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Purchase Agreement

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Date:
2002
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                               PURCHASE AGREEMENT


                                      among


                       SCHLUMBERGER TECHNOLOGY CORPORATION
                                   ("Seller")


                                       and


                               GRANT PRIDECO, INC.
                              ("Purchaser Parent")




                                TABLE OF CONTENTS






                                                                                                                PAGE
                                                                                                                ----
                                                                                                             
ARTICLE I PURCHASE AND SALE.......................................................................................2
         1.1        Purchase and Sale.............................................................................2
         1.2        Limitation on Assignments.....................................................................2
         1.3        Consideration/Allocation......................................................................3
         1.4        Purchase Price Adjustment.....................................................................3
         1.5        Excluded Assets...............................................................................6
         1.6        Assumed and Excluded Liabilities..............................................................6

ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER...............................................................7
         2.1        Organization..................................................................................7
         2.2        Capitalization; Seller's Ownership of Acquired Entities.......................................7
         2.3        Subsidiaries..................................................................................7
         2.4        Authority of Seller...........................................................................8
         2.5        No Conflict/Consents..........................................................................8
         2.6        Personal Property.............................................................................9
         2.7        Real Property................................................................................10
         2.8        Intellectual Property........................................................................11
         2.9        Financial Statements.........................................................................12
         2.10       Absence of Certain Changes and Events........................................................12
         2.11       Taxes........................................................................................14
         2.12       Litigation...................................................................................16
         2.13       Employee Benefit Matters.....................................................................16
         2.14       Material Contracts...........................................................................18
         2.15       Warranties and Product Liability.............................................................20
         2.16       Brokers......................................................................................20
         2.17       Absence of Certain Payments..................................................................20
         2.18       Employees....................................................................................20
         2.19       Environmental................................................................................21
         2.20       Environmental Permits........................................................................22
         2.21       Compliance with Law; Authorizations..........................................................22
         2.22       Securities/Resale............................................................................23
         2.23       No Other Representations or Warranties.......................................................23

ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER PARENT...................................................23
         3.1        Organization.................................................................................23
         3.3        Authority of Purchaser Parent................................................................23
         3.4        Brokers......................................................................................24
         3.5        No Conflict; Consents........................................................................24
         3.6        Taxes........................................................................................24
         3.7        Litigation...................................................................................24
         3.8        Environmental................................................................................25
         3.9        Compliance with Law; Authorizations..........................................................25
         3.10       Securities/Resale............................................................................25



                               TABLE OF CONTENTS



                                                                                                                PAGE
                                                                                                                ----
                                                                                                             
         3.11       Securities Representations...................................................................25
         3.12       Issuance and Listing of Shares...............................................................26
         3.13       No Other Representations or Warranties.......................................................26

ARTICLE IV COVENANTS OF SELLER...................................................................................26
         4.1        Corporate and Other Actions..................................................................26
         4.2        Full Access..................................................................................26
         4.3        Ordinary Course of Business..................................................................26
         4.4        Filings and Consents.........................................................................27
         4.5        Employment Matters...........................................................................28
         4.6        Covenant Not to Compete......................................................................28
         4.7        Non-Solicitation of Employees................................................................29
         4.8        Nondisclosure of Proprietary Information.....................................................29
         4.9        Transition Services Agreement................................................................30
         4.10       Registration Rights Agreement................................................................30
         4.11       Financial Statements.........................................................................30
         4.12       Insurance Matters............................................................................31
         4.13       Cooperation on Financing.....................................................................31
         4.14       Formation of Entities and Transfer of Assets.................................................32
         4.15       Joint Contracts..............................................................................32
         4.16       MFGPro.......................................................................................32
         4.17       Union Negotiations...........................................................................32

ARTICLE V COVENANTS OF PURCHASER PARENT..........................................................................33
         5.1        Corporate and Other Actions..................................................................33
         5.2        Employees and Benefit Plans..................................................................33
         5.3        Full Access..................................................................................35
         5.4        Filings and Consents.........................................................................35
         5.5        Use of Scorpion Name.........................................................................35
         5.6        No Negotiation...............................................................................36
         5.7        License Back of Transferred Intellectual Property............................................36
         5.8        Continuation of Subsidiaries.................................................................37

ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER PARENT...............................................37
         6.1        Warranties True As of Both Present Date and the Closing Date.................................37
         6.2        Compliance with Agreements and Covenants.....................................................37
         6.3        Competition Law Approvals....................................................................37
         6.4        Injunctions..................................................................................37
         6.5        Deliveries by Seller.........................................................................37
         6.6        Consents.....................................................................................38
         6.7        Removal of Excluded Assets and Excluded Liabilities..........................................38
         6.8        Restructuring................................................................................38

ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER........................................................38
         7.1        Warranties True as of Both Present Date and the Closing Date.................................38



                                      -ii-

                               TABLE OF CONTENTS




                                                                                                                PAGE
                                                                                                                ----
                                                                                                             
         7.2        Compliance with Agreements and Covenants.....................................................38
         7.3        Competition Law Approvals....................................................................38
         7.4        Injunctions..................................................................................38
         7.5        Deliveries by Purchaser Parent...............................................................38
         7.6        Consents.....................................................................................38
         7.7        Restructuring................................................................................39

ARTICLE VIII CLOSING.............................................................................................39
         8.1        Closing......................................................................................39
         8.2        Seller's Deliveries..........................................................................39
         8.3        Purchaser Parent's Deliveries................................................................40
         8.4        Termination..................................................................................40

ARTICLE IX SURVIVAL AND INDEMNIFICATION..........................................................................41
         9.1        Survival.....................................................................................41
         9.2        Indemnification by Seller (other than for Tax Matters).......................................41
         9.3        Indemnification by Purchaser Parent (other than for Tax Matters).............................42
         9.4        Limitations on Liability of the Seller.......................................................43
         9.5        Notice of Third Party Claims: Assumption of Defense..........................................43
         9.6        Settlement or Compromise.....................................................................44
         9.7        Tax Indemnification..........................................................................44
         9.8        Time Limits..................................................................................47
         9.9        Net Losses...................................................................................47
         9.10       Purchase Price Adjustments...................................................................48
         9.11       Remedial Action..............................................................................48
         9.12       Negligence of Indemnified Parties............................................................48
         9.13       Environmental Matters........................................................................48
         9.14       Waiver of Consequential Damages..............................................................50

ARTICLE X TAX MATTERS............................................................................................50
         10.1       Tax Elections................................................................................50
         10.2       Other Tax Matters............................................................................51

ARTICLE XI MISCELLANEOUS.........................................................................................54
         11.1       Delivery of Corporate Documents; Retention of Records........................................54
         11.2       Cooperation After Closing....................................................................55
         11.3       Expenses.....................................................................................56
         11.4       Amendment....................................................................................56
         11.5       Notices......................................................................................56
         11.6       Waivers......................................................................................57
         11.7       Counterparts.................................................................................57
         11.8       Headings.....................................................................................57
         11.9       Applicable Law...............................................................................57
         11.10      Assignment...................................................................................58
         11.11      No Third Party Beneficiaries.................................................................58

                                     -iii-



                               TABLE OF CONTENTS



                                                                                                                PAGE
                                                                                                                ----
                                                                                                             

         11.12      Jurisdiction; Venue; Service of Process; Waiver of Jury Trial................................58
         11.13      Schedules....................................................................................58
         11.14      Incorporation................................................................................58
         11.15      Complete Agreement...........................................................................58
         11.16      Disclaimer...................................................................................58
         11.17      Knowledge Defined............................................................................59
         11.18      Public Announcements.........................................................................59
         11.19      Currency.....................................................................................59
         11.20      Specific Performance.........................................................................59
         11.21      Further Assurances...........................................................................59
         11.22      Severability.................................................................................60




                                      -iv-



                               PURCHASE AGREEMENT


         THIS PURCHASE AGREEMENT is entered into on the 25th day of October,
2002, among Schlumberger Technology Corporation, a Texas corporation (the
"Seller"), and Grant Prideco, Inc., a Delaware corporation ("Purchaser Parent")
(each a "Party" and collectively, the "Parties").

         WHEREAS, the Seller and its Affiliates, through various directly and
indirectly wholly-owned subsidiaries, are engaged in the business of developing,
manufacturing, selling and distributing drilling bits and related assets and
technology to the oil and gas industry and, to a lesser extent, other industrial
applications (such business, including the Acquired Entities, the Acquired
Assets and the US Assets, the "Business");

         WHEREAS, on the terms and subject to the conditions herein, Purchaser
Parent desires to purchase the Business from the Seller and its subsidiaries
and, on or prior to the Closing Date, will designate one or more existing or
newly formed entities to purchase the Business (each such designated subsidiary
a "Purchaser Entity" and, collectively the "Purchaser Entities");

         WHEREAS, on or prior to the Closing Date, Seller will cause the assets
of the Business located in the United States set forth on Seller Schedule O (the
"US Assets") to be contributed to and the liabilities and obligations of the
Business in the United States to be assumed by Reed-Hycalog Operating, LP, a
Delaware limited partnership ("Road Runner-US"); and

         WHEREAS, on or prior to the Closing Date, Seller will cause all of the
assets and liabilities of Reed Tool Singapore Pte. Ltd., a company incorporated
in Singapore ("Road Runner-Singapore-Old") to be transferred to and assumed by a
newly formed partnership ("Road Runner-Singapore-New") that will be owned
directly or indirectly 100% by Camco International (UK) Limited, a United
Kingdom corporation ("Road Runner-UK"); and

         WHEREAS, on or prior to the Closing Date, Seller will cause the
inventory, contracts and other assets set forth on Seller Schedule 1.1(a) (the
"Acquired Assets") to be acquired by a newly formed Subsidiary of Road
Runner-UK; and

         WHEREAS, in order to transfer the Business to the Purchaser Entities,
subject to the terms and conditions set forth herein, the Seller desires to sell
to the Purchaser Entities and the Purchaser Parent desires to purchase or cause
the Purchaser Entities to purchase from the Seller, all of the issued and
outstanding (i) capital stock of Road Runner-UK, (ii) capital stock of Camco
International (Canada) Limited, a Canadian corporation ("Road Runner-Canada"),
(iii) membership interests of Reed-Hycalog, LLC, a Delaware limited liability
company which is the general partner of Road Runner-US ("Road Runner-LLC") and
(iv) limited partner interests of Road Runner-US (Road Runner-UK, Road
Runner-Canada, Road Runner-LLC, Road Runner-US and their respective
subsidiaries, the "Acquired Entities") and certain related assets held by the
Seller and its Affiliates. Capitalized terms not defined in the body of this
Agreement shall have the meanings assigned to them in Appendix I attached
hereto, which is incorporated herein and a part hereof in all respects.






         NOW, THEREFORE, in consideration of the premises and the mutual
promises herein contained, Purchaser Parent, and the Seller hereby agree as
follows:

                                   ARTICLE I
                                PURCHASE AND SALE

         1.1 Purchase and Sale.

             (a) Purchase. On the terms and subject to the conditions set forth
herein, at the Closing, Purchaser Parent and/or its Affiliates shall purchase
from the Seller and/or its Affiliates, (i) 100% of the membership interests in
Road Runner-LLC, (ii) 100% of the limited partner interests in Road Runner-US,
(iii) 100% of the issued and outstanding shares of capital stock of Road
Runner-UK, and (iv) 100% of the issued and outstanding shares of capital stock
of Road Runner-Canada. In connection with the Restructuring, the Acquired
Entities shall assume all Assumed Liabilities (as defined herein) for which they
are not already liable. Seller shall be entitled to designate one or more
Affiliates of Seller as the Sellers of all or part of the Business at any time
prior to the Closing with the consent of Purchaser Parent, which consent will
not be unreasonably withheld.

             (b) Purchaser Entities. Purchaser Schedule 1.1(b) sets forth the
name and jurisdiction of formation of the entity that will purchase (i) the
membership interests in Road Runner-LLC, (ii) the limited partnership interests
in Road Runner-US, (iii) the capital stock of Road Runner-UK, and (iv) the
capital stock of Road Runner-Canada. Purchaser Schedule 1.1(b) also specifies
for each entity listed, the ownership of that entity and its ownership link to
the Purchaser Parent; provided, however, that Purchaser Parent shall be entitled
to change the designation of the entities purchasing all or part of the Business
at any time prior to the Closing if such change shall not be expected by Seller
or Purchaser Parent to have any material adverse consequences on Seller or its
Affiliates.

         1.2 Limitation on Assignments. The Seller shall use its reasonable
commercial efforts to obtain all consents of third parties as are necessary for
the assignment of the Acquired Assets and the US Assets and the assignment of
any contracts, leases, property (real or personal) or other assets of the
Business to the Acquired Entities or their Subsidiaries. To the extent that (i)
any of the Acquired Assets or US Assets (and any contracts, leases, property
(real or personal) or other assets of the Business to be assigned to an Acquired
Entity or their Subsidiaries) are not assignable by the terms thereof, (ii)
consents to the assignment of any of the Acquired Assets or US Assets (and any
contracts, leases, property (real or personal) or other assets of the Business
to be assigned to an Acquired Entity or their Subsidiaries) cannot be obtained
as provided herein, (iii) the assignment of any Acquired Assets or US Assets
(and any contracts, leases, property (real or personal) or other assets of the
Business to be assigned to an Acquired Entity or their Subsidiaries) would
constitute a violation of any law, judgment, decree, order, writ, injunction,
rule or regulation of any Governmental Authority or (iv) any Acquired Asset or
US Asset (and any contract, lease, property (real or personal) or other asset of
the Business to be assigned to the Acquired Entities or their Subsidiaries) is
not assigned by Seller or its Affiliates at the Closing without a breach by such
Person of its obligations hereunder, such Acquired Assets or US Assets (and any
contracts, leases, property (real or personal) or other assets of the Business
to be assigned to the Acquired Entities or their Subsidiaries) shall be held by


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