ASSET PURCHASE AND PROPERTY TRANSFER AGREEMENT

Exhibit 10.16

ASSET PURCHASE AND PROPERTY TRANSFER AGREEMENT

        This ASSET PURCHASE AND PROPERTY TRANSFER AGREEMENT (this " Agreement "), dated effective as of May 19, 2005 (the " Agreement Date "), is entered into by and between St. Vrain Trading, LLC, d/b/a Crocs Hawaii, LLC, a Colorado Limited Liability Company (" Seller "), and Crocs, Inc. a Colorado company (" Buyer " or " Crocs ").

         WHEREAS, Buyer manufactures and sells Crocs brand products; and

         WHEREAS, Seller owns and operates a business unit in Honolulu, Hawaii which markets and distributes Crocs brand products to local retailers (the " Business "); and

         WHEREAS, Crocs desires to purchase, and Seller desires to sell, certain assets of the of the Business for the Purchase Price (as defined in Section 4.1 below), subject to the terms and conditions of this Agreement; and

         WHEREAS, in connection with the execution of this Agreement desires to accept the assignment of the lease for the property where the Business is currently located (the " Lease Agreement "):

         NOW, THEREFORE, the parties hereto agree as follows:

        1.     Purchase and Sale of Purchased Assets.     Subject to the terms and conditions of this Agreement, at the Closing, Seller agrees to sell, assign, transfer and convey to Crocs, and Crocs agrees to purchase and acquire from Seller, all of Seller's right, title and interest in and to all of the assets owned by the business other than the Excluded Assets (as defined below) as listed on the adjusted balance sheet dated May 19, 2005 (the " Closing Date Balance Sheet "). A true and correct copy of the Closing Date Balance sheet is attached hereto as Exhibit 3 to this Agreement. The Purchased Assets shall be delivered to Crocs free and clear of any mortgage, pledge, lien, or other encumbrance. For the purposes of this Agreement, " Purchased Assets " shall mean the following:

•         (i)    all machinery, equipment, furniture, leasehold improvements and other fixed assets owned or used by Seller in connection with the Business;

          (ii)   all prepaid expenses and off-book assets relating to the Business, including all phone and facsimile numbers;

          (iii)  all of Seller's rights under license agreements, utility agreements, leases and other contracts related to the Business to which it is a party;

          (iv)  all right title and interest in the name Crocs Hawaii, which will be assigned to Buyer within 30 business days of the Closing (as defined below);

          (v)   all computers, software, office equipment and know-how, related to the Business;

          (vi)  all cash and cash accounts of the Business; and

          (vii) all other assets of the Business not listed above which are reflected on the Closing Date Balance Sheet except the following excluded assets (the " Excluded Assets "):

  •         a)    The Accounts Receivable listed on the Closing Date Balance Sheet;

            b)    The van used by the Business; and

            c)     All other assets of Seller net used in the Business.

Notwithstanding the description contained in this Section 1, a list of the Purchased Assets prepared by Seller is attached hereto as Exhibit 1.

        2.     Asset Transfer; Passage of Title; Delivery.     

•         2.1.      Title Passage.     At the Closing, title to all of the Purchased Assets shall pass to Crocs, and Seller shall transfer to Crocs possession all of the Purchased Assets and deliver to Crocs a bill of sale in the form attached hereto as Exhibit 2.1.

          2.2.      Delivery of Purchased Assets.     The Purchased Assets shall be transferred on the Closing Date. All risk of loss and damage to the Purchased Assets shall be borne by Crocs on and as of the Closing Date.

        3.     Retention of Liabilities.     Seller shall retain all of the liabilities of Seller other than the Assumed Liabilities (defined in Section 3(ii) below). For the purposes of this Agreement " Retained Liabilities " shall mean the following:

•         (i)    all accrued employee compensation, expenses and liabilities as of Closing Date;

          (ii)   all other liabilities of Seller related to the Business other than the following " Assumed Liabilities ":

  •         (a)   All contracts or agreements with third parties are listed on Exhibit 3-1;

            (b)   The Lease Agreement; and

            (c)   All liabilities reflected on the Closing Date Balance Sheet.

        4.     Consideration for Purchased Assets.     

•         4.1.      Purchase Price.     

  •         a.      Cash Consideration.     The cash consideration to be paid by Crocs for the Purchased Assets shall be the Net Equity of the Business (as evidenced on the Closing Date Balance Sheet), less the Accounts Receivable on the Closing Date Balance Sheet, plus Fifty Thousand United States Dollars ($50.000.00), adjusted in the manner set forth on the Settlement Statement is attached hereto as Exhibit 4 (the " Cash Consideration "), The Cash Consideration shall be paid on the Closing Date by check or other delivery of immediately available funds.

            b.      Assumption of Liabilities.     Crocs shall assume and accept assignment of the Assumed Liabilities at Closing as outlined in Section 3 above. Crocs agrees to perform all of the Assumed Liabilities that arise on and after the Closing Date as and when due and in accordance with their terms.

            c.      Taxes.     All transfer taxes arising as a result of this transaction shall be payable by Buyer.

        5.     Closing.     

        The consummation of the purchase and sale of the Purchased Assets contemplated hereby (the " Closing ") will take place, but effective as of the Agreement Date (the " Closing Date ").

        6.     Employees.     

        Seller will terminate all of its employees on the Closing Date. Crocs agrees to offer employment to the employees of the Business that Crocs desires to retain.

        7.     Representations and Warranties of Seller.     

•         7.1.      Seller Authorization.     The Seller has all requisite power and authority to enter into, execute and deliver this Agreement and to perform its obligations hereunder. This Agreement has been duly executed and delivered by the Seller and constitutes the valid and binding obligations of

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• the Seller enforceable in accordance with its terms. The execution, delivery and performance by the Seller of this Agreement and any other agreement, document or instrument executed by the Seller in connection with the consummation of the transactions contemplated hereby has been duly authorized by all necessary corporate and third party action.

          7.2      Ownership.     The Seller has good and marketable title to all of the Purchased Assets and Inventory, free and clear of all liens, encumbrances, security interests, restrictions or charges of any kind. Seller has not imposed any security interest upon any of the Purchased Assets or Inventory.

          7.3      Condition of Assets.     The Purchased Assets are, in the aggregate, free from defects, have been maintained in accordance with normal industry practice, are in good operating condition and repair (subject to normal wear and tear) and are suitable for the purposes for which they presently are used.

          7.4      Complete Equipment List.     Seller represents that it has supplied Buyer with a complete list of the Equipment (including applicable software and software licenses) that Seller deems necessary to support Seller's business.

          7.5      Accuracy of Information.     Seller represents and warrants that the documents it has provided to Buyer in connection with this Agreement, including but not limited to the Closing Date Balance Sheet, are true, correct and an accurate representation of the Business as of the Closing and do not contain any inaccuracies or misstatements of any kind.

          7.6      Disclosure.     No representation or warranty by the Seller contained in this Agreement, and no statement contained in the Exhibits or any other document, certificate or