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  <p align="center" style="border:none;margin:0in 0in .0001pt;padding:0in;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  
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  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">UNITED
  STATES</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">SECURITIES AND EXCHANGE COMMISSION</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">WASHINGTON, DC 20549</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">FORM&nbsp;8-K</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="3" face="Times New Roman" style="font-size:12.0pt;font-weight:bold;">CURRENT REPORT PURSUANT TO</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="3" face="Times New Roman" style="font-size:12.0pt;font-weight:bold;">SECTION&nbsp;13 OR 15(d)&nbsp;OF
  THE</font></b></p>
  
  <p style="margin:0in 0in .0001pt;text-align:center;"><b><font size="3" face="Times New Roman" style="font-size:12.0pt;font-weight:bold;">SECURITIES
  EXCHANGE ACT OF 1934</font></b></p>
  
  <p style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Date of report (Date of earliest event reported): <b>April&nbsp;30, 2008</b></font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="5" face="Times New Roman" style="font-size:18.0pt;font-weight:bold;">HEELYS, INC.</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Exact name of
  registrant as specified in its charter)</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>
  
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    <td width="32%" valign="top" style="padding:0in .7pt 0in .7pt;width:32.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Delaware</font></b></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.0%;">
    <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
    </td>
    <td width="32%" valign="top" style="padding:0in .7pt 0in .7pt;width:32.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">001-33182</font></b></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.0%;">
    <p style="margin:0in 0in .0001pt;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;">&nbsp;</font></b></p>
    </td>
    <td width="32%" valign="top" style="padding:0in .7pt 0in .7pt;width:32.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">75-2880496</font></b></p>
    </td>
   </tr>
   <tr>
    <td width="32%" valign="top" style="padding:0in .7pt 0in .7pt;width:32.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(State or other
    jurisdiction of<br>
    incorporation or organization)</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.0%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="32%" valign="top" style="padding:0in .7pt 0in .7pt;width:32.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Commission File No.</font></p>
    </td>
    <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.0%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="32%" valign="top" style="padding:0in .7pt 0in .7pt;width:32.0%;">
    <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(IRS Employer<br>
    Identification No.)</font></p>
    </td>
   </tr>
  </table>
  
  </div>
  
  <p style="margin:0in 0in .0001pt;"><font size="3" face="Times New Roman">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">3200
  Belmeade Drive, Suite&nbsp;100, Carrollton, Texas 75006</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Address of principal executive offices and zip code)</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">(214)
  390-1831</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(Registrant&#146;s telephone number, including area code)</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt 1.0in;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Check the appropriate
  box below if the Form&nbsp;8-K filing is intended to simultaneously satisfy the
  filing obligations of the registrant under any of the following provisions:</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt .5in;text-align:left;text-indent:-.5in;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font><font size="1" face="Times New Roman" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Written
  communications pursuant to Rule&nbsp;425 under the Securities Act (17 CFR
  230.425)</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt .5in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt .5in;text-align:left;text-indent:-.5in;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font><font size="1" face="Times New Roman" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Soliciting
  material pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR
  240.14a-12)</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt .5in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt .5in;text-align:left;text-indent:-.5in;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font><font size="1" face="Times New Roman" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pre-commencement
  communications pursuant to Rule&nbsp;14d-2(b)&nbsp;under the Exchange Act (17
  CFR 240.14d-2(b))</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt .5in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt .5in;text-align:left;text-indent:-.5in;"><font size="2" face="Wingdings" style="font-size:10.0pt;">o</font><font size="1" face="Times New Roman" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pre-commencement
  communications pursuant to Rule&nbsp;13e-4(c)&nbsp;under the Exchange Act (17
  CFR 240.13e-4(c))</font></p>
  
  <p align="left" style="margin:0in 0in .0001pt .5in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <div style="border:none;border-bottom:double windowtext 6.0pt;padding:0in 0in 0in 0in;">
  
  <p align="left" style="border:none;margin:0in 0in .0001pt .5in;padding:0in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  </div>
  
  <p align="left" style="margin:0in 0in .0001pt .5in;text-align:left;text-indent:-.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>
  
  </div>
  <!-- SEQ.=1,FOLIO='',FILE='C:\JMS\Vmeane\08-13369-1\task2912865\13369-1-ba.htm',USER='vmeane',CD='May  2 14:55 2008' -->
  
  
  
  <br clear="all" style="page-break-before:always;">
  <div style="font-family:Times New Roman;">
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Item
  1.01&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Entry into a Definitive
  Material Contract.</font></b></p>
  
  <p align="left" style="margin:0in 0in .0001pt;text-align:left;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Effective
  as of April&nbsp;30, 2008 (the &#147;Effective Date&#148;), two wholly owned subsidiaries
  of Heelys,&nbsp;Inc. (the &#147;Company&#148;) entered into agreements to change the
  arrangements regarding the distribution of Heelys-branded footwear and products
  (&#147;Products&#148;) in France, Monaco and Andorra (the &#147;Territory&#148;).</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;letter-spacing:-.1pt;">Termination Agreement</font></u></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;letter-spacing:-.1pt;">Heeling Sports Limited (&#147;HSL&#148;) entered into a Termination
  Agreement (the &#147;Termination Agreement&#148;) with </font><font size="2" style="font-size:10.0pt;">Trotwood Import/Export (the &#147;Distributor&#148;),
  Trotwood Investments Ltd., which is the sole owner of the Distributor (the &#147;Shareholder&#148;),
  and David Stanley (&#147;Stanley&#148;) and Margarete Stanley (the &#147;Consultant&#148;, and
  together with Stanley, the sole owners of the Shareholder), to terminate an
  International Distributor Agreement between HSL and the Distributor (the &#147;Distributor
  Agreement&#148;).&#160; Under the Termination
  Agreement:</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">HSL agreed to purchase from
  the Distributor all of the Distributor&#146;s inventory of unsold Products for the
  Distributor&#146;s cost of such products, the Distributor&#146;s order books relating to
  Products at the value on Distributor&#146;s books and certain other incidental
  assets of the Distributor related to its distribution operations as described
  in the Termination Agreement (the &#147;Purchase Items&#148;).&#160; HSL agreed to pay Distributor for the
  Purchase Items on or before May&nbsp;16, 2008.</font></p>
  
  <p style="margin:0in 0in .0001pt 1.5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">HSL agreed to purchase from
  the Distributor all of the unshipped orders for Products on the Distributor&#146;s
  order book as of the Effective Date that are not novated to HSL or one of its
  affiliates (the &#147;Unshipped Orders&#148;) for a price equal to the Distributor&#146;s net
  wholesale margin on the Unshipped Orders.&#160;
  The purchase price will be payable to the Distributor on or before the
  end of the month following HSL&#146;s receipt of payment for the Products shipped in
  response to all Unshipped Orders.&#160; If an
  Unshipped Order is not novated to HSL or one of its affiliates, HSL agreed to
  supply Distributor with goods to fulfill such order, and if any such customer
  cancels such unshipped order because HSL or its affiliate does not comply with
  such customer&#146;s terms and conditions of purchase, HSL agreed to pay Distributor
  the net wholesale margin on such unfulfilled order.</font></p>
  
  <p style="margin:0in 0in .0001pt 1.5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">The Distributor, Stanley and
  the Consultant agreed, until April&nbsp;30, 2012, not to directly or indirectly
  engage in, or enter into any business relationship with any person or entity
  engaged in, any business that uses, imports, distributes, sales, or manufactures
  any products that compete with any of the Products anywhere in the world.&#160; In consideration for such covenant not to
  compete, HSL agreed to pay Distributor an additional amount set forth in the
  Termination Agreement.</font></p>
  
  <p style="margin:0in 0in .0001pt 1.5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">HSL agreed to pay Distributor
  an additional amount for each pair of Heelys branded footwear sold by the HSL
  or its affiliates in the Territory.&#160; This
  obligation terminates on the earlier of (a)&nbsp;April&nbsp;30, 2011 or (b)&nbsp;when
  HSL and its affiliates have sold 400,000 pairs of Heelys-branded footwear in
  the Territory.</font></p>
  
  <p style="margin:0in 0in .0001pt 1.5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt .5in;text-indent:-.5in;"><font size="2" face="Symbol" style="font-size:10.0pt;">&#183;</font><font size="1" style="font-size:3.0pt;">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; </font><font size="2" style="font-size:10.0pt;">The Distributor, Stanley and
  the Consultant jointly and severally agreed to retain, release HSL and its
  affiliates from, and indemnify HSL and its affiliates against all liabilities
  incurred by the Distributor relating to all commissions and other amounts
  payable to the Distributor&#146;s sales agents or others relating to the Unshipped
  Orders and all liabilities arising out of or in connection with any and all of
  the Distributor&#146;s actions or omissions under or relating to the Distributor
  Agreement.</font></p>
  
  <p style="margin:0in 0in .0001pt 1.5in;text-indent:-.25in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><font face="Times New Roman">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;text-autospace:none;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>
  
  <div style="margin:0in 0in .0001pt;text-autospace:none;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>
  
  </div>
  <!-- SEQ.=1,FOLIO='2',FILE='C:\JMS\Vmeane\08-13369-1\task2912865\13369-1-bc.htm',USER='vmeane',CD='May  2 15:03 2008' -->
  
  
  <br clear="all" style="page-break-before:always;">
  
  
  <div style="font-family:Times New Roman;">
  
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;text-autospace:none;"><font face="Times New Roman">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;text-autospace:none;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;letter-spacing:-.1pt;">Consulting Agreement</font></u></p>
  
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;text-autospace:none;"><font face="Times New Roman">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Heeling
  Sports EMEA, a Belgian company (SPRL) (&#147;EMEA&#148;), <font style="letter-spacing:-.1pt;">entered into </font>a Consulting Agreement (the &#147;Consulting Agreement&#148;)
  with the Consultant.</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">The
  consulting services to be rendered by the Consultant under the Consulting
  Agreement consist primarily of making available to EMEA the customer lists and
  other intangible assets of the Consultant that would be useful in developing
  the &#147;Heelys&#148; brand and distribution business and promoting interest in, and the
  sales and use of, Products in the Territory.&#160;
  During the term of the Consulting Agreement, which expires April&nbsp;30,
  2009, EMEA shall pay the Consultant consulting fees as set forth in the
  Consulting Agreement </font><font size="2" style="font-size:10.0pt;">and
  shall reimburse the Consultant for her reasonable and pre-approved business and
  travel expenses.&#160; </font><font size="2" style="font-size:10.0pt;">EMEA may
  terminate the Consulting Agreement, and the payment obligations thereunder, at
  any time upon any felony conviction of the Consultant; any theft,
  misappropriation, or misdirection of EMEA&#146;s funds, property, or business
  opportunities by the Consultant; the Consultant&#146;s material violation of the
  Consulting Agreement; or the Distributor&#146;s violation of the Termination
  Agreement.</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;">Forward Looking Statements</font></u></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">This Report contains forward-looking
  statements within the meaning of Section&nbsp;27A of the Securities Act of
  1933, as amended, and Section&nbsp;21E of the Securities Exchange Act of 1934,
  as amended, that are based on information currently available to the Company&#146;s
  management as well as management&#146;s assumptions and beliefs. These statements
  include statements regarding the Company&#146;s assessment of the claims described
  above and are generally identified by the use of words such as &#147;subject to,&#148; &#147;believes,&#148;
  &#147;anticipates,&#148; &#147;plans,&#148; &#147;expects,&#148; &#147;intends,&#148; &#147;estimates,&#148; &#147;may,&#148; &#147;will,&#148; &#147;should,&#148;
  &#147;can,&#148; the negatives thereof, variations thereof, similar expressions, or
  discussions of strategy. These forward-looking statements reflect the Company&#146;s
  current views with respect to future events, based on what we believe are
  reasonable assumptions; however, such statements are subject to certain risks
  and uncertainties. The Company&#146;s actual results and the timing of events could
  differ materially from those described in or implied by the forward-looking
  statements as a result of risks and uncertainties, including, without
  limitation, the fact that substantially all of the Company&#146;s net sales are
  generated by one product, continued changes in fashion trends and consumer
  preferences and general economic conditions, the Company&#146;s intellectual
  property may not restrict competing products that infringe on its patents from
  being sold, the Company&#146;s dependence on independent manufacturers, the Company
  may not be able to successfully introduce new product categories, the outcome
  of lawsuits filed against the Company, which could have a material adverse
  effect on the Company, and additional factors which are detailed in the Company&#146;s
  filings with the Securities and Exchange Commission, including the Risk Factors
  contained in the Company&#146;s Annual Report on Form&nbsp;10-K. Investors,
  potential investors and other readers are urged to consider these factors
  carefully in evaluating the forward-looking statements and are cautioned not to
  place undue reliance on such forward-looking statements. The forward-looking
  statements made herein are only made as of the date of this Report and the
  Company undertakes no obligation to publicly update such forward-looking
  statements to reflect subsequent events or circumstances.</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p>
  
  <div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>
  
  </div>
  <!-- SEQ.=1,FOLIO='3',FILE='C:\JMS\Vmeane\08-13369-1\task2912865\13369-1-bc.htm',USER='vmeane',CD='May  2 15:03 2008' -->
  
  
  <br clear="all" style="page-break-before:always;">
  
  
  <div>
  
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SIGNATURES</font></b></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Pursuant to the requirements of the Securities
  Exchange Act of 1934, the Registrant has duly caused this report to be signed
  on its behalf by the undersigned, thereunto duly authorized.</font></p>
  
  <p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
   <tr>
    <td width="17%" valign="top" style="padding:0in .7pt 0in .7pt;width:17.9%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;letter-spacing:-.1pt;">&nbsp;</font></b></p>
    </td>
    <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.5%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;letter-spacing:-.1pt;">&nbsp;</font></b></p>
    </td>
    <td width="14%" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;letter-spacing:-.1pt;">&nbsp;</font></b></p>
    </td>
    <td width="14%" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;letter-spacing:-.1pt;">&nbsp;</font></b></p>
    </td>
    <td width="14%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;letter-spacing:-.1pt;">Heelys,&nbsp;Inc.</font></b></p>
    </td>
    <td width="14%" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><b><font size="2" face="Times New Roman" style="font-size:1.0pt;font-weight:bold;letter-spacing:-.1pt;">&nbsp;</font></b></p>
    </td>
    <td width="19%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:19.88%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="17%" valign="top" style="padding:0in .7pt 0in .7pt;width:17.9%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.5%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="14%" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="14%" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="14%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="14%" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="19%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:19.88%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="17%" valign="top" style="padding:0in .7pt 0in .7pt;width:17.9%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.5%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="14%" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="14%" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="14%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="14%" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="19%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:19.88%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="17%" valign="top" style="padding:0in .7pt 0in .7pt;width:17.9%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.5%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="14%" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="14%" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="14%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="14%" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
    <td width="19%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:19.88%;">
    <p style="margin:0in 0in .0001pt;text-indent:0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="17%" valign="top" style="padding:0in .7pt 0in .7pt;width:17.9%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;letter-spacing:-.1pt;">Date:
    May&nbsp;2, 2008</font></p>
    </td>
    <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.5%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="14%" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="14%" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="4%" valign="top" style="padding:0in .7pt 0in .7pt;width:4.32%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
    </td>
    <td width="35%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext 1.0pt;padding:0in .7pt 0in .7pt;width:35.64%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;/s/ Michael W. Hessong</font></p>
    </td>
    <td width="8%" valign="top" style="padding:0in .7pt 0in .7pt;width:8.28%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
   </tr>
   <tr>
    <td width="17%" valign="top" style="padding:0in .7pt 0in .7pt;width:17.9%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.5%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="14%" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="14%" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="4%" valign="top" style="padding:0in .7pt 0in .7pt;width:4.32%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
    </td>
    <td width="43%" colspan="4" valign="top" style="padding:0in .7pt 0in .7pt;width:43.92%;">
    <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Michael W.
    Hessong</font></p>
    </td>
   </tr>
   <tr>
    <td width="17%" valign="top" style="padding:0in .7pt 0in .7pt;width:17.9%;">
    <p style="margin:0in 0in .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:1.0pt;font-style:italic;">&nbsp;</font></i></p>
    </td>
    <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.5%;">
    <p style="margin:0in 0in .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:1.0pt;font-style:italic;">&nbsp;</font></i></p>
    </td>
    <td width="14%" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:1.0pt;font-style:italic;">&nbsp;</font></i></p>
    </td>
    <td width="14%" valign="top" style="padding:0in .7pt 0in .7pt;width:14.18%;">
    <p style="margin:0in 0in .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:1.0pt;font-style:italic;">&nbsp;</font></i></p>
    </td>
    <td width="4%" valign="top" style="padding:0in .7pt 0in .7pt;width:4.32%;">
    <p style="margin:0in 0in .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:1.0pt;font-style:italic;">&nbsp;</font></i></p>
    </td>
    <td width="43%" colspan="4" valign="top" style="padding:0in .7pt 0in .7pt;width:43.92%;">
    <p style="margin:0in 0in .0001pt;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">Chief Financial Officer</font></i></p>
    </td>
   </tr>
   <tr height="0">
    <td width="134" style="border:none;"></td>
    <td width="41" style="border:none;"></td>
    <td width="106" style="border:none;"></td>
    <td width="106" style="border:none;"></td>
    <td width="32" style="border:none;"></td>
    <td width="74" style="border:none;"></td>
    <td width="106" style="border:none;"></td>
    <td width="87" style="border:none;"></td>
    <td width="62" style="border:none;"></td>
   </tr>
  </table>
  
  <p style="margin:0in 0in .0001pt .5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>
  
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4</font></p>
  
  <div style="margin:0in 0in .0001pt;"><hr size="3" width="100%" noshade color="#010101" align="left"></div>
  
  <p style="margin:0in 0in .0001pt .5in;"><i><font size="2" face="Times New Roman" style="font-size:10.0pt;font-style:italic;">&nbsp;</font></i></p>
  
  </div>
  <!-- SEQ.=1,FOLIO='4',FILE='C:\JMS\Vmeane\08-13369-1\task2912865\13369-1-bc.htm',USER='vmeane',CD='May  2 15:03 2008' -->
  
  
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metadata_documents: [{"type": "8-K", "sequence": "1", "filename": "a08-13369_18k.htm", "description": "CURRENT REPORT OF MATERIAL EVENTS OR CORPORATE CHANGES", "secsgml_size_bytes": 38403}]
metadata_filer: {"company-data": {"conformed-name": "Heelys, Inc.", "cik": "0001373980", "assigned-sic": "3140", "irs-number": "752880496", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-33182", "film-number": "08799363"}, "business-address": {"street1": "3200 BELMEADE", "city": "CARROLLTON", "state": "TX", "zip": "75006", "phone": "214-390-1831"}, "mail-address": {"street1": "3200 BELMEADE", "city": "CARROLLTON", "state": "TX", "zip": "75006"}}
text: UNITED
  STATES
  SECURITIES AND EXCHANGE COMMISSION
  WASHINGTON, DC 20549
  FORM 8-K
  CURRENT REPORT PURSUANT TO
  SECTION 13 OR 15(d) OF
  THE
  SECURITIES
  EXCHANGE ACT OF 1934
  Date of report (Date of earliest event reported):
  April 30, 2008
  HEELYS, INC.
  (Exact name of
  registrant as specified in its charter)
  Delaware
  001-33182
  75-2880496
  (State or other
    jurisdiction of
  incorporation or organization)
  Commission File No.
  (IRS Employer
  Identification No.)
  3200
  Belmeade Drive, Suite 100, Carrollton, Texas 75006
  (Address of principal executive offices and zip code)
  (214)
  390-1831
  (Registrant's telephone number, including area code)
  Check the appropriate
  box below if the Form 8-K filing is intended to simultaneously satisfy the
  filing obligations of the registrant under any of the following provisions:
  o
  Written
  communications pursuant to Rule 425 under the Securities Act (17 CFR
  230.425)
  o
  Soliciting
  material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
  240.14a-12)
  o
  Pre-commencement
  communications pursuant to Rule 14d-2(b) under the Exchange Act (17
  CFR 240.14d-2(b))
  o
  Pre-commencement
  communications pursuant to Rule 13e-4(c) under the Exchange Act (17
  CFR 240.13e-4(c))
  Item
  1.01               Entry into a Definitive
  Material Contract.
  Effective
  as of April 30, 2008 (the "Effective Date"), two wholly owned subsidiaries
  of Heelys, Inc. (the "Company") entered into agreements to change the
  arrangements regarding the distribution of Heelys-branded footwear and products
  ("Products") in France, Monaco and Andorra (the "Territory").
  Termination Agreement
  Heeling Sports Limited ("HSL") entered into a Termination
  Agreement (the "Termination Agreement") with
  Trotwood Import/Export (the "Distributor"),
  Trotwood Investments Ltd., which is the sole owner of the Distributor (the "Shareholder"),
  and David Stanley ("Stanley") and Margarete Stanley (the "Consultant", and
  together with Stanley, the sole owners of the Shareholder), to terminate an
  International Distributor Agreement between HSL and the Distributor (the "Distributor
  Agreement").  Under the Termination
  Agreement:
  ·
  HSL agreed to purchase from
  the Distributor all of the Distributor's inventory of unsold Products for the
  Distributor's cost of such products, the Distributor's order books relating to
  Products at the value on Distributor's books and certain other incidental
  assets of the Distributor related to its distribution operations as described
  in the Termination Agreement (the "Purchase Items").  HSL agreed to pay Distributor for the
  Purchase Items on or before May 16, 2008.
  ·
  HSL agreed to purchase from
  the Distributor all of the unshipped orders for Products on the Distributor's
  order book as of the Effective Date that are not novated to HSL or one of its
  affiliates (the "Unshipped Orders") for a price equal to the Distributor's net
  wholesale margin on the Unshipped Orders. 
  The purchase price will be payable to the Distributor on or before the
  end of the month following HSL's receipt of payment for the Products shipped in
  response to all Unshipped Orders.  If an
  Unshipped Order is not novated to HSL or one of its affiliates, HSL agreed to
  supply Distributor with goods to fulfill such order, and if any such customer
  cancels such unshipped order because HSL or its affiliate does not comply with
  such customer's terms and conditions of purchase, HSL agreed to pay Distributor
  the net wholesale margin on such unfulfilled order.
  ·
  The Distributor, Stanley and
  the Consultant agreed, until April 30, 2012, not to directly or indirectly
  engage in, or enter into any business relationship with any person or entity
  engaged in, any business that uses, imports, distributes, sales, or manufactures
  any products that compete with any of the Products anywhere in the world.  In consideration for such covenant not to
  compete, HSL agreed to pay Distributor an additional amount set forth in the
  Termination Agreement.
  ·
  HSL agreed to pay Distributor
  an additional amount for each pair of Heelys branded footwear sold by the HSL
  or its affiliates in the Territory.  This
  obligation terminates on the earlier of (a) April 30, 2011 or (b) when
  HSL and its affiliates have sold 400,000 pairs of Heelys-branded footwear in
  the Territory.
  ·
  The Distributor, Stanley and
  the Consultant jointly and severally agreed to retain, release HSL and its
  affiliates from, and indemnify HSL and its affiliates against all liabilities
  incurred by the Distributor relating to all commissions and other amounts
  payable to the Distributor's sales agents or others relating to the Unshipped
  Orders and all liabilities arising out of or in connection with any and all of
  the Distributor's actions or omissions under or relating to the Distributor
  Agreement.
  2
  Consulting Agreement
  Heeling
  Sports EMEA, a Belgian company (SPRL) ("EMEA"),
  entered into
  a Consulting Agreement (the "Consulting Agreement")
  with the Consultant.
  The
  consulting services to be rendered by the Consultant under the Consulting
  Agreement consist primarily of making available to EMEA the customer lists and
  other intangible assets of the Consultant that would be useful in developing
  the "Heelys" brand and distribution business and promoting interest in, and the
  sales and use of, Products in the Territory. 
  During the term of the Consulting Agreement, which expires April 30,
  2009, EMEA shall pay the Consultant consulting fees as set forth in the
  Consulting Agreement
  and
  shall reimburse the Consultant for her reasonable and pre-approved business and
  travel expenses.
  EMEA may
  terminate the Consulting Agreement, and the payment obligations thereunder, at
  any time upon any felony conviction of the Consultant; any theft,
  misappropriation, or misdirection of EMEA's funds, property, or business
  opportunities by the Consultant; the Consultant's material violation of the
  Consulting Agreement; or the Distributor's violation of the Termination
  Agreement.
  Forward Looking Statements
  This Report contains forward-looking
  statements within the meaning of Section 27A of the Securities Act of
  1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
  as amended, that are based on information currently available to the Company's
  management as well as management's assumptions and beliefs. These statements
  include statements regarding the Company's assessment of the claims described
  above and are generally identified by the use of words such as "subject to," "believes,"
  "anticipates," "plans," "expects," "intends," "estimates," "may," "will," "should,"
  "can," the negatives thereof, variations thereof, similar expressions, or
  discussions of strategy. These forward-looking statements reflect the Company's
  current views with respect to future events, based on what we believe are
  reasonable assumptions; however, such statements are subject to certain risks
  and uncertainties. The Company's actual results and the timing of events could
  differ materially from those described in or implied by the forward-looking
  statements as a result of risks and uncertainties, including, without
  limitation, the fact that substantially all of the Company's net sales are
  generated by one product, continued changes in fashion trends and consumer
  preferences and general economic conditions, the Company's intellectual
  property may not restrict competing products that infringe on its patents from
  being sold, the Company's dependence on independent manufacturers, the Company
  may not be able to successfully introduce new product categories, the outcome
  of lawsuits filed against the Company, which could have a material adverse
  effect on the Company, and additional factors which are detailed in the Company's
  filings with the Securities and Exchange Commission, including the Risk Factors
  contained in the Company's Annual Report on Form 10-K. Investors,
  potential investors and other readers are urged to consider these factors
  carefully in evaluating the forward-looking statements and are cautioned not to
  place undue reliance on such forward-looking statements. The forward-looking
  statements made herein are only made as of the date of this Report and the
  Company undertakes no obligation to publicly update such forward-looking
  statements to reflect subsequent events or circumstances.
  3
  SIGNATURES
  Pursuant to the requirements of the Securities
  Exchange Act of 1934, the Registrant has duly caused this report to be signed
  on its behalf by the undersigned, thereunto duly authorized.
  Heelys, Inc.
  Date:
    May 2, 2008
  By:
  /s/ Michael W. Hessong
  Michael W.
    Hessong
  Chief Financial Officer
  4