EXHIBIT B

SETTLEMENT AGREEMENTadidasandSkechersUSA, Inc..

THIS AGREEMENTis enteredinto this____ dayof July 1995 by andbetweenadida.sAG, ajoint-stock company,wIth a placeofbusinessat Postfach1120,D-91072,Herzogenauracl:z,

FederalRepublic of Germanyand adidasAmerica,Inc., a Delawarecorporation,withaplaceoibusiness at 541 N.E.20th Avenue,Portland,Oregon97232(collectively referredto hereinafter~s“adidas”). andSkechersUSA, Inc., a Californiacoiporation,with a placeofbusinessat 228ManhattanBeachBoulevard.Suite200, ManhattanBeach,California.

WHEREAS,adidas commencedanactionin theUnited StatesDistrict Court, District ofOregc aagainstSkechersunderCivil No. CV 95-0037-ST.datedJanuary12, 1995,alleging,interalia,thatSkechers hasengagedin certainactsthatviolate Sections32 and43(a)of theLanhamAct.and federalandstatelaws prohibiting icts of~ünfaircompetition(the “Civil Action”); and

WHEREAS,Skechers deniessuch allegations;and

WHEREAS, it is thejudgmentofall partiesheretothattheir respectiveinterestswould bebestservedby resolution of the issues raised in adidas’ complaintwithout the necessity of a hearin.;or trial;

NOW,THEREFORE,the partieshaveagreed to settle their disputeunderthe following termsandconditions:

1. adidas agrees to discontinue the Civil Action against Skechers with prejudice;Concurrently with theexecutionofthis Agreement,thepartiesshall execute a Stipulat onofDismissalwith Prejudicein the fomi shownandattachedhereto asExhibit 1. AterWynneHewitt Dodson& Skerritt, counselfor adidas,shall promptlyfile Exhibit I wi’lithe Court. -

2. Skechersacknowledgesthatadidasis theexclusiveowneroftheTHREESTRIPEIDESIGN. Skechersagreesriot to usetheTHREESTRIPEDESIGNor anymark

confusinglysimilar theretoto theextentthat anyform of thatmark is entitledtoprotectionunderstateor federallaw, andSkechcrsagreesnotto challengeorcontest,Df

assistanotherin challengingorcontesting,adidas’exclusiverights in and to theTHR 3ESTRIPEDESIGNmark. For purposesofthis settlementonly, theTHREE STRIPEDESIGN is defined asthreeparallelstripesofu.niform width.. By wayof illustration,severalvariationsoftheTHREESTRIPEDESIGN areshown andattached hereto asExhibit 2.

3. Skechersagreesto ceasedistributionof its KARL K~NIsportshoe,style ~ 4712,shwnandattachedto adidas’complaintas Exhibit 1, Page1. Skecherswarrantsandrepre~~ntsthat therehas been nothitherimportation,shipment., manufacture,distribution, orsals ofsuchfootwearsincetheserviceof theCivil Action. Skechersfurtherwarrantsand

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represents it has not, nor anyparty underits control, placedanyadditionalorders orotherwiseincreased itsinventory ofsuch footwear.

4. The partieshaveagreedthat jurisdiction is retainedby-the UnitedStatesDistrict Court,District of Oregon to enforcethis Agreement.

5. The parties shall be solely responsiblefor all of theirown costs, attorneys’ fees andexpenses incurredin connection with theCivil Action andsettlement of this matter.

6. Each party represents,warrants and agrees that it has the full right and authority to enterinto this Agreement, and the officer, employee, agentor other representative executingthis Agreementon its behalf hasthe full right andauthorityto doso,andto fully cornrn.tarid bind it to this Agreement.

7. Any amendment,modification or waiverofany terra or condition of thisAgreement rmist

• be in writing andsignedby authorized representativesofall parties.No amendment,

modification or waiver ofanytermor condition ofthis Agreementshaft be madeorally orimplied from conductor otherwise; andanysuchattemptedamendment, modification crwaiver shall be null andvoid, andofno force or effect

8. This Agreementshall inure to thebenefit ofandbe binding uponeach oftheparties, an Ieach oftheir officers, directors, partners,employees,agentsaiadattorneys; theirpredecessors,successors,heirs, assigns; theirparent,subsidiaryandaffiliatedcorporations or businesses;andall persons andentities acting by, through, under or inconcert with them or anyof them.

9. if anypartybrings an action arisingout ofor relating to this Agreement,the prevailIngpartyshall be entitled to recover its costsandexpenses,includingreasonableattorneysfees,incurredin connectionwith such an action.

10. This Agreementshallbe construedin accordancewith, aridall disputeshereunder shal begovernedby, the lawsof the State ofOregon. Any ruleofconstructiondisfavoringthedraftingparty shallnot apply in the construction ofanyprovision of thisAgreement.

11. This Agreementmaybe executed inoneor morecounterparts,all ofwhich takentogethershall bedeemedoneoriginal.

12. This Agreementis the final written expression,andthecompletearid exclusivestatem~nt,

of all of theagreern iits, conditions,promisesandcovenantsamongthepartieswithrespectto the sub’ ectmatter hereof. ThisAgreementsupersedesall prior orcontemporaneou.3agreements,negotiations1representations,understandingsanddiscussions betweenthe parties and/ortheir respectivecounselwith respectto thesubj~ctmatter coveredhereby.

2

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IN WITNESS WHEREOF,theparties have caused this Agreement to be duly executed asof U~eday and year firstwritten aboveand intend to be legally bound thereto.

adidasAG

J~o~W.Title:(~~emark Counsel

adidasAmerica, Inc.

~W. Erb

Tit1e(~~eral Counsel

SkechersUSA, Inc.

Name: David Ueinber~

Title: Chief Financial Officer

3.

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