Common use of Aggravating and Mitigating Factors Clause in Contracts

Aggravating and Mitigating Factors. The penalties in this matter were determined in consideration of all relevant circumstances, including statutory factors as described in CARB’s Enforcement Policy. CARB considered whether the violator came into compliance quickly and cooperated with the investigation; the extent of harm to public health, safety and welfare; nature and persistence of the violation, including the magnitude of the excess emissions; compliance history; preventative efforts taken; innovative nature and the magnitude of the effort required to comply, and the accuracy, reproducibility, and repeatability of the available test methods; efforts to attain, or provide for, compliance prior to violation; action taken to mitigate the violation; financial burden to the violator; and voluntary disclosure. The penalties are set at levels sufficient to deter violations, to remove any economic benefit or unfair advantage from noncompliance, to obtain swift compliance, and the potential costs, risks, and uncertainty associated with litigation. Penalties in future cases might be smaller or larger depending on the unique circumstances of the case. Mitigating factors include the following specific examples, one or more of which may apply to each specific issue: a) PORSCHE thoroughly and timely self-disclosed all of the alleged violations included herein to CARB and the United States Environmental Protection Agency (EPA) pursuant to “Incentives for Self-Policing; Discovery, Disclosure, Correction and Prevention of Violations, 65 Federal Regulations, section 19,618 (Apr. 11, 2000) and the California Environmental Protection Agency’s (“CalEPA”) “Recommended Guidance on Incentives for Voluntary Disclosure” (October 2003); b) PORSCHE has promptly commenced to completely fix and has in most cases already fixed all problems identified associated with identified emissions exceedances; c) PORSCHE improved processes that address the issues and to ensure that no vehicle will be imported, sold, or delivered in California that is not the same in all material respects as the vehicle in the application for certification; d) These were first time occurrences by PORSCHE of these types of alleged violations; e) PORSCHE fully complied with the investigation and performed substantial, additional analysis, testing, and effort, and provided requested information in a complete and timely manner; f) PORSCHE promptly mitigated the environmental and programmatic impacts of the alleged violation by issuing a stop-sale order for vehicles with emission exceedances and promptly working to determine the appropriate technical solutions to address the emission exceedances; g) PORSCHE met with CARB on numerous occasions to promptly respond to questions, provide clarification, present findings of testing/investigation, and provide updates; and h) CARB’s enforcement program has had a deterrent effect on Porsche, including through its agreement to enter into Consent Decrees in 2016 and 2017 with respect to emissions and testing violations by Porsche related to diesel vehicles.

Aggravating and Mitigating Factors. The penalties in this matter were determined in consideration of all relevant circumstances, including statutory factors as described in CARB’s Enforcement Policy. CARB considered whether the violator came into compliance quickly and cooperated with the investigation; the extent of harm to public health, safety and welfare; nature and persistence of the violation, including the magnitude of the excess emissions; compliance history; preventative efforts taken; innovative nature and the magnitude of the effort required to comply, and the accuracy, reproducibility, and repeatability of the available test methods; efforts to attain, or provide for, compliance prior to violation; action taken to mitigate the violation; financial burden to the violator; and voluntary disclosure. The penalties are set at levels sufficient to deter violations, to remove any economic benefit or unfair advantage from noncompliance, to obtain swift compliance, and the potential costs, risks, and uncertainty associated with litigation. Penalties in future cases might be smaller or larger depending on the unique circumstances of the case. Mitigating factors include the following specific examples, one or more of which may apply to each specific issue: a) PORSCHE thoroughly and timely self-disclosed all of the alleged violations included herein to CARB and the United States Environmental Protection Agency (EPA) pursuant to “Incentives for Self-Policing; Discovery, Disclosure, Correction and Prevention of Violations, 65 Federal Regulations, section Fed. Reg. 19,618 (Apr. 11, 2000) and the California Environmental Protection Agency’s (“CalEPACAL/EPA”) “Recommended Guidance on Incentives for Voluntary Disclosure” (October 2003); b) PORSCHE has promptly commenced to and completely fix and has in most cases already fixed all problems identified associated with identified emissions exceedancesidentified; c) PORSCHE identified and initiated necessary process changes and implemented the required improvements and other measures to prevent undisclosed running changes and field fixes in the future; d) Based on best engineering judgment, no impacts to evaporative emissions and durability are expected; e) The ECU/TCU software combinations tested by PORSCHE showed results for criteria air pollutants that are considerably below the standard when tested under the applicable test conditions in drive mode, and In-Use Verification Program (IUVP) results are consistent with the certification values; f) The ECU/TCU software combinations tested by PORSCHE showed only minor deviation in carbon dioxide (CO2) results over four model years; g) PORSCHE promptly improved processes that address the issues and to ensure that no vehicle will be imported, sold, or delivered in California that is not until it has received certification by CARB; h) PORSCHE’s IUVP on-board refueling vapor recovery testing results were all below the same applicable standard; i) PORSCHE’s IUVP evaporative emissions results are below the EPA regulatory standards; j) There were no warranty claims for any one specific symptom or specific part associated with the affected vehicles’ evaporative systems; k) PORSCHE established an independent department for technical conformity (“ET”) in all material respects as the vehicle 2017 with over 100 employees; l) PORSCHE confirmed durability with gasoline containing 15% ethanol; m) PORSCHE confirmed there were no significant differences in the application for certificationdeterioration factor determination, allowing future model year vehicles to be certified; dn) The identical engine and transmission calibration in the 991II Carrera GTS, a certified vehicle, is in the 991 II Carrera S Kit; o) The identical OBD system in the 991II Carrera GTS 2019 model year OBD II group is in the 991 II Carrera S Kit; p) PORSCHE’s emission tests with a representative worst case vehicle of the 991II Carrera S KIT have shown compliance with the Tier3/Bin160 Emission Standard; q) PORSCHE’s fuel economy results for the 991 II Carrera S Kit are comparable to those of the 991II Carrera GTS but have a lowered fuel economy as compared to the 991II Carrera S; r) PORSCHE integrated its certification process so all power kits would go through the technical conformity group as is done for all new vehicle certifications; s) Changes to the fuel and breather lines were with a product of superior evaporative performance; t) The alleged violations do not undermine emissions standards or cause the release of excess emissions; u) These were unintentional, first time occurrences by PORSCHE of these types of alleged violations; ev) PORSCHE fully complied with the investigation and performed substantial, additional analysis, testing, and effort, and provided requested information in a complete and timely manner; fw) PORSCHE promptly mitigated the environmental and programmatic impacts of the alleged violation by issuing a stoppromptly fixing problems, e.g., flashing vehicles that contained pre-sale order for vehicles with emission exceedances series production software and promptly working to determine buy-back of the appropriate technical solutions to address the emission exceedancesPorsche GT3 Touring Edition vehicle; gx) PORSCHE met with CARB on numerous occasions to promptly respond to questions, provide clarification, present findings of testing/investigation, and provide updates; and hy) CARB’s enforcement program has had a clear deterrent effect on PorschePORSCHE. Specifically, including through as part of the 3L consent decree in 2017, PORSCHE (along with the other defendants) admitted to the presence of defeat devices, which weren’t disclosed to the agencies at the time of certification, admitted that the vehicles emit NOx above the certification limits, paid substantial civil penalties, paid $225,000,000 to fund Eligible Mitigation Actions to fully mitigate the total, lifetime excess NOx emissions, agreed to remove from commerce or perform an AEM on at least 85% of the vehicles, agreed to a buy-back and lease termination, agreed to perform 5 years of in-use compliance testing, agreed to perform PEMS testing of 33% of its agreement MY2017-2019 vehicles, agreed to enter into Consent Decrees two Green City Initiatives (▇▇▇ investment), agreed to pay CARB $25,000,000 to fund ▇▇▇-related aspects of the EFMP Plus Up program, or the ▇▇▇- related aspects of similar vehicle replacement programs, and agreed to self-disclose violations. PORSCHE’s first self-disclosure occurred in 2016 October 2016, shortly after the 3L diesel investigation commenced. In addition, PORSCHE continues to promptly and 2017 fully self-disclose other issues to CARB and to work with respect CARB to emissions and testing violations by Porsche related to diesel vehiclesresolve the issues.

Aggravating and Mitigating Factors. The penalties in this matter were determined in consideration of all relevant circumstances, including statutory factors as described in CARB’s Enforcement Policy. CARB considered whether the violator came into compliance quickly and cooperated with the investigation; the extent of harm to public health, safety and welfare; nature and persistence of the violation, including the magnitude of the excess emissions; compliance history; preventative efforts taken; innovative nature and the magnitude of the effort required to comply, and the accuracy, reproducibility, and repeatability of the available test methods; efforts to attain, or provide for, compliance prior to violation; action taken to mitigate the violation; financial burden to the violator; and voluntary disclosure. The penalties are set at levels sufficient to deter violations, to remove any economic benefit or unfair advantage from noncompliance, to obtain swift compliance, and the potential costs, risks, and uncertainty associated with litigation. Penalties in future cases might be smaller or larger depending on the unique circumstances of the case. Mitigating factors in this case include but are not limited to the following specific examples, one or more of which may apply to each specific issue: (a) PORSCHE thoroughly Yanmar acted transparently and timely in good faith, including by notifying CARB in 2015 that it was implementing the alleged inadequately disclosed, off-road CI AECD both as a field fix to address a potential emission-related defect and on new production engines affected by it for the 2013 through 2015 model years; (b) Yanmar self-disclosed all of the alleged violations included herein LSI engine issue and came into compliance quickly by expeditiously modifying the allegedly non-compliant LSI engines to CARB and their certified configuration before the United States Environmental Protection Agency (EPA) pursuant to “Incentives engines were delivered for Self-Policing; Discovery, Disclosure, Correction and Prevention of Violations, 65 Federal Regulations, section 19,618 (Apr. 11, 2000) and the California Environmental Protection Agency’s (“CalEPA”) “Recommended Guidance on Incentives for Voluntary Disclosure” (October 2003)sale in California; b) PORSCHE has promptly commenced to completely fix and has in most cases already fixed all problems identified associated with identified emissions exceedances; (c) PORSCHE improved processes that address the issues and to ensure that no vehicle will be imported, sold, or delivered in California that is not the same in all material respects as the vehicle in the application for certification; d) These were first time occurrences by PORSCHE of these types of alleged violations; e) PORSCHE Yanmar fully complied cooperated with the investigation and performed substantial, additional analysis, testing, and effort, and provided requested information in a complete and timely manner; f) PORSCHE promptly mitigated the environmental and programmatic impacts of the alleged violation by issuing a stop-sale order for vehicles with emission exceedances and promptly working to determine the appropriate technical solutions to address the emission exceedances; g) PORSCHE met with CARB on numerous occasions to promptly respond to questions, provide clarification, present findings of testing/CARB's investigation, and provide updates; and h(d) Yanmar's compliance history with CARB’s enforcement program has had a deterrent effect on Porsche, including through its agreement to enter into Consent Decrees in 2016 and 2017 with respect to emissions and testing violations by Porsche related to diesel vehicles.

Aggravating and Mitigating Factors. The penalties in this matter were determined in consideration of all relevant circumstances, including statutory factors as described in CARB’s Enforcement Policy. CARB considered whether the violator came into compliance quickly and cooperated with the investigation; the extent of harm to public health, safety and welfare; nature and persistence of the violation, including the magnitude of the excess emissions; compliance history; preventative efforts taken; innovative nature and the magnitude of the effort required to comply, and the accuracy, reproducibility, and repeatability of the available test methods; efforts to attain, or provide for, compliance prior to violation; action taken to mitigate the violation; financial burden to the violator; and voluntary disclosure. The penalties are set at levels sufficient to deter violations, to remove any economic benefit or unfair advantage from noncompliance, to obtain swift compliance, and the potential costs, risks, and uncertainty associated with litigation. Penalties in future cases might be smaller or larger depending on the unique circumstances of the case. Mitigating factors include the following specific examples, one or more of which may apply to each specific issue: a) PORSCHE thoroughly and timely VW self-disclosed all of the alleged violations included herein to CARB and the United States Environmental Protection Agency (EPA) pursuant to “Incentives for Self-Policing; Discovery, Disclosure, Correction and Prevention of Violations, 65 Federal Regulations, section Fed. Reg. 19,618 (Apr. 11, 2000) and the California Environmental Protection Agency’s (“CalEPACAL/EPA”) “Recommended Guidance on Incentives for Voluntary Disclosure” (October 2003); b) PORSCHE has VW promptly commenced to and completely fix and has in most cases already fixed all the problems identified associated with identified emissions exceedancesidentified; c) PORSCHE VW identified and initiated necessary process changes and implemented the required improvements and other measures to prevent undisclosed running changes and field fixes in the future; d) VW asserts that, based on good engineering judgment, there are no impacts on evaporative emissions and durability; e) VW implemented service campaigns to correct vehicles that had received the undisclosed ECU/TCU software combinations; f) VW promptly improved processes that address the issues and to ensure that no vehicle will be prevent vehicles from being imported, sold, or delivered in California that is not the same in all material respects as the until it has received certification by CARB; g) VW confirmed vehicle durability with gasoline containing 15% ethanol; h) VW confirmed there were no significant differences in the application for certificationdeterioration factor determination, allowing future model year vehicles to be certified; di) VW contends the alleged violations do not undermine emissions standards or cause the release of excess emissions; j) These were first time occurrences by PORSCHE VW of these types of alleged violations; ek) PORSCHE VW fully complied with the investigation and investigation, performed substantial, additional analysis, testing, and effortconfirmatory tests, and provided requested information in a complete and timely manner; fl) PORSCHE promptly VW mitigated the environmental and programmatic impacts of the alleged violation by issuing a stop-sale order for vehicles with emission exceedances and promptly working to determine the appropriate technical solutions to address the emission exceedancescorrecting subject issues wherever possible; gm) PORSCHE VW met with CARB on numerous occasions to promptly respond to questions, provide clarification, present findings of testing/investigation, and provide updates; and hn) CARB’s enforcement program has had a deterrent effect on PorscheVW, including through its agreement to enter into Consent Decrees in 2016 and 2017 with respect to emissions and testing violations by Porsche VW related to diesel vehicles.

Aggravating and Mitigating Factors. The penalties in this matter were determined in consideration of all relevant circumstances, including statutory factors as described in CARB’s Enforcement Policy. CARB considered whether the violator came into compliance quickly and cooperated with the investigation; the extent of harm to public health, safety and welfare; nature and persistence of the violation, including the magnitude of the excess emissions; compliance history; preventative efforts taken; innovative nature and the magnitude of the effort required to comply, and the accuracy, reproducibility, and repeatability of the available test methods; efforts to attain, or provide for, compliance prior to violation; action taken to mitigate the violation; financial burden to the violator; and voluntary disclosure. The penalties are set at levels sufficient to deter violations, to remove any economic benefit or unfair advantage from noncompliance, to obtain swift compliance, and to avoid the potential costs, risks, and uncertainty associated with litigation. Penalties in future cases might be smaller or larger depending on the unique circumstances of the each case. Mitigating factors include the following specific examples, one or more of which may apply to each specific issue: (a) PORSCHE HATCI thoroughly and timely self-disclosed all of the alleged violations included herein pursuant to CARB and Mail-Out #ECC 2020-06 with the United States Environmental Protection Agency (EPA) pursuant to subject name, “Incentives for Alert: Self-Policing; DiscoveryDisclosure of Non- Compliant Software and Other Violations by December 31, Disclosure2020;” (b) HATCI asserts that, Correction and Prevention of Violationsbased on its good engineering judgment, 65 Federal Regulations, section 19,618 (Apr. 11, 2000) and the California Environmental Protection Agency’s (“CalEPA”) “Recommended Guidance alleged violations have no impact on Incentives for Voluntary Disclosure” (October 2003)the affected vehicles’ emissions; b(c) PORSCHE has promptly commenced HATCI improved its running change processes to completely fix and has in most cases already fixed all problems identified associated with identified emissions exceedancesprevent future violation occurrences; c(d) PORSCHE improved processes that address the issues and to ensure that no vehicle will be imported, sold, or delivered in California that is not the same in all material respects as the vehicle in the application for certificationThe alleged violations were first-time occurrences of its type; d) These were first time occurrences by PORSCHE of these types of alleged violations; (e) PORSCHE fully complied with the investigation and performed substantial, additional analysis, testing, and effort, and provided requested information in a complete and timely manner; f) PORSCHE promptly HATCI mitigated the environmental and programmatic impacts of the alleged violation violations by issuing a stop-sale order for vehicles with emission exceedances and promptly working to determine correcting the appropriate technical solutions to address the emission exceedances; g) PORSCHE met with CARB on numerous occasions to promptly respond to questions, provide clarification, present findings of testing/investigation, and provide updatesassociated issues wherever possible; and h(f) HATCI was very cooperative during CARB’s investigation of the Self- Disclosures and alleged violations, and met in person with CARB enforcement program has had a deterrent effect on Porsche, including through its agreement staff numerous times in order to enter into Consent Decrees in 2016 provide all requested information and 2017 with respect detailed explanations and question responses to emissions and testing violations by Porsche related to diesel vehiclesgreat effect.