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<SEC-DOCUMENT>0000950129-08-001838.txt : 20080320
<SEC-HEADER>0000950129-08-001838.hdr.sgml : 20080320
<ACCEPTANCE-DATETIME>20080320172823
ACCESSION NUMBER:		0000950129-08-001838
CONFORMED SUBMISSION TYPE:	424B3
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20080320
DATE AS OF CHANGE:		20080320

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NATIONAL OILWELL VARCO INC
		CENTRAL INDEX KEY:			0001021860
		STANDARD INDUSTRIAL CLASSIFICATION:	OIL & GAS FILED MACHINERY & EQUIPMENT [3533]
		IRS NUMBER:				760475815
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-149609
		FILM NUMBER:		08703418

	BUSINESS ADDRESS:	
		STREET 1:		10000 RICHMOND AVENUE
		STREET 2:		6TH FLOOR
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77042-4200
		BUSINESS PHONE:		7133467500

	MAIL ADDRESS:	
		STREET 1:		10000 RICHMOND AVENUE
		STREET 2:		6TH FLOOR
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77042-4200

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	NATIONAL OILWELL INC
		DATE OF NAME CHANGE:	19960829
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B3
<SEQUENCE>1
<FILENAME>h54629b3e424b3.htm
<DESCRIPTION>PROSPECTUS
<TEXT>
<HTML>
<HEAD>
<TITLE>e424b3</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 94%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN PAGE WIDTH -->

<DIV align="right" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Filed Pursuant to Rule&#160;424(b)(3)</B>
</DIV>

<DIV align="right" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Registration No.&#160;333-149609</B>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>PROSPECTUS</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="h54629b3h5462900.gif" alt="(NATIONAL OILWELL VARCO INC. LOGO)"><B>
    </B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt">Exchange Offer and Consent
    Solicitation</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 9pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Offer to
    Exchange<BR>
    National Oilwell Varco
    6<FONT style="vertical-align: text-top; font-size: 70%;">1</FONT>/<FONT style="font-size: 70%;">8</FONT>%&#160;Senior
    Notes due 2015<BR>
    For All Outstanding<BR>
    Grant Prideco
    6<FONT style="vertical-align: text-top; font-size: 70%;">1</FONT>/<FONT style="font-size: 70%;">8</FONT>%&#160;Senior
    Notes due 2015</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 9pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Exchange
    Offer Expiration: April&#160;21, 2008, unless extended<BR>
    Consent Payment Deadline: April&#160;3, 2008, unless
    extended</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are making this exchange offer and consent solicitation in
    connection with, and subject to the consummation of, the planned
    acquisition of Grant Prideco, Inc. by National Oilwell Varco,
    Inc. pursuant to the agreement and plan of merger referred to
    below.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are offering to exchange all properly tendered and accepted
    6<FONT style="vertical-align: text-top; font-size: 70%;">1</FONT>/<FONT style="font-size: 70%;">8</FONT>%&#160;Senior
    Notes due 2015 that were issued by Grant Prideco. In exchange
    for each Grant Prideco note that is properly tendered and
    accepted, holders will receive a new National Oilwell Varco note
    in a principal amount equal to the exchange price of such
    tendered Grant Prideco note. However, the principal amount of
    each new National Oilwell Varco note will be rounded down, if
    necessary, to the nearest whole multiple of $1,000, and we will
    pay cash equal to the remaining portion, if any, of the exchange
    price of such Grant Prideco note. <B>The exchange price for each
    Grant Prideco note will be 100% of its principal amount if it is
    properly tendered prior to 5:00&#160;p.m., New York City time,
    on April&#160;3, 2008, and 95% of its principal amount if it is
    properly tendered after such time and prior to the expiration of
    the exchange offer</B>. Each new National Oilwell Varco note
    issued in exchange for a Grant Prideco note will have the same
    interest rate, interest payment dates, redemption terms and
    maturity as the Grant Prideco note, and will accrue interest
    from the most recent interest payment date of the Grant Prideco
    note. <B>The exchange offer will expire immediately following
    9:00 a.m., New York City time, on April&#160;21, 2008, unless
    extended. </B>You may withdraw tendered notes at any time prior
    to the expiration of the exchange offer. As of the date of this
    prospectus, there was $174,585,000 principal amount of Grant
    Prideco notes outstanding. The CUSIP No. for the Grant Prideco
    notes is 38821GAH4.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are also soliciting consents to amend the indenture governing
    the Grant Prideco notes. In order to give your consent to the
    proposed amendments, you must validly tender your Grant Prideco
    notes in the exchange offer. Grant Prideco will pay $2.50 per
    $1,000 principal amount of Grant Prideco notes to each holder of
    Grant Prideco notes only if the holder has delivered and not
    revoked a valid consent by the consent payment deadline and we
    accept such consent. <B>The consent payment deadline for the
    consent solicitation will be 5:00&#160;p.m., New York City time,
    on April&#160;3, 2008, unless extended</B>. You may revoke your
    consent at any time prior to the consent payment deadline, but
    you may not do so after that deadline. A holder validly
    tendering Grant Prideco notes for exchange will, by tendering
    those notes, consent to the amendments to the indenture under
    which those notes were issued as described under &#147;The
    Proposed Amendments&#148;.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our obligations to complete the exchange offer and to cause
    Grant Prideco to make the consent payments are conditioned upon,
    among other things, consummation of the merger referred to below
    and receipt of valid consents sufficient to effect all of the
    proposed amendments to the Grant Prideco indenture.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On December&#160;16, 2007, National Oilwell Varco and Grant
    Prideco entered into an Agreement and Plan of Merger pursuant to
    which National Oilwell Varco will acquire all of the issued and
    outstanding shares of common stock of Grant Prideco. Pursuant to
    the merger agreement, Grant Prideco will merge with and into NOV
    Sub, Inc., a wholly owned subsidiary of National Oilwell Varco,
    and NOV Sub will be the surviving company in the merger. In the
    merger, each stockholder of Grant Prideco will receive 0.4498 of
    a share of common stock of National Oilwell Varco and $23.20 in
    cash for each share of common stock of Grant Prideco that the
    stockholder owns, plus cash in lieu of fractional shares.
    Stockholders of National Oilwell Varco will continue to own
    their existing shares, which will not be affected by the merger.
    Based on the number of outstanding shares of common stock of
    Grant Prideco and the number of outstanding shares of common
    stock of National Oilwell Varco on March&#160;14, 2008, we
    anticipate that stockholders of Grant Prideco will own
    approximately 14% of the outstanding shares of common stock of
    National Oilwell Varco immediately following the merger.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to consummate the merger, the merger agreement must be
    adopted by the stockholders of Grant Prideco. The obligations of
    National Oilwell Varco and Grant Prideco to complete the merger
    are also subject to the satisfaction or waiver of several other
    conditions to the merger, including receiving approvals from
    regulatory agencies. If the merger agreement is terminated for
    any reason, National Oilwell Varco intends promptly to terminate
    the exchange offer and the consent solicitation.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We plan to issue new National Oilwell Varco notes as soon as
    practicable after the exchange offer expiration and the
    consummation of the merger (in exchange for Grant Prideco notes
    that are properly tendered before the expiration of the exchange
    offer).
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The National Oilwell Varco notes will not be listed on any
    securities exchange.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>This investment involves risks. See the section entitled
    &#147;Risk Factors&#148; that begins on page&#160;11 for a
    discussion of the risks that you should consider in connection
    with your investment in the notes.</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of these
    securities or determined if this prospectus is truthful or
    complete. Any representation to the contrary is a criminal
    offense.</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    None of National Oilwell Varco, Grant Prideco, the exchange
    agent, the information agent, the trustee under the Grant
    Prideco indenture, the trustee under the National Oilwell Varco
    indenture or the dealer manager makes any recommendation as to
    whether holders of Grant Prideco notes should exchange their
    notes in the exchange offer or consent to the proposed
    amendments to the Grant Prideco indenture.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 17%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=480 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 8pt">The dealer manager for the exchange
    offer and consent solicitation is:
    </FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 18pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Goldman,
    Sachs&#160;&#038; Co.</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 17%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=480 length=84 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The date of this prospectus is March 20, 2008
</DIV>

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 89%; margin-left: 5%"><!-- BEGIN PAGE WIDTH -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="97%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#101'>ABOUT THIS PROSPECTUS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    i
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#102'>CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
    STATEMENTS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    ii
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#103'>WHERE YOU CAN FIND MORE INFORMATION</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    iii
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#104'>RISK FACTORS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#105'>USE OF PROCEEDS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    22
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#106'>THE COMPANIES</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    23
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#107'>THE MERGER</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    26
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#108'>THE EXCHANGE OFFER</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#109'>DESCRIPTION OF THE DIFFERENCES BETWEEN THE GRANT
    PRIDECO NOTES&#160;AND THE NATIONAL OILWELL VARCO NOTES</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    40
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#110'>THE PROPOSED AMENDMENTS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    67
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#111'>DESCRIPTION OF THE NATIONAL OILWELL VARCO
    NOTES</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    69
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#112'>UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
    STATEMENTS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    79
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#113'>NOTES&#160;TO UNAUDITED PRO FORMA CONDENSED
    COMBINED FINANCIAL STATEMENTS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    82
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#114'>UNITED STATES FEDERAL INCOME TAX CONSEQUENCES</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    86
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#115'>ERISA CONSIDERATIONS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    94
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#116'>LEGAL MATTERS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    94
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#117'>EXPERTS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    94
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#118'>Annex&#160;A&#160;&#151; Form of Supplemental
    Indenture to Grant Prideco Indenture</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    A-1
</TD>
<TD>&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>
<A name='101'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ABOUT
    THIS PROSPECTUS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The information contained in this prospectus is not complete and
    may be changed. You should rely only on the information provided
    in or incorporated by reference in this prospectus, any
    prospectus supplement, or documents to which we otherwise refer
    you. We have not authorized anyone else to provide you with
    different information. We are not making an offer of any
    securities in any jurisdiction where the offer is not permitted.
    You should not assume that the information in this prospectus,
    any prospectus supplement or any document incorporated by
    reference is accurate as of any date other than the date of the
    document in which such information is contained or such other
    date referred to in such document, regardless of the time of any
    sale or issuance of a security.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus is part of a registration statement that we have
    filed with the Securities and Exchange Commission, or SEC. You
    should read this prospectus and any prospectus supplement
    together with the registration statement, the exhibits thereto
    and the additional information described under the heading
    &#147;Where You Can Find More Information&#148;.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    i
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='102'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CAUTIONARY
    STATEMENT REGARDING FORWARD-LOOKING STATEMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus and the documents incorporated by reference
    contain various forward-looking statements and information that
    are based on the beliefs of National Oilwell Varco, as well as
    assumptions made by National Oilwell Varco and information
    currently available to us. When used in this prospectus, words
    such as &#147;anticipate&#148;, &#147;project&#148;,
    &#147;expect&#148;, &#147;plan&#148;, &#147;goal&#148;,
    &#147;forecast&#148;, &#147;intend&#148;, &#147;could&#148;,
    &#147;believe&#148;, &#147;may&#148;, and similar expressions
    and statements regarding our plans and objectives for future
    operations, are intended to identify forward-looking statements.
    Forward-looking statements in this prospectus also include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    statements relating to the cost savings, transaction costs or
    integration costs that National Oilwell Varco anticipates to
    arise from the merger;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    statements with respect to various actions to be taken or
    requirements to be met in connection with completing the merger
    or integrating National Oilwell Varco and Grant Prideco;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    statements relating to revenue, income and operations of the
    combined company after the merger is completed;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    statements regarding the expected financing available to
    National Oilwell Varco for the cash portion of the consideration
    payable in the merger;&#160;and
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    statements relating to Grant Prideco&#146;s expected sale of
    certain tubular business units.
</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These forward-looking statements are subject to a number of
    factors and uncertainties that could cause actual results to
    differ materially from those described in the forward-looking
    statements. The following factors, among others, including those
    discussed in the &#147;Risk Factors&#148; section of this
    prospectus, could cause actual results to differ materially from
    those described in the forward-looking statements:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    expected cost savings from the merger may not be fully realized
    or realized within the expected time frame;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    revenue of the combined company following the transaction may be
    lower than expected;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    costs or difficulties related to obtaining regulatory approvals
    for completing the merger and, following the transaction, to the
    integration of the businesses of National Oilwell Varco and
    Grant Prideco, may be greater than expected;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    general economic conditions, either internationally or
    nationally or in the jurisdictions in which National Oilwell
    Varco or Grant Prideco is doing business, may be less favorable
    than expected:
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the potential for rapid and significant changes in technology
    and their effect on the combined company&#146;s operations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    inability to retain key personnel after the merger;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    operating, legal and regulatory risks.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except for its ongoing obligations to disclose material
    information as required by the federal securities laws, National
    Oilwell Varco has no intention or obligation to update these
    forward-looking statements after it distributes this prospectus.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    ii
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='103'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">WHERE YOU
    CAN FIND MORE INFORMATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco has filed with the Securities and
    Exchange Commission a registration statement under the
    Securities Act of 1933 that registers the issuance of National
    Oilwell Varco notes in exchange for Grant Prideco notes. That
    registration statement, including the attached exhibits and
    schedules, contains additional relevant information about
    National Oilwell Varco. The rules and regulations of the
    Securities and Exchange Commission allow us to omit some of the
    information included in the registration statement from this
    prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, National Oilwell Varco and Grant Prideco file
    reports, proxy statements and other information with the
    Securities and Exchange Commission under the Securities Exchange
    Act of 1934. You may read and copy that information at the
    Securities and Exchange Commission&#146;s public reference room
    at the following location:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Public Reference Room
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    450&#160;Fifth Street, N.W.
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Washington,&#160;D.C. 20549
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="white-space: nowrap">1-800-732-0330</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You may also obtain copies of this information by mail from the
    Public Reference Section of the Securities and Exchange
    Commission, 450&#160;Fifth Street, N.W., Room&#160;1024,
    Washington,&#160;D.C. 20549, at prescribed rates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Securities and Exchange Commission also maintains an
    Internet world wide website that contains reports, proxy
    statements and other information about issuers, including
    National Oilwell Varco and Grant Prideco, that file
    electronically with the Securities and Exchange Commission. The
    address of that site is
    <I><FONT style="white-space: nowrap">http://www.sec.gov</FONT></I>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Securities and Exchange Commission allows National Oilwell
    Varco to &#147;incorporate by reference&#148; information into
    this prospectus. This means that National Oilwell Varco can
    disclose important information by referring you to another
    document filed separately with the Securities and Exchange
    Commission. The information incorporated by reference is
    considered to be part of this prospectus, except for any
    information that is superseded by information that is included
    directly in this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus incorporates by reference the documents listed
    below that National Oilwell Varco and Grant Prideco have
    previously filed with the Commission, excluding any information
    furnished, pursuant to Item&#160;2.02 or Item&#160;7.01 in a
    Current Report on
    <FONT style="white-space: nowrap">Form&#160;8-K</FONT>
    or other applicable rules of the Commission, rather than filed.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">National
    Oilwell Varco&#146;s Filings (File
    <FONT style="white-space: nowrap">No.&#160;001-12317)</FONT></FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended December&#160;31, 2007 filed with the
    Commission on February&#160;29, 2008
    <FONT style="white-space: nowrap">(10-K)</FONT> and
    March&#160;13, 2008; and.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Current Reports on Form&#160;8-K dated
    February&#160;20,&#160;2008 and February 21,&#160;2008.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You may request a copy of National Oilwell Varco&#146;s filings
    at no cost by making written or telephone requests for copies
    to: National Oilwell Varco, Inc., 7909 Parkwood Circle Drive,
    Houston, Texas 77036,
    <FONT style="white-space: nowrap">(713)&#160;375-3700,</FONT>
    Attention: Investor Relations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco also makes available free of charge on
    its Internet website at
    <I><FONT style="white-space: nowrap">http://www.nov.com</FONT>
    </I>its Annual Reports on
    <FONT style="white-space: nowrap">Form&#160;10-K,</FONT>
    Quarterly Reports on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    and Current Reports on
    <FONT style="white-space: nowrap">Form&#160;8-K,</FONT>
    and any amendments to those reports, as soon as reasonably
    practicable after it electronically files such material with, or
    furnishes it to, the Commission. Information contained on the
    web site of National Oilwell Varco is not part of this
    prospectus.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Grant
    Prideco&#146;s Filings (File
    <FONT style="white-space: nowrap">No.&#160;001-15423)</FONT></FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended December&#160;31, 2007 filed with the
    Commission on February&#160;29, 2008; and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Current Report on Form 8-K dated February&#160;29, 2008.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You may request a copy of Grant Prideco&#146;s filings at no
    cost by making written or telephone requests for copies to Grant
    Prideco, Inc., 400&#160;N.&#160;Sam Houston Parkway East,
    Suite&#160;900, Houston, Texas 77060, Telephone:
    <FONT style="white-space: nowrap">(281)&#160;878-8000,</FONT>
    Attention: Investor Relations.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    iii
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco also makes available free of charge on its
    Internet website at
    <FONT style="white-space: nowrap">http://www.grantprideco.com</FONT>
    its Annual Reports on
    <FONT style="white-space: nowrap">Form&#160;10-K,</FONT>
    Quarterly Reports on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    and Current Reports on
    <FONT style="white-space: nowrap">Form&#160;8-K,</FONT>
    and any amendments to those reports, as soon as reasonably
    practicable after it electronically files such material with, or
    furnishes it to, the Commission. Information contained on the
    web site of Grant Prideco is not part of this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We also incorporate by reference additional documents that
    either company may file with the Securities and Exchange
    Commission pursuant to Section&#160;13(a), 13(c), 14 or 15(d) of
    the Securities Exchange Act of 1934 until the expiration of the
    exchange offer. Those documents include periodic reports such as
    an Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K,</FONT>
    Quarterly Reports on
    <FONT style="white-space: nowrap">Form&#160;10-Q</FONT>
    and Current Reports on
    <FONT style="white-space: nowrap">Form&#160;8-K,</FONT>
    as well as proxy statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You can obtain any of the documents incorporated by reference
    into this prospectus through National Oilwell Varco or from the
    Securities and Exchange Commission&#146;s website at
    <FONT style="white-space: nowrap">http://www.sec.gov.</FONT>
    Documents incorporated by reference are available from National
    Oilwell Varco without charge, excluding any exhibits to those
    documents unless the exhibit is specifically incorporated by
    reference into this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have not authorized anyone to give any information or make
    any representation about the merger, the exchange offer, the
    consent solicitation, National Oilwell Varco or Grant Prideco,
    that is different from, or in addition to, the information
    contained in this prospectus or in any of the materials that
    have been incorporated into this prospectus by reference.
    Therefore, if anyone does give you information of this sort, you
    should not rely on it. If you are in a jurisdiction where offers
    to exchange or sell, or solicitations of offers to exchange or
    purchase, the securities offered by this prospectus is unlawful,
    then the offer presented in this prospectus does not extend to
    you. The information contained in this prospectus speaks only as
    of the date of this prospectus unless the information
    specifically indicates that another date applies.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    iv
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SUMMARY</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>This summary highlights some of the information in this
    prospectus. It may not contain all of the information that is
    important to you. To understand the exchange offer and consent
    solicitation fully and for a more complete description of the
    terms of the merger, you should read carefully this prospectus
    and the documents we incorporate by reference. Please also read
    &#147;Where You Can Find More Information&#148;. We have
    included references to other portions of this prospectus to
    direct you to a more complete description of the topics
    presented in this summary.</I>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Unless otherwise indicated, pro forma financial results
    presented in this prospectus give effect to the completion of
    the merger.</I>
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Companies</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>National Oilwell Varco, Inc.</I>&#160;&#160;National Oilwell
    Varco, Inc. is a worldwide leader in the design, manufacture and
    sale of equipment and components used in oil and gas drilling
    and production, the provision of oilfield services and supply
    chain integration services to the upstream oil and gas industry.
    With over 700 worldwide manufacturing and service center
    locations across six continents, National Oilwell Varco supplies
    customer-focused solutions to meet the quality, productivity,
    safety and environmental requirements of the oil and gas
    industry.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco designs, manufactures, sells and services
    complete systems for drilling, completion and servicing of oil
    and gas wells both on land and offshore. It also provides a
    variety of consumable goods and services used to drill,
    complete, remediate and workover oil and gas wells and service
    pipelines, flowlines and other oilfield tubular goods. In
    addition, National Oilwell Varco provides maintenance, repair
    and operating supplies and spare parts to drill site and
    production locations worldwide.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco&#146;s principal executive offices are
    located at 7909 Parkwood Circle Drive, Houston, Texas 77036 and
    its telephone number is
    <FONT style="white-space: nowrap">(713)&#160;346-7500.</FONT>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Grant Prideco, Inc.</I>&#160;&#160;Grant Prideco, Inc. is a
    world leader in drill stem technology development and drill pipe
    manufacturing, sales and service, as well as a leader in drill
    bit and specialty tools, manufacturing, sales and service. In
    addition, Grant Prideco provides an integrated package of
    large-bore tubular products and services.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco manufactures and sells drill stem products,
    including drill pipe products, drill collars and heavyweight
    drill pipe and drill stem accessories, as well as designs,
    manufactures and distributes drill bits, hole- opening or hole
    enlarging tools, coring services and other related technology to
    the oil and gas industry. Grant Prideco also offers an
    integrated package of large-bore tubular products and services
    for offshore wells and well-site data transmission services.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco&#146;s principal executive offices are located at
    400&#160;N.&#160;Sam Houston Parkway East, Suite&#160;900,
    Houston, Texas 77060 and its telephone number is
    <FONT style="white-space: nowrap">(281)&#160;878-8000.</FONT>
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Merger (see page&#160;26)</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the merger agreement dated as of December&#160;16,
    2007, at the effective time of the merger, Grant Prideco will
    merge with and into NOV Sub, Inc., a wholly owned subsidiary of
    National Oilwell Varco, with NOV Sub surviving the merger. As a
    result of the merger, each stockholder of Grant Prideco will
    receive 0.4498 of a share of common stock of National Oilwell
    Varco and $23.20 in cash for each share of common stock of Grant
    Prideco that the stockholder owns at the effective time of the
    merger. Based on the number of outstanding shares of common
    stock of Grant Prideco and National Oilwell Varco as of
    March&#160;14, 2008, we anticipate that National Oilwell Varco
    will issue approximately 56.3&#160;million shares of its common
    stock in the merger and that, upon completion of the merger,
    stockholders of Grant Prideco will own approximately 14% of
    National Oilwell Varco and stockholders of National Oilwell
    Varco will own approximately 86% of National Oilwell Varco. At
    the effective time of the merger, all debts, liabilities and
    duties of Grant Prideco and NOV Sub before the merger will
    become the debts, liabilities and duties of NOV Sub, as the
    surviving corporation. National Oilwell Varco and Grant Prideco
    will complete the merger only if the conditions set forth in the
    merger agreement are satisfied or, in some cases, waived.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Recent
    Developments</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the date of this prospectus, National Oilwell Varco and
    Grant Prideco are aware of five shareholder lawsuits that have
    been filed in connection with the proposed merger. These
    lawsuits, each of which has been filed in the District Court of
    Harris County, Texas, against Grant Prideco, its board of
    directors and, in one case, National
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    1
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Oilwell Varco, are as follows: <I>Mark Bornstein, On Behalf of
    Himself and All Others Similarly Situated vs. Grant Prideco,
    Inc., et al</I>., Cause
    <FONT style="white-space: nowrap">No.&#160;2007-76092,</FONT>
    In the District Court of Harris County, Texas,
    269th&#160;Judicial District; <I>Catholic Medical Mission Board,
    On Behalf of Itself and All Others Similarly Situated vs. Grant
    Prideco, Inc., et al.</I>, Cause
    <FONT style="white-space: nowrap">No.&#160;2007-76418,</FONT>
    In the District Court of Harris County, Texas,
    55th&#160;Judicial District; <I>Thomas Gray, On Behalf of
    Himself and All Others Similarly Situated vs. Grant Prideco,
    Inc., et al.</I>, Cause
    <FONT style="white-space: nowrap">No.&#160;2007-76419,</FONT>
    In the District Court of Harris County, Texas,
    133rd&#160;Judicial District; <I>Roslyn Feder, On Behalf of
    Herself and All Others Similarly Situated vs. Grant Prideco,
    Inc., et al.</I>, In the District Court of Harris County, Texas,
    61st&#160;Judicial District; and <I>Kenneth Engberg, On Behalf
    of Himself and All Others Similarly Situated vs. Grant Prideco,
    Inc., et al.</I>, Cause
    <FONT style="white-space: nowrap">No.&#160;2008-02244,</FONT>
    In the District Court of Harris County, Texas,
    281st&#160;Judicial District.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each of the plaintiffs in these five lawsuits alleges that they
    are stockholders of Grant Prideco and each of these five
    lawsuits is brought as a putative class action. Each of these
    lawsuits alleges that the proposed merger consideration is
    inadequate and that Grant Prideco and its individual directors
    breached fiduciary duties owed to the stockholders of Grant
    Prideco in connection with the proposed merger. Additionally, in
    the <I>Bornstein </I>suit, plaintiff alleges that National
    Oilwell Varco aided and abetted the alleged breach of fiduciary
    duty by Grant Prideco and its board of directors. The plaintiffs
    in each of these actions seek certification of their lawsuits as
    class actions, seek to enjoin the proposed merger and also ask
    for other legal and equitable relief, including an award of
    attorneys&#146; fees and costs of court. On January&#160;17,
    2008, Grant Prideco filed a motion requesting that all of these
    shareholder actions be consolidated with the <I>Bornstein
    </I>case in the 269th&#160;Judicial District Court of Harris
    County, Texas. The Court has not yet ruled on this motion to
    consolidate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This litigation is in its very early stages; however, National
    Oilwell Varco and Grant Prideco believe that each of these five
    lawsuits is without merit and intend to defend them.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Questions
    and Answers about the Exchange Offer and Consent
    Solicitation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>Why is National Oilwell Varco making the exchange offer and
    the consent solicitation?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>A: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    As a result of the merger of Grant Prideco with Nov Sub, Grant
    Prideco will become a wholly-owned subsidiary of National
    Oilwell Varco. The exchange offer and the proposed amendments
    are intended to provide us with greater operational and
    financial flexibility, including greater flexibility in our
    integration efforts, and to allow us to structure our operations
    and the operations of our subsidiaries in a more efficient
    manner and allow for potential savings. If the proposed
    amendments are adopted, certain provisions in the Grant Prideco
    indenture that differ from the National Oilwell Varco indenture
    will be eliminated.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>What will I receive if I tender my Grant Prideco notes in the
    exchange offer and consent solicitation?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    In the exchange offer, we are offering in exchange for a
    holder&#146;s outstanding tendered
    6<FONT style="vertical-align: text-top; font-size: 70%;">1</FONT>/<FONT style="font-size: 70%;">8</FONT>%&#160;Senior
    Notes due August&#160;15, 2015 of Grant Prideco,
    6<FONT style="vertical-align: text-top; font-size: 70%;">1</FONT>/<FONT style="font-size: 70%;">8</FONT>%&#160;Senior
    Notes due 2015 of National Oilwell Varco having a principal
    amount that is equal to the exchange price of such Grant Prideco
    notes.</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    The exchange price for the tendered Grant Prideco notes will be
    100% of their aggregate principal amount if such notes are
    properly tendered prior to 5:00&#160;p.m., New York City time on
    April&#160;3, 2008, and 95% of their aggregate principal amount
    if such notes are properly tendered after such time and prior to
    the expiration of the exchange offer.</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Notwithstanding the foregoing, the National Oilwell Varco notes
    will be issued only in denominations of $1,000 and whole
    multiples of $1,000. See &#147;Description of the National
    Oilwell Varco Notes&#160;&#151; General Terms&#148;. If National
    Oilwell Varco would otherwise be required to issue a National
    Oilwell Varco note in a denomination other than $1,000 or a
    whole multiple of $1,000, National Oilwell Varco will, in lieu
    of such issuance:</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    &#149;&#160;issue a National Oilwell Varco note in a principal
    amount that has been rounded down to the nearest lesser whole
    multiple of $1,000;&#160;and</DIV>
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    &#149;&#160;pay cash, which we refer to as cash exchange
    consideration, in an amount equal to:</DIV>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    &#149;&#160;the difference between (i)&#160;the principal amount
    yielded by such formula and (ii)&#160;the principal amount of
    the National Oilwell Varco note actually issued in accordance
    with this paragraph; plus</DIV>
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    &#149;&#160;accrued and unpaid interest on the principal amount
    representing such difference to the date of the exchange.</DIV>
</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    2
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    The National Oilwell Varco notes will be issued under and
    governed by the terms of the National Oilwell Varco indenture
    described below under &#147;The Exchange offer&#148;. Except as
    otherwise set forth above, instead of receiving a payment for
    accrued interest on Grant Prideco notes you exchange, the
    National Oilwell Varco notes you receive in exchange for those
    Grant Prideco notes will accrue interest from the most recent
    date to which interest has been paid on those Grant Prideco
    notes.</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    In addition, Grant Prideco will pay an amount in cash equal to
    $2.50 per $1,000 principal amount outstanding of Grant Prideco
    notes to each holder of Grant Prideco notes only if the holder
    has delivered and not revoked a valid consent prior to the
    consent payment deadline and we accept such consent. The consent
    payment deadline for the exchange offer (that is, the time by
    which a holder must have delivered and not revoked a valid
    consent in order to be eligible to receive the consent payment)
    will be 5:00&#160;p.m., New York City time, on April&#160;3,
    2008, unless extended.</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    As a holder of Grant Prideco notes, you may give your consent to
    the proposed amendments to the Grant Prideco indenture only by
    tendering your Grant Prideco notes in the exchange offer. By
    tendering your Grant Prideco notes for exchange, you will be
    deemed to have given a consent with respect to the notes.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>What are the consequences of not consenting in the consent
    solicitation prior to the consent payment deadline?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    If the proposed amendments to the Grant Prideco indenture are
    adopted, holders that failed to deliver valid and unrevoked
    consents prior to the consent payment deadline will not receive
    the consent payment, even though the proposed amendments will
    become effective with respect to their Grant Prideco notes.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>What are the consequences of not tendering in the exchange
    offer?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    If the proposed amendments to the Grant Prideco indenture have
    been adopted, the amendments will apply to all Grant Prideco
    notes not acquired in the exchange offer. Thereafter, all such
    Grant Prideco notes will be governed by the Grant Prideco
    indenture as amended by the proposed amendments, which will have
    less restrictive terms and afford reduced protections to the
    holders of such securities compared to those currently in the
    Grant Prideco indenture. See &#147;Risk Factors
    &#151;&#160;Risks Related to the Exchange Offer, the Consent
    Solicitation and the National Oilwell Varco Notes&#160;&#151;
    The proposed amendments to the Grant Prideco indenture will
    afford reduced protection to remaining holders of Grant Prideco
    notes&#148;.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>How do the Grant Prideco notes differ from the National
    Oilwell Varco notes to be issued in the exchange offer?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    The Grant Prideco notes are the obligations solely of Grant
    Prideco and are governed by the Grant Prideco indenture, while
    the National Oilwell Varco notes will be the obligations solely
    of National Oilwell Varco and will be governed by the National
    Oilwell Varco indenture. The Grant Prideco indenture and the
    National Oilwell Varco indenture differ in certain respects,
    including as follows:</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    &#149;&#160;The provisions of the Grant Prideco indenture that
    limit the ability of Grant Prideco and its subsidiaries to incur
    liens or engage in sale and leaseback transactions are more
    restrictive than the corresponding provisions of the National
    Oilwell Varco indenture.</DIV>
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    &#149;&#160;The Grant Prideco indenture restricts Grant
    Prideco&#146;s ability to merge or consolidate with, or sell
    substantially all of its assets to, entities other than
    corporations organized and existing under the laws of the
    United&#160;States or any state thereof or the District of
    Columbia.</DIV>
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    &#149;&#160;The Grant Prideco indenture contains events of
    default that are inconsistent with those set forth in the
    National Oilwell Varco indenture, including events of default
    resulting from specified judgments.</DIV>
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    However, if the proposed amendments are adopted, these
    provisions will be eliminated from the Grant Prideco indenture
    or modified. Certain covenants in the Grant Prideco indenture
    would no longer apply once the Grant Prideco notes have an
    investment grade credit rating, which National Oilwell Varco
    anticipates may occur after consummation of the merger; however,
    there can be no assurance that the Grant Prideco notes will have
    such a credit rating.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    See &#147;Description of the Differences Between Grant Prideco
    Notes and National Oilwell Varco Notes&#148;, &#147;The Exchange
    offer&#148;, &#147;The Proposed Amendments&#148; and
    &#147;Description of the National Oilwell Varco Notes&#148;.</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    The National Oilwell Varco notes offered in the exchange offer
    will be the general unsecured obligations of National Oilwell
    Varco.  The National Oilwell Varco notes will not be guaranteed
    by any of our subsidiaries and, accordingly, will be
    structurally subordinated to all of the debt and other
    liabilities of our subsidiaries, which, after giving effect to
    the merger, will include Grant Prideco and its subsidiaries.
    Accordingly, the National Oilwell Varco notes will be
    structurally subordinated to any of the Grant Prideco notes that
    remain outstanding following the exchange offer and any other
    obligations of Grant Prideco.  As of December&#160;31, 2007, our
    subsidiaries had approximately $5,390.7&#160;million of total
    balance sheet liabilities, whereas pro&#160;forma Grant Prideco
    had approximately $595.6&#160;million of total balance sheet
    liabilities (including the Grant Prideco notes).  See &#147;Risk
    Factors&#160;&#151; Risks Related to the Exchange Offer, the
    Consent Solicitation and the National Oilwell Varco
    Notes&#160;&#151; As a holding company, we will depend on our
    subsidiaries for funds to meet our payment obligations under the
    National Oilwell Varco notes&#148;, &#147;Risk
    Factors&#160;&#151; Risks Related to the Exchange Offer, the
    Consent Solicitation and the National Oilwell Varco
    Notes&#160;&#151; The National Oilwell Varco notes will be
    unsecured general obligations of National Oilwell Varco. As
    such, the National Oilwell Varco notes will be effectively
    junior to any secured debt we may have to the extent of the
    value of the security and to the existing and future debt and
    other liabilities of our subsidiaries&#148; and
    &#147;Description of the National Oilwell Varco
    Notes&#160;&#151; Ranking&#148;.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>What are the U.S. federal income tax consequences to holders
    of Grant Prideco notes in connection with the exchange offer and
    the consent solicitation?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    Holders should consider certain United States federal income tax
    consequences of the exchange offer and consent solicitation. See
    &#147;United States Federal Income Tax Consequences&#148;.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>What consents are required to effect the proposed amendments
    to the Grant Prideco indenture and consummate the exchange
    offer?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    Consents from holders of record of a majority of the total
    principal amount of Grant Prideco notes outstanding under the
    Grant Prideco indenture as of the close of business on
    April&#160;3, 2008 must be received in order to amend the Grant
    Prideco indenture.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Our obligations to complete the exchange offer and cause Grant
    Prideco to make the consent payment relating to the exchange
    offer are conditioned upon, among other things, (i)&#160;receipt
    of valid consents sufficient to effect the amendments with
    respect to the Grant Prideco notes and (ii)&#160;the
    consummation of the merger with Grant Prideco, although we may,
    at our option, waive this or any other condition with respect to
    the exchange offer. For information about other conditions to
    our obligations to complete the exchange offer and cause Grant
    Prideco to make the consent payment, see &#147;The Exchange
    Offer&#160;&#151; Conditions to the Exchange Offer and Consent
    Solicitation&#148;.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>Will National Oilwell Varco accept all tenders of Grant
    Prideco notes?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    Subject to the satisfaction or waiver of the conditions to the
    exchange offer, we will accept for exchange any and all Grant
    Prideco notes that (i)&#160;have been properly tendered in the
    exchange offer on or before the expiration date of the exchange
    offer and (ii)&#160;have not been validly withdrawn before the
    expiration of the exchange offer.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>When will National Oilwell Varco cause consent payments to be
    made, issue new notes and pay cash exchange consideration (as
    applicable)?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    Assuming the required consents are obtained and the other
    conditions to the making of the consent payments are satisfied
    or waived, we will cause Grant Prideco to make the consent
    payments upon the first acceptance of the Grant Prideco notes
    for exchange, which is anticipated to occur concurrently with
    the consummation of the merger.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Assuming the conditions to the exchange offer are satisfied or
    waived, we will issue new National Oilwell Varco notes in
    book-entry form and pay cash exchange consideration (as
    applicable) as soon as practicable after the expiration date of
    the exchange offer and consummation of the merger (in exchange
    for Grant Prideco notes that are properly tendered (and not
    validly withdrawn) before the expiration of the exchange offer
    and accepted for exchange).</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>When will the proposed amendments to the Grant Prideco
    indenture become effective?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    If we receive the requisite consents by the consent payment
    deadline, the proposed amendments to the Grant Prideco
    indentures will become effective concurrently with the
    consummation of the merger.</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    4
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    If the proposed amendments are adopted:</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    &#149;&#160;National Oilwell Varco expects to cause Grant
    Prideco to pay one or more cash dividends to National Oilwell
    Varco, which may occur as early as immediately after the merger;
    a dividend could not be declared at such time if the covenants
    on restricted payments in the Grant Prideco indenture were still
    effective;&#160;and</DIV>
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    &#149;&#160;the holders of Grant Prideco notes will no longer
    have the right to cause Grant Prideco to make an offer to
    holders of the Grant Prideco notes to repurchase all or any part
    of such holders&#146; Grant Prideco notes at an offer price in
    cash equal to 101% of the aggregate principal amount of notes
    repurchased, plus accrued and unpaid interest, as would
    otherwise be required by the Grant Prideco indenture as a result
    of the consummation of the merger.</DIV>
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>When do I need to deliver my consent to be eligible to
    receive the consent payment?</B></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    The consent payment deadline for the exchange offer is
    5:00&#160;p.m., New York City time on April&#160;3, 2008, unless
    extended. The consent payment deadline is the latest date and
    time on which you may deliver a valid and unrevoked consent and
    receive the consent payment.</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>When does the exchange offer expire?</B></TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    The exchange offer will expire immediately following 9:00 a.m.,
    New York City time, on April&#160;21, 2008, unless we, in our
    sole discretion, extend the exchange offer, in which case the
    expiration date will be the latest date and time to which the
    exchange offer is extended. See &#147;The Exchange
    Offer&#160;&#151; Consent Payment Deadline; Expiration Date;
    Extensions; Amendments&#148;.</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>What are my rights if I change my mind after I tender my
    Grant Prideco notes and deliver my consent?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    You may withdraw your tendered notes at any time before the
    expiration of the exchange offer. You may revoke your consent at
    any time before the consent payment deadline. You may not revoke
    your consent at any time after the consent payment deadline. A
    valid withdrawal of tendered Grant Prideco notes prior to the
    consent payment deadline will constitute the revocation of the
    related consent to the proposed amendments to the Grant Prideco
    indenture. You may only revoke your consent by validly
    withdrawing the Grant Prideco notes prior to the consent payment
    deadline. If you validly withdraw your Grant Prideco notes
    following the consent payment deadline, but before the
    expiration of the exchange offer, your consent will be counted,
    but you will not receive the consent payment. See &#147;The
    Exchange offer&#160;&#151; Withdrawal of Tenders and Revocation
    of Corresponding Consents&#148;.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>How do I exchange my Grant Prideco notes if I am a beneficial
    owner of Grant Prideco notes held of record by a custodian bank,
    depositary, broker, trust company or other nominee? Will the
    record holder exchange my Grant Prideco notes for me?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    If your Grant Prideco notes are held by a custodian bank,
    depositary, broker, trust company or other nominee and you wish
    to tender the securities in the exchange offer, you should
    contact that institution promptly and instruct the institution
    to tender on your behalf. The record holder will tender your
    notes on your behalf, but only if you instruct the record holder
    to do so. See &#147;The Exchange offer&#160;&#151; Procedures
    for Consenting and Tendering&#160;&#151; Grant Prideco Notes
    Held through a Nominee&#148;.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>Do I have the right to dissent from the exchange offer or the
    consent solicitation or seek appraisal of the Grant Prideco
    notes&#160;I hold?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    Holders of Grant Prideco notes do not have any appraisal or
    dissenters&#146; rights under New York law, the law governing
    the Grant Prideco indenture, or under the terms of the Grant
    Prideco indenture in connection with the exchange offer and
    consent solicitation.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>Will the National Oilwell Varco notes be eligible for trading
    on an exchange?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    We expect that the National Oilwell Varco notes will be eligible
    for trading on the OTC Bulletin&#160;Board. However, there can
    be no assurance as to the development or liquidity of any market
    for the National Oilwell Varco notes. See &#147;Risk Factors
    &#151;&#160;Risks Related to the Exchange Offer, the Consent
    Solicitation and the National Oilwell Varco Notes&#160;&#151;
    Your ability to transfer the National Oilwell Varco notes may be
    limited by the absence of a trading market.&#148;</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    5
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <B>Q: </B></TD>
    <TD></TD>
    <TD valign="bottom">
    <B>To whom should I direct any questions?</B></TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    A: </TD>
    <TD></TD>
    <TD valign="bottom">
    Questions concerning the terms of the exchange offer or the
    consent solicitation should be directed to the dealer manager;
    contact information for the dealer manager is set forth on the
    back cover of this prospectus. Questions concerning tender
    procedures and requests for additional copies of this prospectus
    statement should be directed to the information agent. The
    addresses and telephone numbers of the dealer manager and the
    information agent are set forth on the back cover page of this
    prospectus.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    We may be required to amend or supplement this prospectus at any
    time to add, update or change the information contained in this
    prospectus. You should read this prospectus and any amendment or
    supplement hereto, together with the documents incorporated by
    reference herein and the additional information described under
    &#147;Where You Can Find More Information&#148;.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risk
    Factors</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An investment in the National Oilwell Varco notes involves risks
    that a potential investor should carefully evaluate prior to
    making an investment in the National Oilwell Varco notes. See
    &#147;Risk Factors&#148; beginning on page&#160;11.
</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    6
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Selected
    Historical Consolidated Financial Data of National Oilwell
    Varco</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco is providing the following information to
    aid in your analysis of the financial aspects of the exchange
    offer. The following selected historical financial data for each
    of the years in the five-year period ended December&#160;31,
    2007 has been derived from the audited consolidated financial
    statements for National Oilwell Varco.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The information is only a summary. You should read it along with
    the historical financial statements and related notes and the
    section titled &#147;Management&#146;s Discussion and Analysis
    of Financial Condition and Results of Operations&#148; contained
    in the Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for National Oilwell Varco for the year ended December&#160;31,
    2007 on file with the Securities and Exchange Commission and
    incorporated by reference into this prospectus. See &#147;Where
    You Can Find More Information&#148;.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="18" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2006</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2005(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2004</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2003</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="18" align="center" valign="bottom">
    <B>(In millions, except per share data)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Operation Data:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Revenue
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9,789.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,025.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,644.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,318.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,004.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Operating Profit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,044.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,111.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    476.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    176.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    164.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Income before Taxes and Minority Interest
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,028.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,049.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    430.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    138.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    121.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,337.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    684.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    286.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    115.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    79.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net income per Share(2):
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Basic
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.77
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1.95
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.92
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.67
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.47
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Diluted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.76
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1.93
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.91
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.67
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.47
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Balance Sheet Data (at end of period):</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total Assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    12,114.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9,019.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6,678.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,576.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,213.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Long-term debt, less Current Maturities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    737.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    834.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    835.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    350.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    594.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Stockholders&#146; Equity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,661.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,023.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,194.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,270.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,059.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 15pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Financial results of Varco International, Inc.
    (&#147;Varco&#148;) have been included in National Oilwell
    Varco&#146;s consolidated financial statements beginning
    March&#160;11, 2005, the date the Varco merger was completed and
    Varco&#146;s common shares were exchanged for shares of National
    Oilwell Varco&#146;s common stock. Financial information for
    prior periods and dates may not be comparable with 2005 due to
    the impact of this business combination on National Oilwell
    Varco&#146;s financial position and results of operation. See
    Note&#160;3 of the Notes to National Oilwell Varco&#146;s
    Consolidated Financial Statements (incorporated herein by
    reference to National Oilwell Varco&#146;s annual report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended December&#160;31, 2006)&#160;for a
    description of the Varco merger and related adjusted financial
    information. Results for the year ended December&#160;31, 2005
    include integration costs associated with the Varco merger of
    $31.7&#160;million and stock-based compensation costs of
    $15.6&#160;million related to the amortization expense of
    options assumed in the Varco merger.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    All periods reflect a
    <FONT style="white-space: nowrap">two-for-one</FONT>
    stock split effected as a stock dividend in September 2007.</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    7
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Selected
    Historical Consolidated Financial Data of Grant
    Prideco</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following information of Grant Prideco is being provided to
    aid in your analysis of the financial aspects of the exchange
    offer. The following selected historical financial data for each
    of the years in the five-year period ended December&#160;31,
    2007 has been derived from audited consolidated financial
    statements for Grant Prideco. This information has been adjusted
    in all periods to reflect the pending sale of Grant
    Prideco&#146;s Atlas Bradford Premium Threading and Services,
    TCA Premium Casing and Tube-Alloy Accessories to Vallourec S.A.
    and Vallourec &#038; Mannesmann Holdings, Inc., including the
    disposal of certain other divisions in Canada and Venezuela, and
    the sale of Grant Prideco&#146;s Texas Arai division in 2004 as
    discontinued operations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The information is only a summary. You should read it along with
    historical financial statements and related notes and the
    section titled &#147;Management&#146;s Discussion and Analysis
    of Financial Condition and Results of Operations&#148; contained
    in the Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for Grant Prideco for the year ended December&#160;31, 2007 on
    file with the Securities and Exchange Commission. See
    &#147;Where You Can Find More Information&#148;.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="51%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="18" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2006(1)(2)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2005(3)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2004(4)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2003(5)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="18" align="center" valign="bottom">
    <B>(In millions, except per share data)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Operation Data:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Revenue
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,908.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,530.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,089.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    767.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    628.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Operating Income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    580.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    470.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    233.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    121.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Income (Loss) from Continuing Operations
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    478.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    404.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    139.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    50.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (3.4
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    519.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    464.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    189.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    55.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Income (Loss) Per Share:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Income (Loss) from Continuing Operations:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Basic
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.73
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.41
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.03
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Diluted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.69
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.05
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.07
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.03
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net Income:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Basic
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.05
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.56
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.49
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.45
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.04
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 30pt">
    Diluted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.01
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.45
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.44
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.04
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Balance Sheet Data (At End of Period):</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total Assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,350.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,022.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,540.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,344.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,262.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Long-Term Debt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    176.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    237.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    217.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    377.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    426.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Stockholders&#146; Equity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,709.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,362.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    996.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    705.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    606.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    See discussion of other operating items related to 2007 and 2006
    in Note&#160;6 in Grant Prideco&#146;s consolidated financial
    statements for the year ended December&#160;31, 2007 that are
    incorporated by reference to Grant Prideco&#146;s annual report
    on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended December&#160;31, 2007.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes a license and royalty payment in 2006 of
    $20.0&#160;million that Grant Prideco received in exchange for
    the use of ReedHycalog&#146;s patented technology for the
    shallow leaching of PDC cutters (see Note&#160;5 in Grant
    Prideco&#146;s consolidated financial statements for the year
    ended December&#160;31, 2007 that are incorporated by reference
    to Grant Prideco&#146;s annual report on Form
    <FONT style="white-space: nowrap">10-K</FONT> for the
    year ended December&#160;31, 2007).</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes total refinancing charges of $57.1&#160;million in
    2005, which includes $35.4&#160;million related to replacing
    Grant Prideco&#146;s previous $190&#160;million credit facility
    with a new $350&#160;million credit facility, and an early
    redemption of Grant Prideco&#146;s $200&#160;million
    9<FONT style="vertical-align: text-top; font-size: 70%;">5</FONT>/<FONT style="font-size: 70%;">8</FONT>%&#160;Senior
    Notes due 2007 and $21.7&#160;million related to the repurchase
    of substantially all of Grant Prideco&#146;s 9%&#160;Senior
    Notes.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes $9.0&#160;million of charges in 2004, which include
    $3.8&#160;million related to the relocation of Grant
    Prideco&#146;s corporate offices, $2.0&#160;million due to lease
    termination, severance and other exit costs related to the
    Drilling Products rationalization program and $3.2&#160;million
    of severance costs related to the former Tubular Technology and
    Services organizational restructuring.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (5) </TD>
    <TD></TD>
    <TD valign="bottom">
    Includes $37.8&#160;million of charges in 2003, which includes
    $24.9&#160;million related to fixed asset write-downs,
    $6.4&#160;million related to inventory reserves for exited
    product lines, $6.4&#160;million related to asset impairments,
    $1.5&#160;million related to stock-based compensation expense
    offset by a benefit of $1.4&#160;million related to the
    settlement of a contingent liability.</TD>
</TR>

</TABLE>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    8
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Selected
    Unaudited Pro Forma Condensed Combined Financial and Other
    Data</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger will be accounted for under the purchase method of
    accounting, which means that the assets and liabilities of Grant
    Prideco will be recorded, as of the completion of the merger, at
    their fair values and added to those of National Oilwell Varco.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Presented below are selected unaudited pro forma condensed
    combined financial information that is intended to provide you
    with a better picture of what the businesses might have looked
    like had National Oilwell Varco actually owned Grant Prideco as
    of December&#160;31, 2007. The unaudited pro forma combined
    balance sheet combines the audited historical consolidated
    balance sheet of National Oilwell Varco with the Grant Prideco
    Unaudited Pro&#160;Forma Condensed Consolidated Balance Sheet
    (which adjusts Grant Prideco&#146;s historical consolidated
    balance sheet to reflect the pending disposition of certain
    Grant Prideco tubular business units as if it occurred on
    December&#160;31, 2007) and gives effect to the merger as if it
    also occurred on December&#160;31, 2007. The unaudited pro forma
    combined statement of operations combine the historical
    consolidated statement of income of National Oilwell Varco with
    the historical consolidated statement of operations of Grant
    Prideco for the year ended December&#160;31, 2007, giving effect
    to the merger as if it occurred on January&#160;1, 2007. The
    pending disposition is expected to close in the first half of
    2008 subject to customary closing conditions, including
    regulatory approval. However, there can be no assurance the
    pending disposition will be completed prior to the closing of
    the merger or at all. The selected unaudited pro forma condensed
    combined financial information does not reflect cost savings
    that may result from the merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should not rely on the selected unaudited pro forma
    condensed combined financial information as being indicative of
    the historical results that would have occurred had the
    companies been combined or the future results that may be
    achieved after the merger. The condensed combined financial
    information would have been different, perhaps materially, had
    the companies actually been combined during the period
    presented. The following selected unaudited pro forma combined
    financial information has been derived from, and should be read
    in conjunction with, the unaudited pro forma condensed combined
    financial statements and related notes included elsewhere in
    this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="84%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Year Ended<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>(In millions, except<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>per share data)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Statement of Operations Data:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Revenues
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,646.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Operating Profit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,433.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income from Continuing Operations
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,629.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income from Continuing Operations per Share:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Basic
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.97
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Diluted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.95
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="88%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>December&#160;31,<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>(In millions)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Balance Sheet Data (at end of period):</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cash and Cash Equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,000.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total Assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    19,437.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Long-term Debt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,408.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total Stockholders&#146; Equity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,860.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    9
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Ratio of
    Earnings to Fixed Charges</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The ratio of earnings to fixed charges for National Oilwell
    Varco for each of the periods indicated below is as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="67%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="19" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>For the Year Ended December&#160;31,</B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2006</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2005</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2004</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2003</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ratio of earnings to fixed charges
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    22.3x
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13.8x
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.8x
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.0x
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.6x
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These computations include us and our subsidiaries. For these
    ratios, &#147;earnings&#148; means:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the sum of: pre-tax income from continuing operations before
    adjustments for minority interests in consolidated subsidiaries
    or income or loss from equity investees; fixed charges;
    amortization of capitalized interest; distributed income of
    equity investees; and our share of pre-tax losses of equity
    investees for which charges arising from guarantees are included
    in fixed charges;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    less: interest capitalized; preference security dividend
    requirements of consolidated subsidiaries; and minority interest
    in pre-tax income of subsidiaries that have not incurred fixed
    charges.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The term &#147;fixed charges&#148; means the sum of the
    following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    interest expensed and capitalized;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    amortized premiums, discounts and capitalized expenses related
    to indebtedness;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    estimate of interest within rental expense;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    preference security dividend requirements of consolidated
    subsidiaries.
</TD>
</TR>

</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    10
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='104'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RISK
    FACTORS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>In addition to the other information included in this
    prospectus, including the matters addressed in &#147;Cautionary
    Statement Regarding Forward-Looking Statements&#148;, you should
    carefully consider the following risks before deciding whether
    to participate in the exchange offer and consent solicitation.
    In addition, you should read and consider the risks associated
    with each of the businesses of National Oilwell Varco and Grant
    Prideco because these risks will also affect the combined
    company. These risks can be found in National Oilwell
    Varco&#146;s and Grant Prideco&#146;s respective Annual Reports
    on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended December&#160;31, 2007, which reports are
    filed with the SEC and incorporated by reference into this
    prospectus.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to the Exchange Offer, the Consent Solicitation and the
    National Oilwell Varco Notes</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">You
    will have little protection under the terms of the National
    Oilwell Varco notes in the event of a highly leveraged
    transaction or change of control.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The National Oilwell Varco notes do not contain provisions that
    will afford you protection in the event of a highly leveraged
    transaction or change in control, including a takeover, other
    mergers, recapitalization or similar restructuring, a sale of
    substantially all of our assets or similar transactions. These
    types of transactions may adversely affect our financial and
    operating condition, our creditworthiness and the investment
    quality of our securities. Consequently, your investment in the
    National Oilwell Varco notes may be materially adversely
    affected.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">As a
    holding company, we will depend on our subsidiaries for funds to
    meet our payment obligations under the National Oilwell Varco
    notes.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The National Oilwell Varco notes are exclusively our obligations
    and not obligations of our subsidiaries. As a holding company,
    we conduct substantially all of our operations exclusively
    through our subsidiaries and our only significant assets are our
    investments in these subsidiaries. This means that we are
    dependent on dividends, other distributions, loans or other
    payments of funds from our subsidiaries to meet our debt service
    and other obligations, including our obligations relating to the
    National Oilwell Varco notes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our subsidiaries are separate and distinct legal entities and
    have no obligation to pay any amounts due under the National
    Oilwell Varco notes or to provide us with funds for our payment
    obligations, whether by dividends, distributions, loans or other
    payments. In addition, any payment of dividends, distributions,
    loans or advances by our subsidiaries to us could be subject to
    statutory or contractual restrictions. Payments to us by our
    subsidiaries will also be contingent upon our subsidiaries&#146;
    earnings and business considerations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The indenture governing the National Oilwell Varco notes,
    subject to certain restrictions, permits us to incur additional
    secured indebtedness and permits our subsidiaries to incur
    additional secured and unsecured indebtedness, all of which
    would in effect be senior to the National Oilwell Varco notes.
    The indenture also permits certain of our subsidiaries to pledge
    assets in order to secure our indebtedness and to agree with
    lenders under any secured indebtedness to restrictions or
    repurchase of the National Oilwell Varco notes and on the
    ability of those subsidiaries to make distributions, loans,
    other payments or asset transfers to us. As of December&#160;31,
    2007, our subsidiaries had approximately $5,390.7&#160;million
    of total balance sheet liabilities, whereas pro&#160;forma Grant
    Prideco had approximately $595.6&#160;million of total balance
    sheet liabilities, including the Grant Prideco notes for which
    we are making the exchange offer.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    National Oilwell Varco notes will be unsecured general
    obligations of National Oilwell Varco. As such, the National
    Oilwell Varco notes will be effectively junior to any secured
    debt we may have to the extent of the value of the security and
    to the existing and future debt and other liabilities of our
    subsidiaries.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The National Oilwell Varco notes will be unsecured debt and will
    rank equally in right of payment with all of our other existing
    and future unsubordinated debt. The National Oilwell Varco notes
    will be effectively junior to all our secured debt and to the
    debt and other liabilities of our subsidiaries, which, after
    giving effect to the merger, will include Grant Prideco and its
    subsidiaries. Because our subsidiaries are separate and distinct
    legal entities, our right to receive any assets of any of our
    subsidiaries upon their liquidation or reorganization, and
    therefore the right of the holders of the National Oilwell Varco
    notes to participate in those assets, will be effectively junior
    to the claims of that subsidiary&#146;s creditors, including
    trade creditors. In addition, even if we were a creditor of any
    of our
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    11
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    subsidiaries, our rights as a creditor would be junior to any
    security interest in the assets of our subsidiaries and any
    indebtedness of our subsidiaries senior to that held by us. As
    of December&#160;31, 2007, our subsidiaries had approximately
    $5,390.7&#160;million of total balance sheet liabilities,
    whereas pro&#160;forma Grant Prideco had approximately
    $595.6&#160;million of total balance sheet liabilities
    (including the Grant Prideco notes).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    proposed amendments to the Grant Prideco indenture will afford
    reduced protection to remaining holders of Grant Prideco
    notes.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the proposed amendments to the Grant Prideco indenture are
    adopted, the covenants and some other terms of the Grant Prideco
    notes will be materially less restrictive and will afford
    significantly reduced protection to holders of such securities
    compared to the covenants and other provisions currently
    contained in the Grant Prideco indenture. The proposed
    amendments to the Grant Prideco indenture would, among other
    things:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    eliminate the covenants requiring Grant Prideco to prepare and
    file separate periodic reports under the Exchange Act;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    eliminate the covenants requiring Grant Prideco to deliver
    compliance certificates;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    eliminate the covenants requiring Grant Prideco to pay all
    material taxes;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    eliminate the covenants prohibiting Grant Prideco and its
    subsidiaries from making certain restricted payments;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    eliminate the covenants prohibiting Grant Prideco and its
    subsidiaries from encumbering the ability of its subsidiaries to
    pay dividends and other payments or make loans or advances or
    transfer properties or assets to Grant Prideco or another
    subsidiary;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    eliminate the covenants prohibiting Grant Prideco and its
    subsidiaries from incurring certain indebtedness or issuing
    preferred stock;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    eliminate the covenants restricting Grant Prideco and its
    subsidiaries from engaging in certain transactions with
    affiliates;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    eliminate the covenants prohibiting Grant Prideco and its
    subsidiaries from incurring certain liens securing indebtedness;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    eliminate the covenants requiring newly acquired or created
    subsidiaries of Grant Prideco or its subsidiaries to become
    guarantors under the Grant Prideco indenture;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    eliminate the covenants prohibiting Grant Prideco and its
    subsidiaries from consummating certain asset sales;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    eliminate the covenants requiring Grant Prideco to make certain
    offers to purchase Grant Prideco notes in the event of a change
    of control;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    eliminate the covenants restricting Grant Prideco and its
    subsidiaries from engaging in certain businesses;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    eliminate the covenants prohibiting Grant Prideco and its
    subsidiaries from entering into certain sale and leaseback
    transactions;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    eliminate the covenants requiring Grant Prideco and its
    subsidiaries to pay equal consideration as an inducement to any
    consent, waiver or amendment of any terms of the Grant Prideco
    notes or the related indenture;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    eliminate the suspension of certain covenants if the Grant
    Prideco notes have an investment grade credit rating;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    eliminate certain requirements that must be met for Grant
    Prideco to consolidate, merge or sell all or substantially all
    of its assets;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    eliminate some of the events from the definition of an
    &#147;event of default&#148; under the Grant Prideco indenture.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    12
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the proposed amendments are adopted with respect to the Grant
    Prideco notes, each non-exchanging holder of Grant Prideco notes
    will be bound by the proposed amendments even if that holder did
    not consent to the proposed amendments. The elimination or
    modification of the covenants and other provisions in the Grant
    Prideco indenture contemplated by the proposed amendments would,
    among other things, permit National Oilwell Varco, Grant Prideco
    and their respective subsidiaries to take actions that could
    increase the credit risk with respect to Grant Prideco, and
    might adversely affect the liquidity, market price and price
    volatility of the Grant Prideco notes or otherwise be adverse to
    the interests of the holders of the Grant Prideco notes. See
    &#147;The Proposed Amendments&#148;.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    liquidity of the Grant Prideco notes that are not exchanged will
    be reduced.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The current trading market for the Grant Prideco notes is
    limited. The trading market for unexchanged Grant Prideco notes
    will become more limited and could cease to exist due to the
    reduction in the amount of the Grant Prideco notes outstanding
    upon consummation of the exchange offer. A more limited trading
    market might adversely affect the liquidity, market price and
    price volatility of these securities. If a market for
    unexchanged Grant Prideco notes exists or develops, these
    securities may trade at a discount to the price at which the
    securities would trade if the amount outstanding were not
    reduced, depending on prevailing interest rates, the market for
    similar securities and other factors. However, there can be no
    assurance that an active market in the unexchanged Grant Prideco
    notes will exist, develop or be maintained or as to the prices
    at which the unexchanged Grant Prideco notes may be traded.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Your
    ability to transfer the National Oilwell Varco notes may be
    limited by the absence of a trading market.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The National Oilwell Varco notes will be new securities for
    which currently there is no established trading market. We do
    not currently intend to apply for listing of the National
    Oilwell Varco notes on any securities exchange. We expect that
    the National Oilwell Varco notes will be eligible for trading on
    the OTC Bulletin&#160;Board; however, the liquidity of any
    market for the National Oilwell Varco notes will depend on the
    number of holders of the National Oilwell Varco notes, our
    performance, the market for similar securities, the interest of
    securities dealers in making a market for the National Oilwell
    Varco notes, prevailing interest rates and other factors.
    Accordingly, we can provide no assurance as to the development
    or liquidity of any market for the National Oilwell Varco notes.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    exchange offer and consent solicitation may be cancelled or
    delayed.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are not obligated to complete the exchange offer and consent
    solicitation unless and until we receive valid and unrevoked
    tenders and consents representing a majority in aggregate
    principal amount of the Grant Prideco notes outstanding under
    the Grant Prideco indenture. If the merger agreement is
    terminated for any reason, National Oilwell Varco intends
    promptly to terminate the exchange offer and the consent
    solicitation. Even if the exchange offer and consent
    solicitation is completed, it may not be completed on the
    schedule described in this prospectus. Accordingly, holders
    participating in the exchange offer and consent solicitation may
    have to wait longer than expected to receive their National
    Oilwell Varco notes and cash exchange consideration, if any,
    during which time those holders of Grant Prideco notes will not
    be able to effect transfers of their Grant Prideco notes
    tendered for exchange.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to the Merger and the Related Transactions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    not be able to successfully integrate the operations of the two
    companies and realize the anticipated benefits of the
    merger.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Achieving the benefits we expect from the merger will depend in
    large part on integrating our technology, operations and
    personnel in a timely and efficient manner to minimize the
    impact on customers, employees and management. Integration of
    the two previously independent companies will be a complex, time
    consuming and costly process. Failure to timely and successfully
    integrate these companies may have a material adverse effect on
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    13
</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    the combined company&#146;s business, financial condition and
    results of operations. The difficulties of combining the
    companies will present challenges to the combined company&#146;s
    management, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    operating a significantly larger combined company with
    operations in more geographic areas and with more business lines;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    integrating personnel with diverse backgrounds and
    organizational cultures;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    coordinating sales and marketing functions;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    retaining key employees, customers or suppliers;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    preserving the research and development, collaboration,
    distribution, marketing, promotion and other important
    relationships of National Oilwell Varco and Grant Prideco;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    integrating the internal controls and procedures that National
    Oilwell Varco will be required to maintain under the
    Sarbanes-Oxley Act of 2002;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    consolidating other corporate and administrative functions.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The combined company will also be exposed to other risks that
    are commonly associated with transactions similar to the merger,
    such as unanticipated liabilities and costs, some of which may
    be material, and diversion of management&#146;s attention. As a
    result, we cannot assure you that we will realize any of the
    anticipated benefits of the merger, including anticipated cost
    savings, and failure to do so could adversely affect the
    business of the combined company after the merger.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    costs of the merger could adversely affect combined financial
    results.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect the total merger-related costs, including executive
    severance but exclusive of other employee benefit costs, to be
    approximately $110&#160;million, consisting primarily of
    executive severance, financial advisory, legal and accounting
    fees, financial printing costs and other related charges. The
    amount of these expenses is a preliminary estimate and is
    subject to change. In addition, the combined company will incur
    certain integration costs, including, but not limited to, costs
    associated with consolidating administrative and operational
    functions and the closure of certain facilities. If the benefits
    of the merger do not exceed the costs associated with the
    merger, including any dilution to the stockholders of both
    companies resulting from the issuance of shares in connection
    with the merger, the combined company&#146;s financial results,
    including earnings per share, could be adversely affected.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Whether
    or not the merger is completed, the pendency of the transaction
    could cause disruptions in the businesses of National Oilwell
    Varco and Grant Prideco, which could have an adverse effect on
    their businesses and financial results.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In response to the announcement of the merger, National Oilwell
    Varco&#146;s or Grant Prideco&#146;s customers may delay or
    defer purchasing decisions. Any delay or deferral of purchasing
    decisions by customers could negatively affect the business and
    results of operations of National Oilwell Varco and Grant
    Prideco, regardless of whether the merger is ultimately
    completed. Similarly, current and prospective employees of
    National Oilwell Varco and Grant Prideco may experience
    uncertainty about their future roles with the companies until
    after the merger is completed or if the merger is not completed.
    This may adversely affect the ability of National Oilwell Varco
    and Grant Prideco to attract and retain key management,
    marketing and technical personnel. In addition, the diversion of
    the attention of the companies&#146; respective management teams
    away from the day-to-day operations during the pendency of the
    transaction could have an adverse effect on the financial
    condition and operating results of either company.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">National
    Oilwell Varco and Grant Prideco could be required to divest,
    hold separate or license assets to complete the
    merger.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We cannot complete the merger until the waiting period under the
    <FONT style="white-space: nowrap">Hart-Scott-Rodino</FONT>
    Antitrust Improvements Act of 1976 or any other applicable
    waiting period has expired or is otherwise terminated. On
    February&#160;6, 2008, National Oilwell Varco and Grant Prideco
    refiled antitrust documents relating to the merger with the FTC
    and the
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    14
</DIV><!-- END PAGE WIDTH -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    DOJ. On March&#160;6, 2008, the parties received early
    termination of the waiting period from the FTC and the DOJ.
    National Oilwell Varco and Grant Prideco have also made, or are
    in the process of making, the required filings relating to the
    merger with various government authorities in a number of
    foreign jurisdictions in which one or both companies have
    sufficient market presence to require filings. We continue to
    work with these various governmental agencies to obtain
    regulatory clearance to complete the merger. As a prerequisite
    to obtaining the expiration or termination of this waiting
    period, or to avoid an injunction by a governmental entity,
    whether foreign or domestic, National Oilwell Varco, Grant
    Prideco or both companies may be required to divest, hold
    separate or license certain assets. Although each of National
    Oilwell Varco and Grant Prideco have agreed to use their
    reasonable best efforts to obtain the expiration or termination
    of this waiting period and to obtain any other governmental
    clearance or approvals under federal, state or foreign antitrust
    laws, neither National Oilwell Varco nor Grant Prideco is
    required to divest, hold separate or license any of their
    respective businesses, product lines or assets, take or agree to
    take any other action or agree to any limitation, that would
    reasonably be expected to have a material adverse effect on the
    financial condition, results of operations or prospects of
    National Oilwell Varco or Grant Prideco or that is not
    conditioned upon completion of the merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Divestitures or licensing of assets can be time consuming and
    may delay or prevent completion of the proposed merger. Because
    there may be a limited number of potential buyers or licensees
    for the assets subject to divestiture or license and because
    potential buyers will likely be aware of the circumstances of
    the sale or license, these assets could be sold or licensed at
    prices or rates lower than their fair market values or the
    prices National Oilwell Varco or Grant Prideco paid for these
    assets. Asset divestitures or licenses of National Oilwell
    Varco&#146;s or Grant Prideco&#146;s assets could also
    significantly reduce the value of the combined company,
    eliminate potential cost savings opportunities or lessen the
    anticipated benefits of the merger.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If
    National Oilwell Varco or Grant Prideco fails to obtain all
    required consents and waivers, third parties may terminate or
    alter existing contracts.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain agreements with suppliers, customers, licensors or other
    business partners may require National Oilwell Varco or Grant
    Prideco to obtain the approval or waiver of these other parties
    in connection with the merger. National Oilwell Varco and Grant
    Prideco have agreed to use reasonable efforts to secure the
    necessary approvals and waivers. However, we cannot assure you
    that National Oilwell Varco
    <FONT style="white-space: nowrap">and/or</FONT> Grant
    Prideco will be able to obtain all of the necessary approvals
    and waivers, and failure to do so could have a material adverse
    effect on the business of the combined company after the merger.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Certain
    litigation against Grant Prideco, its directors and National
    Oilwell Varco has been instituted. This litigation could delay
    or prevent the merger. Similar litigation could also be
    instituted in the future.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of the date of this prospectus, National Oilwell Varco and
    Grant Prideco are aware of five lawsuits that have been filed in
    connection with the proposed merger. All five cases were filed
    in the district court of Harris County, Texas.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The plaintiffs in these lawsuits are stockholders of Grant
    Prideco. They allege, among other things, breaches of fiduciary
    duties of the directors of Grant Prideco owed to the
    stockholders of Grant Prideco in connection with the proposed
    merger. In one of the complaints, the plaintiffs also allege
    aiding and abetting by National Oilwell Varco of the alleged
    breaches. The plaintiffs seek to enjoin the merger and ask for
    other legal and equitable relief. National Oilwell Varco and
    Grant Prideco believe that these lawsuits are without merit and
    intend to defend against them. This litigation could, however,
    delay or prevent the proposed merger. It is also possible that
    additional suits seeking to enjoin the proposed merger could be
    filed. Any such suit could delay or prevent the proposed merger.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to the Combined Company&#146;s Business</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">National
    Oilwell Varco and Grant Prideco are dependent upon the oil and
    gas industry, which may be volatile.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The oil and gas industry in which National Oilwell Varco and
    Grant Prideco participate historically has experienced
    significant volatility. Demand for our services and products
    depends primarily upon the number of oil rigs in operation, the
    number of oil and gas wells being drilled, the depth and
    drilling conditions of these wells, the
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    15
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    volume of production, the number of well completions, capital
    expenditures of other oilfield service companies and the level
    of workover activity. Drilling and workover activity can
    fluctuate significantly in a short period of time, particularly
    in the United States and Canada. The willingness of oil and gas
    operators to make capital expenditures to explore for and
    produce oil and natural gas and the willingness of oilfield
    service companies to invest in capital equipment will continue
    to be influenced by numerous factors over which we have no
    control, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability of the members of the Organization of Petroleum
    Exporting Countries, or OPEC, to maintain price stability
    through voluntary production limits, the level of production by
    non-OPEC countries and worldwide demand for oil and gas;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    level of production from known reserves;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    cost of exploring for and producing oil and gas;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    level of drilling activity:
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    worldwide economic activity;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    national government political requirements;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    development of alternate energy sources;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    environmental regulations.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If there is a significant reduction in demand for drilling
    services, in cash flows of drilling contractors, well servicing
    companies or production companies or in drilling or well
    servicing rig utilization rates, then demand for the products
    and services of the combined company after the merger will
    decline, and could lead to cancellations of orders placed with
    the combined company and a reduction of its backlog.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Volatile
    oil and gas prices affect demand for our products.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Oil and gas prices have been volatile since 1990. In general,
    oil prices approximated $18-22 per barrel from 1991 through
    1997, experienced a decline into the low teens in 1998 and 1999,
    and have generally ranged between $25-100 per barrel since 2000.
    Spot gas prices generally ranged between $1.80-2.60 per mmbtu of
    gas from 1991 through 1999, then experienced severe spikes into
    the $10 range in 2001 and 2003. Absent occasional spikes and
    dips due to imbalances in supply and demand, prices have
    generally ranged between $5.00-10.00 per mmbtu during the last
    two years.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Expectations for future oil and gas prices cause many shifts in
    the strategies and expenditure levels of oil and gas companies
    and drilling contractors, particularly with respect to decisions
    to purchase major capital equipment of the type we manufacture.
    Oil and gas prices, which are determined by the marketplace, may
    fall below a range that is acceptable to our customers, which
    could reduce demand for our products.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Competition
    in our industry could ultimately lead to lower revenues and
    earnings.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The oilfield products and services industry is highly
    competitive. National Oilwell Varco and Grant Prideco both
    compete with regional, national and foreign competitors in each
    of their current major product lines. These competitors may have
    greater financial, technical, manufacturing and marketing
    resources than National Oilwell Varco or Grant Prideco, even on
    a combined basis, and may be in a better competitive position.
    The following competitive actions can each affect our revenues
    and earnings:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    price changes;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    new product and technology introductions;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    improvements in availability and delivery.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, certain foreign jurisdictions and government-owned
    petroleum companies located in some of the countries in which
    National Oilwell Varco and Grant Prideco operate have adopted
    policies or regulations that may give local nationals in these
    countries competitive advantages over National Oilwell Varco and
    Grant Prideco and that could impact the operations of the
    combined company after the merger.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    16
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We cannot assure you that the competitive environment in which
    National Oilwell Varco and Grant Prideco operate will not have
    an adverse effect on the combined company after the merger.
    Competition in our industry could lead to lower revenues and
    earnings.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Increases
    in the prices of our raw materials could affect our results of
    operations.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The combined company of National Oilwell Varco and Grant Prideco
    is likely to use large amounts of steel and alloy tubulars and
    bars in the manufacturing of its drilling products. The price of
    steel and these alloy raw materials has a significant impact on
    the cost of production. If the combined company is unable to
    pass future raw material price increases on to customers, its
    margins and results of operations, stockholders&#146; equity,
    cash flows and financial condition could be adversely affected.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Steel and alloy prices have increased significantly during the
    past several years, caused primarily by significant increases in
    the prices paid by suppliers for scrap and coke and alloys
    utilized in their operations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, rising alloy and steel costs also have the
    potential to delay increases in demand for Grant Prideco&#146;s
    drill stem components. As drill stem products are not
    consumables, Grant Prideco&#146;s customers could elect to defer
    purchases until such time as they determine that steel prices
    have stabilized or returned to more normalized conditions. Grant
    Prideco&#146;s forward-looking statements do not assume that
    there will be any reduced demand for drill stem products as a
    result of increased prices caused by the current shortages being
    experienced in the worldwide steel and alloy markets. Reduced
    demand could adversely affect the results of operations,
    stockholders&#146; equity, cash flows and financial condition of
    the combined company.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Interruptions
    in the supply of raw materials could materially adversely affect
    our results of operations.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The combined company of National Oilwell Varco and Grant Prideco
    will rely on various suppliers to supply the components utilized
    to manufacture drilling products. The availability of the raw
    materials is not only a function of the availability of steel,
    but also the alloy materials utilized by suppliers in
    manufacturing component parts that meet the combined
    company&#146;s proprietary requirements. If material disruptions
    to the availability of raw materials occurs, it could adversely
    affect the results of operations, stockholders&#146; equity,
    cash flows and financial condition of the combined company, as
    well as its ability to increase manufacturing operations to help
    meet its revenue targets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In this regard, Grant Prideco is party to a green-tube supply
    agreement with voestalpine Tubulars GmbH&#160;&#038; Co. KG, or
    VAT, a company in which Grant Prideco beneficially owns a 50.01%
    interest, the term of which expires March&#160;31, 2009. If the
    combined company is unsuccessful in renewing this agreement with
    VAT in the future, the pricing terms of the existing agreement
    result in a material increase in the combined company&#146;s
    green-tube costs or the combined company or VAT fail to perform
    under the terms of the contract, it could have an adverse affect
    on the company&#146;s results of operations, stockholders&#146;
    equity, cash flows and financial condition and the
    company&#146;s ability to increase its manufacturing operations
    to meet the increased revenues upon which its forward-looking
    statements are based.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">National
    Oilwell Varco and Grant Prideco have each aggressively expanded
    their businesses, and the combined company intends to maintain
    an aggressive growth strategy after the merger.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco and Grant Prideco have aggressively
    expanded and grown their businesses during the past several
    years, primarily through acquisitions. We anticipate that
    National Oilwell Varco will continue to pursue an aggressive
    growth strategy following the merger; however, we cannot assure
    you that attractive acquisitions will be available after the
    merger, at reasonable prices or at all. In addition, we cannot
    assure you that we will successfully integrate the operations
    and assets of any acquired business with our own or that our
    management will be able to manage effectively the increased size
    of the combined company or operate any new lines of business.
    Any inability on the part of management to integrate and manage
    acquired businesses and their assumed liabilities could
    adversely affect our business and financial performance. In
    addition, after the merger, we may need to incur substantial
    indebtedness to finance future acquisitions. We cannot assure
    you that we will be able to obtain this financing on terms
    acceptable to us or at all. Future acquisitions may result in
    increased depreciation and amortization expense, increased
    interest expense, increased financial leverage or decreased
    operating income for the combined company, any of which could
    cause our business to suffer.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    17
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Both
    National Oilwell Varco&#146;s and Grant Prideco&#146;s operating
    results have fluctuated during recent years and these
    fluctuations may continue for the combined company after the
    merger.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Both National Oilwell Varco and Grant Prideco have experienced
    in the past, and the combined company may experience in the
    future, fluctuations in quarterly operating results. We cannot
    assure you that the combined company will realize expected
    earnings growth or that earnings in any particular quarter will
    not fall short of either a prior fiscal quarter or
    investors&#146; expectations. The following factors, in addition
    to others not listed, may affect the combined company&#146;s
    quarterly operating results in the future:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fluctuations in the oil and gas industry;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    competition;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability to effectively and efficiently integrate the
    operations and businesses of National Oilwell Varco and Grant
    Prideco;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability to service the debt obligations of the combined
    company;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability to identify strategic acquisitions at reasonable
    prices;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability to manage and control operating costs of the
    combined company;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    fluctuations in political and economic conditions in the United
    States and abroad;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability to protect National Oilwell Varco&#146;s and Grant
    Prideco&#146;s intellectual property rights.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">In
    connection with their business operations, National Oilwell
    Varco and Grant Prideco could be subject to substantial
    liability claims that adversely affect their results of
    operations.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Both National Oilwell Varco and Grant Prideco manufacture
    complex products and equipment and the failure of these products
    and equipment to operate properly or to meet specifications may
    greatly increase customers&#146; costs of drilling a well. In
    addition, many of these products are used in hazardous drilling
    and production applications where an accident or product failure
    can cause personal injury or loss of life, damage to property,
    equipment or the environment, regulatory investigations and
    penalties, and the suspension of the end-user&#146;s operations.
    If National Oilwell Varco&#146;s or Grant Prideco&#146;s
    products or services fail to meet specifications or are involved
    in accidents or failures, the combined company could face
    warranty, contract or other litigation claims for which we may
    be held responsible and our reputation for providing quality
    products may suffer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The insurance carried by National Oilwell Varco and Grant
    Prideco may not be adequate in risk coverage or policy limits to
    cover all losses or liabilities that we may incur or for which
    we may be responsible. Moreover, in the future we may not be
    able to maintain insurance at levels of risk coverage or policy
    limits that we deem adequate or at premiums that are reasonable
    for us, particularly in the recent environment of significant
    insurance premium increases. Further, any claims made under our
    policies will likely cause our premiums to increase.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any future damages deemed to be caused by the products or
    services of National Oilwell Varco or Grant Prideco that are
    assessed against us and that are not covered by insurance, or
    that are in excess of policy limits or subject to substantial
    deductibles, could have a material adverse effect on our results
    of operations and financial condition. Litigation and claims for
    which we are not insured can occur, including employee claims,
    intellectual property claims, breach of contract claims and
    warranty claims. Any forward-looking statements of National
    Oilwell Varco and Grant Prideco assume that such uninsured
    claims or issues will not occur. If the combined company
    accounts for warranty reserves on a specific identification
    basis, a significant unexpected warranty issue during a
    particular quarter or year could cause a material reduction in
    the results of operations, stockholders&#146; equity, cash flows
    and financial condition of the combined company in the quarter
    or year in which the reserve for such warranty is made.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    18
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    results of operations for National Oilwell Varco or Grant
    Prideco could be adversely affected by actions under U.S. trade
    laws and new foreign entrants into U.S. markets.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although National Oilwell Varco and Grant Prideco are
    <FONT style="white-space: nowrap">U.S.-based</FONT>
    manufacturing companies, each owns and operates international
    manufacturing operations that support the
    <FONT style="white-space: nowrap">U.S.-based</FONT>
    businesses. If actions under U.S.&#160;trade laws were
    instituted that limited access to these products, the combined
    company&#146;s ability to meet customer specifications and
    delivery requirements would be reduced. Any adverse effects on
    the ability to import products from foreign subsidiaries could
    have a material adverse effect on the results of operations,
    stockholders&#146; equity, cash flows and financial condition of
    the combined company.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">There
    are risks associated with National Oilwell Varco and Grant
    Prideco&#146;s presence in international markets, including
    political or economic instability and currency
    restrictions.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Approximately 59% of National Oilwell Varco&#146;s revenues and
    42% of Grant Prideco&#146;s revenues in 2007 were derived from
    operations outside the United States (based on revenue
    recognition for National Oilwell Varco and based on origination
    for Grant Prideco). National Oilwell Varco&#146;s foreign
    operations include significant operations in Canada, Europe, the
    Middle East, Africa, Southeast Asia, South&#160;America and
    other international markets. Grant Prideco has significant
    foreign operations in Europe, Canada, Latin America, Southeast
    Asia and other international markets. Both companies&#146;
    revenues and operations are subject to the risks normally
    associated with conducting business in foreign countries,
    including uncertain political and economic environments, which
    may limit or disrupt markets, restrict the movement of funds or
    result in the deprivation of contract rights or the taking of
    property without fair compensation. Government-owned petroleum
    companies located in some of the countries in which National
    Oilwell Varco or Grant Prideco operates have adopted policies,
    or are subject to governmental policies, giving preference to
    the purchase of goods and services from companies that are
    majority-owned by local nationals. As a result of these
    policies, National Oilwell Varco and Grant Prideco rely on joint
    ventures, license arrangements and other business combinations
    with local nationals in these countries. In addition, political
    considerations may disrupt the commercial relationships between
    National Oilwell Varco and Grant Prideco and government-owned
    petroleum companies.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under broad powers granted to the President of Venezuela by the
    National Assembly on January&#160;31, 2007, the Venezuelan
    government began asserting closer government control over its
    oil and gas reserves. National Oilwell Varco generated revenue
    of $69.6&#160;million from its Venezuelan operations in 2007,
    and as of December&#160;31, 2007 had a net equity investment in
    Venezuela of $53.7&#160;million. These political events could
    adversely affect the combined company&#146;s operations in
    Venezuela and financial results in the future.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    results of our operations are subject to market risk from
    changes in foreign currency exchange rates.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco and Grant Prideco earn revenues, pay
    expenses and incur liabilities in countries using currencies
    other than the U.S.&#160;dollar, including the Canadian dollar,
    the Euro, the British Pound and the Norwegian Kroner.
    Approximately 59% of National Oilwell Varco&#146;s 2007 revenue
    and 42% of Grant Prideco&#146;s 2007 revenue was derived from
    sales outside the United States. Because our consolidated
    financial statements are presented in U.S.&#160;dollars, we must
    translate revenues, income and expenses into U.S.&#160;dollars
    at exchange rates in effect during or at the end of each
    reporting period. Thus, increases or decreases in the value of
    the U.S.&#160;dollar against other currencies in which our
    operations are conducted will affect our revenues and operating
    income. Because of the geographic diversity of our operations,
    weaknesses in some currencies might be offset by strengths in
    others over time. We also use derivative financial instruments
    to further reduce our net exposure to currency exchange
    fluctuations. National Oilwell Varco had forward contracts with
    a notional amount of $4,104.1&#160;million (with a fair value of
    $103.0&#160;million) as of December&#160;31, 2007 to reduce the
    impact of foreign currency exchange rate movements, but is also
    subject to risks that the counterparties to these contracts fail
    to meet the terms of National Oilwell Varco&#146;s foreign
    currency contracts. We cannot assure you that fluctuations in
    foreign currency exchange rates would not affect our financial
    results.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    19
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">An
    impairment of goodwill or indefinite-lived intangibles could
    reduce the combined company&#146;s earnings.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco had recorded approximately
    $2,445.1&#160;million of goodwill on its consolidated balance
    sheet as of December&#160;31, 2007. National Oilwell Varco
    currently expects to record approximately $2,670.7&#160;million
    of goodwill and $752.0&#160;million for the Reed Hycalog and
    Grant Prideco tradenames which are considered indefinite lived
    upon completion of the merger, but that estimate is subject to
    change based upon the final number of shares of common stock of
    National Oilwell Varco issued at the time of closing of the
    merger and the final valuation of the identified assets and
    liabilities of Grant Prideco. Consequently, following the
    merger, we expect that approximately $5,867.8&#160;million,
    representing approximately 30.2% of the combined company&#146;s
    consolidated assets on a pro forma as adjusted basis, may be
    recorded as goodwill and indefinite-lived intangibles. Goodwill
    is recorded when the purchase price of a business exceeds the
    fair market value of the tangible and separately measurable
    intangible net assets. Generally accepted accounting principles
    will require the combined company to test goodwill and
    indefinite-lived intangibles for impairment on an annual basis
    or when events or circumstances occur indicating that an
    impairment might exist. If the combined company were to
    determine that any of its remaining balance of goodwill or
    indefinite-lived tradenames were impaired, it would record an
    immediate charge to earnings with a corresponding reduction in
    stockholders&#146; equity and increase in balance sheet leverage
    as measured by debt to total capitalization.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    could be adversely affected if we fail to comply with any of the
    numerous federal, state and local laws, regulations and policies
    that govern environmental protection, zoning and other matters
    applicable to our businesses.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The businesses of National Oilwell Varco and Grant Prideco are
    subject to numerous federal, state and local laws, regulations
    and policies governing environmental protection, zoning and
    other matters. These laws and regulations have changed
    frequently in the past and it is reasonable to expect additional
    changes in the future. If existing regulatory requirements
    change, we may be required to make significant unanticipated
    capital and operating expenditures. We cannot assure you that
    our operations will continue to comply with future laws and
    regulations. Governmental authorities may seek to impose fines
    and penalties on us or to revoke or deny the issuance or renewal
    of operating permits for failure to comply with applicable laws
    and regulations. Under these circumstances, we might be required
    to reduce or cease operations or conduct site remediation or
    other corrective action which could adversely impact our
    operations and financial condition.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    businesses expose us to potential environmental
    liability.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our businesses expose us to the risk that harmful substances may
    escape into the environment, which could result in:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    personal injury or loss of life;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    severe damage to or destruction of property;&#160;or
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    environmental damage and suspension of operations.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our current and past activities, as well as the activities of
    our former divisions and subsidiaries, could result in our
    facing substantial environmental, regulatory and other
    liabilities. These could include the costs of cleanup of
    contaminated sites and site closure obligations. These
    liabilities could also be imposed on the basis of one or more of
    the following theories:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    negligence;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    strict liability;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    breach of contract with customers;&#160;or
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    as a result of our contractual agreement to indemnify our
    customers in the normal course of our business, which is
    normally the case.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    20
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    not have adequate insurance for potential environmental
    liabilities.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    While National Oilwell Varco and Grant Prideco maintain
    liability insurance, this insurance is subject to coverage
    limits. In addition, certain policies do not provide coverage
    for damages resulting from environmental contamination. We face
    the following risks with respect to our insurance coverage:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we may not be able to continue to obtain insurance on
    commercially reasonable terms;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we may be faced with types of liabilities that will not be
    covered by our insurance;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our insurance carriers may not be able to meet their obligations
    under the policies;&#160;or
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the dollar amount of any liabilities may exceed our policy
    limits.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Even a partially uninsured claim, if successful and of
    significant size, could have a material adverse effect on our
    consolidated financial statements.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">There
    are risks associated with certain contracts for our drilling
    equipment.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of December&#160;31, 2007, National Oilwell Varco had a
    backlog of approximately $9&#160;billion of drilling equipment
    to be manufactured, assembled, tested and delivered by its Rig
    Technology group. The following factors, in addition to others
    not listed, could reduce our margins on these contracts,
    adversely affect our position in the market and subject us to
    contractual penalties:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our failure to adequately estimate costs for making this
    drilling equipment;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our inability to deliver equipment that meets contracted
    technical requirements;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our inability to maintain our quality standards during the
    design and manufacturing process;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our inability to secure parts made by third party vendors at
    reasonable costs and within required timeframes;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    unexpected increases in the costs of raw materials;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our inability to manage unexpected delays due to weather,
    shipyard access, labor shortages or other factors beyond our
    control.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Such developments could have a material adverse effect on our
    consolidated financial statements.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    21
</DIV><!-- END PAGE WIDTH -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='105'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">USE OF
    PROCEEDS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will not receive any cash proceeds from the issuance of the
    National Oilwell Varco notes in connection with the exchange
    offer. In exchange for issuing the National Oilwell Varco notes
    and paying the cash exchange consideration (as applicable), we
    will receive Grant Prideco notes in an aggregate principal
    amount equal to (i)&#160;the aggregate principal amount of such
    National Oilwell Varco notes plus (ii)&#160;the aggregate amount
    of such cash exchange consideration. The Grant Prideco notes
    surrendered in connection with the exchange offer will be
    retired and cancelled and will not be reissued.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    22
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='106'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">THE
    COMPANIES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">National
    Oilwell Varco&#146;s Business</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>This section summarizes information from National Oilwell
    Varco&#146;s Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended December&#160;31, 2007. For a more detailed
    discussion of National Oilwell Varco&#146;s business, please
    read National Oilwell Varco&#146;s Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended December&#160;31, 2007 and its other filings
    incorporated into this prospectus by reference.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Business
    Segments</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco&#146;s business has three reportable
    operating segments:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Rig Technology;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Petroleum Services&#160;&#038; Supplies;&#160;and
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Distribution Services.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Rig
    Technology</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco&#146;s Rig Technology segment designs,
    manufactures, sells and services complete systems for the
    drilling, completion, and servicing of oil and gas wells. The
    segment offers a comprehensive line of highly-engineered
    equipment that automates complex well construction and
    management operations, such as offshore and onshore drilling
    rigs; derricks; pipe lifting, racking, rotating and assembly
    systems; coiled tubing equipment and pressure pumping units;
    well workover rigs; wireline winches; and cranes. Demand for Rig
    Technology products is primarily dependent on capital spending
    plans by drilling contractors, oilfield service companies, and
    oil and gas companies, and secondarily on the overall level of
    oilfield drilling activity, which drives demand for spare parts
    for the segment&#146;s large installed base of equipment.
    National Oilwell Varco has made strategic acquisitions and other
    investments during the past several years in an effort to expand
    its product offering and its global manufacturing capabilities,
    including adding additional operations in the United States,
    Canada, Norway, the United Kingdom, China, India and Belarus.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Petroleum
    Services&#160;&#038; Supplies</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco&#146;s Petroleum Services&#160;&#038;
    Supplies segment provides a variety of consumable goods and
    services used to drill, complete, remediate and workover oil and
    gas wells and service pipelines, flowlines and other oilfield
    tubular goods. The segment manufactures, rents and sells a
    variety of products and equipment used to perform drilling
    operations, including transfer pumps, solids control systems,
    drilling motors and other downhole tools, rig instrumentation
    systems, and mud pump consumables. Demand for these services and
    supplies is determined principally by the level of oilfield
    drilling and workover activity by drilling contractors, major
    and independent oil and gas companies, and national oil
    companies. Oilfield tubular services include the provision of
    inspection and internal coating services and equipment for
    drillpipe, linepipe, tubing, casing and pipelines; and the
    design, manufacture and sale of coiled tubing pipe and advanced
    composite pipe for application in highly corrosive environments.
    The segment sells its tubular goods and services to oil and gas
    companies; drilling contractors; pipe distributors, processors
    and manufacturers; and pipeline operators. This segment has
    benefited from several strategic acquisitions and other
    investments completed during the past few years, including
    adding additional operations in the United States, Canada, the
    United Kingdom, China, the United Arab Emirates, Kazakhstan,
    Mexico, Russia, Argentina, India, Bolivia, the Netherlands,
    Singapore, Malaysia and Vietnam.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Distribution
    Services</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco&#146;s Distribution Services segment
    provides maintenance, repair and operating supplies and spare
    parts to drill site and production locations worldwide. In
    addition to its comprehensive network of field locations
    supporting land drilling operations throughout North America,
    the segment supports major offshore drilling contractors through
    locations in Mexico, the Middle East, Europe, Southeast Asia and
    South America. Using its advanced information technology
    platforms and processes, the Distribution Services segment can
    provide
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    23
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    complete procurement, inventory management, and logistics
    services to its customers. Demand for the segment&#146;s
    services are determined primarily by the level of drilling,
    servicing and oil and gas production activities.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Grant
    Prideco&#146;s Business</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>This section summarizes information from Grant Prideco&#146;s
    Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended December&#160;31, 2007. For a more detailed
    discussion of Grant Prideco&#146;s business, please read Grant
    Prideco&#146;s Annual Report on
    <FONT style="white-space: nowrap">Form&#160;10-K</FONT>
    for the year ended December&#160;31, 2007 and its other filings
    incorporated into this prospectus by reference.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Business
    Segments</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco&#146;s business activities are segregated into
    four distinct segments:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Drilling Products and Services;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    ReedHycalog;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Other (which includes results of IntelliServ, Inc. and XL
    Systems);&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Corporate
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For information relating to revenues from external customers,
    operating income and total assets of each segment, please read
    the financial statements incorporated by reference into this
    prospectus.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Drilling
    Products and Services</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco&#146;s Drilling Products and Services segment
    manufactures and sells a variety of drill stem products used for
    the drilling of oil and gas wells. The principal products sold
    by this segment are: (1)&#160;drill pipe products,
    (2)&#160;drill collars and heavyweight drill pipe and
    (3)&#160;drill stem accessories. Demand for the segment&#146;s
    drill stem products is impacted primarily by changes in drilling
    activity and worldwide rig activity, but also by the level of
    inventory held by customers and their perceptions as to future
    activity and the near-term need for new drill stem products.
    With the increased complexity of drilling activity, demand for
    the segment&#146;s proprietary line of
    eXtreme<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    drilling and other premium drilling products has remained
    strong. The segment&#146;s premium drilling products are
    specifically designed for extreme drilling conditions such as
    extended reach, directional, horizontal, deep gas, offshore and
    ultra-deepwater drilling, as well as high-temperature,
    high-pressure and corrosive well conditions. The segment&#146;s
    drill stem products are sold to a variety of customers,
    including oil and gas drilling contractors, rental tool
    companies and major, independent and state-owned oil and gas
    companies. The principal competitors for our drill stem products
    include Smith International Inc., Texas Steel Conversion,
    Vallourec and Mannesmann and various smaller local manufacturers
    in the U.S.&#160;and worldwide.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">ReedHycalog</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco&#146;s ReedHycalog segment is a leading global
    designer, manufacturer and distributor of drill bits,
    hole-opening or hole enlarging tools, coring services and other
    related technology to the oil and gas industry. This segment
    services its customer base through a technical sales and
    marketing network in virtually every significant oil and
    gas-producing region in the world. All of the products and
    services are generally sold directly to the upstream oil and gas
    operators and, to a lesser extent, drilling contractors on
    turnkey and footage contracts. Competition is based on technical
    performance, price and service. ReedHycalog manufactures and
    sells both fixed-cutter bits and roller-cone bits on a global
    basis. The primary market driver for these bits is worldwide
    drilling activity or, more specifically, total footage drilled,
    as well as a function of well depth and complexity; demand for
    fixed-cutter bits is tied more strongly to offshore, directional
    or horizontal drilling. This segment provides a complete series
    of drill bits incorporating advanced materials technology and a
    range of performance-enhancing features. In addition, the
    segment provides drill bit selection, well-planning services and
    vibration monitoring and control through its field sales and
    engineering organization. Grant Prideco&#146;s principal
    competitors are Hughes Christensen (a division of Baker Hughes
    Inc.), Smith Bits (a division of Smith International Inc.), and
    Security DBS (a division of Halliburton Company) as well as
    numerous smaller competitors throughout the world.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    24
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Other
    Segment</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco&#146;s Other segment primarily includes the
    operations of IntelliServ, Inc. (Intelliserv) and XL Systems. In
    September 2005, Grant Prideco acquired full ownership of
    IntelliServ, a company focused on the provision of well-site
    data transmission services. IntelliServ&#146;s core product,
    &#147;The
    IntelliServ<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>
    Network&#148;, was commercialized in 2006 and incorporates
    various proprietary mechanical and electrical components into
    its premium drilling tubulars to allow bi-directional data
    transfer via the drill string. This network functions at speeds
    several orders of magnitude higher than current mud pulse and
    electromagnetic transmission systems and will potentially
    deliver significant improvements in drilling efficiency and well
    placement. IntelliServ began its commercial operations in the
    last quarter of 2006 and offers its products and services on a
    rental basis to oil and gas operators. XL Systems provides
    integrated packages of large-bore tubular products and services
    for offshore wells, including a proprietary line of wedge thread
    marine connections on large-bore tubulars and related
    engineering and design services. XL Systems provides its product
    line for drive pipe, jet strings and conductor casing and also
    offers weld-on connections and service personnel in connection
    with the installation of these products. In early 2007, XL
    Systems completed development of its new high-strength
    Viper<SUP style="font-size: 85%; vertical-align: text-top"><FONT style="font-variant: SMALL-CAPS">tm</FONT></SUP>
    weld-on connector which Grant Prideco believes will permit it to
    penetrate traditional markets that do not require the enhanced
    performance of XL Systems&#146; proprietary wedge-thread system.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Corporate
    Segment</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Grant Prideco&#146;s Corporate segment includes its general
    corporate overhead expenses.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    25
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='107'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">THE
    MERGER</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>The following summary describes certain provisions of the
    merger agreement. While the discussion below summarizes many of
    the material provisions of the merger agreement, it may not
    contain all of the information about the merger agreement that
    is important to you. We encourage you to read the merger
    agreement in its entirety for a more complete description of the
    terms and conditions of the merger.</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">General</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement provides that Grant Prideco will be merged
    with and into NOV Sub, Inc., a wholly- owned subsidiary of
    National Oilwell Varco, at the effective time of the merger. NOV
    Sub will continue as the surviving corporation in accordance
    with the Delaware General Corporation Law, or DGCL, and will
    remain as a wholly owned subsidiary of National Oilwell Varco.
    Based on the number of outstanding shares of common stock of
    Grant Prideco and the number of outstanding shares of common
    stock of National Oilwell Varco on March&#160;14, 2008, we
    anticipate that stockholders of Grant Prideco will own
    approximately 14% of the outstanding shares of common stock of
    National Oilwell Varco following the merger. At the effective
    time of the merger, all the property, rights, privileges, powers
    and franchises of Grant Prideco and NOV Sub before the merger
    will vest in the surviving corporation, and all debts,
    liabilities and duties of Grant Prideco and NOV Sub before the
    merger will become the debts, liabilities and duties of the
    surviving corporation.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger will be completed after all conditions in the merger
    agreement are met or waived and National Oilwell Varco and Grant
    Prideco file a certificate of merger with the Secretary of State
    of the State of Delaware. The merger agreement provides that the
    closing of the merger will take place at 10:00&#160;a.m.,
    Houston time, on a date specified by National Oilwell Varco and
    Grant Prideco but not later than the second business day after
    satisfaction or waiver of the conditions to the merger unless
    the companies otherwise agree.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Conversion
    of Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement provides that each issued and outstanding
    share of the common stock of Grant Prideco, other than shares
    owned by Grant Prideco, National Oilwell Varco or NOV Sub, and
    other than shares held by stockholders effecting their appraisal
    rights, will be converted into the right to receive 0.4498 of a
    share of National Oilwell Varco&#146;s common stock, which we
    refer to as the exchange ratio, and $23.20 of cash
    consideration. However, if prior to the merger, the outstanding
    shares of the common stocks of Grant Prideco or National Oilwell
    Varco are changed into a different number of shares or a
    different class, by reason of any stock dividend, subdivision,
    reclassification, recapitalization, split, combination or
    exchange of shares, the exchange ratio and cash consideration
    will be adjusted accordingly.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each share of the outstanding common stock of National Oilwell
    Varco will be unaffected by the merger and will remain
    outstanding.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No fractional shares of the common stock of National Oilwell
    Varco will be issued in the merger. Each holder of common stock
    of Grant Prideco who would have otherwise been entitled to
    receive a fraction of a share of the common stock of National
    Oilwell Varco will receive cash in lieu of a fractional share of
    the common stock of National Oilwell Varco. The amount of cash
    will be equal to the relevant fraction times the average of the
    last reported sales price of the common stock of National
    Oilwell Varco on the New York Stock Exchange Composite
    Transactions Tape on each of the ten consecutive trading days
    immediately preceding the date of the effective time of the
    merger.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Conditions
    to the Merger</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Joint
    Conditions to the Merger</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement provides that the obligations of National
    Oilwell Varco and Grant Prideco to effect the merger are subject
    to the satisfaction or waiver of the following conditions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the stockholders of Grant Prideco must adopt the merger
    agreement;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    26
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the waiting period under the
    <FONT style="white-space: nowrap">Hart-Scott-Rodino</FONT>
    Antitrust Improvements Act of 1976 shall have expired or been
    terminated;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    other than approvals related to the
    <FONT style="white-space: nowrap">Hart-Scott-Rodino</FONT>
    Antitrust Improvements Act of 1976, all governmental consents
    and approvals must be obtained and all waiting periods imposed
    by any governmental entity must expire, unless the failure to
    obtain approval or the continuation of the waiting period of any
    of these is not reasonably likely to have a material adverse
    effect;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    National Oilwell Varco&#146;s registration statement relating to
    the issuance of shares of common stock of National Oilwell Varco
    in connection with the merger must be effective under the
    Securities Act of 1933 and not be the subject of a stop order or
    proceeding seeking a stop order;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the absence of any order, injunction, judgment, decree, statute,
    rule or regulation that makes the merger illegal or otherwise
    prohibits the consummation of the merger;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the shares of the common stock of National Oilwell Varco to be
    issued in the merger must be approved for listing on the New
    York Stock Exchange, subject to official notice of
    issuance;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    there shall not be pending or threatened any suit, action or
    proceeding by any governmental entity that has a reasonable
    likelihood of success that would interfere with the consummation
    of the merger or that otherwise is reasonably likely to have a
    material adverse effect on Grant Prideco or National Oilwell
    Varco.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">National
    Oilwell Varco and NOV Sub&#146;s Conditions to the
    Merger</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, the merger agreement provides that National Oilwell
    Varco&#146;s and NOV Sub&#146;s obligations to effect the merger
    are subject to the satisfaction or waiver of the following
    conditions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the representations and warranties of Grant Prideco regarding
    its capital structure and corporate power and authority must be
    true and correct in all material respects as of the date of the
    merger agreement and as of the date of the closing of the merger
    (except to the extent such representations and warranties were
    expressly made as of an earlier date, in which case as of such
    date);
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all other representations and warranties of Grant Prideco must
    be true and correct as of the date of the merger agreement and
    as of the date of the closing of the merger (except to the
    extent such representations and warranties were expressly made
    as of an earlier date, in which case as of such date), except
    where the failure to be true and correct, individually or in the
    aggregate, has not had and would not reasonably be expected to
    have a material adverse effect on Grant Prideco;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Grant Prideco must have performed, in all material respects, all
    of its obligations under the merger agreement prior to the
    closing of the merger;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    National Oilwell Varco must receive a written legal opinion of
    Andrews Kurth LLP to the effect that the merger will qualify for
    federal income tax purposes as a reorganization within the
    meaning of Section&#160;368(a) of the Internal Revenue
    Code;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    since the date of the merger agreement, there shall not have
    been any event that has had or would reasonably be expected to
    have a material adverse effect on Grant Prideco&#146;s business,
    assets, liabilities or obligations, financial condition or
    results of operations.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Grant
    Prideco&#146;s Conditions to the Merger</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, the merger agreement provides that Grant
    Prideco&#146;s obligation to effect the merger is subject to the
    satisfaction or waiver of the following conditions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the representations and warranties of National Oilwell Varco
    regarding its capital structure and corporate power and
    authority must be true and correct in all material respects as
    of the date of the merger agreement and as of the date of the
    closing of the merger (except to the extent such representations
    and warranties were expressly made as of an earlier date, in
    which case as of such date);
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    27
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    all other representations and warranties of National Oilwell
    Varco must be true and correct as of the date of the merger
    agreement and as of the date of the closing of the merger
    (except to the extent such representations and warranties were
    expressly made as of an earlier date, in which case as of such
    date), except where the failure to be true and correct,
    individually or in the aggregate, has not had and would not
    reasonably be expected to have a material adverse effect on
    National Oilwell Varco;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    each of National Oilwell Varco and NOV Sub must have performed,
    in all material respects, all of its obligations under the
    merger agreement prior to the date of the closing of the merger;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Grant Prideco must receive a written legal opinion of Cravath,
    Swaine&#160;&#038; Moore LLP to the effect that the merger will
    qualify for federal income tax purposes as a reorganization
    within the meaning of Section&#160;368(a) of the Internal
    Revenue Code;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    since the date of the merger agreement, there shall not have
    been any event that has had or would reasonably be expected to
    have a material adverse effect on National Oilwell Varco&#146;s
    business, assets, liabilities or obligations, financial
    condition or results of operations.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Material
    Adverse Effect Definition</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain representations and warranties of National Oilwell Varco
    and Grant Prideco, and certain other provisions in the merger
    agreement, are qualified by references to a &#147;material
    adverse effect&#148;. For purposes of the merger agreement, a
    &#147;material adverse effect&#148; on a person means a material
    adverse effect on (i)&#160;the business, assets, liabilities or
    obligations, financial condition or results of operations of
    such person and its subsidiaries, taken as a whole,
    (ii)&#160;the ability of such person to perform its obligations
    under the merger agreement or (iii)&#160;the ability of such
    person to consummate the merger. However, a &#147;material
    adverse effect&#148; does not include changes or conditions
    relating to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the economy, or financial or capital markets, in the
    U.S.&#160;or elsewhere in which such person or subsidiary has
    significant operations or sales unless they have a
    disproportionate effect on the person relative to other
    participants in the oilfield services industry;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the oilfield services industry in general in the U.S.&#160;or in
    any other country in which the person has significant operations
    or sales unless they have a disproportionate effect on the
    person relative to other participants in the oilfield services
    industry;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any change in such person&#146;s stock price or trading volume,
    in and of itself;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any change after the date of the merger agreement in the law or
    generally accepted accounting principles;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the announcement or pendency of the merger agreement or the
    merger itself;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    acts of war, sabotage or terrorism;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    natural disasters such as earthquakes, hurricanes or tornados
    unless they have a disproportionate effect on the person
    relative to other participants in the oilfield services industry;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Grant Prideco&#146;s failure in and of itself to meet any
    internal or published projections, forecasts, or other
    predictions;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any change in the price of oil or natural gas or the number of
    active drilling rigs operating in the geographic areas where
    such person and its subsidiaries have significant operations or
    sales;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any change in the price of steel or other raw materials of the
    type and grade customarily purchased by such person and its
    subsidiaries.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    28
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Termination;
    Termination Fees and Expenses</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Termination
    of the Merger Agreement</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement may be terminated at any time prior to the
    completion of the merger, before or after adoption of the merger
    agreement by the stockholders of Grant Prideco:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by mutual written consent of National Oilwell Varco, Grant
    Prideco and NOV Sub;&#160;or
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by either National Oilwell Varco or Grant Prideco if:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;the merger is not consummated on or before
    August&#160;31, 2008;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;the stockholder approval of Grant Prideco has not been
    obtained at a meeting of such stockholders at which the merger
    agreement is voted upon;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;a court or other governmental entity has issued an
    order, decree or ruling that cannot be appealed and that
    prohibits the completion of the merger;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by National Oilwell Varco if:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;the Grant Prideco board of directors withdraws or
    modifies its recommendation of the merger;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;the Grant Prideco board of directors recommends an
    acquisition transaction other than the merger to stockholders of
    Grant Prideco;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;Grant Prideco has breached a representation, warranty,
    covenant or agreement contained in the merger agreement, which
    has not been cured within 10 business days after receiving
    written notice of the breach.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    by Grant Prideco, if:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;National Oilwell Varco has breached a representation,
    warranty, covenant or agreement contained in the merger
    agreement, which has not been cured within 10 business days
    after receiving written notice of the breach;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;prior to the receipt of approval of stockholders of
    Grant Prideco, Grant Prideco receives a superior proposal, its
    board of directors determines to approve and enter into an
    agreement relating to such superior proposal, Grant Prideco
    gives National Oilwell Varco four business days&#146; prior
    written notice of its intention to terminate the merger
    agreement, such acquisition proposal continues to constitute a
    superior proposal after taking into account any revised proposal
    made by National Oilwell Varco during such period of time and
    Grant Prideco&#146;s board of directors determines in good
    faith, following receipt of advice of its outside legal counsel,
    that the failure to accept such superior proposal would be
    inconsistent with its fiduciary duties under applicable law;
    provided, however, that such termination will not be effective
    until such time as payment of the termination fee shall have
    been made by Grant Prideco; provided, further, that Grant
    Prideco&#146;s right to terminate the merger agreement shall not
    be available if it breached the no solicitation provision of the
    merger agreement in any material respect in connection with such
    superior proposal.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;Superior proposal&#148; means any bona fide written
    proposal made by a third party to acquire substantially all the
    equity securities or assets of Grant Prideco (including
    substantially all of the assets of Grant Prideco&#146;s
    subsidiaries), pursuant to a tender or exchange offer, a merger,
    a consolidation, a liquidation or dissolution, a
    recapitalization, a sale of all or substantially all of its and
    its subsidiaries&#146; assets or otherwise, on terms which the
    board of directors of Grant Prideco determines in good faith,
    after consultation with Grant Prideco&#146;s outside legal
    counsel and financial advisors and after taking into account all
    material legal, financial, strategic, regulatory and other
    aspects of such proposal and the party making such proposal,
    (i)&#160;to be more favorable from a financial point of view to
    the holders of Grant Prideco&#146;s common stock than the merger
    agreement, taking into account all the terms and conditions of
    the merger agreement (including any proposal by National Oilwell
    Varco to amend the terms of the merger or the merger agreement)
    and (ii)&#160;is reasonably likely to he consummated.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    29
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the merger agreement is terminated by either National Oilwell
    Varco or Grant Prideco as provided above, the merger agreement
    will become void and National Oilwell Varco, Grant Prideco and
    NOV Sub will not have any continuing liabilities or obligations
    under the merger agreement, except for:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any obligation to reimburse certain expenses or pay a
    termination fee under the circumstances described below;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the provisions of the confidentiality agreement, which shall
    remain in full force and effect;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    liabilities for any knowing or willful misrepresentation in or
    breach of a representation, warranty, covenant or agreement
    contained in the merger agreement.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Amendment
    and Waiver</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The merger agreement may be amended at any time by action taken
    by the boards of directors of National Oilwell Varco, NOV Sub
    and Grant Prideco, before or after adoption of the merger
    agreement by Grant Prideco&#146;s stockholders. However, once
    the merger agreement is so adopted by the stockholders, no
    change can be made where further stockholder approval is
    required by law. National Oilwell Varco and Grant Prideco also
    may extend the time for performance of the obligations or other
    acts of the other, may waive inaccuracies in the representations
    or warranties contained in the merger agreement and may waive
    compliance with any agreements or conditions contained in the
    merger agreement.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    30
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='108'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">THE
    EXCHANGE OFFER</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Purpose
    of the Exchange Offer</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The exchange offer and the proposed amendments to the Grant
    Prideco indenture are intended to provide us with greater
    operational and financial flexibility, including greater
    flexibility in our efforts to integrate Grant Prideco, and to
    allow us to structure our operations and the operations of our
    subsidiaries in a more efficient manner and allow for potential
    savings. See &#147;The Proposed Amendments&#148;.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Terms of
    the Exchange Offer and Consent Solicitation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the exchange offer, we are offering in exchange for a
    holder&#146;s outstanding tendered
    6<FONT style="vertical-align: text-top; font-size: 70%;">1</FONT>/<FONT style="font-size: 70%;">8</FONT>%&#160;Senior
    Notes due August&#160;15, 2015 of Grant Prideco,
    6<FONT style="vertical-align: text-top; font-size: 70%;">1</FONT>/<FONT style="font-size: 70%;">8</FONT>%&#160;Senior
    Notes due 2015 of National Oilwell Varco having a principal
    amount that is equal to the exchange price of such Grant Prideco
    notes.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The exchange price for the tendered Grant Prideco notes will be
    100% of their aggregate principal amount if such notes are
    properly tendered prior to 5:00&#160;p.m., New York City time,
    on April&#160;3, 2008, and 95% of their aggregate principal
    amount if such notes are properly tendered after such time and
    prior to the expiration of the exchange offer.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Notwithstanding the foregoing, the National Oilwell Varco notes
    will be issued only in denominations of $1,000 and whole
    multiples of $1,000. See &#147;Description of the National
    Oilwell Varco Notes&#160;&#151; General Terms&#148;. If National
    Oilwell Varco would otherwise be required to issue an National
    Oilwell Varco note in a denomination other than $1,000 or a
    whole multiple of $1,000, National Oilwell Varco will, in lieu
    of such issuance:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    issue a National Oilwell Varco note in a principal amount that
    has been rounded down to the nearest lesser whole multiple of
    $1,000;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    pay cash, which we refer to as cash exchange consideration, in
    an amount equal to:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the difference between (i)&#160;the principal amount yielded by
    such formula and (ii)&#160;the principal amount of the National
    Oilwell Varco note actually issued in accordance with this
    paragraph; plus
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    accrued and unpaid interest on the principal amount representing
    such difference to the date of the exchange.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The interest rate, redemption terms and payment and maturity
    dates of the National Oilwell Varco notes offered in the
    exchange offer are the same as those of the Grant Prideco notes.
    The National Oilwell Varco notes you receive in exchange for
    Grant Prideco notes will accrue interest from the most recent
    date to which interest has been paid on those Grant Prideco
    notes. Except as otherwise set forth above, you will not receive
    a payment for accrued interest on Grant Prideco notes you
    exchange at the time of the exchange.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the purposes of this prospectus, &#147;National Oilwell
    Varco indenture&#148; means the indenture governing senior debt
    securities between National Oilwell Varco and The Bank of New
    York Trust Company, N.A., to be dated as of the first date on
    which we exchange National Oilwell Varco notes for Grant Prideco
    notes pursuant to the exchange offer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are also soliciting consents from the holders of the Grant
    Prideco notes to effect a number of amendments to the Grant
    Prideco indenture under which those notes were issued. For a
    description of the proposed amendments, see &#147;The Proposed
    Amendments&#148;. Our obligations to complete the exchange offer
    and cause Grant Prideco to make the consent payments are
    conditioned on, among other things, receipt of valid and
    unrevoked consents to the amendments from the holders of a
    majority in principal amount of the Grant Prideco notes
    outstanding under the Grant Prideco indenture (which we refer to
    as the required consents), although we may, at our option, waive
    this or any other condition with respect the exchange offer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A holder validly tendering Grant Prideco notes for exchange
    will, by tendering those notes, be deemed to be consenting to
    the proposed amendments to the Grant Prideco indenture.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    31
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the National Oilwell Varco notes that we will
    issue, and the cash exchange consideration (as applicable) that
    we will pay, in exchange for Grant Prideco notes, Grant Prideco
    will pay an amount in cash equal to $2.50 per $1,000 principal
    amount outstanding of Grant Prideco notes to each holder of
    Grant Prideco notes only if the holder has delivered and not
    revoked a valid consent prior to the consent payment deadline.
    The consent payment deadline for the consent solicitation (that
    is, the time by which holders must have delivered and not
    revoked a valid consent in order to be eligible to receive the
    consent payment) will be 5:00&#160;p.m., New York City time, on
    April&#160;3, 2008, unless extended.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a holder of Grant Prideco notes, you may give your consent to
    the proposed amendments to the Grant Prideco indenture only by
    tendering your Grant Prideco notes in the exchange offer. By
    tendering your Grant Prideco notes for exchange, you will be
    deemed to have given a consent with respect to the notes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the required consents are received and accepted with respect
    to the Grant Prideco notes, then Grant Prideco and the trustee
    under the Grant Prideco indenture will execute a supplemental
    indenture setting forth the proposed amendments in respect of
    the notes. Under the terms of the supplemental indenture, the
    amendments will become operative with respect to the Grant
    Prideco notes concurrently with the consummation of the merger,
    irrespective of whether the exchange offer with respect to the
    Grant Prideco notes is consummated. Each non-consenting holder
    of Grant Prideco notes will be bound by the supplemental
    indenture.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Conditions
    to the Exchange Offer and Consent Solicitation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our obligations to complete the exchange offer and cause Grant
    Prideco to make the consent payments relating to the exchange
    offer are subject to the satisfaction or waiver (by us) of the
    following conditions: (a)&#160;the receipt of the required
    consents described above under &#147;Terms of the Exchange Offer
    and Consent Solicitation&#148;, (b)&#160;the valid tender (and
    no valid withdrawal) of a majority in principal amount held by
    nonaffiliates of Grant Prideco of the Grant Prideco notes as of
    the expiration date of the exchange offer, as may be extended,
    (c)&#160;the merger has been consummated and (d)&#160;the
    following statements being true:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;In our reasonable judgment, no action or event has
    occurred or been threatened (including a default under an
    agreement, indenture or other instrument or obligation to which
    we or one of our affiliates is a party or by which we or one of
    our affiliates is bound), no action is pending, no action has
    been taken, and no statute, rule, regulation, judgment, order,
    stay, decree or injunction has been promulgated, enacted,
    entered, enforced or deemed applicable to the exchange offer,
    the exchange of Grant Prideco notes under the exchange offer,
    the consent solicitation or the proposed amendments, by or
    before any court or governmental, regulatory or administrative
    agency, authority or tribunal, which either:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    challenges the exchange offer, the exchange of Grant Prideco
    notes under the exchange offer, the consent solicitation or the
    proposed amendments or might, directly or indirectly, prohibit,
    prevent, restrict or delay consummation of, or might otherwise
    adversely affect in any material manner, the exchange offer, the
    exchange of Grant Prideco notes under the exchange offer, the
    consent solicitation or the proposed amendments,&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    in our reasonable judgment, could materially affect the
    business, condition (financial or otherwise), income,
    operations, properties, assets, liabilities or prospects of
    National Oilwell Varco and its subsidiaries, taken as a whole,
    or materially impair the contemplated benefits to National
    Oilwell Varco of the exchange offer, the exchange of Grant
    Prideco notes under the exchange offer, the consent solicitation
    or the proposed amendments, or might be material to holders of
    Grant Prideco notes in deciding whether to accept the exchange
    offer and give their consents;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;None of the following has occurred:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any general suspension of or limitation on trading in securities
    on any United States national securities exchange or in the
    over-the-counter market (whether or not mandatory),
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a material impairment in the general trading market for debt
    securities,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a declaration of a banking moratorium or any suspension of
    payments in respect of banks by federal or state authorities in
    the United States (whether or not mandatory),
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    32
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="8%"></TD>
    <TD width="2%"></TD>
    <TD width="90%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a commencement or escalation of a war, armed hostilities,
    terrorist act or other national or international crisis directly
    or indirectly relating to the United States,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any limitation (whether or not mandatory) by any governmental
    authority on, or other event having a reasonable likelihood of
    affecting, the extension of credit by banks or other lending
    institutions in the United States,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any material adverse change in United States securities or
    financial markets generally,&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    in the case of any of the foregoing existing at the time of the
    commencement of the exchange offer, a material acceleration or
    worsening thereof;&#160;and
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;The trustee under the Grant Prideco indenture has
    executed and delivered a supplemental indenture relating to the
    proposed amendments and has not objected in any respect to, or
    taken any action that could in our reasonable judgment adversely
    affect the consummation of, any of the exchange offer, the
    exchange of Grant Prideco notes under the exchange offer, the
    consent solicitation or our ability to effect the proposed
    amendments, nor has such trustee taken any action that
    challenges the validity or effectiveness of the procedures used
    by us in soliciting consents (including the form thereof) or in
    making the exchange offer, the exchange of the Grant Prideco
    notes under the exchange offer or the consent solicitation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All of these conditions are for our sole benefit and may be
    waived by us, in whole or in part, and with respect to the
    exchange offer or consent solicitation for the Grant Prideco
    notes, in our sole discretion. Any determination made by us
    concerning these events, developments or circumstances shall be
    conclusive and binding.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If any of these conditions are not satisfied with respect to the
    Grant Prideco notes, we may, at any time before the consummation
    of the exchange offer or consent solicitation:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;terminate the exchange offer or the consent
    solicitation and return all tendered Grant Prideco notes to the
    holders thereof (whether or not we terminate the exchange offer
    or consent solicitation);
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;modify, extend or otherwise amend the exchange offer or
    consent solicitation and retain all tendered Grant Prideco notes
    and consents until the expiration date, as extended, of the
    exchange offer or consent solicitation, subject, however, to the
    withdrawal rights of holders (See &#147;The Exchange
    offer&#160;&#151; Withdrawal of Tenders and Revocation of
    Corresponding Consents&#148; and &#147;&#151;&#160;Consent
    Payment Deadline; Expiration Date; Extensions;
    Amendments&#148;);&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;waive the unsatisfied conditions with respect to the
    exchange offer or consent solicitation and accept all Grant
    Prideco notes tendered and not previously validly withdrawn.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the merger agreement is terminated for any reason, National
    Oilwell Varco intends promptly to terminate the exchange offer
    and the consent solicitation.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Consent
    Payment Deadline; Expiration Date; Extensions;
    Amendments</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of the consent solicitation, the term &#147;consent
    payment deadline&#148; means 5:00&#160;p.m., New York City time,
    on April&#160;3, 2008, subject to our right to extend that date
    and time in our sole discretion, in which case the consent
    payment deadline shall be the latest date and time to which that
    consent payment deadline is extended.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of the exchange offer, the term &#147;expiration
    date&#148; means the time immediately following 9:00&#160;a.m.,
    New York City time, on April&#160;21, 2008, subject to our right
    to extend that date and time for the exchange offer in our sole
    discretion, in which case the expiration date shall be the
    latest date and time to which the exchange offer is extended.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We reserve the right, in our sole discretion, to (1)&#160;delay
    accepting any validly tendered Grant Prideco notes,
    (2)&#160;extend the exchange offer, or (3)&#160;terminate or
    amend the exchange offer, by giving oral or written notice of
    such delay, extension, termination or amendment to the exchange
    agent. Any such delay in acceptance, extension, termination or
    amendment will be followed as promptly as practicable by a
    public announcement thereof which, in the case of an extension,
    will be made no later than 9:00&#160;a.m., New York City time,
    on the next business day after the previously scheduled
    expiration date.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    33
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We also reserve the right, in our sole discretion, to provide a
    subsequent offering period of between three and 20 business days
    for the exchange offer. If a subsequent offering period is
    provided, all Grant Prideco notes that (i)&#160;have been
    validly tendered prior to the expiration date of the initial
    offering period and (ii)&#160;have not been validly withdrawn
    prior to the expiration of the exchange offer will be accepted
    and exchanged for National Oilwell Varco notes and, as
    applicable, cash exchange consideration, and we will make a
    public announcement of the subsequent offering period no later
    than 9:00&#160;a.m., New York City time, on the next business
    day after the expiration date of the initial offering period.
    Unless otherwise provided in the announcement of the subsequent
    offering period, all Grant Prideco notes validly tendered during
    the subsequent offering period will be promptly accepted and
    exchanged for the National Oilwell Varco notes and, as
    applicable, cash exchange consideration, as they are tendered.
    Unless otherwise provided in the announcement of the subsequent
    offering period, holders of Grant Prideco notes will not have
    the right to withdraw notes tendered during the subsequent
    offering period and no consent payment will be made with respect
    to notes tendered during the subsequent offering period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the exchange offer is amended in a manner determined by us to
    constitute a material change, we will promptly disclose such
    amendment by means of a supplement to this prospectus that will
    be distributed to holders of Grant Prideco notes and we will
    extend the exchange offer to a date five to ten business days
    after disclosing the amendment, depending upon the significance
    of the amendment and the manner of disclosure to the holders, if
    the exchange offer would otherwise have expired during such five
    to ten business day period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Without limiting the manner in which we may choose to make a
    public announcement of any delay, extension, amendment or
    termination of the exchange offer and consent solicitation, we
    will have no obligation to publish, advertise or otherwise
    communicate any such public announcement other than by making a
    timely release to any appropriate news agency, including the Dow
    Jones News Service.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Effect of
    Tender</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any tender by a holder of Grant Prideco notes prior to the
    expiration date of the exchange offer that is not validly
    withdrawn prior to the expiration of the exchange offer will
    constitute a binding agreement between that holder and National
    Oilwell Varco and (if not withdrawn prior to the consent payment
    deadline) a consent to the proposed amendments, upon the terms
    and subject to the conditions of the exchange offer and the
    letter of transmittal and consent. The acceptance of the
    exchange offer by a tendering holder of Grant Prideco notes will
    constitute the agreement by that holder to deliver good and
    marketable title to the tendered Grant Prideco notes, free and
    clear of all liens, charges, claims, encumbrances, interests and
    restrictions of any kind.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Absence
    of Dissenters&#146; Rights</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Holders of the Grant Prideco notes do not have any appraisal or
    dissenters&#146; rights under New York law, the law governing
    the Grant Prideco indenture and the Grant Prideco notes, or
    under the terms of the Grant Prideco indenture in connection
    with the exchange offer and consent solicitation.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Accounting
    Treatment of the Exchange Offer</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The exchange offer will be accounted for by National Oilwell
    Varco as an exchange of debt under United States generally
    accepted accounting principles. The National Oilwell Varco notes
    to be issued in the exchange offer will be recorded at the same
    carrying value as the Grant Prideco notes. Accordingly, National
    Oilwell Varco will not recognize significant gain or loss for
    accounting purposes upon the consummation of the exchange offer.
    The consent payments will be capitalized and amortized over the
    term of the National Oilwell Varco notes issued in the exchange
    offer. The direct costs incurred with third parties will be
    expensed.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Acceptance
    of Grant Prideco Notes for Exchange; Delivery of Consent
    Payments, National Oilwell Varco Notes and Cash Exchange
    Consideration; Effectiveness of Proposed Amendments</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Assuming the required consents are obtained and the other
    conditions to the making of the consent payments are satisfied
    or waived, after acceptance thereof, we will cause Grant Prideco
    to make the consent payments upon the first acceptance of the
    Grant Prideco Notes for exchange, which is anticipated to occur
    concurrently with the consummation of the merger.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    34
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Assuming the conditions to the exchange offer are satisfied or
    waived, we will issue new National Oilwell Varco notes in
    book-entry form and pay any cash exchange consideration (as
    applicable) in connection with the exchange offer as soon as
    practicable after the expiration date of the exchange offer and
    consummation of the merger (in exchange for Grant Prideco notes
    that are properly tendered (and not validly withdrawn) before
    the expiration of the exchange offer and accepted for exchange).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We refer to each date on which we exchange National Oilwell
    Varco notes for Grant Prideco notes pursuant to the exchange
    offer as an &#147;exchange date&#148;.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will be deemed to have accepted validly tendered Grant
    Prideco notes (and will be deemed to have accepted validly
    delivered consents to the proposed amendments) when, and if, we
    have given oral or written notice thereof to the exchange agent.
    Subject to the terms and conditions of the exchange offer,
    delivery of National Oilwell Varco notes and payment of any cash
    exchange consideration (as applicable) in connection with the
    exchange of Grant Prideco notes accepted by us will be made by
    the exchange agent on the exchange date upon receipt of such
    notice. Subject to the terms and conditions of the consent
    solicitation, any consent payments will be made by the exchange
    agent on the first exchange date upon receipt of such notice.
    The exchange agent will act as agent for participating holders
    of the Grant Prideco notes for the purpose of receiving consents
    and Grant Prideco notes from, and transmitting National Oilwell
    Varco notes, cash exchange consideration and consent payments
    to, such holders. If any tendered Grant Prideco notes are not
    accepted for any reason set forth in the terms and conditions of
    the exchange offer or if Grant Prideco notes are withdrawn prior
    to the expiration of the exchange offer, such unaccepted or
    withdrawn Grant Prideco notes will be returned without expense
    to the tendering holder as promptly as practicable after the
    expiration or termination of the exchange offer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we receive the requisite consents by the consent payment
    deadline, the proposed amendments to the Grant Prideco indenture
    will become effective concurrently with the consummation of the
    merger.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Procedures
    for Consenting and Tendering</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If you hold Grant Prideco notes and wish to have those notes
    exchanged for National Oilwell Varco notes and, as applicable,
    cash exchange consideration, you must validly tender (or cause
    the valid tender of) your Grant Prideco notes using the
    procedures described in this prospectus and in the accompanying
    letter of transmittal and consent. The proper tender of Grant
    Prideco notes will constitute an automatic consent to the
    proposed amendments to the Grant Prideco indenture.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The procedures by which you may tender or cause to be tendered
    Grant Prideco notes will depend upon the manner in which you
    hold the Grant Prideco notes, as described below.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Grant
    Prideco Notes Held Through a Nominee</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If you are a beneficial owner of Grant Prideco notes that are
    held of record by a custodian bank, depositary, broker, trust
    company or other nominee, and you wish to tender Grant Prideco
    notes in the exchange offer, you should contact the record
    holder promptly and instruct the record holder to tender the
    Grant Prideco notes and deliver a consent on your behalf using
    one of the procedures described below.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Grant
    Prideco Notes Held with DTC</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to authority granted by The Depository
    Trust&#160;Company, or DTC, if you are a DTC participant that
    has Grant Prideco notes credited to your DTC account and thereby
    held of record by DTC&#146;s nominee, you may directly tender
    your Grant Prideco notes and deliver a consent as if you were
    the record holder. Accordingly, references herein to record
    holders include DTC participants with Grant Prideco notes
    credited to their accounts. Within two business days after the
    date of this prospectus, the exchange agent will establish
    accounts with respect to the Grant Prideco notes at DTC for
    purposes of the exchange offer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any participant in DTC may tender Grant Prideco notes and
    deliver a consent to the proposed amendments to the Grant
    Prideco indenture by effecting a book-entry transfer of the
    Grant Prideco notes to be tendered in the exchange offer into
    the account of the exchange agent at DTC and either
    (1)&#160;electronically transmitting its acceptance of the
    exchange offer through DTC&#146;s Automated Tender Offer
    Program, or ATOP, procedures for
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    35
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    transfer; or (2)&#160;completing and signing the letter of
    transmittal and consent according to the instructions and
    delivering it, together with any signature guarantees and other
    required documents, to the exchange agent at its address on the
    back cover page of this prospectus, in either case before the
    exchange offer expires.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If ATOP procedures are followed, DTC will verify each acceptance
    transmitted to it, execute a book-entry delivery to the exchange
    agent&#146;s account at DTC and send an agent&#146;s message to
    the exchange agent. An &#147;agent&#146;s message&#148; is a
    message, transmitted by DTC to and received by the exchange
    agent and forming part of a book-entry confirmation, which
    states that DTC has received an express acknowledgement from a
    DTC participant tendering Grant Prideco notes that the
    participant has received and agrees to be bound by the terms of
    the letter of transmittal and consent and that National Oilwell
    Varco and Grant Prideco may enforce the agreement against the
    participant. DTC participants following this procedure should
    allow sufficient time for completion of the ATOP procedures
    prior to the expiration date of the exchange offer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The letter of transmittal and consent (or facsimile thereof),
    with any required signature guarantees, or (in the case of
    book-entry transfer) an agent&#146;s message in lieu of the
    letter of transmittal and consent, and any other required
    documents, must be transmitted to and received by the exchange
    agent prior to the expiration date of the exchange offer at one
    of its addresses set forth on the back cover page of this
    prospectus. Delivery of such documents to DTC does not
    constitute delivery to the exchange agent.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Letter
    of Transmittal and Consent</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subject to and effective upon the acceptance for exchange and
    issuance of National Oilwell Varco notes and, as applicable, the
    payment of cash exchange consideration, in exchange for Grant
    Prideco notes tendered by a letter of transmittal and consent in
    accordance with the terms and subject to the conditions set
    forth in this prospectus, by executing and delivering a letter
    of transmittal and consent (or agreeing to the terms of a letter
    of transmittal and consent pursuant to an agent&#146;s message)
    a tendering holder of Grant Prideco notes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    irrevocably sells, assigns and transfers to or upon the order of
    National Oilwell Varco all right, title and interest in and to,
    and all claims in respect of or arising or having arisen as a
    result of the holder&#146;s status as a holder of the Grant
    Prideco notes tendered thereby;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    waives any and all rights with respect to the Grant Prideco
    notes (including any existing or past defaults and their
    consequences in respect of the Grant Prideco notes);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    releases and discharges National Oilwell Varco, Grant Prideco
    and the trustee under the Grant Prideco indenture from any and
    all claims such holder may have, now or in the future, arising
    out of or related to the Grant Prideco notes, including any
    claims that such holder is entitled to receive additional
    principal or interest payments with respect to the Grant Prideco
    notes (other than as expressly provided in this document and in
    the letter of transmittal and consent) or to participate in any
    redemption or defeasance of the Grant Prideco notes;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    represents and warrants that the Grant Prideco notes tendered
    were owned as of the date of tender, free and clear of all
    liens, charges, claims, encumbrances, interests and restrictions
    of any kind;
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    consents to the proposed amendments described below under
    &#147;The Proposed Amendments&#148;;&#160;and
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    irrevocably constitutes and appoints the exchange agent the true
    and lawful agent and attorney-in-fact of the holder with respect
    to any tendered Grant Prideco notes, with full powers of
    substitution and revocation (such power of attorney being deemed
    to be an irrevocable power coupled with an interest) to cause
    the Grant Prideco notes tendered to be assigned, transferred and
    exchanged in the exchange offer.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Proper
    Execution and Delivery of Letter of Transmittal and
    Consent</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If you wish to participate in the exchange offer and consent
    solicitation, delivery of your Grant Prideco notes, signature
    guarantees and other required documents are your responsibility.
    Delivery is not complete until the required items are actually
    received by the exchange agent. If you mail these items, we
    recommend that you (1)&#160;use registered mail properly insured
    with return receipt requested and (2)&#160;mail the required
    items sufficiently in advance of the expiration date with
    respect to the exchange offer to allow sufficient time to ensure
    timely delivery.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    36
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as otherwise provided below, all signatures on the letter
    of transmittal and consent or a notice of withdrawal must be
    guaranteed by a recognized participant in the Securities
    Transfer Agents Medallion Program, the NYSE Medallion Signature
    Program or the Stock Exchange Medallion Program. Signatures on
    the letter of transmittal and consent need not be guaranteed if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the letter of transmittal and consent is signed by a participant
    in DTC whose name appears on a security position listing of DTC
    as the owner of the Grant Prideco notes and the portion entitled
    &#147;Special Issuance and Payment Instructions&#148; or
    &#147;Special Delivery Instructions&#148; on the letter of
    transmittal and consent has not been completed;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the Grant Prideco notes are tendered for the account of an
    eligible institution. See Instruction&#160;4 in the letter of
    transmittal and consent.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Withdrawal
    of Tenders and Revocation of Corresponding
    Consents</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Tenders of Grant Prideco notes in connection with the exchange
    offer may be withdrawn at any time prior to the expiration of
    the exchange offer. Tenders of Grant Prideco notes may not be
    withdrawn at any time thereafter. Consents to the proposed
    amendments in connection with the consent solicitation may be
    revoked at any time prior to the consent payment deadline.
    Consents may not be withdrawn at any time thereafter. The valid
    withdrawal of tendered Grant Prideco notes prior to the consent
    payment deadline will be deemed to be a concurrent revocation of
    the related consent to the proposed amendments to the Grant
    Prideco indenture. You may only revoke a consent by validly
    withdrawing the related Grant Prideco notes prior to the consent
    payment deadline. If you validly withdraw your Grant Prideco
    notes following the consent payment deadline, but before the
    expiration of the exchange offer, your consent will be counted,
    but you will not receive the consent payment.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Beneficial owners desiring to withdraw Grant Prideco notes
    previously tendered should contact the DTC participant through
    which they hold their Grant Prideco notes. In order to withdraw
    Grant Prideco notes previously tendered, a DTC participant may,
    prior to the expiration of the exchange offer, withdraw its
    instruction previously transmitted through ATOP by
    (1)&#160;withdrawing its acceptance through ATOP, or
    (2)&#160;delivering to the exchange agent by mail, hand delivery
    or facsimile transmission, notice of withdrawal of such
    instruction. The notice of withdrawal must contain the name and
    number of the DTC participant. Withdrawal of a prior instruction
    will be effective upon receipt of such notice of withdrawal by
    the exchange agent. All signatures on a notice of withdrawal
    must be guaranteed by a recognized participant in the Securities
    Transfer Agents Medallion Program, the NYSE Medallion Signature
    Program or the Stock Exchange Medallion Program, except that
    signatures on the notice of withdrawal need not be guaranteed if
    the Grant Prideco notes being withdrawn are held for the account
    of an eligible institution. A withdrawal of an instruction must
    be executed by a DTC participant in the same manner as such DTC
    participant&#146;s name appears on its transmission through ATOP
    to which such withdrawal relates. A DTC participant may withdraw
    a tender only if such withdrawal complies with the provisions
    described in this paragraph.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Withdrawals of tenders of Grant Prideco notes may not be
    rescinded and any Grant Prideco notes withdrawn will thereafter
    be deemed not validly tendered for purposes of the exchange
    offer. Properly withdrawn Grant Prideco notes, however, may be
    retendered by following the procedures described above at any
    time prior to expiration of the exchange offer.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Miscellaneous</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All questions as to the validity, form, eligibility (including
    time of receipt) and acceptance for exchange of any tender of
    Grant Prideco notes in connection with the exchange offer will
    be determined by us, in our sole discretion, and our
    determination will be final and binding. We reserve the absolute
    right to reject any or all tenders not in proper form or the
    acceptance for exchange of which may, in the opinion of our
    counsel, be unlawful. We also reserve the absolute right to
    waive any defect or irregularity in the tender of any Grant
    Prideco notes in the exchange offer, and our interpretation of
    the terms and conditions of the exchange offer (including the
    instructions in the letter of transmittal and consent) will be
    final and binding on all parties. None of National Oilwell
    Varco, Grant Prideco, the exchange agent, the information agent,
    the dealer manager or any other person will be under any duty to
    give notification of any defects or irregularities in tenders or
    incur any liability for failure to give any such notification.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    37
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Tenders of Grant Prideco notes involving any irregularities will
    not be deemed to have been made until such irregularities have
    been cured or waived. Grant Prideco notes received by the
    exchange agent in connection with any exchange offer that are
    not validly tendered and as to which the irregularities have not
    been cured or waived will be returned by the exchange agent to
    the DTC participant who delivered such Grant Prideco notes by
    crediting an account maintained at DTC designated by such DTC
    participant as promptly as practicable after the expiration date
    of the exchange offer or the withdrawal or termination of the
    exchange offer.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Transfer
    Taxes</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will pay all transfer taxes, if any, applicable to the
    transfer and sale of Grant Prideco notes to us in the exchange
    offer. If transfer taxes are imposed for any other reason, the
    amount of those transfer taxes, whether imposed on the
    registered holders or any other persons, will be payable by the
    tendering holder. Other reasons transfer taxes could be imposed
    include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    if National Oilwell Varco notes in book-entry form are to be
    registered in the name of any person other than the person
    signing the letter of transmittal and consent;&#160;or
</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    if tendered Grant Prideco notes are registered in the name of
    any person other than the person signing the letter of
    transmittal and consent.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If satisfactory evidence of payment of or exemption from those
    transfer taxes is not submitted with the letter of transmittal
    and consent, the amount of those transfer taxes will be billed
    directly to the tendering holder
    <FONT style="white-space: nowrap">and/or</FONT>
    withheld from any payments due with respect to the Grant Prideco
    notes tendered by such holder.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">U.S.
    Federal Backup Withholding; Withholding on Consent Payments to
    <FONT style="white-space: nowrap">Non-U.S.</FONT>
    Holders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    U.S.&#160;federal income tax law requires that a holder of Grant
    Prideco notes, whose notes are accepted for exchange, provide
    the exchange agent, as payer, with the holder&#146;s correct
    taxpayer identification number or otherwise establish a basis
    for an exemption from backup withholding. This information
    should be provided on Internal Revenue Service, or IRS,
    <FONT style="white-space: nowrap">Form&#160;W-9.</FONT>
    In the case of a holder who is an individual, other than a
    resident alien, this identification number is his or her social
    security number. For holders other than individuals, the
    identification number is an employer identification number.
    Exempt holders, including, among others, all corporations and
    certain foreign individuals, are not subject to these backup
    withholding and reporting requirements, but must establish that
    they are so exempt. If you do not provide the exchange agent
    with your correct taxpayer identification number or an adequate
    basis for an exemption or a completed IRS
    <FONT style="white-space: nowrap">Form&#160;W-8BEN</FONT>
    (&#147;Certificate of Foreign Status of Beneficial Owner for
    United States Tax Withholding&#148;), you may be subject to
    backup withholding on payments made in exchange for any Grant
    Prideco notes and a penalty imposed by the IRS. Backup
    withholding is not an additional federal income tax. Rather, the
    amount of tax withheld will be credited against the federal
    income tax liability of the holder subject to backup
    withholding. If backup withholding results in an overpayment of
    taxes, you may obtain a refund from the IRS. You should consult
    with a tax advisor regarding qualifications for exemption from
    backup withholding and the procedure for obtaining the exemption.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To prevent backup withholding, you must either (1)&#160;provide
    a completed IRS
    <FONT style="white-space: nowrap">Form&#160;W-9</FONT>
    and indicate either (a)&#160;your correct taxpayer
    identification number or (b)&#160;an adequate basis for an
    exemption, or (2)&#160;provide a completed
    <FONT style="white-space: nowrap">Form&#160;W-8BEN.</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In compliance with U.S.&#160;federal withholding tax
    requirements applicable to payments of certain U.S.&#160;source
    income to foreign persons, Grant Prideco intends to withhold tax
    at the rate of 30% on consent payments made to
    <FONT style="white-space: nowrap">non-U.S.&#160;holders,</FONT>
    unless the holder establishes an exemption or a reduced rate.
    See &#147;United States Federal Income Tax
    Consequences&#160;&#151;
    <FONT style="white-space: nowrap">Non-U.S.&#160;Holders&#160;&#151;</FONT>
    Consent Payments&#148;.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Exchange
    Agent</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Global Bondholder Services Corporation has been appointed the
    exchange agent for the exchange offer and consent solicitation.
    Letters of transmittal and consent and all correspondence in
    connection with the exchange offer should be sent or delivered
    by each holder of Grant Prideco notes, or a beneficial
    owner&#146;s custodian bank, depositary, broker, trust company
    or other nominee, to the exchange agent at the addresses and
    telephone numbers
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    38
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    set forth on the back cover page of this prospectus. We will pay
    the exchange agent reasonable and customary fees for its
    services and will reimburse it for its reasonable, out-of-pocket
    expenses in connection therewith.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Information
    Agent</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Global Bondholder Services Corporation has been appointed as the
    information agent for the exchange offer and the consent
    solicitation, and will receive customary compensation for its
    services. Questions concerning tender procedures and requests
    for additional copies of this prospectus or the letter of
    transmittal and consent should be directed to the information
    agent at the address and telephone numbers set forth on the back
    cover page of this prospectus. Holders of Grant Prideco notes
    may also contact their custodian bank, depositary, broker, trust
    company or other nominee for assistance concerning the exchange
    offer.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Dealer
    Manager</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have retained Goldman, Sachs&#160;&#038; Co. to act as dealer
    manager in connection with the exchange offer and consent
    solicitation and will pay the dealer manager for soliciting
    tenders in the exchange offer and consents in the consent
    solicitation a customary percentage of the total principal
    amount outstanding of each series of Grant Prideco notes if the
    required consents are received and the exchange offer is
    completed. We will also reimburse the dealer manager for certain
    expenses. The obligations of the dealer manager to perform such
    function are subject to certain conditions. We have agreed to
    indemnify the dealer manager against certain liabilities,
    including liabilities under the federal securities laws.
    Questions regarding the terms of the exchange offer or the
    consent solicitation may be directed to the dealer manager at
    the address and telephone number set forth on the back cover
    page of this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    From time to time, the dealer manager has provided, and may
    provide in the future, investment banking and other services for
    National Oilwell Varco and Grant Prideco for customary
    compensation. The dealer merger is acting as a financial advisor
    to National Oilwell Varco with respect to the merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The dealer manager in the ordinary course of its business
    purchases and/or sells securities, including the National
    Oilwell Varco notes, for its own account and for the account of
    its customers. As a result, the dealer managers at any time may
    own certain of our debt securities, including the National
    Oilwell Varco notes. In addition the dealer manager may tender
    the National Oilwell Varco notes into the tender offer for its
    own account.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Other
    Fees and Expenses</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The expenses of soliciting tenders and consents with respect to
    the Grant Prideco notes will be borne by us. The principal
    solicitation is being made by mail; however, additional
    solicitations may be made by facsimile transmission, telephone
    or in person by the dealer manager and the information agent, as
    well as by officers and other employees of National Oilwell
    Varco and its affiliates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Tendering holders of Grant Prideco notes will not be required to
    pay any fee or commission to the dealer manager. However, if a
    tendering holder handles the transaction through its broker,
    dealer, commercial bank, trust company or other institution,
    such holder may be required to pay brokerage fees or commissions.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    39
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='109'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DESCRIPTION
    OF THE DIFFERENCES BETWEEN THE GRANT<BR>
    PRIDECO NOTES&#160;AND THE NATIONAL OILWELL VARCO
    NOTES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a summary comparison of the material terms of
    the Grant Prideco notes and the National Oilwell Varco notes.
    The National Oilwell Varco notes issued in the exchange offer
    will be governed by the National Oilwell Varco indenture. The
    summary does not purport to be complete and is qualified in its
    entirety by reference to the Grant Prideco indenture and the
    National Oilwell Varco indenture. Copies of those indentures are
    available from the information agent upon request.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Grant Prideco notes represent, as of the date of this
    prospectus, the only debt securities issued under the Grant
    Prideco indenture.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Terms used in the descriptions of the Grant Prideco notes and
    the National Oilwell Varco notes below and not otherwise defined
    in this prospectus have the meanings given to such terms in the
    Grant Prideco indenture and the National Oilwell Varco
    indenture, respectively. Article and section references in the
    descriptions of the notes below are references to the applicable
    indenture under which the notes were or will be issued.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The description of the Grant Prideco notes reflects the Grant
    Prideco notes as currently constituted and does not reflect any
    changes to the covenants and other terms of the Grant Prideco
    notes or the Grant Prideco indenture that may be effected
    following the consent solicitation as described under &#147;The
    Proposed Amendments&#148;.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    40
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 100%; margin-left: 0%"><!-- BEGIN PAGE WIDTH -->



<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="19%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
    <B>Reports</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 4.03<BR>
    </U></I> (a) Whether or not Grant Prideco is required to do so
    by the rules and regulations of the SEC, so long as any notes
    are outstanding, Grant Prideco will file with the SEC within the
    time periods specified in the SEC&#146;s rules and regulations,
    all reports, statements and other information as Grant Prideco
    would be required to file with the SEC by Section 13(a) or 15(d)
    of the Exchange Act. Grant Prideco will deliver to the trustee
    and furnish each holder of Grant Prideco notes, without cost to
    such holder, copies of such reports and other information.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section&#160;4.5<BR>
    </U></I> (a)&#160;National Oilwell Varco will file with the
    trustee, within 15&#160;days after it files the same with the
    SEC, copies of the annual reports and the information, documents
    and other reports (or copies of such portions of any of the
    foregoing) as the SEC may by rules and regulations prescribe
    that National Oilwell Varco is required to file with the SEC
    pursuant to Section&#160;13 or 15(d) of the Exchange Act.
    National Oilwell Varco will also comply with the provisions of
    Section&#160;314(a) of the Trust&#160;Indenture Act.
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (b) For so long as any notes remain outstanding, Grant Prideco
    will furnish to the holders and to securities analysts and
    prospective purchasers of Grant Prideco notes, upon their
    request, the information required to be delivered pursuant to
    Rule 144A(d)(4) under the Securities Act.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (c) Whether or not required by the rules and regulations of the
    SEC, Grant Prideco will file a copy of all of the information
    and reports required to be delivered pursuant to clause (a) of
    Section 4.03 with the SEC for public availability, unless the
    SEC will not accept such a filing, and from and after the date
    of the Grant Prideco indenture will make this information
    available to securities analysts and prospective investors upon
    request. In addition, for so long as any notes remain
    outstanding, Grant Prideco will file with the trustee and the
    SEC (unless the SEC will not accept such filing) the information
    required to be delivered pursuant to clause (a) of this Section
    4.03 within the time periods specified in the SEC&#146;s rules
    and regulations and furnish that information to holders of the
    notes, securities analysts and prospective investors upon their
    request.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (d) In the event that the SEC will not accept those reports for
    filing, Grant Prideco will nonetheless furnish to the holders of
    the notes within the same time period: (1) all quarterly and
    annual financial information that would be required to be
    contained in a filing with the SEC on Forms 10-Q and 10-K if
    Grant Prideco were required to file such forms, including a
    &#147;Management&#146;s Discussion and Analysis of Financial
    Condition and Results of Operations&#148; and, with respect to
    the annual information only, a report on the annual financial
    statements by Grant Prideco&#146;s certified independent
    accountants; and (2) all current reports that would be required
    to be filed with the SEC on Form 8-K if Grant Prideco were
    required to file such reports.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    41
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<DIV style="width: 100%; margin-left: 0%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="19%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (e) If Grant Prideco has designated any subsidiaries as
    unrestricted subsidiaries, then the quarterly and annual
    financial information required by Section 4.03 will include a
    reasonably detailed presentation, either on the face of the
    financial statements or in the footnotes thereto, and in the
    Management&#146;s Discussion and Analysis of Financial Condition
    and Results of Operations, of the financial condition and
    results of operation of Grant Prideco and its restricted
    subsidiaries separate from the financial condition and results
    of operations of the unrestricted subsidiaries, if materially
    different.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    <B>Compliance Certificate</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 4.04<BR>
    </U></I> (a) Grant Prideco will deliver to the trustee, within
    90&#160;days after the end of each fiscal year, an
    Officers&#146; Certificate stating that a review of the
    activities of Grant Prideco and its restricted subsidiaries
    during the preceding fiscal year has been made under the
    supervision of the signing officers with a view to determining
    whether each of Grant Prideco and its restricted subsidiaries
    has kept, observed, performed and fulfilled its obligations
    under the Grant Prideco indenture, and further stating, as to
    each such officer signing such certificate, that to the best of
    his or her knowledge Grant Prideco has kept, observed, performed
    and fulfilled each and every covenant contained in the Grant
    Prideco indenture and is not in default in the performance or
    observance of any of the terms, provisions and conditions of the
    Grant Prideco indenture (or, if a default or event of default
    shall have occurred, describing all such defaults or events of
    default of which he or she may have knowledge and what action
    Grant Prideco is taking or proposes to take with respect
    thereto) and that to the best of his or her knowledge no event
    has occurred and remains in existence by reason of which
    payments on account of the principal of or interest, if any, on
    the notes is prohibited or if such event has occurred, a
    description of the event and what action Grant Prideco is taking
    or proposes to take with respect thereto.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section&#160;4.3<BR>
    </U></I> National Oilwell Varco will deliver to the trustee,
    within 120&#160;days after the end of each fiscal year of
    National Oilwell Varco, an Officers&#146; Certificate, stating
    whether or not to the knowledge of the signers thereof a default
    or event of default has occurred during that fiscal year,
    specifying all such defaults or events of defaults (as
    applicable) and the nature and status thereof.<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    National Oilwell Varco will deliver to the trustee, as soon as
    possible and in any event within five days after National
    Oilwell Varco becomes aware of the occurrence of any event of
    default or default, an Officers&#146; Certificate setting forth
    the details of such event of default or default and the action
    that National Oilwell Varco proposes to take with respect
    thereto.
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (b) So long as not contrary to the then current recommendations
    of the American Institute of Certified Public Accountants, the
    year-end financial statements delivered pursuant to the
    provisions of the Grant Prideco indenture will be accompanied by
    a written statement of Grant Prideco&#146;s independent public
    accountants (who shall be a firm of established national
    reputation) that in making the examination necessary for
    certification of such financial statements, nothing has come to
    their attention that would lead them to believe that Grant
    Prideco has violated specified provisions of the Grant Prideco
    indenture, if any such violation has occurred, specifying the
    nature
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    42
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<DIV style="width: 100%; margin-left: 0%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="19%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     and period of existence thereof, it being understood that such
    accountants will not be liable directly or indirectly to any
    person for any failure to obtain knowledge of any such
    violation.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (c) Grant Prideco will, so long as any of the notes are
    outstanding, deliver to the trustee, forthwith upon any officer
    becoming aware of any default or event of default, an
    Officers&#146; Certificate specifying such default or event of
    default and what action Grant Prideco is taking or proposes to
    take with respect thereto.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
    <B>Taxes</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 4.05<BR>
    </U></I> Grant Prideco will pay, and shall cause each of its
    subsidiaries to pay, prior to delinquency, all material taxes,
    assessments, and governmental levies except such as are
    contested in good faith and by appropriate proceedings or where
    the failure to effect such payment is not adverse in any
    material respect to the holders of the notes.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
     There is no comparable provision under the National Oilwell
    Varco indenture.
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    <B>Restricted Payments</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 4.07<BR>
    </U></I> (a) Grant Prideco will not, and will not permit any of
    its restricted subsidiaries to, directly or indirectly:
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
     There is no comparable provision under the National Oilwell
    Varco indenture.
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (i) declare or pay any dividend or make any other payment or
    distribution on account of Grant Prideco&#146;s or any of its
    restricted subsidiaries&#146; equity interests, including,
    without limitation, any payment in connection with any merger or
    consolidation involving Grant Prideco or any of its restricted
    subsidiaries, or to the direct or indirect holders of Grant
    Prideco or any of its restricted subsidiaries&#146; equity
    interests in their capacity as such, except for dividends or
    distributions that are payable in Grant Prideco&#146;s equity
    interests (other than disqualified stock) or payable to Grant
    Prideco or any of its restricted subsidiaries;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (ii) purchase, redeem or otherwise acquire or retire for value,
    including, without limitation, in connection with any merger or
    consolidation involving Grant Prideco, any of Grant
    Prideco&#146;s equity interests;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (iii) make any principal payment on or with respect to, or
    purchase, redeem, defease or otherwise acquire or retire for
    value, prior to any scheduled final maturity, scheduled
    repayment or repurchase or scheduled sinking fund payment, any
    indebtedness that is subordinated to the notes or the subsidiary
    guarantees; or
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    43
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 100%; margin-left: 0%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="19%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (iv) make any restricted investment; all such payments and other
    actions set forth in these clauses (i) through (iv) above being
    collectively referred to as &#147;restricted payments&#148;.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (b) Notwithstanding clause (a) of Section 4.07, Grant Prideco is
    permitted to engage in, and to cause or allow any of its
    restricted subsidiaries to engage in, a restricted payment, so
    long as, at the time of and after giving effect to such
    restricted payment:
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (i) no default or event of default has occurred and is
    continuing or would occur as a consequence of such restricted
    payment;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (ii) Grant Prideco would, at the time of such restricted payment
    and after giving pro forma effect thereto as if such restricted
    payment had been made at the beginning of the applicable four-
    quarter period, have been permitted to incur at least $1.00 of
    additional indebtedness pursuant to the fixed charge coverage
    ratio test set forth in the Grant Prideco indenture; and
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (iii) the aggregate amount of that restricted payment and all
    other restricted payments made by Grant Prideco and its
    restricted subsidiaries after the issue date, excluding
    restricted payments permitted by clauses (ii), (iii), (iv), (vi)
    and (vii) of Section 4.07(c), is less than or equal to the sum,
    without duplication, of:
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (A) 50% of Grant Prideco&#146;s consolidated net income for the
    period (taken as one accounting period) from January 1, 2005 to
    the end of Grant Prideco&#146;s most recently ended fiscal
    quarter for which Grant Prideco has filed financial statements
    with the SEC (or, if such consolidated net income for such
    period is a deficit, less 100% of such deficit), plus
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (B) 100% of the aggregate net cash proceeds received by Grant
    Prideco since the issue date as a contribution to Grant
    Prideco&#146;s common equity capital or from the issue or sale
    (other than to a subsidiary) of Grant Prideco&#146;s or any of
    its restricted subsidiaries&#146; equity interests (other than
    disqualified stock) or from the issue or sale (other than to a
    subsidiary) of Grant Prideco&#146;s convertible or exchangeable
    disqualified stock or Grant Prideco&#146;s convertible or
    exchangeable debt securities that have been converted into or
    exchanged for equity interests (other than disqualified stock),
    plus
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    44
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 100%; margin-left: 0%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="19%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (C) to the extent that any restricted investment that Grant
    Prideco or any of its restricted subsidiaries makes after the
    issue date is sold for cash or otherwise liquidated or repaid
    for cash, an amount equal to the lesser of (1) the cash return
    of capital with respect to any such restricted investment (less
    the cost of disposition, if any) and (2) the initial amount of
    such restricted investment, plus
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (D) if Grant Prideco redesignates any unrestricted subsidiary as
    a restricted subsidiary after the issue date, an amount equal to
    the lesser of (1) the net book value of Grant Prideco&#146;s
    investment in the unrestricted subsidiary at the time the
    unrestricted subsidiary was designated as such and (2) the fair
    market value of Grant Prideco&#146;s investment in the
    unrestricted subsidiary at the time of the redesignation.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (c) Notwithstanding clauses (a) and (b) of Section 4.07, Grant
    Prideco is permitted to effect, and to cause or allow any of its
    restricted subsidiaries to effect:
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (i) the payment of any dividend within 60&#160;days after the
    date of declaration of the dividend, if at the date of
    declaration the dividend payment would have complied with the
    provisions of the Grant Prideco indenture;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (ii) the redemption, repurchase, retirement, defeasance or other
    acquisition of any of (a) Grant Prideco&#146;s indebtedness or
    any indebtedness of any guarantor that is subordinated to the
    notes or the subsidiary guarantees, or (b) Grant Prideco&#146;s
    equity interests or any equity interests of any of Grant
    Prideco&#146;s restricted subsidiaries, in either case in
    exchange for, or out of the net cash proceeds of the
    substantially concurrent sale (other than to one of Grant
    Prideco&#146;s subsidiaries) of, Grant Prideco&#146;s equity
    interests (other than disqualified stock); provided, however,
    that the amount of any such net cash proceeds that are utilized
    for any such redemption, repurchase, retirement, defeasance or
    other acquisition will be excluded from clause (c)(iii)(B) of
    Section 4.07;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (iii) the defeasance, redemption, repurchase or other
    acquisition of Grant Prideco&#146;s indebtedness or indebtedness
    of any guarantor that is subordinated to the notes or the
    subsidiary guarantees with the net cash proceeds from an
    incurrence of permitted refinancing indebtedness;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    45
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 100%; margin-left: 0%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="19%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (iv) the payment of any dividend by one of Grant Prideco&#146;s
    restricted subsidiaries to the holders of that restricted
    subsidiary&#146;s common equity interests on a pro rata basis,
    so long as Grant Prideco or one of its restricted subsidiaries
    receives at least a pro rata share (and in like form) of the
    dividend or distribution in accordance with its common equity
    interests;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (v) the repurchase, redemption or other acquisition or
    retirement for value of any of Grant Prideco&#146;s or any of
    its restricted subsidiaries&#146; equity interests held by any
    member of Grant Prideco&#146;s or any of its restricted
    subsidiaries&#146; management pursuant to any management equity
    subscription agreement, stock option agreement or similar
    agreement, provided, however, that the aggregate price paid for
    all such repurchased, redeemed, acquired or retired equity
    interests may not exceed $5.0 million in any twelve-month
    period;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
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</TD>
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&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (vi) in connection with an acquisition by Grant Prideco or any
    of its restricted subsidiaries, the return to Grant Prideco or
    such restricted subsidiary of equity interests of Grant Prideco
    or such restricted subsidiary constituting a portion of the
    purchase consideration in settlement of indemnification claims;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
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<TD>
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</TD>
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</TD>
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<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (vii) the purchase by Grant Prideco of fractional shares arising
    out of stock dividends, splits or combinations or business
    combinations;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
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</TD>
<TD>
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<TD>
&nbsp;
</TD>
</TR>
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<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (viii) repurchases of equity interests deemed to occur upon
    exercise of stock options or warrants if such equity interests
    represent a portion of the exercise price of such options or
    warrants or the payment of withholding taxes through the
    issuance of equity interests;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (ix) the acquisition in open-market purchases of Grant
    Prideco&#146;s common equity interests for matching
    contributions to Grant Prideco&#146;s employee stock purchase
    and deferred compensation plans in the ordinary course of
    business and consistent with past practices; or
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
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</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (x) other restricted payments in an aggregate amount since the
    issue date not to exceed $35.0 million, provided, however, that,
    with respect to clauses (ii), (iii), (v), (ix) and (x) above, no
    default or event of default shall have occurred and be
    continuing immediately after such transaction.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

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    46
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 100%; margin-left: 0%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
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    <TD width="19%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
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<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (d) For the avoidance of doubt, any cash payment on any
    indebtedness convertible into capital stock (other than
    disqualified stock) in an amount not in excess of the aggregate
    principal amount thereof will not be deemed a &#147;restricted
    payment&#148; under Section 4.07; provided that such payment was
    a scheduled payment included in the instrument relating to such
    indebtedness upon original issuance thereof. The amount of all
    restricted payments (other than cash) will be the fair market
    value on the date of the restricted payment of the asset(s) or
    securities proposed to be transferred or issued by Grant Prideco
    or a restricted subsidiary, as the case may be, pursuant to the
    restricted payment. The fair market value of any assets or
    securities that are required to be valued by Section 4.07 will
    be determined by Grant Prideco&#146;s board of directors whose
    resolution with respect thereto will be delivered to the
    trustee. The board of directors&#146; determination must be
    based upon an opinion or appraisal issued by an accounting,
    appraisal or investment banking firm of national standing if the
    fair market value exceeds $20.0 million. Not later than the date
    of making any restricted payment, Grant Prideco will deliver to
    the trustee an Officers&#146; Certificate stating that such
    restricted payment is permitted and setting forth the basis upon
    which the calculations required by Section 4.07 were computed,
    together with a copy of any fairness opinion or appraisal
    required by the Grant Prideco indenture.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
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<TD>
&nbsp;
</TD>
<TD>
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<TD>
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</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    <B>Dividend and Other Payment Restrictions Affecting<BR>
     Subsidiaries</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 4.08<BR>
    </U></I> (a) Grant Prideco will not, and will not permit any of
    its restricted subsidiaries to, directly or indirectly, create
    or permit to exist or become effective any consensual
    encumbrance or restriction on the ability of any restricted
    subsidiary of Grant Prideco to (i)(A) pay dividends or make any
    other distributions on any capital stock of such restricted
    subsidiary to Grant Prideco or any other restricted subsidiary,
    or with respect to any other interest or participation in, or
    measured by, the profits of such restricted subsidiary, or (B)
    pay any indebtedness owed to Grant Prideco or any other
    restricted subsidiary, (ii) make loans or advances to Grant
    Prideco or any other restricted subsidiary, or (iii) transfer
    any of its properties or assets to Grant Prideco or any other
    restricted subsidiary.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
     There is no comparable provision under the National Oilwell
    Varco indenture.
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
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</TD>
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&nbsp;
</TD>
<TD>
&nbsp;
</TD>
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<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (b) The provisions of Section 4.08(a) above will not apply to
    encumbrances or restrictions existing under or by reason of:
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
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<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (i) agreements governing existing indebtedness, or any credit
    facilities, as in effect on the issue date and any amendments,
    modifications, restatements, renewals, increases, supplements,
    refundings,
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

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    47
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 100%; margin-left: 0%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
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    <TD width="19%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
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    <TD width="39%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
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&nbsp;
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&nbsp;
</TD>
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&nbsp;
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<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     replacements or refinancings of those agreements, provided that
    the amendments, modifications, restatements, renewals,
    increases, supplements, refundings, replacement or refinancings
    of any of the foregoing are no more restrictive, taken as a
    whole, with respect to such dividend and other payment
    restrictions than those contained in those agreements on the
    date hereof;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (ii) the Grant Prideco indenture, the notes and the subsidiary
    guarantees, or any other indenture governing debt securities
    that are no more restrictive, taken as a whole, with respect to
    dividend and other payment restrictions than those contained in
    the Grant Prideco indenture and the notes;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
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&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (iii) applicable law or any applicable rule, regulation or
    order;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
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&nbsp;
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&nbsp;
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&nbsp;
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<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (iv) any instrument governing indebtedness or capital stock of a
    person acquired by Grant Prideco or any of its restricted
    subsidiaries as in effect at the time of such acquisition
    (except to the extent such indebtedness or capital stock was
    incurred in connection with or in contemplation of such
    acquisition), which encumbrance or restriction is not applicable
    to any person, or the properties or assets of any person, other
    than the person, or the property or assets of the person, so
    acquired, provided that, in the case of indebtedness, such
    indebtedness was permitted by the terms of the Grant Prideco
    indenture to be incurred;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (v) customary non-assignment provisions in leases entered into
    in the ordinary course of business and consistent with past
    practices;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (vi) purchase money obligations for property acquired in the
    ordinary course of business that impose restrictions on that
    property of the nature described in clause (a)(iii) of Section
    4.08; (vii) any agreement (A) for the sale or other disposition
    of all of the equity interests in or all or substantially all of
    the assets of one of Grant Prideco&#146;s restricted
    subsidiaries that restricts distributions or asset transfers by
    that restricted subsidiary pending that sale or other
    disposition or (B) for the sale of a particular asset or line of
    business of a restricted subsidiary that imposes restrictions on
    the property subject to an agreement of the nature described in
    clause (a)(iii) of Section 4.08;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (viii) permitted refinancing indebtedness, provided that any
    restrictions contained in the agreements governing such
    permitted
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

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    48
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 100%; margin-left: 0%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="19%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     refinancing indebtedness are not materially more restrictive,
    taken as a whole, than those contained in the agreements
    governing the indebtedness being refinanced and that such
    permitted refinancing indebtedness was permitted to be incurred
    under specified provisions of the Grant Prideco indenture;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (ix) any instrument governing indebtedness of a foreign
    restricted subsidiary permitted to be incurred pursuant
    specified provisions of the Grant Prideco indenture;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (x) liens securing indebtedness otherwise permitted to be
    incurred under specified provisions of the Grant Prideco
    indenture that limit the right of the debtor to dispose of the
    assets subject to such liens; and
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (xi) provisions with respect to the disposition of specific
    assets or property in asset sale agreements entered into in the
    ordinary course of business.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    <B>Incurrence of Indebtedness and Issuance of Preferred
    Stock</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 4.09<BR>
    </U></I> (a) Grant Prideco will not, and will not permit any of
    its restricted subsidiaries to, incur any indebtedness
    (including acquired debt), and Grant Prideco will not issue any
    disqualified stock, and will not permit any of its restricted
    subsidiaries to issue any shares of preferred stock; provided,
    however, that (1) Grant Prideco and any guarantor may incur
    indebtedness (including acquired debt) and (2) Grant Prideco may
    issue disqualified stock, if, in each case, the fixed charge
    coverage ratio for Grant Prideco&#146;s most recently ended
    fiscal four full fiscal quarters for which Grant Prideco has
    filed financial statements with the SEC preceding the date on
    which such additional indebtedness is incurred or such
    disqualified stock is issued, as the case may be, would have
    been at least 2.0 to 1.0, determined on a pro forma basis
    (including a pro forma application of the net proceeds
    therefrom), as if the additional indebtedness had been incurred
    or the disqualified stock had been issued, as the case may be,
    at the beginning of such four-quarter period.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
     There is no comparable provision under the National Oilwell
    Varco indenture.
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
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&nbsp;
</TD>
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<TD nowrap align="left" valign="top">
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<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (b) In addition to the foregoing, Grant Prideco and any
    restricted subsidiary (except as specified below) may incur the
    following types of indebtedness (collectively, &#147;permitted
    debt&#148;):
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
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<TD>
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<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (i) the incurrence by Grant Prideco or any restricted subsidiary
    of additional indebtedness and letters of credit under one or
    more credit facilities and guarantees thereof by the guarantors;
    provided, however,
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

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    49
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 100%; margin-left: 0%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
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    <TD width="39%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
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<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="top">
&nbsp;
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<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
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<TD>
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<TD nowrap align="left" valign="top">
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<TD>
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</TD>
<TD align="left" valign="top">
     that the aggregate principal amount of all indebtedness
    incurred by Grant Prideco and its restricted subsidiaries
    pursuant to this clause (i) (with letters of credit being deemed
    to have a principal amount equal to the maximum potential
    liability of Grant Prideco and its restricted subsidiaries
    thereunder) outstanding at any one time does not exceed $400.0
    million;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
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</TD>
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<TD>
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</TD>
<TD>
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</TD>
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<TD nowrap align="left" valign="top">
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</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (ii) the incurrence by Grant Prideco and the restricted
    subsidiaries of the indebtedness existing when Grant Prideco
    first issued the Grant Prideco notes;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
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<TD>
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<TD nowrap align="left" valign="top">
&nbsp;
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<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (iii) the incurrence by Grant Prideco of indebtedness
    represented by the Grant Prideco notes and the incurrence by the
    guarantors of the subsidiary guarantees of those notes;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
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<TD>
&nbsp;
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<TD>
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<TD>
&nbsp;
</TD>
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&nbsp;
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&nbsp;
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<TD nowrap align="left" valign="top">
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<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (iv) the incurrence by Grant Prideco, or by any restricted
    subsidiary that is a guarantor, of indebtedness represented by
    capital lease obligations, mortgage financings or purchase money
    obligations, in each case incurred for the purpose of financing
    all or any part of the purchase price or cost of construction or
    improvement of property, plant or equipment used in Grant
    Prideco&#146;s business or the business of that restricted
    subsidiary, in an aggregate principal amount not to exceed the
    greater of (x) $30.0 million at any time outstanding and (y)
    3.5% of total assets at the time of such incurrence of such
    indebtedness;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
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<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
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&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (v) the incurrence by Grant Prideco or any of its restricted
    subsidiaries of permitted refinancing indebtedness in exchange
    for, or the net proceeds of which are used to refund, refinance
    or replace indebtedness (other than intercompany indebtedness)
    that was incurred under clause (a) of Section 4.09 or clauses
    (ii), (iii) or (iv) of Section 4.09(b); provided, however, that
    no restricted subsidiary that is not a guarantor may refund,
    refinance or replace indebtedness previously incurred by Grant
    Prideco or by any restricted subsidiary that is a guarantor;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (vi) the incurrence by Grant Prideco or any of its restricted
    subsidiaries of intercompany indebtedness between or among Grant
    Prideco and any of its restricted subsidiaries; provided,
    however, that:
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
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<TD>
&nbsp;
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&nbsp;
</TD>
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</TD>
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<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (A) if Grant Prideco or a guarantor is the obligor on such
    intercompany indebtedness, such intercompany indebtedness must
    be expressly subordinated to the prior payment in full in cash
    of all obligations
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    50
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 100%; margin-left: 0%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
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    <TD width="19%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
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    <TD width="39%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
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    <TD width="39%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
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&nbsp;
</TD>
<TD>
&nbsp;
</TD>
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<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     with respect to, in the case of Grant Prideco, the notes, and,
    in the case of a guarantor, the subsidiary guarantees; and
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
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<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
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&nbsp;
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<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (B) (1) any subsequent issuance or transfer of equity interests
    that results in any such indebtedness being held by a person
    other than Grant Prideco or a restricted subsidiary that is a
    guarantor and (2) any sale or other transfer of any such
    indebtedness to a person that is not either Grant Prideco or a
    restricted subsidiary that is a guarantor will be deemed, in
    each case, to constitute an incurrence of such indebtedness by
    Grant Prideco or such restricted subsidiary, as the case may be,
    that was not permitted by this clause (vi);
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
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<TD>
&nbsp;
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&nbsp;
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<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (vii) the incurrence by Grant Prideco or any of its restricted
    subsidiaries of hedging obligations;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (viii) indebtedness of the foreign restricted subsidiaries that
    are not guarantors in an aggregate principal amount not to
    exceed the greater of (x) $75.0 million and (y) 7.5% of total
    assets at the time of incurrence of such indebtedness;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
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<TD>
&nbsp;
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&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (ix) the guarantee by Grant Prideco or any of the guarantors of
    indebtedness of Grant Prideco or of any of the guarantors that
    was permitted to be incurred by another provision of Section
    4.09; and
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (x) the incurrence by Grant Prideco or a restricted subsidiary
    of additional indebtedness in an aggregate principal amount (or
    accreted value, as applicable) at any time outstanding,
    including all permitted refinancing indebtedness incurred to
    refund, refinance or replace any indebtedness incurred pursuant
    to this clause (x), not to exceed $50.0 million.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (c) The maximum amount of indebtedness that Grant Prideco or a
    restricted subsidiary may incur pursuant to Section 4.09 will
    not be deemed to be exceeded, with respect to any outstanding
    indebtedness, due solely to fluctuations in the exchange rates
    of currencies.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (d) For purposes of determining compliance with this covenant,
    in the event that an item of proposed indebtedness, including
    acquired debt, meets the criteria of more than one of the
    categories of permitted debt described in clauses (b)(i) through
    (x) of Section 4.09 as of the date of incurrence thereof, or is
    entitled to be incurred pursuant to clause (a) of Section 4.09
    as of the date of incurrence thereof or pursuant to any
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

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    51
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 100%; margin-left: 0%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="19%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     combination of the foregoing as of the date of incurrence
    thereof, Grant Prideco will, in its sole discretion, classify
    (or later classify or reclassify) in whole or in part, in Grant
    Prideco&#146;s sole discretion, such item of indebtedness in any
    manner that complies with Section 4.09. Accrual of interest or
    dividends, the accretion of accreted value or liquidation
    preference and the payment of interest or dividends in the form
    of additional indebtedness or disqualified stock will not be
    deemed to be an incurrence of indebtedness or an issuance of
    disqualified stock for purposes of Section 4.09.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    <B>Transactions with Affiliates</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 4.10<BR>
    </U></I> (a) Grant Prideco will not, and will not permit any of
    its restricted subsidiaries to, make any payment to, or sell,
    lease, transfer or otherwise dispose of any properties or assets
    to, or purchase any property or assets from, or enter into or
    make or amend any transaction, contract, agreement,
    understanding, loan, advance or guarantee with, or for the
    benefit of, any affiliate (each, an &#147;affiliate
    transaction&#148;), unless:
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
     There is no comparable provision under the National Oilwell
    Varco indenture.
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (i) the affiliate transaction is on terms that are no less
    favorable to Grant Prideco or the relevant restricted subsidiary
    than those that would have been obtained in a comparable
    transaction by Grant Prideco or such restricted subsidiary with
    an unrelated person; and
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
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    (ii) Grant Prideco delivers to the trustee:
</TD>
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    (A) with respect to any affiliate transaction or series of
    related affiliate transactions involving aggregate consideration
    in excess of $5.0 million, a resolution of Grant Prideco&#146;s
    board of directors set forth in an officers&#146; certificate
    certifying that such affiliate transaction complies with Section
    4.10 and that such affiliate transaction has been approved by a
    majority of the disinterested members of Grant Prideco&#146;s
    board of directors; and
</TD>
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    (B) with respect to any affiliate transaction or series of
    related affiliate transactions involving aggregate consideration
    in excess of $10.0 million, an opinion as to the fairness to the
    holders of such affiliate transaction from a financial point of
    view issued by an accounting, appraisal or investment banking
    firm of national standing.
</TD>
<TD>
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</TD>
<TD nowrap align="left" valign="top">
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

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<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
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    (b) The following items will not be deemed to be affiliate
    transactions and, therefore, will not be subject to the
    provisions of clause (a) of Section 4.10:
</TD>
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    (i) any employment agreement entered into by Grant Prideco or a
    restricted subsidiary in the ordinary course of business and
    consistent with the past practice of Grant Prideco or such
    restricted subsidiary;
</TD>
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    (ii) transactions between or among Grant Prideco and/or its
    restricted subsidiaries;
</TD>
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    (iii) transactions with a person that is an affiliate of Grant
    Prideco solely because Grant Prideco owns an equity interest in
    such person;
</TD>
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    (iv) payment of reasonable directors fees and reasonable
    indemnitees to persons who are not otherwise affiliates of Grant
    Prideco;
</TD>
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    (v) sales of equity interests (other than disqualified stock) to
    affiliates of Grant Prideco;
</TD>
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    (vi) restricted payments or permitted investments that are
    permitted by Section 4.07; or
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<TD align="left" valign="top">
    (vii) transactions in the ordinary courses of business
    consistent with the past practices with persons that one of
    Grant Prideco&#146;s directors serves as an officer or director
    of such person.
</TD>
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<TD nowrap align="left" valign="top">
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<TD nowrap align="left" valign="top">
    <B>Liens</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 4.11<BR>
    </U></I> Grant Prideco will not, and will not permit any of its
    restricted subsidiaries to, directly or indirectly, create,
    incur, assume or suffer to exist any lien of any kind securing
    indebtedness, attributable debt or trade payables, except
    permitted liens, upon any of Grant Prideco&#146;s, or a
    restricted subsidiary&#146;s, property or assets, now owned or
    acquired after the issue date, unless all payments due under the
    Grant Prideco indenture and the notes, or the subsidiary
    guarantees, as applicable, are secured on an equal and ratable
    basis with (or if the obligations being secured rank junior in
    right of payment to the notes, on a senior basis to) the
    obligations so secured until such time as such obligations are
    no longer secured by a lien.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section&#160;4.6<BR>
    </U></I> So long as any of the notes are outstanding, National
    Oilwell Varco will not at any time create, incur, issue, assume
    or guarantee, and will not cause, suffer or permit a restricted
    subsidiary to create, incur, issue, assume or guarantee, any
    secured debt without making effective provision (and National
    Oilwell Varco covenants that in such case it will make or cause
    to be made such effective provision) whereby the notes then
    outstanding and any other indebtedness of or guaranteed by
    National Oilwell Varco or any restricted subsidiary then
    entitled thereto, subject to applicable priorities of payment,
    will be secured, by a lien equally and ratably with any and all
    other obligations and indebtedness thereby secured, so long as
    such other obligations and indebtedness will be so secured;
    provided, that if any such lien securing such secured debt
    ceases to exist, such equal and ratable security for the benefit
    of the holders of notes will automatically cease to exist
</TD>
</TR>
</TABLE>

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    53
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 100%; margin-left: 0%"><!-- BEGIN PAGE WIDTH -->

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    <TD width="39%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
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<!-- Table Width Row END -->
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<TD nowrap align="center" valign="top">
&nbsp;
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<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
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</TD>
<TD nowrap align="left" valign="top">

</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     without any further action; provided, further, that if such
    secured debt is expressly subordinated to the notes, the lien
    securing such subordinated secured debt will be subordinate and
    junior to the lien securing the notes with the same relative
    priority as such secured debt will have with respect to the
    notes; and provided further, that the foregoing covenants will
    not be applicable to the secured debt that is secured by
    permitted liens.
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
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<TD nowrap align="left" valign="top">

</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Notwithstanding the foregoing, National Oilwell Varco and its
    restricted subsidiaries may, without equally and ratably
    securing the notes, create, incur, issue, assume or guarantee
    secured debt not otherwise permitted or excepted if the sum of
    (a)&#160;the amount of such secured debt plus (b)&#160;the
    aggregate value of sale and leaseback transactions (excluding
    sale and leaseback transactions identified in (a) through (d) of
    Section&#160;4.7), does not exceed 10% of consolidated net
    tangible assets (as shown in the quarterly consolidated balance
    sheet of National Oilwell Varco most recently published prior to
    the date of creation, incurrence, issuance, assumption or
    guarantee).
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
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<TD align="left" valign="top">
    <B>Additional Subsidiary Guarantees</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 4.12<BR>
    </U></I> On the issue date of the Grant Prideco notes, each of
    Grant Prideco&#146;s domestic subsidiaries executed a subsidiary
    guarantee.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
     There is no comparable provision under the National Oilwell
    Varco indenture.
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
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<TD align="left" valign="top">
    If Grant Prideco or any of its restricted subsidiaries acquires
    or creates another domestic subsidiary on or after the issue
    date, then that newly acquired or created domestic subsidiary
    will become a guarantor and execute a supplemental indenture and
    deliver an opinion of counsel satisfactory to the trustee within
    10 business days of the date on which it was acquired or
    created; provided, however, that the foregoing will not apply to
    subsidiaries that have been properly designated as unrestricted
    subsidiaries in accordance with the Grant Prideco indenture for
    so long as they continue to constitute unrestricted
    subsidiaries; provided further, however, that if a subsidiary
    that is not a guarantor guarantees any of Grant Prideco&#146;s
    or a guarantor&#146;s indebtedness, that subsidiary will be
    required to provide Grant Prideco with a guarantee that ranks
    pari passu with (or, if that indebtedness is subordinated
    indebtedness, prior to) that indebtedness.
</TD>
<TD>
&nbsp;
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<TD nowrap align="left" valign="top">
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<TD align="left" valign="top">
    <B>Corporate Existence</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 4.14<BR>
    </U></I> Subject to specified exceptions, Grant Prideco will do
    or cause to be done all things necessary to preserve and keep in
    full force and effect (i) its corporate existence, and the
    corporate, partnership or other existence of each of its
    restricted subsidiaries, in accordance with
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section&#160;4.4<BR>
    </U></I> Subject to specified exceptions, National Oilwell Varco
    will do or cause to be done all things necessary to preserve and
    keep in full force and effect (i)&#160;National Oilwell
    Varco&#146;s corporate existence, and the corporate, partnership
    or other existence of each of its restricted
</TD>
</TR>
</TABLE>

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    54
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 100%; margin-left: 0%"><!-- BEGIN PAGE WIDTH -->

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<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
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<TD align="left" valign="top">
     the respective organizational documents (as the same may be
    amended from time to time) of Grant Prideco or any such
    restricted subsidiary and (ii) the rights (charter and
    statutory), licenses and franchises of Grant Prideco and its
    restricted subsidiaries; provided, however, that Grant Prideco
    will not be required to preserve any such right, license or
    franchise, or the corporate, partnership or other existence of
    any of its restricted subsidiaries, if the board of directors
    shall determine that the preservation thereof is no longer
    desirable in the conduct of the business of Grant Prideco and
    its restricted subsidiaries, taken as a whole, and that the loss
    thereof is not adverse in any material respect to the holders of
    the notes.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     subsidiaries, in accordance with the respective organizational
    documents (as the same may be amended from time to time) of
    National Oilwell Varco or any such restricted subsidiary and
    (ii)&#160;the rights (charter and statutory), licenses and
    franchises of National Oilwell Varco and its restricted
    subsidiaries; provided, however, that National Oilwell Varco
    will not be required to preserve any such right, license or
    franchise, or the corporate, partnership or other existence of
    any of its restricted subsidiaries, if the board of directors
    shall determine that the preservation thereof is no longer
    desirable in the conduct of the business of National Oilwell
    Varco and its restricted subsidiaries, taken as a whole, and
    that the loss thereof is not adverse in any material respect to
    the holders of the notes.
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
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&nbsp;
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&nbsp;
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<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    <B>Asset Sales</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 4.15<BR>
    </U></I> a) Grant Prideco will not, and will not permit any of
    its restricted subsidiaries to, consummate an asset sale unless:
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
     There is no comparable provision under the National Oilwell
    Varco indenture.
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
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&nbsp;
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&nbsp;
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&nbsp;
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<TD nowrap align="left" valign="top">
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<TD>
&nbsp;
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<TD align="left" valign="top">
    (i) Grant Prideco, or the restricted subsidiary, as the case may
    be, receives consideration at the time of the asset sale at
    least equal to the fair market value of the assets or equity
    interests issued or sold or otherwise disposed of;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
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    (ii) in the case of asset sales for consideration exceeding $5.0
    million, the fair market value is determined by Grant
    Prideco&#146;s board of directors and evidenced by a resolution
    of Grant Prideco&#146;s board of directors set forth in an
    officer&#146;s certificate delivered to the trustee; and
</TD>
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    (iii) at least 75% of the consideration received in the asset
    sale by Grant Prideco or such subsidiary is in the form of cash.
    For purposes of this provision, each of the following will be
    deemed to be cash:
</TD>
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    (A) any secured indebtedness of Grant Prideco or a guarantor and
    any indebtedness of a restricted subsidiary that is not a
    guarantor that are assumed by the transferee of any such assets
    pursuant to a customary novation agreement that releases Grant
    Prideco or such restricted subsidiary from further liability;
</TD>
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    (B) any securities, notes or other obligations received by Grant
    Prideco or any restricted subsidiary from such transferee that
    Grant Prideco or such restricted subsidiary within 180&#160;days
    of receipt thereof, converts into cash, to the extent of the
    cash received, in that conversion;
</TD>
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    55
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

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<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
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<TD>&nbsp;
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    (C) any designated non-cash consideration received by Grant
    Prideco or any restricted subsidiary in such asset sale having
    an aggregate fair market value (as determined in good faith by
    Grant Prideco&#146;s board of directors), taken together with
    all other designated non-cash consideration received pursuant to
    this clause (c) that is at that time outstanding, not to exceed
    the greater of (x) $50.0 million and (y) 5.0% of total assets at
    the time of the receipt of such designated non- cash
    consideration (with the fair market value of each item of
    designated non-cash consideration being measured at the time
    received without giving effect to subsequent changes in value);
    and
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    (D) liquid securities.
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    (b) Within 365&#160;days after the receipt of any net proceeds
    from an asset sale, Grant Prideco may apply those net proceeds
    at its option:
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    (i) to permanently repay any secured indebtedness of Grant
    Prideco or a guarantor, or any indebtedness of a restricted
    subsidiary that is not a guarantor and, if any indebtedness
    repaid under this clause (i) is revolving credit indebtedness,
    to correspondingly reduce commitments with respect thereto;
    provided, however, that for purposes of this clause (i) only,
    indebtedness will include accrued but unpaid interest thereon;
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    (ii) to acquire all or substantially all of the assets of, or a
    majority of the voting stock of, another permitted business;
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    (iii) to make a capital expenditure;
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    (iv) to acquire other long-term assets that are used or useful
    in a permitted business; or
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    (v) make a permitted investment.
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    Pending the final application of any net proceeds, Grant Prideco
    may temporarily reduce revolving credit borrowings or otherwise
    invest the net proceeds in any manner that is not prohibited by
    the Grant Prideco indenture.
</TD>
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    (c) Any net proceeds from asset sales that are not applied or
    invested as provided in the preceding paragraph will constitute
    &#147;excess proceeds&#148;. When the aggregate amount of excess
    proceeds exceeds $20.0 million,
</TD>
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</TABLE>

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    56
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 100%; margin-left: 0%"><!-- BEGIN PAGE WIDTH -->

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<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
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<TD align="left" valign="top">
     Grant Prideco will make a pro rata offer to purchase (an
    &#147;asset sale offer&#148;) to all holders of  Grant Prideco
    notes and all holders of other indebtedness that is pari passu
    with the notes containing provisions similar to those set forth
    in the Grant Prideco indenture with respect to offers to
    purchase or redeem with the proceeds of sales of assets to
    purchase the maximum principal amount of notes and such other
    pari passu indebtedness that may be purchased out of the excess
    proceeds. The offer price in any asset sale offer will be equal
    to 100% of the principal amount plus accrued and unpaid interest
    to the date of purchase, and will be payable in cash. If any
    excess proceeds remain after consummation of an asset sale
    offer, Grant Prideco may use those excess proceeds for any
    purpose not otherwise prohibited by the Grant Prideco indenture.
    If the aggregate principal amount of notes and other pari passu
    indebtedness tendered into such asset sale offer exceeds the
    amount of excess proceeds, the trustee will select the Grant
    Prideco notes and such other pari passu indebtedness to be
    purchased on a pro rata basis (based upon the aggregate
    principal amount of the notes and such other pari passu
    indebtedness tendered). Upon completion of each asset sale
    offer, the amount of excess proceeds will be deemed to have been
    reset at zero.
</TD>
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<TD align="left" valign="top">
    (d) Grant Prideco will comply with the requirements of Rule
    14e-1 under the Exchange Act and any other securities laws and
    regulations thereunder to the extent those laws and regulations
    are applicable in connection with repurchases of Grant Prideco
    notes pursuant to an asset sale offer. To the extent that the
    provisions of any securities laws or regulations conflict with
    Section 4.15, Grant Prideco will comply with the applicable
    securities laws and regulations and will not be deemed to have
    breached its obligations under Section 4.15 by virtue of that
    conflict.
</TD>
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<TD align="left" valign="top">
    <B>Offer to Repurchase upon Change of Control</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 4.16<BR>
    </U></I> (a) Upon the occurrence of a change of control
    triggering event, each holder will have the right to require
    Grant Prideco to make an offer (a &#147;change of control
    offer&#148;) to each holder to repurchase all or any part, equal
    to $1,000 or an integral multiple of $1,000, of such
    holder&#146;s Grant Prideco notes at an offer price in cash
    equal to 101% of the aggregate principal amount of notes
    repurchased, plus accrued and unpaid interest and liquidated
    damages, if any, on notes repurchased to the date fixed for
    repurchase (the &#147;change of control payment&#148;).
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
     There is no comparable provision under the National Oilwell
    Varco indenture.
</TD>
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<TD align="left" valign="top">
    (b) Within 15 business days following a change of control
    triggering event, Grant Prideco will mail a notice to each
    holder describing the
</TD>
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</TABLE>

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    57
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 100%; margin-left: 0%"><!-- BEGIN PAGE WIDTH -->

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<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
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     transaction or transactions that constitute the change of
    control triggering event and offering to repurchase the Grant
    Prideco notes on the date specified in the notice, which date
    will be no earlier than 30&#160;days and no later than
    60&#160;days from the date the notice is mailed (the
    &#147;change of control payment date&#148;) pursuant to the
    procedures set forth in specified provisions of the Grant
    Prideco indenture and described in the notice. Grant Prideco
    will comply with the requirements of Rule 14e-1 under the
    Exchange Act and any other securities laws and regulations
    thereunder to the extent those laws and regulations are
    applicable to the repurchase of the Grant Prideco notes as a
    result of a change of control triggering event. To the extent
    that the provisions of any securities laws or regulations
    conflict with Section 4.16, Grant Prideco will comply with the
    applicable securities laws and regulations and will not be
    deemed to have breached its obligations under Section 4.16 by
    virtue of such conflict.
</TD>
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<TD align="left" valign="top">
    (c) On the change of control payment date, Grant Prideco will,
    to the extent lawful, (i) accept for payment all Grant Prideco
    notes or portions of notes properly tendered under the change of
    control offer; (ii) deposit with the paying agent an amount
    equal to the change of control payment in respect of all Grant
    Prideco notes or portions of the notes properly tendered; and
    (iii) deliver or cause to be delivered to the trustee the notes
    so accepted together with an officers&#146; certificate stating
    the aggregate principal amount of notes or portions of the Grant
    Prideco notes being purchased by Grant Prideco.
</TD>
<TD>
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    (d) The paying agent will deliver promptly to each holder of
    Grant Prideco notes properly tendered the change of control
    payment for such notes, and, upon receipt of an authentication
    order in accordance with specified provisions of the Grant
    Prideco indenture with respect to such notes, the trustee will
    promptly authenticate and deliver, or cause to be transferred by
    book entry, to each holder a new note equal in principal amount
    to any unpurchased portion of the notes surrendered, if any,
    provided that each new note shall be in a principal amount of
    $1,000 or an integral multiple of $1,000.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
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</TD>
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<TD>
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</TD>
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</TD>
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<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (e) The change of control provisions described in Section 4.16
    will be applicable whether or not any other provisions of the
    Grant Prideco indenture are applicable.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
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<TD>
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</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
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<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (f) Grant Prideco will not be required to make a change of
    control offer following a change of control triggering event if
    a third party makes the change of control offer in the manner,
    at the times and otherwise in
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

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    58
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 100%; margin-left: 0%"><!-- BEGIN PAGE WIDTH -->

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<TD nowrap align="center" valign="top">
&nbsp;
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<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
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<TD align="left" valign="top">
     compliance with the requirements set forth in Section 4.16 and
    purchases all notes properly tendered and not withdrawn under
    the change of control offer.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
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<TD>
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</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    <B>Limitations on Line of Business</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 4.17<BR>
    </U></I> Grant Prideco will not, and will not permit any
    restricted subsidiary to, engage in any business other than a
    permitted business, except to such extent as is not material to
    Grant Prideco and its restricted subsidiaries, taken as a whole.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
     There is no comparable provision under the National Oilwell
    Varco indenture.
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    <B>Sale and Leaseback Transactions</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 4.18<BR>
    </U></I> (a) Grant Prideco will not, and will not permit any of
    its restricted subsidiaries to, enter into any sale and
    leaseback transaction; provided that Grant Prideco and its
    restricted subsidiaries may enter into a sale and leaseback
    transaction if:<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (i)
    Grant Prideco or the relevant restricted subsidiary, as the case
    may be, could have (A) incurred indebtedness in an amount equal
    to the attributable debt relating to such sale and leaseback
    transaction under the fixed charge coverage ratio test set forth
    in the Grant Prideco indenture and (B) incurred a lien to secure
    such indebtedness pursuant to specified provisions; provided,
    however, that clause (A) of this clause (a)(i) will not be
    applicable at any time after the date that the Grant Prideco
    notes have an investment grade credit rating and no default has
    occurred and is continuing under the indenture (a
    &#147;fall-away event&#148;);<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (ii)
    the gross cash proceeds of the sale and leaseback transaction
    are at least equal to the fair market value, as determined in
    good faith by Grant Prideco and set forth in an Officers&#146;
    Certificate delivered to the trustee, of the property that is
    the subject of the sale and leaseback transaction; provided,
    however, that in the case of any sale and leaseback transaction
    for consideration exceeding $10.0 million, the fair market value
    will be determined by Grant Prideco&#146;s board of directors
    and set forth in an Officers&#146; Certificate delivered to the
    trustee; and<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (iii)
    the transfer of assets in the sale and leaseback transaction is
    permitted by, and Grant Prideco or the relevant restricted
    subsidiary applies the proceeds of the transaction in compliance
    with, specified provisions of the Grant Prideco indenture;
    provided, however, that, in the event that Grant Prideco or any
    of its restricted subsidiaries consummates a sale and leaseback
    transaction at any time after the occurrence of a fall-away
    event, within 12&#160;months of that sale and
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section&#160;4.7<BR>
    </U></I> National Oilwell Varco will not, nor will it permit any
    of its restricted subsidiaries to, engage in a sale and
    leaseback transaction, unless: (a)&#160;such sale and leaseback
    transaction occurs within one year from the date of completion
    of the acquisition of the principal property subject thereto or
    the date of the completion of construction, development or
    substantial repair or improvements, or commencement of full
    operations, on such principal property, whichever is later,
    (b)&#160;the sale and leaseback transaction involves a lease for
    a period, including renewals, of not more than three years,
    (c)&#160;National Oilwell Varco or such restricted subsidiary
    would be entitled to incur secured debt secured by a lien on the
    principal property subject thereto in a principal amount equal
    to or exceeding the net sale proceeds from such sale and
    leaseback transaction without equally and ratably securing the
    notes pursuant to Section&#160;4.6, or (d)&#160;National Oilwell
    Varco or such restricted subsidiary, within a one-year period
    after the sale and leaseback transaction, applies or causes to
    be applied an amount not less than the net sale proceeds from
    such sale and leaseback transaction to (i)&#160;the redemption
    of the National Oilwell Varco notes or the prepayment,
    repayment, reduction or retirement of any indebtedness of
    National Oilwell Varco that ranks pari passu with the National
    Oilwell Varco notes or (ii)&#160;the expenditure or expenditures
    for principal property used or to be used in the ordinary course
    of business of National Oilwell Varco or any of its restricted
    subsidiaries.<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    Notwithstanding the foregoing, National Oilwell Varco may, and
    may permit each of its restricted subsidiaries, to, effect any
    sale and leaseback transaction that is not excepted by
    clauses&#160;(a) through (d) (inclusive) of the above paragraph,
    provided that, after giving effect thereto and the application
    of proceeds, if any, received by National Oilwell Varco or any
    its restricted subsidiaries as a result thereof, the net sale
    proceeds from such sale and leaseback transaction, together with
    the aggregate principal amount of all secured debt then
    outstanding (other than the notes) secured by liens upon
    principal
</TD>
</TR>
</TABLE>

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    59
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    <TD width="39%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
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<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
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&nbsp;
</TD>
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&nbsp;
</TD>
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<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     leaseback transaction, Grant Prideco will apply the net cash
    proceeds thereof to permanently repay secured indebtedness of
    Grant Prideco or a guarantor, or any indebtedness of any of
    Grant Prideco&#146;s restricted subsidiaries that is not a
    guarantor, and if any indebtedness repaid under this clause
    (a)(iii) is revolving credit indebtedness, to correspondingly
    reduce commitments with respect thereto.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     property (which are not permitted liens) would not exceed 10%
    of the consolidated net tangible assets (as shown in the
    quarterly consolidated balance sheet of National Oilwell Varco
    most recently published prior to the date the sale and leaseback
    transaction is effected).
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    <B>Payments for Consent</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 4.19<BR>
    </U></I> Neither Grant Prideco nor any of its restricted
    subsidiaries will, directly or indirectly, pay or cause to be
    paid any consideration, whether by way of interest, fee or
    otherwise, to or for the benefit of any holder for or as an
    inducement to any consent, waiver or amendment of any of the
    terms or provisions of the Grant Prideco indenture or the Grant
    Prideco notes unless such consideration is offered to be paid or
    is paid to all holders that consent, waive or agree to amend in
    the time frame set forth in the solicitation documents relating
    to such consent, waiver or agreement.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
     There is no comparable provision under the National Oilwell
    Varco indenture.
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    <B>Suspension of Covenants</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 4.20<BR>
    </U></I> If on any date following the issue date the Grant
    Prideco notes have an investment grade rating from two specified
    rating agencies and no default has occurred and is continuing
    under the Grant Prideco indenture (a &#147;fall-away
    event&#148;), Grant Prideco and its restricted subsidiaries will
    not be subject to Sections 4.07, 4.08, 4.09, 4.10, 4.15, 4.17,
    4.18(a)(i)(A) and 5.01(a)(iv) (collectively, the &#147;fall-away
    covenants&#148;) and such fall-away covenants will not
    thereafter be reinstated.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <BR>
     There is no comparable provision under the National Oilwell
    Varco indenture.
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    <B>Merger, Consolidation, or Sale of Assets</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 5.01<BR>
    </U></I> (a) Grant Prideco will not, directly or indirectly,
    consolidate or merge with or into another person (whether or not
    Grant Prideco is the surviving corporation), or sell, assign,
    transfer, convey or otherwise dispose of all or substantially
    all of the properties or assets of Grant Prideco and its
    restricted subsidiaries taken as a whole, in one or more related
    transactions, to another person unless:<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (i)
    either: (A) Grant Prideco is the surviving corporation or (B)
    the person formed by or surviving any such consolidation or
    merger (if other than Grant Prideco) or to which such sale,
    assignment, transfer, conveyance or other disposition has been
    made is a corporation organized or existing under the laws of
    the United States, any state of the United States or the
    District of Columbia;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (ii)
    the person formed by or surviving any such consolidation or
    merger
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section&#160;5.01<BR>
    </U></I> National Oilwell Varco may (a)&#160;consolidate with or
    merge into, or (b)&#160;sell, convey, transfer, lease or
    otherwise dispose of its properties and assets substantially as
    an entirety to, any person, provided that (i)&#160;in the case
    of any such consolidation or merger, National Oilwell Varco is
    the continuing entity or, if National Oilwell Varco is not the
    continuing entity, the continuing entity is a person organized
    and validly existing under the laws of the United States, any
    political subdivision thereof or any State thereof and assumes
    by supplemental indenture all of National Oilwell Varco&#146;s
    obligations on the notes and under the National Oilwell Varco
    indenture, and (ii)&#160;after giving effect to the transaction
    no event of default, and no event which, after notice or lapse
    of time or both, would become an event of default, shall exist.
    Upon a disposition of assets described in
    clause&#160;(b)&#160;of the preceding sentence, National Oilwell
    Varco will be released from any further
</TD>
</TR>
</TABLE>

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<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
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&nbsp;
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&nbsp;
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&nbsp;
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<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     (if other than Grant Prideco) or the person to which such sale,
    assignment, transfer, conveyance or other Grant Prideco
    disposition has been made assumes all of Grant Prideco&#146;s
    obligations under the Grant Prideco notes and the Grant Prideco
    indenture pursuant to agreements reasonably satisfactory to the
    trustee;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     liability under the National Oilwell Varco notes and the
    National Oilwell Varco indenture.
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
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&nbsp;
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<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
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<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (iii) immediately before and after giving effect to such
    transaction, no default or event of default exists; and
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (iv) Grant Prideco or the person formed by or surviving any such
    consolidation or merger (if other than Grant Prideco), or to
    which such sale, assignment, transfer, conveyance or other
    disposition has been made will, on the date of such transaction
    after giving pro forma effect thereto and any related financing
    transactions as if the same had occurred at the beginning of the
    applicable four-quarter period, be permitted to incur at least
    $1.00 of additional indebtedness pursuant to the fixed charge
    coverage ratio test set forth in the Grant Prideco indenture;
    provided, however, that Grant Prideco delivers to the trustee an
    Officers&#146; Certificate, attaching the arithmetic
    computations to demonstrate compliance with this clause (a)(iv),
    and an opinion of counsel, in each case stating that such
    consolidation, merger or transfer complies with this provision
    and that all conditions precedent provided for herein relating
    to such transaction have been complied with; and provided
    further, that this clause (a)(iv) will not apply (A) pursuant to
    specified provisions of the Grant Prideco indenture, after a
    fall- away event has occurred, and (B) if, in the good faith
    determination of the board of directors, the principal purpose
    of the transaction is to change Grant Prideco&#146;s state of
    incorporation and the transaction does not have as one of its
    purposes the evasion of the foregoing limitations.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (b) Grant Prideco will not, directly or indirectly, lease all or
    substantially all of its properties or assets, in one or more
    related transactions, to any other person.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
    <B>Events of Default</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 6.01<BR>
    </U></I> &#147;Event of default&#148; when used in the Grant
    Prideco indenture, with respect to the Grant Prideco notes,
    means any of the following:
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section&#160;6.01<BR>
    </U></I> &#147;Event of default&#148; when used in the National
    Oilwell Varco indenture with respect to the National Oilwell
    Varco notes, means any of the following:
</TD>
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    (a) default in the payment when due of interest on, or
    liquidated damages with respect to, any Grant Prideco note, and
    such default continues for a period of 30&#160;days;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (a)&#160;National Oilwell Varco defaults in the payment when due
    of principal of or make- whole premium, if any, on, the National
    Oilwell Varco notes;
</TD>
</TR>
</TABLE>

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<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
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    (b) default in the payment when due of principal of or premium,
    if any, on any Grant Prideco note when the same becomes due and
    payable at maturity, upon acceleration, upon redemption or
    otherwise;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (b)&#160;National Oilwell Varco defaults in payment when due of
    interest on the National Oilwell Varco notes and such default
    continues for a period of 30&#160;days;
</TD>
</TR>
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<TD align="left" valign="top">
    (c) default in the performance or breach of the provisions by
    Grant Prideco or any of its restricted subsidiaries of specified
    provisions of the Grant Prideco indenture;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (d)
    default in the performance by Grant Prideco or any of its
    restricted subsidiaries of specified provisions of the Grant
    Prideco indenture, and such default continues for a period of
    30&#160;days after written notice;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (c)&#160;National Oilwell Varco or any of its restricted
    subsidiaries fails to observe or perform any covenant of
    National Oilwell Varco (other than the covenants described in
    clauses&#160;(a) or (b) above) in the National Oilwell Varco
    notes or the indenture for 60&#160;days after notice to National
    Oilwell Varco by the trustee or the holders of at least 25% in
    aggregate principal amount of the National Oilwell Varco notes
    then outstanding;
</TD>
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<TD align="left" valign="top">
    (e) default in the performance of or breaches of any other
    covenant or agreement of Grant Prideco in the Grant Prideco
    indenture or under the Grant Prideco notes (other than a default
    specified in clause (a), (b), (c) or (d) above) by Grant Prideco
    or any of its restricted subsidiaries, and such default or
    breach continues for a period of 60&#160;days after written
    notice by the trustee to Grant Prideco or by the holders of 25%
    or more in aggregate principal amount of the notes to Grant
    Prideco and the trustee;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (f)
    default under any mortgage, indenture or instrument under which
    there may be issued or by which there may be secured or
    evidenced any indebtedness for money borrowed by Grant Prideco
    or any of its restricted subsidiaries (or the payment of which
    is guaranteed by Grant Prideco or any of its restricted
    subsidiaries) whether such indebtedness or guarantee then
    existed, or was created after the date of the Grant Prideco
    indenture, if that default: (i) is caused by a failure to pay
    principal of, or interest or premium, if any, on such
    indebtedness prior to the expiration of the grace period
    provided in such indebtedness on the date of such default (a
    &#147;payment default &#147;); or (ii) results in the
    acceleration of such indebtedness prior to its express maturity,
    and, in each case, the principal amount of any such
    indebtedness, together with the principal amount of any other
    such indebtedness under which there has been a payment default
    or the maturity of which has been so accelerated, aggregates
    $10.0 million or more;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (g)
    default by Grant Prideco or any of its subsidiaries in the
    payment of final judgments aggregating in excess of $10.0
    million, which judgments are not paid, discharged or stayed for
    a period of 60&#160;days;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (d)&#160;indebtedness of National Oilwell Varco or any
    subsidiary is not paid when due within the applicable grace
    period, if any, or is accelerated by the holders thereof and, in
    either case, the principal amount of such unpaid or accelerated
    indebtedness exceeds $20&#160;million;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    (e)&#160;National Oilwell Varco or any of its significant
    subsidiaries or any group of subsidiaries that, when taken
    together, would constitute a significant subsidiary:
    (i)&#160;commences a voluntary case, (ii)&#160;consents to the
    entry of an order for relief against it in an involuntary case,
    (iii)&#160;consents to the appointment of a custodian of it or
    for all or substantially all of its property, or (iv)&#160;makes
    a general assignment for the benefit of its creditors;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    (f)&#160;a court of competent jurisdiction enters an order or
    decree under the Bankruptcy Code that: (i)&#160;is for relief
    against National Oilwell Varco or any of its significant
    subsidiaries or any group of subsidiaries that, when taken
    together, would constitute a significant subsidiary, in an
    involuntary case; (ii)&#160;appoints a custodian of National
    Oilwell Varco or any of its significant subsidiaries or any
    group of subsidiaries that, when taken together, would
    constitute a significant subsidiary, or for all or substantially
    all of the property of National Oilwell Varco or any group of
    subsidiaries that, when taken together, would constitute a
    significant subsidiary; or (iii)&#160;orders the liquidation of
    National Oilwell Varco or any of its significant subsidiaries or
    any group of subsidiaries that, when taken together, would
    constitute a significant subsidiary; and the order or decree
    remains unstayed and in effect for 60 consecutive days.
</TD>
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    (h) except as permitted by the Grant Prideco indenture, any
    subsidiary guarantee shall be held in any judicial proceeding to
    be unenforceable or invalid or shall cease for any reason to be
    in full force and effect or any
</TD>
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<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
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<TD align="left" valign="top">
     guarantor, or any person acting on behalf of any guarantor,
    shall deny or disaffirm its obligations under its subsidiary
    guarantee;
</TD>
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&nbsp;
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<TD align="left" valign="top">
    (i) a court having jurisdiction in the premises enters a decree
    or order for (i) relief in respect of Grant Prideco or any of
    its restricted subsidiaries in an involuntary case under any
    applicable bankruptcy, insolvency or other similar law now or
    hereafter in effect, (ii) appointment of a receiver, liquidator,
    assignee, custodian, trustee, sequestrator or similar official
    of Grant Prideco or any of its restricted subsidiaries or for
    all or substantially all of the property and assets of Grant
    Prideco or any of its restricted subsidiaries, or (iii) the
    winding up or liquidation of the affairs of Grant Prideco or any
    of its restricted subsidiaries and, in each case, such decree or
    order shall remain unstayed and in effect for a period of 30
    consecutive days; or
</TD>
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<TD align="left" valign="top">
    (j) Grant Prideco or any of its restricted subsidiaries: (i)
    commences a voluntary case under any applicable bankruptcy,
    insolvency or other similar law now or hereafter in effect, or
    consents to the entry of an order for relief in an involuntary
    case under any such law, (ii) consents to the appointment of or
    taking possession by a receiver, liquidator, assignee,
    custodian, trustee, sequestrator or similar official of Grant
    Prideco or such restricted subsidiary or for all or
    substantially all of the property and assets of Grant Prideco or
    such restricted subsidiary, or (iii) effects any general
    assignment for the benefit of creditors.
</TD>
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<TD align="left" valign="top">
    <B>Amendment, Supplement and Waiver</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 10.01 &#038; 10.02</U></I>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Sections&#160;9.01 &#038; 9.02</U></I>
</TD>
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<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section 10.01</U></I>&#160;&#151; Without Consent of
    Holders of Notes:
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    <I><U>Section&#160;9.01</U></I>&#160;&#151; Without Consent of
    Holders of Notes:
</TD>
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&nbsp;
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<TD align="left" valign="top">
    Notwithstanding Section 10.02, Grant Prideco, the guarantors and
    the trustee may amend or supplement the Grant Prideco indenture
    or the notes without the consent of any holder of a Grant
    Prideco note:
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Notwithstanding Section&#160;9.2, National Oilwell Varco and the
    trustee may amend or supplement the National Oilwell Varco
    indenture or the notes without the consent of holders of the
    National Oilwell Varco notes:
</TD>
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&nbsp;
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&nbsp;
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&nbsp;
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<TD align="left" valign="top">
    (a) to cure any ambiguity, defect or inconsistency;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (a)&#160;to cure any ambiguity, defect or inconsistency;
</TD>
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&nbsp;
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&nbsp;
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<TD align="left" valign="top">
    (b) to provide for uncertificated Grant Prideco notes in
    addition to or in place of certificated Grant Prideco notes;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (c)
    to provide for the assumption of Grant Prideco&#146;s
    obligations to the holders of the Grant Prideco notes by a
    successor to Grant Prideco pursuant to specified provisions of
    the Grant Prideco indenture;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (b)&#160;to provide for uncertificated National Oilwell Varco
    notes in addition to or in place of certificated National
    Oilwell Varco notes or to alter specified provisions of the
    National Oilwell Varco indenture (including the related
    definitions) in a manner that does not materially adversely
    affect any holder;
</TD>
</TR>
</TABLE>

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&nbsp;
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<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
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&nbsp;
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&nbsp;
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&nbsp;
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&nbsp;
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&nbsp;
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<TD align="left" valign="top">
    (d) to make any change that would provide any additional rights
    or benefits to the holders of the Grant Prideco notes or that
    does not adversely affect the legal rights hereunder of any
    holder of the Grant Prideco note; or<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (e)
    to comply with requirements of the SEC in order to effect or
    maintain the qualification of the Grant Prideco indenture under
    the Trust Indenture Act.<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> Upon
    the request of Grant Prideco accompanied by a resolution of its
    board of directors authorizing the execution of any such amended
    or supplemental indenture, and upon receipt by the trustee of
    the documents described in specified provisions of the Grant
    Prideco indenture, the trustee will join with Grant Prideco in
    the execution of any amended or supplemental indenture
    authorized or permitted by the terms of the Grant Prideco
    indenture and to make any further appropriate agreements and
    stipulations that may be therein contained, but the trustee will
    not be obligated to enter into such amended or supplemental
    indenture that affects its own rights, duties or immunities
    under the Grant Prideco indenture or otherwise.<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    <I><U>Section 10.02</U></I>&#160;&#151; With Consent of Holders
    of Notes: <BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (a)
    Except as provided below in Section 10.02, the Grant Prideco
    indenture and the Grant Prideco notes may be amended or
    supplemented with the consent of the holders of at least a
    majority in principal amount of the Grant Prideco notes then
    outstanding voting as a single class (including, without
    limitation, consents obtained in connection with a tender offer
    or exchange offer for, or purchase of, the notes), and, subject
    to specified provisions of the Grant Prideco indenture, any
    existing default or event of default (other than a default or
    event of default in the payment of the principal of, premium, if
    any, or interest on the Grant Prideco notes, except a payment
    default resulting solely from an acceleration that has been
    rescinded) or compliance with any provision of the Grant Prideco
    indenture or the Grant Prideco notes may be waived with the
    consent of the holders of a majority in principal amount of the
    then outstanding Grant Prideco notes voting as a single class
    (including consents obtained in connection with a tender offer
    or exchange offer for, or purchase of, the notes). However,
    without the consent of each holder affected, an amendment or
    waiver under Section 10.02 may not (with respect to any notes
    held by a non-consenting holder):<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (i)
    reduce the principal amount of Grant Prideco notes whose holders
    must consent to an amendment, supplement or waiver;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    (c)&#160;to provide for the assumption of National Oilwell
    Varco&#146;s obligations to the holders of any of the National
    Oilwell Varco notes in the case of a merger, consolidation or
    sale of assets of National Oilwell Varco pursuant to specified
    provisions of the National Oilwell Varco indenture;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    (d)&#160;to make any change that would provide any additional
    rights or benefits to the holders of the National Oilwell Varco
    notes or that does not adversely affect the legal rights
    hereunder of any such holder in any material respect;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    (e)&#160;to conform the text of the National Oilwell Varco
    indenture or the National Oilwell Varco notes to any provision
    of the &#147;Description of the National Oilwell Varco
    Notes&#148; section of this prospectus to the extent such
    provision was intended to be a verbatim recitation of a
    provision of such indenture or the National Oilwell Varco
    notes;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    (f)&#160;to comply with requirements of the SEC in order to
    effect or maintain the qualification of the National Oilwell
    Varco indenture under the Trust&#160;Indenture Act; or<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    (g)&#160;to allow any guarantor to guarantee the National
    Oilwell Varco notes.<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> Upon
    the request of National Oilwell Varco accompanied by a
    resolution of its board of directors authorizing the execution
    of any such amended or supplemental indenture, and upon receipt
    by the trustee of the documents described in specified
    provisions of the National Oilwell Varco indenture, the trustee
    will join with National Oilwell Varco in the execution of any
    amended or supplemental indenture authorized or permitted by the
    terms of the National Oilwell Varco indenture and to make any
    further appropriate agreements and stipulations that may be
    therein contained, but the trustee will not be obligated to
    enter into such amended or supplemental indenture that affects
    its own rights, duties, liabilities or immunities under the
    National Oilwell Varco indenture or otherwise.<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    <I><U>Section&#160;9.02</U></I>&#160;&#151; With Consent of
    Holders of Notes: <BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    Except as provided below in Section&#160;9.02, National Oilwell
    Varco and the trustee may amend or supplement the National
    Oilwell Varco indenture and the National Oilwell Varco notes may
    be amended or supplemented with the consent of the holders of a
    majority in principal amount of the National Oilwell Varco notes
    then outstanding (including, without limitation, consents
    obtained in connection with
</TD>
</TR>
</TABLE>

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    64
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<DIV style="width: 100%; margin-left: 0%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
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    <TD width="19%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
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    <TD width="39%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
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    <TD width="39%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     (ii) reduce the principal of or change the fixed maturity of
    any Grant Prideco note or alter the provisions with respect to
    the redemption of the Grant Prideco notes, other than specified
    provisions of the Grant Prideco indenture;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (iii)
    reduce the rate of or change the time for payment of interest on
    any Grant Prideco note;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (iv)
    waive a default or event of default in the payment of principal
    of, or interest or premium, if any, on the Grant Prideco notes
    (except a rescission of acceleration of the Grant Prideco notes
    by the holders of at least a majority in aggregate principal
    amount of the Grant Prideco notes and a waiver of the payment
    default that resulted from such acceleration);<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (v)
    make any Grant Prideco note payable in money other than that
    stated in the Grant Prideco notes;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (vi)
    make any change in the provisions of the Grant Prideco indenture
    relating to waivers of past defaults, including specified
    provisions of the Grant Prideco indenture, or the rights of
    holders of Grant Prideco notes to receive payments of principal
    of, or interest or premium, if any, on, the Grant Prideco
    notes;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (vii)
    waive a redemption payment with respect to any Grant Prideco
    note, other than a payment required under specified provisions
    of the Grant Prideco indenture;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    (viii) release any guarantor from any of its obligations under
    its subsidiary guarantee or the Grant Prideco indenture, except
    in accordance with the terms of the Grant Prideco indenture;
    or<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (ix)
    make any change in the preceding amendment and waiver
    provisions.<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (b)
    Upon the request of Grant Prideco accompanied by a resolution of
    its board of directors authorizing the execution of any such
    amended or supplemental indenture, and upon the filing with the
    trustee of evidence satisfactory to the trustee of the consent
    of the holders of notes as aforesaid, and upon receipt by the
    trustee of the documents described in specified provisions of
    the Grant Prideco indenture, the trustee will join with Grant
    Prideco in the execution of such amended or supplemental
    indenture unless such amended or supplemental indenture directly
    affects the trustee&#146;s own rights, duties or immunities
    under the Grant Prideco indenture or otherwise, in which case
    the trustee may in its discretion, but shall not be obligated
    to, enter into such amended or supplemental indenture.<BR>

</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     a tender offer or exchange offer for the National Oilwell Varco
    notes), and, subject to specified provisions of the National
    Oilwell Varco indenture, any existing default or event of
    default (other than a default or event of default in the payment
    of the principal of, or premium, if any, or interest on, the
    National Oilwell Varco notes, except a payment default resulting
    from an acceleration that has been rescinded) or compliance with
    any provision of the National Oilwell Varco indenture or the
    National Oilwell Varco notes may be waived with the consent of
    the holders of a majority in principal amount of the then
    outstanding National Oilwell Varco notes (including consents
    obtained in connection with a tender offer or exchange offer for
    the National Oilwell Varco notes).<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> Upon
    the request of National Oilwell Varco accompanied by a
    resolution of its board of directors authorizing the execution
    of any such amended or supplemental indenture, and upon the
    filing with the trustee of evidence satisfactory to the trustee
    of the consent of the holders of National Oilwell Varco notes as
    aforesaid, and upon receipt by a responsible officer of the
    trustee of the documents described in specified provisions of
    the National Oilwell Varco indenture, the trustee will join with
    National Oilwell Varco in the execution of such amended or
    supplemental indenture. It is not necessary for the consent of
    the holders of National Oilwell Varco notes under
    Section&#160;9.02 to approve the particular form of any proposed
    amendment or waiver, but it will be sufficient if such consent
    approves the substance thereof.<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> After
    an amendment, supplement or waiver under Section&#160;9.02
    becomes effective, National Oilwell Varco will mail to the
    holders of notes affected thereby a notice briefly describing
    the amendment, supplement or waiver. Any failure of National
    Oilwell Varco to mail such notice, or any defect therein, will
    not, however, in any way impair or affect the validity of any
    such amended or supplemental indenture or waiver. Subject to
    specified provisions of the National Oilwell Varco indenture,
    the holders of a majority in aggregate principal amount of the
    National Oilwell Varco notes then outstanding may waive
    compliance in a particular instance by National Oilwell Varco
    with any provision of the National Oilwell Varco indenture or
    the National Oilwell Varco notes. However, without the consent
    of each holder affected, an amendment or waiver may not (with
    respect to any National Oilwell Varco notes held by a
    nonconsenting holder):<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    (a)&#160;change the stated maturity of the principal of, or any
    installment of principal of or interest on, any such National
    Oilwell Varco note;<BR>

</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">

</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
</TD>
</TR>
</TABLE>

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    65
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<DIV style="width: 100%; margin-left: 0%"><!-- BEGIN PAGE WIDTH -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="19%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="39%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Grant Prideco Notes</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>National Oilwell Varco Notes</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (c)
    It shall not be necessary for the consent of the holders of
    Grant Prideco notes under Section 10.02 to approve the
    particular form of any proposed amendment or waiver, but it will
    be sufficient if such consent approves the substance thereof.<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV> (d)
    After an amendment, supplement or waiver under Section 10.02
    becomes effective, Grant Prideco will mail to the holders of
    Grant Prideco notes affected thereby a notice briefly describing
    the amendment, supplement or waiver. Any failure of Grant
    Prideco to mail such notice, or any defect therein, will not,
    however, in any way impair or affect the validity of any such
    amended or supplemental indenture or waiver. Subject to
    specified provisions of the Grant Prideco indenture, the holders
    of a majority in aggregate principal amount of the Grant Prideco
    notes then outstanding voting as a single class may waive
    compliance in a particular instance by Grant Prideco with any
    provision of the Grant Prideco indenture or the Grant Prideco
    notes.
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     (b)&#160;reduce the principal amount of, or any interest on,
    any such National Oilwell Varco note;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    (c)&#160;reduce the amount of principal of any such National
    Oilwell Varco note payable upon acceleration of the stated
    maturity thereof;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    (d)&#160;change the place or currency of payment of principal
    of, or interest on, any such National Oilwell Varco note;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    (e)&#160;impair the right to institute suit for the enforcement
    of any payment on or with respect to any such National Oilwell
    Varco note;<BR>
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    (f)&#160;reduce the percentage in principal amount of such
    National Oilwell Varco note, the consent of whose holders is
    required for modification or amendment of the National Oilwell
    Varco indenture;<BR>

</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">

</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    (g)&#160;reduce the percentage in principal amount of such
    National Oilwell Varco note necessary for waiver of compliance
    with certain provisions of the National Oilwell Varco indenture
    or for waiver of certain defaults;<BR>

</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">

</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    (h)&#160;modify such provisions with respect to modification and
    waiver;<BR>

</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">

</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    (i)&#160;waive, reduce or modify a make-whole premium payable
    with respect to any National Oilwell Varco note called for
    redemption; or<BR>

</TD>
</TR>
<TR valign="bottom" style="line-height: 12pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">

</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
     <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
    (j)&#160;make any change in specified provisions of the National
    Oilwell Varco indenture or in the foregoing amendment and waiver
    provisions.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

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    66
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<A name='110'>
<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">THE
    PROPOSED AMENDMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are soliciting the consent of the holders of Grant Prideco
    notes to (1)&#160;eliminate many covenants in the Grant Prideco
    indenture, (2)&#160;eliminate the restrictions on Grant
    Prideco&#146;s ability to consolidate, merge or sell all or
    substantially all of its assets and (3)&#160;eliminate some
    events of default under the Grant Prideco indenture. If the
    proposed amendments described below are adopted, the amendments
    will apply to all Grant Prideco notes not acquired in the
    exchange offer. Thereafter, all such Grant Prideco notes will be
    governed by the Grant Prideco indenture as amended by the
    proposed amendments, which will have less restrictive terms and
    afford reduced protections to the holders of such securities
    compared to those currently in the Grant Prideco indenture. See
    &#147;Risk Factors&#160;&#151; Risks Related to the Exchange
    Offer, the Consent Solicitation and the National Oilwell Varco
    Notes&#160;&#151; The proposed amendments to the Grant Prideco
    indenture will afford reduced protection to remaining holders of
    Grant Prideco notes&#148;.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The descriptions below of the provisions of the Grant Prideco
    indenture to be eliminated or modified do not purport to be
    complete and are qualified in their entirety by reference to the
    Grant Prideco indenture and the form of supplemental indenture
    to the Grant Prideco indenture that contains the proposed
    amendments with respect to the Grant Prideco notes (and that is
    to be executed by Grant Prideco and the trustee under the Grant
    Prideco indenture in the event the required consents are
    obtained). The form of supplemental indenture is included in
    this prospectus as Annex&#160;A.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The proposed amendments constitute a single proposal and a
    consenting holder of Grant Prideco notes must consent to the
    proposed amendments in their entirety and may not consent
    selectively with respect to certain of the proposed amendments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the terms of the Grant Prideco Indenture, the
    proposed amendments require the consent of the holders of at
    least a majority in principal amount of the Grant Prideco notes
    outstanding. As of the date of this prospectus, the aggregate
    principal amount of the Grant Prideco notes outstanding is
    $174,585,000.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The valid tender of a holder&#146;s Grant Prideco notes will
    constitute the consent of such tendering holder to the proposed
    amendments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the requisite consents are received, all of the sections or
    provisions of the Grant Prideco indenture listed below will be
    deleted. For a description of these covenants, see
    &#147;Description of the Differences Between Grant Prideco Notes
    and National Oilwell Varco Notes&#148;.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Section&#160;4.03&#160;&#151; Reports
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Section&#160;4.04&#160;&#151; Compliance Certificate
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Section&#160;4.05&#160;&#151; Taxes
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Section&#160;4.07&#160;&#151; Restricted Payments (1)
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Section&#160;4.08&#160;&#151; Dividend and Other Payment
    Restrictions Affecting Subsidiaries (1)
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Section&#160;4.09&#160;&#151; Incurrence of Indebtedness and
    Issuance of Preferred Stock (1)
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Section&#160;4.10&#160;&#151; Transactions with Affiliates (1)
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Section&#160;4.11&#160;&#151; Liens
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Section&#160;4.12&#160;&#151; Additional Subsidiary Guarantees
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Section&#160;4.15&#160;&#151; Asset Sales (1)
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Section&#160;4.16&#160;&#151; Offer to Repurchase upon Change of
    Control
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Section&#160;4.17&#160;&#151; Limitations on Line of Business (1)
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Section&#160;4.18&#160;&#151; Sales and Leaseback Transactions
    (1)
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Section&#160;4.19&#160;&#151; Payments for Consent
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    67
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Section&#160;4.20&#160;&#151; Suspension of Covenants
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Section&#160;5.01&#160;&#151; Merger, Consolidation or Sale of
    Assets
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 8pt">(1)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">Section&#160;4.20 of the Grant
    Prideco indenture provides for the suspension of all or a
    portion of these covenants on any date the Grant Prideco notes
    have an investment grade rating from two specified rating
    agencies and no default has occurred and is continuing under
    that indenture. As a result of the merger and assumed
    capitalization of Grant Prideco, we believe that the rating
    agencies may give the Grant Prideco notes an investment grade
    rating.
    </FONT></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, clauses&#160;(c) and (d) (default of certain
    specified covenants), (f) (cross-acceleration) and (g) (judgment
    defaults) of Section&#160;6.01 (Events of Default) would be
    deleted.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Conforming Changes, etc.</I>&#160;&#160;The proposed
    amendments would amend the Grant Prideco indenture to make
    certain conforming or other changes to the Grant Prideco
    indenture, including modification or deletion of certain
    definitions and cross-references.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    By consenting to the proposed amendments to the Grant Prideco
    indenture, you will be deemed to have waived any default, event
    of default or other consequence under such indenture for failure
    to comply with the terms of the provisions identified above
    (whether before or after the date of the supplemental indenture
    effecting the amendments described above).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Effectiveness
    of Proposed Amendments</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we receive the requisite consents by the consent payment
    deadline, the proposed amendments to the Grant Prideco indenture
    will become effective concurrently with the consummation of the
    merger.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the proposed amendments become so effective:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    National Oilwell Varco expects to cause Grant Prideco to pay one
    or more cash dividends to National Oilwell Varco, which may
    occur as early as immediately after the merger; a dividend could
    not be declared at such time if the covenants on restricted
    payments in Section&#160;4.07 of the Grant Prideco indenture
    were still effective;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the holders of Grant Prideco notes will no longer have the right
    to cause Grant Prideco to make an offer to holders of the Grant
    Prideco notes to repurchase all or any part of such
    holders&#146; Grant Prideco notes at an offer price in cash
    equal to 101% of the aggregate principal amount of notes
    repurchased, plus accrued and unpaid interest, as would
    otherwise be required by Section&#160;4.16 of the Grant Prideco
    indenture as a result of the consummation of the merger.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    68
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='111'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DESCRIPTION
    OF THE NATIONAL OILWELL VARCO NOTES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">General</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The National Oilwell Varco notes are to be issued under an
    indenture to be dated as of the first date on which we exchange
    National Oilwell Varco notes for Grant Prideco notes pursuant to
    the exchange offer. The indenture will be a contract between
    National Oilwell Varco and The Bank of New York Trust Company,
    N.A., which will act as trustee. By its terms, the indenture
    will incorporate certain provisions of the Trust&#160;Indenture
    Act and, upon consummation of the exchange offer, the National
    Oilwell Varco indenture will be subject to and governed by the
    Trust&#160;Indenture Act. The National Oilwell Varco indenture
    and the National Oilwell Varco notes will contain the full legal
    text of the matters described in this section. The National
    Oilwell Varco indenture and the National Oilwell Varco notes are
    governed by New York law. We have filed a form of the National
    Oilwell Varco indenture as an exhibit to the registration
    statement of which this prospectus is a part.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a description of the material provisions of the
    National Oilwell Varco notes and the related indenture and is a
    summary only. Because this section is a summary, it does not
    describe every aspect of those documents. This summary is
    subject to and qualified in its entirety by reference to all the
    provisions of those documents, including definitions of terms
    referenced in this prospectus.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The notes are direct, unsecured and senior obligations of
    National Oilwell Varco. The National Oilwell Varco indenture
    does not limit our ability to incur additional indebtedness.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Principal
    and Maturity</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The National Oilwell Varco notes will mature on August&#160;15,
    2015, unless sooner redeemed. Although only up to $174,585,000
    in aggregate principal amount of National Oilwell Varco notes
    would be issued in the exchange offer, we may, so long as no
    Event of Default under the National Oilwell Varco indenture has
    occurred and is continuing, issue and sell additional principal
    amounts of the National Oilwell Varco notes in the future
    without the consent of the holders of the National Oilwell Varco
    notes. The National Oilwell Varco notes, together with any
    additional notes subsequently issued, will constitute a single
    series of National Oilwell Varco notes under the National
    Oilwell Varco indenture.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The National Oilwell Varco notes are not entitled to the
    benefits of a sinking fund.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All of the National Oilwell Varco notes will be held initially
    in the form of one or more global notes. See
    &#147;&#151;&#160;Legal Ownership&#160;&#151; Global Notes&#148;
    for a general description of the global notes.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Interest</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The National Oilwell Varco notes bear interest at the annual
    rate of 6.125%, payable semi-annually in arrears on
    February&#160;15, and August 15 of each year to noteholders in
    whose name the National Oilwell Varco notes are registered at
    the close of business on February 1 or August 1 (whether or not
    a business day) preceding the applicable interest payment date.
    We refer to each of those payment days as an interest payment
    date. If an interest payment date or a redemption date occurs on
    a date that is not a business day, payment will be made on the
    next business day and no additional interest will accrue.
    Interest payments will commence on August&#160;15, 2008.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Interest on the notes is computed on the basis of a
    <FONT style="white-space: nowrap">360-day</FONT> year
    comprised of twelve
    <FONT style="white-space: nowrap">30-day</FONT>
    months.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Ranking</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The National Oilwell Varco notes rank equally with all of our
    existing and future unsecured senior indebtedness and senior to
    all of our existing and future subordinated debt. The indenture
    does not limit our ability to incur additional indebtedness.
    Because we are a holding company that conducts all our
    operations through subsidiaries, the notes will be effectively
    subordinated to all obligations of our subsidiaries, which,
    after giving effect to the merger, will include Grant Prideco
    and its subsidiaries. Consequently, our right to receive assets
    of any subsidiary (and thus the ability of noteholders to
    benefit indirectly from these assets) is subject to the prior
    claims of creditors of that subsidiary. As of December&#160;31,
    2007, our subsidiaries had approximately $5,390.7&#160;million
    of total balance sheet liabilities, whereas pro&#160;forma Grant
    Prideco had approximately $595.6&#160;million of total balance
    sheet liabilities (including the Grant Prideco notes).
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    69
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The indenture governing the National Oilwell Varco notes permits
    us to incur an unlimited amount of indebtedness. Our
    subsidiaries may also incur an unlimited amount of indebtedness.
    The National Oilwell Varco notes are not guaranteed by any of
    our subsidiaries.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Redemption</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Optional Redemption.</I>&#160;&#160;Except as described
    below, the National Oilwell Varco notes are not redeemable
    before August&#160;15, 2010. Thereafter, we may redeem the
    National Oilwell Varco notes at our option, in whole or in part,
    upon not less than 30 nor more than 60&#160;days notice, at the
    following redemption prices (expressed as percentages of the
    principal amount thereof) if redeemed during the twelve-month
    period commencing August 15 of the years set forth below:
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="90%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Year</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Percentage</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    2010
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    103.063
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    2011
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    102.042
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    2012
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    101.021
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    2013 and thereafter
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    100.000
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, we must pay accrued and unpaid interest on the
    National Oilwell Varco notes redeemed.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Optional Redemption&#160;Upon Equity
    Offerings.</I>&#160;&#160;From time to time, on or prior to
    August&#160;15, 2008, we may, at our option, use the net cash
    proceeds of one or more Equity Offerings (as defined below) to
    redeem up to 35% of the principal amount of the National Oilwell
    Varco notes issued under the National Oilwell Varco indenture at
    a redemption price of 106.125% of the principal amount thereof
    plus accrued and unpaid interest thereon, if any, to the date of
    redemption; <I>provided </I>that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;at least 65% of the principal amount of National
    Oilwell Varco notes issued under the National Oilwell Varco
    indenture remains outstanding immediately after any such
    redemption;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;we make such redemption not more than 90&#160;days
    after the consummation of any such Equity Offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;Disqualified Stock&#148; means any of our corporate stock
    that, by its terms (or by the terms of any security into which
    it is convertible, or for which it is exchangeable, in each case
    at the option of the holder of the corporate stock), or upon the
    happening of any event (other than upon an optional redemption
    by us), matures or is mandatorily redeemable, pursuant to a
    sinking fund obligation or otherwise, or redeemable at the
    option of the holder of the corporate stock, in whole or in
    part, on or prior to the date that is 91&#160;days after the
    date on which the National Oilwell Varco notes mature.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;Equity Offering&#148; means any public or private sale of
    our corporate stock, including all warrants, options or other
    rights to acquire our corporate stock (but excluding any debt
    security that is convertible into, or exchangeable for, our
    corporate stock), but other than Disqualified Stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Selection and Notice.</I>&#160;&#160;If less than all of the
    National Oilwell Varco notes are to be redeemed at any time, the
    trustee will select notes for redemption as follows:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;if the National Oilwell Varco notes are listed on any
    national securities exchange, in compliance with the
    requirements of the principal national securities exchange on
    which the National Oilwell Varco notes are listed;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;if the National Oilwell Varco notes are not listed on
    any national securities exchange, on a pro rata basis, by lot or
    by such method as the trustee deems fair and appropriate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No National Oilwell Varco notes of $1,000 or less can be
    redeemed in part. If a partial redemption is made with the
    proceeds of an Equity Offering, the trustee will select the
    notes only on a pro rata basis or on as nearly a pro rata basis
    as is practicable (subject to DTC procedures). Notices of
    redemption will be mailed by first class mail at least 30 but
    not more than 60&#160;days before the redemption date to each
    holder of notes to be redeemed at its registered address.
    Notices of redemption may not be conditional.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If any National Oilwell Varco note is to be redeemed in part
    only, the notice of redemption that relates to that National
    Oilwell Varco note will state the portion of the principal
    amount of that note that is to be redeemed. A new National
    Oilwell Varco note in principal amount equal to the unredeemed
    portion of the original National Oilwell Varco note will be
    issued in the name of the holder of notes upon cancellation of
    the original note. National Oilwell
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    70
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Varco notes called for redemption become due on the date fixed
    for redemption. On and after the redemption date, interest
    ceases to accrue on National Oilwell Varco notes or portions of
    them called for redemption unless we default in our obligation
    to redeem the National Oilwell Varco notes.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Same Day
    Settlement</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The National Oilwell Varco notes will trade in The Depository
    Trust&#160;Company&#146;s settlement system until maturity. As a
    result, The Depository Trust&#160;Company will require secondary
    trading activity in the notes to be settled in immediately
    available funds. So long as the notes continue to trade in The
    Depository Trust&#160;Company&#146;s settlement system, all
    payments of principal and interest on the global notes will be
    made by us in immediately available funds.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Certain
    Definitions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following definitions are applicable to the discussion of
    the National Oilwell Varco indenture in this summary.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;Consolidated Net Tangible Assets&#148; means the aggregate
    amount of assets included on our consolidated balance sheet,
    less applicable reserves and other properly deductible items and
    after deducting therefrom (a)&#160;all current liabilities
    (other than liabilities that, by their terms, are extendable or
    renewable at the option of the obligor to a date that is
    12&#160;months or more after the date on which such current
    liabilities are determined) and (b)&#160;all goodwill, trade
    names, trademarks, patents, copyrights, unamortized debt
    discount and expense and other like intangibles, all in
    accordance with generally accepted accounting principles
    consistently applied.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;Government Securities&#148; means direct obligations of,
    or obligations guaranteed by, the United States of America for
    the payment of which guarantees or obligations the full faith
    and credit of the United States is pledged.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;Lien&#148; means, with respect to any property or asset,
    any mortgage, pledge, lien, encumbrance, charge or security
    interest of any kind in respect of such property or asset,
    whether or not filed, recorded or otherwise perfected under
    applicable law, but excluding agreements to refrain from
    granting Liens.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;Permitted Liens&#148; means:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    certain purchase money Liens;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    statutory liens or landlords&#146;, carriers&#146;,
    warehouseman&#146;s, mechanics&#146;, suppliers&#146;,
    materialmen&#146;s, repairmen&#146;s or other similar Liens
    arising in the ordinary course of business and with respect to
    amounts not yet delinquent or being contested in good faith by
    appropriate proceedings;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Liens existing on property at the time we or a Restricted
    Subsidiary acquire it;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Liens on the property or on the outstanding shares or
    indebtedness of any Person at the time it becomes a Restricted
    Subsidiary;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Liens on property of a Person existing at the time such Person
    is merged or consolidated with us or a Restricted Subsidiary;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Liens in favor of governmental bodies to secure certain progress
    or advance payments;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Liens existing on property we or any of our Subsidiaries own on
    the date of the indenture or provided for pursuant to agreements
    existing on the date of the indenture;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Liens created pursuant to the creation of trusts or other
    arrangements funded solely with cash or securities of the type
    customarily subject to such arrangements in customary financial
    practice with respect to long-term or medium-term indebtedness
    for borrowed money, the sole purpose of which is to make
    provision for the retirement or defeasance, without prepayment
    of indebtedness;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any extensions, renewals or replacements in whole or in part of
    a Lien enumerated in any of the foregoing.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;Person&#148; means (a)&#160;any form of business entity,
    association, grouping, trust or other form now or hereafter
    permitted by the laws of any state of the United States of
    America or any foreign government or utilized by businesses in
    the conduct of their activities and (b)&#160;a natural person,
    as the context may require.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;Principal Property&#148; means (a)&#160;any real property,
    manufacturing plant, office building, warehouse or other
    physical facility, or any other like depreciable asset of us or
    any Restricted Subsidiary, whether owned at the date of
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    71
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    the indenture or thereafter acquired that in the opinion of our
    Board of Directors is of material importance to the total
    business we and our Restricted Subsidiaries conduct, as a whole;
    provided, however, that any such property shall not be deemed a
    Principal Property if such property does not have a fair value
    in excess of 5% of the total assets included on our consolidated
    balance sheet prepared in accordance with generally accepted
    accounting principles consistently applied.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;Restricted Subsidiary&#148; means (a)&#160;any currently
    existing Subsidiary whose principal assets and business are
    located in the United States or Canada and (b)&#160;any
    Subsidiary that we designate to be a Restricted Subsidiary.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;Sale and Leaseback Transaction&#148; means the sale or
    transfer by us or a Restricted Subsidiary of any Principal
    Property owned by us or it with the intention of taking back a
    lease on such property.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;Secured Debt&#148; means indebtedness for money we or a
    Restricted Subsidiary borrow and any other indebtedness of us or
    a Restricted Subsidiary on which interest is paid or payable
    (other than indebtedness owed by a Restricted Subsidiary to us,
    by a Restricted Subsidiary to another Restricted Subsidiary or
    by us to a Restricted Subsidiary), that in any such case is
    secured by (a)&#160;any Lien on any Principal Property of us or
    a Restricted Subsidiary or (b)&#160;a Lien on any shares of
    stock or indebtedness of a Restricted Subsidiary that owns a
    Principal Property. The amount of Secured Debt at any time
    outstanding shall be the amount we or a Restricted Subsidiary
    then owe thereon.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;Significant Subsidiary&#148; means a subsidiary that would
    be a &#147;Significant Subsidiary&#148; within the meaning of
    <FONT style="white-space: nowrap">Rule&#160;1-02</FONT>
    under
    <FONT style="white-space: nowrap">Regulation&#160;S-X</FONT>
    promulgated by the Securities and Exchange Commission.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;Subsidiary&#148; means, with respect to any Person,
    (a)&#160;any corporation of which we, or we and one or more
    Subsidiaries, or any one or more Subsidiaries, directly or
    indirectly own voting securities entitling any one or more of us
    and our Subsidiaries to elect a majority of the directors,
    either at all times, or so long as there is no default or
    contingency which permits the holders of any other class or
    classes of securities to vote for the election of one or more
    directors, (b)&#160;any partnership of which we, or we and one
    or more of our Subsidiaries, or any one or more Subsidiaries, is
    at the date of determination, a general or limited partner of
    such partnership, but only if we and our Subsidiaries are
    entitled to receive more than 50% of the assets of such
    partnership upon dissolution or more than 50% of the profits of
    such partnership, or (c)&#160;any other Person (other than a
    corporation or partnership) in which we, or we and one or more
    Subsidiaries, or any one or more Subsidiaries, directly or
    indirectly, at the date of determination thereof, has
    (x)&#160;at least a majority ownership interest or (y)&#160;the
    power to elect or direct the election of a majority of the
    directors or other governing body of such Person.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Important
    Covenants</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Limitation
    on Liens</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The National Oilwell Varco indenture provides that we will not,
    nor will we permit any Restricted Subsidiary to, create, incur,
    issue, assume or guarantee any Secured Debt without making
    effective provision whereby the notes and any other indebtedness
    of or guaranteed by us or any of our Restricted Subsidiaries
    then entitled thereto, subject to applicable priorities of
    payment, shall be secured by a Lien equally and ratably with any
    and all other obligations and indebtedness thereby secured, so
    long as any of the other obligations and indebtedness shall be
    so secured; provided, that if any such Lien securing such
    Secured Debt ceases to exist, such equal and ratable security
    for the benefit of the noteholders shall automatically cease to
    exist without any further action; provided, further, that if the
    Secured Debt is expressly subordinated to the notes, the Lien
    securing such subordinated Secured Debt shall be subordinate and
    junior to the Lien securing the notes with the same relative
    priority as such Secured Debt shall have with respect to the
    notes. These provisions do not apply to Secured Debt that is
    secured by Permitted Liens.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Notwithstanding these restrictions, we and our Restricted
    Subsidiaries may, without equally and ratably securing the
    notes, create, incur, issue, assume or guarantee Secured Debt
    not otherwise permitted or excepted if the sum of (a)&#160;the
    amount of such Secured Debt plus (b)&#160;the aggregate value of
    Sale and Leaseback Transactions (excluding Sale and Leaseback
    Transactions described in clauses&#160;(1) through (4)&#160;of
    &#147;Limitation of Sale and Leaseback Transactions&#148;), does
    not exceed 10% of Consolidated Net Tangible Assets (as shown in
    our quarterly consolidated balance sheet most recently published
    prior to the date of the creation, incurrence, issuance,
    assumption or guarantee).
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    72
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Limitation
    on Sale and Leaseback Transactions</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The indenture provides that we will not, and we will not permit
    any of our Restricted Subsidiaries to, engage in a Sale and
    Leaseback Transaction unless:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;the Sale and Leaseback Transaction occurs within one
    year from the date of completion of the acquisition of the
    Principal Property subject thereto or the date of the completion
    of construction, development or substantial repair or
    improvements, or commencement of full operations, on such
    Principal Property, whichever is later;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;the Sale and Leaseback Transaction involves a lease for
    a period, including renewals, of not more than three years;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (3)&#160;we or a Restricted Subsidiary would be entitled to
    incur Secured Debt secured by a Lien on the Principal Property
    subject thereto in a principal amount equal to or exceeding the
    net sale proceeds from such Sale and Leaseback Transaction
    without equally and ratably securing the notes pursuant to the
    covenant &#147;Limitation on Liens&#148; described above;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (4)&#160;we or a Restricted Subsidiary, within a one-year period
    after such Sale and Leaseback Transaction, apply or cause to be
    applied an amount not less than the net sale proceeds from such
    Sale and Leaseback Transaction to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the redemption of the notes or the prepayment, repayment,
    reduction or retirement of any of our indebtedness that ranks
    pari passu with the notes;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the expenditure or expenditures for Principal Property used or
    to be used in the ordinary course of our business or the
    business of any of our Restricted Subsidiaries.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Notwithstanding the foregoing, the National Oilwell Varco
    indenture provides that we may, and may permit each of our
    Restricted Subsidiaries to, effect any Sale and Leaseback
    Transaction that is not excepted by clauses&#160;(1) through (4)
    (inclusive) of the above paragraph, provided that, after giving
    effect thereto and the application of proceeds, if any, received
    by us or any Restricted Subsidiaries as a result thereof, the
    net sale proceeds from such Sale and Leaseback Transaction,
    together with the aggregate principal amount of all Secured Debt
    then outstanding (other than the notes) secured by Liens upon
    Principal Property that are not Permitted Liens would not exceed
    10% of the Consolidated Net Tangible Assets (as shown in our
    quarterly consolidated balance sheet most recently published
    prior to the date such Sale and Leaseback Transaction is
    effected).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Consolidation,
    Merger And Sale Of Assets</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The National Oilwell Varco indenture provides that we may
    (a)&#160;consolidate with or merge into or (b)&#160;sell,
    convey, transfer, lease or otherwise dispose of our properties
    and assets substantially as an entirety to, any Person, provided
    that (i)&#160;the Person surviving such consolidation or merger
    (if we are not the continuing entity) is a Person organized and
    validly existing under the laws of the United States, any
    political subdivision thereof or any State thereof and assumes
    by supplemental indenture all of our obligations on the notes
    and under the indenture, and (ii)&#160;after giving effect to
    the transaction no Event of Default, and no event which, after
    notice or lapse of time or both, would become an Event of
    Default, exists. Upon a disposition of assets as described in
    clause&#160;(b) of the preceding sentence, we will be released
    from any further liability under the notes and the indenture.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Events Of
    Default</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the National Oilwell Varco indenture, an Event of Default
    will mean any of the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    failure to pay principal of, or any make-whole premium on, any
    note when due;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    failure to pay any interest on any note when due, and the
    continuance of that failure for 30&#160;days;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    failure to perform or observe any other covenant in the notes or
    indenture, and the continuance of such default for 60&#160;days
    after written notice has been given by the trustee, or the
    holders of at least 25% in principal amount of the notes, as
    provided in the indenture;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our indebtedness or the indebtedness of any Subsidiary is not
    paid when due within the applicable grace period, if any, or is
    accelerated by the holders thereof and, in either case, the
    principal amount of the unpaid or accelerated indebtedness
    exceeds $20&#160;million;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the bankruptcy, insolvency or reorganization of us or a
    Significant Subsidiary.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    73
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If an Event of Default (other than an Event of Default, as a
    result of the bankruptcy, insolvency or reorganization of us or
    a Significant Subsidiary) occurs and continues, either the
    trustee or the holders of at least 25% in aggregate principal
    amount of the notes outstanding, by notice to us, may declare
    the principal amount of all notes to be due and payable
    immediately. If an Event of Default occurs as a result of the
    bankruptcy, insolvency or reorganization of us or a Significant
    Subsidiary, the principal amount of all the notes will
    automatically, and without any action by the trustee or any
    holder, become immediately due and payable. After any
    acceleration, but before a judgment or decree for the payment of
    the money due has been obtained by the trustee, the holders of a
    majority in aggregate principal amount of the notes outstanding,
    by written notice to the trustee, may rescind and annul the
    acceleration and its consequences if all Events of Default,
    other than the non-payment of accelerated principal, have been
    cured or waived as provided in the indenture. For information as
    to waiver of defaults, see &#147;Modification and Waiver&#148;
    below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Other than its duties in case of a default that is continuing,
    the trustee is under no obligation to exercise any of its rights
    or powers under the indenture at the request or direction of any
    holders, unless the holders furnish the trustee reasonable
    indemnity. Subject to these provisions to indemnify the trustee,
    the holders of a majority in aggregate principal amount of the
    notes outstanding have the right to direct the time, method and
    place of conducting any proceeding for any remedy available to
    the trustee, or exercising any trust or power conferred on the
    trustee, for the notes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No holder of any National Oilwell Varco note has the right to
    institute any proceeding with respect to the National Oilwell
    Varco indenture, or for the appointment of a receiver or a
    trustee, or for any other remedy thereunder, unless:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the holder has previously given written notice of a continuing
    Event of Default to the trustee;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the holders of at least 25% in aggregate principal amount of the
    notes outstanding have made written request, and have furnished
    reasonable indemnity to the trustee, to institute proceedings in
    respect to such Event of Default;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the trustee has failed to institute such proceeding, and has not
    received from the holders of a majority in aggregate principal
    amount of the notes outstanding a direction inconsistent with
    such request, within 60&#160;days after notice, request and
    offer.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These limitations do not apply if a holder institutes a
    proceeding for the enforcement or payment of the principal of,
    or the premium or interest on, any note on or after the
    applicable due date specified in such note.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are required to furnish the trustee with an annual statement
    from our officers as to whether or not, to our knowledge, we are
    in default in the performance or observance of any of the terms,
    provisions or conditions of the indenture and, if so, specifying
    all such known defaults. We are also required to deliver to the
    Trustee a certificate, as soon as possible, but in no event
    later than 5&#160;days, after we become aware that a Default or
    Event of Default has occurred. If a Default or Event of Default
    occurs and is continuing and if it is actually known to a
    responsible officer of the trustee, the trustee must mail to the
    noteholders a notice of the Default or Event of Default within
    90&#160;days after it occurs. Except in the case of a Default or
    Event of Default in payment of principal, interest or premium,
    if any, on any note, the trustee may withhold the notice, if and
    so long as, a committee of its responsible officers in good
    faith determines that withholding the notice is in the interests
    of the noteholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Modification
    And Waiver</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the National Oilwell Varco indenture, generally we and the
    trustee may modify our rights and obligations with the consent
    of the holders of a majority in principal amount of the notes.
    We may not modify or amend the National Oilwell Varco indenture,
    without the consent of the holder of each note affected thereby,
    if the amendment or modification would (with respect to any
    notes held by a nonconsenting holder):
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    change the maturity date of the principal of, or any installment
    of principal of or interest on, any note;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reduce the principal amount of, or any interest on, any note;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reduce the amount of principal of any note payable upon
    acceleration of the maturity date;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    change the place or currency of payment of principal of, or
    interest on, any note;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    impair the right to institute suit for the enforcement of any
    payment on or with respect to any note;
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    74
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reduce the percentage in principal amount of the notes, the
    consent of whose holders is required for modification or
    amendment of the indenture;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reduce the percentage in principal amount of the notes necessary
    for waiver of compliance with certain provisions of the
    indenture or for waiver of certain defaults;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    modify such provisions with respect to modification and waiver;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    waive, reduce or modify a make-whole premium with respect to any
    note called for redemption;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    make changes to the amendment and waiver provisions of the
    indenture, or to the provisions relating to waivers of past
    defaults or institution of proceedings for payment of principal,
    any premium or interest.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Without the consent of any noteholder, we and the trustee may
    amend the National Oilwell Varco indenture:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to cure any ambiguity, defect or inconsistency;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to provide for uncertificated notes in addition to or in place
    of certificated notes or to alter the provisions relating to the
    form, issuance, delivery, transfer, exchange, replacement and
    other limited matters with respect to the notes in a manner that
    does not materially adversely affect any holder;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to provide for the assumption of our obligations to noteholders
    in the case of a merger, consolidation or sale of all or
    substantially all of our assets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to make any change that would provide any additional rights or
    benefits to the noteholders or that does not adversely affect
    the legal rights of any noteholder in any material respect;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to conform the text of the indenture or the notes to any
    provision of this Description of the National Oilwell Varco
    notes to the extent such provision was intended to be a verbatim
    recitation of a provision of the indenture or the notes;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to comply with requirements of the Securities and Exchange
    Commission in order to effect or maintain the qualification of
    the indenture under the Trust&#160;Indenture Act or to allow any
    guarantor to guarantee the notes.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Holders of a majority in principal amount of the National
    Oilwell Varco notes may waive our compliance with certain
    restrictive provisions of the National Oilwell Varco indenture
    or waive any past default or event of default under the
    indenture, except a continuing default in the payment of
    principal of any premium or interest on the notes and covenants
    and provisions of the indenture that require the consent of the
    holder of each note affected thereby.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except in certain limited circumstances, we are entitled to set
    any day as a record date for the purpose of determining the
    noteholders entitled to give or take any direction, notice,
    consent, waiver or other action under the indenture, in the
    manner and subject to the limitations provided in the indenture.
    In certain limited circumstances, the trustee may be entitled to
    set a record date for noteholder action or for payments if there
    is a default. If a record date is set for action to be taken by
    the noteholders, the action may be taken only by Persons who are
    noteholders on the record date. To be effective, action must be
    taken by holders of the requisite principal amount of the notes
    within a specified period following the record date. For any
    particular record date, this period will be 180&#160;days or
    such shorter period as may be specified by us (or the trustee,
    if it sets the record date), and may be shortened or lengthened
    (but not beyond 180&#160;days) from time to time.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Discharging
    Our Obligations; Defeasance</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Satisfaction
    and Discharge</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may satisfy and discharge certain of our obligations with
    respect to notes which have not already been delivered to the
    trustee for cancellation and which have either become due and
    payable or are by their terms due and payable within one year by:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    depositing or causing to be deposited with the trustee money or
    Government Securities in an amount sufficient to pay the
    principal and any premium and interest to the date of such
    deposit (in case of the notes which have become due and payable)
    or to the maturity date, as the case may be;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    paying or causing to be paid all other sums payable under the
    indenture with respect to the notes;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    delivering to the trustee an Officer&#146;s Certificate relating
    to our satisfaction and discharge.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    75
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Defeasance
    and Discharge</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may discharge all of our indebtedness and obligations with
    respect to the National Oilwell Varco notes (except for
    obligations to exchange or register the transfer of the notes,
    to replace stolen, lost or mutilated outstanding notes, to
    maintain paying agencies and to hold moneys for payment in
    trust) upon the deposit in trust for the benefit of the
    noteholders of money or Government Securities, or both, which,
    through the payment of principal and interest in respect thereof
    in accordance with their terms, will provide money in an amount
    sufficient to pay the principal of, any premium and interest on
    the notes on the maturity date in accordance with the terms of
    the indenture and the notes. Such defeasance or discharge may
    occur only if, among other things, we have delivered to the
    trustee an opinion of counsel to the effect that we have
    received from, or there has been published by, the United States
    Internal Revenue Service a ruling, or there has been a change in
    tax law, in either case to the effect that the noteholders will
    not recognize gain or loss for federal income tax purposes as a
    result of such deposit, defeasance and discharge and will be
    subject to federal income tax on the same amount, in the same
    manner and at the same times as would have been the case if such
    deposit, defeasance and discharge were not to occur.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Defeasance
    of Certain Covenants</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The National Oilwell Varco indenture provides that we may omit
    to comply with certain restrictive covenants, including the
    covenants described under &#147;Limitation on Liens&#148;,
    &#147;Limitation on Sale and Leaseback Transactions&#148; and
    &#147;Consolidation, Merger and Sale of Assets&#148;, in which
    event certain Events of Default, which are described above (with
    respect to such respective covenants) under &#147;Events of
    Default&#148;, will no longer constitute Events of Default. In
    order to exercise such option to defease such covenants, we will
    be required to deposit, in trust for the benefit of the
    noteholders, money or Government Securities, or both, which,
    through the payment of principal and interest in respect thereof
    in accordance with their terms, will provide money in an amount
    sufficient to pay the principal of, any premium and interest on
    the notes on the maturity date in accordance with the terms of
    the indenture and the notes. We will also be required, among
    other things, to deliver to the trustee an opinion of counsel to
    the effect that noteholders will not recognize gain or loss for
    federal income tax purposes as a result of such deposit and
    defeasance of certain obligations and will be subject to federal
    income tax on the same amount, in the same manner and at the
    same times as would have been the case if such deposit and
    defeasance were not to occur.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If subsequent to the completion of a defeasance of certain
    covenants as described in the immediately preceding paragraph,
    the notes are declared due and payable because of the occurrence
    of any remaining Event of Default, the amount of money and
    Government Securities we deposit in trust would be sufficient to
    pay amounts due on the notes on the maturity date but may not be
    sufficient to pay amounts due on the notes upon any acceleration
    resulting from such Event of Default. In such case, we would
    remain liable for such payments.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Concerning
    The Trustee</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Bank of New York Trust Company, N.A. is the trustee under
    the National Oilwell Varco indenture.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Legal
    Ownership</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Street
    Name and Other Indirect Holders</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Investors who hold National Oilwell Varco notes in accounts at
    banks, brokers and other financial institutions will generally
    not be recognized by us as legal holders of notes. This is
    called holding in street name. These intermediary banks, brokers
    and other financial institutions pass along principal, interest
    and other payments on the National Oilwell Varco notes, either
    because they agree to do so in their customer agreements or
    because they are legally required to do so. If you will hold
    National Oilwell Varco notes in street name, you should check
    with your own institution to find out:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    how it handles securities payments and notices;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    whether it imposes fees or charges;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    how it would handle voting, if required;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    how it would pursue rights under the National Oilwell Varco
    notes if there were a default or other event triggering the need
    for holders to act to protect their interests.
</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    76
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Direct
    Holders</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco&#146;s obligations, as well as the
    obligations of the trustee and those of any third parties
    employed by us or the trustee, extend only to Persons who are
    registered as holders of National Oilwell Varco notes. We do not
    have any responsibility for any aspect of the records relating
    to or payments made on account of beneficial ownership interest
    in a global note, for maintaining, supervising or reviewing any
    records relating to such beneficial ownership interests or for
    any action taken or omitted to be taken by DTC or any
    participant because the notes are issued in the form of global
    notes as described below. For example, once we make a payment to
    the registered holder, we have no further responsibility for the
    payment, even if that holder is legally required to pass the
    payment along to you as a street name customer but does not do
    so.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Global
    Notes</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A global note is a special type of indirectly held note. Because
    we will issue the National Oilwell Varco notes only in the form
    of global notes, the ultimate beneficial owners can only be
    indirect holders. We do this by requiring that the global notes
    be registered in the name of a financial institution we select
    and by requiring that the National Oilwell Varco notes included
    in the global notes not be transferred to the name of any other
    direct holder unless the special circumstances described below
    occur. The financial institution that acts as the sole direct
    holder of the global note is called the depositary. Any Person
    wishing to own a note must do so indirectly by virtue of an
    account with a bank, broker or other financial institution that
    in turn has an account with the depositary.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Special
    Investor Considerations for Global Notes</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As an indirect holder, an investor&#146;s rights relating to the
    global notes will be governed by the account rules of the
    investor&#146;s bank, broker or other financial institution and
    of the depositary, as well as general laws relating to
    securities transfers. We do not recognize this type of investor
    as a holder of notes and instead deal only with the depositary
    that holds the global notes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If you are an investor, you should be aware that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    you cannot get National Oilwell Varco notes registered in your
    own name;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    you cannot receive physical certificates for your interest in
    the notes;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    you will be a street name holder and must look to your own bank,
    broker or other financial institution for payments on the notes
    and protection of your legal rights relating to the notes; see
    &#147;&#151;&#160;Street Name and Other Indirect Holders&#148;;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    you may not be able to sell or pledge your interest in the notes
    to some insurance companies and other institutions that are
    required by law to own their securities in the form of physical
    certificates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the depositary&#146;s policies will govern payments, transfers,
    exchange and other matters relating to your interest in the
    global notes. We and the trustee have no responsibility for any
    aspect of the depositary&#146;s actions or for its records of
    ownership interest in the global notes. We and the trustee also
    do not supervise the depositary in any way;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    so long as the depositary, or its nominee, is the registered
    owner or holder of a global note, the depositary, or its
    nominee, will be considered the sole owner or holder of the
    notes represented by the global note for all purposes under the
    indenture, the notes and applicable law, including having the
    right to sue for nonpayment of principal and interest;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    as an indirect owner, you will not be able to transfer the
    interest in the global note, except in accordance with the
    depositary&#146;s applicable procedures (in addition to those
    under the indenture referred to herein).
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Special
    Situations When Global Notes Will Be Terminated</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In a few special situations described in the next paragraph, the
    global notes will terminate and interests in them will be
    exchanged for physical certificates representing the notes.
    After that exchange, the choice of whether to hold notes
    directly or in street name will be up to you. You must consult
    your own bank, broker or other financial institution to find out
    how to have your interests in the notes transferred to your own
    name, so that you will be a direct holder. The rights of street
    name investors and direct holders in the notes have been
    previously described in the subsections entitled &#147;Street
    Name and Other Indirect Holders&#148; and &#147;Direct
    Holders&#148;.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    77
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The special situations for termination of the global notes are:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    when the depositary notifies us that it is unwilling, unable or
    no longer qualified to continue as depositary;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    when we notify the trustee that we wish to terminate the global
    notes.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Additional
    Mechanics</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following discussion only applies if the global notes are
    terminated as described above under &#147;&#151;&#160;Legal
    Ownership&#160;&#151; Global Notes&#160;&#151; Special
    Situations When Global Notes Will Be Terminated&#148; and the
    notes are issued in the form of physical certificates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The notes will be issued:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    only in registered form;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    without interest coupons;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    in denominations that are even multiples of $1,000.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You may have your notes divided into more notes of smaller
    denominations (but not less than $1,000) or combined into fewer
    notes of larger denominations, as long as the total principal
    amount is not changed. This is called an exchange.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You may exchange or transfer notes at the office of the trustee.
    The trustee acts as our agent for registering notes in the names
    of holders and transferring notes. We may change this
    appointment to another entity or perform these functions
    ourselves. The entity performing the role of maintaining the
    list of registered holders is called the security registrar. It
    will also perform transfers. You will not be required to pay a
    service charge to transfer or exchange the notes, but you may be
    required to pay for any tax or other governmental charge
    associated with the exchange or transfer. The transfer or
    exchange will only be made if the security registrar is
    satisfied with your proof of ownership.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may cancel the designation of any particular transfer agent.
    We may also approve a change in the office through which any
    transfer agent acts.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    78
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='112'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">UNAUDITED
    PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The unaudited pro forma condensed combined financial statements
    have been prepared assuming the merger of National Oilwell Varco
    and Grant Prideco is accounted for as a purchase under
    U.S.&#160;generally accepted accounting principles, and are
    based on the historical consolidated financial statements of
    each company which include, in the opinion of management of both
    companies, all adjustments necessary to present fairly the
    results for such periods. The unaudited pro forma condensed
    combined financial statements reflect  the pending disposition
    of certain Grant Prideco tubular business units as further
    discussed in Note&#160;F to the Unaudited Pro Forma Condensed
    Combined Financial Statements. The disposition is expected to
    close in the first half of 2008 subject to customary closing
    conditions, including regulatory approval. However, there can be
    no assurance the pending disposition will be completed prior to
    the closing of the merger or at all. The Pro Forma Financial
    Statements do not reflect cost savings that may result from the
    merger. The following unaudited pro forma condensed combined
    balance sheet as of December&#160;31, 2007, and unaudited pro
    forma condensed combined statement of operations for the year
    ended December&#160;31, 2007, should be read in conjunction with
    the historical financial statements of National Oilwell Varco
    and Grant Prideco and the related notes which are incorporated
    by reference into this document. The unaudited pro forma
    condensed combined balance sheet was prepared as if the merger
    occurred on December&#160;31, 2007 and the unaudited pro forma
    condensed income statement was prepared as if the merger
    occurred on January&#160;1, 2007.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The unaudited pro forma condensed combined financial statements
    are not necessarily indicative of results of operations or
    financial position that would have occurred had the merger been
    consummated earlier, nor are they necessarily indicative of
    future results.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    National Oilwell Varco estimates that it will incur fees and
    expenses totaling approximately $110&#160;million in connection
    with the acquisition of Grant Prideco, and it has included these
    costs in calculating the purchase price. After the acquisition
    is completed, National Oilwell Varco expects to incur additional
    charges and expenses relating to restructuring overhead
    functions and certain operations. The amount of these charges
    has not yet been determined. In addition, the pro forma
    information assumes a
    <FONT style="white-space: nowrap">write-up</FONT> in
    inventory to fair market value of $112.7&#160;million. National
    Oilwell Varco expects that the majority of this
    <FONT style="white-space: nowrap">write-up</FONT>
    will flow out to costs of goods sold during the 12-month period
    following the closing date of the acquisition. The allocation of
    purchase price to the assets and liabilities of Grant Prideco is
    subject to change based on the final valuation by National
    Oilwell Varco&#146;s independent third-party valuation firm.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    79
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NATIONAL
    OILWELL VARCO, INC. AND GRANT PRIDECO, INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">UNAUDITED
    PRO FORMA CONDENSED COMBINED BALANCE SHEET<BR>
    </FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">(In
    millions)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="48%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="11%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="5%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="14" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>December&#160;31, 2007</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Historical<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>National<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Pro Forma<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Pro Forma<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Oilwell Varco</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Grant Prideco (F)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Adjustments</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Combined</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    <B>ASSETS</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Current assets:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (3,032.4
</TD>
<TD nowrap align="left" valign="bottom">
    )&#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Cash and cash equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,841.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    696.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,494.4
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(B)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,000.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Receivables, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,099.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    415.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (10.4
</TD>
<TD nowrap align="left" valign="bottom">
    )&#160;(D)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,504.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Inventories, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,574.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    471.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    112.7
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,158.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Costs in excess of billings
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    643.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    643.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Prepaid and other current assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    434,0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    86.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    520.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 27pt">
    Total current assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,593.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,669.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,435.7
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,827.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Property, plant and equipment, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,197.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    328.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    142.1
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,668.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Goodwill
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,445.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    458.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,211.9
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,115.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Intangibles, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    774.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    81.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,503.8
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,359.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Investment in unconsolidated affiliate
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    134.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    203.0
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    337.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Other assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    104.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    24.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    128.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Total assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    12,114.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,697.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,625.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    19,437.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD colspan="17">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD colspan="17" valign="bottom">
    <B>LIABILITIES AND STOCKHOLDERS&#146; EQUITY </B>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Current liabilities:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Current portion of long-term debt and short-term borrowings
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    152.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    153.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Accounts payable
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    604.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    127.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (10.4
</TD>
<TD nowrap align="left" valign="bottom">
    )&#160;(D)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    721.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Billings in excess of costs
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,396.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,396.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Accrued income taxes
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    112.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    77.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    190.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Other accrued liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,761.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    118.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,880.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 27pt">
    Total current liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,026.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    324.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (10.4
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,341.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Long-term debt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    737.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    176.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,494.4
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(B)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,408.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Deferred income taxes
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    564.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,022.3
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,652.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Other liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    61.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    91.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Total liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5,390.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    595.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,506.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,492.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Minority interest
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    62.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    83.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Commitments and contingencies
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Stockholders&#146; equity:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1.3
</TD>
<TD nowrap align="left" valign="bottom">
    )&#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Common stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.6
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;&#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (750.0
</TD>
<TD nowrap align="left" valign="bottom">
    )&#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Additional
    <FONT style="white-space: nowrap">paid-in-capital</FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,617.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    750.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4,198.7
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;&#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7,815.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Retained earnings
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,845.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,733.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1,733.4
</TD>
<TD nowrap align="left" valign="bottom">
    )&#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,845.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Treasury stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (426.6
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    426.6
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;&#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Deferred compensation obligation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (10.6
</TD>
<TD nowrap align="left" valign="bottom">
    )&#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 18pt">
    Accumulated other comprehensive income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    195.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (11.8
</TD>
<TD nowrap align="left" valign="bottom">
    )&#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    195.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 27pt">
    Total stockholders&#146; equity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,661.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,080.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,118.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,860.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Total liabilities and stockholders&#146; equity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    12,114.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,697.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,625.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    19,437.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    80
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NATIONAL
    OILWELL VARCO, INC. AND GRANT PRIDECO, INC.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">UNAUDITED
    PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS<BR>
    </FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">(In
    millions, except per share data)</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="14" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31, 2007</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Historical<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>National<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Historical<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Pro Forma<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Oilwell Varco</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Grant Prideco</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Adjustments</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Combined</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Revenues
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9,789.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,908.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (51.3
</TD>
<TD nowrap align="left" valign="bottom">
    )(D)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,646.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    191.2
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(C)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cost of products and services sold
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6,958.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    975.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (51.3
</TD>
<TD nowrap align="left" valign="bottom">
    )(D)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8,074.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Gross profit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,830.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    933.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (191.2
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3,572.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Selling, general and administrative
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    785.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    352.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,138.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Operating profit
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,044.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    580.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (191.2
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,433.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Interest and financial costs
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (50.3
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (14.2
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (89.7
</TD>
<TD nowrap align="left" valign="bottom">
    )(B)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (154.2
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other income (expense), net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    34.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1.6
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    33.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Equity income in unconsolidated affiliate
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    124.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    124.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income from continuing operations before income taxes and
    minority interest
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,028.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    689.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (280.8
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,437.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (30.5
</TD>
<TD nowrap align="left" valign="bottom">
    )(B)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Provision for income taxes
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    675.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    201.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (65.0
</TD>
<TD nowrap align="left" valign="bottom">
    )(C)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    781.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income from continuing operations before minority interest
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,353.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    488.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (185.4
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,655.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Minority interest in income of consolidated subsidiaries
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income from continuing operations
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,337.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    478.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    (185.4
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,629.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Income from continuing operations per share:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Basic
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.77
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.73
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.97
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Diluted
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.76
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.69
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.95
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Weighted average shares outstanding:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (128.1
</TD>
<TD nowrap align="left" valign="bottom">
    )(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Basic
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    354.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    128.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    56.3
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    410.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.1
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(E)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (129.6
</TD>
<TD nowrap align="left" valign="bottom">
    )(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Dilutive
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    355.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    129.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    56.3
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(A)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    412.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    81
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    UNAUDITED PRO FORMA<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CONDENSED
    COMBINED FINANCIAL STATEMENTS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD valign="top">
    (A) </TD>
    <TD></TD>
    <TD valign="bottom">
    To record the issuance of: (i)&#160;56,293,781&#160;shares of
    National Oilwell Varco common stock, at an assumed market price
    of $72.74 per share, and an assumed cash payment of
    $2,903.5&#160;million to acquire all of the 125,152,915
    outstanding shares of Grant Prideco common stock at
    December&#160;12, 2007 at the agreed exchange ratio of 0.4498
    per share plus cash paid per outstanding Grant Prideco share of
    $23.20 per share; and (ii)&#160;options to purchase
    1,708,919&#160;shares of National Oilwell Varco common stock at
    an average price of $27.19 per share, in exchange for all of the
    outstanding options to purchase shares of Grant Prideco common
    stock at an average price of $20.89 per share. This also
    reflects the exchange of 365,971&#160;shares of National Oilwell
    Varco common stock, at an assumed market price of $72.74 per
    share, and cash of $18.9&#160;million in exchange for
    outstanding Grant Prideco restricted stock awards. The estimated
    initial transaction costs of $110.0&#160;million include
    one-time professional and advisory fees, and change of control
    costs. The following table summarizes the estimated purchase
    price (in millions).</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="60%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="14%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Estimated<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Estimated<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Non-Cash Fair Value<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Estimated<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Total<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>of NOV Stock and<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Cash to<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Purchase<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Options to be Issued</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>be Paid</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Price</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Outstanding Grant Prideco Stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,094.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,903.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6,998.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Fair Value of Grant Prideco Options
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    77.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    77.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Outstanding Grant Prideco Restricted Stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    26.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    45.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Estimated Initial Transaction Costs
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    110.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    110.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total Purchase Price
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4,199.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3,032.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,231.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    Based on preliminary independent valuation estimates, the
    transaction is assumed to result in the write up of Grant
    Prideco&#146;s inventory by $112.7&#160;million and fixed assets
    by $142.1&#160;million, the identification of additional Grant
    Prideco intangible assets of $3,503.8&#160;million, the write up
    of other assets of $203.0&#160;million, and related deferred
    taxes of $1,022.3&#160;million. The identified intangibles
    include patents, customer relationships and tradenames, with
    lives ranging from 10 to 30&#160;years, except for the Reed
    Hycalog and Grant Prideco tradenames, valued at
    $752.0&#160;million, which are considered indefinite lived. The
    asset and liability valuations and estimated lives used to
    calculate the depreciation and amortization identified in
    (C)&#160;below are preliminary and are subject to change based
    on the final valuation by National Oilwell Varco&#146;s
    independent valuation experts. The excess of the purchase price
    over the net assets acquired of $2,670.7&#160;million is
    included in goodwill.</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (B) </TD>
    <TD></TD>
    <TD valign="bottom">
    To record estimated debt issued of $1,494.4&#160;million and
    related cash proceeds as a result of the transaction and to
    reflect cash balance required to meet working capital needs. The
    related interest costs on the incremental debt is
    $89.7&#160;million for the year ended December&#160;31, 2007,
    calculated at an estimated annual interest rate of 6.0%. The pro
    forma tax benefit on the additional estimated interest costs is
    $30.5&#160;million for the year ended December&#160;31, 2007,
    calculated at an estimated tax rate of 34%. If the pending
    disposition of certain Grant Prideco tubular business units were
    not to occur, National Oilwell Varco would expect to have an
    additional $535.9&#160;million in long-term debt. This would
    increase pro forma interest expense by $32.2&#160;million on a
    pre-tax basis and $21.2&#160;million on an after-tax basis and
    would increase pro forma long-term debt from
    $2,408.4&#160;million to $2,944.3&#160;million. National Oilwell
    Varco expects that substantially all of the
    $1,494.4&#160;million of estimated debt issued will be under new
    unsecured credit facilities for an aggregate of
    $3.0&#160;billion that will close concurrent with the merger
    closing. These facilities, which are expected to consist of a
    $2.0&#160;billion, five-year revolving credit facility and a
    $1.0&#160;billion,
    <FONT style="white-space: nowrap">364-day</FONT>
    revolving credit facility, will replace National Oilwell
    Varco&#146;s existing $500&#160;million credit facility.
    National Oilwell Varco is also making an exchange offer of new
    6<FONT style="vertical-align: text-top; font-size: 70%;">1</FONT>/<FONT style="font-size: 70%;">8</FONT>%&#160;Senior
    Notes due 2015 of National Oilwell Varco to holders of Grant
    Prideco&#146;s existing $174.6&#160;million outstanding
    principal amount of
    6<FONT style="vertical-align: text-top; font-size: 70%;">1</FONT>/<FONT style="font-size: 70%;">8</FONT>%&#160;Senior
    Notes due 2015. No additional pro forma net debt would be issued
    by National Oilwell Varco as a result of this exchange offer.</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (C) </TD>
    <TD></TD>
    <TD valign="bottom">
    To record the increased depreciation and amortization expense of
    $191.2&#160;million for the year ended December&#160;31, 2007,
    associated with the write up of fixed assets and identified
    intangibles, as noted in </TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    82
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    (A)&#160;above. The pro forma tax benefit on the additional
    depreciation and amortization costs is $65.0&#160;million for
    the year ended December&#160;31, 2007, calculated at an
    estimated tax rate of 34%.</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (D) </TD>
    <TD></TD>
    <TD valign="bottom">
    To eliminate (i)&#160;revenue and costs of goods sold of
    $51.3&#160;million for the year ended December&#160;31, 2007,
    associated with sales between National Oilwell Varco and Grant
    Prideco on the Pro Forma Statement of Operations and
    (ii)&#160;accounts receivable and accounts payable balances of
    $10.4&#160;million between National Oilwell Varco and Grant
    Prideco on the Pro Forma Balance Sheet at December&#160;31, 2007.</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (E) </TD>
    <TD></TD>
    <TD valign="bottom">
    To record additional dilution of 1,119,416 National Oilwell
    Varco shares related to the estimated exchange of the Grant
    Prideco stock options and restricted stock awards pursuant to
    the merger agreement.</TD>
</TR>

<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (F) </TD>
    <TD></TD>
    <TD valign="bottom">
    The Grant Prideco Unaudited Pro Forma Condensed Consolidated
    Balance Sheet includes the historical consolidated balance sheet
    of Grant Prideco, adjusted to reflect the pending disposition
    of certain Grant Prideco tubular business units that are
    expected to be divested prior to the close of the merger. Atlas
    Bradford Premium Connections and Services, Tube-Alloy
    Accessories and TCA Premium Casing are being sold pursuant to an
    October 2007 purchase and sale agreement between Grant Prideco
    and Vallourec S.A. and Vallourec&#160;&#038; Mannesmann
    Holdings, Inc. (collectivity referred to as
    &#147;Vallourec&#148;). In addition to the businesses being sold
    to Vallourec above, a tubular business located in Venezuela is
    being otherwise sold or discontinued by Grant Prideco. The
    related historical balances for all of the businesses not
    expected to be acquired by National Oilwell Varco have been
    excluded in the Grant Prideco Unaudited Pro Forma Condensed
    Consolidated Balance Sheet. In addition, the Grant Prideco
    Unaudited Pro Forma Condensed Consolidated Balance Sheet has
    been adjusted to reflect the sale of the three business units to
    Vallourec and the estimated net cash proceeds of
    $535.9&#160;million (net of estimated transaction costs and
    income taxes) received in that disposition. The Grant Prideco
    Unaudited Pro Forma Condensed Consolidated Balance Sheet is
    based on preliminary estimates of transaction costs and net cash
    proceeds received that could differ following consummation of
    these transactions. Additionally, there can be no assurance the
    sales will be completed prior to the closing of the merger or at
    all.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following are details related to Grant Prideco&#146;s Unaudited
    Pro Forma Condensed Consolidated Balance Sheet.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    83
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">GRANT
    PRIDECO, INC.<BR>
    UNAUDITED PRO FORMA CONDENSED CONSOLIDATED<BR>
    BALANCE SHEET<BR>
    </FONT></B><FONT style="font-family: 'Times New Roman', Times">(in
    millions)
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="61%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="8%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="10" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>As of December&#160;31, 2007</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Historical<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Pro Forma<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Grant Prideco</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Adjustments(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Grant Prideco</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Current Assets:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Cash and cash equivalents
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    161.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    535.2
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(2)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    696.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Receivables, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    415.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    415.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Inventories, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    471.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    471.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Assets held for sale
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    186.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (184.8
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Prepaids and other current assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    86.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1.6
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    84.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Total Current Assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,320.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    348.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,669.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Property, Plant and Equipment, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    329.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.6
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    328.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Goodwill
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    458.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    458.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Intangibles, net
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    82.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.8
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    81.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Investment in unconsolidated affiliate
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    134.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    134.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    25.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1.1
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    24.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Total assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,350.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    346.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,697.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Current liabilities:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Current portion of long-term debt and short-term borrowings
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Accounts payable
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    127.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    127.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Accrued income taxes
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    77.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    77.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Liabilities held for sale
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (16.5
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Other accrued liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    119.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.7
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    118.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Total current liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    342.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (17.2
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    324.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Long-term debt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    176.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    176.1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Deferred income taxes
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    72.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (7.2
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    29.2
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Total Liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    620.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (24.4
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    595.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Minority interests
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20.9
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Commitments and contingencies
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Stockholders&#146; equity:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Common stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Additional
    <FONT style="white-space: nowrap">paid-in-capital</FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    748.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    750.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Retained earnings
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,364.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    369.1
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;(3)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,733.4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Treasury stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (426.6
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (426.6
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Deferred compensation obligation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10.6
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Accumulated other comprehensive income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 40pt">
    Total stockholders&#146; equity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,709.8
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    370.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,080.5
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 50pt">
    Total liabilities and stockholders&#146; equity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,350.7
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    346.3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    2,697.0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    84
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="4%"></TD>
    <TD width="1%"></TD>
    <TD width="95%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents adjustments to reflect the historical balances of
    certain tubular businesses that are expected to be disposed of
    prior to the merger involving National Oilwell Varco and Grant
    Prideco. Atlas Bradford Premium Connections and Services,
    Tube-Alloy Accessories and TCA Premium Casing are being sold
    pursuant to an October 2007 purchase and sale agreement between
    Grant Prideco and Vallourec S.A. and Vallourec&#160;&#038;
    Mannesmann Holdings, Inc. (collectively, referred to as
    &#147;Vallourec&#148; ). In addition to the businesses being
    sold to Vallourec above, a tubular business located in Venezuela
    is being otherwise sold or discontinued by Grant Prideco. The
    related historical balances for all of the businesses not being
    acquired by National Oilwell have been eliminated in the Grant
    Prideco Unaudited Pro Forma Condensed Consolidated Balance Sheet.</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Adjustment reflects the estimated cash proceeds of
    $535.9&#160;million, net of tax, related to the sale of certain
    tubular businesses to Vallourec which is based on preliminary
    estimates of remaining transaction costs of $12.2&#160;million
    and income taxes of $242.8&#160;million that could differ
    following the consummation of the transaction with Vallourec,
    partially offset by cash paid of $0.7&#160;million related to
    certain employee liabilities not being acquired by Vallourec.</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Adjustment reflects the estimated gain of $369.1&#160;million,
    net of tax, on the sale of certain tubular businesses to
    Vallourec which is based on preliminary estimates of transaction
    costs and income taxes that could differ following the
    consummation of the transaction with Vallourec.</TD>
</TR>

</TABLE>

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    <BR>
    85
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='114'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">UNITED
    STATES FEDERAL INCOME TAX CONSEQUENCES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following discussion summarizes the material
    U.S.&#160;federal income tax considerations relating to the
    exchange offer and consent solicitation and to the ownership and
    disposition of the National Oilwell Varco notes to initial
    holders of these securities. This discussion only addresses tax
    considerations relevant to holders that hold Grant Prideco
    notes, and will hold National Oilwell Varco notes, as capital
    assets within the meaning of Section&#160;1221 of the Internal
    Revenue Code of 1986, as amended (the &#147;Internal Revenue
    Code&#148;).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In this discussion, we do not purport to address all tax
    considerations that may be important to a particular holder in
    light of the holder&#146;s circumstances, or to certain
    categories of investors that may be subject to special rules,
    such as:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    dealers in securities or currencies;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    traders in securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    U.S.&#160;holders (as defined below) whose functional currency
    is not the U.S.&#160;dollar;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    persons holding notes as part of a hedge, straddle, conversion
    or other &#147;synthetic security&#148; or integrated
    transaction;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    U.S.&#160;expatriates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    financial institutions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    insurance companies;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    entities that are tax-exempt for U.S.&#160;federal income tax
    purposes.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This discussion does not address all of the aspects of
    U.S.&#160;federal income taxation that may be relevant to you in
    light of your particular investment or other circumstances. If a
    partnership or other entity treated as a partnership for
    U.S.&#160;federal income tax purposes holds Grant Prideco notes
    or will hold National Oilwell Varco notes as a result of the
    exchange offer, the tax treatment of a partner will generally
    depend on the status of the partner and on the activities of the
    partnership. We urge partners of partnerships holding notes to
    consult their tax advisors. This discussion is limited to
    holders of National Oilwell Varco notes who acquire these
    securities in connection with the exchange offer. In addition,
    this discussion does not address any state, local or foreign
    income or other tax consequences.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This discussion is based on U.S.&#160;federal income tax law,
    including the provisions of the Internal Revenue Code, Treasury
    Regulations, administrative rulings and judicial authority, all
    as in effect as of the date of this document. Subsequent
    developments in U.S.&#160;federal income tax law, including
    changes in law or differing interpretations, which may be
    applied retroactively, could have a material effect on the
    U.S.&#160;federal income tax consequences of owning and
    disposing of notes as described in this discussion. We cannot
    assure you that the Internal Revenue Service, or IRS, will not
    challenge one or more of the tax results described in this
    discussion, and we have not obtained, nor do we intend to
    obtain, a ruling from the IRS with respect to the
    U.S.&#160;federal tax consequences of the exchange offer and
    consent solicitation and of the ownership and disposition of
    National Oilwell Varco notes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We urge you to consult your own tax advisor regarding the
    particular U.S.&#160;federal, state and local and foreign income
    and other tax consequences of the exchange offer and consent
    solicitation and of owning and disposing of National Oilwell
    Varco notes that may be applicable to you in your particular
    circumstances.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">U.S.
    Holders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You are a U.S.&#160;holder for purposes of this discussion if
    you are a beneficial owner of Grant Prideco notes or National
    Oilwell Varco notes received upon the exchange of Grant Prideco
    notes pursuant to the exchange offer that is, for
    U.S.&#160;federal income tax law purposes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an individual who is a citizen or resident of the United States,
</TD>
</TR>

</TABLE>

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    <BR>
    86
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a corporation created or organized in or under the laws of the
    United States, any state thereof or the District of Columbia,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an estate the income of which is subject to U.S.&#160;federal
    income taxation regardless of its source,&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    a trust if a U.S.&#160;court can exercise primary supervision
    over the trust&#146;s administration and one or more
    U.S.&#160;persons are authorized to control all substantial
    decisions of the trust.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Exchange
    Offer</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under general principles of tax law, the modification of a debt
    instrument creates a deemed exchange upon which gain or loss is
    realized if the modified debt instrument differs materially
    either in kind or in extent from the original debt instrument.
    Under the Treasury Regulations, the modification of a debt
    instrument is a &#147;significant&#148; modification (i.e., a
    modification upon which gain or loss is realized) if, based on
    all the facts and circumstances and taking into account all
    modifications of the debt instrument collectively, the legal
    rights or obligations that are altered and the degree to which
    they are altered are &#147;economically significant.&#148; The
    Treasury Regulations that govern the determination of whether a
    modification is a significant modification provide that a change
    in the obligor of a recourse debt instrument is treated as a
    significant modification unless certain exceptions apply.
    Because the exchange offer will result in a change in obligor of
    the Grant Prideco notes and none of the enumerated exceptions
    applies, the modification will be treated as significant and
    thus a taxable exchange, unless, as discussed below, the
    exchange offer is treated as a tax-free exchange pursuant to a
    tax-free reorganization.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The consummation of the merger is conditioned on the receipt by
    each of National Oilwell Varco and Grant Prideco of opinions
    from their respective counsel to the effect that the merger will
    qualify for federal income tax purposes as a reorganization
    within the meaning of Section&#160;368(a) of the Internal
    Revenue Code. Assuming that the merger qualifies as a
    reorganization under the Internal Revenue Code, the tender of
    Grant Prideco notes pursuant to the exchange offer in exchange
    for National Oilwell Varco notes should be treated as a tax-free
    exchange for federal income tax purposes if the Grant Prideco
    notes and National Oilwell Varco notes both constitute
    &#147;securities&#148; for federal income tax purposes and the
    exchange is in pursuance of the &#147;plan of
    reorganization&#148;. It is not clear what is required for the
    exchange offer to be considered in pursuance of a plan of
    reorganization. In general, the Treasury Regulations governing
    tax-free reorganizations provide that the plan must be adopted
    by each of the corporations that are parties thereto. Since the
    exchange offer and the proposed amendments will not be adopted
    by the Grant Prideco board of directors, the exchange may not be
    considered in pursuance of a plan of reorganization. However,
    the courts have taken a more expansive view of the meaning of
    &#147;plan of reorganization.&#148; The exchange offer is
    contingent on consummation of the merger, which supports the
    determination that the exchange offer is in pursuance of the
    plan of reorganization. Thus, the determination of whether the
    exchange is pursuant to a plan of reorganization is not clear.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The term &#147;security&#148; is not defined in the Internal
    Revenue Code or in any applicable Treasury Regulations and has
    not been clearly defined by judicial decisions. The
    determination of whether a particular debt constitutes a
    &#147;security&#148; generally depends on an overall evaluation
    of the nature of the original debt. One of the most significant
    factors considered in determining whether a particular debt is a
    security is its original term. In general, debt obligations
    issued with a weighted average maturity at issuance of five
    years or less (e.g., trade debt and revolving credit
    obligations) do not constitute securities, whereas debt
    obligations with a weighted average maturity at issuance of ten
    years or more constitute securities. The IRS has ruled in the
    context of a transaction that otherwise constituted a tax-free
    merger that where new debt instruments were issued by the
    acquiring company in exchange for debt securities of the merged
    company and such new debt instruments bore the same terms
    (except for adjustments to the interest rate to reflect
    differences in credit worthiness) as such old debt securities,
    such new debt instruments themselves constituted debt securities
    even though the remaining term was only two years. Because the
    Grant Prideco notes had a weighted average maturity at issuance
    of ten years, Grant Prideco notes and National Oilwell Varco
    notes should constitute &#147;securities&#148; for purposes of
    the Internal Revenue Code, although the IRS could take a
    contrary position.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the tender of Grant Prideco notes pursuant to the exchange
    offer is treated as a tax-free exchange for federal income tax
    purposes, you should not recognize any loss in respect of the
    exchange of Grant Prideco notes for National Oilwell Varco
    notes, and you should recognize gain, if any, equal to the
    lesser of (i)&#160;the amount of any cash
</DIV>

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    <BR>
    87
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    treated as exchange consideration (less any portion of the cash
    exchange consideration attributable to accrued but unpaid
    interest) you receive in the exchange offer and (ii)&#160;the
    amount of gain &#147;realized&#148; in the exchange offer. You
    will also be required to recognize ordinary income equal to any
    cash treated as exchange consideration that is attributable to
    accrued but unpaid interest on Grant Prideco notes not
    previously included in income. In addition, upon the receipt of
    National Oilwell Varco notes, you may also be required to
    recognize ordinary income equal to the accrued but unpaid
    interest not previously included in income on the Grant Prideco
    notes exchanged for such National Oilwell Varco notes, although
    such amount will not be again included in your income when
    actually paid.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In that case, the amount of gain &#147;realized&#148; should
    equal the excess, if any, of the sum of the amount of any cash
    treated as exchange consideration (less any portion of the cash
    exchange consideration attributable to accrued but unpaid
    interest) plus the issue price, as defined below, of the
    National Oilwell Varco notes you receive over your adjusted tax
    basis in your Grant Prideco notes. Subject to the application of
    the market discount rules with respect to any Grant Prideco note
    the basis of which in your hands is less than the note&#146;s
    adjusted issue price, any gain you recognize should be capital
    gain, and would be long-term capital gain if at the time of the
    exchange you held the Grant Prideco notes for more than one
    year. You should continue to have the same tax basis in the
    National Oilwell Varco notes as the tax basis of the Grant
    Prideco notes exchanged therefor, increased by any gain you
    recognize and reduced by the amount of any cash treated as
    exchange consideration (less any portion of the cash exchange
    consideration attributable to accrued but unpaid interest) you
    receive in the exchange offer. The holding period for the
    National Oilwell Varco notes should include the holding period
    during which the Grant Prideco notes were held by you. Special
    rules governing the treatment of discount and premium are
    discussed below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, if the tender of Grant Prideco notes pursuant to the
    exchange offer is treated as a taxable exchange for federal
    income tax purposes either because the Grant Prideco notes or
    the National Oilwell Varco notes are not securities or because
    the exchange is not pursuant to a plan of reorganization, you
    should generally recognize gain or loss equal to the difference
    between (i)&#160;the sum of the issue price, as defined below,
    of the National Oilwell Varco notes and the amount of any cash
    treated as exchange consideration (less any portion of the cash
    exchange consideration attributable to accrued but unpaid
    interest) which you receive and (ii)&#160;your adjusted basis in
    the Grant Prideco notes. This gain or loss will generally be
    capital gain or loss except for gain attributable to accrued but
    unrecognized market discount, if any, which will be ordinary
    income. In addition, you will recognize ordinary interest income
    on the amount of accrued and unpaid interest on the Grant
    Prideco notes which you have not previously included in income,
    although such amount will not be again included in income when
    actually paid. The deductibility of capital losses is subject to
    limitations. Your initial tax basis in a National Oilwell Varco
    note will generally equal its issue price. The holding period
    for the National Oilwell Varco notes will begin the day after
    the exchange.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Consent
    Payments</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The U.S.&#160;federal income tax treatment of the consent
    payments is unclear. The receipt of consent payments by an
    exchanging U.S.&#160;holder may be treated either as additional
    consideration received in the exchange or as separate
    consideration for consenting to the proposed amendments to the
    Grant Prideco notes. We intend to take the position that the
    payments represent separate consideration for consenting to the
    proposed amendments and will represent ordinary income to
    holders in the full amount of the payments, without reduction by
    any portion of a holder&#146;s basis in the Grant Prideco notes.
    We urge you to consult your own tax advisor as to possible
    alternative treatments of the consent payments.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Taxation
    of Interest, Discount and Premium on National Oilwell Varco
    Notes</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Generally, interest on the National Oilwell Varco notes will be
    taxed as ordinary interest income at the time it is paid or at
    the time it accrues in accordance with your regular method of
    accounting for federal income tax purposes. Special rules
    governing the treatment of discount and premium described below
    apply to the exchange offer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the face amount of any National Oilwell Varco note exceeds
    the issue price (as defined below) of the note by more than a de
    minimis amount (which is generally
    <FONT style="vertical-align: text-top; font-size: 70%;">1</FONT>/<FONT style="font-size: 70%;">4</FONT>
    of one percent of the face amount multiplied by the number of
    complete years to maturity), the excess will constitute original
    issue discount for federal income tax purposes. Each holder of a
    National Oilwell Varco note that is issued with original issue
    discount would be required to include
</DIV>

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    <BR>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    the discount in ordinary income as interest for federal income
    tax purposes as it accrues in accordance with a constant yield
    method based upon a compounding of interest (subject to
    reduction in the case of acquisition premium), before receiving
    cash to which that interest income is attributable, in addition
    to being required to report as income for federal income tax
    purposes stated interest earned on the National Oilwell Varco
    note in accordance with the holder&#146;s method of accounting
    for tax purposes. Under this method, you will be required to
    include in income increasingly greater amounts of discount in
    successive periods. Your tax basis in the National Oilwell Varco
    notes will be increased by the amount of original issue discount
    includible in your gross income as it accrues.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the National Oilwell Varco notes are publicly traded, within
    the meaning of the applicable Treasury Regulations, or the
    National Oilwell Varco notes are not publicly traded but the
    Grant Prideco notes are publicly traded, the issue price of the
    National Oilwell Varco notes will be the fair market value of
    such publicly traded notes excluding the amount of pre-issuance
    accrued interest on the National Oilwell Varco notes. If neither
    the National Oilwell Varco notes nor the Grant Prideco notes are
    publicly traded, the issue price of the National Oilwell Varco
    notes will equal their principal amount. We believe that the
    requisite public trading will exist and intend to take this
    position for all relevant reporting and other purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because we intend to determine the issue price of the National
    Oilwell Varco notes by reference to the fair market value of
    either the Grant Prideco notes or the National Oilwell Varco
    notes on the applicable exchange date, we cannot know before the
    applicable exchange date whether the National Oilwell Varco
    notes will have original issue discount.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Grant Prideco notes you exchange have market discount and
    you have not made the election to include such market discount
    in income currently as it accrues, then any accrued market
    discount will be (i) treated as accrued market discount with
    respect to the National Oilwell Varco notes received in the
    exchange, if such National Oilwell Varco notes have market
    discount, or (ii) treated as ordinary income on the disposition
    of the National Oilwell Varco notes received in the exchange, if
    such National Oilwell Varco notes do not have market discount.
    Whether the National Oilwell Varco notes you receive in the
    exchange offer will be treated as having market discount will
    depend on your basis in the National Oilwell Varco notes,
    immediately after the exchange, and the issue price of the
    National Oilwell Varco notes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If your tax basis in a National Oilwell Varco note immediately
    after the exchange is less than or equal to its face amount, but
    exceeds the issue price of the note, that excess will be
    considered &#147;acquisition premium.&#148; In such case, you
    may reduce any original issue discount inclusions with respect
    to a National Oilwell Varco note by an amount equal to the
    amount of original issue discount you would otherwise include in
    gross income multiplied by a fraction, the numerator of which is
    the amount of acquisition premium and the denominator of which
    is the excess of the face amount of the note over the issue
    price of the note. Alternatively, you may elect to accrue
    original issue discount on the note on a constant yield basis as
    if the issue price of the note were equal to your tax basis in
    the National Oilwell Varco note immediately after the exchange.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If your tax basis in a National Oilwell Varco note immediately
    after the exchange exceeds its face amount, you will be
    considered to have acquired the National Oilwell Varco note with
    &#147;amortizable bond premium&#148; equal in amount to that
    excess. You may elect to amortize the premium by offsetting
    against the interest otherwise required to be included in income
    in respect of the National Oilwell Varco note during any taxable
    year the allocable portion of such premium, determined under the
    constant yield method over the remaining term. In that case,
    your basis in the National Oilwell Varco note will be reduced by
    the amount of bond premium offset against interest. An election
    to amortize bond premium will apply to all taxable debt
    obligations that you then own and thereafter acquire, and may be
    revoked only with the consent of the Internal Revenue Service.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The rules concerning discounts and premiums are complex, and we
    urge you to consult your own tax advisor to determine how, and
    to what extent, any discount or premium will be included in your
    income or amortized, and as to the desirability, mechanics and
    consequences of making any elections in connection therewith in
    connection with your particular circumstances.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    89
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Sale or
    Other Disposition of National Oilwell Varco Notes</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    When you sell or otherwise dispose of a National Oilwell Varco
    note (including a retirement or redemption) in a taxable
    transaction, you generally will recognize taxable gain or loss
    equal to the difference, if any, between:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the amount realized on the sale or other disposition, less any
    amount attributable to accrued interest, which will be taxable
    in the manner described under
    &#147;&#151;&#160;U.S.&#160;Holders&#160;&#151; Taxation of
    Interest, Discount and Premium on National Oilwell Varco
    Notes&#148;;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    your adjusted tax basis in a National Oilwell Varco note.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Gain or loss realized on the sale or other disposition of a
    National Oilwell Varco note will generally be capital gain or
    loss (except for gain attributable to accrued market discount
    not previously taken into income) and will be long-term capital
    gain or loss if the note is held for more than one year. You are
    urged to consult your own tax advisors regarding the treatment
    of capital gains, which may be taxed at lower rates than
    ordinary income for taxpayers who are individuals, and losses,
    the deductibility of which is subject to limitations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times"><FONT style="white-space: nowrap">Non-U.S.</FONT>
    Holders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You generally are a
    <FONT style="white-space: nowrap">non-U.S.&#160;holder</FONT>
    for purposes of this discussion if you are a beneficial owner
    (other than a partnership) of Grant Prideco notes or National
    Oilwell Varco notes that is not a U.S.&#160;holder, as described
    above.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Exchange
    Offer</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You generally will not be subject to U.S.&#160;federal income
    and withholding tax on any gain recognized on the exchange of
    Grant Prideco notes for National Oilwell Varco notes pursuant to
    the exchange offer unless:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    you are an individual present in the United States for
    183&#160;days or more in the year of such exchange and specific
    other conditions are present,&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the gain from the exchange is effectively connected with your
    conduct of a U.S.&#160;trade or business, and, if a
    U.S.&#160;income tax treaty applies, is generally attributable
    to a U.S.&#160;&#147;permanent establishment&#148; you maintain.
    Please read
    <FONT style="white-space: nowrap">&#147;&#151;&#160;Non-U.S.&#160;Holders&#160;&#151;</FONT>
    Income Effectively Connected with U.S.&#160;Trade or
    Business.&#148;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    However, to the extent that cash treated as exchange
    consideration represents interest on the Grant Prideco notes
    accruing between interest payment dates, you will be required to
    establish an exemption from United States federal income tax.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Consent
    Payments</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In compliance with U.S.&#160;federal withholding tax
    requirements applicable to payments of certain U.S.&#160;source
    income to foreign persons, Grant Prideco intends to withhold tax
    at the rate of 30% on consent payments made to
    <FONT style="white-space: nowrap">non-U.S.&#160;holders,</FONT>
    unless the holder establishes an exemption or a reduced rate. An
    exemption will apply to a consent payment which represents
    effectively connected income to the holder (in which case the
    <FONT style="white-space: nowrap">non-U.S.&#160;holder</FONT>
    should provide IRS
    <FONT style="white-space: nowrap">Form&#160;W-8ECI),</FONT>
    and an exemption or reduced rate may apply to a consent payment
    when the
    <FONT style="white-space: nowrap">non-U.S.&#160;holder</FONT>
    is entitled to the benefits of a tax treaty (in which case the
    <FONT style="white-space: nowrap">non-U.S.&#160;holder</FONT>
    should provide IRS
    <FONT style="white-space: nowrap">Form&#160;W-8BEN).</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The proper treatment of the consent payments is unclear.
    Notwithstanding that Grant Prideco will withhold tax on the
    consent payments in the absence of an exemption, it is possible
    that such withholding is not in fact required, in which case you
    would be entitled to a refund of the tax withheld. You are urged
    to consult your own tax advisor on this matter.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    90
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Taxation
    of Interest</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under current U.S.&#160;federal income tax laws, and subject to
    the discussion below, U.S.&#160;federal withholding tax will not
    apply to payments of interest on the National Oilwell Varco
    notes under the &#147;portfolio interest&#148; exception of the
    Internal Revenue Code, provided that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    you do not actually or constructively own 10% or more of the
    total combined voting power of all classes of our shares,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    you are not a controlled foreign corporation that is related to
    us within the meaning of the Internal Revenue Code,&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the U.S.&#160;payor does not have actual knowledge or reason to
    know that you are a U.S.&#160;person and either (1)&#160;the
    beneficial owner of the National Oilwell Varco note certifies to
    the applicable payor or its agent, under penalties of perjury,
    that it is not a U.S.&#160;holder and provides its name and
    address on IRS
    <FONT style="white-space: nowrap">Form&#160;W-8BEN</FONT>
    (or a suitable substitute form) or (2)&#160;a securities
    clearing organization, bank or other financial institution, that
    holds customers&#146; securities in the ordinary course of its
    trade or business (a &#147;financial institution&#148;) and
    holds the National Oilwell Varco note, certifies under penalties
    of perjury that a IRS
    <FONT style="white-space: nowrap">Form&#160;W-8BEN</FONT>
    (or a suitable substitute form) has been received from the
    beneficial owner by it or by a financial institution between it
    and the beneficial owner and furnishes the payor with a copy of
    the form or the U.S.&#160;payor otherwise possesses
    documentation upon which it may rely to treat the payment as
    made to a
    <FONT style="white-space: nowrap">non-U.S.&#160;person</FONT>
    in accordance with Treasury Regulations.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Payments made to a
    <FONT style="white-space: nowrap">non-U.S.&#160;holder</FONT>
    which are attributable to original issue discount will generally
    be treated in the same manner as payments of interest, as just
    described.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If you cannot satisfy the requirements described above, payments
    of interest made to you will be subject to U.S.&#160;federal
    withholding tax at a rate of 30%, unless you provide a properly
    executed IRS
    <FONT style="white-space: nowrap">Form&#160;W-8BEN</FONT>
    or successor form claiming an exemption from or a reduction of
    withholding under the benefit of a U.S.&#160;income tax treaty,
    or you provide a properly executed IRS
    <FONT style="white-space: nowrap">Form&#160;W-8ECI</FONT>
    claiming that the payments of interest are effectively connected
    with your conduct of a trade or business in the United States.
    If such interest is effectively connected with a U.S.&#160;trade
    or business of yours, please read
    <FONT style="white-space: nowrap">&#147;&#151;&#160;Non-U.S.&#160;Holders&#160;&#151;</FONT>
    Income Effectively Connected with U.S.&#160;Trade or
    Business.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A portion of the first payment of stated interest made by us on
    the National Oilwell Varco notes will represent pre-issuance
    interest in the amount of interest on the Grant Prideco notes
    which was accrued and unpaid on the date of the exchange. This
    payment will be treated as a payment by us and subject to the
    same U.S.&#160;federal withholding tax rules and exemptions
    applicable to interest payments, as described above.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Gain
    on Disposition of the National Oilwell Varco Notes</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You generally will not be subject to U.S.&#160;federal income
    and withholding tax on gain realized on the sale, exchange,
    redemption or other taxable disposition of a National Oilwell
    Varco note unless:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    you are an individual present in the United States for
    183&#160;days or more in the year of such sale, exchange,
    redemption or other taxable disposition and specific other
    conditions are present,&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the gain is effectively connected with your conduct of a
    U.S.&#160;trade or business, and, if a U.S.&#160;income tax
    treaty applies, is generally attributable to a
    U.S.&#160;&#147;permanent establishment&#148; you maintain.
    Please read
    <FONT style="white-space: nowrap">&#147;&#151;&#160;Non-U.S.&#160;Holders&#160;&#151;</FONT>
    Income Effectively Connected with U.S.&#160;Trade or
    Business&#148;.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    However, to the extent that disposition proceeds represent
    either interest accruing between interest payment dates or
    original issue discount accruing while you held the National
    Oilwell Varco note, you may be required to establish an
    exemption from United States federal income and withholding tax.
    Please read
    <FONT style="white-space: nowrap">&#147;&#151;&#160;Non-U.S.&#160;Holders&#160;&#151;</FONT>
    Taxation of Interest.&#148;
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    91
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Income
    Effectively Connected with U.S. Trade or Business</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If you are engaged in a trade or business in the United States
    and interest, gain or any other income regarding a National
    Oilwell Varco note or Grant Prideco note is effectively
    connected with the conduct of your trade or business, or, if a
    U.S.&#160;income tax treaty applies and you maintain a
    U.S.&#160;&#147;permanent establishment&#148; to which the
    interest, gain or other income is generally attributable, you
    may be subject to U.S.&#160;income tax on a net income basis on
    such interest, gain or income. In this instance, however, the
    interest on your notes will be exempt from the
    U.S.&#160;withholding tax discussed under the caption
    <FONT style="white-space: nowrap">&#147;&#151;&#160;Non-U.S.&#160;Holders&#160;&#151;</FONT>
    Taxation of Interest&#148;, if you provide a properly executed
    IRS
    <FONT style="white-space: nowrap">Form&#160;W-8ECI</FONT>
    or appropriate substitute form to the payor on or before any
    payment date to claim the exemption.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, if you are a foreign corporation, you may be
    subject to a U.S.&#160;branch profits tax equal to 30% of your
    effectively connected earnings and profits for the taxable year,
    as adjusted for certain items, unless a lower rate applies to
    you under a U.S.&#160;income tax treaty with your country of
    residence. For this purpose, you must include interest, gain and
    income on your notes in the earnings and profits subject to the
    U.S.&#160;branch profits tax if these amounts are effectively
    connected with the conduct of your U.S.&#160;trade or business.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Backup
    Withholding and Information Reporting</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">U.S.
    Holders</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Consent payments and interest payments made on, or the proceeds
    of the sale or other disposition of, Grant Prideco notes or
    National Oilwell Varco notes will be subject to information
    reporting. Additionally, the receipt of these payments will be
    subject to U.S.&#160;federal backup withholding tax if the
    recipient of those payments fails to supply an accurate taxpayer
    identification number or otherwise fails to establish an
    exemption or comply with applicable United States information
    reporting or certification requirements. Any amount withheld
    from a payment to a U.S.&#160;holder under the backup
    withholding rules is allowable as a credit against the
    U.S.&#160;holder&#146;s federal income tax, provided that the
    required information is furnished to the IRS.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times"><FONT style="white-space: nowrap">Non-U.S.</FONT>
    Holders</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, backup withholding and information reporting will
    not apply to consent payments and interest payments made on, or
    the proceeds of the sale or other disposition of, the Grant
    Prideco notes or National Oilwell Varco notes if the holder
    establishes by providing a certificate or, in some cases, by
    providing other evidence, that the holder is not a
    U.S.&#160;person or the holder otherwise establishes an
    exemption. Additional exemptions are available for specific
    payments made outside the United States.
    <FONT style="white-space: nowrap">Non-U.S.&#160;holders</FONT>
    of Grant Prideco notes or National Oilwell Varco notes are urged
    to consult their tax advisors regarding the application of
    information reporting and backup withholding in their particular
    situations, the availability of exemptions, and the procedure
    for obtaining such an exemption, if available. Any amount
    withheld from a payment to a
    <FONT style="white-space: nowrap">non-U.S.&#160;holder</FONT>
    under the backup withholding rules will be allowable as a credit
    against the holder&#146;s U.S.&#160;federal income tax, provided
    that the required information is furnished to the IRS.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Holders
    Not Tendering in the Exchange Offer</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under general principles of tax law, the modification of a debt
    instrument creates a deemed exchange upon which gain or loss is
    realized if the modified debt instrument differs materially
    either in kind or in extent from the original debt instrument.
    Under the Treasury Regulations, the modification of a debt
    instrument is a &#147;significant&#148; modification (i.e., a
    modification upon which gain or loss is realized) if, based on
    all the facts and circumstances and taking into account all
    modifications of the debt instrument collectively, the legal
    rights or obligations that are altered and the degree to which
    they are altered are &#147;economically significant.&#148;
    Whether holders that do not tender their Grant Prideco notes in
    the exchange offer are treated as exchanging, for
    U.S.&#160;federal income tax purposes, their Grant Prideco notes
    for new Grant Prideco notes as a result of the merger or the
    adoption of the proposed modifications to the Grant Prideco
    notes (see &#147;the Proposed Amendments&#148;) depends on
    whether these transactions result in a &#147;significant&#148;
    modification of the existing Grant Prideco notes. The Treasury
    Regulations generally provide that a change in obligor on a
    recourse debt instrument is a significant modification. Although
    the merger will result in a change in obligor of the Grant
    Prideco notes, a change in obligor resulting from a
    reorganization or
</DIV>

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    <BR>
    92
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    an acquisition where the new obligor acquires substantially all
    the assets of the original obligor, in each case that does not
    result in a &#147;change in payment expectations&#148; or a
    &#147;significant alteration&#148; of the notes, is not a
    significant modification for these purposes. The merger will not
    result in a significant alteration of the Grant Prideco notes
    and National Oilwell Varco does not believe that the merger will
    cause a change in payment expectations. The Treasury Regulations
    also provide that a modification of a debt instrument that adds,
    deletes or alters customary accounting or financial covenants is
    not a significant modification. The Treasury Regulations do not,
    however, define &#147;customary accounting or financial
    covenants.&#148; In the case of the adoption of the proposed
    amendments, although the issue is not free from doubt, National
    Oilwell Varco intends to take the position that the adoption of
    such amendments should not constitute a significant modification
    of the terms of the Grant Prideco notes for federal income tax
    purposes, in which case a U.S.&#160;holder would not recognize
    any gain or loss and such U.S.&#160;holder should continue to
    have the same tax basis and holding period with respect to such
    notes as it had before the adoption.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the adoption of the proposed amendments were treated as a
    significant modification of the terms of the Grant Prideco
    notes, however, a non-tendering U.S.&#160;holder of such notes
    would be treated, for federal income tax purposes, as having
    exchanged its Grant Prideco notes for new Grant Prideco notes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If both the Grant Prideco notes and the new Grant Prideco notes
    as modified by the proposed amendments were treated as
    &#147;securities&#148; for federal income tax purposes, such
    exchange could be treated as a tax-free recapitalization, in
    which case such non-tendering U.S.&#160;holders should not
    recognize any gain or loss, except that a non-tendering
    U.S.&#160;holder may be required to recognize ordinary income
    equal to the accrued but unpaid interest in the Grant Prideco
    notes not previously included in income, although such amount
    will not be again included in income when actually paid. The
    non-tendering U.S.&#160;holder&#146;s holding period in the new
    Grant Prideco notes would include such holder&#146;s holding
    period in the Grant Prideco notes prior to modification by the
    proposed amendments, and such holder&#146;s basis in the new
    Grant Prideco notes as modified by the proposed amendments would
    equal such holder&#146;s previous basis in the Grant Prideco
    notes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the Grant Prideco notes or the new Grant Prideco notes were
    not treated as &#147;securities&#148; for federal income tax
    purposes, a non-tendering U.S.&#160;holder would recognize
    capital gain or loss in an amount equal to the difference
    between the U.S.&#160;holder&#146;s adjusted tax basis in the
    Grant Prideco notes and the issue price of the new Grant Prideco
    notes deemed received in exchange therefor, provided that any
    such gain attributable to accrued but unrecognized market
    discount would be subject to tax as ordinary income. The
    deductibility of capital losses is subject to limitations. In
    addition, a non-tendering U.S.&#160;holder would recognize
    ordinary interest income on the amount of accrued and unpaid
    interest on such Grant Prideco notes that such holder has not
    previously included in income, although such amount will not be
    again included in income when actually paid. The non-tendering
    U.S.&#160;holder&#146;s holding period in such new Grant Prideco
    notes would begin the day after the effective date of the
    proposed amendments and the non-tendering
    U.S.&#160;holder&#146;s basis in the new Grant Prideco notes
    would generally equal their issue price.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Holders are urged to consult their tax advisors as to the
    amount, timing and character of any income, gain or loss that
    would be recognized for federal income tax purposes in the case
    of a deemed exchange and the possibility of the new Grant
    Prideco notes being issued with original issue discount or
    premium.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A
    <FONT style="white-space: nowrap">non-U.S.&#160;holder</FONT>
    who does not tender the Grant Prideco notes in the exchange
    offer will be subject to the same rules as those discussed above
    with respect to non-tendering U.S.&#160;holders for purposes of
    determining whether the proposed amendments give rise to a
    deemed exchange or a tax-free recapitalization. In the event
    that such proposed amendments are considered to result in a
    deemed exchange that does not qualify as a tax-free
    recapitalization, a
    <FONT style="white-space: nowrap">non-U.S.&#160;holder</FONT>
    will generally be taxed on any gain realized on the exchange in
    the same manner as tendering
    <FONT style="white-space: nowrap">non-U.S.&#160;holders.</FONT>
</DIV>

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    <BR>
    93
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='115'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ERISA
    CONSIDERATIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The National Oilwell Varco notes may be purchased and held by an
    employee benefit plan subject to Title&#160;I of the Employee
    Retirement Income Security Act of 1974, as amended, or ERISA, or
    by an individual retirement account or other plan subject to
    Section&#160;4975 of the Code. A fiduciary of an employee
    benefit plan subject to ERISA must determine that the purchase
    and holding of a National Oilwell Varco note is consistent with
    its fiduciary duties under ERISA. The fiduciary of an ERISA
    plan, as well as any other prospective investor subject to
    Section&#160;4975 of the Code or any similar law, must also
    determine that its purchase and holding of National Oilwell
    Varco notes does not result in a non-exempt prohibited
    transaction as defined in Section&#160;406 of ERISA or
    Section&#160;4975 of the Code or similar law. Each purchaser and
    transferee of a National Oilwell Varco note who is subject to
    ERISA <FONT style="white-space: nowrap">and/or</FONT>
    Section&#160;4975 of the Code or a similar law will be deemed to
    have represented by its acquisition and holding of the National
    Oilwell Varco note that its acquisition and holding of the
    National Oilwell Varco note does not constitute or give rise to
    a non-exempt prohibited transaction under ERISA,
    Section&#160;4975 of the Code or any similar law.
</DIV>
<A name='116'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    MATTERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain legal matters with respect to the National Oilwell Varco
    notes offered in the exchange offer will be passed upon for us
    by Andrews Kurth LLP, Houston, Texas.
</DIV>
<A name='117'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">EXPERTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The consolidated financial statements and schedule of National
    Oilwell Varco, Inc. at December&#160;31, 2007 and 2006, and for
    each of the three years in the period ended December&#160;31,
    2007, and the effectiveness of National Oilwell Varco&#146;s
    internal control over financial reporting as of
    December&#160;31, 2007, incorporated by reference into this
    prospectus and registration statement have been audited by
    Ernst&#160;&#038; Young LLP, independent registered public
    accounting firm, as set forth in their reports incorporated by
    reference herein. Such consolidated financial statements are
    incorporated by reference herein in reliance upon such report
    given on the authority of such firm as experts in accounting and
    auditing.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The consolidated financial statements and related financial
    statement schedule of Grant Prideco, Inc. as of
    December&#160;31, 2007 and 2006, and for each of the three years
    in the period ended December&#160;31, 2007, and the
    effectiveness of Grant Prideco&#146;s internal control over
    financial reporting incorporated by reference in this prospectus
    have been audited by Deloitte&#160;&#038; Touche LLP, an
    independent registered public accounting firm, as stated in
    their reports incorporated herein (which reports
    (1)&#160;express an unqualified opinion on the financial
    statements and financial statement schedule and include an
    explanatory paragraph regarding the Company&#146;s adoption of
    Statement of Financial Accounting Standard No.&#160;123(R),
    <I>Share-based Payment</I>, on January&#160;1, 2006 and
    (2)&#160;express an unqualified opinion on the effectiveness of
    internal control over financial reporting), and have been so
    included in reliance upon the reports of such firm given upon
    their authority as experts in accounting and auditing.
</DIV>

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    <BR>
    94
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<A name='118'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ANNEX&#160;A</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">FORM&#160;OF
    SUPPLEMENTAL INDENTURE<BR>
    TO GRANT PRIDECO INDENTURE</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    FIRST SUPPLEMENTAL INDENTURE, dated as of
    April&#160;&#160;&#160;&#160;&#160;, 2008 (this
    &#147;Supplemental Indenture&#148;), between Grant Prideco,
    Inc., a Delaware corporation (the &#147;Company&#146;&#146;),
    and Wells Fargo Bank, N.A., a national banking corporation, as
    trustee under the Indenture referred to below (the
    &#147;Trustee&#148;).
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RECITALS
    OF THE COMPANY</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    WHEREAS, the Company and the Trustee are parties to that certain
    Indenture, dated as of July&#160;27, 2005 (the &#147;Original
    Indenture&#148;), such Original Indenture, as amended and
    supplemented from time to time (including, without limitation,
    pursuant to this Supplemental Indenture), being referred to
    herein as the &#147;Indenture&#148;;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    WHEREAS, pursuant to Section&#160;10.02 of the Indenture, the
    Company and the Trustee may amend or supplement the Indenture
    with the written consent of the Holders of at least a majority
    in principal amount of the Notes outstanding;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    WHEREAS, National Oilwell Varco, Inc., a Delaware corporation
    (&#147;National Oilwell Varco&#148;), has offered to exchange
    all of the outstanding Notes, upon the terms and subject to the
    conditions set forth in its Prospectus,
    dated&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2008, and in the related Letter of Transmittal and Consent (the
    &#147;Exchange Offer&#148;);&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    WHEREAS, in connection with the Exchange Offer, National Oilwell
    Varco has been soliciting written consents of the Holders to the
    amendments to the Original Indenture set forth herein (and to
    the execution of this Supplemental Indenture), and National
    Oilwell Varco has now obtained such written consents from the
    Holders of a majority in aggregate principal amount of the
    outstanding Notes;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    WHEREAS, accordingly, this Supplemental Indenture and the
    amendments set forth herein are authorized pursuant to
    Section&#160;10.02 of the Original Indenture;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    WHEREAS, the execution and delivery of this Supplemental
    Indenture has been duly authorized by the parties hereto, and
    all other acts necessary to make this Supplemental Indenture a
    valid and binding supplement to the Indenture effectively
    amending the Indenture as set forth herein have been duly
    taken;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    NOW, THEREFORE, in consideration of the premises, agreements and
    obligations set forth herein and for other good and valuable
    consideration, the receipt and sufficiency of which are hereby
    acknowledged, the parties hereto hereby agree, for the equal and
    proportionate benefit of all Holders of the Notes, as follows:
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;1.<BR>
    RELATION TO INDENTURE; DEFINITIONS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;1.01.&#160;&#160;<U>Relation to Indenture</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    With respect to the Notes, this Supplemental Indenture
    constitutes an integral part of the Indenture.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;1.02.&#160;&#160;<U>Definitions</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For all purposes of this Supplemental Indenture, except as
    otherwise expressly provided herein, capitalized terms used
    herein and not otherwise defined herein shall have the meanings
    ascribed thereto in the Original Indenture.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;1.03.&#160;&#160;<U>General References</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All references in this Supplemental Indenture to Articles and
    Sections, unless otherwise specified, refer to the corresponding
    Articles and Sections of this Supplemental Indenture; and the
    terms &#147;herein&#148;, &#147;hereof&#148;,
    &#147;hereunder&#148; and any other word of similar import
    refers to this Supplemental Indenture.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-1
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;2.<BR>
    AMENDMENTS TO INDENTURE</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;2.01.&#160;&#160;<U>Amendments</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    With respect to all outstanding Notes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;Sections&#160;4.03, 4.04, 4,05, 4.07, 4.08, 4.09, 4.10,
    4.11, 4.12, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 5.01 and
    6.01(c), (d), (f)&#160;and (g)&#160;of the Original Indenture
    are hereby deleted and the Company is hereby released from its
    obligations thereunder;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;any failure by the Company to comply with the terms of
    any of the foregoing Sections of the Original Indenture (whether
    before or after the execution of this Supplemental Indenture)
    shall no longer constitute a Default or an Event of Default
    under the Indenture and shall no longer have any other
    consequence under the Indenture;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;2.02.&#160;&#160;<U>Deleted Defined Terms</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In conjunction with the amendments identified in
    Section&#160;2.01 above, the following defined terms used in the
    Indenture are hereby deleted:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;Acquired Debt&#148;, &#147;Affiliate Transaction&#148;,
    &#147;Asset Sale Offer&#148;, &#147;Attributable Debt&#148;,
    &#147;Change of Control Offer&#148;, &#147;Change of Control
    Payment&#148;, &#147;Change of Control Payment Date&#148;,
    &#147;Change of Control Triggering Event&#148;,
    &#147;Consolidated Cash Flow&#148;, &#147;Consolidated Net
    Income&#148;, &#147;Credit Facilities&#148;, &#147;Designated
    Non-cash Consideration&#148;, &#147;Domestic Subsidiary&#148;,
    &#147;Excess Proceeds&#148;, &#147;Existing Indebtedness&#148;,
    &#147;Fall-away Covenants&#148;, &#147;Fall-away Event&#148;,
    &#147;Fixed Charge Coverage Ratio&#148;, &#147;Fixed
    Charges&#148;, &#147;Foreign Restricted Subsidiary&#148;,
    &#147;Investment Grade Rating&#148;, &#147;Liquid
    Securities&#148;, &#147;Net Income&#148;, &#147;Permitted
    Debt&#148;, &#147;Permitted Liens&#148;, &#147;Permitted
    Refinancing Indebtedness&#148;, &#147;Rating Agency&#148;,
    &#147;Rating Category&#148;, &#147;Rating Decline&#148;,
    &#147;Restricted Investment&#148;, &#147;sale and leaseback
    transaction&#148;, and &#147;Total Assets&#148;.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;2.03.&#160;&#160;<U>Effectiveness; Operation</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This Supplemental Indenture shall be effective as of the date
    hereof. However, the amendments and other changes to the
    Original Indenture contemplated hereby shall become operative
    upon the first acceptance of the Notes for exchange in the
    Exchange Offer and the delivery of the consideration therefor to
    the Exchange Agent for the Exchange Offer.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ARTICLE&#160;3.<BR>
    MISCELLANEOUS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.01.&#160;&#160;<U>Certain Trustee Matters</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The recitals contained herein shall be taken as the statements
    of the Company, and the Trustee assumes no responsibility for
    their correctness.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Trustee makes no representations as to the validity or
    sufficiency of this Supplemental Indenture or the proper
    authorization or due execution thereof by the Company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.02.&#160;&#160;<U>Continued Effect</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except as expressly supplemented and amended by this
    Supplemental Indenture, the Original Indenture (as supplemented
    and amended to date) shall continue in full force and effect in
    accordance with the provisions thereof, and the Original
    Indenture (as so supplemented and amended, and as further
    supplemented and amended by this Supplemental Indenture) is in
    all respects hereby ratified and confirmed. This Supplemental
    Indenture and all its provisions shall be deemed a part of the
    Original Indenture in the manner and to the extent herein and
    therein provided.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.03.&#160;&#160;<U>Governing Law</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE
    USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING
    EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE
    EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION
    WOULD BE REQUIRED THEREBY.
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-2
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Section&#160;3.04.&#160;&#160;<U>Counterparts</U>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This instrument may be executed in any number of counterparts,
    each of which shall be deemed to be an original, but all such
    counterparts shall together constitute but one and the same
    instrument.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    **********
</DIV>

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    A-3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="font-size: 2pt; margin-left: 0%; width: 100%; align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=0 -->

<DIV style="font-size: 2pt; margin-left: 0%; width: 100%; align: left; border-bottom: 2pt solid #000000"></DIV><!-- callerid=999 iwidth=455 length=0 -->

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="h54629b3h5462900.gif" alt="(NATIONAL OILWELL VARCO INC. LOGO)">
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 12pt">$174,585,000
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">OFFER TO EXCHANGE</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">ALL OUTSTANDING
    6<FONT style="vertical-align: text-top; font-size: 70%;">1</FONT>/<FONT style="font-size: 70%;">8</FONT>%
    SENIOR NOTES&#160;OF GRANT PRIDECO, INC.</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 14%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=68 -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="font-size: 12pt">PROSPECTUS
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 14%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=455 length=68 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>The Exchange Agent for the Exchange Offer and the Consent
    Solicitation is:</I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 16pt">Global Bondholder Services
    Corporation</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="48%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<TR valign="bottom">
<TD align="center" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <I>By Facsimile (Eligible Institutions Only):</I>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <I>By Mail or Hand:</I>
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    (212)
    <FONT style="white-space: nowrap">430-3775</FONT><BR>
    Attention: Corporate Actions<BR>
    For Information or<BR>
    Confirmation by Telephone:<BR>
    <FONT style="white-space: nowrap">(212)&#160;430-3774</FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    65 Broadway - Suite 723<BR>
    New York, New York 10006<BR>
    Attention:  Corporate Actions
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any questions or requests for assistance may be directed to the
    Dealer Manager at the address and telephone number set forth
    below. Requests for additional copies of this Prospectus and the
    Letter of Transmittal may be directed to the Information Agent.
    Beneficial owners may also contact their custodian for
    assistance concerning the Exchange Offer and the Consent
    Solicitation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>The Information Agent for the Exchange Offer and the
    Consent Solicitation is:</I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Global Bondholder Services Corporation
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    65 Broadway - Suite&#160;723
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    New York, New York 10006
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Attn: Corporate Actions
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Bank and Brokers Call Collect:
    <FONT style="white-space: nowrap">(212)&#160;430-3774</FONT>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All Others Please Call Toll-Free:
    <FONT style="white-space: nowrap">(866)&#160;470-3700</FONT>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I>The Dealer Manager for the Exchange Offer and the Consent
    Solicitation is:</I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">Goldman, Sachs&#160;&#038;
    Co.</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Credit Liability Management Group
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1 New York Plaza
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    New York, New York 10004
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Collect:
    <FONT style="white-space: nowrap">(212)&#160;902-9077</FONT>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Toll-Free:
    <FONT style="white-space: nowrap">(800)&#160;828-3182</FONT>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
