Exhibit 10.1

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

Norfolk Division

PLEA AGREEMENT

This Plea Agreement between John C. Cruden, Assistant Attorney General of the Environment and Natural Resources Division, through Trial Attorneys Patrick Duggan and Christopher Hale; Dana J. Boente, United States Attorney for the Eastern District of Virginia, through Stephen W. Haynie, Assistant United States Attorney; the defendant, Lumber Liquidators, Inc., and the defendant’s counsel, is being entered pursuant to Rule 11(c)(1)(C) of the Federal Rules of Criminal Procedure. The terms of the Plea Agreement are as follows:

1. Offenses and Maximum Penalties

The defendant agrees to waive indictment and plead guilty to the five counts in the Criminal Information filed in the above-styled matter. Count One charges the defendant with the felony of Entry of Goods by Means of False Statements, in violation of 18 U.S.C. § 542. The maximum penalty for Count One is a fine of the greater of $500,000 or twice the gross gain or loss, a five-year term of probation, and a $400 special assessment. Counts Two, Three, and Five charge Transport of Illegally Imported Timber, which under the facts of this case, are misdemeanors under the Lacey Act, in violation of 16 U.S.C. §§ 3372(a)(1), 3373(d)(2). Count Four charges Import of Illegally Harvested Timber, which under the facts of this case, is a misdemeanor under the Lacey Act, in violation of 16 U.S.C. §§ 3372(a)(2)(B)(IV), 3372(d)(2). These Lacey Act misdemeanors each carry a maximum fine of $200,000, a five-year term of probation, and a special assessment of $125. The Criminal Information also contains a Forfeiture Allegation, which is not contested by the defendant.

The defendant will plead guilty because the defendant is in fact guilty of the charged offenses. The defendant admits to the charges and the factual assertions set forth in the stipulated Statement of Facts filed with this Plea Agreement. The defendant agrees that those facts establish guilt, beyond a reasonable doubt, of the offenses charged, and that those facts do not represent the entirety of the government’s evidence against the defendant. The Statement of Facts, which is hereby incorporated into this Plea Agreement, constitutes a stipulation of facts for purposes of Section 1B1.2(a) of the Sentencing Guidelines.

The defendant is satisfied that the defendant’s attorneys have rendered effective assistance. The defendant understands that by entering into this Agreement, defendant surrenders certain rights. The defendant understands that the rights of criminal defendants include the following:

a. the right to plead not guilty and to persist in that plea;

b. the right to a jury trial;

c. the right to be represented by counsel - and if necessary have the court appoint counsel - at trial and at every other stage of the proceedings; and

d. the right at trial to confront and cross-examine adverse witnesses, to testify and present evidence, and to compel the attendance of witnesses.

The defendant understands that the Court has the jurisdiction and final authority to impose the sentence. In this Plea Agreement, the parties have agreed and stipulated to specific aspects of the sentence, e.g., criminal fine, length and conditions of probation, Environmental Compliance Plan, forfeiture, and community service payments. Pursuant to Federal Rule of Criminal Procedure 11(c)(1)(C), the Court can elect to accept the stipulated sentence as a whole or reject the proposed sentence as a whole, but the Court cannot modify the proposed sentence’s terms without the mutual consent of the parties. If the Court rejects this Plea Agreement, it is further agreed that the defendant may withdraw its guilty plea. If the Court rejects the Plea Agreement, the government would be permitted to withdraw from the Plea Agreement.

The parties agree that the 2015 U.S. Sentencing Commission Guidelines Manual will be used in this case. The parties further agree that the provisions of Chapter 8 of the Guidelines Manual, which pertain to fines imposed on corporate defendants, such as the defendant, do not apply to environmental offenses. See USSG §8C2.1 and USSG §8C2.10. The parties agree that the remaining provisions of Chapter 8 of the Guidelines Manual, including community service and probation, apply to the defendant. See USSG §8B1.3; see also 18 U.S.C. § 3563(b)(12) (community service as part of a criminal sentence).

Pursuant to Federal Rule of Criminal Procedure 11(c)(1)(C), the parties agree that the appropriate disposition of the case is as follows:

a. Criminal Fine

Pursuant to the Alternative Fines Act, 18 U.S.C. § 3571(d), the defendant shall pay a criminal fine of $7,800,000. For purposes of this Plea Agreement only, the parties stipulate that the gross gain (identical to the gross loss) was $4,600,000. The fine is due and payable according to the following phased payment schedule: (1) $4,000,000 due at sentencing, (2) $2,000,000 due within 12 months of sentencing, and (3) any outstanding balance due within 24 months of sentencing. Pursuant to 16 U.S.C. § 3375(d), the entire fine shall be directed to the Lacey Act Reward Fund at the following address: Lacey Act Reward Fund, USFWS, Cost Accounting Section, P.O. Box 272065, Denver, CO 80227-9060, with the note “Case No. 2012803149.”

b. Community Service Payments

Within 72 hours of sentencing, the defendant shall make two community service payments, totaling $1,230,825. Defendant shall not seek or accept any tax offset or reduction for the community service payments, nor shall the defendant seek any marketing, advertising, or public relations benefit from the payments. Unless otherwise ordered by the Court, payment shall be made by cashier’s or certified check, and the defendant shall file a Notice of Proof of Payment with the Court within five days of sentencing. The payments are as follows:

1. National Fish and Wildlife Foundation (“NFWF”). The defendant shall make a one-time payment of $880,825 to the National Fish and Wildlife Foundation. NFWF is a congressionally-chartered nonprofit organization, established by 16 U.S.C. §§ 3701-3710, for the purpose of furthering the conservation and management of fish, wildlife, plants, and other natural resources. The payment to NFWF shall be sent to the following address: National Fish and Wildlife Foundation, Attn: Chief Financial Officer, 1133 15th Street NW, Suite 1100, Washington, DC 20005, with the case number specified in the note field of the check. NFWF shall exclusively utilize the $880,825 payment for two separate projects, as follows:

A. NFWF Project 1 - Timber Identification Technology. $500,000 to fund one or more projects designed for the development, testing, training, ground-truthing, experimentation, and/or employment of electronic wood identification devices, that identify the genus and species - and if possible, country of origin - of timber and wood products in a non-laboratory setting. Priority shall be given to development of cost-effective ID devices that can be utilized in field inspection, enforcement, or border interdiction scenarios with a high degree of accuracy and precision,

B. NFWF Project 2 - Amur Leopard Conservation. $380,825 to fund one or more projects designed to further research and conservation efforts aimed at protecting, restoring, and rehabilitating wild Amur leopards and their habitat.

2. Rhinoceros and Tiger Conservation Fund. The defendant shall make a one-time payment of $350,000 to the USFWS Rhinoceros and Tiger Conservation Fund at the following address: Rhinoceros and Tiger Conservation Fund, USFWS, Division of International Conservation, Budget Analyst-Program Support, 5275 Leesburg Pike, MS: IA, Falls Church, VA 22041-3803 with the case number and “ Panthera tigris altaica ” in the note of the check. The Fund was established pursuant to the Rhinoceros and Tiger Conservation Act of 1994, 16 U.S.C. §§ 5304 and 5305, to promote and fund projects for the international conservation of tigers. The payment shall be used exclusively for research and conservation efforts aimed at protecting, restoring, and rehabilitating wild tigers (with highest priority given to the altaica subspecies) and their habitat.

3. Conditions. NFWF and the Rhinoceros and Tiger Conservation Fund shall obligate one quarter of the respective community service payments within 12 months of sentencing; the funds shall be fully obligated by no later than 24 months of sentencing. Projects shall be designed so that funding will be fully expended by no later than 60 months of sentencing. NFWF and the Rhinoceros and Tiger Conversation Fund shall separately be required to prepare and provide to the parties and the U.S. probation office annual reports detailing expenditures, goals, progress, results, and future plans.

The defendant shall be sentenced to a probation term of five years. In addition to whatever probation conditions might be imposed by the Court, the defendant shall be subject to the following Special Conditions of Probation ¹ :

a. Special Condition No. 1

At its own expense and at no expense to the Government, the defendant shall implement an Environmental Compliance Plan (“ECP”), attached as Exhibit A, and incorporated herein. The defendant shall fully implement the ECP within three months of the date of sentencing. In the sole and exclusive discretion of the Government ² , if the Government determines that the defendant has not fully implemented the ECP within three months, the defendant shall cease the importation of hardwood flooring until the Government determines that the ECP has been fully and satisfactorily implemented. Without prejudice to the foregoing, in the sole and exclusive discretion of the Government, and with the mutual written consent of the defendant and the U.S. Probation Office, the implementation date of the ECP may be modified or extended.

¹ Lumber Liquidators, Inc. agrees that these Special Conditions apply to its subsidiary companies and in turn to their subsidiary and/or directly affiliated business entities. Through separate documents, the Lumber Liquidators Holdings, Inc., Board of Directors Consent Resolution (Exhibit C-2) and the Guaranty (Exhibit D), the defendant’s parent company, Lumber Liquidators Holdings, Inc., agrees that it and its direct and indirect subsidiaries and business units are bound by the terms of these Special Conditions as if they were named defendants in this case.

² For the purposes of these Special Conditions, “Government” means the Environmental Crimes Section of the U.S. Department of Justice.

b. Special Condition No. 2

During the first four years of probation, the defendant shall engage an outside accounting and/or environmental consulting firm to conduct three audits of all aspects of its compliance with both the (i) ECP and (ii) plant declaration, transportation, and importation requirements and prohibitions set forth in the Lacey Act, 16 U.S.C. § 3372(a), (d) & (f). The auditors shall generate a written report of their findings and recommendations. The reports are due within 18 months, 35 months, and 48 months of sentencing. Each report shall be transmitted to the Government and the Probation Office. At the Government’s or Probation Office’s exclusive and separate options, the defendant shall conduct an additional audit that covers year 5 of the probation term. The above audits shall be at no cost to the Government or the Probation Office.

Pursuant to 31 U.S.C. § 9703, upon sentencing, the defendant agrees to forfeit and pay $969,175, which represents proceeds and substitute assets (cash) of 385.38 m ³ of Mongolian oak ( Quercus mongolica) flooring imported into the United States between February 1, 2013, and August 30, 2013, to the United States, more specifically to “Customs and Border Protection,” and to send the money to the U.S. Attorney’s Office, Asset Forfeiture Unit, 101 West Main Street, Suite 8000, Norfolk, Virginia 23150. The parties further agree that this sum will be paid at or prior to sentencing in this matter. See numbered paragraphs 12 and 13 infra for additional detail. The defendant agrees to execute the attached Consent Order of Forfeiture, attached hereto as Exhibit B.

Pursuant to 18 U.S.C. § 3013(a), the defendant agrees to pay a mandatory special assessment of $900. The special assessment is due at sentencing.

For the purposes of this Plea Agreement only, the parties agree that the Court should not order restitution.

This Plea Agreement is only binding on the Environmental Crimes Section of the Environment and Natural Resources Division of the U.S. Department of Justice and the U.S. Attorney’s Office for the Eastern District of Virginia. This Plea Agreement does not bind any other federal, state, or local prosecuting authority, nor does it bind or preclude cases or proceedings brought by any governmental entity with regard to tax, civil, or administrative penalties and remedies. In exchange for the defendant pleading guilty and complying with all the terms of this Plea Agreement and the imposed sentence, the Environmental Crimes Section and the U.S. Attorney’s Office agree not to initiate or pursue additional criminal charges arising from activities that occurred up to the date of the signing of this Agreement related to the illegal harvest of timber, false statements made on Lacey Act Declarations, or other false statements as to timber harvest legality, location, or species. This limited immunity only applies to the defendant corporation, to wit: Lumber Liquidators, Inc., and to its subsidiary companies and in turn to their subsidiary and/or directly affiliated business entities, but not to any individuals. In addition, this limited immunity shall not bar the U.S. Attorney’s Office or other governmental entities from initiating and pursuing criminal charges against the defendant for any other violation of law not explicitly identified above, including but not limited to mail fraud, wire fraud, and securities fraud not related to timber harvest legality, location, or species. Without prejudice to the foregoing, the two governmental parties to this Plea Agreement agree that, upon the defendant’s full compliance with the terms of the Plea Agreement and the sentence imposed by the Court, Lumber Liquidators, Inc. will have accepted responsibility for the conduct set forth in the Criminal Information and that the governmental parties would make that fact known to any other appropriate governmental entity upon request of Lumber Liquidators, Inc.

The defendant acknowledges that pleading guilty to these charges may have consequences with regard to its ability to maintain and/or obtain governmental licenses and certifications, e.g., import permits and business licenses. The defendant further acknowledges that although it has agreed to comport itself pursuant to a stipulated Environmental Compliance Plan, state and federal agencies could legally and independently suspend, revoke, or withhold the issuance of permits or licenses based on the administrative and regulatory authority of those agencies. Nevertheless, the defendant affirms that it desires to plead guilty regardless of any licensing and certification consequences that may result from its guilty plea. The government agrees that, if requested to do so, it will advise any appropriate authority that, in the government’s view, the defendant has accepted responsibility for its conduct.

The defendant understands that the forfeiture of assets is part of the sentence that must be imposed in this case. As described in paragraph 7, the defendant agrees to forfeit any property that is traceable to, derived from, fungible with, or a substitute for property that constitutes the proceeds of the crime charged in Count One including, but not limited to, the following specific property: the amount of at least $969,175 which represents the proceeds of the offense charged in Count One. The defendant understands that if proceeds of the offense are not available to the United States to be forfeited, the Court must enter a forfeiture money judgment in the amount of the proceeds or forfeit substitute assets. See United States v. Alamoudi , 452 F.3d 310, 314 (4th Cir. 2006). The defendant further agrees to waive all interest in the assets in any administrative or judicial forfeiture proceeding, whether criminal or civil, state or federal. The defendant agrees to consent to the entry of orders of forfeiture for such property and waives the requirements of Federal Rules of Criminal Procedure 32.2 and 43(a) regarding notice of the forfeiture in the charging instrument, announcement of the forfeiture at sentencing, and incorporation of the forfeiture in the judgment. Defendant admits and agrees that the conduct described in the charging instrument and stipulated Statement of Facts provides a sufficient factual and statutory basis for the forfeiture of the property sought by the federal government. The defendant shall execute the Consent Order of Forfeiture no later than ten days prior to the sentencing hearing.

In addition to and apart from the criminal forfeiture described herein, the defendant admits to the allegations contained in the verified Complaint in the companion in rem civil forfeiture case, United States v. $3,155,000.00 Res in lieu of 2,129,242 Square Feet of Assorted Birch Hardwood Flooring and 242,717 Square Feet of Assorted Oak Hardwood Flooring (Case No. 2:15-cv-___ ), and the defendant agrees to execute and comply with the Stipulation for

Settlement and Joint Motion for Entry of Consent Order of Forfeiture and the Stipulated Consent Judgment and Order of Forfeiture in that case.

The defendant further agrees to waive all constitutional and statutory challenges to forfeiture in any manner to any forfeiture carried out in accordance with this Plea Agreement on any grounds, including that the forfeiture constitutes an excessive fine or punishment. The defendant also waives any failure by the Court to advise the defendant of any applicable forfeiture at the time the guilty plea is accepted as required by Rule 11(b)(1)(J). The defendant agrees to take all steps as requested by the United States to pass clear title to forfeitable assets to the United States, and to testify truthfully in any judicial forfeiture proceeding. The defendant understands and agrees that all property covered by this Agreement is subject to forfeiture as proceeds of illegal conduct and substitute assets for property otherwise subject to forfeiture.

This Agreement is effective when signed by the defendant, the defendant’s attorney, and an attorney for the United States. The defendant agrees to entry of this Plea Agreement at the date and time scheduled with the Court by the United States (in consultation with the defendant’s attorney). If the defendant withdraws from this Agreement, or commits or attempts to commit any additional federal, state or local crimes, or intentionally gives materially false, incomplete, or misleading testimony or information, or otherwise violates any provision of this Agreement, then:

a. The United States will be released from its obligations under this Agreement. The defendant, however, may not withdraw the guilty plea entered pursuant to this Agreement;

b. The defendant will be subject to prosecution for any federal criminal violation, including, but not limited to, perjury and obstruction of justice, that is not time-barred by the applicable statute of limitations on the date this Agreement is signed; and

c. Any prosecution, including the prosecution that is the subject of this Agreement, may be premised upon any information provided, or statements made, by the defendant, and all such information, statements, and leads derived therefrom may be used against the defendant. The defendant waives any right to claim that statements made before or after the date of this agreement, including the stipulated Statement of Facts accompanying this Agreement or adopted by the defendant and any other statements made pursuant to this or any other Agreement with the United States, should be excluded or suppressed under Fed. R. Evid. 410, Fed. R. Crim. P. 11(f), the Sentencing Guidelines, or any other provision of the Constitution or federal law.

Any alleged breach of this Agreement by either party shall be determined by the Court in an appropriate proceeding at which the defendant’s disclosures and documentary evidence shall be admissible and at which the moving party shall be required to establish a breach of the Plea Agreement by a preponderance of the evidence.

The defendant understands that 18 U.S.C. § 3742 affords a defendant the right to appeal the sentence imposed. Nonetheless, the defendant knowingly waives the right to appeal the conviction and any sentence within the statutory maximum described above (or the manner in which that sentence was determined) on the grounds set forth in 18 U.S.C. § 3742 or on any ground whatsoever, in exchange for the concessions made by the United States in this Plea Agreement. This Agreement does not affect the rights or obligations of the United States as set forth in 18 U.S.C. § 3742(b). The defendant also agrees not to collaterally challenge its conviction. Nevertheless, the defendant may bring a post-conviction claim if the defendant establishes that ineffective assistance of counsel directly affected the validity of this waiver of appeal and collateral challenge rights or the validity of the guilty plea itself. The defendant also hereby waives all rights, whether asserted directly or by a representative or corporate affiliate, to request or receive from any department or agency of the United States any records pertaining to the investigation or prosecution of this case, including without limitation any records that may be sought under the Freedom of Information Act, 5 U.S.C. § 552, or the Privacy Act, 5 U.S.C. § 552a.

Contemporaneous with the execution of this Plea Agreement, the defendant has provided the United States with the corporate resolution, attached hereto as Exhibit C-1 (a) identifying the corporate representative, (b) authorizing the entry of the guilty plea, including the completion and signing of related exhibits, court forms, and paperwork, (c) acknowledging the financial obligations as to fine, community service, forfeiture, and special assessment, (d) pledging to make timely payments under the terms of the Plea Agreement, (e) binding Lumber Liquidators, Inc. and its direct and indirect subsidiaries and business units to the obligations and terms herein, and (e) warranting that the resolution was in accordance with corporate formalities, company bylaws, and the applicable laws of the State of Virginia.

The defendant shall not, through a change of name, business reorganization, bankruptcy, insolvency, receivership, sale or purchase of assets, divestiture of assets, or similar action, seek to avoid the obligations and terms set forth in this Plea Agreement. This Agreement, together will all of the obligations and terms hereof, shall inure to the benefit of and shall bind partners, assignees, successors-in-interest, or transferees of the defendant.

This written agreement constitutes the complete Plea Agreement between the government, the defendant, and the defendant’s counsel. The defendant agrees that the obligations and terms of this agreement shall apply to all direct and indirect subsidiaries of the defendant, as well as any direct or indirect subsidiaries subsequently formed. The defendant and the defendant’s attorney acknowledge that no threats, promises, or representations have been made, nor agreements reached, other than those set forth in writing in this Plea Agreement, including the stipulated Statement of Facts, Environmental Compliance Plan (Exhibit A), Consent Order of Forfeiture (Exhibit B), and Guaranty of Lumber Liquidators Holdings, Inc. (Exhibit D), and the Stipulation for Settlement and Joint Motion for Entry of Consent Order of Forfeiture in Case No.___________ , to cause the defendant to plead guilty. Any modification of this Plea Agreement shall be valid only as set forth in writing in a supplemental or revised Plea Agreement signed by all parties.

Defendant’s Signature: I hold the title of Chief Compliance and Legal Officer at the defendant corporation, and I am the authorized representative of the defendant corporation. I hereby agree that I have consulted with my attorney and fully understand all rights with respect to the pending Criminal Information. Further, I fully understand all rights with respect to 18 U.S.C. § 3553 and the provisions of the Sentencing Guidelines Manual that may apply in this case. I have read this Plea Agreement and carefully reviewed every part of it with my attorney. I understand this Agreement and voluntarily agree to it on behalf of the defendant.

Defense Counsel Signature: I am counsel for the defendant in this case. I have fully explained to the defendant the defendant’s rights with respect to the pending Criminal Information. Further, I have reviewed 18 U.S.C. § 3553 and the Sentencing Guidelines Manual, and I have fully explained to the defendant the provisions that may apply in this case. I have carefully reviewed every part of this Plea Agreement with the defendant. To my knowledge, the defendant’s decision to enter into this Agreement is an informed and voluntary one.

U. S. DEPARTMENT OF JUSTICE
Statement of Special Assessment Account

This statement reflects your special assessment only. There may be other penalties imposed at sentencing.

INSTRUCTIONS:

Lacey Act Compliance Framework ¹

1. Compliance Objectives

As a company, Lumber Liquidators Inc., including all current and subsequent direct and indirect subsidiaries ² (“Lumber Liquidators” or the “Company”) is committed to being a good “corporate citizen” and abiding by the applicable laws, rules and regulations wherever we do business. As part of its efforts to continuously improve its processes and procedures, the Company, in consultation with third-party subject matter experts, updates and revises relevant Company policies in an effort to meet this commitment.

As an industry leader, the Company seeks to conserve and protect threatened forest habitats and safeguard the future of natural resources critical to the timber industry. A large part of this effort is the support and use of legally harvested and exported sustainable wood sources. Compliance with relevant laws, including the Lacey Act (16 U.S.C. §§ 3371 et seq .) is a critical component of a transparent, legal, and sustainable supply chain.

The objective of this document is to set forth a framework that will help ensure legal wood sourcing, accurate reporting, and accurate labeling. As part of a comprehensive Lacey Act compliance program, the Company will develop specific procedures and documents that implement the rules set forth below. This document, therefore, represents only the minimum standards that will be met by the Company, as opposed to the specific procedures that the Company will utilize to meet the standards herein.

2. Legal Background

The Lacey Act is the oldest wildlife protection statute in the United States. Initially enacted to protect animal species, the Lacey Act was amended, effective May 22, 2008, to more broadly include plant species. The goals of the amendment were, amongst others, to prevent trade in illegally-harvested lumber and products made thereof, to ensure that U.S. companies were operating on a level playing field, and to provide better transparency into the source and species of products being imported into the U.S.

2.1. General Prohibitions Under the Lacey Act

The Lacey Act makes it unlawful to:

Trade in any plant that is taken, possessed, transported, or sold in violation of the laws of the United States, a State, Indian Tribe, or any foreign law that protects plants; Falsify or submit falsified documents, accounts or records of any plant covered by the Lacey Act; and/or Import plants and plant products (with some exemptions) without an import declaration.

¹ Pursuant to Special Condition No. 1 of the Plea Agreement in U.S. v. Lumber Liquidators, Inc. (Case No. __________ ), this Framework is synonymous with the court-mandated Environmental Compliance Plan.

² Pursuant to the footnote two of the Plea Agreement and the Guaranty Agreement with Lumber Liquidators Holdings, Inc., this framework is binding upon Lumber Liquidators Holdings, Inc. and all direct and indirect subsidiaries and business units.

Exhibit A to the PLEA AGREEMENT

The full text of the Lacey Act can be found at Attachment A. In addition, a useful reference guide can be found at http://www.aphis.usda.gov/plant_health/lacey_act/-index.shtml.

2.2. Lacey Act Penalties

Violations of the Lacey Act carry serious penalties for companies and individuals. In addition to civil fines and forfeiture of goods, criminal penalties may also attach to individuals or companies found to have knowingly, and in some cases with lack of due care, violated the Lacey Act.

A misdemeanor violation of the Lacey Act, punishable by up to one (1) year in prison and a fine of $100,000 ($200,000 for companies), may be found if, in the exercise of due care, the individual or the company should have known the wood it purchased was illegally taken, possessed, transported or sold. Felony culpability, punishable by up to five (5) years in prison and a $250,000 ($500,000 for companies), may lie for knowing violations of the Lacey Act.

3. Program Authority and Governance

Lumber Liquidators shall implement and maintain a code of business conduct and ethics that affirms that every employee at Lumber Liquidators shall be responsible for compliance with the Lacey Act’s requirements, as with every other regulation to which the Company is subject. Employees in the various business units shall have the primary responsibility to ensure that the Company adheres to laws like the Lacey Act and when there is a question as to whether an action is or is not permitted, it is their duty to consult their counterparts in Legal and Compliance before proceeding.

In turn, the leaders of these business units shall be responsible for ensuring that their teams and the third parties they engage follow all necessary compliance procedures.

Lumber Liquidators’ Chief Compliance Officer (CCO) shall be responsible for the oversight of the Company’s program to address the requirements of the Lacey Act and related regulations. The CCO shall report directly to the Chief Executive Officer (CEO) of the Company, shall make periodic (at least semi-annual) reports regarding compliance matters directly to the Board of Directors of the Company or a Committee of the Board of Directors of the Company (the term “Board” shall mean such Board of Directors or Committee thereof), and shall be authorized to report on such matters to the CEO of the Company and the Board at any time. A team of individuals that focuses on the requirements of the Lacey Act (“Lacey team”) shall report directly to the CCO. At least one member of the Lacey team, which may include the CCO, shall be a U.S.-based employee with at least approximately five years of experience in the timber-product or forestry industry. The Lacey team shall coordinate with other business functions, as appropriate, to meet the requirements of the Lacey Act Compliance Program and its associated processes. Each business function shall have a designated member of the Lacey team that is responsible for liaising with that business function.

4. Due Care and Diligence

Lumber Liquidators will exercise due care and diligence through the research, review and validation of relevant information regarding merchandise sold in its stores and the individuals and organizations with which the Company conducts business.

There will be four general steps in the Company’s due care activities: risk assessment, vendor validation/evaluation, purchase order (PO) review, and auditing/monitoring. In addition to those four steps the Company will exercise due care by providing its employees with training and tools to report any potential Lacey Act concerns via secure and anonymous means. The Company’s procedures to ensure the exercise of due care shall all be memorialized.

5. Risk Assessment

Lumber Liquidators will use a risk-based approach to the implementation of the various elements of its compliance program including the Lacey Act Compliance Program.

a) The Risk Assessment described in this numbered paragraph shall be implemented according to the following schedule:

b) In evaluating risk of a supplier, a U.S.-based member of the Lacey team will consider, in addition to other factors:

c) Lumber Liquidators, may also consider the following factors,

Once all of these factors, and any others found to be appropriate, are considered as part of an objective matrix and are given a risk level, the Company will designate each supplier and product (SKU) as low risk, medium risk, or high risk, and set out specific restrictions regarding doing business with each supplier, such as additional approval or other monitoring requirements (if any) beyond what is set forth herein that are deemed appropriate. If the supplier is providing a product that is considered high risk per the above factors, then that supplier will automatically be considered high risk. Further, the factors enumerated in subparagraph c) above may not constitute more than 10% of any objective risk matrix.

If a supplier is considered medium or high risk, then the Chief Compliance Officer must give initial approval before any product is purchased or any transactions are completed that would result in a shipment to United States of product from such a supplier. The CCO must make a written record of the decision-making process.

A supplier shall be evaluated every three years if low risk, every two years if medium risk, and every year if high risk. If the Company has never purchased product from the supplier, then the evaluation must take place before the Company begins to import product from that supplier is into the U.S.

³ Each time that a supplier or product undergoes a risk evaluation or revaluation, a member of the Lacey team (or a third party engaged by the Company to provide this service) shall conduct an internet search in order to determine what the most recent legality concerns are for that product or supplier. The search should include regional legality concerns, the history of the supplier, and legality concerns related to the specific specie(s) being evaluated. The efforts to determine current legality concerns must include information from a minimum of four sources and must be documented and retained. Though internet-based resources are subject to change, current sources of information on timber legality issues include: Global Forest Registry ( www.globalforestregistry.org ), the Global Forest Trade Network Guide to Legal and Responsible Sourcing ( http://sourcing.gftn.panda.org/), Keep it Legal Country Guides, and the Forest Legality Alliance ( http://www.forestlegality.org/)

A member of the Lacey team (or an internal employee trained in Lacey inspection protocols and reporting up to CCO, either on a full-time or project basis), third-party auditor with specialized industry expertise, or appropriate certification body, shall conduct onsite inspection visits no less than quarterly for medium and high risk suppliers, as well as low risk suppliers who are providing medium risk products. A record of the onsite visit will be maintained by a U.S.-based member of the Lacey team.

Lumber Liquidators will continuously evaluate its risk assessment methodology to stay current with legislative/regulatory updates and external trends. The CCO shall be responsible for the development and implementation of risk assessment procedures designed to address all components of the Lacey Act Compliance Program, but any modifications to the Program shall not be less stringent that what is set forth in this Framework.

6. Vendor Validation and Evaluation

The CCO shall be responsible for implementing procedures designed to ensure that Lumber Liquidators does not conduct business with suppliers and other vendors whose products or activities may be in violation of Lacey Act requirements. A critical element for avoiding business activities with non-compliant third parties is to establish a third party due diligence process aimed at not engaging such vendors in the first place.

When onboarding a new supplier or vendor whose activities implicate Lacey Act requirements, the Lacey team will work with the relevant business functions to complete a series of procedures to ensure the vendor is capable of meeting the Company’s standards. These procedures will include, but are not limited to:

The Lacey team will be responsible for memorializing the above steps. The CCO must provide written authorization to conduct business with a new supplier before the Company may engage in any transactions with that new supplier. The authorization must include consideration of the factors listed above.

To the extent that the Lacey Act-specific onboarding requirements overlap with the procedures of the Company’s supplier audits, those procedures can be used to fulfill the requirements of this program. However, to the extent that those procedures rely on self-reported information provided by potential vendors, those supplier audit procedures should be supplemented by the above items where appropriate in order to independently verify and augment the data supplied by the third parties under review.

7. Purchase Order Review

The Lacey team shall be responsible for creating and implementing a risk-based approach to ensure that Purchase Orders (“POs”) comply with the Lacey Act. The purpose of the PO review is not just to audit the PO documents, but to ensure that by June 1, 2016, Lumber Liquidators can establish an unbroken and verified chain of custody from itself back to the product’s source using documentation down to the forest level.

At a minimum, prior to the importation of any wood product, a U.S.-based member of the Lacey team shall:

Required documentation may be compiled by a non-U.S. based employee trained in Lacey compliance that reports up to CCO. Additional monitoring and auditing processes (if deemed appropriate) conducted by U.S. based employees reporting up to the CCO (either on a full time or project basis) shall be implemented, based on risk level of product and supplier. To be clear, each PO for a medium or high risk product or from a medium or high risk supplier shall be reviewed and analyzed as above and requires clearance before importation into the U.S., and if cleared, such clearance must be signed off by the CCO, or the CCO’s designee. A record shall be kept indicating which member of the Lacey team performed each of the above tasks for each purchase order.

If any purchase order is not accompanied by sufficient supplemental documentation to support legality, or the PPQ-505 declaration cannot be supported by the supplemental documentation, then the product will not be accepted until such documentation is provided. If the documentation is not provided within a reasonable time, then the product will not be imported. If a product has already been shipped at the time that a deficiency is identified, then the Company shall reject the product and ship it back to the supplier.

8. Auditing and Monitoring

The Chief Compliance Officer, using either internal or third-party resources ⁴ , shall ensure that appropriate auditing and monitoring activities are conducted for Lacey Act compliance. These activities shall include field and desk audits to verify that Company requirements are being met, identification of necessary corrective action, and ensuring that ongoing monitoring is incorporated into the Company’s activities.

9. Remediation and Mitigation

The Chief Compliance Officer shall be responsible for remediation and mitigation relating to the Lacey Act Compliance Program. Corrective action plans and verification procedure(s) shall be used when missteps are detected during audit monitoring and/or review processes, or otherwise. If, at any point in the purchase or order cycle, the Company becomes aware that a product does not adhere to Lumber Liquidators’ requirements, the Company will reject the PO and refuse to import, return, and/or refuse receipt of the product as appropriate at that point in the cycle. Further, Lumber Liquidators may require the DNA and/or isotope testing of products as needed to verify that the genus, species, and/or growing region of a raw material used to produce a product is consistent with the information provided by the supplier. For any medium or high risk products, a program of random species identification of products will be developed and implemented on an ongoing basis beginning no later than January 1, 2016.

Business units (such as Merchandising) engage in the primary activities that implicate the Lacey Act Compliance Program. Therefore, while the Chief Compliance Officer shall be the approver of the Lacey Act Compliance Program, each business unit leader shall be responsible for ensuring that employee and third-parties working in his or her business unit adhere to the established protocols to address compliance with the Lacey Act, including but not limited to, the tracking and enforcement of identified, required corrective action(s), including those issued to product suppliers.

If, at any point, a member of the Lacey team or any other employee determines that the Company is not internally capable of sufficiently auditing or evaluating a supplier or a product, then that concern should be reported through appropriate channels to the CCO. The CCO shall make a record of the concern, should consider the concern, and where appropriate, either increase internal capabilities as needed, or engage a third-party to conduct the activities that the Company cannot sufficiently complete internally. If the decision is made that the reported concern was unfounded, the CCO shall make a record of that decision and the basis therefore.

⁴ Pursuant to the Plea Agreement in this case, the Lacey Act compliance procedures will be audited by a third-party for at least three of the first four years of probation.

10. Training and Communication

The leaders of the business units implicated by the Lacey Act shall bear the primary responsibility for ensuring that all necessary employees receive the proper training. The Chief Compliance Officer shall be responsible for providing training and updates related to the requirements of the Lacey Act and applicable regulations as well as the Company’s policies and procedures.

Annual training regarding the Lacey Act and the Company’s Lacey Act compliance program will be required for employees and third parties whose responsibilities are affected by the Lacey Act. The CCO will identify employees and third parties who must receive the Lacey Act training and such training will be tailored based upon the degree to which an employee’s or third party’s duties relate to the Lacey Act. The Lacey team will develop these training programs, coordinating with other business functions as appropriate. A record will be maintained of the identity and position of each employee trained each year, and the date(s) of training.

11. Disciplinary Action for Non-Compliance

Any Company employee who is found to have violated any of the procedures contained in the Company’s Lacey Act Compliance Program will be subject to disciplinary action including possible termination. The Company will maintain records related to any such disciplinary action in the personnel files of any affected employee.

12. Records Retention

Lumber Liquidators will retain all records related to Lacey Act compliance for a minimum of 5 years.

13. Reporting Violation and Non-Retaliation

Directors, officers, employees, and agents will be directed to report any potential misconduct if they have a good faith belief that there may be a violation of law or the Lacey Act Compliance Program and accompanying procedures. Reports may be made anonymously through the telephone hotline or email hotline, or to supervisors, management, Legal, or Compliance.

Exhibit 10.2

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF VIRGINIA

Norfolk Division

STIPULATION FOR SETTLEMENT AND JOINT MOTION FOR ENTRY OF

CONSENT ORDER OF FORFEITURE

WHEREAS, on or about June 15, 2015, through an agreement with the United States of America (“Government”), the claimant Lumber Liquidators, Inc., (“LL”) sequestered, separated, and withdrew from its sales inventory, as part of a constructive seizure, the defendant property. The defendant property, together and hereinafter, “HARDWOOD FLOORING,” is more specifically defined as 30,472 sq. ft. of 10024298 MAY ENG Bund Birch 5/16x5 inch flooring; 175,478 sq. ft. of 10024668 MAYHS ENG Rift Valley Birch 3/8x4-3/4 inch flooring; 155,565 sq. ft. of 10024686 MAY HS ENG Lake Tana Birch 3/8x4-3/4 inch flooring; 353,403 sq. ft. of 10026381 MAY ENG Aberdeen Birch 5/16x4 inch flooring; 4,746 sq. ft. of 10027201 MAY HS ENG Riverton Birch 3/8x5 inch flooring; 161,218 sq. ft. of 10027202 MAY HS ENG Canyon Birch 3/8x5 inch flooring; 109,251 sq. ft. of 10028357 MAY ENG Tuscan Red Birch QC 3/8x4- 3/4 inch flooring; 170,996 sq. ft. of 10028358 MAY ENG Chocolate Birch QC 3/8x4-3/4 inch flooring; 9,331 sq. ft. of 10028362 MAY ENG Bronzed Birch QC 3/8x4-3/4 inch flooring; 1,653 sq. ft. of 10029175 LIQ HS ENG Rustic Birch 1/2x5 inch flooring; 434,123 sq. ft. of 10032487 MAY HS Stampede Birch 5/16x5 inch flooring; 10,738 sq. ft. of 10035548 SCH ENG Wayne Red Oak QC 3/8x4-3/4 inch flooring; 15,993 sq. ft. of 10035553 VM HS ENG Holly Birch 3/8x4-3/4 inch flooring; 195,133 sq. ft. of 10035559 VM HS ENG Coronado Birch 3/8x5 inch flooring; 203,340 sq. ft. of 10035566 VM HS ENG Bridger Birch 3/8x5 inch flooring; 148,026 sq. ft. of 10035570 VMHS ENG Rivers Red Oak QC 3/8x4-3/4 inch flooring; 48,630 sq. ft. of 10036957 VM HS Log Cabin Birch 3/8x5 inch flooring; 59,910 sq. ft. of 10036961 VM HS ENG Toasted Birch 3/8x4-3/4 inch QC flooring; and 83,943 sq. ft. of 10036966 VM HS ENG Grand Oak QC 3/8x4-3/4 inch flooring.

WHEREAS, the above-captioned civil forfeiture action was filed on October 7, 2015,
alleging that HARDWOOD FLOORING is forfeitable under the Lacey Act, 16 U.S.C. §§ 3374, 3375.

WHEREAS, in accordance with 16 U.S.C. § 3375(b), in lieu of physical arrest and seizure of HARDWOOD FLOORING by law enforcement agents of the United States, claimant LL agrees to remit to the custody and control of the United States the sum of $3,155,000.00 in the form of a cashier’s check made payable to Customs and Border Protection and which sum claimant LL and the Government agree shall serve as a substitute res for HARDWOOD FLOORING. The remission of the $3,155,000.00 by claimant LL shall be pursuant to the terms set out herein.

WHEREAS, on __________, 2015, the claimant LL filed a claim asserting ownership
of HARDWOOD FLOORING.

WHEREAS, claimant admits the allegations in the Complaint for Forfeiture In Rem and now desires to settle this action involving the forfeiture of the $3,155,000.00 as a substitute res for HARDWOOD FLOORING.

NOW THEREFORE, the United States of America and Lumber Liquidators, Inc., by and through their respective attorneys, hereby agree and STIPULATE to settle this action as follows:

1.                 Claimant agrees to the entry of the attached Stipulated Consent Judgment and Order of Forfeiture condemning, quit-claiming, abandoning, and forfeiting the $3,155,000.00 as a substitute res for HARDWOOD FLOORING to the United States, to be disposed of by the Department of Homeland Security or the U.S. Fish and Wildlife Service, at the plaintiff’s election, pursuant to law. Claimant waives any claim or argument with regard to venue or personal jurisdiction.

2.                 The claimant shall ensure that the $3,155,000.00 is transferred to the custody and control of the plaintiff within 72 hours after the Stipulated Consent Judgment and Order of Forfeiture is entered by the Court.

3.                 Plaintiff shall seek no payment of interest or collection of interest from claimant on the $3,155,000.00.

4.                 Once the $3,155,000.00 is fully remitted to the plaintiff, the plaintiff shall release its constructive seizure of HARDWOOD FLOORING. Furthermore, in accordance with 50 C.F.R. § 12.32 (Effect of Prior Illegality), the plaintiff shall, upon payment of the $3,155,000.00 in full, forever waive any claim to HARDWOOD FLOORING, and claimant will then be free to sell HARDWOOD FLOORING and retain any and all proceeds.

5.                 The parties agree to each bear their own costs, including attorney’s fees.

6.                 Claimant warrants that it has the legal authority to comply with the terms of this Stipulation and agrees to execute any and all documents necessary and to take all steps necessary to effectuate the intent of this Stipulation.

7.                   Claimant agrees to accept these terms as full settlement and satisfaction of any and all claims which it and its assigns may have against the United States of America, its agents, and employees on account of the investigation into and constructive seizure of HARDWOOD FLOORING and the payment of the $3,155,000.00.

8.                   Claimant hereby releases, forever discharges, and holds harmless the United States of America, and its agencies, officers, attorneys, agents, servants, employees, successors, and assigns from any and all claims, demands, damages, causes of action or suits, of whatever kind and description, and wheresoever situated, which it and its assigns, or any third party ever had, now have, or may have in the future in connection with the investigation into and constructive seizure of HARDWOOD FLOORING and the payment of the $3,155,000.00.

9.                   The United States of America hereby releases, forever discharges, and holds harmless Lumber Liquidators, Inc., and its corporate successors and assigns from any and all claims, demands, damages, causes of action or suits, of whatever kind and description, and wheresoever situated, which it and its assigns, or any third party ever had, now have, or may have in the future in connection with the importation, preparation or filing of Lacey Act Declarations for, receipt, acquisition, or constructive seizure of HARDWOOD FLOORING and the seeking and collection of the $3,155,000.00 as a substitute res for HARDWOOD FLOORING.

10.               The United States of America and claimant hereby move the Court for entry of the Stipulated Consent Judgment and Order of Forfeiture.