On March 9, 2009, Smith International, Inc., a Delaware corporation (the "Company"), entered into a $525.0 million term loan ("Term Loan") with a group of financial institutions (the "Lenders"). On July 24, 2009, the Company allowed all commitments under the Term Loan to expire and entered into a new $375.0 million revolving credit facility ("Facility") with the Lenders. Borrowings under the 364-day Facility, which is currently undrawn, are unsecured and bear interest at the rates specified in the accompanying Credit Agreement. The Credit Agreement contains customary terms, including leverage ratio covenants and events of default.
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the full text of the Credit Agreement, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Reference is made to the disclosure set forth under Item 1.01 of this report, which disclosure is incorporated into this Item 2.03 by reference. Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number                                  Description
     10.1         Credit Agreement, dated as of July 24, 2009, among Smith International,
                  Inc., the Lenders from time to time party thereto, and DNB NOR Bank ASA,
                  as administrative agent, Wells Fargo Bank, N.A., as syndication agent,
                  Calyon New York Branch, as senior managing agent, and DNB NOR Bank ASA
                  and Wells Fargo Securities, LLC as co-lead arrangers and joint
                  bookrunners.