Late Penalty Clause

DATE: June 25, 2012
Re: Performance / Late Penalty Clauses

Dear Valued Customer,

As a manufacturer of API 6A gate valves and wellhead components, with our global manufacturing network, and U.S. manufacturing, assembly, & test operations, we strive daily to meet your needs to provide your products on time with quality-guaranteed. In this extremely volatile oil & gas market, we do the absolute best possible job of quoting / estimating production deliveries and then meeting those quoted deliveries. As supply & demand are extremely difficult to predict and plan for, and as the global steel supply is very volatile as well, the deliveries that are quoted to you are our best "estimates" that we can determine at the time of the quote.

There are many variables that come into play when delivering your products. There are raw material delays, shipping delays, production backlogs that cause delays, etc... While Valveworks USA will always strive to proactively communicate any delivery delays to you, it should be noted that VALVEWORKS USA does not, and WILL NOT, agree to any type of performance clause or late-delivery penalty clause whatsoever. This includes (but is not limited to) financial compensation, discounts, expedited freight charges (i.e. hot shot, airfreight, etc...) or reimbursement thereof.

Valveworks USA is sensitive to the fact that your customer may levy these fines on your organization due to late delivery, etc..., but that is a contract independent of the operations of Valveworks USA and does not apply to the agreement between your company and Valveworks USA.

If you have any questions regarding this policy, please feel free to contact me personally. My contact information is listed below.

Best Regards,
1650 Swan Lake Rd
Bossier City, LA 71111
Ph (318) 425-0266
Fax (318) 550-0205