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Case 3:15-md-02672-CRB Document 1605 Filed 06/28/16 Page 1 of 2123456789JOHN C. CRUDENAssistant Attorney GeneralEnvironment and Natural Resources DivisionJOSHUA H. VAN EATON (WA-39871)BETHANY ENGEL (MA-660840)Trial AttorneysEnvironmental Enforcement SectionU.S. Department of JusticeP.O. Box 7611Washington DC 20044-7611Telephone: (202) 514-5474Facsimile: (202) 514-0097Email: [email protected] for Plaintiff United States of AmericaUNITED STATES DISTRICT COURTNORTHERN DISTRICT OF CALIFORNIASAN FRANCISCO DIVISION14151617181920IN RE: VOLKSWAGEN “CLEANDIESEL” MARKETING, SALESPRACTICES, AND PRODUCTSLIABILITY LITIGATION)))))))))))Case No: MDL No. 2672 CRB (JSC)NOTICE OF LODGING OFPARTIAL CONSENT DECREEHon. Charles R. Breyer212223Consistent with the requirements of 28 C.F.R. § 50.7, a proposed Partial Consent Decreeis being lodged with the Court in this Civil Action, after having been concurred to and signed by2425the relevant parties in this matter. After the requisite Federal Register Notice is published, the2630-day time period for comments has run, and the comments, if any, have been evaluated, the27Court will be further advised as to any action that may be required by the Court at that time.281NOTICE OF LODGING OFPARTIAL CONSENT DECREEMDL No. 2672 CRB (JSC)

Case 3:15-md-02672-CRB Document 1605 Filed 06/28/16 Page 2 of 21During the pendency of the Federal Register Notice comment period, no action is required of the2Court.3Dated: June 28, 2016Respectfully submitted,4JOHN C. CRUDENAssistant Attorney GeneralEnvironment and Natural Resources DivisionU.S. Department of Justice5678By:/s/ Bethany EngelJOSHUA H. VAN EATONBETHANY ENGELGABRIEL ALLENLESLIE ALLENPATRICK BRYANNIGEL COONEYKAREN DWORKINDANICA GLASERANNA GRACESHEILA McANANEYMARCELLO MOLLOROBERT MULLANEYERIKA ZIMMERMANIVA ZIZAEnvironmental Enforcement SectionEnvironment and Natural Resources DivisionUnited States Department of JusticeP.O. Box 7611Washington, D.C. 20044-7611Telephone: (202) 514-5474Facsimile: (202) j.gov91011121314151617181920212223Counsel for the United States24252627282NOTICE OF LODGING OFPARTIAL CONSENT DECREEMDL No. 2672 CRB (JSC)

Case 3:15-md-02672-CRB Document 1605-1 Filed 06/28/16 Page 1 of 225123456789JOHN C. CRUDENAssistant Attorney GeneralEnvironment and Natural Resources DivisionJOSHUA H. VAN EATON (WA-39871)BETHANY ENGEL (MA-660840)Trial AttorneysEnvironmental Enforcement SectionU.S. Department of JusticeP.O. Box 7611Washington DC 20044-7611Telephone: (202) 514-5474Facsimile: (202) 514-0097Email: [email protected] for Plaintiff United States of AmericaUNITED STATES DISTRICT COURTNORTHERN DISTRICT OF CALIFORNIASAN FRANCISCO DIVISION14151617181920IN RE: VOLKSWAGEN “CLEANDIESEL” MARKETING, SALESPRACTICES, AND PRODUCTSLIABILITY LITIGATION)))))))))))Case No: MDL No. 2672 CRB (JSC)PARTIAL CONSENT DECREEHon. Charles R. Breyer2122232425262728PARTIAL CONSENT DECREEMDL No. 2672 CRB (JSC)

Case 3:15-md-02672-CRB Document 1605-1 Filed 06/28/16 Page 2 of 225TABLE OF .XXI.XXII.JURISDICTION AND VENUE . 6APPLICABILITY . 6DEFINITIONS. 8PARTIAL INJUNCTIVE RELIEF . 12APPROVAL OF SUBMISSIONS AND EPA/CARB DECISIONS . 18REPORTING AND CERTIFICATION REQUIREMENTS . 20STIPULATED PENALTIES AND OTHER MITIGATION TRUST PAYMENTS . 23FORCE MAJEURE . 30DISPUTE RESOLUTION . 32INFORMATION COLLECTION AND RETENTION . 35EFFECT OF SETTLEMENT/RESERVATION OF RIGHTS . 38COSTS . 43NOTICES . 43EFFECTIVE DATE . 48RETENTION OF JURISDICTION . 48MODIFICATION . 48TERMINATION . 49PUBLIC PARTICIPATION . 49SIGNATORIES/SERVICE. 50INTEGRATION . 50FINAL JUDGMENT . 51APPENDICES . 5116171819202122232425262728iPARTIAL CONSENT DECREEMDL No. 2672 CRB (JSC)

Case 3:15-md-02672-CRB Document 1605-1 Filed 06/28/16 Page 3 of 2251WHEREAS, Plaintiff United States of America, on behalf of the United States2Environmental Protection Agency, filed a complaint in this action on January 4, 2016, against3Volkswagen AG, Volkswagen Group of America, Inc., Volkswagen Group of America45Chattanooga Operations, LLC, Audi AG, Dr. Ing. h.c. F. Porsche AG, and Porsche Cars North6America, Inc. alleging that Defendants violated Sections 203(a)(1), (2), (3)(A), and (3)(B) of the7Clean Air Act, 42 U.S.C. §§ 7522(a)(1), (2), (3)(A), and (3)(B), with regard to approximately8500,000 model year 2009 to 2015 motor vehicles containing 2.0 liter diesel engines (more9specifically defined elsewhere as “2.0 Liter Subject Vehicles”) and approximately 80,000 model1011year 2009 to 2016 motor vehicles containing 3.0 liter diesel engines (more specifically defined12elsewhere as “3.0 Liter Subject Vehicles”), for a total of approximately 580,000 motor vehicles13(collectively, “Subject Vehicles”);14WHEREAS, the U.S. Complaint alleges that each Subject Vehicle contains, as part of1516the engine control module (“ECM”), certain computer algorithms that cause the emissions17control system of those vehicles to perform differently during normal vehicle operation and use18than during emissions testing. The U.S. Complaint alleges that these computer algorithms are19prohibited defeat devices under the Act, and that during normal vehicle operation and use, the20Subject Vehicles emit levels of oxides of nitrogen (“NOx”) significantly in excess of the EPA212223242526compliant levels. The U.S. Complaint alleges and asserts four claims for relief related to thepresence of the defeat devices in the Subject Vehicles;WHEREAS, the People of the State of California, by and through the California AirResources Board and Kamala D. Harris, Attorney General of the State of California, filed acomplaint on June 28, 2016, against Defendants alleging that Defendants violated Cal. Health &2728Safety Code §§ 43106, 43107, 43151, 43152, 43153, 43205, 43211, and 43212; Cal. Code Regs.1PARTIAL CONSENT DECREEMDL No. 2672 CRB (JSC)

Case 3:15-md-02672-CRB Document 1605-1 Filed 06/28/16 Page 4 of 2251tit. 13, §§ 1903, 1961, 1961.2, 1965, 1968.2, and 2037, and 40 C.F.R. Sections incorporated by2reference in those California regulations; Cal. Bus. & Prof. Code §§ 17200 et seq., 17500 et seq.,3and 17580.5; Cal. Civ. Code § 3494; and 12 U.S.C. § 5531 et seq., with regard to approximately4571,000 model year 2009 to 2015 motor vehicles containing 2.0 liter diesel engines and6approximately 16,000 model year 2009 to 2016 motor vehicles containing 3.0 liter diesel7engines, for a total of approximately 87,000 motor vehicles. The California Complaint alleges,8in relevant part, that the motor vehicles contain prohibited defeat devices and have resulted in,9and continue to result in, increased NOx emissions from each such vehicle significantly in excess1011of CARB requirements, that these vehicles have resulted in the creation of a public nuisance, and12that Defendants engaged in related conduct that violated unfair competition, false advertising,13and consumer protection laws;14WHEREAS, the United States and California enter into this Partial Consent Decree with1516Volkswagen AG, Audi AG, Volkswagen Group of America, Inc., and Volkswagen Group of17America Chattanooga Operations, LLC (“Settling Defendants”) (collectively, the “Parties”) to18address the 2.0 Liter Subject Vehicles on the road and the associated environmental19consequences resulting from the past and future excess emissions from the 2.0 Liter Subject20Vehicles;2122WHEREAS, Settling Defendants admit that software in the 2.0 Liter Subject Vehicles23enables the vehicles’ ECMs to detect when the vehicles are being driven on the road, rather than24undergoing Federal Test Procedures, and that this software renders certain emission control25systems in the vehicles inoperative when the ECM detects the vehicles are not undergoing26Federal Test Procedures, resulting in emissions that exceed EPA-compliant and CARB-2728compliant levels when the vehicles are driven on the road;2PARTIAL CONSENT DECREEMDL No. 2672 CRB (JSC)

Case 3:15-md-02672-CRB Document 1605-1 Filed 06/28/16 Page 5 of 225123WHEREAS, Settling Defendants admit that this software was not disclosed in theCertificate of Conformity and Executive Order applications for the 2.0 Liter Subject Vehicles,and, as a result, the design specifications of the 2.0 Liter Subject Vehicles, as manufactured,45678differ materially from the design specifications described in the Certificate of Conformity andExecutive Order applications;WHEREAS, except as expressly provided in this Consent Decree, nothing in thisConsent Decree shall constitute an admission of any fact or law by any Party except for the9purpose of enforcing the terms or conditions set forth herein;1011121314WHEREAS, the Parties agree that:1.The 2.0 Liter Subject Vehicles on the road emit NOx at levels above the standardsto which they were certified to EPA and CARB pursuant to the Clean Air Act and the CaliforniaHealth and Safety Code, and a prompt remedy to address the noncompliance is needed;15162.At the present time, there are no practical engineering solutions that would,17without negative impact to vehicle functions and unacceptable delay, bring the 2.0 Liter Subject18Vehicles into compliance with the exhaust emission standards and the on-board diagnostics19requirements to which VW certified the vehicles to EPA and CARB;203.Accordingly, as one element of the remedy to address the Clean Air Act and2122California Health and Safety Code violations, Settling Defendants are required to remove from23commerce in the United States and/or perform an Approved Emissions Modification on at least2485% of the 2.0 Liter Subject Vehicles (“Recall Rate”). To this end, Settling Defendants must25offer each and every Eligible Owner and Eligible Lessee of an Eligible Vehicle the option of the26Buyback of the Eligible Vehicle or the Lease Termination, in accordance with the terms2728specified in Appendix A (Buyback, Lease Termination, and Vehicle Modification Recall3PARTIAL CONSENT DECREEMDL No. 2672 CRB (JSC)

Case 3:15-md-02672-CRB Document 1605-1 Filed 06/28/16 Page 6 of 2251Program). In addition, Settling Defendants shall offer Eligible Owners and Eligible Lessees the2option of an emissions modification in accordance with the technical specifications of Appendix3B (Vehicle Recall and Emissions Modification Program), if Settling Defendants propose such a45modification and EPA/CARB approve it. Settling Defendants estimate that the total cost of6injunctive relief pursuant to the requirements of Appendix A and the related Class Action7Settlement and FTC Order may be up to 10,033,000,000. In the event Settling Defendants do8not achieve an 85% Recall Rate, Settling Defendants must pay additional funds into the9Mitigation Trust;10114.The practical engineering solutions provided by Appendix B (Vehicle Recall and12Emissions Modification Program), should Settling Defendants propose such emissions13modifications consistent with the provisions of Appendix B, would substantially reduce NOx14emissions from the 2.0 Liter Subject Vehicles and improve their on-board diagnostics, would1516avoid undue waste and potential environmental harm that would be associated with removing the172.0 Liter Subject Vehicles from service, and would allow Eligible Owners and Eligible Lessees18to retain their Eligible Vehicles if they want to do so;19205.Members of the public who are Eligible Owners or Eligible Lessees of EligibleVehicles will benefit from the relief provided by this Consent Decree;21226.As described in Appendix C (ZEV Investment Commitment), Settling Defendants23will direct 2,000,000,000 of investments over a 10-year period to support increased use of24technology for Zero Emission Vehicles (“ZEV”) in California and the United States and may25include investments related to ZEV infrastructure, access to ZEVs, and ZEV education. The26ZEV investments required by this Consent Decree are intended to address the adverse2728environmental impacts arising from consumers’ purchases of the 2.0 Liter Subject Vehicles,4PARTIAL CONSENT DECREEMDL No. 2672 CRB (JSC)

Case 3:15-md-02672-CRB Document 1605-1 Filed 06/28/16 Page 7 of 2251which the United States and California contend were purchased with the mistaken belief that2they were lower-emitting vehicles;37.As described below and in Appendix D (Form of Environmental Mitigation Trust45Agreement), Settling Defendants will pay a total of 2,700,000,000 to fund Eligible Mitigation6Actions that will reduce emissions of NOx where the 2.0 Liter Subject Vehicles were, are, or will7be operated. The funding for the Eligible Mitigation Actions required by this Consent Decree is8intended to fully mitigate the total, lifetime excess NOx emissions from the 2.0 Liter Subject9Vehicles; and1011WHEREAS, the Parties recognize, and the Court by entering this Consent Decree finds,12that this Consent Decree has been negotiated by the Parties in good faith and will avoid litigation13among the Parties regarding certain relief with respect to the 2.0 Liter Subject Vehicles for the14claims alleged in the Complaints, and that this Consent Decree is fair, reasonable, and in the1516public interest;17WHEREAS, the Parties recognize, and the Court by entering this Consent Decree finds,18that the United States and California are not enforcing the laws of other countries, including the19emissions laws or regulations of any jurisdiction outside the United States. Nothing in this20Consent Decree is intended to apply to, or affect, Settling Defendants’ obligations under the laws2122or regulations of any jurisdiction outside the United States. At the same time, the laws and23regulations of other countries shall not affect the Settling Defendants’ obligations under this24Consent Decree.2526NOW, THEREFORE, before the taking of any testimony, without the adjudication ofany issue of fact or law, and with the consent of the Parties, IT IS HEREBY ADJUDGED,2728ORDERED, AND DECREED as follows:5PARTIAL CONSENT DECREEMDL No. 2672 CRB (JSC)

Case 3:15-md-02672-CRB Document 1605-1 Filed 06/28/16 Page 8 of 225I.1231.JURISDICTION AND VENUEThe Court has jurisdiction over the subject matter of this action, pursuant to 28U.S.C. §§ 1331, 1345, and 1355, and Sections 203, 204, and 205 of the Act, 42 U.S.C. §§ 7522,457523, and 7524, and over the Parties. Venue lies in this District pursuant to 28 U.S.C. § 14076and the MDL Panel’s Transfer Order, dated December 8, 2015, and filed in this MDL action as7Dkt. # 1. The Court has supplemental jurisdiction over the California State law claims pursuant8to 28 U.S.C. § 1367. For purposes of this Decree, Settling Defendants consent to the Court’s9jurisdiction over this Consent Decree, over any action to enforce this Consent Decree, and over1011Settling Defendants, and consent to venue in this judicial district. Settling Defendants reserve12the right to challenge and oppose any claims to jurisdiction that do not arise from the Court’s13jurisdiction over this Consent Decree or an action to enforce this Consent Decree.14152.For purposes of this Consent Decree, Settling Defendants agree that the U.S.Complaint states claims upon which relief may be granted pursuant to Sections 203, 204, and1617205 of the Act, 42 U.S.C. §§ 7522, 7523, and 7524, and that the California Complaint states18claims upon which relief may be granted pursuant to Cal. Health & Safety Code §§ 43106,1943107, 43151, 43152, 43153, 43205, 43211, and 43212; Cal. Code Regs., tit. 13, §§ 1903, 1961,201961.2, 1965, 1968.2, and 2037, and 40 C.F.R. Sections incorporated by reference in those212223California regulations; Cal. Bus. & Prof. Code §§ 17200 et seq., 17500 et seq., and 17580.5; Cal.Civ. Code § 3494; and 12 U.S.C. § 5531 et seq.II.2425263.APPLICABILITYThe obligations of this Consent Decree apply to and are binding upon the UnitedStates and California, and upon Settling Defendants and any of Settling Defendants’ successors,27assigns, or other entities or persons otherwise bound by law.286PARTIAL CONSENT DECREEMDL No. 2672 CRB (JSC)

Case 3:15-md-02672-CRB Document 1605-1 Filed 06/28/16 Page 9 of 2251234.Settling Defendants’ obligations to comply with the requirements of this ConsentDecree are joint and several. In the event of the insolvency of any Settling Defendant or thefailure by any Settling Defendant to implement any requirement of this Consent Decree, the45678remaining Settling Defendants shall complete all such requirements.5.Any legal successor or assign of any Settling Defendant shall remain jointly andseverally liable for the payment and other performance obligations hereunder. SettlingDefendants shall include an agreement to so remain liable in the terms of any sale, acquisition,9merger, or other transaction changing the ownership or control of any of the Settling Defendants,1011and no change in the ownership or control of any Settling Defendant shall affect the obligations12hereunder of any Settling Defendant without modification of the Decree in accordance with13Section XVI.146.Settling Defendants shall provide a copy of this Consent Decree to the members1516of their respective Board of Management and/or Board of Directors and their executives whose17duties might reasonably include compliance with any provision of this Decree. Settling18Defendants shall condition any contract providing for work required under this Consent Decree19to be performed in conformity with the terms thereof. Settling Defendants shall also ensure that20any contractors, agents, and employees whose duties might reasonably include compliance with212223242526any provision of the Decree are made aware of those requirements of the Decree relevant to theirperformance.7.In any action to enforce this Consent Decree, Settling Defendants shall not raiseas a defense the failure by any of its officers, directors, employees, agents, or contractors to takeany actions necessary to comply with the provisions of this Consent Decree.27287PARTIAL CONSENT DECREEMDL No. 2672 CRB (JSC)

Case 3:15-md-02672-CRB Document 1605-1 Filed 06/28/16 Page 10 of 225III.1238.DEFINITIONSTerms used in this Consent Decree that are defined in the Act or in regulationspromulgated pursuant to the Act shall have the meanings assigned to them in the Act or such45regulations, unless otherwise provided in this Decree. Terms that are defined in an Appendix to6this Consent Decree have the meaning assigned to them in that Appendix. Whenever the terms7set forth below are used in this Consent Decree, the following definitions apply:89“2.0 Liter Subject Vehicles” means each and every light duty diesel vehicle equippedwith a 2.0 liter TDI engine that Settling Defendants sold or offered for sale in, or introduced or1011delivered for introduction into commerce in the United States or its Territories, or imported into12the United States or its Territories, and that is or was purported to have been covered by the13following EPA Test Groups:1415161718192021Model YearEPA Test GroupVehicle Make and Model(s)20099VWXV02.035NVW Jetta, VW Jetta Sportwagen20099VWXV02.0U5NVW Jetta, VW Jetta Sportwagen2010AVWXV02.0U5NVW Golf, VW Jetta, VW Jetta Sportwagen, Audi A32011BVWXV02.0U5NVW Golf, VW Jetta, VW Jetta Sportwagen, Audi A32012CVWXV02.0U5NVW Golf, VW Jetta, VW Jetta Sportwagen, Audi A32012CVWXV02.0U4SVW Passat2013DVWXV02.0U5NVW Beetle, VW Beetle Convertible, VW Golf, VW22Jetta, VW Jetta Sportwagen, Audi A3232013DVWXV02.0U4SVW Passat2014EVWXV02.0U5NVW Beetle, VW Beetle Convertible, VW Golf, VW2425Jetta, VW Jetta Sportwagen26272014EVWXV02.0U4SVW Passat288PARTIAL CONSENT DECREEMDL No. 2672 CRB (JSC)

Case 3:15-md-02672-CRB Document 1605-1 Filed 06/28/16 Page 11 of 22512015FVGAV02.0VAL2VW Beetle, VW Beetle Convertible, VW Golf, VWGolf Sportwagen, VW Jetta, VW Passat, Audi A3345“3.0 Liter Subject Vehicles” means each and every model year 2009 to 2016 light dutydiesel vehicle equipped with a 3.0 liter TDI engine that Settling Defendants sold or offered for67sale in, or introduced or delivered for introduction into, commerce in the United States or its8Territories, or imported into the United States or its Territories, and that is or was purported to9have been covered by the EPA test groups set forth in Appendix B to the U.S. Complaint;10“Approved Emissions Modification” has the meaning set forth in Appendix B;11“Buyback” has the meaning set forth in Appendix A;1213141516“CA AG” means the California Attorney General’s Office and any of its successordepartments or agencies;“California” means the People of the State of California, acting by and through theCalifornia Attorney General and the California Air Resources Board;171819202122“California Complaint” means the complaint filed by California in this action;“CARB” means the California Air Resources Board and any of its successor departmentsor agencies;“Class Action Settlement” has the meaning set forth in Appendix A;“Clean Air Act” or “Act” means 42 U.S.C. §§ 7401-7671q;2324252627“Complaints” means the U.S. Complaint and the California Complaint;“Consent Decree” or “Decree” or “Partial Consent Decree” means this partial consentdecree and all appendices attached hereto (listed in Section XXII);“Day” means a calendar day unless expressly stated to be a business day. In computing28any period of time under this Consent Decree, where the last day would fall on a Saturday,9PARTIAL CONSENT DECREEMDL No. 2672 CRB (JSC)

Case 3:15-md-02672-CRB Document 1605-1 Filed 06/28/16 Page 12 of 2251Sunday, or federal or California holiday, the period shall run until the close of business of the2next business day;3“Defendants” means the persons or entities named in the U.S. Complaint and California45Complaint, specifically, Volkswagen AG, Volkswagen Group of America, Inc., Volkswagen6Group of America Chattanooga Operations, LLC, Audi AG, Dr. Ing. h.c. F. Porsche AG, and7Porsche Cars North America, Inc.;8“Effective Date” has the meaning set forth in Section XIV;9“Eligible Lessee” has the meaning set forth in Appendix A;1011“Eligible Mitigation Actions” has the meaning set forth in Appendix D;12“Eligible Owner” has the meaning set forth in Appendix A;13“Eligible Vehicle” has the meaning set forth in Appendix A;14“EPA” means the United States Environmental Protection Agency and any of its1516successor departments or agencies;17“FTC Order” has the meaning set forth in Appendix A;18“Indian tribe” means any Indian or Alaska Native tribe, band, nation, pueblo, village, or1920community that the Secretary of the Interior acknowledges to exist as an Indian tribe. The list offederally recognized Indian entities is maintained and updated by the Department of the Interior212223and published in the Federal Register pursuant to the Federally Recognized Indian Tribe List Actof 1994, 25 U.S.C. 479a-1;24“Lease Termination” has the meaning set forth in Appendix A;25“Materials” means Submissions and other documents, certifications, plans, reports,26notifications, data, or other information that is required to be submitted pursuant to this Decree;272810PARTIAL CONSENT DECREEMDL No. 2672 CRB (JSC)

Case 3:15-md-02672-CRB Document 1605-1 Filed 06/28/16 Page 13 of 225123“Mitigation Trust” or “Trust” means the trust to be established pursuant to Paragraph 16and governed by a trust agreement in the form set forth in Appendix D;“Mitigation Trust Payment” means any payment required to be paid into the Trust45Account;6“Paragraph” means a portion of this Decree identified by an Arabic numeral;7“Parties” means the United States, California, and Settling Defendants;8“Retail Replacement Value” has the meaning set forth in Appendix A;9“Section” means a portion of this Decree identified by a Roman numeral;1011121314“Settling Defendants” means Volkswagen AG, Audi AG, Volkswagen Group ofAmerica, Inc., and Volkswagen Group of America Chattanooga Operations, LLC;“Submission” means any plan, report, guidance, or other item that is required to besubmitted for approval pursuant to this Consent Decree;151617181920“Trust Account” has the meaning set forth in the Trust Agreement;“Trust Agreement” means a trust agreement in the form set forth in Appendix D to beentered into by the Settling Defendants and the trustee selected pursuant to Paragraph 15;“Trust Effective Date” means the date upon which a fully executed version of the TrustAgreement is filed with the Court pursuant to Paragraph 17;212223242526“United States” means the United States of America, acting on behalf of EPA, exceptwhen used in Paragraph 75.h, when it shall mean the United States of America;“U.S. Complaint” means the complaint filed by the United States in this action onJanuary 4, 2016; and“ZEV Investments” has the meaning set forth in Appendix C.272811PARTIAL CONSENT DECREEMDL No. 2672 CRB (JSC)

Case 3:15-md-02672-CRB Document 1605-1 Filed 06/28/16 Page 14 of 225IV.123456PARTIAL INJUNCTIVE RELIEFA. Buyback, Lease Termination, and Vehicle Modification Recall Program(Appendix A)9.Settling Defendants shall implement the Buyback, Lease Termination, andVehicle Modification Recall Program in accordance with the requirements set forth in AppendixA as one element of the remedy to address the Clean Air Act and California Health and Safety7Code violations.8910. Settling Defendants shall remove from commerce in the United States and/or10perform an Approved Emissions Modification (as described in Section IV.B) on at least 85% of11the 2.0 Liter Subject Vehicles as set forth in Appendix A. Settling Defendants must offer each12and every Eligible Owner and Eligible Lessee of an Eligible Vehicle the option of the Buyback131415161718of the Eligible Vehicle at a price no less than Retail Replacement Value, or the LeaseTermination in accordance with the terms specified in Appendix A.11. In the event Settling Defendants do not achieve an 85% Recall Rate, SettlingDefendants shall pay additional funds into the Mitigation Trust as set forth in Appendix A.B. Vehicle Recall and Emissions Modification Program (Appendices A & B)192012. Settling Defendants shall not sell or cause to be sold, or lease or cause to be21leased, any 2.0 Liter Subject Vehicle, except as provided in Appendices A and B. Settling22Defendants shall not modify or cause to be modified any emission control system or emissions23aftertreatment or any other software or hardware that affects the emission control system on any242.0 Liter Subject Vehicle except in compliance with Appendices A and B. If the Settling2526Defendants elect to propose a vehicle recall and Emissions Modification for any 2.0 Liter27Subject Vehicle, approval and implementation of that modification shall be governed by28Appendices A and B. As specified in Appendices A and B, Settling Defendants may export from12PARTIAL CONSENT DECREEMDL No. 2672 CRB (JSC)

Case 3:15-md-02672-CRB Document 1605-1 Filed 06/28/16 Page 15 of 2251the United States to another country any 2.0 Liter Subject Vehicle, provided that such vehicle2has received the applicable Approved Emissions Modification, and that no vehicle may be3exported if the applicable Approved Emissions Modification has been suspended as set forth in456789Appendix B, Paragraph 7.3.C. ZEV Investment Commitment (Appendix C)13. Settling Defendants shall make 2,000,000,000 in ZEV Investments inaccordance with the requirements set forth in Appendix C.D. Mitigation of Excess Emissions and Mitigation Trust (Appendix D)101114. Payment of Mitigation Funds. In addition to any Mitigation Trust Payments12required by Appendices A and B, Settling Defendants shall make 2,700,000,000 in Mitigation13Trust Payments to the Trust to be used to fund Eligible Mitigation Actions to achieve reductions14of NOx emissions in accordance with requirements to be set forth in a Trust Agreement, the form15of which is attached as Appendix D. Settling Defendants shall notify the Trustee and the United1617States and CARB by mail and email in accordance with the requirements of Section XIII18(Notices) on the Day any such payments are made.

KAREN DWORKIN . DANICA GLASER . ANNA GRACE SHEILA McANANEY . MARCELLO MOLLO . ROBERT MULLANEY . ERIKA ZIMMERMAN . IVA ZIZA . Environmental Enforcement Section . Environment and Natural Resources Division . United States Department of