<PAGE>
                                                                     EXHIBIT 4.7
                                 GLOBAL SECURITY
CUSIP: 832110 AH 3
NO. 001
$75,000,000

         THIS NOTE IS A BOOK-ENTRY SECURITY AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY. THIS NOTE IS EXCHANGEABLE FOR NOTES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED HEREIN, AND NO TRANSFER OF THIS NOTE
(OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF
THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN SUCH LIMITED
CIRCUMSTANCES.

         UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, NEW YORK, NEW YORK ("DTC"), TO SMITH INTERNATIONAL,
INC. (THE "COMPANY") OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

         THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT") AND MAY NOT BE OFFERED OR SOLD IN VIOLATION OF SUCH ACT. THE
HOLDER (AND EACH BENEFICIAL OWNER) HEREOF BY ITS ACCEPTANCE HEREOF (OR
ACQUISITION OF A BENEFICIAL INTEREST HEREIN), REPRESENTS THAT IT IS ACQUIRING
THIS NOTE FOR INVESTMENT AND NOT WITH A VIEW TO ANY SALE OR DISTRIBUTION HEREOF.
THIS NOTE (OR ANY BENEFICIAL INTEREST HEREIN) MAY BE TRANSFERRED ONLY PURSUANT
TO ONE OF THE FOLLOWING METHODS: (1) TO THE COMPANY OR THE INITIAL HOLDER, (2)
SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER, AS DEFINED IN RULE 144A, THAT IS PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM
NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OR (4) PURSUANT TO ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, IF AVAILABLE, IN EACH CASE IN ACCORDANCE
WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES OR ANY
OTHER APPLICABLE JURISDICTION.

THIS NOTE AND RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO
TIME TO MODIFY THE RESTRICTIONS ON AND PROCEDURES FOR RESALES AND OTHER
TRANSFERS OF THIS NOTE TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR
THE INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER
OF RESTRICTED SECURITIES GENERALLY. THE HOLDER (AND EACH BENEFICIAL OWNER) OF
THIS NOTE SHALL BE DEEMED, BY THE ACCEPTANCE OF THIS NOTE (OR ACQUISITION OF A
BENEFICIAL INTEREST HEREIN), TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.
ALTHOUGH THE INITIAL HOLDER MAY REPURCHASE NOTES, IT IS NOT OBLIGATED TO DO SO.


<PAGE>


                            SMITH INTERNATIONAL, INC.

                     FLOATING RATE NOTE DUE OCTOBER 15, 2003

         SMITH INTERNATIONAL, INC., A CORPORATION DULY ORGANIZED AND EXISTING
UNDER THE LAWS OF THE STATE OF DELAWARE (THE "COMPANY", WHICH TERM SHALL INCLUDE
ANY SUCCESSOR TO THE COMPANY), FOR VALUE RECEIVED, HEREBY PROMISES TO PAY TO
CEDE & CO., AS THE NOMINEE OF THE DEPOSITORY TRUST COMPANY, OR REGISTERED
ASSIGNS, THE PRINCIPAL AMOUNT OF SEVENTY-FIVE MILLION UNITED STATES DOLLARS
($75,000,000) ON OCTOBER 15, 2003 (THE "MATURITY DATE") AND TO PAY INTEREST AS
SET FORTH BELOW ON THE OUTSTANDING PRINCIPAL AMOUNT HEREOF. THIS NOTE WILL BEAR
INTEREST FROM OCTOBER 15, 2001, AT THE RATES, DETERMINED QUARTERLY, AS DESCRIBED
BELOW. INTEREST SHALL BE PAYABLE QUARTERLY ON JANUARY 15, APRIL 15, JULY 15 AND
OCTOBER 15 OF EACH YEAR (EACH, AN "INTEREST PAYMENT DATE"), COMMENCING JANUARY
15, 2002. IF AN INTEREST PAYMENT DATE FALLS ON A DAY THAT IS NOT A BUSINESS DAY,
INTEREST WILL BE PAYABLE ON THE NEXT SUCCEEDING BUSINESS DAY WITH THE SAME FORCE
AND EFFECT AS IF MADE ON SUCH INTEREST PAYMENT DATE. EACH PERIOD COMMENCING ON
AN INTEREST PAYMENT DATE AND ENDING ON THE DAY PRECEDING THE NEXT SUCCEEDING
INTEREST PAYMENT DATE IS CALLED AN "INTEREST PERIOD," WITH THE EXCEPTION THAT
THE FIRST INTEREST PERIOD SHALL BEGIN ON THE DATE OF THE ISSUANCE OF THIS NOTE
AND EXTEND THROUGH JANUARY 14, 2002, THE DAY PRECEDING THE FIRST INTEREST
PAYMENT DATE. INTEREST WILL BE PAID TO THE PERSON IN WHOSE NAME THIS NOTE IS
REGISTERED AT THE CLOSE OF BUSINESS ON THE 15TH CALENDAR DAY NEXT PRECEDING EACH
QUARTERLY INTEREST PAYMENT DATE (THE "REGULAR RECORD DATE").

         THIS NOTE WILL BEAR INTEREST FOR EACH INTEREST PERIOD AT A PER ANNUM
RATE DETERMINED BY THE TRUSTEE (AS DEFINED BELOW) OR ITS SUCCESSOR APPOINTED BY
THE COMPANY, ACTING AS CALCULATION AGENT (THE "CALCULATION AGENT"). THE INTEREST
RATE WILL BE EQUAL TO LIBOR (AS DEFINED BELOW) ON THE SECOND LONDON BUSINESS DAY
(AS DEFINED BELOW) IMMEDIATELY PRECEDING THE FIRST DAY OF SUCH INTEREST PERIOD
(EACH AN "INTEREST DETERMINATION DATE") PLUS 1.125%; PROVIDED, HOWEVER, THAT IN
CERTAIN CIRCUMSTANCES DESCRIBED BELOW, THE INTEREST RATE WILL BE DETERMINED IN
AN ALTERNATIVE MANNER WITHOUT REFERENCE TO LIBOR. PROMPTLY UPON SUCH
DETERMINATION, THE CALCULATION AGENT WILL NOTIFY THE TRUSTEE OF THE INTEREST
RATE FOR THE NEW INTEREST PERIOD.

         FOR PURPOSES OF THIS CALCULATION, "LONDON BUSINESS DAY" IS DEFINED AS A
DAY ON WHICH DEALING IN DEPOSITS IN U.S. DOLLARS ARE TRANSACTED, OR WITH RESPECT
TO ANY FUTURE DATE, ARE EXPECTED TO BE TRANSACTED, IN THE LONDON INTERBANK
MARKET.

         "LIBOR" FOR ANY INTEREST DETERMINATION DATE WILL BE THE OFFERED RATE
FOR DEPOSITS IN U.S. DOLLARS HAVING AN INDEX MATURITY OF THREE MONTHS FOR A
PERIOD COMMENCING ON THE SECOND LONDON BUSINESS DAY IMMEDIATELY FOLLOWING THE
INTEREST DETERMINATION DATE ("THREE MONTH DEPOSITS") IN AMOUNTS OF NOT LESS THAN
$1,000,000, AS SUCH RATE APPEARS ON TELERATE PAGE 3750 (AS DEFINED BELOW), OR A
SUCCESSOR REPORTER OF SUCH RATES SELECTED BY THE CALCULATION AGENT AND
ACCEPTABLE TO THE COMPANY, AT APPROXIMATELY 11:00 A.M., LONDON TIME, ON THE
INTEREST DETERMINATION DATE (THE "REPORTED RATE").

         "TELERATE PAGE 3750" MEANS THE DISPLAY DESIGNATED ON PAGE "3750" ON DOW
JONES MARKETS LIMITED (OR SUCH OTHER PAGE AS MAY REPLACE THE 3750 PAGE ON THAT
SERVICE OR SUCH OTHER SERVICE OR SERVICES AS MAY BE NOMINATED BY THE BRITISH
BANKERS' ASSOCIATION FOR THE PURPOSE OF DISPLAYING LONDON INTERBANK OFFERED
RATES FOR U.S. DOLLAR DEPOSITS).

         IF THE FOLLOWING CIRCUMSTANCES EXIST ON ANY INTEREST DETERMINATION
DATE, THE CALCULATION AGENT SHALL DETERMINE THE INTEREST RATE FOR THIS NOTE AS
FOLLOWS:

         (i)      IN THE EVENT THE REPORTED RATE CANNOT BE DETERMINED AS OF
                  APPROXIMATELY 11:00 A.M. LONDON TIME ON AN INTEREST
                  DETERMINATION DATE, THE CALCULATION AGENT SHALL REQUEST THE
                  PRINCIPAL LONDON OFFICES OF EACH OF FOUR MAJOR BANKS IN THE
                  LONDON INTERBANK MARKET SELECTED BY THE CALCULATION AGENT
                  (AFTER CONSULTATION WITH THE COMPANY) TO PROVIDE A QUOTATION
                  OF THE RATE (A "RATE QUOTATION") AT WHICH THREE MONTH DEPOSITS
                  IN AMOUNTS OF NOT LESS THAN $1,000,000 ARE OFFERED BY IT TO
                  PRIME BANKS IN THE LONDON INTERBANK MARKET, AS OF
                  APPROXIMATELY 11:00 A.M. LONDON TIME ON SUCH INTEREST
                  DETERMINATION DATE, THAT IS REPRESENTATIVE OF SINGLE
                  TRANSACTIONS AT SUCH TIME ("REPRESENTATIVE AMOUNTS"). IF AT
                  LEAST TWO RATE QUOTATIONS ARE PROVIDED, THE INTEREST RATE WILL
                  BE THE ARITHMETIC MEAN OF THE RATE QUOTATIONS OBTAINED BY THE
                  CALCULATION AGENT, PLUS 1.125%.

         (ii)     IN THE EVENT THE REPORTED RATE CANNOT BE DETERMINED AND THERE
                  ARE FEWER THAN TWO RATE QUOTATIONS, THE INTEREST RATE WILL BE
                  THE ARITHMETIC MEAN OF THE RATES QUOTED AT APPROXIMATELY 11:00
                  A.M. NEW YORK CITY TIME


<PAGE>

                  ON SUCH INTEREST DETERMINATION DATE, BY THREE MAJOR BANKS IN
                  NEW YORK CITY, SELECTED BY THE CALCULATION AGENT (AFTER
                  CONSULTATION WITH THE COMPANY), FOR LOANS IN REPRESENTATIVE
                  AMOUNTS IN U.S. DOLLARS TO LEADING EUROPEAN BANKS, HAVING AN
                  INDEX MATURITY OF THREE MONTHS FOR A PERIOD COMMENCING ON THE
                  SECOND LONDON BUSINESS DAY IMMEDIATELY FOLLOWING SUCH INTEREST
                  DETERMINATION DATE, PLUS 1.125%; PROVIDED, HOWEVER, THAT IF
                  FEWER THAN THREE BANKS SELECTED BY THE CALCULATION AGENT ARE
                  QUOTING SUCH RATES, THE INTEREST RATE FOR THE APPLICABLE
                  PERIOD WILL BE THE SAME AS THE INTEREST RATE IN EFFECT FOR THE
                  IMMEDIATELY PRECEDING INTEREST PERIOD.

         UPON THE REQUEST OF THE HOLDER OF THIS NOTE, THE CALCULATION AGENT WILL
PROVIDE TO SUCH HOLDER THE INTEREST RATE IN EFFECT ON THE DATE OF SUCH REQUEST
AND, IF DETERMINED, THE INTEREST RATE FOR THE NEXT INTEREST PERIOD.

         ALL PERCENTAGES RESULTING FROM ANY CALCULATION OF THE INTEREST RATE ON
THIS NOTE WILL BE ROUNDED, IF NECESSARY, TO THE NEAREST ONE HUNDRED-THOUSANDTH
OF A PERCENTAGE POINT, WITH FIVE ONE-MILLIONTHS OF A PERCENTAGE POINT ROUNDED
UPWARD (E.G., 9.876545% (OR .09876545) BEING ROUNDED TO 9.87655% (OR .0987655)).

         THE CALCULATION AGENT SHALL, AS SOON AS PRACTICABLE AFTER IT HAS
DETERMINED THE INTEREST RATE ON THE NOTES ON EACH INTEREST DETERMINATION DATE,
CALCULATE THE AMOUNT OF INTEREST PAYABLE IN RESPECT OF THE FOLLOWING INTEREST
PERIOD (THE "INTEREST AMOUNT"). THE INTEREST AMOUNT SHALL BE CALCULATED BY
APPLYING THE INTEREST RATE ON THE NOTES TO THE PRINCIPAL AMOUNT OF EACH NOTE
OUTSTANDING AT THE COMMENCEMENT OF THE INTEREST PERIOD, MULTIPLYING EACH SUCH
AMOUNT BY THE ACTUAL NUMBER OF DAYS IN THE INTEREST PERIOD CONCERNED (WHICH
ACTUAL NUMBER OF DAYS SHALL INCLUDE THE FIRST DAY BUT EXCLUDE THE LAST DAY OF
SUCH INTEREST PERIOD) DIVIDED BY 360 AND ROUNDING THE RESULTANT FIGURE UPWARDS
TO THE NEAREST CENT (HALF A CENT BEING ROUNDED UPWARDS). THE DETERMINATION OF
THE INTEREST RATE ON THE NOTES AND THE INTEREST AMOUNT BY THE CALCULATION AGENT
SHALL (IN THE ABSENCE OF WILLFUL DEFAULT, BAD FAITH OR MANIFEST ERROR) BE FINAL
AND BINDING ON ALL PARTIES.

         NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE INTEREST RATE ON
THE NOTES SHALL IN NO EVENT BE HIGHER THAN THE MAXIMUM RATE PERMITTED BY NEW
YORK LAW, AS THE SAME MAY BE MODIFIED BY UNITED STATES LAW OF GENERAL
APPLICATION.

         THIS NOTE IS ONE OF A DULY AUTHORIZED ISSUE OF DEBENTURES, NOTES, BONDS
OR OTHER EVIDENCES OF INDEBTEDNESS OF THE COMPANY (HEREINAFTER CALLED THE
"SECURITIES") OF THE SERIES HEREINAFTER SPECIFIED, ALL ISSUED OR TO BE ISSUED
UNDER AND PURSUANT TO AN INDENTURE DATED AS OF SEPTEMBER 8, 1997 (THE
"INDENTURE"), DULY EXECUTED AND DELIVERED BY THE COMPANY AND THE BANK OF NEW
YORK, AS TRUSTEE (HEREIN CALLED THE "TRUSTEE") TO WHICH INDENTURE, ALL
INDENTURES SUPPLEMENTAL THERETO AND ALL RESOLUTIONS OF THE BOARD OF DIRECTORS
ESTABLISHING THE FORM OR TERMS OF ANY SERIES OF SECURITIES, REFERENCE IS HEREBY
MADE FOR A DESCRIPTION OF THE RIGHTS, LIMITATIONS OF RIGHTS, OBLIGATIONS, DUTIES
AND IMMUNITIES THEREUNDER OF THE TRUSTEE, THE COMPANY AND THE HOLDERS OF THE
SECURITIES. THE SECURITIES MAY BE ISSUED IN ONE OR MORE SERIES, WHICH DIFFERENT
SERIES MAY BE ISSUED IN VARIOUS AGGREGATE PRINCIPAL AMOUNTS, MAY MATURE AT
DIFFERENT TIMES, MAY BEAR INTEREST (IF ANY) AT DIFFERENT RATES, MAY BE SUBJECT
TO DIFFERENT REDEMPTION PROVISIONS (IF ANY), MAY BE SUBJECT TO DIFFERENT
SINKING, PURCHASE OR ANALOGOUS FUNDS (IF ANY) AND MAY OTHERWISE VARY AS IN THE
INDENTURE PROVIDED. THIS NOTE IS ONE OF A SERIES DESIGNED AS THE FLOATING RATE
NOTES DUE OCTOBER 15, 2003 (HEREIN CALLED THE "NOTES") OF THE COMPANY, LIMITED
INITIALLY IN AGGREGATE PRINCIPAL AMOUNT TO $75,000,000, WITH THE COMPANY HAVING
THE OPTION TO ISSUE ADDITIONAL NOTES IN AN UNLIMITED AGGREGATE PRINCIPAL AMOUNT
FROM TIME TO TIME AFTER THE ORIGINAL ISSUANCE OF THE NOTES.

         SO LONG AS THIS NOTE REMAINS OUTSTANDING, THE COMPANY SHALL MAINTAIN
UNDER APPOINTMENT A CALCULATION AGENT, WHICH SHALL INITIALLY BE THE TRUSTEE, TO
CALCULATE THE INTEREST RATE PAYABLE ON THIS NOTE IN RESPECT OF EACH INTEREST
PERIOD. IF THE CALCULATION AGENT SHALL BE UNABLE OR UNWILLING TO CONTINUE TO ACT
AS CALCULATION AGENT OR IN THE EVENT OF THE CALCULATION AGENT FAILING DULY TO
ESTABLISH THE APPLICABLE RATE OF INTEREST FOR ANY INTEREST PERIOD, OR IF THE
COMPANY SHALL REMOVE THE CALCULATION AGENT, THE COMPANY SHALL APPOINT ANOTHER
LEADING COMMERCIAL OR INVESTMENT BANK ENGAGED IN THE LONDON INTERBANK MARKET TO
ACT AS THE CALCULATION AGENT; PROVIDED, HOWEVER, THAT THE CALCULATION AGENT
SHALL NOT RESIGN OR BE REMOVED UNTIL ACCEPTANCE OF AN APPOINTMENT BY A SUCCESSOR
AS EVIDENCED BY AN APPROPRIATE AGREEMENT ENTERED INTO BY THE COMPANY AND SUCH
SUCCESSOR CALCULATION AGENT.

         ALL CERTIFICATES, COMMUNICATIONS, OPINIONS, DETERMINATIONS,
CALCULATIONS, QUOTATIONS AND DECISIONS GIVEN, EXPRESSED, MADE OR OBTAINED FOR
THE PURPOSES OF THE PROVISIONS HEREOF RELATING TO THE PAYMENT AND CALCULATION OF
INTEREST ON THIS NOTE, WHETHER BY THE REFERENCE BANKS (OR ANY OF THEM) OR THE
CALCULATION AGENT, SHALL (IN THE ABSENCE OF WILLFUL DEFAULT, BAD FAITH OR
MANIFEST ERROR) BE BINDING ON THE COMPANY, THE CALCULATION AGENT AND ALL OF THE
HOLDERS AND OWNERS OF BENEFICIAL INTERESTS IN THIS NOTE, AND NO LIABILITY SHALL
(IN ABSENCE OF WILLFUL DEFAULT, BAD FAITH OR MANIFEST ERROR) ATTACH TO THE
CALCULATION AGENT IN CONNECTION WITH THE EXERCISE OR NON-EXERCISE BY IT OF ITS
POWERS, DUTIES AND DISCRETIONS.


<PAGE>

         THE COMPANY SHALL CAUSE TO BE KEPT AT AN OFFICE OR AGENCY TO BE
MAINTAINED BY THE COMPANY A REGISTER (THE REGISTER MAINTAINED IN SUCH OFFICE
BEING HEREIN REFERRED TO AS THE "NOTE REGISTER") IN WHICH, SUBJECT TO SUCH
REASONABLE REGULATIONS AS IT MAY PRESCRIBE, THE COMPANY SHALL PROVIDE FOR THE
REGISTRATION OF NOTES AND OF TRANSFERS OF NOTES. THE TRUSTEE IS HEREBY APPOINTED
"NOTE REGISTRAR" FOR THE PURPOSE OF REGISTERING NOTES AND TRANSFERS OF NOTES AS
HEREIN PROVIDED. THE COMPANY MAY APPOINT CO-REGISTRARS AND MAY CHANGE ANY NOTE
REGISTRAR OR CO-REGISTRAR WITHOUT NOTICE.

         THE NOTES AND ANY CERTIFICATES FOR NOTES ISSUED IN EXCHANGE FOR NOTES
OR A BENEFICIAL INTEREST THEREIN WILL BEAR THE LEGENDS SET FORTH IN THIS NOTE,
EXCEPT THAT CERTIFICATED NOTES SHALL NOT BEAR THE FIRST AND SECOND SUCH LEGENDS.
THE HOLDER OF A NOTE MAY TRANSFER SUCH NOTE, SUBJECT TO COMPLIANCE WITH THE
PROVISIONS OF THE THIRD SUCH LEGEND, AS PROVIDED IN THIS NOTE AND THE INDENTURE.
UPON THE TRANSFER, EXCHANGE OR REPLACEMENT OF NOTES BEARING ANY SUCH LEGEND, OR
UPON SPECIFIC REQUEST FOR REMOVAL OF ANY SUCH LEGEND ON A NOTE, THE COMPANY WILL
DELIVER ONLY NOTES BEARING SUCH LEGEND, OR WILL REFUSE TO REMOVE SUCH LEGEND, AS
THE CASE MAY BE, UNLESS THERE IS DELIVERED TO THE COMPANY SUCH SATISFACTORY
EVIDENCE, WHICH MAY INCLUDE AN OPINION OF COUNSEL, AS MAY REASONABLY BE REQUIRED
BY THE COMPANY THAT NEITHER SUCH LEGEND NOR THE RESTRICTIONS ON TRANSFER SET
FORTH THEREIN ARE REQUIRED TO ENSURE COMPLIANCE WITH THE PROVISIONS OF THE
SECURITIES ACT.

         IN CASE AN EVENT OF DEFAULT WITH RESPECT TO NOTES, AS DEFINED IN THE
INDENTURE, SHALL HAVE OCCURRED AND BE CONTINUING, THE PRINCIPAL HEREOF AND THE
INTEREST ACCRUED HEREON, IF ANY, MAY BE DECLARED, AND UPON SUCH DECLARATION
SHALL BECOME, DUE AND PAYABLE, IN THE MANNER, WITH THE EFFECT AND SUBJECT TO THE
CONDITIONS PROVIDED IN THE INDENTURE.

         THE INDENTURE CONTAINS PROVISIONS WHICH PROVIDE THAT THE COMPANY AND
THE TRUSTEE MAY ENTER INTO ONE OR MORE SUPPLEMENTAL INDENTURES AMENDING THE
INDENTURE AND THE SECURITIES OF ANY SERIES WITH THE CONSENT OF THE HOLDERS OF AT
LEAST A MAJORITY IN PRINCIPAL AMOUNT OF THE OUTSTANDING SECURITIES OF EACH
SERIES AFFECTED BY SUCH SUPPLEMENTAL INDENTURE, AND THE HOLDERS OF AT LEAST A
MAJORITY IN PRINCIPAL AMOUNT OF THE OUTSTANDING SECURITIES OF ANY SERIES MAY
WAIVE (a) ANY PAST DEFAULT UNDER THE INDENTURE WITH RESPECT TO SUCH SERIES AND
ITS CONSEQUENCES AND (b) EITHER PAST OR FUTURE COMPLIANCE BY THE COMPANY WITH
ANY PROVISION OF SECTIONS 10.4 TO 10.8 OF THE INDENTURE; PROVIDED THAT, WITHOUT
THE CONSENT OF EACH HOLDER OF THE SECURITIES OF EACH SERIES AFFECTED THEREBY, AN
AMENDMENT OR WAIVER, INCLUDING A WAIVER OF PAST DEFAULTS, MAY NOT: (i) CHANGE
THE DUE DATE OF THE PRINCIPAL OF, OR ANY INSTALLMENT OF PRINCIPAL OF OR INTEREST
ON, ANY SECURITY, OR REDUCE THE PRINCIPAL AMOUNT THEREOF OR THE RATE OF INTEREST
THEREON OR ANY PREMIUM PAYABLE UPON REDEMPTION THEREOF, OR REDUCE THE AMOUNT OF
THE PRINCIPAL OF ANY SECURITY THAT WOULD BE DUE AND PAYABLE UPON A DECLARATION
OF THE MATURITY THEREOF PURSUANT TO THE INDENTURE, OR CHANGE THE PLACE OF
PAYMENT WHERE, OR THE COIN OR CURRENCY IN WHICH, ANY SECURITY OR ANY PREMIUM OR
THE INTEREST THEREON IS DENOMINATED OR PAYABLE (OR, IN THE CASE OF CERTAIN
SECURITIES WHICH PROVIDE FOR LESS THAN THE ENTIRE PRINCIPAL AMOUNT THEREOF TO BE
DUE AND PAYABLE UPON A DECLARATION OF ACCELERATION OF THE MATURITY THEREOF
PURSUANT TO THE INDENTURE, REDUCE THE AMOUNT OF PRINCIPAL PAYABLE UPON SUCH A
DECLARATION OF ACCELERATION OF THE MATURITY THEREOF), OR IMPAIR THE RIGHT TO
INSTITUTE SUIT FOR THE ENFORCEMENT OF ANY SUCH PAYMENT ON OR AFTER THE DUE DATE
THEREOF (OR, IN THE CASE OF REDEMPTION, ON OR AFTER THE REDEMPTION DATE), (ii)
REDUCE THE PERCENTAGE OF THE PRINCIPAL AMOUNT OF THE OUTSTANDING SECURITIES OF
ANY SERIES, THE CONSENT OF WHOSE HOLDERS IS REQUIRED FOR ANY SUCH SUPPLEMENTAL
INDENTURE, OR THE CONSENT OF WHOSE HOLDERS IS REQUIRED FOR ANY WAIVER (OF
COMPLIANCE WITH THE AFORESAID PROVISIONS OF THE INDENTURE OR DEFAULTS THEREUNDER
AND THEIR CONSEQUENCES) PROVIDED FOR IN THE INDENTURE OR (iii) MODIFY ANY OF THE
PROVISIONS OF SECTION 5.13, SECTION 9.2 OR SECTION 10.10 OF THE INDENTURE,
EXCEPT TO INCREASE ANY SUCH PERCENTAGE OR TO PROVIDE THAT CERTAIN OTHER
PROVISIONS OF THE INDENTURE CANNOT BE MODIFIED OR WAIVED WITHOUT THE CONSENT OF
THE HOLDER OF EACH OUTSTANDING SECURITY AFFECTED THEREBY.

         IT IS ALSO PROVIDED IN THE INDENTURE THAT, SUBJECT TO CERTAIN
CONDITIONS, THE HOLDERS OF AT LEAST A MAJORITY IN PRINCIPAL AMOUNT OF THE
OUTSTANDING SECURITIES OF ANY SERIES MAY WAIVE AN EXISTING DEFAULT WITH RESPECT
TO THE SECURITIES OF SUCH SERIES AND ITS CONSEQUENCES, EXCEPT A DEFAULT IN THE
PAYMENT OF PRINCIPAL OF (OR PREMIUM, IF ANY) OR INTEREST ON ANY SECURITY OF SUCH
SERIES OR IN RESPECT OF A COVENANT OR PROVISION OF THE INDENTURE WHICH CANNOT BE
MODIFIED OR AMENDED WITHOUT THE CONSENT OF THE HOLDER OF EACH OUTSTANDING
SECURITY OF SUCH SERIES AFFECTED. UPON ANY SUCH WAIVER, SUCH DEFAULT SHALL CEASE
TO EXIST, AND ANY EVENT OF DEFAULT ARISING THEREFROM SHALL BE DEEMED TO HAVE
BEEN CURED, FOR EVERY PURPOSE OF THE INDENTURE; BUT NO SUCH WAIVER SHALL EXTEND
TO ANY SUBSEQUENT OR OTHER DEFAULT OR IMPAIR ANY RIGHT CONSEQUENT THERETO.

         NO REFERENCE HEREIN TO THE INDENTURE AND NO PROVISION OF THIS NOTE OR
OF THE INDENTURE SHALL ALTER OR IMPAIR THE OBLIGATION OF THE COMPANY, WHICH IS
ABSOLUTE AND UNCONDITIONAL, TO PAY THE PRINCIPAL OF AND INTEREST ON THIS NOTE IN
THE MANNER, AT THE PLACE, AT THE RESPECTIVE TIMES, AT THE RATE AND IN THE COIN
OR CURRENCY HEREIN PRESCRIBED.


<PAGE>

         THE NOTES ARE ISSUABLE ONLY IN FULLY REGISTERED FORM, WITHOUT COUPONS,
IN DENOMINATIONS OF $1,000 AND ANY WHOLE MULTIPLE THEREOF.

         THE NOTES ARE NOT REDEEMABLE BEFORE THE MATURITY DATE.

         THE COMPANY SHALL HAVE NO OBLIGATION TO REDEEM, PURCHASE OR REPAY THE
NOTES PURSUANT TO A MANDATORY REDEMPTION, SINKING FUND OR ANALOGOUS PROVISION OR
AT THE OPTION OF A HOLDER THEREOF.

         AT THE COMPANY'S OPTION, EITHER (i) THE COMPANY SHALL BE DEEMED TO HAVE
BEEN DISCHARGED FROM ITS OBLIGATION WITH RESPECT TO THE NOTES ON THE 91ST DAY
AFTER THE APPLICABLE CONDITIONS SET FORTH IN SECTION 13.2 OF THE INDENTURE HAVE
BEEN SATISFIED ("DEFEASANCE") OR (ii) THE COMPANY SHALL CEASE TO BE UNDER ANY
OBLIGATION TO COMPLY WITH ANY TERM, PROVISION OR CONDITION SET FORTH IN SECTION
10.4, SECTION 10.5, SECTION 10.6, SECTION 10.7 AND SECTION 10.8 OF THE INDENTURE
WITH RESPECT TO THE NOTES AND CERTAIN RESTRICTIVE COVENANTS AT ANY TIME AFTER
THE APPLICABLE CONDITIONS SET FORTH IN SECTION 13.2 OF THE INDENTURE HAVE BEEN
SATISFIED ("COVENANT DEFEASANCE"); DEFEASANCE OR COVENANT DEFEASANCE SHALL BE
ACCOMPLISHED AS PROVIDED IN AND IN COMPLIANCE WITH THE PROVISIONS OF SECTION
13.2 OF THE INDENTURE.

         UPON DUE PRESENTMENT FOR REGISTRATION OF TRANSFER OF THIS NOTE AT THE
OFFICE OR AGENCY OF THE COMPANY IN NEW YORK, NEW YORK, A NEW NOTE OR NOTES OF
AUTHORIZED DENOMINATIONS FOR AN EQUAL AGGREGATE PRINCIPAL AMOUNT WILL BE ISSUED
TO THE TRANSFEREE IN EXCHANGE THEREFOR, SUBJECT TO THE LIMITATIONS PROVIDED IN
THE INDENTURE, WITHOUT CHARGE EXCEPT FOR ANY TAX OR OTHER GOVERNMENTAL CHARGE
IMPOSED IN CONNECTION THEREWITH.

         THE COMPANY, THE TRUSTEE AND ANY AGENT OF THE COMPANY OR THE TRUSTEE
MAY DEEM AND TREAT THE REGISTERED HOLDER HEREOF AS THE ABSOLUTE OWNER OF THIS
NOTE (WHETHER OR NOT THIS NOTE SHALL BE OVERDUE AND NOTWITHSTANDING ANY NOTATION
OF OWNERSHIP OR OTHER WRITING HEREON), FOR THE PURPOSE OF RECEIVING PAYMENT OF,
OR ON ACCOUNT OF, THE PRINCIPAL HEREOF AND, SUBJECT TO THE PROVISIONS HEREOF,
INTEREST HEREON, AND FOR ALL OTHER PURPOSES, AND NEITHER THE COMPANY NOR THE
TRUSTEE NOR ANY AGENT OF THE COMPANY OR THE TRUSTEE SHALL BE AFFECTED BY ANY
NOTICE TO THE CONTRARY.

         NO RECOURSE UNDER OR UPON ANY OBLIGATION, COVENANT OR AGREEMENT OF THE
COMPANY IN THE INDENTURE, ANY INDENTURE SUPPLEMENTAL THERETO OR IN ANY NOTE, OR
BECAUSE OF ANY INDEBTEDNESS EVIDENCED THEREBY, SHALL BE HAD AGAINST ANY
INCORPORATOR, STOCKHOLDER, OFFICER OR DIRECTOR, AS SUCH, PAST, PRESENT, OR
FUTURE, OF THE COMPANY OR OF ANY SUCCESSOR CORPORATION, EITHER DIRECTLY OR
THROUGH THE COMPANY OR ANY SUCCESSOR CORPORATION, UNDER ANY RULE OF LAW, STATUTE
OR CONSTITUTIONAL PROVISION OR BY THE ENFORCEMENT OF ANY ASSESSMENT OR BY ANY
LEGAL OR EQUITABLE PROCEEDING OR OTHERWISE, ALL SUCH LIABILITY BEING EXPRESSLY
WAIVED AND RELEASED BY THE ACCEPTANCE HEREOF AND AS PART OF THE CONSIDERATION
FOR THE ISSUE HEREOF.

         THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.

         PURSUANT TO A RECOMMENDATION PROMULGATED BY THE COMMITTEE ON UNIFORM
SECURITY IDENTIFICATION PROCEDURES, THE COMPANY HAS CAUSED A CUSIP NUMBER TO BE
SET FORTH ON THIS NOTE AS A CONVENIENCE TO THE HOLDER HEREOF. NO REPRESENTATION
IS MADE AS TO THE ACCURACY OF SUCH NUMBER AND RELIANCE MAY BE PLACED ONLY ON THE
OTHER IDENTIFYING INFORMATION SET FORTH HEREON.


<PAGE>


         THIS NOTE SHALL NOT BE VALID OR BECOME OBLIGATORY FOR ANY PURPOSE UNTIL
THE CERTIFICATE OF AUTHENTICATION HEREON SHALL HAVE BEEN MANUALLY SIGNED BY THE
TRUSTEE UNDER THE INDENTURE.

         IN WITNESS WHEREOF, SMITH INTERNATIONAL, INC. HAS CAUSED THIS
INSTRUMENT TO BE SIGNED MANUALLY OR BY FACSIMILE BY ITS DULY AUTHORIZED OFFICER
AND HAS CAUSED ITS CORPORATE SEAL TO BE AFFIXED HEREUNTO OR IMPRINTED HEREON.

DATED: OCTOBER, 2001


                                                SMITH INTERNATIONAL, INC.



                                              BY: /s/ MARGARET K. DORMAN
                                                  -----------------------------
                                              NAME:  MARGARET K. DORMAN
                                              TITLE: SENIOR VICE PRESIDENT AND
                                                     CHIEF FINANCIAL OFFICER






       /s/ NEAL S. SUTTON
       ---------------------------------------
NAME:  NEAL S. SUTTON
TITLE: SENIOR VICE PRESIDENT--ADMINISTRATION,
       GENERAL COUNSEL AND SECRETARY


<PAGE>


                          CERTIFICATE OF AUTHENTICATION


         THIS IS ONE OF THE SECURITIES OF THE SERIES DESIGNATED PURSUANT TO THE
WITHIN-MENTIONED INDENTURE.


                                                THE BANK OF NEW YORK, AS TRUSTEE



                                                BY: /s/
                                                    ----------------------------
                                                    AUTHORIZED SIGNATORY

                    DATE OF AUTHENTICATION: OCTOBER 15, 2001


<PAGE>


                                   ASSIGNMENT


FOR VALUE RECEIVED, THE UNDERSIGNED SELLS, ASSIGNS AND TRANSFERS THIS NOTE TO

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                   (PRINT OR TYPE TRANSFEREE'S NAME, ADDRESS,
                    ZIP CODE AND SOCIAL SECURITY OR TAXPAYER
                          IDENTIFICATION NUMBER ABOVE)

AND IRREVOCABLY APPOINT _________________________ AGENT TO TRANSFER THIS NOTE ON
THE BOOKS OF THE COMPANY. THE AGENT MAY SUBSTITUTE ANOTHER TO ACT FOR HIM.



DATED:
       ----------------

                     YOUR SIGNATURE:
                                    --------------------------------------------
                                    NOTICE: THE SIGNATURE(S) ON THIS ASSIGNMENT
                                    MUST CORRESPOND IN EVERY PARTICULAR WITH THE
                                    NAME(S) OF THE REGISTERED OWNER(S) APPEARING
                                    ON THE FACE OF THE NOTE.


                                    --------------------------------------------
                                    SIGNATURE


SIGNATURE GUARANTEED BY:


--------------------------------------------
NOTICE: SIGNATURE MUST BE GUARANTEED BY AN
"ELIGIBLE GUARANTOR INSTITUTION" MEETING THE
REQUIREMENTS OF THE FISCAL AGENT, WHICH
REQUIREMENTS WILL INCLUDE MEMBERSHIP OR
PARTICIPATION IN STAMP OR SUCH OTHER
SIGNATURE GUARANTY PROGRAM AS MAY BE
DETERMINED BY THE FISCAL AGENT IN ADDITION
TO, OR IN SUBSTITUTION FOR, STAMP, ALL IN
ACCORDANCE WITH THE SECURITIES EXCHANGE ACT
OF 1934, AS AMENDED.


IN CONNECTION WITH ANY TRANSFER OF ANY OF THIS NOTE, THE UNDERSIGNED CONFIRMS
THAT SUCH NOTE IS BEING TRANSFERRED IN ACCORDANCE WITH ITS TERMS.




CHECK ONE BOX BELOW


                  (1)      [ ]      TO THE COMPANY; OR

<PAGE>

                  (2)      [ ]      PURSUANT TO AN EFFECTIVE REGISTRATION
                                    STATEMENT UNDER THE SECURITIES ACT OF 1933;
                                    OR

                  (3)      [ ]      INSIDE THE UNITED STATES TO A "QUALIFIED
                                    INSTITUTIONAL BUYER" (AS DEFINED IN RULE
                                    144A UNDER THE SECURITIES ACT OF 1933) THAT
                                    PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
                                    ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
                                    TO WHOM NOTICE IS GIVEN THAT SUCH TRANSFER
                                    IS BEING MADE IN RELIANCE ON RULE 144A, IN
                                    EACH CASE PURSUANT TO AND IN COMPLIANCE WITH
                                    RULE 144A UNDER THE SECURITIES ACT OF 1933;
                                    OR

                  (4)      [ ]      OUTSIDE THE UNITED STATES IN AN OFFSHORE
                                    TRANSACTION WITHIN THE MEANING OF REGULATION
                                    S UNDER THE SECURITIES ACT IN COMPLIANCE
                                    WITH RULE 904 UNDER THE SECURITIES ACT OF
                                    1933; OR

                  (5)      [ ]      PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM
                                    REGISTRATION UNDER THE SECURITIES ACT OF
                                    1933.

                  UNLESS ONE OF THE BOXES IS CHECKED, THE TRUSTEE WILL REFUSE TO
REGISTER THIS NOTE IN THE NAME OF ANY PERSON OTHER THAN THE REGISTERED HOLDER
THEREOF; PROVIDED, HOWEVER, THAT IF BOX (4) OR (5) IS CHECKED, THE TRUSTEE MAY
REQUIRE, PRIOR TO REGISTERING ANY SUCH TRANSFER OF THIS NOTE, SUCH LEGAL
OPINIONS, CERTIFICATIONS AND OTHER INFORMATION AS THE COMPANY HAS REASONABLY
REQUESTED TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OF 1933, SUCH AS THE EXEMPTION PROVIDED BY RULE 144 UNDER SUCH
ACT.

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              TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.

                  THE UNDERSIGNED REPRESENTS AND WARRANTS THAT IT IS PURCHASING
THIS NOTE FOR ITS OWN ACCOUNT OR AN ACCOUNT WITH RESPECT TO WHICH IT EXERCISES
SOLE INVESTMENT DISCRETION AND THAT IT AND ANY SUCH ACCOUNT IS A "QUALIFIED
INSTITUTIONAL BUYER" WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT OF
1933, AND IS AWARE THAT THE SALE TO IT IS BEING MADE IN RELIANCE ON RULE 144A
AND ACKNOWLEDGES THAT IT HAS RECEIVED SUCH INFORMATION REGARDING THE COMPANY AS
THE UNDERSIGNED HAS REQUESTED PURSUANT TO RULE 144A OR HAS DETERMINED NOT TO
REQUEST SUCH INFORMATION AND THAT IT IS AWARE THAT THE TRANSFEROR IS RELYING
UPON THE UNDERSIGNED'S FOREGOING REPRESENTATIONS IN ORDER TO CLAIM THE EXEMPTION
FROM REGISTRATION PROVIDED BY RULE 144A.

DATED:
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                                  NOTICE: TO BE EXECUTED BY AN EXECUTIVE OFFICER