CORPORATE COMPLIANCEAND

BUSINESS ETHICS MANUAL

MANUAL DE CUMPLIMIENTOY

ETICA DE NEGOCIOS CORPORATIVOS´

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GRANT PRIDECO, INC.

CORPORATE COMPLIANCEAND

BUSINESS ETHICS MANUAL

Additional copies of this manual can be obtained from the Human Resources or Legal Department of

Grant Prideco's corporate office in Houston, Texas

Version Date: 06/2005

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Foreword ....................................................................................................................3

Definitions ..................................................................................................................4

Company Policies

Compliance and Ethics Resources ..........................................................................4

Reporting Policy Violations .....................................................................................5

Accurate Records ......................................................................................................7

Antitrust Issues .........................................................................................................8

Bribery and Illegal or Unethical Business Practices ..........................................10

Business Gifts ...........................................................................................................11

Charitable Contributions .......................................................................................13

Confidential Information .......................................................................................14

Conflicts of Interest .................................................................................................15

Delivery of Materials ..............................................................................................17

Environmental, Health, and Safety ......................................................................18

Equal Opportunity ..................................................................................................19

Financial Control and Reporting ..........................................................................20

Information and Data Security and Appropriate Computer Use ...................21

Intellectual Property ...............................................................................................24

International Business ............................................................................................26

Political Contributions ...........................................................................................27

Records Retention ...................................................................................................28

Securities Transactions ...........................................................................................29

Sexual Harassment .................................................................................................30

Certificate of Compliance ................................................(back inside of manual)

Table of ConTenTs

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Grant Prideco's reputation for integrity is very important to us and is what provides the Company an opportunity to serve its customers. Integrity is never to be sacrificed for the sake of results. There is no more important issue than the lawful and ethical conduct of employees in their relationships with customers, industry, government and others. This is true in all countries and communities where the Company operates.

The policies set forth in this Manual are applicable to every employee of Grant Prideco regardless of level, seniority or authority. We all share responsibility for maintaining a high standard of business conduct at Grant Prideco.

This Manual summarizes the Grant Prideco business ethics policies and the code of conduct with which all employees are expected to comply. Read this Manual carefully and understand it fully. In some instances, the Company's entire policy may be set forth in this Manual. In other instances, this Manual only summarizes the applicable policy. The full text of any summarized policies are set forth in the Company's Management Manual as well as any division-specific policies that have been published. Contact your supervisor to obtain the full text of the Management Manual or any division policy. It also is available electronically on the Company's Intranet. Should a question arise as to the proper interpretation of a policy, ask your supervisor or a member of the Legal Department for clarification.

A single employee's misconduct can do much to damage a hard-earned reputation. All employees should be aware that conduct that violates the policies set forth in this Manual is always considered outside the scope of their employment. Violation of these policies may expose both the Company and the individual employee to fines, imprisonment, and lawsuits for damages. In addition, individuals who violate these policies are subject to appropriate disciplinary action by the Company, including possible termination of employment.

Persons who have employees reporting to them should also take all necessary steps to ensure their employees know and follow these policies. In this connection, all managers should periodically consult with their staff members to determine that appropriate procedures for implementation of Company policies have been developed and are being followed.

Michael McShane President and Chief Executive Officer

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Company - Grant Prideco and all its subsidiaries.

Division President - The Officer of Grant Prideco designated as the President of an operating segment. Operating segments of Grant Prideco are described in the Company's Annual Report to Stockholders.

Ethics Website - Website located on the company’s intranet by clicking on “Legal”.

President - The person who holds the titles of President and Chief Executive Officer of the Company.

Management Manual - The Company's Management Manual containing the full text of many of the policies summarized in this Manual. Cross references to many of the most important sections of the Management Manual are set forth in this Manual. Divisions of the Company also may have published applicable policies. The Management Manual is available on the company’s intranet site by clicking on “Human Resources”.

definiTions

ComplianCe and eThiCs resourCes

There are numerous resources available to Company employees so that questions can be an answered and ethical issues can be reported. Company resources include the following:

Ethics WebsiteThe Company maintains a Legal and Corporate Compliance Website on its intranet. The Ethics Website contains links to many of the Company’s policies that are summarized in this Ethics Manual, as well as other resources to help employees of the Company understand and solve ethical and compliance problems. The Website also contains links to the Company’s ethics hotline for reporting ethics and compliance concerns as well as the Company’s ethics help line for asking questions when trying to solve a compliance or ethics issue.

The Ethics Website can be accessed by any Company employee by clicking on the “legal” page of the Grant Prideco Intranet site. If any employee has difficulty accessing this site, he or she should contact their Human Resources representative or call the Legal Department.

Management ManualThe Company’s Management Manual contains many of the Company’s policies and procedures relating to ethics and compliance issues, in particular, employee related matters. Copies of the Company’s Management Manual are available from your HR representative as well as on the Company’s Intranet site under the “Human Resources Page”.

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reporTing poliCy ViolaTions

Policy An employee who becomes aware of an apparent violation of the Company's policies regarding legal or ethical business conduct must report the violation. This includes violations of policies set forth in this handbook, or other manuals or guides distributed by the Company.

How to Report an Apparent ViolationThe method in which to report an apparent violation of Company policies regarding legal or ethical business conduct often depends upon the nature of the apparent violation. The following summarizes appropriate methods of reporting violations for certain broad categories of issues:

Human Resource Concerns. Human resource concerns, such as discrimination or harassment, can be appropriately reported to an employee’s supervisor or local human resource representative.

Financial and Accounting Matters. Financial and accounting concerns can be appropriately reported to an employee’s applicable financial manager, the Division Vice President of Finance, Corporate Controller or the Internal Audit Department.

Environmental, Health and Safety. Environmental, health and safety matters can be appropriately reported to your local QHS&E representative or the Company’s corporate QHS&E department. Legal and Other Matters. Many policies and concerns relate to potential violations of laws or conflicts of interests. These can be appropriately reported to the legal department.

In addition, if an employee is not comfortable for any reason with reporting concerns through one of the suggested methods above, or if an employee does not

Company Employees and ServicesWhen in doubt regarding an ethics or compliance issue, it is always best to discuss the matter with your supervisor or local human resources representative. In addition, employees should always feel free to discuss ethics or compliance issues with their applicable division president, corporate officer or financial officer. Finally, employees can always contact the Company’s legal or internal audit departments.

TrainingThe Company provides training on ethics and compliance issues. Training can take the form of Computer Based Ethics or QHS&E training as well as presentations and classroom sessions on ethics and compliance matters. To schedule training, please contact your applicable HR or QHS&E representative or the legal department.

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believe that appropriate action was taken by the individual to whom the concern was initially reported, the employee should feel free to contact their appropriate regional manager, division president or corporate officer. In addition, employee’s can always report concerns of any nature to the Company’s legal or internal audit departments.

Finally, the Company maintains an employee hotline. This hotline is monitored by both the Company’s General Counsel and Director of Internal Audit and permits employees to report concerns anonymously. Information regarding the Company’s hotline (as of the date of this manual) is as follows:

Telephone: 1-800-932-5378Grant Prideco, Inc.

PO BOX 62082Houston, Texas 77205-2082

How to Report a Financial Concern to the Audit CommitteeIf an employee desires to report a financial concern to the Audit Committee of the Company’s Board of Directors, including matters relating to accounting, financial reporting, internal controls or any audit, employees should utilize the hotline discussed above or directly contact the Company’s Director of Internal Audit or Vice President and General Counsel.

Safeguards Against RetaliationNo employee will be adversely affected in employment with the Company as a result of reporting a violation of Company policy or providing further information during an investigation. This includes those who report a violation of the policy against discrimination and sexual harassment.

When appropriate, safeguards will be applied in an effort to keep the matter confidential.

PenaltiesDeparture from the required standards of conduct according to Company policy and the law will result in appropriate disciplinary action by Company management. This may include termination of employment.

Employees who violate the law may be subject to criminal prosecution and may be held liable for damages incurred by the Company as a result of such violation.

Any employee who fails to report violations or provide further information about a violation will be appropriately disciplined. Disciplinary actions include possible termination of employment.

Any employee who makes false allegations of violations in bad faith shall be subject to the same disciplinary action as one who fails to report or provide information about a violation.

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aCCuraTe reCords

PolicyThe Company's records should be kept in a manner that accurately reflects its transactions. No employee of the Company shall falsify records in any way.

Legislation Regarding Accurate Record KeepingThere are a number of U.S. criminal statutes requiring companies to maintain accurate books and records, including: • The Foreign Corrupt Practices Act • The Federal False Claims Act • Environmental reporting laws • Export control laws • Federal mail fraud statutes • Federal sentencing guidelines • Sarbanes-Oxley Act of 2002

International personnel are expected to be knowledgeable of and comply with local laws and record keeping requirements.

GuidelinesThe Company's books and records should be kept in a manner that: • fully represents the Company's: ◊receipts, ◊expenditures, ◊assets, ◊liabilities; • records transactions in accordance with U.S. federal law and the laws of anycountriesorterritoriesinwhichtheCompanydoesbusiness; • complies with the Company's U.S. and international operating, safety and environmental, human resource, accounting and financial reporting and otherpolicies; • each division and operating location should maintain a record retention policy applicable to such location that is consistent in all respects with the company’s corporate record retention policy.

Applicable Cross References The company’s corporate record retention policy is available on the ethics website. In addition, each employee is encouraged to contact the Finance and Accounting Department for the Company's detailed accounting policies and read the policies on the ethics website and in the Management Manual, including the following policies: • HSE-01 – QHS&E Management System • HSE-03 – Environmental protection • L-01 – Conflicts of Interest • L-05 – Foreign Corrupt Practices Act Compliance Policy • L-06 – Sanction and Export Compliance Policy • L-07 – Anti-Boycott Policy

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anTiTrusT issues

PolicyThe U.S. Federal Government, most state governments, and many other countries have adopted antitrust laws. In broad terms, these antitrust laws make it illegal and criminal to engage in activities that reduce competition or restrain free trade.

In the U.S., these laws are enforced by the Department of Justice, the Federal Trade Commission, state Attorneys General, and by private individuals seeking treble damages.

The Company firmly supports these laws, and it is strict company policy that all antitrust statutes are complied with in every respect.

Laws Enforcing Antitrust Policies in the U.S.The laws enforcing antitrust policies in the U.S. are: • The Sherman Act of 1890 • The Clayton Act of 1914 • The Robinson-Patman Act of 1936 • The Federal Trade Commission Act of 1914

The Sherman Act The Sherman Act prohibits: •attemptstomonopolize; • price-fixing or price-stabilizing agreements among competitors or betweensuppliersandcustomers; • agreements among competitors or between suppliers and customers to: ◊dividemarketsorcustomers, ◊limitproduction, ◊boycottthirdparties; • "tying agreements" (forcing customers to buy a less desired product or servicefromyouinordertoobtaintheitemtheyreallywant); • reciprocity (coercing a company to purchase products or services from your company based on the volume of your company's purchases of products or services from that company).

The Clayton ActThe Clayton Act supplements the Sherman Act and also prohibits acquisitions or joint ventures that may substantially reduce competition.

The Robinson-Patman Act TheRobinson-PatmanActgenerallyforbidspricediscrimination;thatis,sellinganitem of like grade and quantity at different prices to competing customers that may substantially lessen competition.

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The Federal Trade Commission Act Of 1914The Federal Trade Commission Act of 1914 gave authority to the FTC to determine that certain conduct constitutes "unfair competition." In many instances, violations of the antitrust laws also are considered "unfair competition" in violation of the Federal Trade Commission Act.

Laws Enforcing Antitrust Policies in EuropeThe antitrust laws of the European Union (EU) apply to transactions that occur in the EU.

The two principal EU provisions governing antitrust policies are Articles 85 and 86 of the Treaty of Rome, which established the EU. Never assume that just because a practice is legal (or illegal) under U.S. law that it is necessarily legal under the EU rules.

Questions about activities in Europe that appear to be inconsistent with U.S. law or which involve substantial amounts of money should be reviewed with Company Counsel.

Price FixingPrice fixing is an area in which employees may be susceptible to violation of antitrust laws.

Price fixing occurs when two or more competitors agree on how they will charge customers for products or services. For purposes of the antitrust laws, “price” includes all terms and conditions of sale.

It does not matter that a price was decreased rather than increased, that no exact price was fixed, or that the price involved was reasonable. Nor does it matter whether the agreement to fix prices was in writing or even discussed orally. Courts and juries can infer a conspiracy to fix prices through certain actions or failure to take action.

In order to ensure that you do not violate the law, do not discuss any of the following with your competitors: • Past, present or future pricing • Production capacity • Production allocation • Mutual customers • Bidding • Marketing

For example, you could be found guilty of price fixing if you were at a meeting where competitors were present and an unscheduled discussion of industry prices developed. In a situation like this, you must excuse yourself and report the matter to the Company's Legal Department.

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Except for bona fide purchase and sale agreements where Grant Prideco is selling a product to or purchasing a product from a competitor, it is against Company policy to accept price lists from competitors or to give them copies of our price lists.

PenaltiesThe penalties for breaking the law or acting against Company policy are severe. Employees could lose their job, face heavy fines, go to prison or otherwise cause employee and thier family substantial anguish. In addition, employee’s improper actions could cost the Company heavy fines or expose it to lawsuits for treble damages.

Applicable Cross-Reference For additional information on the policies described, each employee is encouraged to contact the Legal Department and read the policies on the ethics website.

bribery and illegal or uneThiCal business praCTiCes

PolicyNo employee or representative of the Company shall, directly or through an intermediary, offer or give anything of value to foreign government officials, employees or representatives.

Employees of the Company shall refrain from illegal or unethical actions that might injure the Company's business reputation.

Bribery of Government OfficialsPayment of money or gifts that could be construed as an attempt to induce a government official or political party to assist the Company in obtaining or retaining business or secure any improper advantage is prohibited.

Although bribing government officials is an accepted practice in some countries, such activity is in violation of Company policy and is also outlawed by state and federal laws, including the U.S. Foreign Corrupt Practices Act.

Small payments to government officials whose duties are ministerial or clerical in order to expedite services to which the Company is otherwise entitled are not prohibited if they conform to local practice. For example, these payments would never be permitted in the U.S. Any such payment in excess of $250 must be reported to the Internal Audit Department or attorney in the legal department.

Other Commercial BriberyPayment of money or gifts that could be construed as an attempt to induce a person to use his or her influence to do the following is prohibited: • Assist the Company in obtaining or retaining business • Benefit the Company • Benefit an individual

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Offering nominal business gifts is acceptable provided the gifts conform to the guidelines described in the “Business Gifts” section of this handbook.

QuestionsEmployees with questions about the legal or ethical nature of a transaction should contact the Company’s Legal Department.

Penalties The Company may be fined up to $2.5 million for failure to comply with state and federal regulations regarding bribery and other corrupt business practices.

In addition, any employee or Company representative who willingly violates state or federal regulations may be personally fined up to $10,000 and imprisoned up to five years. U.S. law extends these penalties to non-U.S. citizens.

Applicable Cross-ReferencesFor additional information on the policies described, each employee is encouraged to contact the Legal Department and read the policies on the ethics website.

business gifTs

PolicyIf an organization, person, or group is: • doing business with, • seeking to do business with or • competing against the Company,

then Company employees shall not seek, solicit or accept any of the following from that organization, person, or group: • Gifts • Payments • Fees • Services • Opportunities • Favors

Exception: Employees may accept nominal gifts as stipulated below.

Purpose and Scope of PolicyThe purpose of this policy is to avoid any misunderstanding with third parties that gifts, contributions or donations are required or will aid in gaining or continuing business with the Company. It applies to all individual employee activities. However, solicitation of gifts, door prizes, etc. for Company-sponsored events such as golf tournaments shall not be prohibited by this policy, to the extent approved by a Division President.

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Unacceptable Business GiftsGifts of cash, stocks, bonds or similar items shall not be given or accepted, regardless of amount.

Acceptable Business Gifts From Outside Companies It is acknowledged that certain gifts of nominal value are widely offered as common business practice and may be accepted as such. In no instance, however, should gifts, contributions or donations be requested or in any way solicited by a Company employee.

Acceptable Business Gifts To Outside Companies All gifts, favors and entertainment offered to others by employees of the Company will be in accordance with widely accepted good business practices and will be of such a nature that public disclosure of all related facts would not embarrass the employee or the Company.

Such gifts are never to be offered in such a way as to imply that they are a kickback, bribe or payoff.

Reporting Business GiftsReport any of the following to the appropriate Division President and the Legal Department: • Any gift given or received with a value in excess of $200 • Any gift that can be construed as a violation of Company policy, regardless of amount

If you have any questions regarding the propriety of any entertainment or gifts, especially if you have dealings with government employees who may not be allowed to accept such items, consult the Company's Legal Department.

Applicable Cross-ReferencesFor additional information on the policies described, each employee is encouraged to contact such employee's HR Representative or the Legal Department and read the policies in the Management Manual and on the ethics website, including the following policies:

• L-01 – Conflicts of Interest • L-05 – Anti bribery and FCPA compliance policy

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ChariTable ConTribuTions

PolicyCharitable contributions up to $250 can be made at the local office level consistent with this policy. Charitable contributions over $250 must be approved by the Division President or Corporate Vice President. Charitable contributions over $1,000 must also have the approval of the President of the Company and Vice President of Marketing and Communications.

Employees of the Company's operations outside the U.S. should follow the charitable contribution policies or rules in effect in their country or region.

Expenses incurred on behalf of local organizations to facilitate delivery of services (such as donations to communities to build roads or schools) are not charitable contributions for purposes of this policy and should not be categorized as such in the Company’s records. Such payments may only be made if they comply with the Company’s policy on Bribery and Illegal or Unethical Business Practices.

ReceiptsReceipts should be obtained for all charitable contributions.

Receipts for contributions made in the U.S. should list Grant Prideco, L.P. as the contributor. All such receipts should be forwarded to the Tax Department at the Houston Corporate Office.

Receipts for contributions made outside the U.S. should list the local Grant Prideco entity as the contributor.

Acceptable Contributions Charitable contributions permitted by this policy can be made to Federal (national), state (provincial) or local government units that use the contribution exclusively for public purposes. This does not include contributions to political candidates, officials or parties.

Gifts to entities organized and operated exclusively for religious, charitable educational and similar purposes also qualify.

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ConfidenTial informaTion

Policy No employee or former employee shall disclose Company trade secrets or other confidential information.

Trade Secret AgreementEach Grant Prideco employee may be required to sign an agreement not to reveal the Company’s trade secrets to others or use such trade secrets for his or her personal benefit.

This agreement applies for as long as an employee is employed at Grant Prideco and also after his or her employment has terminated.

Definition of Confidential InformationFor the purposes of this policy, the Company defines confidential information as including: • Prices paid or charged for equipment, products and labor marketing strategies • Non-public financial information • Financing plans • Arrangements with suppliers (including transportation companies) • Potential acquisitions • Divestitures or organizational changes • Information about the Company’s products and technology, unless the information has been specifically published

Confidential Technological Information The Company helps to maintain its business position through technological innovations that improve products and lower costs. These innovations are developed at great cost to the Company and represent valuable business trade secrets.

Disclosing any of the Company’s confidential technological information may seriously harm the Company’s competitive position.

Questions Regarding ConfidentialityEmployees who have questions regarding what constitutes confidential information should discuss the matter with their Regional Manager, Division President or Legal Department.

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Applicable Cross-ReferencesFor additional information on the policies described, each employee is encouraged to read the policies set forth in the Company's Management Manual and the ethics website, including the following:

• L-01 – Conflicts of Interest • L-02 – Protection of Confidential Information/Inventions • L-08 – Disclosure of Company Information • L-09 – News Release Clearance Procedures

ConfliCTs of inTeresT

PolicyNo employee shall have any investment in or relationship with an outside organization that might put that employee in a position that conflicts with the best interest of the Company.

Possible Conflicts of InterestThe following are situations or transactions that might involve conflicts of interest:

• An employee or an associate of an employee has or may have a direct or indirect interest in a Company transaction • An employee is involved in legal proceedings in which the employee or any associate of the employee is an adverse party to the Company or has an adverse interest to the Company • An employee or an associate of an employee has any financial interest or position of responsibility (officer, director, principal stockholder, partner or owner) with any third party who: ◊doesbusinesswiththeCompany ◊seekstodobusinesswiththeCompany ◊competeswiththeCompany

For the purposes of this policy, the Company defines an associate as:

• Any member of an employee's family, including: ◊Spouse ◊Father ◊Mother ◊Brother ◊Sister ◊Aunts ◊Uncles ◊Nieces ◊Nephews ◊Grandparents ◊In-laws

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• Any organization not associated with the Company in which the employee or family member is a/an: ◊Officer ◊Owner ◊Partner ◊ Beneficialowneroftenpercentormoreofanyclassofequity securities • Any trust or estate in which such person has a substantial beneficial interest or for which they serve as a trustee or in a similar capacity • Any person who has a business relationship with an employee of the Company

Violation: Ownership of A Business Affiliated with the CompanyIt is a violation of this policy if an employee owns a financial interest in a company that seeks to do business with the Company, especially if that employee can have an effect on decisions regarding the Company’s business with such organization.

Violation: Use of Company AssetsIt is a violation of this policy for an employee to use a Company asset for his or her personal advantage. Also, it is a violation to allow a third party to use a Company asset without prior agreement by and fair payment to the Company.

Violation: Acquisition of Assets It is a violation of this policy for an employee to acquire property or other assets if the value of the assets is likely to be affected by an action of the Company. This is especially true if the employee can make a decision or recommendation that could affect the Company’s action regarding the employee's property or other assets.

Violation: Employment It is a violation of this policy for an employee to serve on the board of directors or to work for, or have contracts with, any: • Supplier • Competitor • Customer of the Company

The President of the Company may approve exceptions to the policy in appropriate cases.

Reporting Conflicts of Interest or Possible ViolationsAll employees are required to disclose to the appropriate Division President and the Legal Department any proposed transaction or existing situation in which a conflict of interest could arise.

Employees of Grant Prideco International Operations should report any conflicts of interest to the appropriate Region Manager and the Legal Department in Houston.

Periodically, employees will be asked to complete a form or certificate on which they will list details about their relationships or holdings that might be deemed conflicts

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of interest. Failure to complete the form truthfully will be a basis for appropriate disciplinary action including possible termination of employment.

Division Presidents or Corporate Vice Presidents in consultation with the Legal Department will determine if a conflict could adversely effect an employee's judgment or performance of job duties.

Applicable Cross-ReferencesFor additional information on the policies described, each employee is encouraged to read the policies set forth in the Company's Management Manual or ethics website, including the following: • L-01 – Conflicts of Interest • HR-7 – Outside Employment

deliVery of maTerials

PolicyIt is the policy of the Company to deliver the quality of service and quantity of materials requested by customers.

GuidelinesThe Company has established the following guidelines to ensure proper delivery of materials. It is the responsibility of each country or district manager to ensure that the guidelines are followed.

• Any deviation in quality or quantity will only be made with the knowledge and approval of customers • Customers will be accurately invoiced for all materials and services provided • Accurate inventory records will be kept. These records should be complete enough to support amounts billed to customers

Reporting ViolationsAny deviation from this policy should be reported to a Division President or other Divisional Officer or Corporate Officer or the Legal Department.

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enVironmenTal, healTh and safeT y

PolicyAll employees must comply with laws and regulations of the jurisdictions they are operating in concerning the protection of the environment and the safety of Company personnel.

ComplianceIt is essential that all Company employees become familiar with and comply with the environmental, health, and safety laws and regulations to which they are subject. This includes compliance with: • the Company’s document retention policy relating to environmental, safety, and health matters and • all other guidelines and procedures described in manuals issued by the Company

Each Company Division must utilize appropriate management practices and sound pollution control mechanisms to prevent risks to: • Employees • Public health • The environment

QuestionsAny employee who has questions regarding any environmental, health or safety matter should consult his or her supervisor or applicable QHSPE representative.

PenaltiesSubstantial fines and other penalties can be assessed against the Company for violation of environmental and workplace safety laws. Managers and employees who knowingly violate the law and fail to correct any such violation may be held criminally liable.

Any employee who delays or fails to notify his or her supervisor of violations or who knowingly makes false statements or falsifies documents relating to these matters can create substantial liability for the Company and may also be found personally liable.

Applicable Cross-ReferencesFor additional information on the policies described, each employee is encouraged to contact the QHS&E Department and read the policies set forth in the Company’s Management Manual, including the following:

• HSE-01 – QHS&E Management System • HSE-02 – Health System • HSE-03 – Environmental Protection • HSE-04 – Employee Security

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• HSE-05 – Employee Requiring Medical Attention • HSE-06 – Temporary Duty Assignment • HSE-07 – Smoking in the Work Place • HSE-08 – Substance Abuse • HSE-09 – Contraband • HSE-10 – PPE – Prescription Safety Glass Reimbursement

equal opporTuniT y

Policy The Company will provide equal opportunity for employment to all individuals regardless of:

• Race • Color • Religion • Sex • National origin • Age • Marital status • Veteran status • Disability

The Company makes an exception to this policy only when hiring for a position that requires specific physical abilities to perform the primary functions of the job.

PurposeThe Company’s continued success depends on its ability to: • attract, develop, and retain a highly competent work force and • make creative, effective, and productive use of all of its human resources.

The Company believes that talent exists across all population groups. The Company is also committed to conducting business with due regard to the human dignity and self-worth of each individual.

Applicable Cross-ReferencesFor additional information on the policies described, each employee is encouraged to contact the Human Resources Department and read the policies in the Company's Management Manual, including the following:

• HSE-03 – Equal Employment Opportunity

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finanCial ConTrol reporTing

Policy All employees must follow appropriate internal accounting control procedures. All financial and accounting transactions will be accurately and fully reported in the Company's financial records and financial reports.

Internal Accounting ControlsOperating units and divisions are responsible for implementing control procedures that provide reasonable assurance that:

•transactionsareexecutedinaccordancewithmanagementauthorization; • transactions are recorded in a way that allows accurate preparation of financial reports and statements that comply with federal, state, and local accountingregulations; • transactions between the Company and its subsidiaries or management areproperlyaccountedforand,ifrequired,appropriatelydisclosed; • there are no undisclosed transactions, which include: ◊receiptsfromorpaymentstogovernmentofficialsoremployees; ◊receiptofamountswithanunderstandingthatrebatesorrefunds willbemadeincontraventionofthelawsofanyjurisdiction; • all misappropriations and irregularities of any nature that are identified are immediately reported to the: ◊CorporateController, ◊InternalAuditDepartment,and ◊GeneralCounsel.

Statement of Integrity Division Management is required to submit periodic statements to the Company’s Chief Financial Officer acknowledging their responsibility for the preparation and integrity of financial information submitted for inclusion in the Company’s consolidated financial statements.

The statement will also acknowledge responsibility for fostering a strong ethical climate and maintaining adequate internal accounting controls systems in that region.

Reporting Policy Violations Any employee who becomes aware of any possible policy violation should report it to his or her Division President, Manager or Controller or Corporate Officer, who will investigate and take appropriate action, including reporting to the Legal Department and Internal Audit Department as appropriate.

For more information, see the Reporting Policy Violations section in this Manual.

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informaTion & daTa seCuriTy & appropriaTe CompuTer use

PolicyEach employee must take responsibility for protecting the security of the:

• confidentiality of information regarding the Company and our customers, and • the security and integrity of the Company’s computers and information systems.

Purpose and ScopeThe Company has a significant responsibility to our customers and shareholders to protect the security and integrity of our systems and customers’ data. Therefore, employees should be aware that third parties who may wish to do damage to the Company or its employees might intercept any of the following:

• Conversations that an employee conducts either in person or over the telephone • Documents carried by an employee • Information that an employee receives or transmits via the Internet

This policy is intended to protect the security of confidential information and to safeguard against embarrassment or legal ramifications arising from improper use of the Company’s network.

Business While TravelingWhen traveling on business, employees should consider whether it is possible their conversations, either in person or over the phone, could be overheard, either electronically or otherwise.

In some places, cellular phone conversations are monitored. Also, in some places electronic "bugs" or eavesdropping devices may monitor conversations. Employees should be aware of these possibilities and take precaution to ensure that confidential information important to the Company's business cannot be learned this way. Employees should always be sensitive to situations where their conversations can be overheard, such as airplanes.

Employees should also be certain not to leave any sensitive documents unattended at any time. For example, employees should never leave a briefcase containing confidential information in a hotel room where security may not be adequate or throw away sensitive documents without ensuring that they are unreadable.

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Definition: Network A network connects the various worldwide computer systems of the Company and includes all of the following:

• Computers • Software • Communications equipment • Communication lines • Cabling

Computer Use Computing equipment and software issued by the Company are the property of Grant Prideco and are provided for authorized business use only. Likewise, access to the Internet or other outside networks using Company equipment, phone lines or network is provided for authorized business use only.

Copyright/LicensingThe Company’s employees are responsible for properly handling copyrighted and licensed materials and software. Unless explicitly authorized or when in doubt, do not copy.

Before installing any software not provided by the Company's Information Technology Department, employees must obtain the approval of the IT Department.

Electronic Mail Electronic mail (e-mail) is subject to being disclosed to third parties in litigation and can be subpoenaed.

Keep the following in mind when using e-mail:

• Managers will have access to subordinates' e-mail messages • E-mail should be used only for business purposes • Guidelines regarding interoffice memoranda or letters also apply to e-mail • E-mail records should be maintained no longer than necessary • Deleting an e-mail message from the “in box” does not mean that the message has been deleted from back-up files

Internet Use Employee use of the Internet is limited to business-related purposes such as:

• Communicating with customers and suppliers • Researching relevant topics • Obtaining useful business information

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All existing Company policies apply to conduct on the Internet, including - but not limited to - those that deal with intellectual property, privacy, misuse of company resources, sexual harassment and confidentiality.

Sensitive Information Confidential, classified, or proprietary information of the Company or its customers shall not be transmitted over the Internet or to other outside networks without prior management approval and reasonable security measures. In addition, export-controlled information or technical data shall not be posted to public groups on the Internet.

Inappropriate Internet UseThe following are examples of inappropriate employee Internet use:

• Accessing or downloading pornographic material • Gambling • Soliciting for personal gain or profit • Making or posting indecent remarks or proposals • Uploading or downloading commercial software in violation of its copyright or without Company authorization • Downloading any software or electronic files without reasonable virus protection measures in place • Intentionally interfering with the normal operation of any Company Internet gateway • Transmitting inappropriate jokes or material that may be offensive to others

Monitoring Internet UseUse of the Company network to access the Internet is subject to monitoring. The Company may implement and maintain an audit log of every Internet transaction including:

•WorldWideWebsitevisits; •chat,newsgroupore-mailmessages;and • file transfers into or out of the Company's internal network.

PenaltiesUsing the Company's facilities or equipment for abusive, unethical, or “inappropriate” use of the Internet may be grounds for disciplinary action or termination.

The Company has installed firewalls and other security systems to assure the safety and security of its network. Any employee who attempts to disable, defeat or circumvent any company security facility will be subject to disciplinary action up to and including termination.

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Policy Employees shall protect the Company’s intellectual property and no employee shall infringe upon the rights of third parties with respect to their intellectual property.

DefinitionsFor the purpose of this policy, intellectual property means any idea, process, identity mark, invention, or improvement conceived by an employee that relates to a company's business or was developed or acquired with the resources of that company. Intellectual property includes, but is not limited to, trade secrets, patents, trademarks, service marks, domain names and copyrights.

For the purpose of this policy, a trade secret is any information that has economic value to a company because of its secrecy - something that gives a company an advantage or head start over its competitors. It does not have to be covered by a patent or copyright able, although it may be. It includes, but is not limited to, technology (R&D information for new or improved products, invention disclosures, pending patent applications, lab results, drawings), business methods, lists (customer, supplier, vendor), manufacturing (processes, sources of materials, inventories) and business knowledge (business risks, business opportunities, budgets).

Property of OthersNo employee shall knowingly appropriate, infringe, disparage, or otherwise make improper use of a valid trademark, patent, trade secret, or proprietary technology belonging to another.

Employees shall not disclose any trade secret or confidential information of their former employer(s), including but not limited to:

• Customer lists • Marketing plans • Sales data • Products or services under development • Technical or performance data

inTelleCTual properT y

Applicable Cross-ReferencesFor additional information on the policies described, each employee is encouraged to contact the IT Department and read the policies in the Company’s Management Manual, including the following:

• IT-01 – Internet Policies • IT-02 – Use of Computer and Telecommunications Resources • IT-03 – Software Duplication • IT-04 – Telephone Voice Mail and Electronic Mail Use

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Property of the Company All employees shall safeguard the Company’s intellectual property and implement the necessary precautions, which include, but are not limited to, the following procedures for trade secret information:

• Physically secure all proprietary information when unattended - do not leave computer disks or papers on desks and do not leave computers logged on to password-protected files, especially during lunch and after hours • Remove flip-charts and erase blackboards/whiteboards at the end of meetings • Mark all, and only, proprietary information with a suitable confidentiality legend to notify anyone handling the information that the material is confidential and requires special protection • Shred documents before disposal • Limit employee access to only those with a need to know • Limit third party access to only those with written authorization • Report all unauthorized access by employees or third parties • Use e-mail and voice mail only for transfer of non-proprietary information • Use computer passwords and maintain their secrecy

Computing equipment and software issued by the Company are the property of Grant Prideco and are provided for authorized business use only.

Each employee shall promptly disclose any new idea or invention of which the employee becomes aware to enable the Company to timely protect the asset.

Any employee receiving unsolicited information that may contain trade secrets or proprietary information of a third party shall promptly forward the material to the Company's General Counsel before reading or analyzing such information.

Reporting Infringements and ViolationsEmployees must report all opportunities, instances, or situations that might infringe upon or violate the Company’s policy regarding intellectual property to the appropriate Division President and the Legal Department.

Management Manual Cross-ReferencesFor additional information on the policies described, each employee is encouraged to contact the Legal Department and read the policies in the Company’s Management Manual and ethics web site, including the following:

• L-02 – Protection of Confidential Information/Inventions

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inTernaTional business

PolicyCompany employees must comply with U.S. and non-U.S. laws that regulate international business, including:

• Export control laws • Economic sanctions laws • Anti-boycott laws • The Foreign Corrupt Practices Act

These laws also apply to tile Company’s non-U.S. business units and individually to Company employees regardless of whether or not the employee resides in the U.S.

No employee shall attempt to evade such laws either directly or indirectly.

Export Control LawsThe U.S. government regulates the export of commodities, technical data, and software developed, produced or owned by U.S-based companies. Government controls also extend to the re-export of items from one foreign destination to another.

Economic Sanctions LawsAt times the U.S. government imposes economic sanctions against specific countries, companies and individuals. Economic sanctions laws prohibit U.S. citizens and companies from conducting business, including export and re-export activities, with the specified countries, companies or individuals.

Anti-Boycott LawsU.S. anti-boycott laws prohibit actions that could be construed as participation in an unsanctioned international boycott such as the economic boycott of Israel by some Arab nations.

Foreign Corrupt Practices Act The Foreign Corrupt Practices Act (FCPA) prohibits the offering or payment of bribes to a foreign government official or political party as a means of obtaining or retaining business. For more information on the FCPA, see the “Bribery and Illegal or Unethical Business Practices” section of this manual.

Potential Violations Employees concerned about whether or not a proposed transaction complies with U.S. law or Company policy should contact the Company’s Legal Department.

Any potential violation of applicable laws must be immediately reported to the Company's General Counsel and activities regarding the transaction in question must be ceased until the General Counsel provides written guidance that the transaction does not violate U.S. law.

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PenaltiesViolation of any of these laws could result in severe criminal and civil penalties against the Company and its individual employees. Penalties may include substantial fines and imprisonment. In some circumstances, the Company could lose its right to export or re-export its products or to perform government contracts.

Applicable Cross-ReferencesFor additional information on the policies described, each employee is encouraged to contact the Legal Department and read the policies on the ethics website and in the Company’s Management Manual, including the following:

• L-05 – Antibribery and FCPA Compliance Policy • L-06 – Sanction and Export Compliance Policy • L-07 – Anti-Boycott Policy

poliTiCal ConTribuTions

PolicyNo Company employee shall, either directly or through an intermediary, use Company funds or resources to make contributions to political parties, party officials, or candidates for U.S. federal office.

This policy applies to all U.S. locations and personnel. International personnel are expected to be knowledgeable of and comply with local laws.

Personal Contributions and Political ActivitiesAn employee may make personal political contributions as long as that employee makes it clear that he/she is acting in his or her own behalf and not as a representative of the Company.

An employee may also engage in personal political activities as long as:

• the activities do not infringe upon his or her responsibilities to theCompany; • the activities are carried out on the employee's personal time, and • the employee makes it clear that he or she is acting in his or her own behalf and not as a representative of the Company.

Company Contributions It is illegal for the Company to make contributions to a candidate for U.S. federal office. Some states permit companies to contribute to political candidates. However, the Company's President and General Counsel must approve every contribution of this kind.

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PolicyAll U.S. and international locations shall establish procedures to meet the following record retention objectives: • Maintain active and inactive records in appropriate storage facilities or approved commercial locations • Identify and protect vital and historical records • Microfilm and electronic imaging systems may be used for appropriate applications • Comply with prevailing state, federal, and international legal guidelines, including legal requirements related to litigation, government investigation, and regulatory audits • Retain records for the specified period of time according to the Company’s Records Retention Schedule (international locations should develop record retention schedules to comply with local conditions or legal requirements) • Encourage the routine destruction of records that are no longer necessary for operational purposes if retention is not required by law or the Records Retention Schedule

ImplementationDepartment Managers are responsible for maintaining an up-to-date records listing for their area and for ensuring compliance with the Company’s Corporate record retention policy.

Vital RecordsTo ensure continuation of operations in case of disaster, it is essential to protect and secure vital records and documents, including computerized records.

Vital records contain information essential to the: • company's continued operations during a disaster, • resumption of Company operations after a disaster, and • re-establishment of the Company’s legal, financial, and/or functional status.

reCords reTenTion

The Company may authorize political contributions through Political Action Committees (PACs), with approval from the Company President and General Counsel.

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seCuriTies TransaCTions

PolicyIt is against federal law, Company policy, and the rules established by the New York Stock Exchange for an employee to buy or sell Company securities when the employee is in the possession of material inside information.

It is also unlawful and against Company Policy for an employee, officer or director to give material inside information to any other person who may then trade on the basis of that information.

Definition of Material Inside InformationMaterial information includes any information that a reasonable investor is likely to consider important when determining whether to buy, sell, or hold the Company’s securities.

Examples of material information include:

• Joint venture, merger with, or acquisition of another company • New major products, services, or patents • Change in control of the Company • A positive or negative change in actual or projected sales or earnings of the Company • Significant capital expenditures and borrowings • Stock split or dividend • Public or private offering of a significant amount of additional securities • Establishment of a stock repurchase program

Such information is considered inside information when it has not been generally disclosed to the public in a press release or a filing with the Securities and Exchange Commission (such as a form 10-K or form 10-Q).

Definition of an InsiderInsiders include all employees of the Company who have access to or possess material inside information. They are not limited to officers and directors.

Possible Sanctions Fines and penalties for violating U.S. insider trading laws include:

• A fine up to $1,000,000 • A fine up to $2,500,000 for a corporation or other such entity • A fine up to three times the profits made or the losses avoided • Imprisonment up to 10 years

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PolicyThe Company does not condone or tolerate the sexual harassment of employees, whether committed by supervisory or non-supervisory personnel.

Definition: Sexual HarassmentUnwelcome sexual advances, requests for sexual favors and other verbal or physical conduct of a sexual nature can be interpreted as sexual harassment when:

• submission is an explicit or implicit condition of an individual’s employment opportunities, including promotional or monetary advancement; • an individual's consent or rejection of such conduct is the basis for any employmentdecisionaffectingthatindividual;and • such conduct has the purpose or effect of unreasonable interference with an individual's work performance or creates an intimidating, hostile or offensive work environment.

Reporting Sexual HarassmentAll complaints of possible sexual harassment must be reported to and investigated by the Human Resources Department.

Employees experiencing or witnessing sexual harassment should contact their immediate supervisor or manager. If the complaint involves the immediate supervisor or manager, then the employee should contact a Human ResourcesRepresentative.

Employees who in good faith report alleged incidents of sexual harassment will under no circumstances be subject to reprisal or retaliation of any kind. Any employee who feels that he or she has been subject to reprisal or retaliation should contact a Human Resources Representative.

sexual harassmenT

Questions Regarding TransactionsEmployees who are unsure whether a trade is proper should consult with the Company’s General Counsel before engaging in the transaction.

Applicable Cross-ReferencesFor additional information on the policies described, each employee is encouraged to contact the Legal Department and read the policies in the Company’s ethics website.

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Penalties When an investigation of a sexual harassment complaint results in verification of the allegations, prompt corrective and disciplinary action will be taken, up to and including termination.

Any employee who is found to have knowingly made a false accusation of sexual harassment or retaliation will also be subject to disciplinary action.

Applicable Cross-ReferencesFor additional information on the policies described, each employee is encouraged to contact such employee's HR Representative or the legal Department and read the policies in the Management Manual, including the following policies:

• HR-27 – Standards of Conduct • HR-28 – Workplace Harassment • HR-29 – Open Door Policy • HR-30 – Grievance Procedures

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®

I have read, understand, and will comply with the following 2005 Grant Prideco Corporate Compliance and Business Ethics policy statements.

• Accurate Records • Antitrust Issues • Bribery and Illegal or Unethical Business Practices • Business Gifts • Charitable Contributions • Confidential Information • Conflicts of Interest • Definition of Associate • Delivery of Materials • Environmental, Health, and Safety • Equal Opportunity • Financial Control and Reporting • Information and Data Security and Appropriate Computer Use • Intellectual Property • International Business • Political Contributions • Records Retention • Securities Transactions • Sexual Harassment

Name (printed):

Signature:

Date: Location:

White Copy – Retained by: Human Resources Department Corporate Office Houston, Texas

Yellow Copy: Remains in Handbook

CertifiCate as to ComplianCe with Corporate Business ethiC poliCies

CORPORATE COMPLIANCEAND

BUSINESS ETHICS MANUAL

MANUAL DE CUMPLIMIENTOY

ETICA DE NEGOCIOS CORPORATIVOS´