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Exhibit 10.17  

 
 

HEELING SPORTS LIMITED 2006 BONUS PLAN
  Period of Employment ending 12/31/06    
    

Annual
bonus payouts are in place to provide appropriate incentives for the management team of Heeling Sports Limited ("HSL"). The following attempts to set forth the parameters of the
2006 plan. 

	1.
	50% of the bonus opportunity is based on HSL 2006 actual EBITDA versus the planned EBITDA as approved by the Board of Directors of
Heeling, Inc. (the "Board") (see details below).

	2.
	25% of the bonus opportunity is based on 3 components:

	a.
	Inventory: HSL management will manage inventory to a maximum of 20% of the year's unit sales volume. For example: If unit sales are
500,000 for 2006 the maximum target inventory position would be 100,000 pair as of December 31, 2006.

	b.
	Cash: HSL management will manage cash within the current established line of credit.

	c.
	Legal Expenses: HSL management will mange legal expenses within the budgeted amounts.

	3.
	25% of the bonus opportunity is based on individual performance versus annual individual objectives. The individual performance portion
of the bonus is subject to the manager and the Board approval.

	4.
	The
maximum bonus is capped at 2x a manager's target bonus opportunity (i.e. $5,000 bonus opportunity can pay a maximum of $10,000).

	5.
	The
bonus will be paid by March 1, 2007.

	6.
	A
manager must be employed with HSL on December 31, 2006 to qualify for a bonus. Managers leaving HSL prior to December 31, 2006 will not be eligible for a bonus.

	7.
	Managers
joining HSL during the year and employed on December 31, 2006 may be eligible for a pro-rated bonus.

	8.
	This
bonus plan is in effect for HSL fiscal year 2006. The plan will be revisited and possibly revised for 2007. 

EBITDA
component (50% of Bonus Opportunity): The target EBITDA for 2006 is $9,025,078

The
attached chart shows the payout for the EBITDA component of the bonus based on company performance: 

	1.
	Legal
defense fees will NOT be added back into the EBITDA unless approved in advance by the HSL Board of Directors

	2.
	Investment
Banker fees WILL be added back into the EBITDA number since these expenses would be considered "non-operating"
expenses and largely outside the control of the management team. 

 
 

HEELING SPORTS LTD 2006 BONUS PLAN    
    

	2006 Bonus Payout Plan
	 	2006 Bonus Payout Plan
	 
	Actual EBITDA
	 	% of EBITDA v Plan
	 	Bonus Payout
	 	Actual EBITDA
	 	% of EBITDA v Plan
	 	Bonus Payout
	 
	$	6,768,809	 	75	%	0	%	$	10,830,094	 	120	%	140	%
	$	6,859,059	 	76	%	4	%	$	10,920,344	 	121	%	142	%
	$	6,949,310	 	77	%	8	%	$	11,010,595	 	122	%	144	%
	$	7,039,561	 	78	%	12	%	$	11,100,846	 	123	%	146	%
	$	7,129,812	 	79	%	16	%	$	11,191,097	 	124	%	148	%
	$	7,220,062	 	80	%	20	%	$	11,281,348	 	125	%	150	%
	$	7,310,313	 	81	%	24	%	$	11,371,598	 	126	%	152	%
	$	7,400,564	 	82	%	28	%	$	11,461,849	 	127	%	154	%
	$	7,490,815	 	83	%	32	%	$	11,552,100	 	128	%	156	%
	$	7,581,066	 	84	%	36	%	$	11,642,351	 	129	%	158	%
	$	7,671,316	 	85	%	40	%	$	11,732,601	 	130	%	160	%
	$	7,761,567	 	86	%	44	%	$	11,822,852	 	131	%	162	%
	$	7,851,818	 	87	%	48	%	$	11,913,103	 	132	%	164	%
	$	7,942,069	 	88	%	52	%	$	12,003,354	 	133	%	166	%
	$	8,032,319	 	89	%	56	%	$	12,093,605	 	134	%	168	%
	$	8,122,570	 	90	%	60	%	$	12,183,855	 	135	%	170	%
	$	8,212,821	 	91	%	64	%	$	12,274,106	 	136	%	172	%
	$	8,303,072	 	92	%	68	%	$	12,364,357	 	137	%	174	%
	$	8,393,323	 	93	%	72	%	$	12,454,608	 	138	%	176	%
	$	8,483,573	 	94	%	76	%	$	12,544,858	 	139	%	178	%
	$	8,573,824	 	95	%	80	%	$	12,635,109	 	140	%	180	%
	$	8,664,075	 	96	%	84	%	$	12,725,360	 	141	%	182	%
	$	8,754,326	 	97	%	88	%	$	12,815,611	 	142	%	184	%
	$	8,844,576	 	98	%	92	%	$	12,905,862	 	143	%	186	%
	$	8,934,827	 	99	%	96	%	$	12,996,112	 	144	%	188	%
	$	9,025,078	 	100	%	100	%	$	13,086,363	 	145	%	190	%
	$	9,115,329	 	101	%	102	%	$	13,176,614	 	146	%	192	%
	$	9,205,580	 	102	%	104	%	$	13,266,865	 	147	%	194	%
	$	9,295,830	 	103	%	106	%	$	13,357,115	 	148	%	196	%
	$	9,386,081	 	104	%	108	%	$	13,447,366	 	149	%	198	%
	$	9,476,332	 	105	%	110	%	$	13,537,617	 	150	%	200	%
	$	9,566,583	 	106	%	112	%	 	 	 	 	 	 	 
	$	9,656,833	 	107	%	114	%	 	 	 	 	 	 	 
	$	9,747,084	 	108	%	116	%	 	 	 	 	 	 	 
	$	9,837,335	 	109	%	118	%	 	 	 	 	 	 	 
	$	9,927,586	 	110	%	120	%	 	 	 	 	 	 	 
	$	10,017,837	 	111	%	122	%	 	 	 	 	 	 	 
	$	10,108,087	 	112	%	124	%	 	 	 	 	 	 	 
	$	10,198,338	 	113	%	126	%	 	 	 	 	 	 	 
	$	10,288,589	 	114	%	128	%	 	 	 	 	 	 	 
	$	10,378,840	 	115	%	130	%	 	 	 	 	 	 	 
	$	10,469,090	 	116	%	132	%	 	 	 	 	 	 	 
	$	10,559,341	 	117	%	134	%	 	 	 	 	 	 	 
	$	10,649,592	 	118	%	136	%	 	 	 	 	 	 	 
	$	10,739,843	 	119	%	138	%	 	 	 	 	 	 	 

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HEELING SPORTS LIMITED 2006 BONUS PLAN Period of Employment ending 12/31/06

HEELING SPORTS LTD 2006 BONUS PLANQuickLinks
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Exhibit 10.18  

 
 

INDEMNIFICATION AGREEMENT    
    

        This Indemnification Agreement (this "Agreement") dated and effective as
of                        , 2006, is between Heelys, Inc., a Delaware corporation (the
"Company"), and                        ("Indemnitee"). 

        WHEREAS,
it is essential to the Company to retain and attract as directors and officers the most capable persons available; 

        WHEREAS,
the Company and Indemnitee (the "Parties") recognize the increased risk of litigation and other claims being asserted against
directors and officers of public companies; 

        WHEREAS,
Indemnitee is willing to serve, or continue to serve, as a director or officer of the Company on the condition that he be indemnified to the fullest extent permitted by law; 

        WHEREAS,
the By-Laws of the Company (the "By-Laws") require the Company to indemnify and advance expenses to its
directors and officers to the fullest extent permitted by law; and 

        WHEREAS,
in recognition of Indemnitee's need for substantial protection against personal liability in order to enhance Indemnitee's service to the Company in an effective manner and
Indemnitee's reliance on the protections afforded by the By-Laws, and in part to provide Indemnitee with specific contractual assurance that the protection promised by the
By-Laws will be available to Indemnitee (regardless of, among other things, any amendment to or repeal of the By-Laws, any change in the composition of the Company's Board of
Directors, or any acquisition transaction relating to the Company), the Company wishes to provide in this Agreement for the indemnification of and the advancement of expenses to Indemnitee to the
fullest extent (whether partial or complete) permitted by law and as set forth in this Agreement and, to the extent insurance is maintained, for the coverage of Indemnitee under the Company's
directors' and officers' liability insurance policy or policies; 

        NOW,
THEREFORE, in consideration of the premises and of Indemnitee serving the Company directly or, at its request, another enterprise, and intending to be legally bound hereby, the
Parties agree as follows: 

        1.     Certain Definitions. Terms defined in the DGCL (as defined below) that are not otherwise defined in this Agreement have
the respective meanings set forth in the DGCL. In addition to terms otherwise defined, the following terms shall have the following respective meanings: 

        (a)   "Affiliate": As to any person, any other person, directly or indirectly, controlling or controlled by or under direct or
indirect common control with such specified person. For the purposes of this definition, "control," when used with respect to any person, means the
power to direct the management and policies of such person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have correlative meanings. 

        (b)   "Change of Control": The occurrence of any of the following events: 

        (i)    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 Company representing (A) 50 percent or more of the combined voting power of
the then outstanding Voting Securities before a Qualified Public Offering, or (B) 25 percent or more of the combined voting power of the then outstanding Voting Securities after a
Qualified Public Offering; 

 

        (ii)   Any
change or changes in the composition of the Company's Board of Directors within a two-year period as a result of which less than a majority of the
directors are (A) persons who were directors at the beginning of that two-year period or (B) 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 Company's directors; 

        (iii)  The
Company is merged or consolidated with another 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 percent of the outstanding Voting Securities (if the Company is the surviving corporation) or 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 immediately before the merger or consolidation; or 

        (iv)  The
Company 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
Company. 

        (c)   "Claim": Any threatened, pending or completed action, suit, proceeding or arbitration or other
alternative-dispute-resolution proceeding or mechanism, or any appeal of any of the foregoing, or any inquiry or investigation, whether instituted by the Company or any governmental authority or
agency or any other party, that Indemnitee in good faith believes might lead to the institution of any such action, suit, proceeding or arbitration or other alternative-dispute-resolution proceeding
or mechanism, whether civil, criminal, administrative, investigative or other (whether or not the claims or allegations therein are groundless, false or fraudulent). 

        (d)   "DGCL": The Delaware General Corporation Law, as amended and in effect from time to time. 

        (e)   "Expenses": Include attorneys' fees and all other costs, expenses and obligations paid or incurred in connection with
investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness in or participate in, any Claim relating to any Indemnifiable Event. 

        (f)    "Indemnifiable Amounts": Any and all Expenses, damages, judgments, fines, penalties, excise taxes and amounts paid in
settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of any such Expenses, judgments, fines, penalties, excise taxes or amounts paid in
settlement) arising out of or resulting from any Claim relating to an Indemnifiable Event. 

        (g)   "Indemnifiable Event": Any event or occurrence, whether before, on or after the date of this Agreement, related to the
fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Company, or is or was serving at the request of the Company as a director, officer, employee, trustee, agent or
fiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise (which request may be written or oral, and which request shall be deemed to have been
made if the other enterprise is an entity in which the Company directly or indirectly owns equity interests or other securities having ordinary voting power to elect a majority of the directors or
other persons performing similar functions), or by reason of anything done or not done by Indemnitee in any such capacity. 

2

 

        (h)   "Independent Legal Counsel": An attorney or firm of attorneys, selected in accordance with Section 4, who or which
is experienced in matters of corporate law and has not have otherwise performed services for the Company or Indemnitee within the five years immediately prior to the date of determination (other than
with respect to matters concerning the rights of Indemnitee under this Agreement, or of other indemnitees under other separate indemnification agreements with the Company). 

        (i)    "Permitted Holders": Capital Southwest Venture Corporation and its Affiliates and Roger R. Adams and his Affiliates. 

        (j)    "Potential Change in Control": Shall be deemed to have occurred if (i) the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change in Control, (ii) any person (including the Company) publicly announces an intention to take or to consider taking actions which
if consummated would constitute a Change in Control, or (iii) the Company's Board of Directors adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in
Control has occurred. 

        (k)   "Qualified Public Offering": 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 Company's common stock for the account of the Company in which the aggregate net proceeds to
the Company equals or exceeds $20 million. 

        (l)    "Reviewing Party": Any appropriate person or body consisting of a member or members of the Company's Board of Directors
or any other person or body appointed by the Board of Directors who is not a party to the particular Claim for which Indemnitee is seeking indemnification, or Independent Legal Counsel. 

        (m)  "Voting Securities": Any securities of the Company the holders of which are entitled to vote generally in the election of
directors. 

        2.     Basic Indemnification Arrangement; Advancement of Expenses. 

        (a)   If
Indemnitee was, is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a Claim by
reason of, or arising in part out of, an Indemnifiable Event, the Company shall indemnify Indemnitee as soon as practicable, but in any event no later than 45 days after written demand is
presented to the Company, against any and all Indemnifiable Amounts. 

        (b)   If
so requested by Indemnitee, the Company shall advance, within five business days of each such request, any and all Expenses relating to any Indemnifiable Event (an
"Expense Advance"). The Company shall, in accordance with the request, pay Expenses on behalf of Indemnitee or, if Indemnitee has already paid Expenses,
reimburse Indemnitee for those Expenses. Subject to the limitations set forth in Sections 2(c) and 2(d), Indemnitee's right to an Expense Advance under this Section 2(b) shall not be subject to
any prior determination, by the Reviewing Party or any other person, that Indemnitee has satisfied any applicable standard of conduct for indemnification. 

        (c)   Notwithstanding
the foregoing in this Section 2, before a Change in Control, Indemnitee shall not be entitled to indemnification or Expense Advance pursuant to
this Agreement in connection with any Claim initiated by Indemnitee, unless (i) the Company has joined in, or the Company's Board of Directors has authorized or consented to the initiation of,
such Claim (it being understood that any counterclaim or any crossclaim initiated by others will not be deemed "initiated" by Indemnitee for this purpose), or (ii) the Claim is one to enforce
Indemnitee's rights under this Agreement. 

3

 

        (d)   Notwithstanding
the foregoing in this Section 2, (i) the obligations of the Company under Section 2(a) shall be subject to the condition that the
Reviewing Party shall not have determined (in a written opinion in any case in which the Independent Legal Counsel referred to in Section 4 is involved) that Indemnitee would not be permitted
to be indemnified under applicable law, and (ii) the obligation of the Company to make an Expense Advance pursuant to Section 2(b) or Section 5 shall be subject to the condition
that, if, when and to the extent that the Reviewing Party determines that Indemnitee would not be permitted to be so indemnified under applicable law, the Company shall be entitled to be reimbursed by
Indemnitee (who hereby agrees to reimburse the Company) for all such amounts theretofore paid (it being understood and agreed that the foregoing agreement by Indemnitee shall be deemed to satisfy any
requirement that Indemnitee provide the Company with an undertaking to repay any advancement of Expenses if it is ultimately determined that Indemnitee is not entitled to indemnification under
applicable law); provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination
that Indemnitee should be indemnified under applicable law, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be
binding and Indemnitee shall not be required to reimburse the Company for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or have lapsed). This undertaking by Indemnitee to repay such Expense Advance shall be unsecured and interest-free. If there has not been a Change in Control,
the Reviewing Party shall be selected by the Board of Directors, and if there has been such a Change in Control, the Reviewing Party shall be the Independent Legal Counsel referred to in
Section 4. Indemnitee shall cooperate with the Reviewing Party making a determination regarding Indemnitee's entitlement to indemnification, including providing to the Reviewing Party upon
reasonable request any documentation or information, not privileged or otherwise protected from disclosure, that is reasonably available to Indemnitee and necessary for such determination. If there
has been no determination by the Reviewing Party, or if the Reviewing Party determines that Indemnitee substantively would not be permitted to be indemnified in whole or in part under applicable law,
Indemnitee shall have the right to commence litigation in any court in the State of Texas or the State of Delaware having subject matter jurisdiction thereof and in which venue is proper seeking an
initial determination by the court or challenging any such determination by the Reviewing Party or any aspect thereof, including the legal or factual bases therefor, and the Company hereby consents to
service of process and to appear in any such proceeding. Any determination by the Reviewing Party otherwise shall be conclusive and binding on the Parties. 

        3.     Notification and Defense of Claim. 

        (a)   Notice. After Indemnitee's receipt of notice of the commencement of any Claim, Indemnitee shall, if a request for
indemnification or any Expense Advance in respect thereof is to be made to the Company under this Agreement, promptly give written notice to the Company of the commencement thereof; but the omission
so to notify, or a delay in notifying, the Company will not relieve the Company from any liability that it may have to Indemnitee hereunder, except to the extent that such omission or delay results in
any forfeiture by the Company of, or any material prejudice to the Company in its, defenses, rights or insurance coverage with respect to such Claim. 

4

 

        (b)   Defense. With respect to any Claim as to which Indemnitee requests indemnification or any Expense Advance, the Company
will be entitled to participate in the Claim at its own expense and, to the extent the Company so wishes (except as otherwise provided below), may assume the defense thereof with counsel acceptable to
Indemnitee (such acceptance not to be unreasonably withheld, conditioned or delayed). After notice from the Company to Indemnitee of its election to assume the defense of any Claim, the Company shall
not be liable to Indemnitee under this Agreement or otherwise for any Expenses subsequently incurred by Indemnitee in connection with the defense of such Claim other than as provided below in this
Section 3(b). Indemnitee shall have the right to employ legal counsel in such Claim, but all Expenses related thereto incurred after notice from the Company of its assumption of the defense
shall be at Indemnitee's expense unless (i) the employment of legal counsel by Indemnitee
has been authorized by the Company, (ii) Indemnitee has reasonably determined, based on the written advice of counsel, that there may be a conflict of interest between Indemnitee and the
Company in the defense of the Claim, (iii) upon or after a Change in Control, the employment of counsel by Indemnitee has been approved by the Independent Legal Counsel or (iv) the
Company shall not in fact have employed counsel to assume the defense of such Claim, in each of which cases all Expenses of the Claim shall be borne by the Company; provided, that in any case, the
Company will not be obligated to bear the Expenses of more than one counsel employed by Indemnitee. The Company shall not be entitled to assume the defense of any Claim brought by or on behalf of the
Company, or as to which Indemnitee shall have made the determination provided for in clause (ii) above in this Section 3(b) or under the circumstances provided for in clause (iii)
or clause (iv) above in this Section 3(b). 

        (c)   Notice to Insurers. If, at the time of receipt of any request by Indemnitee for indemnification or any Expense Advance,
the Company has directors' and officers' liability insurance in effect under which such Claim may be covered, the Company shall give written notice of such Claim to the insurer or insurers in
accordance with the applicable policy or policies. The Company shall provide Indemnitee a copy of such notice and, upon Indemnitee's request, copies of all subsequent correspondence between the
Company and such insurer or insurers regarding such Claim. 

        (d)   Settlement of Claim. The Company shall not be liable to indemnify Indemnitee under this Agreement or otherwise for any
amounts paid in settlement of any Claim effected without the Company's written consent, such consent not to be unreasonably withheld, conditioned or delayed; provided, however, that if a Change in
Control has occurred, the Company shall be liable for indemnification of Indemnitee for amounts paid in settlement if the Independent Legal Counsel has approved the settlement. The Company shall not
settle any Claim in any manner that would impose any penalty or limitation on Indemnitee without Indemnitee's written consent. 

        4.     Change in Control. The Company agrees that if there is a Change in Control, then with respect to all matters thereafter
arising concerning the rights of Indemnitee to indemnification payments and Expense Advances under this Agreement or any other agreement or the By-Laws now or hereafter in effect relating
to Claims for Indemnifiable Events, the Company shall seek legal advice only from Independent Legal Counsel selected by Indemnitee and approved by the Company (which approval shall not be unreasonably
delayed, conditioned or withheld). Such Independent Legal Counsel, among other things, shall render its written opinion to the Parties as to whether and to what extent the Indemnitee would be
permitted to be indemnified under applicable law. The Company agrees to pay the reasonable fees of the Independent Legal Counsel and to indemnify fully such counsel against any and all expenses
(including attorneys' fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. 

5

 

        5.     Indemnification for Additional Expenses. The Company shall indemnify Indemnitee against any and all Expenses, and (if
requested by Indemnitee) shall advance such Expenses to Indemnitee subject to and in accordance with Section 2(b), which are incurred by Indemnitee in connection with any action brought by
Indemnitee for (i) indemnification or an Expense Advance by the Company under this Agreement or any other agreement or the By-Laws now or hereafter in effect relating to Claims for
Indemnifiable Events, and/or (ii) recovery under any directors' and officers' liability insurance policy or policies maintained by the Company, regardless of whether Indemnitee ultimately is
determined to be entitled to such indemnification, Expense Advance or insurance recovery, as the case may be. 

        6.     Partial Indemnity, Etc. If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company
for a portion of the Expenses or other Indemnifiable Amounts in respect of a Claim, but not for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion
thereof to which Indemnitee is entitled. Moreover, notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been successful on the merits or otherwise in defense of any
or all Claims relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, including dismissal without prejudice, Indemnitee shall be indemnified against all
Expenses incurred in connection therewith. 

        7.     Burden of Proof; Reliance. In connection with any determination, by the Reviewing Party or otherwise, as to whether
Indemnitee is entitled to be indemnified or to contribution hereunder, the burden of proof shall be on the Company to establish that Indemnitee is not so entitled. For purposes of this Agreement,
Indemnitee shall be deemed to have acted in good faith and in a manner that Indemnitee reasonably believed to be in or not opposed to the best interests of the Company if Indemnitee's actions or
omissions to act are taken in good faith reliance upon the records of the Company, including its financial statements, or upon information, opinions, reports or statements furnished to Indemnitee by
the officers or employees of the Company in the course of their duties, or by the Company's Board of Directors or any of its committees or by any other person (including legal counsel, accountants,
consultants and financial advisors) as to matters Indemnitee reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or
on behalf of the Company. In addition, the knowledge or actions, or failures to act, of any director, officer, agent or employee of the Company other than Indemnitee shall not be imputed to Indemnitee
for purposes of determining the right to indemnification under this Agreement. 

        8.     No Presumptions. For purposes of this Agreement, the termination or conclusion of any claim, action, suit or proceeding,
by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere or its equivalent, shall not
create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable
law. In addition, neither the failure of the Reviewing Party to have made a determination as to whether Indemnitee has met any particular standard of conduct or had any particular belief, nor an
actual determination by the Reviewing Party that Indemnitee has not met such standard of conduct or did not have such belief, prior to the commencement of legal proceedings by Indemnitee to secure a
judicial determination that Indemnitee should be indemnified under applicable law shall be a defense to Indemnitee's claim or create a presumption that Indemnitee has not met any particular standard
of conduct or did not have any particular belief. 

        9.     Nonexclusivity, Etc. The rights of Indemnitee hereunder shall be in addition to any other rights Indemnitee may have under
the By-Laws or the DGCL or otherwise. To the extent that a change in the DGCL (whether by statute or judicial decision) permits greater indemnification by agreement than would be afforded
currently under the By-Laws and this Agreement, it is the intent of the Parties that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. 

6

 

        10.   Liability Insurance. During Indemnitee's service as a director or officer of the Company and for at least five years
thereafter, the Company shall use commercially reasonable efforts (taking into account the scope and amount of coverage available relative to the cost thereof) to maintain directors' and officers'
liability insurance policies providing coverage for Indemnitee. Upon request, the Company shall provide Indemnitee or Indemnitee's counsel a copy of all directors' and officers' liability insurance
policies, declarations, endorsements and other related materials. In all directors' and officers' liability insurance policies maintained by the Company, Indemnitee shall be named as an insured in
such a manner as to provide Indemnitee the same rights and benefits, subject to the same limitations, as are accorded to the Company's directors and officers most favorably insured by such policies. 

        11.   Period of Limitations. No legal action shall be brought, and no cause of action shall be asserted, by or in the right of
the Company against Indemnitee or Indemnitee's spouse, heirs, executors or personal or legal representatives after the expiration of two years from the date of the occurrence of the events that are
the bases of such cause of action, and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such
two-year period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action, such shorter period shall govern. 

        12.   Amendments, Etc. No modification or amendment of this Agreement shall be binding unless executed in writing by both of
the Parties, and no waiver of any right or obligation under this Agreement shall be binding unless executed in writing by the Party granting the waiver. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. 

        13.   Subrogation. In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery of Indemnitee, who shall execute all documents required and shall do everything that may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce such rights. 

        14.   No Duplication of Payments. The Company shall not be liable under this Agreement to make any payment in connection with
any Claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, the By-Laws or otherwise) of the amounts otherwise
indemnifiable hereunder. 

        15.   Binding Effect, Etc. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the Parties
and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the
Company, spouses, heirs, executors and personal and legal representatives. The Company shall require and cause any successor (whether direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee and Indemnitte's counsel, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall continue in
effect regardless of whether Indemnitee continues to serve as an officer or director of the Company or any other enterprise at the Company's request. 

        16.   Interpretation. The headings of the Sections and subsections of this Agreement are inserted for convenience only, and
shall not be deemed to constitute part of this Agreement or to affect the construction or interpretation of this Agreement. In this Agreement, (i) each reference to a
"Section" is to a numbered or designated section of this Agreement, unless otherwise stated,
(ii) "include" and "including" do not denote or imply any limitation, and
(iii) "herein," "hereunder," "hereof," and
similar terms are references to this Agreement as a whole and not to any particular provision of this Agreement. 

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        17.   Specific Performance, Etc. The Parties recognize that if any provision of this Agreement is violated by the Company,
Indemnitee may be without an adequate remedy at law. Accordingly, in the event of any such violation, Indemnitee shall be entitled, if Indemnitee so elects, to institute proceedings, either in law or
at equity, to obtain damages, to enforce specific performance, to enjoin such violation or to obtain any such other relief, or any combination of the foregoing, as Indemnitee may elect to pursue (in
any case, without the necessity of posting bond or other collateral). 

        18.   Notices. Each request, demand, notice and other communication required or permitted under this Agreement shall be in
writing and shall be deemed given and received if delivered by hand, delivered by prepaid courier or sent by postage prepaid certified or registered mail, with return receipt requested, at a Party's
address set forth below such Party's signature to this Agreement. A request, demand, notice or other communication so delivered or sent shall be deemed given and received (i) on the date of
receipt if so delivered by hand or by courier, and (ii) on the third business day after mailing or on the date or receipt, whichever is earlier, if so sent by mail. A Party may change such
Party's address for notice by giving the other Party notice of such change in accordance with this Section 18. 

        19.   Severability. The provisions of this Agreement shall be severable if any of the provisions hereof (including any
provision within a single Section, subsection, clause or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable in any respect, and the validity and
enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired and shall remain enforceable to the fullest extent permitted by law. 

        20.   Governing Law. This Agreement shall be governed by, enforced under and construed in accordance with the laws of the State
of Delaware applicable to contracts made and to be performed in such state without giving effect to the principles of conflicts of laws. 

        21.   Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and
all of which together shall constitute one, and the same, instrument. Electronic (including facsimile) transmission of any signed original document or retransmission of any signed facsimile
transmission will be deemed the same as delivery of an original. At the request of either Party, the other Party will confirm electronic (including facsimile) transmission by signing a duplicate
original document. 

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        IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date stated in the first paragraph. 

	

 	
 	

HEELYS, INC.
	

 	
 	

By:	
 	

	

 	
 	

Address:

3200 Belmeade Drive

Suite 100

Carrollton, Texas 75006

Attention: ___________________________
	

 	
 	

	

 	
 	

Address:
	

 	
 	

	

 	
 	

	

 	
 	

_________________________, Texas 75______

Signature
Page 

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INDEMNIFICATION AGREEMENT

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