Document:

EX-4.1

 Exhibit 4.1 
  

 
  

WESTAR ENERGY, INC. 
 TO

 THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. 

as Trustee 
  

(as Successor to 
 HARRIS
TRUST AND SAVINGS BANK) 
  
  

FORTY-SIXTH SUPPLEMENTAL INDENTURE 

Dated as of June 20, 2016 

First Mortgage Bonds, 2.55% Series due 2026 
  

 
  

 TABLE OF CONTENTS 

 
  

 

					
	 Parties
	  	 	1	  
	 Recitals
	  	 	1	  
	 Granting Clause
	  	 	5	  
	 Habendum
	  	 	7	  
	 Exceptions and Reservations
	  	 	7	  

  

							
	 	 	 	  	PAGE	 
	ARTICLE I	  
	DESCRIPTION OF BONDS OF THE 2.55% SERIES DUE 2026	  
			
	 Section 1.
	 	 General Description of Bonds of the 2.55% Series due 2026
	  	 	8	  
	 Section 2.
	 	 Denominations of Bonds of the 2.55% Series due 2026 and Privilege of Exchange
	  	 	9	  
	 Section 3.
	 	 Form of Bonds of the 2.55% Series due 2026
	  	 	9	  
	 Section 4.
	 	 Execution and Form of Temporary Bonds of the 2.55% Series due 2026
	  	 	18	  
	
	ARTICLE II	  
	ISSUE OF BONDS OF THE 2.55% SERIES DUE 2026	  
			
	 Section 1.
	 	 Limitation as to Principal Amount of Bonds of the 2.55% Series due 2026
	  	 	18	  
	 Section 2.
	 	 Execution and Delivery of Bonds of the 2.55% Series due 2026
	  	 	18	  
	 Section 3.
	 	 Additional Bonds of the 2.55% Series due 2026
	  	 	18	  
	
	ARTICLE III	  
	REDEMPTION AND SUBSTITUTION OF BONDS OF THE 2.55% SERIES DUE 2026	  
			
	 Section 1.
	 	 Optional Redemption of Bonds of the 2.55% Series due 2026
	  	 	19	  
	 Section 2.
	 	 Substitution of Bonds of the 2.55% Series due 2026
	  	 	21	  
	
	ARTICLE IV	  
	ADDITIONAL COVENANTS	  
			
	 Section 1.
	 	 Title to Mortgaged Property
	  	 	22	  
	 Section 2.
	 	 To Retire Certain Portions of Bonds upon Release of All or Substantially All of the Electric
Properties
	  	 	23	  

  
 i 

							
	ARTICLE V	  
	AMENDMENTS AND RESERVATIONS OF RIGHTS TO AMEND THE ORIGINAL
INDENTURE	  
			
	 Section 1.
	 	 So Long as Bonds Issued Prior to January 1, 1997 Remain Outstanding
	  	 	24	  
	 Section 2.
	 	 Facsimile Signatures
	  	 	27	  
	 Section 3.
	 	 Reservation of Right to Amend Article VII
	  	 	27	  
	 Section 4.
	 	 Reservation of Right to Delete Certain Requirements and Conditions
	  	 	30	  
	 Section 5.
	 	 Issuance of Variable Rate Bonds
	  	 	31	  
	 Section 6.
	 	 Substitution of Bonds
	  	 	31	  
	 Section 7.
	 	 Addition of a Governing Law Clause
	  	 	32	  
	 Section 8.
	 	 Event of Default for Failure to Pay Final Judgments in Excess of $100,000
	  	 	32	  
	 Section 9.
	 	 Net Earnings Test in Connection with Property Acquisitions
	  	 	32	  
	 Section 10.
	 	 Addition of Nuclear Fuel
	  	 	32	  
	 Section 11.
	 	 Modernization of the Original Indenture
	  	 	33	  
	
	ARTICLE VI	  
	MISCELLANEOUS PROVISIONS	  
			
	 Section 1.
	 	 Acceptance of Trust
	  	 	34	  
	 Section 2.
	 	 Responsibility and Duty of Trustee
	  	 	34	  
	 Section 3.
	 	 Parties to Include Successors and Assigns
	  	 	34	  
	 Section 4.
	 	 Benefits Restricted to Parties and to Holders of Bonds and Coupons
	  	 	35	  
	 Section 5.
	 	 Execution in Counterparts
	  	 	35	  
	 Section 6.
	 	 Titles of Articles Not Part of the Forty-Sixth Supplemental Indenture
	  	 	35	  

  

					
	 TESTIMONIUM
	  	 	S-1	  
	 SIGNATURES AND SEALS
	  	 	S-1	  
	 ACKNOWLEDGEMENTS
	  	 	S-3	  

 APPENDIX A 

DESCRIPTION OF PROPERTIES 

  
 ii 

 FORTY-SIXTH SUPPLEMENTAL INDENTURE, dated as of the 20th day of June, Two Thousand and Sixteen, made by and between Westar Energy, Inc., formerly The Kansas Power and Light Company, a corporation organized and existing under the laws of the State of
Kansas (hereinafter called the “Company”), party of the first part, and The Bank of New York Mellon Trust Company, N.A., a national banking association whose mailing address is 2 North La Salle Street, Chicago, Illinois 60602
(hereinafter called the “Trustee”), as Trustee (as successor to Harris Trust and Savings Bank), under the Mortgage and Deed of Trust dated July 1, 1939, hereinafter mentioned, party of the second part; 

WHEREAS, the Company has heretofore executed and delivered to the Trustee its Mortgage and Deed of Trust dated July 1, 1939 (hereinafter
referred to as the “Original Indenture”), to provide for and to secure the issue of First Mortgage Bonds of the Company, issuable in series, and to declare the terms and conditions upon which the Bonds (as defined in the Original
Indenture) are to be issued thereunder; and 
 WHEREAS, the Company has heretofore executed and delivered to the Trustee Forty-Five
Supplemental Indentures, in addition to the Forty-Second Supplemental (Reopening) Indenture, supplemental to said Original Indenture, of which Forty-Four provided for the issuance thereunder of series of the Company’s First Mortgage Bonds, and
there is set forth below information with respect to such Supplemental Indentures as have provided for the issuance of Bonds, and the principal amount of Bonds which remain outstanding as of June 20, 2016: 

 

									
	 Supplemental

Indenture
	  	 Date
	  	 Series of

First Mortgage

Bonds
 Provided
For
	  	Principal
Amount
Issued	  	Principal
Amount
Outstanding
	 Supplemental Indenture
	  	July 1, 1939	  	 3-1/2% Series

Due 1969
	  	$26,500,000	  	None
	 Second Supplemental Indenture
	  	April 1, 1949	  	 2-7/8% Series

Due 1979
	  	10,000,000	  	None
	 Fourth Supplemental Indenture
	  	October 1, 1949	  	 2-3/4% Series

Due 1979
	  	6,500,000	  	None
	 Fifth Supplemental Indenture
	  	December 1, 1949	  	 2-3/4% Series

Due 1984
	  	32,500,000	  	None
	 Seventh Supplemental Indenture
	  	December 1, 1951	  	 3-1/4% Series

Due 1981
	  	5,250,000	  	None
	 Eighth Supplemental Indenture
	  	May 1, 1952	  	 3-1/4% Series

Due 1982
	  	4,750,000	  	None

  
 1 

									
	 Supplemental

Indenture
	  	 Date
	  	 Series of

First Mortgage

Bonds
 Provided
For
	  	Principal
Amount
Issued	  	Principal
Amount
Outstanding
	 Tenth Supplemental Indenture
	  	September 1, 1961	  	 4-3/4% Series

Due 1991
	  	13,000,000	  	None
	 Eleventh Supplemental Indenture
	  	April 1, 1969	  	 7-5/8% Series

Due 1999
	  	19,000,000	  	None
	 Twelfth Supplemental Indenture
	  	September 1, 1970	  	 8-3/4% Series

Due 2000
	  	20,000,000	  	None
	 Thirteenth Supplemental Indenture
	  	February 1, 1975	  	 8-5/8% Series

Due 2005
	  	35,000,000	  	None
	 Fourteenth Supplemental Indenture
	  	May 1, 1976	  	 8-5/8% Series

Due 2006
	  	45,000,000	  	None
	 Fifteenth Supplemental Indenture
	  	April 1, 1977	  	 5.90% Pollution

Control Series
 Due 2007
	  	32,000,000	  	None
	 Sixteenth Supplemental Indenture
	  	June 1, 1977	  	 8-1/8% Series

Due 2007
	  	30,000,000	  	None
	 Seventeenth Supplemental Indenture
	  	February 1, 1978	  	 8-3/4% Series

Due 2008
	  	35,000,000	  	None
	 Eighteenth Supplemental Indenture
	  	January 1, 1979	  	 6-3/4% Pollution

Control Series
 Due 2009
	  	45,000,000	  	None
	 Nineteenth Supplemental Indenture
	  	May 1, 1980	  	 8-1/4% Pollution

Control Series
 Due 1983
	  	45,000,000	  	None
	 Twentieth Supplemental Indenture
	  	November 1, 1981	  	 16.95% Series

Due 1988
	  	25,000,000	  	None
	 Twenty-First Supplemental Indenture
	  	April 1, 1982	  	 15% Series

Due 1992
	  	60,000,000	  	None
	 Twenty-Second Supplemental Indenture
	  	February 1, 1983	  	 9-5/8% Pollution

Control Series
 Due 2013
	  	58,500,000	  	None

  
 2 

									
	 Supplemental

Indenture
	  	 Date
	  	 Series of

First Mortgage

Bonds
 Provided
For
	  	Principal
Amount
Issued	  	Principal
Amount
Outstanding
	 Twenty-Third Supplemental Indenture
	  	July 1, 1986	  	 8-1/4% Series

Due 1996
	  	60,000,000	  	None
	 Twenty-Fourth Supplemental Indenture
	  	March 1, 1987	  	 8-5/8% Series

Due 2020
	  	50,000,000	  	None
	 Twenty-Fifth Supplemental Indenture
	  	October 15, 1988	  	 9.35% Series

Due 1998
	  	75,000,000	  	None
	 Twenty-Sixth Supplemental Indenture
	  	February 15, 1990	  	 8-7/8% Series

Due 2000
	  	75,000,000	  	None
	 Twenty-Seventh Supplemental Indenture
	  	March 12, 1992	  	7.46% Demand Series	  	370,000,000	  	None
	 Twenty-Eighth Supplemental Indenture
	  	July 1, 1992	  	 7-1/4% Series
 Due
1999
  
 8-1/2% Series

Due 2022
	  	 125,000,000 
  

125,000,000
	  	 None 
  

None

	 Twenty-Ninth Supplemental Indenture
	  	August 20, 1992	  	 7-1/4% Series

Due 2002
	  	100,000,000	  	None
	 Thirtieth Supplemental Indenture
	  	February 1, 1993	  	 6% Pollution Control

Revenue Refunding Series
 Due
2033
	  	58,500,000	  	None
	 Thirty-First Supplemental Indenture
	  	April 15, 1993	  	 7.65% Series

Due 2023
	  	100,000,000	  	None
	 Thirty-Second Supplemental Indenture
	  	April 15, 1994	  	 7-1/2% Series

Pollution Control
 Revenue
Refunding
 Due 2032
	  	75,500,000	  	75,500,000

  
 3 

									
	 Supplemental

Indenture
	  	 Date
	  	 Series of

First Mortgage

Bonds
 Provided
For
	  	Principal
Amount
Issued	  	Principal
Amount
Outstanding
	 Thirty-Third Supplemental Indenture
	  	August 11, 1997	  	 6-7/8% Convertible Series

Due 2004
  

7-1/8% Convertible Series
 Due
2009
	  	 370,000,000 
  

 
 150,000,000
	  	 None 
  

None

	 Thirty-Fourth Supplemental Indenture
	  	June 28, 2000	  	 9-1/2% Series

Due 2003
	  	397,800,000	  	None
	 Thirty-Fifth Supplemental Indenture
	  	May 10, 2002	  	 7-7/8% Series

Due 2007
	  	365,000,000	  	None
	 Thirty-Sixth Supplemental Indenture
	  	June 1, 2004	  	 5.00% Series

Pollution Control

Refunding Revenue
 Due
2033
	  	58,340,000	  	None
	 Thirty-Seventh Supplemental Indenture
	  	June 17, 2004	  	 6.00% Series

Due 2014
	  	250,000,000	  	None
	 Thirty-Eighth Supplemental Indenture
	  	January 18, 2005	  	 5.15% Series
 Due
2017
  
 5.95% Series

Due 2035
	  	 125,000,000 
  

125,000,000
	  	 125,000,000 
  

None

	 Thirty-Ninth Supplemental Indenture
	  	June 30, 2005	  	 5.10% Series
 Due
2020
  
 5.875% Series

Due 2036
	  	 250,000,000 
  

150,000,000
	  	 250,000,000 
  

None

	 Fortieth Supplemental Indenture
	  	May 15, 2007	  	 6.10% Series

Due 2047
	  	150,000,000	  	None
	 Forty-First Supplemental Indenture
	  	November 25, 2008	  	 8.625% Series

Due 2018
	  	300,000,000	  	None
	 Forty-Second Supplemental Indenture
	  	March 1, 2012	  	 4.125% Series

Due 2042
	  	250,000,000	  	250,000,000
	 Forty-Second Supplemental (Reopening) Indenture
	  	May 17, 2012	  	 4.125% Series

Due 2042
	  	300,000,000	  	300,000,000
	 Forty-Third Supplemental Indenture
	  	March 28, 2013	  	 4.10% Series

Due 2043
	  	430,000,000	  	430,000,000
	 Forty-Fourth Supplemental Indenture
	  	August 19, 2013	  	 4.625% Series

Due 2043
	  	250,000,000	  	250,000,000
	 Forty-Fifth Supplemental Indenture
	  	November 13, 2015	  	 3.25% Series
 Due
2025
  
 4.25% Series

Due 2045
	  	 250,000,000 
  

300,000,000
	  	 250,000,000 
  

300,000,000

  
 4 

 ; and 

WHEREAS, the Company is entitled at this time to have authenticated and delivered additional bonds, upon compliance with the provisions of
Article III of the Original Indenture, as amended; and 
 WHEREAS, the Company desires by this Forty-Sixth Supplemental Indenture
(hereinafter referred to as this “Supplemental Indenture”) to supplement the Original Indenture and to provide for the creation of a new series of bonds under the Original Indenture to be designated “First Mortgage Bonds, 2.55%
Series due 2026” (hereinafter called “Bonds of the 2.55% Series due 2026”); and the Original Indenture provides that certain terms and provisions, as determined by the Board of Directors of the Company, of the Bonds of any
particular series may be expressed in and provided by the execution of an appropriate supplemental indenture; and 
 WHEREAS, the Company in
the exercise of the powers and authority conferred upon and reserved to it under the provisions of the Original Indenture and indentures supplemental thereto, and pursuant to appropriate resolutions of its Board of Directors, has duly resolved and
determined to make, execute and deliver to the Trustee a supplemental indenture in the form hereof for the purposes herein provided; and 

WHEREAS, all conditions and requirements necessary to make this Supplemental Indenture a valid, binding and legal instrument have been done,
performed and fulfilled, and the execution and delivery hereof have been in all respects duly authorized; 
 NOW, THEREFORE, THIS INDENTURE
WITNESSETH: That, in consideration of the premises and of the mutual covenants herein contained and of the sum of One Dollar duly paid by the Company to the Trustee at or before the time of the execution of these presents, and of other valuable
considerations, the receipt whereof is hereby acknowledged, and in order further to secure the payment of the principal of and interest and premium, if any, on all Bonds at any time issued and outstanding under the Original Indenture as amended by
all indentures supplemental thereto (hereinafter sometimes collectively called the “Indenture”) according to their tenor, purpose and effect, and to declare certain terms and conditions upon and subject to which Bonds are to be
issued and secured, the Company has executed and delivered this Supplemental Indenture, 

  
 5 

 
and by these presents grants, bargains, sells, warrants, aliens, releases, conveys, assigns, transfers, mortgages, pledges, sets over and ratifies and confirms unto The Bank of New York Mellon
Trust Company, N.A., as Trustee, and to its successors in trust under the Indenture forever, all and singular the following described properties (in addition to all other properties heretofore specifically subjected to the lien of the Indenture and
not heretofore released from the lien thereof), that is to say: 
 FIRST. 

All and singular the lands, real estate, chattels real, easements, servitudes, and leaseholds of the Company, or which, subject to the
provisions of Article XII of the Original Indenture, the Company may hereafter acquire, including, among other things, the existing property described in Appendix A hereto under the caption “First,” which description is hereby incorporated
herein by reference and made a part hereof as if fully set forth herein, together with all improvements of any type located thereon. 
 Also
all power houses, plants, buildings and other structures, dams, dam sites, substations, heating plants, gas works, holders and tanks, compressor stations, gasoline extraction plants, together with all and singular the electric heating, gas and
mechanical appliances appurtenant thereto of every nature whatsoever, now owned by the Company or which it may hereafter acquire, including all and singular the machinery, engines, boilers, furnaces, generators, dynamos, turbines and motors, and all
and every character of mechanical appliance for generating or producing electricity, steam, water, gas and other agencies for light, heat, cold or power or any other purpose whatsoever. 

SECOND. 
 Also all
transmission and distribution systems used for the transmission and distribution of electricity, steam, water, gas and other agencies for light, heat, cold or power, or any other purpose whatsoever, whether underground or overhead or on the surface
or otherwise of the Company, or which, subject to the provisions of Article XII of the Original Indenture, the Company may hereafter acquire, including all poles, posts, wires, cables, conduits, mains, pipes, tubes, drains, furnaces, switchboards,
transformers, insulators, meters, lamps, fuses, junction boxes, water pumping stations, regulator stations, town border metering stations and other electric, steam, water and gas fixtures and apparatus. 

THIRD. 
 Also all
franchises and all permits, ordinances, easements, privileges and immunities and licenses, all rights to construct, maintain and operate overhead, surface and underground systems for the distribution and transmission of electricity, gas, water or
steam for the supply to itself or others of light, heat, cold or power or any other purpose whatsoever, all rights-of-way, all waters, water rights and flowage rights and all grants and consents, now owned by the Company or, subject to the
provisions of Article XII of the Original Indenture, which it may hereafter acquire. 

  
 6 

 Also all inventions, patent rights and licenses of every kind now owned by the Company or,
subject to the provisions of Article XII of the Original Indenture, which it may hereafter acquire. 
 FOURTH. 

Also, subject to the provisions of Article XII of the Original Indenture, all other property, real, personal and mixed (except as therein or
herein expressly excepted) of every nature and kind and wheresoever situated now or hereafter possessed by or belonging to the Company, or to which it is now, or may at any time hereafter be, in any manner entitled at law or in equity. 

FIFTH. 
 Also any and all
property of any kind or description which may from time to time after the date of the Original Indenture by delivery or by writing of any kind be conveyed, mortgaged, pledged, assigned or transferred to the Trustee by the Company or by any person,
copartnership or corporation, with the consent of the Company or otherwise, and accepted by the Trustee, to be held as part of the mortgaged property; and the Trustee is hereby authorized to accept and receive any such property and any such
conveyance, mortgage, pledge, assignment and transfer, as and for additional security hereunder, and to hold and apply any and all such property subject to and in accordance with the terms and provisions upon which such conveyance, mortgage, pledge,
assignment or transfer shall be made. 
 SIXTH. 

Together with all and singular, the tenements, hereditaments and appurtenances belonging or in anywise appertaining to the aforesaid property
or any part thereof, with the reversion and reversions, remainder and remainders, tolls, rents, revenues, issues, income, products and profits thereof, and all the estate, right, title, interest and claim whatsoever, at law and in equity, which the
Company now has or may hereafter acquire in and to the aforesaid property and franchises and every part and parcel thereof. 
 EXPRESSLY
EXCEPTING AND EXCLUDING, HOWEVER, all properties of the character excepted from the lien of the Original Indenture. 
 TO HAVE AND TO HOLD
all said properties, real, personal and mixed, mortgaged, pledged and conveyed by the Company as aforesaid, or intended so to be, unto the Trustee and its successors and assigns forever; 

SUBJECT, HOWEVER, to the exceptions and reservations hereinabove referred to, to existing leases other than leases which by their terms are
subordinate 

  
 7 

 
to the lien of the Indenture, to existing liens upon rights-of-way for transmission or distribution line purposes, as defined in Article I of the Original Indenture; and any extensions thereof,
and subject to existing easements for streets, alleys, highways, rights-of-way and railroad purposes over, upon and across certain of the property herein before described and subject also to all the terms, conditions, agreements, covenants,
exceptions and reservations expressed or provided in the deeds or other instruments respectively under and by virtue of which the Company acquired the properties hereinabove described and to undetermined liens and charges, if any, incidental to
construction or other existing permitted liens as defined in Article I of the Original Indenture; 
 IN TRUST, NEVERTHELESS, upon the terms
and trusts in the Original Indenture, and the indentures supplemental thereto, including this Supplemental Indenture, set forth, for the equal and proportionate benefit and security of all present and future holders of the Bonds and coupons issued
and to be issued thereunder, or any of them, without preference of any of said Bonds and coupons of any particular series over the Bonds and coupons of any other series by reason of priority in the time of issue, sale or negotiation thereof, or by
reason of the purpose of issue or otherwise howsoever, except as otherwise provided in Section 2 of Article IV of the Original Indenture. 

AND IT IS HEREBY COVENANTED, DECLARED AND AGREED, by and between the parties hereto for the benefit of those who shall hold the Bonds and
coupons, or any of them, to be issued under the Indenture as follows: 
 ARTICLE I 

DESCRIPTION OF BONDS OF THE 2.55% SERIES
DUE 2026 
 Section 1. General Description of Bonds of the 2.55% Series due 2026. The Bonds of the
2.55% Series due 2026 to be executed, authenticated and delivered under and secured by the Original Indenture shall be designated as “First Mortgage Bonds, 2.55% Series due 2026” of the Company. The Bonds of the 2.55% Series due 2026 shall
be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, all of the terms, conditions and covenants of the Indenture and subject to all the terms, conditions and covenants of this
Supplemental Indenture. 
 Bonds of the 2.55% Series due 2026 shall mature on July 1, 2026 and shall bear interest at the rate of two
and fifty-five hundredths percent (2.55%) per annum payable semi-annually on the first day of January and July in each year, commencing January 1, 2017. Every Bond of the 2.55% Series due 2026 shall be dated the date of authentication of
such Bond except that, notwithstanding the provisions of Section 6 of Article II of the Original Indenture, if any Bond of the 2.55% Series due 2026 shall be authenticated at any time subsequent to the record date (as hereinafter in this
Section defined) for any interest payment date but prior to the day following such interest payment date, it shall be dated as of the day following such interest payment date, provided, however, if at the time of

  
 8 

 
authentication of any Bond of the 2.55% Series due 2026 interest shall be in default on any Bonds of the 2.55% Series due 2026, such Bond shall be dated as of the day following the interest
payment date to which interest has previously been paid in full or made available for payment in full on outstanding Bonds of the 2.55% Series due 2026, as the case may be, or, if no interest has been paid or made available for payment, as of the
date of initial authentication and delivery of such Bond. Every Bond of the 2.55% Series due 2026 shall bear interest from the January 1 or July 1 immediately preceding the date thereof, unless such Bond shall be dated prior to
January 1, 2017, in which case it shall bear interest from June 20, 2016. 
 The person in whose name any Bond of the 2.55% Series
due 2026 is registered at the close of business on any record date with regard to any interest payment date shall be entitled to receive the interest payable thereon on such interest payment date notwithstanding the cancellation of such Bond upon
the transfer or exchange thereof subsequent to such record date and prior to the day following such interest payment date, unless the Company shall default in the payment of the interest due on such interest payment date, in which case such
defaulted interest shall be paid to the person in whose name such Bond is registered on the date of payment of such defaulted interest. The term “record date” as used in this Section with regard to any January 1 and July 1
interest payment date shall mean the close of business on the immediately preceding December 15 and June 15, respectively, or if such day is not a business day, the business day immediately preceding such day. The Bonds of the 2.55% Series
due 2026 shall be payable as to principal, premium, if any, and interest, in any coin or currency of the United States of America which at the time of payment is legal tender for public and private debts, at the agency of the Company in the City of
Chicago, Illinois, or at the option of the holder thereof at the agency of the Company in the Borough of Manhattan, The City of New York, provided that at the option of the Company interest may be paid by check mailed to the holder at such
holder’s registered address. 
 Section 2. Denominations of Bonds of the 2.55% Series due 2026 and Privilege of
Exchange. The Bonds of the 2.55% Series due 2026 shall be registered bonds without coupons of the minimum denominations of $2,000 and of any integral multiples of $1,000 in excess thereof, numbered consecutively from R-1. Bonds of the 2.55%
Series due 2026 may each be interchanged for other Bonds within the same Series in authorized denominations and in the same aggregate principal amounts, without charge, except for any tax or governmental charge imposed in connection with such
interchange. 
 Section 3. Form of Bonds of the 2.55% Series due 2026. The Bonds of the 2.55% Series due 2026, and the
Trustee’s Certificate with respect thereto, shall be substantially in the following forms, respectively: 
 [Form of Bond
appears on following page] 

  
 9 

 [FORM OF LEGEND FOR GLOBAL SECURITY] 

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE
THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE OR ANY SUPPLEMENT THERETO. 
 UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN. 
 CUSIP 95709TAN0 

WESTAR ENERGY, INC. 

(Incorporated under the laws of the State of Kansas) 

FIRST MORTGAGE BOND, 2.55% Series due 2026 

DUE JULY 1, 2026 
  

			
	No. R-1	  	$ 350,000,000.00

 WESTAR ENERGY, INC., a corporation organized and existing under the laws of the State of Kansas (hereinafter
called the “Company”, which term shall include any successor corporation as defined in the Indenture hereinafter referred to), for value received, hereby promises to pay to CEDE & CO. or registered assigns, on the first day
of July 2026, the principal sum of THREE-HUNDRED FIFTY MILLION DOLLARS ($350,000,000.00) in any coin or currency of the United States of America which at the time of payment is legal tender for public

  
 10 

 
and private debts, and to pay interest thereon in like coin or currency from the first day of January and July immediately preceding the date of this Bond, unless such Bond shall be dated prior
to January 1, 2017, in which case from June 20, 2016 at the rate of two and fifty-five hundredths percent (2.55%) per annum, payable semi-annually, on January 1 and July 1 of each year, commencing January 1, 2017, until
maturity, or, if this Bond shall be duly called for redemption or submitted for repurchase, until the redemption date or repurchase date, as the case may be, or, if the Company shall default in the payment of the principal or premium hereof, until
the Company’s obligation with respect to the payment of such principal or premium shall be discharged as provided in the Indenture hereinafter mentioned. The interest payable on any January 1 or July 1 interest payment date as
aforesaid will be paid to the person in whose name this Bond is registered at the close of business on the immediately preceding December 15 and June 15, respectively, or if such day is not a business day, the business day immediately
preceding such day (the “record date”), unless the Company shall default in the payment of the interest due on such interest payment date, in which case such defaulted interest shall be paid to the person in whose name this Bond is
registered on the date of payment of such defaulted interest. Principal of, premium, if any, and interest on, this Bond are payable at the agency of the Company in the City of Chicago, Illinois in immediately available funds, or at the option of the
holder thereof at the agency of the Company in the Borough of Manhattan, The City of New York, provided that at the option of the Company interest may be paid by check mailed to the holder at such holder’s registered address. 

This Bond is one of a duly authorized issue of Bonds of the Company (herein called the “Bonds”), in unlimited aggregate
principal amount, of the series hereinafter specified, all issued and to be issued under and equally and ratably secured by a Mortgage and Deed of Trust, dated July 1, 1939 (the “Original Mortgage”), executed by the Company to
The Bank of New York Mellon Trust Company, N.A. (herein called the “Trustee”), as Trustee (as successor to Harris Trust and Savings Bank), as amended by indentures supplemental thereto including the Forty-Sixth indenture
supplemental thereto dated as of June 20, 2016 (herein called the “Supplemental Indenture”), between the Company and the Trustee (said Original Mortgage, as so amended, being herein called the “Indenture”), to
which Indenture and all indentures supplemental thereto reference is hereby made for a description of the properties mortgaged and pledged, the nature and extent of the security, the rights of the bearers or registered owners of the Bonds and of the
Trustee in respect thereto, and the terms and conditions upon which the Bonds are, and are to be, secured. The Bonds may be issued in series, for various principal sums, may mature at different times, may bear interest at different rates and may
otherwise vary as in the Indenture provided. This Bond is one of a series designated as the “First Mortgage Bonds, 2.55% Series due 2026” (herein called “Bonds of the 2.55% Series due 2026”) of the Company, issued under
and secured by the Indenture executed by the Company to the Trustee. Additional Bonds of the 2.55% Series due 2026 may be issued, at the option of the Company, without the consent of any holder of the Bonds of the 2.55% Series due 2026, at any time
and from time to time in unlimited aggregate principal amount. 

  
 11 

 To the extent permitted by, and as provided in the Indenture, modifications or alterations of the
Indenture or of any indenture supplemental thereto, and of the rights and obligations of the Company and of the holders of the Bonds and coupons, may be made with the consent of the Company by an affirmative vote of not less than 60% in principal
amount of the Bonds entitled to vote then outstanding, at a meeting of Bondholders called and held as provided in the Indenture, and by an affirmative vote of not less than 60% in principal amount of the Bonds of any series entitled to vote then
outstanding and affected by such modification or alteration, in case one or more but less than all of the series of Bonds then outstanding under the Indenture are so affected. No modification or alteration shall be made which will affect the terms
of payment of the principal of or premium, if any, or interest on, this Bond, which are unconditional. The Company has reserved the right to make certain amendments to the Indenture, without any consent or other action by holders of the Bonds of
this series (i) to the extent necessary from time to time to qualify the Indenture under the Trust Indenture Act of 1939, (ii) to delete the requirement that the Company meet a net earnings test as a condition to authenticating additional
Bonds or merging into another company, (iii) to make certain other amendments which make the provisions for the release of mortgaged property less restrictive and (iv) to make certain other amendments, all as more fully provided in the
Indenture and in the Supplemental Indenture. In addition, once all Bonds issued prior to January 1, 1997 are no longer outstanding, the Company will be permitted to issue additional Bonds in an amount equal to 70% of the value of net bondable
property additions not subject to an unfunded prior lien, as provided in the Original Mortgage. 
 This Bond is subject to redemption by the
Company, at its option, on or after April 1, 2026 at any time in whole, or from time to time in part, at a redemption price equal to 100% of the principal amount of the Bond to be redeemed, plus accrued and unpaid interest on the principal
amount of the Bond to be redeemed to but excluding the redemption date. 
 This Bond is subject to redemption by the Company prior to
April 1, 2026 at any time in whole, or from time to time in part, at a price equal to the greater of: (a) 100% of the principal amount of the Bond to be redeemed, plus accrued and unpaid interest on the principal amount of the Bond to be
redeemed to but excluding the redemption date, or (b) as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the Bond to be redeemed that would be due if the Bond
matured on April 1, 2026 (not including any portion of payments of interest accrued as of the redemption date) discounted to the redemption date on a semi-annual basis at the Adjusted Treasury Rate plus fifteen (15) basis points, plus
accrued and unpaid interest on the principal amount of the Bond to be redeemed to but excluding the redemption date, in each of cases (a) and (b) as provided in the Supplemental Indenture. 

  
 12 

 Such redemption in every case shall be effected upon notice given: (1) at least thirty days
and not more than sixty days prior to the redemption date, to the registered owners of such Bonds at their addresses as the same shall appear on the transfer register of the Company; and (2) stating, among other things, the redemption price (or
if not then ascertainable, the manner of calculation thereof) and date, in each case, subject to the conditions of and as more fully set forth in the Indenture. 

The redemption price will be calculated assuming a 360-day year consisting of twelve 30-day months. 

A notice of redemption may provide that the optional redemption described in such notice is conditioned upon the occurrence of certain events
before the redemption date. Such notice of conditional redemption will be of no effect unless all such conditions to the redemption have occurred before the redemption date or have been waived by the Company. If any of these events fail to occur and
are not waived by the Company, the Company will be under no obligation to redeem the Bonds or pay the holders thereof any redemption proceeds, and the Company’s failure to so redeem the Bonds will not be considered a default or event of default
under the Indenture. In the event that any of these conditions fail to occur and are not waived by the Company, the Company will promptly notify the Trustee in writing that the conditions precedent to such redemption have failed to occur and the
Bonds will not be redeemed. 
 Unless the Company defaults in payment of the redemption price, on and after the redemption date, interest
will cease to accrue on the Bonds or portions of the Bonds called for redemption. 
 “Adjusted Treasury Rate” means, with
respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal
to the Comparable Treasury Price for the redemption date. 
 “Business Day” means any day that is not a day on which
banking institutions in New York City are authorized or required by law or regulation to close. 
 “Comparable Treasury
Issue” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of this Bond (assuming, for this purpose, that this Bond matured on April 1, 2026) that would be
used, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of this Bond (assuming, for this purpose, that this Bond matured on
April 1, 2026). 

  
 13 

 “Comparable Treasury Price” means, with respect to any redemption date: 

 

	 	•	 	the average of the Reference Treasury Dealer Quotations for that redemption date, after excluding the highest and lowest of the Reference Treasury Dealer Quotations; or 

 

	 	•	 	if the Quotation Agent obtains fewer than four Reference Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations so received. 

“Quotation Agent” means, as selected by the Company, one of the Reference Treasury Dealers. 

“Reference Treasury Dealer” means each of (1) J.P. Morgan Securities LLC, BNP Paribas Securities Corp. and their
respective successors, unless either of them ceases to be a primary U.S. Government securities dealer in the United States (a “Primary Treasury Dealer”), in which case the Company shall substitute another Primary Treasury Dealer;
and (2) any two other Primary Treasury Dealers selected by the Company. 
 “Reference Treasury Dealer Quotations”
means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Quotation Agent by that Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding that redemption date. 

In case an event of default, as defined in the Indenture, shall occur, the principal of all of the Bonds at any such time outstanding under
the Indenture may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Indenture. The Indenture provides that such declaration may in certain events be waived by the holders of a
majority in principal amount of the Bonds outstanding. 
 This Bond is transferable by the registered owner hereof, in person or by duly
authorized attorney, on the books of the Company to be kept for that purpose at the agency of the Company in the City of Chicago, Illinois, and at the agency of the Company in the Borough of Manhattan, The City of New York, upon surrender and
cancellation of this Bond and on presentation of a duly executed written instrument of transfer, and thereupon a new registered Bond or Bonds of the same series, of the same aggregate principal amount and in authorized denominations will be issued
to the transferee or transferees in exchange herefor; and this Bond, with or without others of like form and series, may in like manner be exchanged for one or more new registered Bonds of the same series of other authorized denominations but of the
same aggregate principal amount; all upon payment of the charges and subject to the terms and conditions set forth in the Indenture. 

  
 14 

 The Company or a successor entity may deliver to the Trustee in substitution for any Bonds of the
2.55% Series due 2026, mortgage bonds or other similar instruments as set forth in the Indenture. 
 Subject to the preceding sentence, no
recourse shall be had for the payment of the principal of or premium, if any, or interest on this Bond, or for any claim based hereon or on the Indenture or any indenture supplemental thereto, against any incorporator, or against any stockholder,
director or officer, past, present or future, of the Company, or of any predecessor or successor corporation, as such, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution, statute or otherwise, of incorporators, stockholders, directors or officers being
released by every owner hereof by the acceptance of this Bond and as part of the consideration for the issue hereof, and being likewise released by the terms of the Indenture. 

No director, officer, employee or stockholder of the Company will have any liability for any obligations of the Company under the Bonds or
Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder by accepting a Bond waives and releases all such liability. The waiver and release are part of the consideration for issuance of the
Bonds. The waiver may not be effective to waive liabilities under the federal securities laws. It is the view of the Securities and Exchange Commission that this type of waiver is against public policy. 

This Bond shall not be entitled to any benefit under the Indenture or any indenture supplemental thereto, or become valid or obligatory for
any purpose, until The Bank of New York Mellon Trust Company, N.A., the Trustee (as successor to Harris Trust and Savings Bank) under the Indenture, or a successor trustee thereto under the Indenture, shall have signed the form of certificate
endorsed hereon. 

  
 15 

 IN WITNESS WHEREOF, WESTAR ENERGY, INC. has caused this Bond to be signed in its name by its
Chairman of the Board, President and Chief Executive Officer or a Vice President, manually or by facsimile, and its corporate seal (or a facsimile thereof) to be hereto affixed and attested by its Secretary or an Assistant Secretary, manually or by
facsimile. 
 Dated:                     

 

			
	WESTAR ENERGY, INC.
		
	By:	 	  

		 	Anthony D. Somma
		 	Senior Vice President,
		 	Chief Financial Officer and Treasurer

  

	
	Attest:
	
	  

	Larry D. Irick
	Vice President, General Counsel and
	Corporate Secretary

 [SIGNATURE PAGE TO GLOBAL NOTE] 

  
 16 

 TRUSTEE’S CERTIFICATE 

This Bond is one of the Bonds, of the series designated herein, described in the within-mentioned Mortgage and Deed of Trust dated
July 1, 1939 and Supplemental Indenture dated as of June     , 2016. 
  

			
	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
	 As Trustee

		
	By:	 	  

		 	Authorized Signatory

 [TRUSTEE’S CERTIFICATE TO GLOBAL NOTE] 

  
 17 

 Section 4. Execution and Form of Temporary Bonds of the 2.55% Series due 2026.
Until Bonds of the 2.55% Series due 2026 in definitive form are ready for delivery, the Company may execute, and upon its request in writing the Trustee shall authenticate and deliver, in lieu thereof, Bonds of the 2.55% Series due 2026 in temporary
form, as provided in Section 9 of Article II of the Original Indenture. 
 ARTICLE II 

ISSUE OF BONDS OF THE 2.55% SERIES DUE
2026 
 Section 1. Limitation as to Principal Amount of Bonds of the 2.55% Series due 2026. The total principal amount
of Bonds of the 2.55% Series due 2026 which may be authenticated and delivered hereunder is not limited except as the Original Indenture and this Supplemental Indenture limit the principal amount of Bonds which may be issued thereunder. 

Section 2. Execution and Delivery of Bonds of the 2.55% Series due 2026. Bonds of the 2.55% Series due 2026 for the
aggregate principal amount of $350,000,000 may forthwith be executed by the Company and delivered to the Trustee and shall be authenticated by the Trustee and delivered (either before or after the filing or recording hereof) to or upon the order of
the Company, upon receipt by the Trustee of the resolutions, certificates, instruments and opinions required by Article III of the Original Indenture. 

Section 3. Additional Bonds of the 2.55% Series due 2026. The Bonds of the 2.55% Series due 2026 need not be issued at the
same time. Subject to the limitations of the Original Indenture and this Supplemental Indenture with respect to the principal amount of Bonds which may be issued thereunder, the Company may, from time to time, at its option and without the consent
of any holder of the Bonds of the 2.55% Series due 2026, reopen the 2.55% Series due 2026 for issuance of additional Bonds of the 2.55% Series due 2026 (such Bonds, “Additional Bonds”); provided that if the Additional Bonds
are not fungible with the previously issued Bonds of the 2.55% Series due 2026 for United States federal income tax purposes, the Additional Bonds will have a separate CUSIP number, and further provided that Additional Bonds shall rank
pari passu with any outstanding Bonds of the 2.55% Series due 2026, shall be consolidated with and treated as a single series with the outstanding Bonds of the 2.55% Series due 2026 for all purposes, and shall have terms and conditions
identical to those of the other outstanding Bonds of the 2.55% Series due 2026, except that Additional Bonds may differ with respect to: 

(i) the date of issuance; 
 (ii)
the amount of interest payable on the first interest payment date therefor; 
 (iii) the first interest payment date; 

  
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 (iv) the issue price; and 

(v) any adjustments necessary in order to conform to and ensure compliance with the Securities Act of 1933 (or other applicable securities
laws), which are not adverse in any material respect to the holder of any outstanding Bonds of the 2.55% Series due 2026. 
 Additional
Bonds of the 2.55% Series due 2026 executed by the Company and delivered to the Trustee shall be authenticated by the Trustee and delivered (either before or after the filing or recording hereof) to or upon the order of the Company, upon receipt by
the Trustee of the resolutions, certificates, instruments and opinions required by Article III of the Original Indenture. 
 ARTICLE III 

REDEMPTION AND SUBSTITUTION OF BONDS OF
THE 2.55% SERIES DUE 2026 
 Section 1. Optional Redemption of Bonds of the
2.55% Series due 2026. 
 (1) Optional Redemption of Bonds of the 2.55% Series due 2026. Prior to April 1, 2026, the Company
may, at its option, redeem the Bonds of the 2.55% Series due 2026 at any time in whole, or from time to time in part, after giving the required notice under subsection (2) of this Article III, Section 1, at a redemption price equal to the
greater of: (a) 100% of the principal amount of the Bonds of the 2.55% Series due 2026 to be redeemed, plus accrued and unpaid interest on Bonds of the 2.55% Series due 2026 to be redeemed to but excluding the redemption date or (b) as
determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the Bonds of the 2.55% Series due 2026 to be redeemed that would be due if such Bonds matured on April 1, 2026
(not including any portion of payments of interest accrued as of the redemption date) discounted to the redemption date on a semi-annual basis at the Adjusted Treasury Rate plus fifteen (15) basis points, plus accrued and unpaid interest on
those Bonds of the 2.55% Series due 2026 to be redeemed to but excluding the redemption date. 
 On or after April 1, 2026, the Company
may, at its option, redeem the Bonds of the 2.55% Series due 2026 at any time in whole, or from time to time in part, after giving the required notice under subsection (2) of this Article III, Section 1, at a redemption price equal to 100%
of the principal amount of the Bonds to be redeemed, plus accrued and unpaid interest on the Bonds to be redeemed to but excluding the redemption date. 

The redemption price will be calculated assuming a 360-day year consisting of twelve 30-day months. 

Unless the Company defaults in payment of the redemption price, on and after the redemption date, interest will cease to accrue on the Bonds
of the 2.55% Series due 2026 or portions of the Bonds of the 2.55% Series due 2026 called for redemption. 

  
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 (2) Notice of Redemption. Subject to the provisions of Article V of the Original
Indenture, in the case of redeeming all or any portion of the Bonds of the 2.55% Series due 2026, the Company shall cause notice of redemption to be given (1) at least thirty days and not more than sixty days prior to the date of redemption, to
the registered owners of such Bonds of the 2.55% Series due 2026 at their addresses as the same shall appear on the transfer register of the Company; and (2) stating, among other things, the redemption price (or if not then ascertainable, the
manner of calculation thereof) and date. 
 Notwithstanding the foregoing, a notice of redemption may provide that the optional redemption
described in such notice is conditioned upon the occurrence of certain events before the date of redemption. Such notice of conditional redemption will be of no effect unless all such conditions to the redemption shall have occurred before the
redemption date or shall have been waived by the Company. If any of these events fail to occur and are not waived by the Company, the Company will be under no obligation to redeem the Bonds of the 2.55% Series due 2026 or pay the holders thereof any
redemption proceeds and the Company’s failure to so redeem the Bonds of the 2.55% Series due 2026 will not be considered a default or event of default under the Indenture. In the event that any of these conditions fail to occur or are not
waived by the Company, the Company will promptly notify the Trustee in writing that the conditions precedent to such redemption have failed to occur and the Bonds of the 2.55% Series due 2026 will not be redeemed. 

“Adjusted Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for the redemption date. 

“Business Day” means any day that is not a day on which banking institutions in New York City are authorized or required by
law or regulation to close. 
 “Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term of the Bonds of the 2.55% Series due 2026 (assuming, for this purpose, that the Bonds of the 2.55% Series due 2026 matured on April 1, 2026) that would be used, at the time
of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Bonds of the 2.55% Series due 2026 (assuming, for this purpose, that the Bonds
of the 2.55% Series due 2026 matured on April 1, 2026). 

  
 20 

 “Comparable Treasury Price” means, with respect to any redemption date: 

 

	 	•	 	the average of the Reference Treasury Dealer Quotations for that redemption date, after excluding the highest and lowest of the Reference Treasury Dealer Quotations; or 

 

	 	•	 	if the Quotation Agent obtains fewer than four Reference Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations so received. 

“Quotation Agent” means, as selected by the Company, one of the Reference Treasury Dealers. 

“Reference Treasury Dealer” means each of (1) ) J.P. Morgan Securities LLC, BNP Paribas Securities Corp. and their
respective successors, unless either of them ceases to be a primary U.S. Government securities dealer in the United States (a “Primary Treasury Dealer”), in which case the Company shall substitute another Primary Treasury Dealer;
and (2) any two other Primary Treasury Dealers selected by the Company. 
 “Reference Treasury Dealer Quotations”
means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Quotation Agent by that Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding that redemption date. 

In connection with any redemption of the Bonds of the 2.55% Series due 2026 occurring prior to April 1, 2026, the Company shall give the
Trustee notice of the redemption price promptly after the calculation thereof and the Trustee shall not be responsible for such calculation. 

Section 2. Substitution of Bonds of the 2.55% Series due 2026. The Company may deliver to the Trustee in substitution
for any Bonds of the 2.55% Series due 2026, mortgage bonds or other similar secured instruments of the Company or any successor entity, whether by merger, combination or acquisition of all or substantially all of the assets of the Company, or
otherwise, issued under a mortgage and deed of trust or similar instrument of the Company or any successor entity in like principal amount of like term and bearing the same rate of interest and having the same interest payment dates and same
redemption provisions as the Bonds of the 2.55% Series due 2026 and which are otherwise substantially similar to the Bonds of the 2.55% Series due 2026 (such substituted bonds hereinafter being referred to in this Article III, Section 2 as the
“2.55% Series due 2026 Substituted Mortgage Bonds”). The 2.55% Series due 2026 Substituted Mortgage Bonds may only be delivered to the Trustee upon receipt by the Trustee of (i) a letter from Moody’s (as hereinafter
defined), dated within ten days prior to 

  
 21 

 
the date of delivery of the 2.55% Series due 2026 Substituted Mortgage Bonds, stating that its rating of the 2.55% Series due 2026 Substituted Mortgage Bonds is at least equal to its then current
rating on the Bonds of the 2.55% Series due 2026, (ii) a letter from S&P (as hereinafter defined), dated within ten days prior to the date of delivery of the 2.55% Series due 2026 Substituted Mortgage Bonds, stating that its rating to the
2.55% Series due 2026 Substituted Mortgage Bonds is at least equal to its then current rating on the Bonds of the 2.55% Series due 2026, (iii) an opinion of counsel, which may be counsel to the Company or any successor entity, that such
substitution will not result in the recognition of capital gain or loss for U.S. federal income tax purposes to the holders of the Bonds of the 2.55% Series due 2026, (iv) an opinion of counsel which may be counsel to the Company or any
successor entity, to the effect that the 2.55% Series due 2026 Substituted Mortgage Bonds shall have been duly and validly authorized, executed, authenticated, and delivered and shall constitute the valid, legally binding and enforceable obligations
of the Company or any successor entity enforceable in accordance with their terms, except as limited by bankruptcy, insolvency or other laws affecting the enforcement of mortgagees’ and other creditors’ rights and shall be entitled to the
benefit of the mortgage and deed of trust or other similar instrument pursuant to which they shall have been issued and (v) such other certificates and documents with respect to the issuance and delivery of the 2.55% Series due 2026 Substituted
Mortgage Bonds as may be required by law or as the Trustee may reasonably request. 
 “Moody’s” means Moody’s
Investors Service, Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and their assigns, except that if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, then the term “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Company. 

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc., duly
organized and existing under and by virtue of the laws of the State of New York, and its successors and assigns, except that if such rating agency shall be dissolved or liquidated or shall no longer perform the functions of a securities rating
agency, then the term “S&P” shall be deemed to refer to any other nationally recognized securities rating agency selected by the Company. 

ARTICLE IV 

ADDITIONAL COVENANTS 

The Company hereby covenants, warrants and agrees: 

Section 1. Title to Mortgaged Property. That the Company is lawfully seized and possessed of all of the mortgaged
property described in the granting clauses of this Supplemental Indenture; that it has good, right and lawful authority to mortgage the same as provided in this Supplemental Indenture; and that such 

  
 22 

 
mortgaged property is, at the actual date of the initial issue of the Bonds of the 2.55% Series due 2026 and at the date of issuance of any Additional Bonds, as applicable, free and clear of any
deed of trust, mortgage, lien, charge or encumbrance thereon or affecting the title thereto prior to the Indenture, except as set forth in the granting clauses of the Original Indenture, the Thirty-Second Supplemental Indenture, the Thirty-Eighth
Supplemental Indenture, the Thirty-Ninth Supplemental Indenture, the Forty-Second Supplemental Indenture, the Forty-Second Supplemental (Reopening) Indenture, the Forty-Third Supplemental Indenture, the Forty-Fourth Supplemental Indenture, the
Forty-Fifth Supplemental Indenture and this Supplemental Indenture. 
 Section 2. To Retire Certain Portions of Bonds upon
Release of All or Substantially All of the Electric Properties. So long as any Bonds of any series originally issued prior to January 1, 1997 are outstanding, in the event all or substantially all of the electric properties shall have been
released as an entirety from the lien of the Original Indenture, the Company will, at any time or from time to time within six months after the date of such release, retire Bonds outstanding under the Original Indenture in an aggregate principal
amount equal to the fair value of the electric properties so released pursuant to Section 3 of Article VII of the Original Indenture, as stated in the engineer’s certificate required by Section 3(b) of said Article VII, and
the proceeds of the electric properties so released pursuant to Section 5 of said Article VII. Such retirement of Bonds shall be effected in either one or both of the following methods: 

(a) By the withdrawal pursuant to Section 2 of Article VIII of the Original Indenture of any moneys deposited with the Trustee
pursuant to Sections 3(d), 4(d) and 5 of Article VII of the Original Indenture upon such release; or 
 (b) By causing the Trustee to
purchase or redeem bonds, pursuant to Section 8 of Article VIII of the Original Indenture, out of any moneys deposited with the Trustee pursuant to Sections 3(d), 4(d) and 5 of Article VII of the Original Indenture upon such
release. 
 The Bonds to be so retired pursuant to such Section 3 of Article VII of the Original Indenture shall include a principal
amount of Bonds of each Series then outstanding in the same ratio to the aggregate principal amount of all Bonds so retired as the aggregate principal amount of all Bonds of each Series outstanding immediately prior to such release bears to the
total principal amount of all Bonds then outstanding. 
 Section 3. The Bonds of the 2.55% Series due 2026 shall be subject to the
following provision: 
 The Company agrees (i) to provide the Trustee with such reasonable information as it has in its possession
to enable the Trustee to determine whether any payments pursuant to the Indenture are subject to the withholding requirements described in Section 1471(b) of the US Internal Revenue Code of 

  
 23 

 
1986 (the “Code”) or otherwise imposed pursuant to Sections 1471 through 1474 of the Code and any regulations, or agreements thereunder or official interpretations thereof
(“Applicable Law”), and (ii) that the Trustee shall be entitled to make any withholding or deduction from payments under the Indenture to the extent necessary to comply with Applicable Law, for which the Trustee shall not have any
liability. 
 ARTICLE V 

AMENDMENTS AND RESERVATIONS OF RIGHTS TO
AMEND THE ORIGINAL 
 INDENTURE 

Section 1. So Long as Bonds Issued Prior to January 1, 1997 Remain Outstanding. So long as any of the Bonds of any
series originally issued prior to January 1, 1997 shall remain outstanding: 
 (a) Notwithstanding the provisions of Section 4 of
Article III of the Original Indenture, no Bonds shall be authenticated and delivered pursuant to the provisions of Article III of the Original Indenture and issued upon the basis of net bondable value of property additions for an aggregate principal
amount in excess of sixty percent (60%) of the net bondable value of property additions not subject to an unfunded prior lien. 
 For
the purposes of Subsections (e) and (f) of the definition of “net bondable value of property additions not subject to an unfunded prior lien,” contained in Article I of the Original Indenture, and Subdivisions 8 and 9 of clause
(a) of Section 4 of Article III of the Original Indenture, in all computations made with respect to a period subsequent to April 1, 1949, the deductions therein referred to shall in each case be ten-sixths (10/6ths) of the
respective amounts mentioned, in lieu of ten-sevenths (10/7ths). 
 (b) Notwithstanding the provisions of Section 3(a) of Article VIII
of the Original Indenture, no moneys received by the Trustee pursuant to Section 5(a) of Article III of the Original Indenture shall be paid over by the Trustee in an amount in excess of sixty percent (60%) of the net bondable value of
property additions not subject to an unfunded prior lien, and for the purposes of Section 3 of Article VII of the Original Indenture, the amount of cash required to be deposited by the Company pursuant to Subsection (d) of said
Section 3 of Article VII shall not be reduced in an amount in excess of sixty percent (60%) of the net bondable value of property additions not subject to an unfunded prior lien. 

(c) For the purposes of clauses (c) and (d) of the definition of “net bondable value of property additions subject to an
unfunded prior lien,” contained in Article I of the Original Indenture, and Subsection 7 of clause (a) of Section 4 of Article III of the Original Indenture, in all computations made with respect to a period subsequent to
April 1, 1949, the deductions therein referred to shall in each case be ten-sixths (10/6ths) of the respective amounts mentioned, in lieu of ten-sevenths (10/7ths). 

  
 24 

 (d) Subsection (a) of Section 14, clauses (1) and (2) of Subsection (a)
of Section 16 of Article IV and clause (1) of Subsection (b) of Section 1 of Article XII of the Original Indenture shall be deemed amended by substituting the words “sixty percent (60%)” for “seventy percent
(70%)” where they appear in said provisions of the Original Indenture. 
 (e) The definition of the term “net earnings
available for interest, depreciation and property retirement,” as contained in Article I of the Original Indenture, shall be deemed to mean the net earnings of the Company ascertained as follows: 

(i) The total operating revenues of the Company and the net non-operating revenues of the properties of the Company shall be
ascertained: 
 (A) From the total, determined as provided in Subsection (a), there shall be deducted all operating expenses,
including all salaries, rentals, insurance, license and franchise fees, expenditures for repairs and maintenance, taxes (other than income, excess profits and other taxes measured by or dependent on net taxable income), depreciation as shown on the
books of the Company or an amount equal to the minimum provision for depreciation as hereinafter defined, whichever is greater, but excluding all property retirement appropriations, all interest and sinking fund charges, amortization of stock and
debt discount and expense or premium and further excluding any charges to income or otherwise for the amortization of plant or property accounts or of amounts transferred therefrom. 

(B) The balance remaining after the deduction of the total amount computed pursuant to Subsection (b) from the total
amount computed pursuant to Subsection (a) shall constitute the “net earnings of the Company available for interest,”provided that not more than fifteen percent (15%) of the net earnings of the Company available for
interest may consist of the aggregate of (1) net non-operating income, (2) net earnings from mortgaged property other than property of the character of property additions and (3) net earnings from property not subject to the lien of
this Indenture. 
 (C) No income received or accrued by the Company from securities and no profits or losses of capital
assets shall be included in making the computations aforesaid. 
 (D) In case the Company shall have acquired any acquired
plant or systems or shall have been consolidated or merged with any other corporation, within or after the particular 

  
 25 

 
period for which the calculation of net earnings of the Company available for interest, depreciation and property retirement is made, then, in computing the net earnings of the Company available
for interest, depreciation and property retirement, there may be included, to the extent they may not have been otherwise included, the net earnings or net losses of such acquired plant or system or of such other corporation, as the case may be, for
the whole of such period. The net earnings or net losses of such property additions, or of such other corporation for the period preceding such acquisition or such consolidation or merger, shall be ascertained and computed as provided in the
foregoing subsections of this definition as if such acquired plant or system had been owned by the Company during the whole of such period, or as if such other corporation had been consolidated or merged with the Company prior to the first day of
such period. 
 (E) In case the Company shall have obtained the release of any property pursuant to Section 3 of
Article VII of the Original Indenture, of a fair value in excess of Five Hundred Thousand Dollars ($500,000), as shown by the engineer’s certificate required by said Section 3, or shall have obtained the release of any property
pursuant to Section 5 of Article VII of the Original Indenture, the proceeds of which shall have exceeded Five Hundred Thousand Dollars ($500,000), within or after the particular period for which the calculation of net earnings of the
Company available for interest, depreciation and property retirement is made, then, in computing the net earnings of the Company available for interest, depreciation and property retirement, the net earnings or net losses of such property for the
whole of such period shall be excluded to the extent practicable on the basis of actual earnings and expenses of such property or on the basis of such estimates of the earnings and expenses of such property as the signers of an officers’
certificate filed with the Trustee pursuant to Section 3(b) of Article III or Section 16 of Article IV of the Original Indenture shall deem proper. 

(ii) The term “minimum charge for depreciation” as used herein shall mean an amount equal to (A) fifteen
percent (15%) of the total operating revenues of the Company after deducting therefrom an amount equal to the aggregate cost to the Company of electric energy, gas and water purchased for resale to others and rentals paid for, or other payments
made for the use of, property owned by others and leased to or operated by the Company, the maintenance of which and depreciation on which are borne by the owners, less (B) an amount equal to the expenditures for maintenance and repairs to the
plants and property of the Company and included or reflected in its operating expense accounts. 

  
 26 

 (iii) The terms “net earnings available for interest, depreciation and
property retirement” and “net earnings of another corporation available for interest, depreciation and property retirement” as contained in Article I of the Original Indenture, when used with respect to any property or with
respect to another corporation, shall mean the net earnings of such property or the net earnings of such other corporation, as the case may be, computed in the manner provided in Subsections (a), (b), (c) and (d) hereof. 

(f) Notwithstanding the provisions of clauses (1) and (2) of Subsection (b) of Section 3 of Article III, and
Subsection (b) of Section 14 of Article IV, and Subsection (b) of Section 16 of Article IV and clause (2) of Subsection (b) of Section 1 of Article XII of the Original Indenture, the computation of net
earnings required therein shall be made as provided in Subsection (e) of this Section 1, and the net earnings tests required in said mentioned provisions of Articles III, IV and XII of the Original Indenture shall be based on two times the
annual interest charges described in such provisions, instead of two and one-half times such charges, but shall not otherwise affect such provisions or relieve from the requirements therein pertaining to ten
percent (10%) of the principal amount of Bonds therein described. 
 Section 2. Facsimile Signatures. All of the
Bonds of the 2.55% Series due 2026 and of any series initially issued after the initial issuance of Bonds of the 2.55% Series due 2026 shall, from time to time, be executed on behalf of the Company by its Chairman of the Board, Chief Executive
Officer, President or one of its Vice Presidents whose signature, notwithstanding the provisions of Section 12 of Article II of the Original Indenture, may be by facsimile, and its corporate seal (which may be in facsimile) shall be thereunto
affixed and attested by its Secretary or one of its Assistant Secretaries whose signature, notwithstanding the provisions of the aforesaid Section 12, may be by facsimile. 

In case any of the officers who have signed or sealed any of the Bonds of the 2.55% Series due 2026 or of any series initially issued after
the initial issuance of Bonds of the 2.55% Series due 2026 manually or by facsimile shall cease to be such officers of the Company before such Bonds so signed and sealed shall have been actually authenticated by the Trustee or delivered by the
Company, such Bonds nevertheless may be authenticated, issued and delivered with the same force and effect as though the person or persons who so signed or sealed such Bonds had not ceased to be such officer or officers of the Company; and also any
such Bonds may be signed or sealed by manual or facsimile signature on behalf of the Company by such persons as at the actual date of the execution of any of such Bonds shall be the proper officers of the Company, although at the nominal date of any
such Bond any such person shall not have been such officer of the Company. 
 Section 3. Reservation of Right to Amend
Article VII. The Company reserves the right subject to appropriate corporate action, but without the consent or other action of holders of bonds of any series created after January 1, 1997, to

  
 27 

 
make such amendments to the Original Indenture, as supplemented, as shall be necessary in order to amend Article VII thereof by adding thereto a Section 8 and a Section 9 to read as
follows: 
 “SECTION 8. Notwithstanding any other provision of this Indenture, unless an event of default shall have
happened and be continuing, or shall happen as a result of the making or granting of an application to release mortgaged property permitted by this Section 8, the Trustee shall release from the lien of this Indenture any mortgaged property if
the fair value to the Company of all of the property constituting the trust estate (excluding the mortgaged property to be released but including any mortgaged property to be acquired by the Company with the proceeds of, or otherwise in connection
with, such release) equals or exceeds an amount equal to 10/7ths of the aggregate principal amount of outstanding Bonds and prior lien bonds outstanding at the time of such release, upon receipt by the Trustee of: 

“(a) an officers’ certificate dated the date of such release, requesting such release, describing in reasonable
detail the mortgaged property to be released and stating the reason for such release; 
 “(b) an engineer’s
certificate, dated the date of such release, stating (i) that the signer of such engineer’s certificate has examined such officers’ certificate in connection with such release, (ii) the fair value to the Company, in the opinion
of the signer of such engineer’s certificate, of (A) all of the property constituting the trust estate, and (B) the mortgaged property to be released, in each case as of a date not more than 90 days prior to the date of such release,
and (iii) that in the opinion of such signer, such release will not impair the security under this Indenture in contravention of the provisions hereof; 

“(c) in case any bondable property is being acquired by the Company with the proceeds of, or otherwise in connection with,
such release, an engineer’s certificate, dated the date of such release, as to the fair value to the Company, as of the date not more than 90 days prior to the date of such release, of the bondable property being so acquired (and if within six
months prior to the date of acquisition by the Company of the bondable property being so acquired, such bondable property has been used or operated by a person or persons other than the Company in a business similar to that in which it has been or
is to be used or operated by the Company, and the fair value to the Company of such bondable property, as set forth in such certificate, is not less than $25,000 and not less than 1% of the aggregate principal amount of Bonds at the time
outstanding, such certificate shall be an independent appraiser’s certificate); 

  
 28 

 “(d) an officer’s certificate, dated the date of such release, stating
the aggregate principal amount of outstanding Bonds and prior lien bonds outstanding at the time of such release, and stating that the fair value to the Company of all of the property constituting the trust estate (excluding the mortgaged property
to be released but including any bondable property to be acquired by the Company with the proceeds of, or otherwise in connection with, such release) stated on the independent appraiser’s certificate filed pursuant to Section 8(c) equals
or exceeds an amount equal to 10/7ths of such aggregate principal amount; 
 “(e) an officers’ certificate, dated
the date of such release, stating that, the Company is not, and by the making or granting of the application will not be, in default in the performance of any of the terms and covenants of this Indenture; and 

“(f) an opinion of counsel, dated the date of such release, as to compliance with conditions precedent. 

“SECTION 9. If the Company is unable to obtain, in accordance with any other Section of this Article VII, the release from
the lien of this Indenture of any property constituting part of the trust estate, unless an event of default shall have happened and be continuing, or shall happen as a result of the making or granting of an application to release mortgaged property
permitted by this Section 9, the Trustee shall release from the lien of this Indenture any mortgaged property if the fair value to the Company thereof, as shown by the engineer’s certificate filed pursuant to Section 9(b), is less
than 1/2 of 1% of the aggregate principal amount of outstanding Bonds and prior lien bonds outstanding at the time of such release, provided that the aggregate fair value to the Company of all mortgaged property released pursuant to this
Section 9, as shown by all engineer’s certificates filed pursuant to Section 9(b) in any period of 12 consecutive calendar months which includes the date of such engineer’s certificate, shall not exceed 1% of the aggregate
principal amount of the outstanding Bonds and prior lien bonds outstanding at the time of such release, upon receipt by the Trustee of: 

“(a) an officers’ certificate, dated the date of such release, requesting such release, describing in reasonable
detail the mortgaged property to be released and stating the reason for such release; 
 “(b) an engineer’s
certificate, dated the date of such release, stating (A) that the signer of such engineer’s certificate has 

  
 29 

 
examined such officers’ certificate in connection with such release, (B) the fair value to the Company, in the opinion of the signer of such engineer’s certificate, of such
mortgaged property to be released as of a date not more than 90 days prior to the date of such release, and (C) that in the opinion of such signer such release will not impair the security under this Indenture in contravention of the provisions
hereof; 
 “(c) an officers’ certificate, dated the date of such release, stating the aggregate principal amount of
outstanding Bonds and prior lien bonds outstanding at the time of such release, that 1/2 of 1% of such aggregate principal amount does not exceed the fair value to the Company of the mortgaged property for which such release is applied for as shown
by the engineer’s certificate referred to in Section 9(b), and that 1% of such aggregate principal amount does not exceed the aggregate fair value to the Company of all mortgaged property released from the lien of this Indenture pursuant
to this Section 9 as shown by all engineer’s certificates filed pursuant to Section 9(b) in such period of 12 consecutive calendar months; 

“(d) an officers’ certificate, dated the date of such release, stating that, the Company is not, and by the making or
granting of the application will not be, in default in the performance of any of the terms and covenants of this Indenture; and 

“(e) an opinion of counsel, dated the date of such release, as to compliance with conditions precedent.” 

The Company also reserves the right subject to appropriate corporate action, but without the consent or other action of holders of Bonds of
any series created after January 1, 1997 to amend, modify or delete any other provision of the Original Indenture, as supplemented, as may be necessary in order to effectuate the intents and purposes contemplated by the foregoing Sections 8 and
9. 
 Section 4. Reservation of Right to Delete Certain Requirements and Conditions. The Company reserves the right
subject to appropriate corporate action, but without the consent or other action of holders of Bonds of any series created after January 1, 1997 to: 

(a) delete as a condition to the authentication of additional Bonds pursuant to Sections 4, 5 or 6 of Article III of the Original Indenture
the requirement to file or deposit with the Trustee the officers’ certificate described in Section 3(b) of Article III of the Original Indenture; 

(b) delete as a condition to the consolidation or merger of the Company into, or sale by the Company of its property as an entirety or
substantially as an entirety to another corporation the requirement set forth in Section 1(b)(2) of Article XII of the Original Indenture; 

  
 30 

 (c) delete as a condition to the release of property pursuant to Section 3 of Article VII of
the Original Indenture, the requirement to obtain an independent engineer’s certificate under the circumstances set forth in Section 3(c) of Article VII; and 

(d) amend, modify or delete any other provision of the Original Indenture, as supplemented, as may be necessary in order to effectuate the
intents and purposes contemplated by this Section 4. 
 Section 5. Issuance of Variable Rate Bonds. The Company
reserves the right, subject to appropriate action, but without any consent or other action by holders of Bonds of the 2.55% Series due 2026, or of any subsequent series of bonds, to clarify the ability of the Company to issue variable rate bonds
under the Original Indenture, notwithstanding any provision of the Original Indenture to the contrary. The Company may make such other amendments to the Original Indenture as may be necessary or desirable in the opinion of the Company to effect the
foregoing. 
 Section 6. Substitution of Bonds. The Company reserves the right, subject to appropriate action, but
without any consent or other action by holders of Bonds of the 2.55% Series due 2026, or of any subsequent series of bonds, to amend the Original Indenture as may be necessary in order to permit the Company to deliver to the Trustee in substitution
for any bonds issued under the Original Indenture (except Bonds of the 2.55% Series due 2026, which are subject to Article III, Section 2 hereof), mortgage bonds or other similar instruments of the Company or any successor entity, whether by
merger, combination or acquisition of all or substantially all of the assets of the Company, or otherwise, issued under a mortgage and deed of trust or similar instrument of the Company or any successor entity in like principal amount of like term
and bearing the same rate of interest as the original bonds (such substituted bonds hereinafter being referred to as the “Substituted Mortgage Bonds”). The Substituted Mortgage Bonds may only be delivered to the Trustee upon receipt
by the Trustee of (i) if the original bonds were rated by Moody’s, a letter from Moody’s, dated within ten days prior to the date of delivery of the Substituted Mortgage Bonds, stating that its rating of the Substituted Mortgage Bonds
is at least equal to its then current rating on the original bonds, (ii) if the original bonds were rated by S&P, a letter from S&P, dated within ten days prior to the date of delivery of the Substituted Mortgage Bonds, stating that its
rating to the Substituted Mortgage Bonds is at least equal to its then current rating on the original bonds, (iii) an opinion of counsel which may be counsel to the Company or any successor entity, to the effect that the Substituted Mortgage
Bonds shall have been duly and validly authorized, executed, authenticated, and delivered and shall constitute the valid, legally binding and enforceable obligations of the Company or any successor entity enforceable in accordance with their terms,
except as limited by bankruptcy, 

  
 31 

 
insolvency or other laws affecting the enforcement of mortgagees’ and other creditors’ rights and shall be entitled to the benefit of the mortgage and deed of trust or other similar
instrument pursuant to which they shall have been issued and (iv) such other certificates and documents with respect to the issuance and delivery of the Substituted Mortgage Bonds as may be required by law or as the Trustee may reasonably
request. The Company may make such other amendments to the Original Indenture as may be necessary or desirable in the opinion of the Company to effect the foregoing. 

Section 7. Addition of a Governing Law Clause. The Company reserves the right, subject to appropriate action, but
without any consent or other action by holders of Bonds of the 2.55% Series due 2026, or of any subsequent series of bonds, to amend the Original Indenture to add the following new section: 

“This Indenture shall be deemed to be a contract made under the laws of the State of Kansas and for all purposes shall be
construed in accordance with the laws of the State of Kansas, without regard to conflicts of laws principles thereof.” 

Section 8. Event of Default for Failure to Pay Final Judgments in Excess of $100,000. The Company reserves the right,
subject to appropriate action, but without any consent or other action by holders of Bonds of the 2.55% Series due 2026, or of any subsequent series of bonds, to amend the Original Indenture to delete Article IX, Section 1(j). The Company may
make such other amendments to the Original Indenture as may be necessary or desirable in the opinion of the Company to effect the foregoing. 

Section 9. Net Earnings Test in Connection with Property Acquisitions. The Company reserves the right, subject to
appropriate action, but without any consent or other action by holders of Bonds of the 2.55% Series due 2026, or of any subsequent series of bonds, to amend the Original Indenture to delete Article IV, Section 14(b) and reserves the right to
further amend, modify or delete any other provision of the Original Indenture, as supplemented, as may be necessary in order to effectuate the intents and purposes contemplated by this Section 9. 

Section 10. Addition of Nuclear Fuel. The Company reserves the right, subject to appropriate action, but without any
consent or other action by holders of Bonds of the 2.55% Series due 2026, or of any subsequent series of bonds, to amend the Original Indenture to (i) add Nuclear Fuel to the definition of “Property Additions”; provided
that there shall be no restrictions under the Original Indenture on the application of any controls, liens, regulations, easements, restrictions, exceptions or reservations by any governmental authority on the Nuclear Fuel, (ii) to allow the
Company to at any time, unless the Company is in default in the payment of the interest on any of the bonds then outstanding or there is an ongoing event of default without any release or consent by, or report to, the Trustee, sell or otherwise
dispose of, free from the lien of the Original Indenture, any Nuclear Fuel which shall have become old, inadequate, obsolete, worn out, 

  
 32 

 
unfit, unadapted, unserviceable, undesirable or unnecessary for use in the operations of the Company upon the replacement or substitution of such Nuclear Fuel with other Nuclear Fuel of at least
equal value and subject to the lien of the Original Indenture and (iii) to further amend, modify or delete any other provision of the Original Indenture, as supplemented, as may be necessary in order to effectuate the intents and purposes
contemplated by this Section 10. 
 The term ‘Nuclear Fuel’ shall mean (a) any fuel element, including nuclear
fuel and associated means (and any similar or analogous device or substance), whether or not classified as fuel and whether or not chargeable to operating expenses, comprising or intended to comprise, or formerly comprising, the core, or other part,
of a nuclear reactor or any similar or analogous device, (b) any fuel element, including nuclear fuel, and associated means (and any similar or analogous device or substance) while in the process of fabrication or preparation and special
nuclear or other materials held for use in such fabrication or preparation, (c) any substances or materials formerly comprising such nuclear fuel and associated means (or any similar or analogous device or substance) and which substances or
materials are undergoing or have undergone reprocessing and (d) uranium, thorium, plutonium, and any other substance or material from time to time used or selected for use by the Company as fuel material, or as potential fuel material, in a
nuclear reactor or any similar or analogous device. 
 Section 11. Modernization of the Original Indenture. The
Company reserves the right, subject to appropriate action, but without any consent or other action by holders of Bonds of the 2.55% Series due 2026, or of any subsequent series of bonds, to amend the Original Indenture to: 

(i) Eliminate maintenance and improvement fund requirements; 

(ii) Simplify the provisions for release of obsolete property, de minimis property releases and substitution of property and
unfunded property; 
 (iii) Permit additional terms of bonds or forms of bond in supplemental indentures, including terms for
uncertificated and global securities (or definitive securities in lieu thereof) and medium-term notes; 
 (iv) Make any
changes necessary to conform the Mortgage with the requirements of the Trust Indenture Act; 
 (v) Add defeasance provisions
providing for covenant and legal defeasance options; 
 (vi) Permit the Company to remove the trustee in certain
circumstances; 

  
 33 

 (vii) Provide for direction to the trustee under the Mortgage to vote pledged
prior lien bonds for specified amendments to the prior lien mortgage; 
 (viii) Provide broader investment directions to the
trustee or permitting the Company to direct investment of money held by the Trustee, so long as there is no event of default under the Mortgage; 

(ix) Amend the definition of “Excepted Property” to exclude property which generally cannot be mortgaged without
undue administrative burden (i.e. automobiles), but allowing the Company to subject Excepted Property to the Mortgage; 
 (x)
Amend the definition of “Bondable Property” to allow all mortgaged property to be bondable; and 
 (xi) Update the
definition of “Permitted Liens.” 
 ARTICLE VI 

MISCELLANEOUS PROVISIONS 

Section 1. Acceptance of Trust. The Trustee accepts the trusts herein declared, provided, created or supplemented and
agrees to perform the same upon the terms and conditions herein and in the Original Indenture, as amended, set forth and upon the following terms and conditions. 

Section 2. Responsibility and Duty of Trustee. The Trustee shall not be responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. In general each and every term and condition contained in Article XIII
of the Original Indenture, as amended by the Second Supplemental Indenture, shall apply to and form part of this Supplemental Indenture with the same force and effect as if the same were herein set forth in full with such omissions, variations and
insertions, if any, as may be appropriate to make the same conform to the provisions of this Supplemental Indenture. 

Section 3. Parties to Include Successors and Assigns. Whenever in this Supplemental Indenture either of the parties
hereto is named or referred to, such reference shall, subject to the provisions of Articles XII and XIII of the Original Indenture, be deemed to include the successors and assigns of such party, and all the covenants and agreements in this
Supplemental Indenture contained by or on behalf of the Company, or by or on behalf of the Trustee, shall, subject as aforesaid, bind and inure to the respective benefits of the respective successors and assigns of such parties, whether so expressed
or not. 

  
 34 

 Section 4. Benefits Restricted to Parties and to Holders of Bonds and
Coupons. Nothing in this Supplemental Indenture, expressed or implied, is intended or shall be construed, to confer upon, or to give to, any person, firm or corporation, other than the parties hereto and the holders of the Bonds and coupons
outstanding under the Indenture, any right, remedy or claim under or by reason of this Supplemental Indenture or any covenant, condition, stipulation, promise or agreement hereof, and all the covenants, conditions, stipulations, promises and
agreements in this Supplemental Indenture contained by and on behalf of the Company shall be for the sole and exclusive benefit of the parties hereto, and of the holders of the Bonds and of the coupons outstanding under the Indenture. 

Section 5. Execution in Counterparts. This Supplemental Indenture may be executed in several counterparts, and all such
counterparts executed and delivered, each as an original, shall constitute but one and the same instrument. 

Section 6. Titles of Articles Not Part of the Forty-Sixth Supplemental Indenture. The Titles of the several Articles of
this Supplemental Indenture shall not be deemed to be any part thereof. 

  
 35 

 IN WITNESS HEREOF, WESTAR ENERGY, INC., party hereto of the first part, has caused its corporate
name to be hereunto affixed, and this instrument to be signed and sealed by its Chairman of the Board, President, Chief Executive Officer or a Vice President, and its corporate seal to be attested by its Secretary or an Assistant Secretary for and
in its behalf, and The Bank of New York Mellon Trust Company, N.A., party hereto of the second part, has caused its corporate name to be hereunto affixed, and this instrument to be signed and sealed by its duly authorized officer and its corporate
seal to be attested by its duly authorized officer, all as of the day and year first above written. 
 (CORPORATE SEAL) 

 

			
	WESTAR ENERGY, INC.
		
	By:	 	  

		 	 Anthony D. Somma
 Senior Vice President,

Chief Financial Officer and Treasurer

 

			
	ATTEST:
		
	By:	 	  

		 	 Larry D. Irick,
 Vice President,

General Counsel and Corporate Secretary

  

			
	 Executed, sealed and delivered by WESTAR

      ENERGY, INC. in the presence of:

		
	By:	 	  

		
	By:	 	  

  
 S-1 

 
			
	 THE BANK OF NEW YORK MELLON

      TRUST COMPANY, N.A., as Trustee

		
	By:	 	  

		 	Manjari Purkayastha, Vice President

  

			
	ATTEST:
		
	By:	 	  

		 	Teresa Petta, Vice President

  

			
	 Executed, sealed and delivered by

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. in the presence of:

		
	By:	 	  

		
	By:	 	  

  
 S-2 

					
	STATE OF KANSAS	  	)	  	
		  	:	  	ss.:
	COUNTY OF SHAWNEE	  	)	  	

 BE IT REMEMBERED, that on this      day of June, 2016, before me, the undersigned,
a Notary Public within and for the County and State aforesaid, personally came Anthony D. Somma and Larry D. Irick, of Westar Energy, Inc., a corporation duly organized, incorporated and existing under the laws of the State of Kansas, who are
personally known to me to be such officers, and who are personally known to me to be the same persons who executed as such officers the within instrument of writing, and such persons duly acknowledged the execution of the same to be the act and deed
of said corporation. 
 IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal on the day and year last above
written. 
  

			
	                                 
                       
	Notary Public
	My Commission Expires	 	  

  
 S-3 

					
	STATE OF KANSAS	  	)	  	
		  	:	  	ss.:
	COUNTY OF SHAWNEE	  	)	  	

 BE IT REMEMBERED, that on this      day of June, 2016, before me, the undersigned,
a Notary Public within and for the County and State aforesaid, personally came Anthony D. Somma, and Larry D. Irick, of Westar Energy, Inc., a corporation duly organized, incorporated and existing under the laws of the State of Kansas, who are
personally known to me to be such officers, being by me respectively duly sworn, did each say that the said Anthony D. Somma is Senior Vice President, Chief Financial Officer and Treasurer and that the said Larry D. Irick is Vice President, General
Counsel and Corporate Secretary of said corporation, that the consideration of and for the foregoing instrument was actual and adequate, that the same was made and given in good faith, for the uses and purposes therein set forth and without any
intent to hinder, delay, or defraud creditors or purchasers. 
 IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my
official seal on the day and year last above written. 
  

			
	                                 
                       
	Notary Public
	My Commission Expires	 	  

  
 S-4 

 APPENDIX A 

to 
 FORTY-SIXTH SUPPLEMENTAL
INDENTURE 
 Dated as of June 20, 2016 

Westar Energy, Inc. 
 to 

The Bank of New York Mellon Trust Company, N.A. 

(as successor to 
 Harris Trust and
Savings Bank) 
  
  

DESCRIPTION OF PROPERTIES 
 LOCATED
IN THE STATE OF KANSAS 
 FIRST 

PARCELS OF REAL ESTATE 
  

 
 ATCHISON
COUNTY 
 Amelia Earhart Sub – 527 S 4th, Atchison, KS 66002 – Lots 1 through 6
inclusive, and the North 35 feet of Lot 7, all in Block “BB” in South Atchison AND the South 3 feet of Lot 7, and all of Lot 8 in Block “BB”, in South Atchison, an addition to the City of Atchison AND All of Lot 9 and South 10
feet of Lot 10 in Block “BB”, South Atchison, an Addition to the City of Atchison, Atchison County, Kansas. 
 COFFEY COUNTY

 Waverly Sub - Lot 1, Block 1 Shilling Subdivision located in Northeast  1⁄4 & Southeast  1⁄4, Section 36, Township 20 South, Range 16 East, Coffey County, Kansas. Together with an easement
for ingress and egress over, under and across said NE  1⁄4 & SE
 1⁄4, said easement being 60 feet in width, 30 feet on each side of the following described centerline as granted in that certain Road Access Easement
Agreement dated as of June 26, 2014 (“Easement Agreement”) by and between Gregory L. Shilling, Susan A. Shilling, Ronald W. Shilling, and Dianne M. Shilling, 

  
 1 

 their respective successors and assigns (collectively hereinafter “Grantor”) and Waverly Wind Farm LLC,
recorded in the County Clerk’s Office, Coffey County, Kansas on July 11, 2014 in Book 3K, pages 367-382: Commencing at the Northwest Corner of said Northeast Quarter thence East along the North line of said Northeast Quarter on record
bearing of North 88° 18’ 47” East a distance of 30.00 feet; Thence South 02°03’47” a distance of 30 feet to the South Right of Way line of 17th Road, to the point of
beginning of the centerline to be described; Thence continuing South 02°03’47” a distance of 1903.06 feet, parallel with the West line of said Northeast Quarter; Thence South 46°52;17: East a distance of 776.35 feet to a point on
the northerly line of said Lot 1 Block 1 Shilling Subdivision and there terminating. 
 JACKSON COUNTY 

Circleville Sub - O Road, Holton, KS 66436 – That part of the Northwest Quarter of Section 31, Township 6 South, Range 15 East of the Sixth
Principal Meridian, Jackson County, Kansas begin described as follows: Commencing at the Northwest corner of said Northwest Quarter; thence N88°10’51”E (Bearings based on the Kansas Coordinate System 1983 North Zone) along the North
line of said Northwest Quarter a distance of 487.00 feet to the Point of Beginning; thence continuing along said North line N88°10’51”E a distance of 550.00 feet; thence S01°49’09”E a distance of 420.00 feet; thence
N88°10’51”W parallel to said North line a distance of 550.00 feet; thence N01°49’09”W a distance of 420.00 feet to the Point of Beginning. 

NEMAHA COUNTY 
 Berwick Jct. Sub -
10.45 acres 660’ x 690’ South  1⁄2 Northeast  1⁄4
Section 3, Township 03 South, Range 14 East. 
 Fee Acquisition: A Ten and Forty-Five Tenths (10.45) +/- acre of land Six Hundred Sixty
Feet wide by Six Hundred Ninety Feet long (660’x 690’) in the South Half of the Northeast Quarter of Section 3, Township 3 South, Range 14 East (S/2 NE/4, S3, T3S, R14E) of the 6th
P.M., Nemaha County, Kansas; And an easement over a Fifty Foot (50’) Strip approximately Six Hundred and Sixty Fee (660’) long in the South Half of the Northeast Quarter of Section 3, Township 3 South, Range 14 East (S/2
NE/4, S3, T3S, R14E) of the 6th P.M., Nemaha County, Kansas. 
 MARSHALL COUNTY

 Marysville Pole Yard - Lots 1, 2, 3, 10, 11 and 12, Block 73, in the Original Town of Palmetto, now incorporated into and a part of the City
of Marysville, Marshall County, Kansas and the alley located between the Southern property boundary of Lots 1, 2 and 3 and the Northern property boundary of Lots 10, 11 and 12 (the “Alley”), to be vacated by Seller prior to Closing. 

  
 2 

 Marshall County Wind Farm - 4.45 Acres. A tract in the Northeast Quarter of Section 2, Township 3
South, Range 9 East, of the 6th P.M., in Marshall County, Kansas, being more fully described as follows: commencing at the Northeast corner of said NE
 1⁄4, said point being marked by a 5/8” x 30” rebar with yellow cap #1548; thence South 1°10’22” East along the East line of the parcel
filed in the Recorder of Deeds in book “N”, pages 60-61 and along the East line of said NE  1⁄4 for 869.93 feet to the point of beginning, said point
also marked by a 5/8” x 30” rebar with yellow cap #1548; thence continuing South 1°10’22” East along said East line of the parcel filed in the Recorder of Deeds in book “N”, pages 60-61 and along said East Quarter
line for 346.00 feet to a point marked by a 5/8” x 30” rebar with yellow cap #1548; thence South 88°49’38” West for 560.00 feet along the South line of the parcel filed in the Recorder of Deeds in book “N”, pages
60-61 to a point marked by a 5/8” x 30” rebar with yellow cap #1548; thence North 1°10’22” West for 346.00 feet along the West line of the parcel filed in the Recorder of Deeds in book “N”, pages 60-61 to a point
marked by a 5/8” x 30” rebar with yellow cap #1548; thence North 88°49’38” East for 560.00 feet to a point marked by a 5/8” x 30” rebar with yellow cap #1548 to the point of beginning. 

  
 3Exhibit 10.1

 

Corrective Action Plan

 

This document constitutes the voluntary corrective action plan
(“CAP”) negotiated between the Office of Compliance and Field Operations (“Office of Compliance”) of the
Consumer Product Safety Commission (“CPSC”) and Lumber Liquidators Holdings, Inc. (“LL”) with respect to
the laminate flooring products manufactured in and imported from China and sold in the United States from 2011 to May 2015 (the
“Product”) to address the issue of formaldehyde emissions from the laminate flooring. The submission of this corrective
action plan does not constitute an admission by LL that either reportable information or a substantial product hazard exists. Set
forth below are the remedial actions that LL will voluntarily undertake:

 

		1.	Inventory Control: The parties acknowledge that
                                         LL has voluntarily moved remaining Product to a warehouse located at 99 Motivation Drive,
                                         Lawrenceburg, Tennessee 38464, following LL’s decision to not sell the Product
                                         in its stores and write down the value on its financial statements. LL estimates that
                                         the remaining Product consists of approximately 22 million board feet of lumber (the
                                         “Inventory”). LL has deactivated and blocked all Inventory and all associated
                                         SKUs from sale and from distribution, and it has placed the Inventory in quarantine.
                                         LL shall not activate or allow sale of any Inventory without prior written approval of
                                         CPSC staff. LL agrees that the Inventory will be maintained in quarantine and shall not
                                         be transferred, reconditioned, relabeled, sold, or exported from the U.S. without CPSC
                                         staff approval. All requests to transfer, recondition, relabel, sell, or export the Inventory
                                         will be sent to CPSC sixty (60) days prior to the date that LL intends to take such action.
                                         Should LL decide to destroy or dispose of the Inventory, LL shall provide CPSC with notice
                                         of such destruction or disposal thirty (30) days prior to the date LL intends to take
                                         such action. All requests to transfer, recondition, relabel, sell, or export the Inventory
                                         and all notices of destruction or disposal should be addressed to Mary Toro, Director,
                                         Division of Regulatory Enforcement, Office of Compliance and Field Operations, U.S. Consumer
                                         Product Safety Commission, Room 610, 4330 East West Highway, Bethesda, MD 20814-4408
                                         (mtoro@cpsc.gov).

 

		2.	Remedy: LL has, since May 2015, voluntarily offered passive badge samplers as a screening tool to monitor the concentration
of formaldehyde in the homes of consumers who purchased the Product from February 2012 through May 2015 (referred to herein as
“Consumers”). This service has been provided to Consumers at no cost. LL agrees to continue to offer Consumers voluntary
testing, at no cost to Consumers.

 

Consumers who participated in the program prior to
the date of this CAP will be informed by LL of this CAP through CPSC staff-approved electronic communication; and, depending on
test results obtained during this earlier program, such consumers will be eligible for any subsequent testing and benefits outlined
in the CAP. Consumers who did not participate in the program prior to the date of this CAP will be informed by LL of this CAP
through CPSC staff-approved electronic communication. A notice of the CAP will also be available as a link on LL’s home
page, www.lumberliquidators.com.

 

    -1- 

     

    

 

Under this program, LL will send a CPSC staff-reviewed
passive badge sampler to Consumers within twenty (20) business days of receipt of their request, although LL will seek to provide
samplers to Consumers within ten (10) business days, to the extent feasible. If the volume of requests, the supply of badges, or
other logistics issues are expected to impact the delivery times, LL will notify CPSC via e-mail. With the sampler, Consumers will
receive CPSC staff-reviewed instructions on appropriate passive badge testing conditions (e.g., badge placement, labeling of passive
badge, length of testing, removal of other formaldehyde sources) to promote accurate testing of the rooms of the home. LL will
offer the Consumer one (1) badge per 600 ft2 of installed laminate flooring. LL will instruct the Consumer to mail the
badge, at LL’s expense, to a specified laboratory (accredited to NIOSH 2016 modified or OSHA 1007) for evaluation. If a Consumer’s
badge test result is at or below 80 ppb, LL will notify Consumers via a CPSC staff-reviewed communication that no further remediation
will be offered.

 

		a.	For any Consumer who had any badge test result exceeding 80 ppb of formaldehyde, LL will offer to conduct emission testing
of a sample of their flooring. For those Consumers, LL shall notify the Consumer through a CPSC-staff-approved communication of
the option to receive additional testing of their flooring, within five (5) business days of LL receiving the test result. The
notification will include information on how to improve indoor air quality with increased ventilation and maintenance of temperature
and humidity, as well as a CPSC staff-approved formaldehyde fact sheet.

 

		b.	Should that Consumer request additional testing, LL shall cause a qualified firm, at LL’s expense, to go to the Consumer’s
home within thirty (30) days of receipt of the Consumers’ request and select a plank from a location designated by the Consumer
in the room with the highest formaldehyde levels. LL will replace the removed flooring with similar product from Inventory or from
the consumer (if leftover from initial installation). LL will rely on its previous testing of the Inventory to screen replacement
products to avoid installation of flooring that exceeds a calculated formaldehyde emission rate of 120 μg/m2-h of
formaldehyde.

 

		c.	Concurrently, LL will provide each consumer who requests floor testing with a CPSC staff-reviewed survey that provides information
about the home environment (e.g., its age, any renovations, smokers) and will ask such Consumers to complete the survey. Consumers
will be informed of the consequences of not completing the survey.

 

    -2- 

     

    

 

		d.	LL shall cause a firm to prepare the sample using methods to ensure sample integrity and send the sample to a laboratory that
is ASTM D6007-accredited to perform emission testing. LL shall cause the laboratory to test the prepared sample using the small
chamber test method in accordance with ASTM D6007-14.

 

		i.	Consumers with samples whose test results are less than
a calculated emission rate of 120 μg/m2-h of formaldehyde (“Level 1 Flooring”) will be informed of the
results and given information about remediation of the space with increased ventilation (air flow) and monitoring temperature
and humidity in the home, as well as a CPSC staff-approved formaldehyde fact sheet, within five (5) business days of LL’s
receipt of the test results. No further remediation will be offered to Consumers with Level 1 Flooring.

 

		ii.	Consumers
with samples whose test results are at or above a calculated emission rate of 120 μg/m2-h of formaldehyde (“Level
2 Flooring”) will be given information about remediation of the space with increased ventilation (air flow) and monitoring
temperature and humidity in the home, as well as a CPSC staff-approved formaldehyde fact sheet within two (2) business days of
LL’s receipt of the test results. The remediation information will be tailored according to the information supplied to
LL by the Consumer in the survey. Before deeming a Consumer ineligible for continued benefits as provided in this CAP based on
the failure to complete the survey, Consumers will be given another opportunity to complete the survey and LL
will reach out to Consumers who do not complete the survey to offer individual assistance. Consumers with Level 2 Flooring who
(i) confirm that they have taken steps to remediate their indoor air and (ii) request an additional passive badge sample, will
be offered a second passive badge sampler(s) with instructions. LL shall send the second sampler(s) within five (5) business days
of the consumer’s request. If a Consumer’s badge test result after remediation is at or below 80 ppb, LL will notify
Consumers that no further remediation will be offered.

 

		1.	If the test results do not reflect levels at or below 80 ppb after remediation, LL will offer a consultation with a Certified
Industrial Hygienist (“CIH”), at LL’s expense, to visit the Consumer’s home and develop recommendations
to improve indoor air quality. Consumers who decline to complete the survey after the second notification regarding the survey
requirement will not be eligible for a CIH consultation. The consultation with the CIH shall occur within thirty (30) days of receipt
of the Consumer’s request.

		2.	The CIH will present their recommendations to LL and the CPSC Office of Compliance. Such recommendations may include, without
limitation, increased ventilation, or control of temperature and humidity, or possibly removal and replacement of sources of formaldehyde.

 

		a.	If LL concurs with the recommendations, LL will inform the Consumer of the recommendations and implement the recommendation
at LL’s expense within sixty (60) days from the receipt of the consumer’s consent to implementation.

 

		b.	If LL disagrees with the recommendation, LL will promptly notify and consult with the CPSC Office of Compliance for resolution
of the matter. The Office of Compliance’s decision with respect to remediation shall be final. Following the Office of Compliance’s
decision, LL will inform the Consumer of the recommendations and implement the recommendation at LL’s expense within sixty
(60) days from the receipt of the consumer’s consent to implementation.

 

		c.	In all cases, LL shall notify the CPSC Office of Compliance if implementation within sixty (60) days from the date of consent
is not reasonably feasible.

 

    -3- 

     

    

 

		3.	Test data: LL has provided, and will continue to provide, badge data, small chamber test data, and analysis from the
surveys from the homes surveyed to the Office of Compliance. This includes data from sampling that occurred prior and subsequent
to the CAP agreement, as well as any on-going testing. LL will also submit the customized Monthly Progress Report (“MPR”)
as noted in the CAP acceptance letter. In addition, LL will supplement its report if it becomes aware of information regarding
illness or injury with the subject product that was not provided earlier as required by the Consumer Product Safety Act and its
implementing regulations.

 

		4.	Supply Chain Control: As set forth in the agreement between the California Air Resources Board (“CARB”)
and LL, dated March 21, 2016 (“Agreement”), LL has agreed to implement a Fabricator Laminate Evaluation and Audit Program
to address compliance with the State of California Air Resources Board (“CARB”) Airborne Toxic Control Measure to Reduce
Formaldehyde Emissions from Composite Wood Products and the proposed future federal requirements. This Agreement requires, among
other things, LL to audit all existing and new fabricators who supply laminate products to LL. LL agrees to share the results of
these audits and testing programs as provided to CARB as required by the Agreement with the CPSC Office of Compliance, as confidential
trade secret information. The Agreement is incorporated herein by reference as Exhibit A.

 

			In addition, in an effort to prevent laminate flooring sold in the U.S. from exceeding a calculated emission rate of 120 μg/m2-h
of formaldehyde, LL will ensure that all fabricators of laminate flooring whose product is sold in the U.S., regardless of where
the fabricators are located, have measures in place to ensure that laminate flooring contains composite wood products that comply
with the emission limits set by CARB for formaldehyde, or any other future federal requirement.

 

CPSC agrees to meet with LL every six months following the date
of execution of this CAP to discuss continuation of the CAP and/or the termination of the MPR requirement.

 

LL hereby acknowledges that CPSC staff may monitor the corrective
action taken by LL pursuant to this CAP and that LL will furnish all requested information. LL agrees that CPSC staff may publicize
the terms of the CAP as set forth in 16 C.F.R. § 1115.20(a)(xi) and as further agreed between LL and CPSC staff. LL acknowledges
that CPSC staff reserves the right to seek broader corrective action if it becomes aware of new facts or if the CAP does not sufficiently
protect the public.

 

 

 

Date: June 15, 2016

 

Signed by:

 

Lumber Liquidators Holdings, Inc.

 

 

 

By: /s/ Jill Witter__________________

 

Name: Jill Witter

Title: Secretary and Chief Compliance and Legal Officer

 

    -4- 

     

    

Exhibit A

 

SETTLEMENT AGREEMENT AND RELEASE

 

This Settlement Agreement and Release (Agreement) is entered
into between the STATE OF CALIFORNIA AIR RESOURCES BOARD (ARB), 1001 I Street, Sacramento, California 95814, and LUMBER LIQUIDATORS
SERVICES LLC, (LL), 3000 John Deere Road, Toano, Virginia 23168.

 

RECITALS

 

		1.	Pursuant to its authority in Health and Safety Code section 39666(a), in 2008 ARB adopted the Airborne Toxic Control Measure
to Reduce Formaldehyde Emissions from Composite Wood Products (ATCM) (Cal. Code Regs., title 17, section 93120 et seq.) that applies
to all manufacturers, distributors, importers, fabricators, and retailers of composite wood products and finished goods that contain
composite wood products.

 

		2.	California Code of Regulations, title 17, section 93120.2 specifies a maximum formaldehyde limit of 0.11 ppm for medium density
fiberboard (MDF) (Emission Standard).

 

		3.	The composite wood products covered by the ATCM apply to MDF.

 

		4.	“Platform,” as defined in California Code of Regulations, title 17, section 93120.1(a)(34), “means the veneer
core, composite core, combination core, lumber core, or special core material used in the manufacture of hardwood plywood or laminated
products.”

 

		5.	California Code of Regulations, title 17, section 93120.1(a)(25) provides, “If the platform consists of a composite wood
product, the platform must comply with the applicable emission standards.”

 

		6.	California Code of Regulations, title 17, section 93120.5(a) provides, “Except as provided in the “sell-through”
provisions of section 93120.12, Appendix 1, all distributors must comply with the requirements of section 93120.2(a) for all composite
wood products and finished goods containing these materials that are sold, supplied, offered for sale, or purchased for sale in
California.”

 

		7.	California Code of Regulations, title 17, section 93120.6(a) provides, “Except as provided in the “sell-through”
provisions of section 93120.12, Appendix 1, all importers must comply with the requirements of section 93120.2(a) for all composite
wood products and finished goods containing these materials that are sold, supplied, offered for sale, or purchased for sale in
California.”

 

		8.	California Code of Regulations, title 17, section 93120.8 provides, “Except as provided in the “sell-through”
provisions of section 93120.12, Appendix 1, all retailers must comply with the requirements of section 93120.2(a) for all composite
wood products and finished goods containing these materials that are sold, supplied, offered for sale, or purchased for sale in
California.”

 

 

    	 	- 1 -	 

     

    

 

California Code of Regulations, title 17, section
93120.2(a) provides:

 

“Except as provided in section 93120.2(b), Exemptions,
and the ’sell-through provisions of section 93120.12, Appendix 1, no person shall sell, supply, offer for sale, or manufacture
for sale in California any composite wood product which, at the time of sale or manufacture, does not comply with the emission
standards in Table 1 on or after the effective dates specified in Table 1 if:

 

* * *

 

“A product ‘does not comply with the emission
standards in Table 1’ if;

 

* * *

 

“(5) A finished good is found to contain any
composite wood product that does not comply with the applicable emission standards in Table 1 using the enforcement test method
for finished goods specified in section 93120.9(c).”

 

		9.	California Code of Regulations, title 17, section 93120.9(c) provides: “Emission testing of samples of . . . MDF contained
in finished goods shall be conducted by ARB or local air district personnel . . . .”

 

		10.	California Code of Regulations, title 17, section 93120.6(b) provides, “Importers must take reasonable prudent precautions
to ensure that the composite wood products and composite wood products contained in finished goods that they purchase comply with
the emission standards specified in section 93120.2(a). ‘Reasonable prudent precautions’ include, at a minimum, instructing
each supplier that the goods they supply to an importer must comply with the applicable emission standards, and obtaining written
documentation from each supplier that this is so.”

 

		11.	California Code of Regulations, title 17, section 93120.8(b) provides, “Retailers must take reasonable prudent precautions
to ensure that the composite wood products and composite wood products contained in finished goods that they purchase comply with
the emission standards specified in section 93120.2(a). ‘Reasonable prudent precautions’ include, at a minimum, instructing
each supplier that the goods they supply to the retailer must comply with the applicable emission standards, and obtaining written
documentation from each supplier that this is so.”

 

		12.	LL and/or its affiliates imports and sells, at retail, laminate flooring that contains composite wood products subject to the
ATCM.

 

    	 	- 2 -	 

     

    

 

		13.	On September 19, 2013, ARB posted the Standard Operating Procedure for Finished Good Test Specimen Preparation Prior to Analysis
of Formaldehyde Emissions from Composite Wood Products (“SOP” or “deconstructive testing”) on its website.
LL alleges that neither the ATCM, the SOP, nor any ARB regulation requires that LL deconstruct products for testing that a fabricator
represents as complying with the ATCM. The SOP is a means of sampling the core in a finished product. Test results using the SOP
sample preparation method may differ from the test results that would have resulted from testing the unfinished MDF core. Although
the ATCM does not require testing by retailers or importers, if non-compliant product is found by ARB, then manufacturers, distributors,
importers, fabricators, and retailers may be liable for the violation.

 

		14.	Beginning on September 4, 2013, ARB obtained samples of MDF products from LL stores in California. Boxes of the flooring were
labeled “CARB Phase 2.” ARB conducted testing of these products for formaldehyde using the SOP sample preparation method.

 

		15.	By letter dated October 8, 2013, based on this testing, ARB notified LL that deconstructed samples of the following products
had tested above the Emission Standard: Dream Home KM Glacier Peak Poplar 12 mm; St. James Vintner’s Reserve 12mm; Dream
Home KM Warm Springs Chestnut 12mm; and Dream Home ISPIRI African Thuya Burlwood 12mm. By letter dated May 7, 2015, ARB
notified LL that additional deconstructed samples of the following products had tested above the Emission Standard: Km Glacier
Peak Poplar 12 mm; and St. James Vintners Reserve 12 mm. By letter dated July 2, 2015, ARB notified LL that deconstructed samples
of the following products had tested above the Emission Standard: ISPIRI Poplar Forest Oak 12 mm; St. James Nantucket Beech 12
mm; St. James Vintners Reserve 12 mm; INSPIRI African Thuya Burlwood 12 mm; KM Warm Springs Chestnut 12 mm; and St. James Golden
Acacia 12mm (collectively, the “Subject Products”).

 

		16.	After LL received notification from ARB of the testing results of the Subject Products, LL initiated communications with ARB,
and LL alleges that it: disputed the validity of the SOP testing method; initiated an investigation of the Subject Product suppliers;
continued to monitor internal testing results of its products and, on or before May 7, 2015, stopped selling the Subject Products
in California.

 

		17.	ARB alleges that on each of approximately 250 days between September 4, 2013 and May 7, 2015, LL sold, supplied, offered for
sale, and/or purchased the Subject Products for sale in California without taking reasonable prudent precautions to ensure that
the Subject Products complied with the Emission Standard. LL disputes this allegation.

 

		18.	LL alleges that it took reasonable prudent precautions as defined in the ATCM and related ARB guidance documents to ensure
that the Subject Products complied with the ATCM. ARB disputes the allegation that LL took reasonable prudent precautions.

 

    	 	- 3 -	 

     

    

 

		19.	In reaching this Agreement, ARB considered a variety of circumstances, including the nature and duration of LL’s conduct
and the actions taken by LL to ensure compliance and the lack of evidence of actual harm to public health, safety and welfare caused
by the alleged failure to take reasonable prudent precautions with regard to the Subject Products.

 

		20.	LL has promptly and fully cooperated with ARB throughout its investigation.

 

		21.	LL has no prior enforcement record with ARB.

 

		22.	LL has taken, or agreed to take, the actions enumerated in Exhibits A and B attached hereto.

 

		23.	ARB alleges that if the facts and allegations described in Recital paragraphs 1 through 17 were proven, civil penalties could
be imposed against LL as provided in Health and Safety Code section 39674.

 

		24.	LL admits the facts in Recital paragraphs 1 through 16, but LL denies any liability arising under any of the Recitals.

 

		25.	The Parties are willing to enter into this Agreement solely for the purpose of settlement and resolution of this matter. ARB
accepts this Agreement in termination of this matter. Accordingly, the parties agree to resolve this matter completely by means
of this Agreement, without the need for formal litigation.

 

TERMS AND RELEASE

 

In settlement of any and all claims that ARB has against LL
under the facts as alleged above, and in consideration of ARB not filing a legal action as well as the other terms set out below,
ARB and LL agree as follows:

 

		1.	As a condition of this Agreement, LL shall pay the total sum of $2,500,000 by cashier’s check payable to the California
Air Pollution Control Fund upon the execution of this Agreement.

 

		2.	The above check shall be mailed to the following address along with the attached Settlement Agreement Payment Transmittal Form:

 

California Air Resources Board

Accounting Branch

P.O. Box 1436

Sacramento, California 95812-1436

 

 

    	 	- 4 -	 

     

    

 

		3.	LL agrees to and shall implement the Fabricator Laminate Evaluation and Audit Program (“LEAP”) described in Exhibit
A. LL alleges that the LEAP goes well beyond the minimum reasonable prudent precautions outlined by ARB in the ATCM and ARB’s
guidance to retailers by requiring a ten-step audit of fabricators before accepting any product for sale in California. Compliance
with the LEAP or any other provision contained in Exhibit A does not affect the liability of any third party for any violation
of the ATCM.

 

		4.	LL agrees to and shall implement the Composite Core Testing Research Program described in Exhibit A.

 

		5.	LL agrees to and shall implement the Finished Goods Testing Research Program described in Exhibit A.

 

		6.	LL agrees that, for the period described in Exhibit A hereof, it will not ship to California any Product that fails testing
using the SOP sample preparation method or does not comply with the ATCM.

 

		7.	LL shall not sell, supply, offer for sale, and/or purchase for sale in California laminate flooring products that violate the
ATCM and shall comply with all other provisions of the ATCM.

 

		8.	This Agreement shall apply to and be binding upon LL, and its principals, officers, directors, agents, receivers, trustees,
employees, successors and assignees, affiliates, subsidiaries and parent corporations and upon ARB and any successor agency that
may have responsibility for and jurisdiction over the subject matter of this Agreement.

 

		9.	Now, therefore, in consideration of the payment by LL to the California Air Pollution Control Fund in the amount specified
above, ARB hereby releases LL and its principals, officers, directors, agents, receivers, trustees, employees, successors and assignees,
affiliates, subsidiary and parent corporations, and predecessors from any and all claims that ARB may have relating to the Subject
Products.

 

		10.	This Agreement constitutes the entire agreement and understanding between ARB and LL concerning the subject matter hereof,
and supersedes and replaces all prior negotiations and agreements between ARB and LL concerning the subject matter hereof.

 

		11.	This Agreement does not constitute an admission by LL or any other entity of any violation of any federal, state or local law,
ordinance or regulation. The Parties intend that neither this Agreement nor anything in this Agreement shall be admissible by any
third party against LL or its principals, officers, directors, agents, receivers, trustees, employees, successors or assignees,
affiliates, subsidiary or parent corporations, or predecessors in any proceeding as evidence of any liability or wrongdoing.

 

    	 	- 5 -	 

     

    

  

		12.	No agreement to modify, amend, extend, supersede, terminate, or discharge this Agreement, or any portion thereof, is valid
or enforceable unless it is in writing and signed by all parties to this Agreement.

 

		13.	Each Party to this Agreement has reviewed the Agreement independently, has had the opportunity to consult counsel, is fully
informed of the terms and effect of this Agreement, and has not relied in any way on any inducement, representation, or advice
of any other Party in deciding to enter into this Agreement.

 

		14.	Each provision of this Agreement is severable, and in the event that any provision of this Agreement is held to be invalid
or unenforceable, the remainder of this Agreement remains in full force and effect.

 

		15.	This Agreement shall be interpreted and enforced in accordance with the laws of the State of California, without regard to
California’s choice-of-law rules.

 

		16.	This Agreement is deemed to have been drafted equally by the ARB and LL; it will not be interpreted for or against either party
on the ground that said party drafted it.

 

		17.	The failure of any Party to enforce any provision of this Agreement shall not be construed as a waiver of any such provision,
nor prevent such Party thereafter from enforcing such provision or any other provision of this Agreement. The rights and remedies
granted all Parties herein are cumulative and the election of one right or remedy by a Party shall not constitute a waiver of such
Party’s right to assert all other legal remedies available under this Agreement or otherwise provided by law.

 

		18.	The Parties agree that this Settlement Agreement may be executed by facsimile and in counterparts by the Parties and their
representatives, and the counterparts shall collectively constitute a single, original document, notwithstanding the fact that
the signatures may not appear on the same page.

 

		19.	The undersigned represent that they have the authority to enter into this Agreement.

 

SB 1402 STATEMENT

 

Senate Bill 1402 (Dutton, Chapter 413, statutes of 2010, Health
and Safety Code section 39619.7) requires the ARB to provide information on the basis for the penalties it seeks. .
ARB alleges that:

 

		1.	The information required under SB 1402, which is provided throughout this settlement agreement, is summarized here.

 

The manner in which the penalty amount was
determined, including a per unit or per vehicle penalty.

 

    	 	- 6 -	 

     

    

 

 

ARB determined the settlement amount in consideration
of all relevant circumstances, including the eight factors specified in Health and Safety Code section 43024.

 

The settlement amount in this case is based on Health
and Safety Code section 39674 in the amount of $10,000 per day for each of approximately 250 days on which the Subject Products
were sold or offered for sale in California without taking reasonable prudent precautions.

 

The provision of law the penalty is being assessed
under and why that provision is most appropriate for that violation.

 

ARB alleges that Health and Safety Code section 39674
provides an appropriate basis for settlement because LL is alleged to have sold the Subject Products without taking reasonable
prudent precautions in violation of the ATCM.

 

Is the penalty being assessed under a provision
of law that prohibits the emission of pollution at a specified level, and, if so a quantification of excess emissions, if it is
practicable to do so.

 

The provisions cited above do not prohibit emissions
above a specified level. It is not practicable to quantify these emissions, because the information necessary to do so, such as
emission rates and time of use, is not available. ARB has conducted no testing that would indicate whether emissions increased
as a result of the use of the Subject Products. In the interests of settlement and because of the time and expense involved, the
parties elected not to do additional testing.

 

		2.	LL acknowledges that ARB has complied with SB 1402 in prosecuting and settling this case. ARB has considered all relevant facts,
including those listed at Health and Safety Code section 43024, has explained the manner in which the settlement amount was calculated,
has identified the provision of law under which the settlement amount was determined, and has considered and determined that this
settlement is not being entered under a provision of law that prohibits the emission of pollutants at a specified level.

 

		3.	The settlement amount was determined based on the unique circumstances of this matter, considered together with the need to
remove any economic benefit from noncompliance, the goal of deterring future violations and obtaining swift compliance, the consideration
of past settlements in similar case negotiation, and the potential costs and risk associated with litigating these particular violations.
The settlement reflects conduct extending over a certain period of time, considered together with the complete circumstances of
this case. Penalties in future cases might be smaller or larger on a per unit basis.

 

		4.	The settlement in this case was based in part on confidential business information provided by LL that is not retained by ARB
in the ordinary course of business. The settlement in this case was also based on confidential settlement communications between
ARB and LL that ARB does not retain in the ordinary course of business either. The settlement also reflects ARB's assessment of
the relative strength of its case against LL, the desire to avoid the uncertainty, burden and expense of litigation.

 

 

 

    	 	- 7 -	 

     

    

 

 

	California
    Air Resources Board	 
	 	 	 
	By:	/s/
    Richard Corey	 
	 	Richard Corey	 
	 	Executive Officer	 
	 	 	 
	Date:	March 21, 2016	 

 

Lumber Liquidators Services LLC

 

	By:	/s/
    John M. Presley	 
	 	 	 
	Name:	John
    M. Presley	 
	 	 	 
	Title:	President
    and Chief Executive Officer	 
	 	 	 
	Date:	March
    18, 2016	 

 

 

    	 	- 8 -	 

     

    

 

 

EXHIBIT A

 

 

VOLUNTARY MEASURES

AND RESEARCH PROGRAMS 

for 

FORMALDEHYDE EMISSIONS FROM

COMPOSITE WOOD FLOORING PRODUCTS

 

 

This Exhibit sets forth the actions Lumber Liquidators Services,
LLC, independently or through its parents, subsidiaries and affiliates (LL), agrees to undertake pursuant to the Agreement. The
capitalized terms used herein shall, unless otherwise noted, have the same meaning as set forth in Air Resources Board’s
(ARB) Airborne Toxic Control Measure for formaldehyde (Title 17 California Code of Regulations, Section 93120 et seq.)(“ATCM”).

 

		1.	Fabricator Laminate Evaluation and Audit Program (LEAP)

 

		a.	Applicability: This audit program shall apply to existing and new Fabricators supplying laminate products to LL.

 

		b.	Timing: Audits of existing Fabricators supplying products to LL shall be completed within one year following the execution
of the Agreement. Audits of Fabricators not supplying laminate flooring to LL as of the date of the Agreement shall be completed
prior to the date on which LL first accepts a Finished Good from such Fabricator.

 

		c.	Qualified Auditors: LL shall perform or cause to be performed by a qualified person, an audit of such Fabricator.

 

		d.	Scope of Audit: The audit shall:

 

		i.	Ensure that the Fabricator understands and agrees by contract to provide LL only products that meet the emission standards
set forth in Title 17 California Code of Regulations, Section 93120.2 (the Emission Standard);

 

		ii.	Examine the Fabricator’s compliance history, including records relating to the supplier’s purchases of Composite
Core used in manufacturing finished products;

 

		iii.	Evaluate the Fabricator’s employee training and awareness programs relating to the ATCM;

 

    	 	- 9 -	 

     

    

 

		iv.	Evaluate any available testing of Composite Core materials for purposes of determining compliance with the ATCM, including:

 

		1.	whether any such testing was performed by an independent third party laboratories accredited by a body that is a signatory
to the International Laboratory Accreditation Cooperation Mutual Recognition Arrangement (ILAC, 2000)(Third Party Laboratory);
and

 

		2.	whether such testing was performed on samples using one of the test methods set forth in title 17, California Code of Regulations,
Section 93120.9;

 

		v.	Identify the Fabricator’s suppliers of Composite Core materials;

 

		vi.	Verify that such suppliers of Composite Cores are certified by an ARB-approved Third Party Certifier (TPC);

 

		vii.	Examine TPC qualifications for each Fabricator it selects, including a review of the ARB TPC certification assessments provided
to LL by ARB;

 

		viii.	Evaluate the Fabricator’s experience in the industry;

 

		ix.	Determine whether the Fabricator is also manufacturing products that do not meet the Emission Standards;

 

		x.	If the Fabricator is also manufacturing products that do not meet the Emission Standards, the auditor shall examine the procedures
by which the Fabricator ensures that such production is kept separate from products fabricated for LL.

 

		xi.	If LL decides to proceed with such Fabricator as a supplier, LL will notify such Fabricator of any identified deficiencies,
and establish a schedule for the Fabricator to correct each such deficiency and to provide verification to LL.

 

		e.	Fabricator audits will be repeated on a periodic basis. The frequency for individual Fabricators will be based on:

 

		i.	Audit results

 

		ii.	Compliance history

 

		iii.	History of relationship with LL

 

		iv.	Experience in industry

 

    	 	- 10 -	 

     

    

 

		v.	Overall strength of compliance program

 

		f.	In addition to such audits, LL shall routinely monitor the performance of its Fabricators, including their compliance with
the Emission Standard.

 

		g.	Based on the findings of the LEAP, including the results of any audit, the type of product the Fabricator is manufacturing,
the type and level of formaldehyde used in products supplied the Fabricator, and such other factors as may be appropriate, LL shall
identify Fabricators with the lowest scores and shall classify such suppliers as “Priority Fabricators.” Priority Fabricators
shall be subject to more frequent and extensive audits.

 

		h.	This Fabricator Audit Program will continue for a period of 12 months following the date on which LL first accepts a Finished
Good from a Priority Fabricator.

 

		2.	Testing Research Programs 

 

		a.	Applicability: The Composite Core Testing Research Program and the Finished Goods Testing Program (the “Testing
Research Programs”) shall apply to Priority Fabricators supplying laminate flooring products to LL. Within 20 days following
LL’s identification of a Fabricator supplying Finished Goods to LL as a Priority Fabricator, LL shall provide ARB with the
name and address of such Priority Fabricator.

 

		b.	Timing/Duration: The Testing Research Programs shall commence on the date any Priority Fabricator first manufactures
a Finished Good for LL (the Start Date), and shall terminate 12 months thereafter (the Termination Date). The period between the
Start Date and the Termination Date shall be the Term.

 

		c.	Scope of Composite Core Testing Research Program: Following the identification of the first Priority Fabricator, it
and such other Priority Fabricators after the Start Date shall be subject to the following Composite Core Testing Program for the
Term of the program (i.e., until the Termination Date).

 

		i.	On each day during which a Priority Fabricator operates its hot press in the fabrication of Finished Goods for LL, LL shall
collect a sample of Composite Core material as it is entering the hot press production phase of fabrication of a specific Finished
Good. Each Finished Good shall be identified by a separate Stock Keeping Unit (SKU) number, and the daily production of a specific
SKU in the hot press shall be considered a Production Lot.

 

		ii.	Such Composite Core samples shall be identified in a manner that, at a minimum, includes the date, time and location the sample
was collected, the supplier of the Composite Core stock from which it was drawn and the finished product for which it was intended,
including the SKU number for such finished product.

 

    	 	- 11 -	 

     

    

 

		iii.	LL shall submit each such Composite Core sample to an independent Third Party Laboratory for analysis to determine whether
it meets the Emission Standard.

 

		iv.	In the event testing results provided by the Third Party Laboratory indicate that the Composite Core sample complies with the
Emission Standard, LL will conduct additional testing under the Finished Goods Testing Research Program as described in paragraph
2(d) of this Exhibit.

 

		v.	In the event a testing result provided by the Third Party Laboratory indicates that the Composite Core sample does not comply
with the Emission Standard, LL will not accept any product from that production run until the failing test result is resolved through
additional sampling and testing determined to be representative of the entire production run.

 

		d.	Scope of Finished Goods Testing Research Program: Priority Fabricators shall be subject to the following Finished Goods
Testing Research Program:

 

		i.	LL will collect a sample of each Production Lot of Finished Goods tested in the Composite Core Testing Research Program for
testing before shipment for sale or distribution in California.

 

		ii.	Such Finished Goods samples shall be identified in a manner that, at a minimum, includes the date, time and location the sample
was collected, the supplier of the product from which it was drawn and the finished product from which it was collected and the
stock keeping unit (SKU) number for such finished product.

 

		iii.	LL will provide such samples to a Third Party Laboratory.

  

		iv.	LL will instruct the Third Party Laboratory to prepare the samples as described in “Standard Operating Procedure for
Finished Good Test Specimen Preparation Prior to Analysis of Formaldehyde Emissions from Composite Wood Products” dated
September 13, 2013 and posted on ARB’s website on September 19, 2013 (SOP) or such other amended SOP, if applicable.

 

		v.	LL will instruct the Third Party Laboratory to test the samples prepared in accordance with the SOP.

 

    	 	- 12 -	 

     

    

 

		3.	Enhanced Regulatory Collaboration

 

		a.	Upon commencement of the
Term of
the Composite Core Testing Research Program, LL shall provide ARB with a list of the suppliers that will be subject to the Testing
Research Programs. LL may add suppliers to the list from time to time during the Term.

 

		b.	During the Term of the Composite Core Testing Research Program, LL will provide to ARB on a quarterly basis, within 30 days
following the end of such quarter, Testing Research Program results obtained from the
suppliers identified in paragraph 3(a) above.

 

		c.	LL and ARB may confer about the results of the Testing Research Programs in order to discuss:

 

		i.	Whether the results are consistent, reliable and repeatable;

 

		ii.	If the results are inconsistent, whether the cause of the inconsistency can be identified;

 

		iii.	If the cause of the inconsistency can be identified, whether it can be accounted for by modifying the deconstructive testing
methodology.

 

		d.	LL and ARB may meet as necessary to discuss data and effectiveness of the TPC Program and the Testing Research Programs.

 

		e.	LL may recommend possible modifications in deconstructive testing methodology, the TPC certification process or other segments
of the manufacturing process.

 

 

    	 	- 13 -	 

     

    

 

 

EXHIBIT B

 

INTERNAL MANAGEMENT AUDITING PROGRAM

for 

FORMALDEHYDE EMISSIONS FROM

COMPOSITE WOOD FLOORING PRODUCTS

 

 

Lumber Liquidators Services, LLC, independently or through its
parents, subsidiaries and affiliates (LL), agrees to take the following internal management auditing measures, listed with the
expected cost of each such measure:

 

		1.	Approximately every six months for a period of two years, a member of senior management shall travel to review the compliance
of suppliers.

 

 

		2.	LL shall retain a Quality Control/Quality Assurance Director solely responsible for its products.

 

 

		3.	LL shall retain on-site inspectors for one year.

 

 

 

    	 	- 14 -

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