by merger to Heeling, Inc. and
the owner of all of the equity interests of the Company (the "Parent"), which consent may be withheld in the Board of Director's sole discretion. Employee will report to the Board of Directors and
shall faithfully and diligently comply with all reasonable and lawful directives. 

        3.    ADHERENCE TO COMPANY RULES.    Subject to the remainder of this
Section 3, Employee, at all times during the performance of this Agreement, shall adhere to and obey all of the Company's rules,
regulations and policies which are now in effect, or as subsequently adopted or modified by the Company which govern the operation of the Company's business and the conduct of employees of the
Company. Employee has substantial responsibility for the research and development function of the Company, and the proper discharge of such responsibilities requires him to spend considerable time in
the field, often outside of normal office hours. The Company is willing to allow Employee to work off-site, including in his personal workshop. Therefore, Employee's compliance with the
Company's rules that would otherwise restrict his place of work or the hours during which such work is to be performed are waived; provided that nothing herein shall be construed to waive the
obligation of Employee to work full-time, or to work the aggregate number of hours otherwise required for his position by the Company's rules, regulations and policies and this Agreement. 

        4.    COMPENSATION.    

        a.    Salary and Bonus.    During the Employment Period, the Company
will pay Employee the compensation set forth in Exhibit 1 hereto. Employee's compensation shall be reviewed annually by the compensation
committee of the Board of Directors, but may not be reduced below the amount set forth in Exhibit 1 hereto. Employee's compensation will be
payable in accordance with the Company's customary payroll practices. 

        b.    Benefits.    During the Employment Period, Employee shall be
entitled to the Benefits as set forth on Exhibit 1 hereto. Notwithstanding anything in this Section 4(b) to the contrary, all Benefit
obligations are subject to guidance issued by the U.S. Department of Treasury under Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"). To the extent required, the
Company may modify the Benefits provided under this Section 4(b) to comply with such guidance; provided, however, that the aggregate value of Benefits provided to Employee after such
modification shall not be less than the aggregate value of the Benefits provided to him prior to the modification. 

        5.    TERMINATION.    Employee's employment with the Company will
continue throughout the Employment Period unless earlier terminated pursuant to any of the following provisions: 

        a.    Termination by the Company for Cause.    The Company shall have
the right to immediately terminate Employee's employment at any time for any of the following reasons (each of which is referred to herein as "Cause") by giving Employee written notice of termination
(the effective date of which may be the date of such notice): 

        (i)    willful
breach by Employee of any provision of this Agreement and failure to cure such breach (to the extent practicable) within 15 days after the date he is
given written notice thereof by the Company; 

        (ii)   any
willful act by Employee of fraud or dishonesty, including but not limited to stealing or falsification of Company records, with respect to any aspect of the
Company's business; 

        (iii)  knowing
violation of state, federal or international laws applicable to the Company; 

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        (iv)  drug
or alcohol use of Employee in violation of Company policy or that materially impedes Employee's job performance or brings Employee or Employer into disrepute in
the community; 

        (v)   substantial
failure by Employee to perform any specific directive of the Board of Directors after 30 days notice of such failure and explanation of such failure
of performance; 

        (vi)  willful
(x) misappropriation of funds or of any corporate opportunity or (y) acts disloyal to the Company; 

        (vii) conviction
of Employee of a felony, or of a crime that the Company, in its sole discretion, determines involves a subject matter which may reflect negatively on the
Company's reputation or business (or a plea of nolo contendere thereto); 

        (viii) acts
by Employee attempting to secure or securing any personal profit not fully disclosed to and approved by the Board of Directors of the Company in connection with
any transaction entered into on behalf of the Company; 

        (ix)  gross,
willful or wanton negligence, or conduct which constitutes a breach of any fiduciary duty owed to the Company by Employee; 

        (x)   conduct
on the part of Employee, even if not in connection with the performance of his duties contemplated under this Agreement, that could result in serious prejudice
to the interests of the Company, and Employee fails to cease such conduct immediately within 30 days of receipt of notice to cease such conduct; 

        (xi)  voluntary
termination initiated by Employee; or 

        (xii) acceptance
of employment with any other employer. 

If
the Company terminates Employee's employment for any of the reasons set forth above, the Company shall have no further obligations hereunder from and after the effective date of termination except
for the payment of Employee's salary and accrued vacation time earned through the date of termination promptly after such termination and the Company shall have all other rights and remedies available
under this or any other agreement and at law or in equity. 

        b.    Termination Upon Death or Disability.    If Employee shall die
or become disabled during the Employment Period, Employee's employment hereunder shall terminate (such termination being treated for purposes of this Agreement as if Employee had not been terminated
for "Cause" pursuant to subsection (a) above) and the Company shall pay to Employee or his estate, as applicable, (i) any compensation (including accrued vacation time and a
pro-rated bonus under the Company's Bonus Plan through the date of death or disability) due that would otherwise have been payable through the date of death or disability promptly after
the death or disability (but the pro-rated bonus will be paid when otherwise payable had he continued as an employee of the Company) and (ii) an amount equal to one times the
Employee's annual base salary which amount shall be payable in cash in 12 equal monthly payments commencing with the month following the month of his death or disability and shall be paid when
otherwise payable had he continued as an Employee. For purposes of this Agreement, Employee shall become "disabled" if (A) he is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or
(B) he is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than
12 months, receiving income 

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replacement
benefits for a period of not less than three months under an accident or health plan covering employees of the Company. 

        c.    Termination Without Cause.    The Company shall have the right
to terminate Employee's employment Without Cause at any time. Upon termination, the Company shall pay to Employee (i) any compensation (including accrued vacation time and a
pro-rated bonus under the Company's Bonus Plan through the date of termination Without Cause) due that would otherwise have been payable through the date of termination Without Cause
promptly after the date of termination Without Cause (but the pro-rated bonus will be paid when otherwise payable had he continued as an employee of the Company) and (ii) one year's
base salary plus, if Employee has completed more than five years of service, including service as a member of the Board of Directors, an additional amount equal to his monthly base salary for each
year of completed service in excess of five years which shall be paid in 12 equal monthly payments commencing with the month following the month in which his employment is terminated Without Cause and
shall be paid when otherwise payable had he continued as an Employee and the Company shall have no further obligations to Employee under this Agreement. If Employee is a Specified Employee on the date
his employment is terminated Without Cause, the monthly payments under Section 5(c)(ii) shall not commence until the first month next following the six-month anniversary of
the date his employment so terminated. For purposes of this Agreement, an Employee shall be considered a "Specified Employee" as provided in Code §409A and the Treasury regulations
promulgated thereunder. If Employee dies after his employment is terminated Without Cause and before his receipt of all salary continuation payments due Employee under this Section 5(c), the
balance shall be paid to his estate in the same manner and at the same time as specified in this Section 5(c). During the required period of continuation coverage within the meaning of Code
§4980B(f)(2)(B)(i)(I), Employee shall be reimbursed by the Company within five days of each payment by Employee of the monthly premium payable to continue coverage of Employee and his
dependents under the Company's group health plan or plans following the date his employment is terminated Without Cause in an amount equal to the amount of that monthly premium payable by Employee for
such continuation coverage. Termination "Without Cause" means the termination of Employee's employment either (i) by the Company for a reason other than for Cause or (ii) by the Company
or Employee resulting from a "Change of Control." For purposes of this Agreement, a "Change of Control" means the occurrence of any of the following events: (A) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other than one or more Permitted Holders, is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Parent representing (1) 50% or more of the combined voting power of the Parent's then
outstanding securities prior to a "Qualified Public Offering" (which, for purposes of this Agreement, means the first firm commitment underwritten public offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended, covering the offering and sale of the Parent's common stock for the account of the Parent in which the aggregate net proceeds to the Parent
equals or exceeds $20 million) or (2) 25% or more of the combined voting power of the Parent's then outstanding securities after a Qualified Public Offering; (B) any change or
changes in the composition of the Parent's Board of Directors within a two-year period as a result of which less than a majority of the directors are (1) persons who were directors
at the beginning of that two-year period or (2) persons who were elected or nominated for election as directors with the affirmative vote or consent of at least a majority of the
incumbent directors at the time of that election or nomination, but not including any person whose election or nomination was or is in connection with an actual or threatened proxy contest regarding
the election of the Parent's directors; (C) the Parent is merged or consolidated with another 

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corporation
or other entity (other than one or more Permitted Holders or any entity controlled by one or more Permitted Holders) and, as a result of the merger or consolidation, less than 75% of the
outstanding voting securities of the surviving or resulting corporation or other entity, as the case may be, are "beneficially owned" (within the meaning of Rule 13d-3 under the
Exchange
Act), directly or indirectly, immediately after the merger or consolidation by persons who or which beneficially owned the outstanding voting securities of the Parent immediately before the merger or
consolidation; or (D) the Parent transfers, sells or otherwise disposes of all or substantially all of its assets to another corporation or other entity which is not an affiliate of the Parent.
"Permitted Holders" means Capital Southwest Venture Corporation and its affiliates and Roger R. Adams and his affiliates. For purposes of this Agreement, any termination of Employee's employment by
the Company which occurs within 12 months following such Change of Control shall be conclusively presumed to have resulted from such Change of Control unless the Company demonstrates to an
arbitrator, or Employee agrees, that the termination was with Cause. Should the Company fail to comply in a material respect with this Agreement, and such failure is not cured (if practicable) within
30 days after the Company is given written notice of such noncompliance, Employee may resign and receive the benefits of this Section 5(c). If, whether before or after a Change of
Control, without Employee's consent the Company reduces the Employee's base salary or "Target" amount for purposes of the Company's Bonus Plan, materially changes his title, reduces the scope of the
assigned work responsibilities, or relocates its offices in excess of 50 miles from the address set forth herein, Employee shall be deemed to have been constructively terminated Without Cause. 

        d.    Limitation on Payments.    If any severance payment or other
benefits received or to be received by Employee under Section 5(c) of this Agreement or any other of the Total Severance Benefits constitute "parachute payments" within the meaning of Code
§280G and would be subject to the excise tax imposed by Code §4999 (the "Excise Tax"), then Employee's payments and benefits under Section 5(c) of this Agreement shall
be either 

        (i)    paid
in full, or 

        (ii)   paid
as to such lesser extent which would result in no portion of such payments or benefits being subject to the Excise Tax, 

whichever
of the foregoing amounts, taking into account the applicable federal, state and local income and payroll taxes and the Excise Tax, results in the receipt by Employee on an
after-tax basis, of the greatest amount of Total Severance Benefits, notwithstanding that all or some portion of such benefits may be subject to the Excise Tax under Section 4999 of
the Code. For purposes of this Agreement, "Total Severance Benefits" means the severance payments and benefits under Section 5(c) of this Agreement and all other payments and benefits received
or to be received by Employee under this Agreement and all payments and benefits (if any) to which Employee may be entitled under any plan, agreement or otherwise upon or as the result of a Change of
Control or the termination of his employment with the Company, or both. This Section 5(d) is not intended to prevent and shall not result in the prevention of the acceleration and full vesting
of any outstanding stock option held by Employee. Any determination required under this Section 5(d) shall be made in writing by the Company's independent public accountants (the
"Accountants"), whose determination shall be conclusive and binding upon Employee and the Company for all purposes. For purposes of making the calculations required by this Section 5(d), the
Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Code
§§280G and 4999. The Company and Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a
determination under this 

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Section 5(d).
The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 5(d). 

        6.    NONDISCLOSURE.    Employee acknowledges that during the course
of his employment by the Company, the Company and its affiliates have provided and will provide, and the Employee has acquired and will acquire, technical knowledge with respect to the Company's and
its affiliates' business operations, including, by way of illustration, the Company's and its affiliates' existing and contemplated product line, trade secrets, compilations, business and financial
methods or practices, plans, pricing, marketing, merchandising and selling techniques and information, customer lists, supplier lists and confidential information relating to the Company's and its
affiliates' policies and/or business strategy (all of such information herein referenced to as the "Confidential Information"). The protection of the Confidential Information against unauthorized
disclosure or use is of critical importance to the Company. Employee agrees that Employee will not, during the Employment Period, divulge to any person, directly or indirectly, except to the Company
or its officers and agents or as reasonably required in connection with Employee's duties on behalf of the Company, or use, except on behalf of the Company, any Confidential Information acquired by
the Employee during the Employment Period. Employee agrees that Employee will not, for a period of three years after the Employment Period has ended, use or divulge to any person directly or
indirectly any Confidential Information, or use any Confidential Information in subsequent employment. 

        7.    RETURN OF DOCUMENTS.    Employee's relationship with the Company
is terminated (for whatever reason), Employee shall not take with Employee, but will leave with the Company, all work product, records, files, memoranda, reports, price lists, customer lists, supplier
lists, documents and other information, in whatever form (including on computer disc), and any copies thereof, relating to the Confidential Information or if such items are not on the premises of the
Company, Employee agrees to return such items immediately upon Employee's termination). Employee acknowledges that all such items are and remain the property of the Company. 

        8.    DISCOVERIES.    Employee will promptly and freely disclose to
the Company, in writing, any and all ideas, conceptions, inventions, improvements and discoveries (collectively, "Discoveries"), whether patentable or not, that are conceived or made by Employee,
solely or jointly with another, during the Employment Period, and that relate to the business or activities of, or the products sold by, the Company. Employee hereby assigns to the Company all of
Employee's interest in any such Discoveries. Upon the request of the Company, whether during or after the Employment Period, Employee will execute any and all applications, assignments and other
instruments that the Company shall, in its sole discretion, deem necessary to apply for and obtain protection, including, without limitation, patent protection, for the Discoveries in all countries of
the world. The obligations of the parties under this Section 8 shall survive the termination of this Agreement. 

        9.    COPYRIGHT.    If, during the Employment Period, Employee creates
any original work of authorship fixed in any tangible medium of expression, which is the subject matter of copyright, including, without limitation, video tapes, written presentations, computer
programs, drawings, models, manuals, brochures and the like, that relate to the Company's business, products sold or services, whether such work is created solely by Employee or jointly with others,
the Company shall be deemed to be the author of such work if the work is prepared by Employee within the scope of Employee's employment; or if the work is not prepared by Employee within the scope of
Employee's employment, but is specially ordered by the Company, including, without limitation, as a contribution to a collective work, or as a part of an audio-visual work, as a translation, as a
supplementary work, as a compilation, or as an instructional text, or is created using any resources or property of the Company, the work shall be considered a work made for hire, and the Company
shall be the author of the work. If such work is neither prepared by Employee within the scope of 

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employment,
nor as a work made for hire, Employee hereby assigns to the Company all of Employee's world-wide right, title and interest in and to such work and all rights of copyright
therein. Employee agrees to, upon the request of the Company, whether during or after the period of Employee's employment by the Company, assist the Company in the protection of the Company's
world-wide right, title and interest in and to the work and all rights of copyright therein, including, without limitation, the execution of all formal assignment documents requested by
the Company, and the execution of all lawful oaths and applications for registration of copyright in the United States and foreign countries. The obligations of the parties under this Section 9
shall survive the termination of this Agreement. 

        10.    NO EXCLUSIONS.    Employee hereby represents that Employee has
not heretofore made any Discoveries or prepared any work which is the subject of copyrights that Employee wishes to exclude from the provisions of Sections 8 and 9 above. 

        11.    NONCOMPETITION.    The business of the Company is relatively
unique and Employee acknowledges that he is being provided and will continue to be provided by the Company with significant information, trade secrets and opportunities, which are confidential and
proprietary in nature. Employee further acknowledges that such information and opportunities would have significant value to any current or
prospective competitor of the Company. In recognition of the Company's agreement to provide to Employee such information and opportunities, of the need to fully protect such information and
opportunities from unauthorized disclosure or use, and in consideration of the numerous mutual promises contained in this Agreement between the Company and the Employee, including, without limitation,
those involving Confidential Information, compensation, termination and arbitration, and in order to protect the Company's Confidential Information and to reduce the likelihood of irreparable damage
which would occur in the event such information is provided to or used by a competitor of the Company, during the Employment Period and for an additional period of one year immediately following the
Employment Period (the "Noncompetition Term"), Employee will not, directly or indirectly, either through any form of ownership or as a director, officer, principal, agent, employee, employer, adviser,
consultant, shareholder, partner, or in any other individual or representative capacity whatsoever, either for his own benefit or for the benefit of any other person, firm, corporation, governmental
or private entity, or any other entity of whatever kind, without the prior written consent of the Company (which consent may be withheld in its sole discretion), compete with the Company or its
affiliates, in North and South America, Mexico, Western and Eastern Europe, the Middle East, and the Far East including Japan, Malaysia, South Korea, China, Taiwan or Asia ("Noncompetition Territory")
in any business activity of the Company existing or contemplated as of, or conducted or contemplated by the Company prior to, the date of this Agreement, and/or during the Employment Period. Any such
acts during the Noncompetition Term in the Non-competition Territory shall be considered breaches and violations of this Agreement. Additionally, during the Noncompetition Term, Employee
shall not directly or indirectly request or advise any customer or supplier of the Company to withdraw, curtail or cancel its business activities with the Company. 

        If,
during any period within the Noncompetition Term, Employee is not in compliance with the terms of this Section 11, the Company shall be entitled to, among other remedies, seek
compliance by Employee with the terms of this Section 11 for an additional period equal to the period of such noncompliance. For purposes of this Agreement, the term "Noncompetition Term" shall
also include this additional period. Employee hereby acknowledges that the geographic boundaries, scope of prohibited activities and the time duration of the provisions of this Section 11 are
reasonable and are no broader than are necessary to protect the legitimate business interests of the Company, given the unique and worldwide nature of the Internet and electronic commerce. 

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        This
Section 11 shall survive the termination of Employee's employment and can only be revoked or modified by a writing signed by the parties which specifically states an intent
to revoke or modify this provision. 

        12.    NO INTERFERENCE WITH EMPLOYEES.    During the Noncompetition
Term, without the consent of the Board of Directors, neither Employee nor any individual, partners, limited partnership, corporation or other entity or business with which Employee is in any way
affiliated, including, without limitation, any partner, limited partner, director, officer, shareholder or employee of any such entity or business, will (i) request, induce or attempt to
influence, directly or indirectly, any employee of the Company to terminate his employment with the Company or (ii) employ any person who as of the date hereof was, or after such date is or
was, an employee of the Company. 

        13.    REFORMATION OF SECTIONS 11 AND 12.    The Company and Employee
agree and stipulate that the agreements and covenants not to compete contained in Sections 11 and 12 hereof are fair and reasonable in light of all of the facts and circumstances of the relationship
between Employee and the Company; however, Employee and the Company are aware that in certain circumstances courts have refused to enforce certain agreements not to compete. Therefore, in furtherance
of, and not in derogation of the provisions of Sections 11 and 12, that in the event a court should decline to enforce the provisions of Sections 11 and/or 12, Sections 11 and/or 12, as applicable,
shall be deemed to be modified or reformed to restrict Employee's competition with the Company or its affiliates to the maximum extent, as to time, geography and business scope, which the court shall
find enforceable; provided, however, in no event shall the provisions of Sections 11 and/or 12, as applicable, be deemed to be more restrictive to Employee than those contained herein. 

        14.    INJUNCTIVE RELIEF.    Employee acknowledges that breach of any
of the agreements contained herein, including, without limitation, any of the noncompetition and confidentiality covenants specified in Sections 6 through 12, will give rise to irreparable injury to
the Company, inadequately compensable in damages. Accordingly, notwithstanding Section 15 below, the Company shall be entitled, without the posting of any bond, to injunctive relief to prevent
or cure breaches or threatened breaches of the provisions of this Agreement and to enforce specific performance of the terms and provisions hereof in any court of competent jurisdiction, in addition
to any other legal or equitable remedies which may be available. Employee further acknowledges and agrees that in the event of the termination of this Agreement, his experience and capabilities are
such that he can obtain employment in business activities which are of a different or noncompeting nature with his activities as an employee of the Company; and that the enforcement of a remedy
hereunder by way of injunction shall not prevent Employee from earning a reasonable livelihood. Employee further acknowledges and agrees that the covenants contained herein are necessary for the
protection of the Company's legitimate business interests and are reasonable in scope and content. 

        15.    MUTUAL AGREEMENT TO ARBITRATE.    COMPANY AND EMPLOYEE
RECOGNIZE THAT DIFFERENCES MAY ARISE BETWEEN THEM. THROUGH THIS SECTION 15, BOTH PARTIES EXPECT TO GAIN THE BENEFITS OF A SPEEDY, ECONOMICAL, IMPARTIAL DISPUTE-RESOLUTION PROCEDURE. THEREFORE, THE
PARTIES AGREE AS FOLLOWS: 

        a.     THIS SECTION 15 SHALL APPLY TO ALL DISPUTES OR CONTROVERSIES, WHETHER OR NOT ARISING OUT OF EMPLOYEE'S EMPLOYMENT (OR
TERMINATION OF THAT EMPLOYMENT), THAT COMPANY MAY HAVE AGAINST EMPLOYEE, OR THAT EMPLOYEE MAY HAVE AGAINST COMPANY OR AGAINST (AS APPLICABLE) ITS PAST OR PRESENT OFFICERS, DIRECTORS, SHAREHOLDERS,
PARTNERS, EMPLOYEES, ADVISORS OR AGENTS 

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(COLLECTIVELY,
"CLAIMS"), EXCEPT FOR INJUNCTIVE RELIEF TO BE PURSUED BY COMPANY PURSUANT TO SECTION (b) BELOW. THE CLAIMS INCLUDE, BUT ARE NOT LIMITED TO, CONTROVERSIES RELATING TO:
COMPENSATION OR BENEFITS, BREACH OF ANY CONTRACT, TORTS, DISCRIMINATION UNDER STATE, FEDERAL OR LOCAL LAW, AND VIOLATION OF ANY FEDERAL, STATE, OR OTHER GOVERNMENTAL LAW, STATUTE, REGULATION, OR
ORDINANCE. HOWEVER, THIS SECTION 15 SHALL NOT APPLY TO ANY CLAIM: (I) FOR WORKERS' COMPENSATION OR UNEMPLOYMENT BENEFITS; OR (II) BY COMPANY FOR INJUNCTIVE AND/OR OTHER EQUITABLE RELIEF
FOR UNFAIR COMPETITION AND/OR THE USE AND/OR UNAUTHORIZED DISCLOSURE OF TRADE SECRETS OR CONFIDENTIAL INFORMATION, INCLUDING BUT NOT LIMITED TO, MATTERS DESCRIBED IN SECTIONS 6 AND 11 ABOVE.
WITH RESPECT TO MATTERS REFERRED TO IN THE FOREGOING SUB-PARAGRAPH (II), COMPANY MAY SEEK AND OBTAIN INJUNCTIVE RELIEF IN COURT, AND THEN PROCEED WITH ARBITRATION UNDER THIS SECTION 15. 

        b.     EXCEPT AS SET FORTH IN THIS AGREEMENT, THE SOLE AND EXCLUSIVE METHOD TO RESOLVE ANY CLAIM IS ARBITRATION AS PROVIDED IN
THIS SECTION 15 AND THE PARTIES EACH WAIVE THEIR RIGHT TO COMMENCE AN ACTION IN ANY COURT TO RESOLVE A CLAIM. EXCEPT WITH RESPECT TO INJUNCTIVE RELIEF SPECIFICALLY PROVIDED FOR IN THIS AGREEMENT,
NEITHER PARTY SHALL INITIATE OR PROSECUTE ANY LAWSUIT IN ANY WAY RELATED TO ANY CLAIM COVERED BY THIS SECTION 15. 

        c.     A CLAIM MUST BE PROCESSED IN THE MANNER SET FORTH BELOW. 

        (i)    WRITTEN
NOTICE OF DESIRE TO ARBITRATE SHALL DESCRIBE THE FACTUAL BASIS OF ALL CLAIMS ASSERTED, AND SHALL BE SENT TO THE OTHER PARTY BY CERTIFIED OR REGISTERED MAIL,
RETURN RECEIPT REQUESTED. WRITTEN NOTICE TO EMPLOYEE WILL BE MAILED TO EMPLOYEE'S ADDRESS AS IT APPEARS IN COMPANY'S RECORDS. WRITTEN NOTICE TO COMPANY, OR ITS OFFICERS, DIRECTORS, EMPLOYEES OR
AGENTS, SHALL BE SENT TO THE COMPANY AT COMPANY'S PRINCIPAL EXECUTIVE OFFICE. IF WRITTEN NOTICE OF INTENTION TO ARBITRATE IS NOT GIVEN WITHIN THE APPLICABLE TIME PERIOD, THE PARTY WHO FAILED TO GIVE
NOTICE WILL BE DEEMED TO HAVE WAIVED THE RIGHT TO FURTHER CONTEST THE MATTER, AND WILL BE DEEMED TO HAVE ACCEPTED THE OTHER PARTY'S LAST STATED POSITION ON THE CLAIM. 

        (ii)   THE
ARBITRATION SHALL BE CONDUCTED IN ACCORDANCE WITH THE THEN-CURRENT MODEL EMPLOYMENT ARBITRATION PROCEDURES OF THE AMERICAN ARBITRATION ASSOCIATION
("AAA") BEFORE A SINGLE ARBITRATOR. THE ARBITRATION SHALL TAKE PLACE IN OR NEAR THE CITY IN WHICH EMPLOYEE IS OR WAS LAST WORKING WITH COMPANY. 

        (A)  THE
ARBITRATOR SHALL BE SELECTED IN THE FOLLOWING MANNER. THE AAA SHALL GIVE EACH PARTY A LIST OF AT LEAST SIX ARBITRATORS DRAWN FROM ITS PANEL OF LABOR AND EMPLOYMENT
ARBITRATORS. EACH SIDE MAY STRIKE ALL NAMES ON THE LIST IT DEEMS UNACCEPTABLE. IF ONLY ONE COMMON NAME REMAINS ON THE LISTS OF ALL PARTIES, THAT INDIVIDUAL SHALL BE THE ARBITRATOR. IF MORE THAN ONE
COMMON NAME REMAINS ON THE LISTS OF ALL PARTIES, THE PARTIES SHALL STRIKE NAMES ALTERNATELY UNTIL ONLY ONE REMAINS. IF NO COMMON NAME 

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REMAINS
ON THE LISTS OF ALL PARTIES, THE AAA SHALL FURNISH ONE ADDITIONAL LIST, AND THE ABOVE PROCEDURE WILL BE UTILIZED. IF NO ARBITRATOR IS DESIGNATED FROM THE SECOND LIST, THE PROCEDURE OF THE AAA
RULES WILL BE UTILIZED TO SELECT THE ARBITRATOR. IN NO EVENT WILL THE ARBITRATOR BE THEN AFFILIATED IN ANY MANNER WITH A COMPETITOR OF THE COMPANY. 

        (B)  ANY
PARTY MAY BE REPRESENTED BY AN ATTORNEY OR OTHER REPRESENTATIVE SELECTED BY THE PARTY. 

        (C)  EACH
PARTY SHALL HAVE THE RIGHT TO TAKE DEPOSITIONS OF INDIVIDUALS AND ANY EXPERT WITNESSES DESIGNATED BY ANOTHER PARTY. EACH PARTY ALSO SHALL HAVE THE RIGHT TO MAKE
REQUESTS FOR PRODUCTION OF DOCUMENTS TO ANY PARTY. ADDITIONAL DISCOVERY MAY BE HAD ONLY WHERE THE ARBITRATOR SO ORDERS, UPON A SHOWING OF SUBSTANTIAL NEED. ALL ISSUES RELATED TO DISCOVERY WILL BE
RESOLVED BY THE ARBITRATOR. 

        (D)  AT
LEAST 14 DAYS BEFORE THE ARBITRATION, THE PARTIES MUST EXCHANGE LISTS OF WITNESSES, INCLUDING ANY EXPERT, AND COPIES OF ALL EXHIBITS INTENDED TO BE USED AT THE
ARBITRATION. 

        (iii)  THE
ARBITRATOR WILL HAVE NO AUTHORITY TO: ADOPT NEW COMPANY POLICIES OR PROCEDURES, MODIFY THIS SECTION 15 OR EXISTING COMPANY POLICIES, PROCEDURES, WAGES OR BENEFITS,
OR IN THE ABSENCE OF A WRITTEN WAIVER PURSUANT TO PARAGRAPH (ix) BELOW, HEAR OR DECIDE ANY MATTER THAT WAS NOT
PROCESSED IN ACCORDANCE WITH THIS SECTION 15. THE ARBITRATOR SHALL HAVE EXCLUSIVE AUTHORITY TO RESOLVE ANY CLAIM, INCLUDING, BUT NOT LIMITED TO, A DISPUTE RELATING TO THE INTERPRETATION,
APPLICABILITY, ENFORCEABILITY OR FORMATION OF THIS SECTION 15, OR ANY CONTENTION THAT ALL OR ANY PART OF THIS SECTION 15 IS VOID OR VOIDABLE. THE ARBITRATOR WILL HAVE THE AUTHORITY TO AWARD ANY FORM
OF REMEDY OR DAMAGES THAT WOULD BE AVAILABLE IN A COURT. 

        (iv)  COMPANY
SHALL PAY REASONABLE AND NECESSARY FEES OF THE AAA AND THE ARBITRATOR. THE PARTIES WILL PAY THEIR OWN ATTORNEYS' FEES AND EXPENSES ASSOCIATED WITH THE
ARBITRATION. 

        (v)   EITHER
PARTY, IN ITS SOLE DISCRETION, MAY, IN WRITING, WAIVE, IN WHOLE OR IN PART, THE OTHER'S FAILURE TO FOLLOW ANY TIME LIMIT OR OTHER REQUIREMENT SET FORTH IN THIS
SECTION 15. 

        (vi)  TO
THE EXTENT PERMITTED BY LAW, EMPLOYEE AGREES NOT TO INITIATE OR PROSECUTE AGAINST COMPANY ANY ADMINISTRATIVE ACTION (OTHER THAN AN ADMINISTRATIVE CHARGE OF
DISCRIMINATION) IN ANY WAY RELATED TO ANY CLAIM COVERED BY THIS SECTION 15. 

        (vii) THE
ARBITRATION WILL BE CONDUCTED IN PRIVATE, AND WILL NOT BE OPEN TO THE PUBLIC OR THE MEDIA. THE TESTIMONY AND OTHER EVIDENCE PRESENTED, AND THE RESULTS OF THE
ARBITRATION, 

10

 

UNLESS
OTHERWISE AGREED TO BY BOTH PARTIES, ARE CONFIDENTIAL AND MAY NOT BE MADE PUBLIC OR REPORTED BY ANY NEWS AGENCY OR LEGAL PUBLISHER OR SERVICE. 

        (viii) THE
ARBITRATOR SHALL RENDER A WRITTEN DECISION AND AWARD (THE "AWARD"), WHICH SHALL SET FORTH THE FACTS AND REASONS THAT SUPPORT THE AWARD. THE AWARD SHALL BE FINAL
AND BINDING ON COMPANY AND EMPLOYEE AND SHALL BE ENTERED IN A COURT OF COMPETENT JURISDICTION. 

        16.    SEVERABILITY AND REFORMATION.    Subject to the reformation
provision in Section 13, if any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law, and if the rights or obligations of Employee or the
Company under this Agreement would not be materially and adversely affected thereby, such provision shall be fully severable, and this Agreement
shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part thereof, the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom, and in lieu of such illegal, invalid or unenforceable provision, there shall be added
automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible, and the Company and
Employee hereby request the court or any arbitrator to whom disputes relating to this Agreement are submitted to reform the otherwise unenforceable covenant in accordance with this Section 16. 

        17.    HEADINGS, GENDER, ETC.    The headings used in this Agreement
have been inserted for convenience and do not constitute matter to be construed or interpreted in connection with this Agreement. Unless the context of this Agreement otherwise requires,
(i) words of any gender shall be deemed to include each other gender; (ii) words using the singular or plural number shall also include the plural or singular number, respectively; and
(iii) the terms "hereof," "herein," "hereby," "hereto," and derivative or similar words shall refer to this entire Agreement. 

        18.    GOVERNING LAW.    THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING EFFECT TO ANY PRINCIPLE OF CONFLICT OF LAWS THAT WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER JURISDICTION. 

        19.    SURVIVAL.    Employee's termination from employment, for
whatever reason, shall not reduce or terminate Employee's or the Company's covenants and agreements set forth herein. 

        20.    NOTICES.    Any notice necessary under this Agreement shall be
in writing and shall be considered delivered three days after mailing if sent certified mail, return receipt requested, or when received, if sent by telecopy, prepaid courier, express mail or personal
delivery to the following addresses: 

	If to the Company:	 	Heelys, Inc.

3200 Belmeade Dr., Suite 100

Carrollton, Texas 75006

Telecopy: (214) 390-1661

Attention: Chairman of the Board
	

If to the Employee:	
 	

Roger R. Adams

3200 Belmeade Dr.,- Suite 100

Carrollton, Texas 75006

Telecopy: 214-390-1661

11

 

        21.    ATTORNEYS' FEES.    The prevailing party in any legal
proceedings brought by or against the other party to enforce any provision of this Agreement shall be entitled to recover against the non-prevailing party the reasonable attorneys' fees,
court costs, arbitration fees and other expenses incurred by the prevailing party. This Section shall not apply to arbitration, which is governed by Section 15(c)(viii). 

        22.    ENTIRE AGREEMENT.    This Agreement, including the Recitals and
introductions and all Exhibits referred to, embodies the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein and supersedes all prior conflicting
or inconsistent agreements, consents and understandings relating to such subject matter. Employee acknowledges and agrees that there is no oral or other agreement between the Company and Employee
relating to the employment relationship which has not been incorporated in this Agreement. 

        23.    NO WAIVER.    The forebearance or failure of one of the parties
hereto to insist upon strict compliance by the other with any provisions of this Agreement, whether continuing or not, shall not be construed as a waiver of any rights or privileges hereunder. No
waiver of any right or privilege of a party arising from any default or failure hereunder of performance by the other shall affect such party's rights or privileges in the event of a further default
or failure of performance. 

        24.    ASSIGNMENT.    This Agreement may not be assigned by the
Company without the Employee's approval, but no approval shall be required for the Company to assign this Agreement to any affiliate or successor in interest to the Company's business or in connection
with a Change of Control. This
Agreement may not be assigned by Employee. Any assignment made by either party in contravention of this Section shall be null and void for all purposes. 

        25.    BINDING EFFECT.    This Agreement shall be binding on and inure
to the benefit of the parties and their respective successors and permitted assigns. 

        26.    MODIFICATION.    This Agreement may be modified only by a
written agreement signed by both parties. Any such written modification must be authorized by the Board of Directors of the Company. 

        27.    COUNTERPARTS.    This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original instrument, and all of which together shall constitute one and the same Agreement. 

        28.    CODE §409A COMPLIANCE.    It is the intention of
the Company and Employee that this Agreement not result in unfavorable tax consequences to Employee under Code §409A. The Company and Employee acknowledge that only limited guidance has
been issued by the Internal Revenue Service with respect to the application of Code §409A to certain arrangements, such as this Agreement. It is expected by the Company and Employee that
the Internal Revenue Service will provide further guidance regarding the interpretation and application of Code §409A in connection with finalizing its current proposed regulations. The
Company and Employee acknowledge further that the full effect of Code §409A on potential payments pursuant to this Agreement cannot be determined at the time that the Company and Employee
are entering into this Agreement. The Company and Employee agree to work together in good faith in an effort to comply with Code §409A including, if necessary, amending the Agreement based
on further guidance issued by the Internal Revenue Service from time to time, provided that neither party shall be required to assume an economic burden beyond what is already required by this
Agreement. 

12

   
        IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the day and year first above written. 

	HEELING SPORTS LIMITED	 	EMPLOYEE
	

By:	
HEELING MANAGEMENT CORP.,

    its sole general partner	
 	

/s/  ROGER R. ADAMS      
 Roger R. Adams
	 	By:	/s/ Michael Staffaroni
	 	 
	 	Title:	President & CEO
	 	 

13

  

 
 

Exhibit 1    
    
    Salary and Benefits    
    

Reference Section 4, part a.  

	1.
	Salary
to be $12,500 per month—$150,000 per year.

	2.
	Bonus
Plan: An Annual Bonus amount as determined by the Company's Compensation Committee and for purposes of such Bonus Plan, Employee's "Target" amount is 35% of Employee's then
current base salary. 

Reference Section 4, part b.  

	1.
	Employee
to receive four weeks paid vacation each calendar year.

	2.
	Employee
to receive medical and dental insurance through the plan adopted by the Company for its full time employees.

	3.
	Employee
shall be entitled to participate in a 401(k) plan adopted by the Company for its full time employees, including any matching arrangements in effect from time to time. 

14

QuickLinks

AMENDED AND RESTATED EMPLOYMENT AGREEMENT, INCLUDING AGREEMENT TO ARBITRATE, NONCOMPETITION AGREEMENT AND NONDISCLOSURE AGREEMENT

R E C I T A L S

Exhibit 1 Salary and BenefitsExhibit 10.15  

WAIVER
AND AGREEMENT 

        THIS
WAIVER AND AGREEMENT (this "Agreement"), dated as of September 14, 2006, is among Heelys, Inc., the surviving corporation pursuant to its merger with
Heeling, Inc., a Nevada corporation (the "Company"), Roger R. Adams ("Adams"), Richard E. Middlekauff ("Middlekauff"), Robert J. Ward ("Ward"), Cypo, Inc., a Texas corporation ("Cypo,"
and together with Adams, Middlekauff and Ward, the "Initial Common Shareholders"), Heeling Holding Corporation, a Nevada corporation ("Holding"), Heeling Management Corp., a Texas corporation
("Management," and together with the Company and Holding, the "Heeling Companies"), Samuel B. Ligon and Patricia P. Ligon (the "Ligons") and Capital Southwest Venture Corporation, a Nevada corporation
("Investor"). 

        WHEREAS,
the parties hereto are parties to that certain Investor Rights Agreement, dated as of May 24, 2000 (the "Investor Rights Agreement"); 

        WHEREAS,
pursuant to the Investor Rights Agreement, an Initial Common Shareholder may not make or suffer any bona fide Disposition (as defined in the Investor Rights Agreement) of all or
any portion of his or its shares of common stock of the Company without complying with the provisions of the Investor Rights Agreement; 

        WHEREAS,
the Initial Common Shareholders are contemplating selling shares of common stock of the Company in connection with the Company's underwritten public offering, and Company,
Investor and the Ligons desire to waive any right of first refusal contained in the Investor Rights Agreement with respect to the Initial Common Shareholders' sales of Company common stock in the
Company's underwritten public offering, so long as such offering is a "Qualified Public Offering" as defined below; 

        WHEREAS,
pursuant to the Investor Rights Agreement, (i) Investor has the right to designate two directors of each of the Heeling Companies, (ii) the Initial Common
Shareholders and the Ligons agreed to vote in favor of such directors, and (iii) for so long as the Investor had the right to designate such two directors, the parties agreed that the board of
directors of each of the Heeling Companies would consist of five directors, two designated by Investor, two designated by the Initial Common Shareholders and one director mutually acceptable to the
Initial Common Shareholders and Investor; 

        WHEREAS,
the parties wish to waive certain rights under the Investor Rights Agreement, terminate the Investor Rights Agreement in its entirety effective upon consummation of the
Company's Qualified Public Offering, and to agree to certain provisions relating to the nomination of certain candidates for election to the board of directors of the Company (the "Board"), upon the
terms and conditions set forth in this Agreement. 

1

 

        NOW,
THEREFORE, in consideration of the premises and the mutual covenants and considerations herein set forth, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows: 

	1.
	Waiver of Rights under, and Termination of, Investor Rights Agreement.

	(a)
	Investor,
the Ligons and the Initial Common Shareholders each waive any and all rights under Section 2 of the Investor Rights Agreement relating to the size of the Board and
agree that the Board shall be increased to seven and that the following individuals shall serve on the Board:

 Roger
A. Adams

Patrick F. Hamner

Samuel B. Ligon

Richard E. Middlekauff

Michael G. Staffaroni

William R. Thomas

James T. Kindley

 

If
a Qualified Public Offering shall not occur by June 30, 2007, then the Board shall remain at seven and Section 2(b) of the Investor Rights Agreement shall be amended and restated in
its entirety as follows: "For so long as the Investor has the right to designate the Preferred Directors under Section 2(a), the parties agree that the Board of Directors of each of the Heeling
Companies shall consist of seven directors: the Preferred Directors, two directors designated by the Initial Common Shareholders and three directors mutually acceptable to the Initial Common
Shareholders and Investor, and the Investor and the Ligons agree to vote his, her or its shares in favor of the directors designated by the Initial Common Shareholders." 

	(b)
	Company,
Investor and the Ligons each waive any and all rights under Section 3 of the Investor Rights Agreement relating to the sale of shares of Company common stock by the
Initial Common Shareholders in connection with the Company's Qualified Public Offering. "Qualified Public Offering" means the first firm commitment underwritten public offering pursuant to an
effective registration statement under the Securities Act of 1933, as amended, covering the offering and sale of common stock for the account of the Company in which the aggregate net proceeds to the
Company equal or exceeds $20 million, net of all expenses and underwriting.

	(c)
	Investor,
the Ligons and the Initial Common Shareholders each waive any and all rights under Section 5 of the Investor Rights Agreement relating to the sale of shares of
Company common stock by the Company in connection with the Company's Qualified Public Offering.

	(d)
	Effective
immediately upon consummation of the Company's Qualified Public Offering, the Investor Rights Agreement shall terminate and be of no further force or effect. 

2

 

	2.
	Designees; Mechanics of Designation.

	(a)
	Subject
to the provisions of Sections 2(b) and 2(c) of this Agreement, Investor will have the right to designate one or two individuals for nomination by the Board for election to the
Board as set forth below and the Company shall cause such individual or individuals to be nominated for election to the Board as set forth below (provided that any obligation of the Company's
directors to make such nomination under this Agreement are subject to (1) the fiduciary duties of the Company's directors and the Delaware General Corporation Law and (2) the
requirements imposed upon a person to be eligible to serve as a director under all applicable laws, including the rules of the Securities and Exchange Commission and the rules of Nasdaq Global
Market):

	i.
	For
so long as Investor owns, in the aggregate, at least 15% of the issued and outstanding shares of common stock $0.001 par value, of the Company (the "Shares"),
Investor shall be entitled to designate two persons for nomination for election to the Board, minus the number of persons that were designated for nomination for election to the Board by Investor and
that are then serving as a member of the Board; or

	ii.
	For
so long as Investor owns, in the aggregate, less than 15%, but at least 10%, of the issued and outstanding Shares, Investor shall be entitled to designate one person
for nomination for election to the Board, unless a person designated for nomination for election to the Board by Investor is then serving as a member of the Board.

	(b)
	At
least 120 days prior to the date of such annual meeting of the Company's stockholders, the Company shall provide Investor with written notice of the expected date of such
meeting (the "Company Notice"). In order to nominate an individual for election to the Board, Investor must submit to the Company written notice within 30 days after the Company Notice, which
notice shall include (i) all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise
required, in accordance with Regulation 14A under the Exchange Act, and (ii) such person's written consent to being named in the proxy statement as a nominee and to serving as a director
if elected. At each meeting of the Company's stockholders at which the directors of the Company are to be elected, the Company agrees to recommend that the stockholders elect to the Board each
designee of Investor nominated for election at such meeting in accordance with the provisions of this Agreement.

	(c)
	If,
while Investor maintains the right to designate a person for nomination for election to the Board under this Agreement a vacancy is created on the Board as a result of the death,
disability, retirement, resignation, removal or otherwise of a designee of Investor, Investor shall have the right to designate for appointment by the remaining directors of the Company under the
Certificate of Incorporation an individual to fill such vacancy and to serve as a director on the Board. To designate a director to fill a vacancy pursuant to this Section 2(c), Investor must
submit to the Company written notice of such designee or designees, which notice shall include (i) all information relating to such person that is required to be disclosed in solicitations of
proxies for election of directors in an election contest, or is otherwise required, in accordance with Regulation 14A under the Exchange Act, and (ii) such person's written consent to
being named in the proxy statement as a nominee and to serving as a director if elected. The Board shall appoint the individual so designated by Investor to the Board as soon as practicable. 

3

 

	3.
	Miscellaneous.

	(a)
	Modification, Amendment, Waiver. No modification, amendment or waiver of any provision of Section 1 or 3 of this Agreement shall
be effective unless approved in writing by the parties hereto. No modification, amendment or waiver of any provision of Section 2 of this Agreement shall be effective unless approved in writing
by the Company and Investor. The failure of any party at any time to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect
the rights of the party thereafter to enforce the provisions of this Agreement in accordance with its terms.

	(b)
	Invalid or Unenforceable Provisions. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law, but if any term or provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect and this Agreement will be reformed, construed and enforced in such jurisdiction
as if such invalid, illegal or unenforceable provision had never been contained herein. The parties further agree that any court of competent jurisdiction is expressly authorized to modify any such
unenforceable provision of this Agreement in lieu of severing such unenforceable provision from this Agreement in its entirety, whether by rewriting the offending provision, deleting any or all of the
offending provision, adding additional language to this Agreement, or by making such other modifications as it deems warranted to carry out the intent and agreement of the parties as embodied herein
to the maximum extent permitted by law. The parties expressly agree that this Agreement as so modified by a court of competent jurisdiction shall be binding upon and enforceable against each of them.

	(c)
	Entire Agreement. Except as otherwise expressly set forth herein, this document embodies the entire agreement and understanding between
the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or between the parties, written or oral, which may
have related to the subject matter hereof in any way.

	(d)
	Binding Effect; Assignment. All of the terms of this Agreement shall inure to the benefit of and shall be binding upon the parties
hereto and their respective successors and assigns.

	(e)
	Remedies. The parties hereto will be entitled to enforce their rights under this Agreement specifically (without posting a bond or
other security), to recover damages by reason of any material breach of any provision of this Agreement and to exercise all other rights existing in their favor. The parties agree that money damages
may not be an adequate remedy for any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction for
specific performance and/or injunctive relief in order to enforce or prevent any violation of the provisions of this Agreement. In the event of any dispute involving the terms of this Agreement, the
prevailing party shall be entitled to collect reasonable fees and expenses incurred by the prevailing party in connection with such dispute from the other parties to such dispute.

	(f)
	Notices. Any notice or other communication in connection with this Agreement shall be deemed to be delivered and received if in writing
addressed as provided below each parties' signature below (a) when actually delivered, in person, (b) if sent by facsimile to said address, when electronically confirmed, (c) when
delivered if delivered by overnight courier or (d) in the case of delivery by mail, five business days shall have elapsed after the same shall have been deposited in the United States mails,
postage prepaid and registered or certified to the address set forth below. 

4

 

	(g)
	Governing Law; Submission to Jurisdiction. All questions concerning the construction, validity and interpretation of this Agreement
will be governed by the internal laws of the State of Delaware, without giving effect to principles of conflicts of law. The parties hereby irrevocably and unconditionally consent to submit to the
exclusive jurisdiction of the courts of the State of Delaware or the United States of America located in the State of Delaware for any actions, suits or proceedings arising out of or relating to this
Agreement and the transactions contemplated hereby (and the parties agree not to commence any action, suit or proceeding relating hereto except in such courts), and further agree that service of any
process, summons, notice or documents by United States registered mail to a party shall be effective service of process for any action, suit or proceeding brought against such party in any such court
and, absent any statute, rule or order to the contrary, that each party shall have 30 days from actual receipt of any complaint to answer or otherwise plead with respect thereto. The parties
hereby irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in the courts
of the State of Delaware or the United States of America located in the State of Delaware, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court
that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

	(h)
	Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this
Agreement.

	(i)
	Counterparts. This Agreement may be executed in separate counterparts each of which will be an original and all of which taken together
will constitute one and the same agreement. 

[Signature pages follow.]

5

 

        IN
WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written. 

	

 	
 	

Capital Southwest Venture Corporation

12900 Preston Road at LBJ, Suite 700

Dallas TX 75230

Attn: William R. Thomas

Fax: (972) 233-7362
	

 	
 	

By:	
 	

/s/ William R. Thomas
 William R. Thomas, President
	

 	
 	

/s/ Samuel B. Ligon
 Samuel B. Ligon

3707 Villanova

Dallas TX 75225

Fax: (214) 265-0493
	

 	
 	

/s/ Patricia P. Ligon
 Patricia P. Ligon

3707 Villanova

Dallas TX 75225

Fax: (214) 265-0493
	

 	
 	

Heelys, Inc.

3200 Belmeade Drive, Suite 100

Carrollton TX 75006

Fax: (214) 390-1661
	

 	
 	

By:	
 	

/s/ Mike Hessong
 Mike Hessong

Chief Financial Officer
	

 	
 	

Heeling Holding Corporation

3200 Belmeade Drive, Suite 100

Carrollton TX 75006

Fax: (214) 390-1661
	

 	
 	

By:	
 	

/s/ Mike Hessong
 /s/ Mike Hessong, Chief Financial Officer
	 	 	 	 	 	 	 

6

 

	

 	
 	

Heeling Management Corp.

3200 Belmeade Drive, Suite 100

Carrollton TX 75006

Fax: (214) 390-1661
	

 	
 	

By:	
 	

/s/ Mike Hessong
 Mike Hessong, Chief Financial Officer
	

 	
 	

/s/ Richard E. Middlekauff
 Richard E. Middlekauff
	

 	
 	

/s/ Robert J. Ward
 Robert J. Ward

1601 Elm Street, Suite 3000

Dallas, TX 75201-4761

Fax: (214) 999-3266
	

 	
 	

CYPO, INC.

3200 Belmeade Drive, Suite 100

Carrollton TX 75006

Fax: (214) 390-1661
	

 	
 	

By:	
 	

/s/ Roger R. Adams
 Roger R. Adams, President
	

 	
 	

/s/ Roger R. Adams
 Roger R. Adams

3200 Belmeade Drive, Suite 100

Carrollton TX 75006

Fax: (214) 390-1661

7

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