DRIL-QUIP INC
CREDIT AGMT. - BANK OF SCOTLAND
<DOCUMENT>
<TYPE>EX-10.2
<SEQUENCE>3
<FILENAME>dex102.txt
<DESCRIPTION>CREDIT AGMT. - BANK OF SCOTLAND
<TEXT>

<PAGE>

[BANK OF SCOTLAND LETTERHEAD]

PRIVATE & CONFIDENTIAL
Dril-Quip (Europe) Limited
Stoneywood Park
DYCE
Aberdeen
AB21 7DZ

                                                                Our Ref: AJM/AGM

                                                                21st March, 2001

TERM LOAN

The Bank is pleased to offer a facility to the undernoted Borrower on the
following terms and conditions ("this Offer"):

1. MAIN FINANCIAL PROVISIONS

   1.1. Name and Address of each Borrower:

        Dril-Quip (Europe) Ltd (Company No. 81748) incorporated under the
        Companies Acts and having its Registered Office at 18 Golden Square,
        Aberdeen, AB10 1HA.

        Where there is more than one Borrower any reference to "the Borrower"
        shall mean and include each of the above and their obligations and
        liabilities under this facility shall be joint and several.

   1.2  Amount of facility: (Pounds)4,000,080

   1.3  Period of facility: 120 months from the date of the drawing under the
        facility.

   1.4  An Arrangement Fee of (Pounds)2,500 is payable on acceptance of this
        Offer and will be debited to the Servicing Account unless otherwise
        agreed.

   1.5  The Servicing Account is Account Number 00361710 with the Bank. The
        Borrower must ensure that at all times there are sufficient funds
        available in the Servicing Account to pay the amounts debited under this
        Offer as soon as those amounts are debited.

   1.6  Interest will be calculated by the Bank on a day-to-day basis on the
        outstanding balance of the facility owing to the Bank. Interest accruing
        will be debited to the Servicing Account on the last business day of
        each month. The interest rate will be 1% per annum over the Bank's Base
        Rate, as fluctuating from time to time.

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   1.7  The Bank's Base Rate at the date of this Offer is 5.75% per annum.
        Changes are notified in national newspapers and all the Bank's Branches.

   1.8  The amount drawn under the facility must be repaid as follows:

        Number of repayments: 120

        Amount of each repayment: (Pounds)33,334.00

        Repayments will be debited to the Servicing Account at intervals of one
        month commencing one month after the date of the drawing under the
        facility.

2. USE OF FACILITY

   The facility may be used only for capital costs relative to the development
   of a Base in Norway.

   Where the facility is to be used for the purchase of an asset (or assets) or
   property then any proceeds of sale of such asset (or assets) or property
   shall be paid to the Bank in reduction or repayment of the facility.

3. EARLY REPAYMENT OF THE FACILITY

   3.1  The facility may be repaid earlier than as specified in paragraph 1.8 of
        this Offer provided repayment takes place on the last business day of a
        calendar month and the Borrower shall give at least 30 days' prior
        notice to the Bank.

   3.2  If only part of the facility is repaid early the Borrower shall ensure
        that the repayments required under this Offer shall continue to be paid
        until all sums due under this Offer have been paid.

   3.3  Any sums repaid early may not be redrawn.

   3.4  This paragraph also applies where a Borrower is required to repay part
        of the facility early because an asset purchased by using the facility
        has been sold.

4. FINANCIAL INFORMATION

   Throughout the period the facility is available (including any extension of
   the facility) the Borrower must provide the Bank with the following financial
   information:

   Annual financial statements for the Company and the US parent, within twelve
   months after the end of the financial year to which they relate.





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5. EVENTS OF DEFAULT

   5.1. The Bank may declare that an event of default has occurred upon or at
        any time after the happening of any of the following events:

        (a) if the Borrower fails to pay any sum on the due date for payment
            under this Offer or any other sum due and payable to the Bank;

        (b) if a petition is presented or an order is made or resolution is
            passed for the bankruptcy, sequestration, winding-up or
            administration of the Borrower or (in Scotland) the appointment of a
            judicial factor to the Borrower;

        (c) if any diligence, distress, execution, sequestration or other legal
            process is levied or enforced or sued out against any of the assets
            of the Borrower;

        (d) if any person takes possession of, or a receiver is appointed over,
            the whole or any part of the assets of the Borrower;

        (e) if the Borrower ceases or suspends payment of sums due or is unable
            to pay debts as they fall due or is deemed unable to pay sums due or
            is deemed apparently insolvent under insolvency legislation;

        (f) if any of the events specified in clauses (a) to (e) inclusive above
            happen in regard to a Guarantor of the Borrower; or

        (g) if the Borrower is a limited company and control of the Borrower
            passes to any person without the Bank's prior consent which, consent
            will not be withheld unreasonably.

   5.2. If the Bank declares that an event of default has occurred the Bank may
        at (or at any time after) the time of making the declaration:

        (a) cancel the facility; and/or

        (b) demand immediate payment of the sums outstanding (in which case the
            sums outstanding shall become immediately due and payable by the
            Borrower) or declare that the sums outstanding shall become due and
            payable on demand; and/or

        (c) elect that interest at the default rate (being 2% over the rate
            specified in this Offer) will apply in which case interest under the
            facility will become payable at that rate before or after any court
            decree or judgement; and/or

        (d) charge an administration fee to compensate it for the additional
            time spent in administering the facility.
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6. GENERAL ADMINISTRATIVE PROVISIONS

   6.1. The Bank can withdraw this Offer at any time prior to acceptance.
        However, unless it is withdrawn, this Offer is open for acceptance which
        must reach the Bank within one calendar month of the date of this Offer.
        If this Offer, duly signed, is not received by the Bank within that
        period then, unless the Bank agrees otherwise, this Offer shall lapse.

   6.2. If the term loan remains undrawn three months from the date of this
        Offer (or such longer period as the Bank may agree) then it shall
        automatically cease to be available.

   6.3. A statement of the sums outstanding at any time and/or interest and/or
        charges due to the Bank at any time, duly certified by a Bank authorised
        official, shall (except where the Bank has made an obvious error) be
        final and conclusive.

   6.4. No delay by the Bank in exercising any right, power or privilege under
        this Offer shall prevent the Bank from exercising it at a later date and
        the Bank can exercise any of the powers conferred on more than one
        occasion.

   6.5. Unless the Bank otherwise agrees in this Offer, this Offer will be
        governed by the law of the country in which the branch of the Bank
        specified in this Offer is situated and the courts of that country will
        have jurisdiction in relation to any matter relating to this Offer.

   6.6. Any notice from the Bank shall be effectively given if sent by post to
        the Registered Office/place of business/residence of the addressee last
        known to the Bank. Any notice shall be deemed to have been given and
        received forty eight hours after being sent by first class post.

   6.7. The Borrower shall reimburse the Bank for all legal fees and expenses
        relating to this Offer and any security that may be required.

7. ADDITIONAL CONDITIONS

   7.2. Updated Valuation of the undernoted sites Secured to the Bank at
        Stoneywood Park, Dyce, Aberdeen to be provided to the Bank prior to
        drawdown, confirming a Value of at least (Pounds)6m. The cost of the
        Valuation to be met by the Company.
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8. SECURITY

   *  The following security ALREADY HELD by the Bank shall be available as
      security for the amounts owing to the Bank under this Offer (as well as
      for any other amounts covered by that security):

      Standard Security over 4.6 acre site, Stoneywood Park, Dyce, Aberdeen.

      Standard Security over office, workshop and yard on a 5.5 acre site at
      Stoneywood Park, Dyce, Aberdeen.

      Any security WHICH MAY SUBSEQUENTLY BE HELD by the Bank shall be available
      to secure the amounts owing to the Bank under this Offer and all other
      sums due to the Bank, to the full extent that the terms of such security
      permit.

      A charge of (Pounds)nil will be made to cover the Bank's security
      administration costs and will be debited on acceptance of this Offer. This
      is in addition to any costs and expenses charged by any firm of solicitors
      employed by the Bank to complete the documentation and procedures for the
      above security requirements which will be paid by the Borrower.

9. EMU COMPLIANCE

   If the introduction of, changeover to or operation of a single or unified
   European currency results in:

   (1) the currency in which the facility is provided changing or being replaced
       or the Bank (in its reasonable opinion) requiring to amend either this
       facility letter or the security held by the Bank due to changes in price
       sources for any European Union member state national currency or the ECU
       or market conventions relating to the calculation of interest; and/or

   (2) the Bank incurring an additional or increased cost in relation to its
       providing the facility;

   then the Borrower agrees that in the case of (1) above, it will permit the
facility letter and/or the security held by the Bank to be amended to the extent
necessary (in the Bank's reasonable opinion) to reflect those changed
circumstances and in the case of (2) above, to indemnify the Bank in respect of
that additional or increased cost.

                                               NOTE * = DELETE IF NOT APPLICABLE








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10. TIME LIMIT FOR ACCEPTANCE OF OFFER

    To accept this Offer, each Borrower named in paragraph 1.1. should please
sign below where indicated, and the completed Offer should be returned to the
Bank at the above address within one calendar month from the date of this Offer.
A duplicate of this Offer is enclosed for the Borrower to keep.

/s/ ALAN MITCHELL                       Date of Offer: 21 March 2001
---------------------------------
For and on behalf of the Bank


AS WITH ANY LEGALLY BINDING AGREEMENT WE RECOMMEND THAT YOU CONSULT YOUR
SOLICITOR, ACCOUNTANT OR OTHER INDEPENDENT PROFESSIONAL ADVISER BEFORE ACCEPTING
THIS OFFER.

We accept the above Offer.

Signed for and on behalf of Dril-Quip (Europe) Ltd:

/s/ W.E. YOUNGMAN             Director
-----------------------------

/s/ N.E. SKENE                Secretary
-----------------------------

         10/4/01              Date
-----------------------------
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