Document:

<PAGE>   1

                                                                     EXHIBIT 4.2

                           WAIVER AND FIRST AMENDMENT
                         TO LOAN AND SECURITY AGREEMENT

                  THIS WAIVER AND FIRST AMENDMENT dated as of October 23, 2000
(this "Amendment") to the Amended and Restated Loan and Security Agreement,
dated as of July 10, 2000 (the "Loan Agreement"; capitalized terms defined
therein shall have the same meanings when used herein unless otherwise defined
herein), among each of the direct and indirect Subsidiaries of Grant Prideco,
Inc. ("GPI") specified on Schedule 1 thereto (the "Borrowers"), the financial
institutions from time to time party thereto as lenders (the "Lenders"),
Transamerica Business Credit Corporation, as agent for the U.S. Lenders (the
"Agent"), and Transamerica Commercial Finance Corporation, Canada, as agent for
the Cdn. Lenders (together with the Agent, the "Agents").

                                   WITNESSETH:

                  WHEREAS, the Borrowers, the Lenders and the Agents are parties
to the Loan Agreement, under which the U.S. Borrowers have granted to the Agent
for the ratable benefit of the Lenders a security interest in all their
Equipment, Inventory and Receivables to secure the obligations of the Borrowers
to the Agents and the Lenders under the Loan Documents;

                  WHEREAS, Tube-Alloy Corporation proposes to acquire with an
effective date of October 1, 2000 all the Capital Stock of Ideal Machine &
Supply, Inc., a Louisiana corporation ("Ideal"), in consideration for
approximately US$4,300,000 of cash (the "Ideal Acquisition"), and immediately
thereafter cause Ideal to be merged with and into Tube-Alloy Corporation (the
"Ideal Merger");

                  WHEREAS, Grant Prideco USA, LLC ("Grant USA") has formed a new
Subsidiary, Star Operating Company, a Delaware corporation ("Star"), for the
purpose of acquiring all the assets of Star Iron Works, Inc., a Pennsylvania
corporation, in consideration for approximately US$12,500,000 of cash (the "Star
Acquisition," and together with the Ideal Acquisition, the "Acquisitions"); and

                  WHEREAS, the Borrowers have requested the Agents and the
Lenders to waive the thirty-day notice requirement set forth in Section 7.2(c)
of the Loan Agreement with respect to the Ideal Merger and amend the Loan
Agreement to add Star as a U.S. Borrower.

                  NOW, THEREFORE, the Borrowers, the Lenders and the Agents
agree as follows:
<PAGE>   2

                  SECTION 1. WAIVER. Section 7.2(c) of the Loan Agreement
requires the Administrative Borrower to give the Agent at least thirty days'
prior written notice of a proposed merger of a Borrower or any Designated
Affiliate with another Person. The Borrowers request that the Lenders and the
Agent waive the thirty-day notice requirement set forth in Section 7.2(c) of the
Loan Agreement before effecting the Ideal Merger. Effective as of the date
hereof, but subject to the satisfaction of the conditions to effectiveness set
forth in Section 3 hereof, the Lenders and the Agents waive the foregoing
thirty-day notice requirement with respect to the Ideal Merger.

                  SECTION 2. AMENDMENTS TO THE LOAN AGREEMENT. Effective as of
the date hereof, but subject to the satisfaction of the conditions to
effectiveness set forth in Section 3 hereof, the Loan Agreement is amended as
follows:

                           (a) Section 7.1(h) of the Loan Agreement is amended
by adding the following at the end thereof:

                                    "(vii) Permitted Acquisitions. As soon as
                  available, and in any event not later than three Business Days
                  before the consummation of an Acquisition by any Borrower or
                  Designated Affiliate, a pro forma balance sheet, profit and
                  loss statement and statement of cash flow of each of GPI and
                  the Loan Parties party to such Acquisition after giving effect
                  thereto."

                           (b) Schedule 1 (Borrowers) to the Loan Agreement is
amended by adding the following at the end thereof:

                                    "8. Star Operating Company, a Delaware
                  corporation."

                           (c) Schedule 5.1(a)(xii) (Leased Locations) to the
Loan Agreement is amended by adding the following at the end thereof:

<TABLE>
<CAPTION>
Entity                                   Landlord                               Property Location
------                                   --------                               -----------------
<S>                                      <C>                                    <C>
Tube-Alloy Corporation                   Ivy Y. Schexnailder, Billy J.          124 Southpark Road, Lafayette, LA
                                         Barret, II, Warren Arnaud and Nancy    70518
                                         Calais Arnaud
</TABLE>

                           (d) Schedule 6.1(a) (Qualification to do Business in
Foreign Jurisdictions) to the Loan Agreement is amended by adding the following
at the end thereof:

                                      -2-
<PAGE>   3

<TABLE>
<CAPTION>
Entity                Del      Texas       Louisiana          Oklahoma          Pennsyl         New Mexico      Alberta
------                ---      -----       ---------          --------          -------         -----------     -------
<S>                   <C>      <C>         <C>                <C>               <C>             <C>             <C>
Star Operating        X        X                                                X
Company
</TABLE>
                           (e) Schedule 6.1(b) (Principal Place of Business,
Collateral Jurisdictions) to the Loan Agreement is amended by adding the
following at the end thereof:

<TABLE>
<CAPTION>
Borrower                                                     Collateral Jurisdictions
--------                                                     ------------------------
<S>                                                          <C>
Star Operating Company                                       Mitchell Avenue, Big Run, Jefferson County, PA  15715
</TABLE>

                           (f) Schedule 6.1(g) (Ownership; Subsidiaries) to the
Loan Agreement is amended by adding the following to the end thereof:

<TABLE>
<CAPTION>
Entity                          State or Country             % of Shares                  Shareholder
------                          ----------------             -----------                  -----------
<S>                             <C>                          <C>                          <C>
Star Operating Company          Delaware                     100%                         Grant Prideco USA, LLC
</TABLE>

                           (g) Schedule 6.1(l) (Former Names; Trade Names) to
the Loan Agreement is amended by adding the following to the end thereof:

                  Star Operating Company        Star Iron Works, Inc.

                  Tube-Alloy Corporation        Ideal Machine & Supply,
                                      Inc.

                           (h) Schedule 7.2(i) (Permitted Liens) to the Loan
Agreement is amended by adding the following to the end thereof:

<TABLE>
<CAPTION>
Company                       Jurisdiction             UCC                              Tax Lien    Judgment
-------                       ------------             ---                              --------    --------
<S>                           <C>                      <C>                              <C>         <C>
Star Operating Company        Pennsylvania             #2274/97, dated 9/5/97,
                                                       assigned to CIT/Equipment on
                                                       4/1/99.  Collateral is a
                                                       Daewoo Model 18 CNC Turning
                                                       Center Machine
</TABLE>

                           (i) Schedule 7.1(r) (Bank Accounts) to the Loan
Agreement is amended by adding the following to the end thereof:

                                      -3-
<PAGE>   4

<TABLE>
<CAPTION>
                                                                                             Account
Company                          Tax ID             Bank Info            Account #           Type
-------                          ------             ---------            ---------           ----
<S>                              <C>                <C>                  <C>                 <C>
Star Operating Company           76-0655528         Chase                00103406121         Lockbox
Star Operating Company           76-0655528         Chase                601-8-40895         Controlled Disbursement
</TABLE>

                  SECTION 3. CONDITIONS TO EFFECTIVENESS. This Amendment shall
not be effective unless and until each of the following conditions shall have
been satisfied, in the Agent's sole determination, on or before October 31,
2000:

                           (a) The Agent shall have received the following, each
dated the date of delivery thereof or as of an earlier date acceptable to the
Agent, in form and substance acceptable to the Agent:

                                  (i) a counterpart of this Amendment, duly
                  executed by each Borrower and acknowledged by each Guarantor;

                                 (ii) a true and correct copy of each purchase
                  and sale, merger or similar agreement related to each of the
                  Acquisitions, certified by the Secretary or an Assistant
                  Secretary of the Administrative Borrower;

                                (iii) an allonge to the U.S. Notes, each duly
                  executed by Star;

                                 (iv) an amendment to the Pledge Agreement, duly
                  executed by Grant USA, pledging to the Agent for the ratable
                  benefit of the Lenders all the shares of Capital Stock of Star
                  together with all certificates representing such shares and
                  undated stock powers therefor;

                                  (v) a Supplement to the Contribution
                  Agreement in the form of Annex I thereto, duly executed by
                  Star;

                                 (vi) (A) executed Uniform Commercial Code
                  financing statements (Form UCC-1) naming the Agent as secured
                  party and each of Grant USA, Star and Tube-Alloy Corporation
                  as debtors and (B) termination statements, each in form and
                  substance satisfactory to the Agent, in each case in proper
                  form for filing in all jurisdictions that the Agent deems
                  necessary or desirable to perfect and protect the Liens on the
                  assets acquired by such Loan Parties in connection with the
                  Acquisitions created under the Loan Agreement and the Security
                  Documents and the priority thereof;

                                      -4-
<PAGE>   5

                               (vii) completed requests for information listing
                  all effective financing statements or registrations filed in
                  the jurisdictions referred to in clause (vi) above, that name
                  each of the Loan Parties specified therein as debtor, together
                  with copies of such financing statements or verification
                  statements, as the case may be;

                              (viii) a completed perfection certificate,
                  substantially in the form of Exhibit P to the Loan Agreement,
                  signed by the president or a vice president of Star;

                                (ix) evidence of the release of all Receivables
                  acquired by the Loan Parties in connection with the
                  Acquisitions from any blocked account or lockbox arrangement
                  theretofore applicable to such Receivables;

                                (x)  a Lockbox Agreement, duly executed by Star
                  and the Lockbox Bank party thereto;

                               (xi)  a pro forma consolidated and consolidating
                  balance sheet and profit and loss statement of each of GPI,
                  Grant Prideco, LP, Tube-Alloy Corporation and Star, after
                  giving effect to the consummation of the Acquisitions and the
                  Ideal Merger;

                              (xii)  certified copies of all policies of
                  insurance required by Section 7.1(f) of the Loan Agreement as
                  a result of the Acquisitions, together with loss payee
                  endorsements for all such policies naming the Agent as lender
                  loss payee and an additional insured;

                                      -5-
<PAGE>   6

                              (xiii) a good standing certificate for Star from
                  the Secretary of State of each of Delaware, Pennsylvania and
                  Texas;

                               (xiv) a certificate of a Responsible Officer of
                  the Administrative Borrower certifying that (A) the
                  representations and warranties of the Loan Parties contained
                  in the Loan Agreement and the other Loan Documents are true
                  and correct in all material respects (and subject to the
                  delivery to the Agent of updated schedules to the Loan
                  Agreement as provided in Section 6.3 thereof) on and as of the
                  date of such certificate as if then made, other than
                  representations and warranties that expressly relate solely to
                  an earlier date, in which case they are true and correct as of
                  such earlier date, and (B) no Default or Event of Default has
                  occurred and is continuing;

                                (xv) an opinion of counsel for the Loan Parties
                  covering such matters incident to the transactions
                  contemplated by this Amendment as the Agent may reasonably
                  require, which such counsel is hereby requested by the Loan
                  Parties to provide;

                               (xvi) copies of the Governing Documents of Star
                  and a copy of the resolutions of the Board of Directors of
                  Star authorizing the execution, delivery and performance of
                  this Amendment and the other Loan Documents to which Star is
                  or is to be a party, and the transactions contemplated hereby
                  and thereby, attached to which is a certificate of the
                  Secretary or an Assistant Secretary of Star certifying (A)
                  that such copies of the Governing Documents and resolutions of
                  Star are true, complete and accurate copies thereof, have not
                  been amended or modified since the date of such certificate
                  and are in full force and effect and (B) the incumbency, names
                  and true signatures of the officers of Star authorized to sign
                  the Loan Documents to which it is a party;

                              (xvii) a Collateral Access Agreement for the
                  additional leased Property specified in Section 2(c) of this
                  Amendment, duly executed by each Person in possession thereof
                  or with a Lien thereon or other interest therein;

                                      -6-
<PAGE>   7

                             (xviii)    an environmental survey for each
                  Property acquired by the Loan Parties in connection with the
                  Acquisitions; and

                               (xix) such other agreements, instruments,
                  documents and evidence as the Agent deems necessary in its
                  sole and absolute discretion in connection with the
                  transactions contemplated hereby; and

                           (b) the Borrowers shall have reimbursed the Agent for
all fees, costs and expenses (including, without limitation, the fees and
expenses of Luskin, Stern & Eisler LLP) incurred by the Agent in connection with
the preparation, negotiation, approval, execution and delivery of this
Amendment.

                  SECTION 4. REPRESENTATIONS AND WARRANTIES OF STAR. Star
represents and warrants as follows:

                           (a) Organization, Good Standing and Qualification.
Star (i) is a corporation, duly organized, validly existing and in good standing
under the laws of the State of Delaware, (ii) has the corporate power and
authority to own its properties and assets and to transact the businesses in
which it presently is, or proposes to be, engaged and (iii) is duly qualified,
authorized to do business and in good standing in each jurisdiction where it
presently is, or proposes to be, engaged in business, except to the extent that
the failure to so qualify or be in good standing could not reasonably be
expected to have a Material Adverse Effect. Schedule 6.1(a) to the Loan
Agreement, as amended hereby, specifies all the jurisdictions in which Star is
qualified to do business as a foreign corporation as of the date hereof.

                           (b) Location of Office, Records and Collateral. The
address of the principal place of business and chief executive office of Star
is, and the books and records of Star and all of its chattel paper and records
of Receivables are maintained exclusively in the possession of Star at, the
address specified for Star in Schedule 6.1(b) to the Loan Agreement, as amended
hereby.

                           (c) Authority. Star has the requisite corporate power
and authority to execute, deliver and perform its obligations under each of the
Loan Documents to which it is or will be a party. All corporate action necessary
for the execution, delivery and performance by Star of the Loan Documents to
which it is or will be a party (including the consent of shareholders where
required) has been taken.

                                      -7-
<PAGE>   8

                           (d) Enforceability. This Agreement is and, when
executed and delivered, each other Loan Document to which Star is or will be a
party, will be, the legal, valid and binding obligation of Star enforceable in
accordance with its terms, except as enforceability may be limited by (i)
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
(ii) general principles of equity.

                           (e) No Conflict. The execution, delivery and
performance by Star of each Loan Document to which it is or will be a party do
not and will not breach or violate (i) any of the Governing Documents of Star,
(ii) any Requirement of Law or (iii) any Material Contract and will not result
in the imposition of any Liens upon any of its properties except in favor of the
Agent.

                           (f) Consents and Filings. No consent, authorization
or approval of, or filing with or other act by, any shareholders of Star, any
Governmental Authority or any other Person is required in connection with the
execution, delivery, performance, validity or enforceability of this Amendment
or any other Loan Document, the consummation of the transactions contemplated
hereby or thereby or the continuing operations of Star following such
consummation, except the filing of financing and termination statements under
the Code.

                           (g) Ownership; Subsidiaries. All of its Capital Stock
is owned by Grant USA, and it has no Subsidiaries.

                  SECTION 5.  REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS.

                           (a) On and after the date hereof, each reference in
the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" and
words of like import, and each reference in the other Loan Documents to the Loan
Agreement shall mean and be a reference to the Loan Agreement as amended hereby.

                           (b) Except as specifically amended above, the Loan
Agreement shall remain in full force and effect and is hereby ratified and
confirmed.

                           (c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a waiver of
or an amendment to any right, power or remedy of the Agent or any Lender under
any of the Loan Documents, or constitute a waiver of or an amendment to any
provision of any of the Loan Documents.

                                      -8-
<PAGE>   9

                           (d) The Borrowers, the Lenders and the Agent agree
that none of the Inventory or Receivables acquired by the Borrowers in
connection with the Acquisitions shall be Eligible Inventory or Eligible
Receivables, respectively, until the Agent shall have completed its audit
thereof and determined to its satisfaction (which shall not be effective unless
and until written notice thereof has been received by the Administrative
Borrower from the Agent) the portion thereof that shall constitute Eligible
Inventory or Eligible Receivables.

                           (e)  This Amendment shall constitute a Loan Document.

                  SECTION 6. COUNTERPARTS; TELECOPIED SIGNATURES. This Amendment
may be executed in counterparts and by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together shall constitute one and the same instrument.
This Amendment may be executed and delivered by telecopier or other facsimile
transmission all with the same force and effect as if the same was a fully
executed and delivered original, manual counterpart.

                  SECTION 7. GOVERNING LAW. This Amendment shall be governed by,
and construed in accordance with, the internal laws (as opposed to the conflicts
of law provisions other than section 5-1401 of the New York General Obligations
Law) and decisions of the State of New York.

                                      -9-
<PAGE>   10

                  IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be executed by its (or its general partner's or managing member's)
proper and duly authorized officer as of the date first set forth above.

                               U.S. BORROWERS

                               GRANT PRIDECO, LP

                               By:  Grant Prideco Holding, LLC,
                                    its general partner

                               By: /s/ Philip A. Choyce
                                  ----------------------------------------------
                                  Philip A. Choyce
                                  Vice President

                               XL SYSTEMS, LP

                               By: /s/ Philip A. Choyce
                                  ----------------------------------------------
                                  Philip A. Choyce
                                  Vice President

                               TEXAS ARAI, INC.

                               By: /s/ Philip A. Choyce
                                  ----------------------------------------------
                                  Philip A. Choyce
                                  Vice President

                               TUBE-ALLOY CORPORATION

                               By: /s/ Philip A. Choyce
                                  ----------------------------------------------
                                  Philip A. Choyce
                                  Vice President

                               CDN. BORROWER

                               GRANT PRIDECO CANADA LTD.

                               By: /s/ Philip A. Choyce
                                  ----------------------------------------------
                                  Philip A. Choyce

                                      -10-
<PAGE>   11
                                  Secretary

                                      -11-
<PAGE>   12

                               NEW U.S. BORROWER

                               STAR OPERATING COMPANY

                               By: /s/ Philip A. Choyce
                                  ----------------------------------------------
                                  Name:  Philip A. Choyce
                                  Title: Vice President

                               U.S. LENDERS

                               TRANSAMERICA BUSINESS CREDIT
                                 CORPORATION

                               By: /s/ Authorized Signature
                                  ----------------------------------------------
                                  Name:
                                  Title:

                               BANK OF AMERICA, N.A.

                               By: /s/ Louis M. Alexander
                                  ----------------------------------------------
                                  Louis M. Alexander
                                  Senior Vice President

                               THE CHASE MANHATTAN BANK

                               By: /s/ Robert J. Arth
                                  ----------------------------------------------
                                  Robert J. Arth
                                  Vice President

                               FLEET CAPITAL CORPORATION

                               By: /s/ Dennis M. Hansen
                                  ----------------------------------------------
                                  Dennis M. Hansen
                                  Senior Vice President

                                      -12-
<PAGE>   13

                                CDN. LENDER

                                TRANSAMERICA COMMERCIAL FINANCE
                                CORPORATION, CANADA

                                By: Transamerica Business Credit
                                Corporation, as Attorney-in-Fact

                                By: /s/ Authorized Signature
                                   ---------------------------------------------
                                   Name:
                                   Title:

                                AGENT

                                TRANSAMERICA BUSINESS CREDIT
                                  CORPORATION

                                By: /s/ Authorized Signature
                                   ---------------------------------------------
                                   Name:
                                   Title:

                                CDN. AGENT

                                TRANSAMERICA COMMERCIAL FINANCE
                                CORPORATION, CANADA

                                By: Transamerica Business Credit
                                Corporation, as Attorney-in-Fact

                                By: /s/ Authorized Signature
                                   ---------------------------------------------
                                   Name:
                                   Title:

                                      -13-
<PAGE>   14

ACKNOWLEDGED AND AGREED AS OF
THE DATE FIRST SET FORTH ABOVE:

GRANT PRIDECO, INC.

By: /s/ Philip A. Choyce
   -----------------------------------------
   Philip A. Choyce
   Vice President

GRANT PRIDECO USA, LLC

By: /s/ Authorized Signature
   -----------------------------------------
   Name:
   Title:

XL SYSTEMS INTERNATIONAL, INC.

By: /s/ Philip A. Choyce
   -----------------------------------------
   Philip A. Choyce
   Vice President

TA INDUSTRIES, INC.

By: /s/ Philip A. Choyce
   -----------------------------------------
   Philip A. Choyce
   Vice President

GRANT PRIDECO HOLDING, LLC

By: /s/ Philip A. Choyce
   -----------------------------------------
   Philip A. Choyce
   Vice President

                                      -14-
<PAGE>   15

GP EXPATRIATE SERVICES, INC.

By: /s/ Philip A. Choyce
   -----------------------------------------
   Name:  Philip A. Choyce
   Title: Vice President

                                      -15-<PAGE>   1

                                                                    EXHIBIT 4.3

                                SECOND AMENDMENT
                         TO LOAN AND SECURITY AGREEMENT

                  THIS SECOND AMENDMENT dated as of November {22}, 2000 (this
"Amendment") to the Amended and Restated Loan and Security Agreement, dated as
of July 10, 2000 (as amended before the date hereof, the "Loan Agreement";
capitalized terms defined therein shall have the same meanings when used herein
unless otherwise defined herein), among each of the direct and indirect
Subsidiaries of Grant Prideco, Inc. ("GPI") specified on Schedule 1 thereto (the
"Borrowers"), the financial institutions from time to time party thereto as
lenders (the "Lenders"), Transamerica Business Credit Corporation, as agent for
the U.S. Lenders (the "Agent"), and Transamerica Commercial Finance Corporation,
Canada, as agent for the Cdn. Lenders (together with the Agent, the "Agents").

                              W I T N E S S E T H :
                              ---------------------

                  WHEREAS, the Borrowers, the Lenders and the Agents are parties
to the Loan Agreement;

                  WHEREAS, GPI proposes to issue unsecured notes (the "GPI
Notes"), which are more fully described in the Preliminary Offering Memorandum
dated November 7, 2000 (the "Preliminary Offering Memorandum"), in an aggregate
principal amount not to exceed US$225,000,000 and to apply US$100,000,000 of the
proceeds thereof to prepay GPI's obligations to Weatherford International, Inc.
under the Subordinated Note as well as outstanding borrowings under the Loan
Agreement;

                  WHEREAS, various Subsidiaries of GPI propose to guaranty the
obligations of GPI under the GPI Notes; and

                  WHEREAS, the Borrowers have requested that the Agents and the
Lenders agree to amend the Loan Agreement to permit the issuance of the GPI
Notes and the guaranty thereof by certain Subsidiaries of GPI.

                  NOW, THEREFORE, the Borrowers, the Lenders and the Agents
agree as follows:

                  SECTION {1.} AMENDMENTS TO THE LOAN AGREEMENT.
Effective as of the date hereof, but subject to the satisfaction of the
conditions to effectiveness set forth in Section 2 hereof, the Loan Agreement is
amended as follows:

                           {(a)}  Article I is amended by:

<PAGE>   2

                                 {(i)} inserting the following new definitions
in their proper alphabetical order:

                                        "`GPI Indenture' means the Indenture,
                  that shall contain terms and conditions substantially similar
                  to the Description of Notes contained within the Preliminary
                  Offering Memorandum {of GPI, dated November 7, 2000}, among
                  GPI, each of the Guarantors (other than GPI) and the Indenture
                  Trustee, as amended, supplemented or otherwise modified from
                  time to time.

                                         `GPI Note Debt' means the Indebtedness
                  incurred by GPI under the GPI Indenture on or before December
                  15, 2000 in an aggregate principal amount not to exceed
                  {$225,000,000}, as evidenced by the GPI Notes.

                                         `GPI Notes' means the unsecured notes
                  issued by GPI under the GPI Indenture maturing on November 15,
                  2007 and accruing interest at a rate not to exceed 11% per
                  annum, payable semi-annually in arrears on May 15 and November
                  15 of each year, as amended, supplemented or otherwise
                  modified from time to time.

                                         `Indenture Trustee' means United States
                  Trust Company of New York or any successor thereto.";

                                {(ii)} amending and restating the definition of
                  "Permitted Intercompany Debt" as follows:

                                        "`Permitted Intercompany Debt' means
                  loans, advances, intercompany accounts, transfers of goods,
                  services, or intellectual property, and Investments
                  (including, but not limited to, loans made pursuant to GPI's
                  cash management system for collections of accounts receivable
                  or disbursements to trade creditors) by any {of the} Loan
                  {Parties} or any of their respective Subsidiaries in, with or
                  to any {of the} other Loan {Parties} or any of their
                  respective Subsidiaries, provided that (i) each such lender
                  and borrower is Solvent after giving effect thereto, and (ii)
                  each such lender and borrower has received reasonably
                  equivalent value and fair consideration in exchange for the
                  transfers made and obligations incurred by it in connection
                  therewith, and provided, further, that, in the case of an
                  intercompany loan made by or to a party other than a Loan
                  Party, (A) no Event of Default under Section 9.1(a) shall have
                  occurred and be continuing, (B) the Obligations shall not have
                  been declared or shall not have otherwise

                                      -2-
<PAGE>   3

                  become immediately due and payable under Section 9.2(a) and
                  (C) the proceeds of such loan shall have been used solely for
                  the purpose of funding, directly or indirectly, scheduled
                  principal (subject to Section 7.2(p)) and interest payments
                  under the GPI Notes."; and

                               {(iii)} amending the definition of "Material
Indebtedness" by inserting at the end of the parenthetical "(other than the
Loans)" the following: "and including, without limitation, the GPI Note Debt".

                           {(b)}  Section 2.4 is amended by adding the following
at the end thereof:

                                        "(f) {With respect to} any sale,
                  transfer or other disposition of Property or Equipment
                  permitted under Section 7.2(e)(i), the applicable Borrower
                  shall, within ninety-two days after such sale, transfer
                  or other disposition, pay to the Agent for application to the
                  U.S. Loans or the Cdn. Loans, as applicable, the proceeds
                  thereof received by such Borrower less the amount of such
                  proceeds used by such Borrower to purchase replacement real
                  property or Equipment within {the} ninety day
                  period {following such sale, transfer or other disposition},
                  except that, so long as no Default or Event of Default has
                  occurred and is continuing or would result therefrom, the
                  proceeds of any sale, transfer or other disposition of real
                  property (as permitted under Section 7.2(e)(i)) may be applied
                  as permitted under Section 7.2(p)(i)(D)."

                           {(c)}  Section 7.2(a) of the Loan Agreement is
amended by (i) deleting "and" at the end of clause (v), (ii) deleting the comma
at the end of clause (vi) and inserting "; and" in lieu thereof and (iii) adding
the following at the end thereof:

                                        "(vii) the GPI Note Debt so long as the
                  Subordinated Note and all accrued and unpaid interest thereon
                  is prepaid in full upon the date issuance of the GPI Notes."

                           {(d)}  Section 7.2(j) is amended by (i) inserting
"(x)" after "except that," and (ii) adding at the end thereof the following:
"and (y) so long as no Event of Default under Section 9.1(a) shall have occurred
and be continuing and the Obligations shall have not been declared, or have
otherwise become, immediately due and payable under Section 9.2(a), any Borrower
or Designated Affiliate may declare or pay dividends or otherwise effect
distributions on account of its Capital Stock

                                      -3-
<PAGE>   4

for the sole purpose of funding, directly or indirectly, scheduled principal
(subject to Section 7.2(p)) and interest payments under the GPI Notes."

                           {(e)}  Section 7.2(p) is amended by (i) inserting in
clause (i)(B) after "Permitted Refinancing Indebtedness" the following ", the
GPI Notes", (ii) deleting at the end of clause (i)(B) "and" and (iii) inserting
at the end of clause (i)(C) the following: "and (D) the prepayment (or
repurchase) by GPI of the GPI Notes solely with the proceeds of the sale of real
property to the extent such sales are permitted under Section 7.2(e)(i),".

                           {(f)}  Section 9.1(h) is amended by deleting "; or"
at the end thereof and {inserting} the following in lieu thereof:

                                        "or (iii) a majority of the members of
                  the board of directors of GPI does not consist of either (A)
                  the members of such board of directors as of the Closing Date
                  or (B) members who were (1) nominated for election or elected
                  to the board of directors of GPI with the approval of a
                  majority of members who, at the time of such nomination or
                  election, satisfied the requirements of clause (A) or (2)
                  subsequent to the Closing Date, nominated and elected with the
                  approval of the directors described in clause (A) or their
                  successors nominated in accordance with this clause (B)".

                  SECTION {2.} CONDITIONS TO EFFECTIVENESS. This Amendment shall
not be effective unless and until each of the following conditions shall have
been satisfied, in the Agent's sole determination, on or before November {22},
2000:

                           {(a)}  The Agent shall have received the following:

                                 {(i)} a counterpart of this Amendment, duly
executed by each Borrower and acknowledged by each Guarantor;

                                {(ii)} a certificate of a Responsible Officer of
the Administrative Borrower certifying that (A) the representations and
warranties of the Loan Parties contained in the Loan Agreement and the other
Loan Documents are true and correct in all material respects (and subject to the
delivery to the Agent of updated schedules to the Loan Agreement as provided in
Section 6.3 thereof) on and as of the date of such certificate as if then made,
other than representations and warranties that expressly relate solely to an
earlier date, in which case they are true and correct as of such earlier date,
(B) no Default or Event of Default has occurred and is continuing

                                      -4-
<PAGE>   5

{and (C) attached thereto is a true and correct copy of the Preliminary Offering
Memorandum; and

                                (iii)} such other agreements, instruments,
documents and evidence as the Agent deems necessary in its sole and absolute
discretion in connection with the transactions contemplated hereby; and

                           {(b)}  the Borrowers shall have reimbursed the Agent
for all fees, costs and expenses (including, without limitation, attorneys' fees
and expenses) incurred by the Agent in connection with the preparation,
negotiation, approval, execution and delivery of this Amendment.

                  SECTION {3.} REPRESENTATIONS AND WARRANTIES. Each of the
Borrowers hereby confirms that each of the representations and warranties in
Section 6.1 of the Loan Agreement is (and will be after giving effect to this
Amendment and the transactions contemplated by this Amendment) true and correct
in all material respects on and as of the date hereof except to the extent such
representation or warranty specifically relates to an earlier date, in which
case it was true and correct in all material respects on and as of such earlier
date.

                  SECTION 4. COVENANT. {The Administrative Borrower} hereby
agrees that it shall deliver to the Agent on or prior to December 15, 2000, a
true and correct copy of the GPI Indenture {(as defined in Section 1 hereof)},
certified by the Secretary or an Assistant Secretary of the Administrative
Borrower.

                  SECTION 5. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS.

                           {(a)}  On and after the date hereof, each reference
in the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" and
words of like import, and each reference in the other Loan Documents to the Loan
Agreement shall mean and be a reference to the Loan Agreement as amended hereby.

                           {(b)}  Except as specifically amended above, the Loan
Agreement shall remain in full force and effect and is hereby ratified and
confirmed.

                           {(c)}  The execution, delivery and effectiveness of
this Amendment shall not, except as expressly provided herein, operate as a
waiver of or an amendment to any right, power or remedy of the Agent or any
Lender under any of the Loan Documents, or constitute a waiver of or an
amendment to any

                                      -5-
<PAGE>   6

provision of any of the Loan Documents.

                           {(d)}  This Amendment shall constitute a Loan
Document.

                  SECTION 6. COUNTERPARTS; TELECOPIED SIGNATURES. This Amendment
may be executed in counterparts and by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together shall constitute one and the same instrument.
This Amendment may be executed and delivered by telecopier or other facsimile
transmission all with the same force and effect as if the same was a fully
executed and delivered original, manual counterpart.

                  SECTION 7. GOVERNING LAW. This Amendment shall be governed by,
and construed in accordance with, the internal laws (as opposed to the conflicts
of law provisions other than section 5-1401 of the New York General Obligations
Law) and decisions of the State of New York.

                                      -6-
<PAGE>   7

                  IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be executed by its (or its general partner's or managing member's)
proper and duly authorized officer as of the date first set forth above.

                                    U.S. BORROWERS
                                    --------------
                                    GRANT PRIDECO, LP

                                    By:  Grant Prideco Holding, LLC,
                                         its general partner

                                    By: /s/ Philip A. Choyce
                                       -----------------------------------------
                                       Philip A. Choyce
                                       Vice President

                                    XL SYSTEMS, LP

                                    By: /s/ Philip A. Choyce
                                       -----------------------------------------
                                       Philip A. Choyce
                                       Vice President

                                    TEXAS ARAI, INC.

                                    By: /s/ Philip A. Choyce
                                       -----------------------------------------
                                       Philip A. Choyce
                                       Vice President

                                    TUBE-ALLOY CORPORATION

                                    By: /s/ Philip A. Choyce
                                       -----------------------------------------
                                       Philip A. Choyce
                                       Vice President

                                    STAR OPERATING COMPANY

                                    By: /s/ Philip A. Choyce
                                       -----------------------------------------
                                       Philip A. Choyce
                                       Vice President

                                      -7-
<PAGE>   8

                                    CDN. BORROWER
                                    -------------
                                    GRANT PRIDECO CANADA LTD.

                                    By: /s/ Philip A. Choyce
                                       -----------------------------------------
                                       Philip A. Choyce
                                       Secretary

                                    U.S. LENDERS
                                    ------------
                                    TRANSAMERICA BUSINESS CREDIT
                                      CORPORATION

                                    By: /s/ Authorized Signatory
                                       -----------------------------------------
                                       Name:
                                       Title:

                                    BANK OF AMERICA, N.A.

                                    By: /s/ Authorized Signatory
                                       -----------------------------------------
                                       Name:
                                       Title:

                                    THE CHASE MANHATTAN BANK

                                    By: /s/ Authorized Signatory
                                       -----------------------------------------
                                       Name:
                                       Title:

                                    FLEET CAPITAL CORPORATION

                                    By: /s/ Authorized Signatory
                                       -----------------------------------------
                                       Name:
                                       Title:

                                      -8-
<PAGE>   9

                                    CDN. LENDER
                                    -----------
                                    TRANSAMERICA COMMERCIAL FINANCE
                                      CORPORATION, CANADA

                                    By: Transamerica Business Credit
                                    Corporation, as Attorney-in-Fact

                                    By: /s/ Authorized Signatory
                                       -----------------------------------------
                                       Name:
                                       Title:

                                    AGENT
                                    -----
                                    TRANSAMERICA BUSINESS CREDIT
                                      CORPORATION

                                    By: /s/ Authorized Signatory
                                       -----------------------------------------
                                       Name:
                                       Title:

                                    CDN. AGENT
                                    ----------
                                    TRANSAMERICA COMMERCIAL FINANCE
                                      CORPORATION, CANADA

                                    By: Transamerica Business Credit
                                    Corporation, as Attorney-in-Fact

                                    By: /s/ Authorized Signatory
                                       -----------------------------------------
                                       Name:
                                       Title:

                                      -9-
<PAGE>   10

ACKNOWLEDGED AND AGREED AS OF
THE DATE FIRST SET FORTH ABOVE:

GRANT PRIDECO, INC.

By: /s/ Philip A. Choyce
   -----------------------------------------
   Philip A. Choyce
   Vice President

GRANT PRIDECO USA, LLC

By: /s/ Authorized Signatory
   -----------------------------------------
   Name:
   Title:

XL SYSTEMS INTERNATIONAL, INC.

By: /s/ Authorized Signatory
   -----------------------------------------
   Philip A. Choyce
   Vice President

TA INDUSTRIES, INC.

By: /s/ Authorized Signatory
   -----------------------------------------
   Philip A. Choyce
   Vice President

GRANT PRIDECO HOLDING, LLC

By: /s/ Authorized Signatory
   -----------------------------------------
   Philip A. Choyce
   Vice President

                                      -10-
<PAGE>   11

GP EXPATRIATE SERVICES, INC.

By:   /s/ Philip A. Choyce
   -----------------------------------------
   Name:  Philip A. Choyce
   Title: Vice President

                                      -11-

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