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SETTLEMENT AGREEMENT AND RELEASE
CARB and American Honda Motor Co., Inc.

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SETTLEMENT AGREEMENT AND RELEASE

This Settlement Agreement and Release (hereinafter “Agreement”) is entered into
between the State of California Air Resources Board (hereinafter “CARB”), with its
principal office at 1001 “I” Street, Sacramento, California; and American Honda Motor
Co., Inc. (hereinafter “HONDA”) with its principal place of business at 1919 Torrance

Boulevard, Torrance, California (collectively, the “parties,” or individually, “party”).

RECITALS

1. The California Health and Safety Code mandates the reduction of air pollution

emissions from off-road engines. (Health & Saf. Code §§ 43013; 43018.)

2. CARB adopted the “Evaporative Emission Requirements for Off-Road Equipment”

Regulation (Cal. Code Regs., tit. 13, §§ 2750-2774) (Evaporative Emissions Regulation)
to reduce emissions of oxides of nitrogen (NOx) and hydrocarbons (HC) from off-road
spark-ignited small off-road engines (SORE) rated at equal to or less than 19 kilowatts,
and equipment utilizing such engines.

3. California Code of Regulations, title 13, section 2400, subsection (a)(2) provides,

“Every new small off-road engine that is manufactured for sale, sold, or offered for
sale in California, or that is introduced, delivered or imported into California for
introduction into commerce, and that is subject to any of the standards prescribed in
this article must be covered by an Executive Order, issued pursuant to this article.”

4. California Code of Regulations, title 13, section 2751, subsection (a) prohibits the

manufacture for sale or sale of engines “without an evaporative emission control
system that has been certified and labeled” pursuant to the small off-road engine

regulation requirements.

5. California Code of Regulations, title 13, section 2753, subsection (a) provides in

pertinent part, “Small off-road engines or equipment that use small off-road engines
subject to this Article must contain evaporative emission control systems. The
evaporative emission control systems must be certified annually to the evaporative
emission standards set out in sections 2754 through 2757 of this Article by the Air
Resources Board.”

6. California Code of Regulations, title 13, section 2752 provides, “’Evaporative Model

Emission Limit (EMEL)’ means the diurnal emission rate declared by the manufacturer
for a model within an evaporative family. The declared rate must be based on diurnal
emissions test results for the model of engine or equipment within the evaporative

family that is expected to exhibit the highest diurnal emission rate relative to the
applicable diurnal emission standard, obtained by following TP-902.”