Exhbit10.2

SETTLEMENT AND STOCK REDEMPTION AGREEMENT

This Settlement and Stock Redemption Agreement (this "Agreement") is executed by
Phillips Family Limited Partnership ("Investor"), a South Dakota limited
partnership; Carey M. Phillips ("Phillips"), a Florida resident; SailTech
International, Inc. (the "Company"), a Nevada corporation; SailTech Design, Inc.
("SDIF"), a Florida corporation; and SailTech Design, Inc., ("SDIBC"), a British
Columbia corporation, both direct or indirect subsidiaries of the Company
(together, the "Subsidiaries" and, individually, a "Subsidiary"), Gunter
Richtler and W. Barry Girling (together, the "Managing Shareholders"), to record
their agreements regarding the redemption by the Company of Investor's shares of
common stock of the Company and related matters.

BACKGROUND

Investor acquired 7,500,000 shares (the "SailTech Shares") of the common stock
of the Company, par value $.001 per share, on September 12, 2002, for a purchase
price of $1,500,000 pursuant to the terms of a Stock Purchase Agreement dated
August 31, 2001, among Investor, Phillips, the Company, SDIF, SDIBC, and the
Managing Shareholders (the "Stock Purchase Agreement"). Section 2.6 of the Stock
Purchase Agreement grants to Investor the right and option (but not the
obligation) to sell to the Company, and to require the Company to purchase from
Investor, at any time during the period after the occurrence of an "Event of
Default" (as defined in the Stock Purchase Agreement) and before the expiration
date of the put option, any or all of the shares of common stock owned by
Investor at a purchase price equal to the greater of $.75 U.S. or the last price
at which the Company sold any shares of the Common Stock (the "Put Option"). The
Stock Purchase Agreement defines an "Event of Default" to include the insolvency
of the Company or any of the Subsidiaries. On Monday, July 1, 2002, Cortland
Steck, an officer and director of the Company, notified the Board of Directors
of the Company that SDIF is insolvent. On Monday, July 1, 2002, following
receipt of Mr. Steck's notice of insolvency, Investor exercised the Put Option
and demanded payment within ten business days thereafter. On execution of the
Put Option by Investor, the Company also became insolvent. Investor also
resigned on July 1, 2002, as an officer and director of the Company and the
Subsidiaries. The amount of the Company's obligation to the Investor is
$5,625,000 U.S.

As an insolvent corporation, the Company is not in a position to satisfy its
obligation to Investor under the Put Option by the payment of cash consideration
and is in default of its obligation to Investor. The Company's only practical
alternative, without a negotiated settlement, is to file for protection under
the federal bankruptcy laws. If that were to occur, the shareholders of the
Company likely would not receive any return on their investment.

Accordingly, the Company and Investor have agreed to the redemption of the
SailTech Shares for the amount of $25,000, and the Investor has agreed to cancel
certain agreements that he has with the Company.

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OPERATIVE PROVISIONS

The parties agree as follows:

1. Contract Interpretation.

A.

Defined Terms. As used in this Agreement, the following capitalized terms have
the respective definitions attributed to them:

"Agreement"means this Settlement and Stock Redemption Agreement among Investor,
Phillips, the Company, the Subsidiaries, and the Managing Shareholders, as
originally executed and subsequently amended.

"Beneficiary" and "Beneficiaries" have the meanings specified in section ____
(a) of this Agreement.

"Closing" means the consummation of the Transactions.

"Closing Date" means the date when the Transactions will be closed, which will
be September 13, 2002, or any date before that when the payments required under
sections 4 and 9 are made to Investor.

"Common Stock" means the common stock of the Company having a par value of $.001
per share.

"Company" means SailTech International, Inc., a Nevada corporation, and a party
to this Agreement, and includes its successors in interest (by operation of law
or otherwise).

"Execution Date"means August 29, 2002,.

"Indemnified Loss" and "Indemnified Losses" have the meanings indicated in
paragraph 11(A) of this Agreement.

"Investor"means Phillips Family Limited Partnership, a South Dakota limited
partnership, and a party to this Agreement, and includes its assignees and
successors in interest (by operation of law or otherwise).

"License Agreement" means the License Agreement executed September 12, 2001,
among Investor, Phillips, the Company, SDIF and SDIBC.

"Lien"means a restriction on the use or transferability of property and any
claim or charge on any interest in property securing an obligation owed to, or
claimed by, a person other than the owner of the property, whether the claim or
charge exists by reason of statute, contract, or common law, and includes a
construction lien, a lease, bailment, or consignment for security purposes, and
a lien or security interest arising from a pledge, mortgage, indenture,
encumbrance, hypothecation, trust receipt, deed of trust, conditional sale,
security agreement, or collateral assignment.

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"Losses" means all costs, losses, expenses, diminution in value, liabilities
(whether fixed or contingent, known or unknown, direct or indirect, asserted or
unasserted, accrued or unaccrued), and damages (whether punitive, incidental, or
consequential and including natural resource damages, amounts paid in settlement
and fines, interest, and penalties imposed or assessed by third parties).

"Managing Shareholders" means, collectively, Gunter Richtler and W. Barry
Girling, both officers, directors, and significant shareholders of the Company.

"Phillips" means Carey M. Phillips, a Florida resident and the General Partner
of Investor, and includes his successors in interest (by operation of law or
otherwise).

"Proceeding" means an audit, claim, action, demand, inquiry, lawsuit,
proceeding, or investigation by a third party or governmental authority (whether
formal or informal, pending, threatened, or completed, or civil, criminal, or
administrative), and includes asserted claims and assessments and trial,
appellate, mediation, arbitration, bankruptcy, and administrative proceedings of
every kind.

"Put Option" means the put option granted Investor pursuant to section 2.6 of
the Stock Purchase Agreement.

"SailTech Shares" means the 7,500,000 shares of Common Stock to be redeemed by
the Company pursuant to this Agreement.

"Stock Purchase Agreement" means the Stock Purchase Agreement executed on August
31, 2001, by Investor, Phillips, the Company, the Subsidiaries, and the
Shareholders.

"Subsidiaries" means SailTech Design, Inc., a Florida corporation, and SailTech
Design, Inc., a British Columbia corporation, each a party to this Agreement and
a direct or indirect wholly owned subsidiary of the Company, and includes their
respective successors in interest (by operation of law or otherwise).

"Surety" or "Sureties" have the meanings specified in section 12 of this
Agreement.

"Transactions" means the redemption of the SailTech Shares by the Company, the
release of certain liens held by Investor on the collateral of the Company and
SDIBC and the other transactions contemplated by this Agreement.

B.

Other Recurring Words. As used throughout this Agreement, (1) the words
"consent" and "approval" are synonymous, (2) the word "including" is always
without limitation, (3) neuter words should be construed to include correlative
feminine and masculine words, (4) words in the singular number include words in
the plural number and vice versa, and (5) the following uncapitalized words and
terms have the definitions attributed to them:

"affiliate" means, with respect to any specified person, (1) any person who
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with the specified person pursuant to
that or another person's direct or indirect possession of the power to direct or
cause the direction of the management and policies of a person, whether by
contract,

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through trust powers, the ownership of voting stock, a membership interest or a
partnership interest, or otherwise, (2) any person who, directly or indirectly,
possesses the sole or shared power to direct the voting or disposition of 10% or
more of any class of equity interests or securities of the specified person, (3)
any officer, director, trustee, manager or general partner of the specified
person, (4) any person of which the specified person is an officer, director,
trustee, manager, general partner or holder, directly or indirectly, of the sole
or shared power to direct the voting or disposition of 10% or more of any class
of equity interests or securities of that person, (5) any spouse of the
specified person, any relative of the specified person or the specified person's
spouse who resides in the home of the specified person and any child, parent, or
sibling of the specified person or the specified person's spouse (whether or not
the person resides in the home of the specified person), and (6) any trust
principally for the benefit of the specified person, any person described in the
preceding clause (5) or any combination of the persons described in this clause
(6).

"costs," when used in reference to Losses, a Proceeding, an Indemnified
Proceeding, or any contribution, indemnification, expense advancement or
reimbursement provided in this Agreement, includes the reasonable fees, costs,
and expenses of experts, attorneys, mediators, arbitrators, investigators,
collection agents, and supersedeas bonds that are incurred in connection with
settling, defending, prosecuting, administering, investigating, preparing to
defend or prosecute, or participating in (as a party, witness, or otherwise) any
Proceeding, including trial, appellate, mediation, arbitration, bankruptcy, and
administrative proceedings.

"days" means calendar days, including Sundays, Saturdays, and holidays.

"governmental authority" includes a government, a central bank, a public body or
authority, and any governmental body, agency, authority, department, or
subdivision, whether domestic or foreign or local, state, regional, or national.

"law" includes a local, state, or national code, rule, treaty, statute,
ordinance, or regulation and the common law arising from final, non-appealable
decisions of governmental authorities and state or federal courts in the United
States of America.

"order" includes an order, decree, ruling, judgment, or injunction.

"person" includes a group, trust, syndicate, corporation, cooperative,
association, partnership, business trust, joint venture, limited liability
company, unincorporated organization, and governmental authority, as well as a
natural person and two or more natural persons who agree to act in concert for
any particular purpose.

"subsidiary" means in reference to any particular party, a corporation with
respect to which the party either (1) is required to consolidate the reporting
of its financial information in accordance with generally accepted accounting
principles, or (2) is a beneficial owner of either at least 20% of any class of
the corporation's securities or securities of the corporation representing at
least 20% of the voting power of all the corporation's outstanding securities
that are entitled to vote in the election of its directors.

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C

. Rights of Third Parties. Nothing in this Agreement, whether express or
implied, is intended or should be construed to confer or grant to any person,
except the parties to this Agreement and their authorized assignees and
successors in interest (by operation of law or otherwise), any claim, right,
remedy, or privilege under, or because of this Agreement or any provision of it.
This Agreement inures to the benefit of, and is binding on, the assignees and
successors in interest of the parties to it.

D.

Execution and Effectiveness. The parties may execute this Agreement in
counterparts. Each executed counterpart of this Agreement will constitute an
original document, and all executed counterparts, together, will constitute the
same agreement. This Agreement will be effective as of the Closing Date when the
payments required under sections 4 and 9 are received by Investor.

E. Direct or Indirect Action.

When any provision of this Agreement requires or prohibits a person from taking
a particular action, the provision applies regardless of whether the action is
taken directly or indirectly by the person.

F.

Headings; References. The headings preceding the text of the articles and
sections of this Agreement are solely for convenient reference and neither
constitutes a part of this Agreement nor affects its meaning, interpretation, or
effect. Unless otherwise expressly stated, all references in this Agreement to
an article, section, or exhibit are to an article, section, or exhibit of this
Agreement.

G.

Severability. Whenever possible, each provision of this Agreement should be
construed and interpreted so that it is valid and enforceable under applicable
law. If a provision of this Agreement is held by a court to be invalid or
unenforceable under applicable law, however, that provision will be deemed
separable from the remaining provisions of this Agreement and will not affect
the validity or interpretation of the other provisions of this Agreement or the
application of that provision to other circumstances in which it is valid and
enforceable.

H.

Governing Laws. The validity, construction, enforcement, and interpretation of
this Agreement are governed by the laws of the State of Florida and the federal
laws of the United States of America, excluding the laws of those jurisdictions
pertaining to resolution of conflicts with laws of other jurisdictions.

I. Survival.

The representations, warranties, and obligations of the parties under this
Agreement will survive the closing of the Transactions but not the rescission or
termination of this Agreement.

2.

Closing.

The closing of the Transactions will take place at the law offices of Glenn
Rasmussen Fogarty & Hooker, P.A., 100 South Ashley Drive, Suite 1300, Tampa,
Florida 33602, at 10:00 o'clock a.m. Tampa, Florida time, on September 13, 2002,
(the "Closing Date").

3.

Redemption of Shares.

On the Closing Date, the Company shall redeem all the SailTech Shares that have
been presented to the Company by Investor pursuant to the Investor's exercise of
the Put Option. Investor further agrees that it releases its security interest
in the collateral of the Company and SDIBC, but not SDIF, under the Security
Agreement.

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4. Payment by the Company

.

The Company will pay to Investor, by certified check, $25,000 at the Closing in
full satisfaction of its obligation to Investor resulting from the exercise by
Investor of the Put Option and the release by Investor of his security interest
in the tangible and intangible assets of the Company and SDIBC, but not SDIF.

5. Representations and Warranties of Investor

Investor represents and warrants to the Company that (a) it was the sole record
and beneficial owner of the SailTech Shares before it exercised the Put Option;
and (b) Investor represents and warrants to the other parties that it has the
sole right and exclusive authority to execute this Agreement on its behalf.

6. Representations and Warranties of Company, Subsidiaries, and Managing
Shareholders

.

Each of the Company, the Subsidiaries, and the Managing Shareholders represents
and warrants to Investor that:

(a)   Execution, delivery, and performance of this Agreement by the Company, the
Subsidiaries, and the Managing Shareholders, including especially the Company's
redemption of the SailTech Shares, have been duly authorized by all requisite
corporate action, and no other action on the part of the Company, the
Subsidiaries, or the Managing Shareholders is necessary to consummate the
Transactions;

(b)  The execution, delivery, and performance of this Agreement by the Company
and the Subsidiaries will not violate any law, conflict with their respective
bylaws or articles of incorporation, require any notice to, filing or
registration with, or consent, license, approval, or authorization of, any
governmental authority, the shareholders of the Company, or any other person;

7.

Conditions Precedent of Company, Subsidiaries, and Managing Shareholders.

The obligations of the Company, the Subsidiaries, Managing Shareholders under
this Agreement are subject to the following conditions precedent, each of which
must be satisfied on or before the Closing Date, unless waived in writing by the
Company:

(a)   The representations and warranties made by Investor in this Agreement must
be true on the Closing Date, as if made on that date; and

(b)   Investor must have performed each obligation required by this Agreement to
be performed by it on or before the Closing Date.

8.

Conditions Precedent of Investor.

The Investor's obligations under this Agreement are subject to the following
conditions precedent, each of which must be satisfied on or before the Closing
Date, unless waived in writing by the Investor:

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(a)   The representations and warranties made by the Company, the Subsidiaries,
and the Managing Shareholders, in this Agreement must be true on the Closing
Date, as if made on that date; and

(b)   The Company, the Subsidiaries, and the Managing Shareholders must have
performed each obligation required by this Agreement to be performed by each of
them on or before the Closing Date.

(c)   The Shareholder Agreement entered into on September 12, 2001 among the
Company and certain shareholders of the Company is terminated.

9. Transaction Expenses

.

Each party shall pay its own expenses (including attorneys' fees and expenses)
in connection with the transactions contemplated by this Agreement and shall
indemnify the other parties against those expenses, except that the Company
shall reimburse Investor at the Closing the amount of $6,000 to cover certain of
its legal expenses in connection with the preparation of this Agreement and
related matters. Notwithstanding the foregoing, the Company agrees to pay to
Investor and Phillips, as incurred, any legal fees and expenses that each of
them incurs in connection with any claim or proceeding regarding the
enforceability of this Agreement.

10.

Release by Company, Subsidiaries, and Managing Shareholder.

Except for new obligations that arise as a result of the execution of this
Agreement, the Company, the Subsidiaries, and the Managing Shareholders for and
on behalf of themselves, their heirs, estates, agents, assigns, insurers,
officers, directors, affiliates, principals, shareholders, representatives,
subsidiaries, parent corporations, successors in interest, and predecessors in
interest, fully and forever acquit, release, and discharge each of the Investor
and Phillips and each of their present and former heirs, estates, agents,
assigns, officers, directors, insurers, affiliates, principals, representatives,
shareholders, subsidiaries, parent corporations, successors in interest, and
predecessors in interest, of and from any and all claims, demands, damages,
liabilities, obligations, indebtedness, lawsuits, and causes of action, whether
in equity or under statutory or common law, whether known, unknown, choate,
inchoate, alleged, disputed, direct, indirect, or contingent, that the Company,
the Subsidiaries, the Managing Shareholders , individually, collectively, or
derivatively, in their personal or representative capacities, had, now has, or
might have at any time in the future against any of the foregoing persons
arising out of any act, fact, event, conduct, omission, inaction, condition,
circumstance, or agreement that occurred at any time on or before the Execution
Date, including without limitation any act, omission, inaction, or decision by
Phillips as an officer and director of the Company and the Subsidiaries.
Notwithstanding the foregoing, this release will not apply to Phillips if a
court of competent jurisdiction determines that he has breached his duty of
loyalty to the Company. The Company, the Subsidiaries, and the Managing
Shareholders acknowledge that the release set forth in this section is a general
release, and they expressly waive and assume the risk of any and all claims for
damages that exist as of the Execution Date and fall within the scope of the
release, but which the Company, the Subsidiaries, or the Managing Shareholders,
as applicable, do not know or suspect to exist, whether through error, omission,
ignorance, oversight, negligence, concealment, or otherwise, but, if known,
would materially affect any of their decisions to enter into this Agreement.

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11.

Release by Investor.

Investor acknowledges that the redemption of the SailTech Shares pursuant to the
provision of this Agreement is in full satisfaction of, and is intended to
remedy the default by the Company in the amount of $5,625,000 pursuant to its
exercise of the Put Option. The foregoing settlement and compromise is subject
to the Transactions and the provisions of this Agreement not being successfully
challenged by any shareholder of the Company or the Subsidiaries or any other
person. If the releases set forth in section 10 are successfully challenged, the
release in this section 11 will immediately become null and void, and the
obligation of the Company to pay to Investor the amount of $5,625,000, less the
amount of the $25,000 payment under this Agreement, that is cancelled as
described in section, 3 and 4 will be reinstated with interest payable on demand
at the annual rate of ten percent from the Execution Date until that
indebtedness has been paid in full. In addition, the Warrant Certificate that is
cancelled as described in section 15 and the License Agreement that is cancelled
as described in section 18 will be reinstated.

12.

Indemnification.

A

. Indemnification of Investor. The Company, each of the Subsidiaries, and each
of the Managing Shareholders (together, the "Sureties" and individually, a
"Surety") jointly and severally shall defend, indemnify, and hold harmless
Investor, Phillips, and their respective heirs, partners, assignees, and
successors in interest by operation of law or otherwise (individually, a
"Beneficiary") from any and all Losses that are paid, incurred, or suffered by
any of them primarily as a result of any of the following (individually, an
"Indemnified Loss" and collectively, "Indemnified Losses"):

(1)   A breach of any warranty made by the Company, the Subsidiaries, or any of
the Managing Shareholders in section 6 of this Agreement;

(2)   A failure of the Company, a Subsidiary, or any of the Managing
Shareholders, to pay or perform any of their respective obligations under this
Agreement when due;

(3)   An inaccuracy in any representation or warranty made by the Company, a
Subsidiary, or any of the Managing Shareholders, in section 6 of this Agreement
or in any list, exhibit, schedule, certificate, or other document delivered to
Investor or Phillips in connection with this Agreement;

(4)   An omission of a material fact in any representation or warranty made by
the Company, a Subsidiary, or any of the Managing Shareholders in this Agreement
or in any list, exhibit, schedule, certificate, or other document delivered to
Investor or Phillips in connection with this Agreement, which material fact is
necessary to make the statements made in the representation or warranty not
misleading, in light of the circumstance under which they were made;

(5)   Any liability, obligation, or indebtedness of the Company, any predecessor
of the Company or SDIBC, and any liability, obligation, or indebtedness of SDIF
that existed as of September 12, 2001, or arose after that date from the conduct
on or before September 12, 2001, of the business of SDIF or any business of a
predecessor of SDIF;

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(6)   Any removal, remedial response, or corrective action pursuant to any
environmental law, or in connection with the clean up, removal, assessment,
investigation, containment, remediation, restoration, or monitoring of any
noise, odor, pollution or contamination of the air, soil, surface water, ground
water, or other elements of the environment, that relates to, arises out of, or
is attributable to any acts, events, omissions, and conditions existing or
occurring on or before September 12, 2001, with respect to the Company, any of
the Subsidiaries, any property now or previously owned by any of them, or any
business operations of the Company, the Subsidiaries, or any of the predecessors
of the Company or a Subsidiary; and

(7)   Any Proceeding that constitutes or might result in a loss, is incident to
any of the foregoing, or that relates to, or arises in any manner out of, the
conduct on or before September 12, 2001, of the business of the Company, any
Subsidiary, or any predecessor of the Company or a Subsidiary, including the
following:

(a)   any claim or litigation by a past or present employee or stockholder of
the Company, a Subsidiary, any of their respective affiliates, or any
predecessor of the Company or a Subsidiary based on the execution and
performance of this Agreement;

(b)   any product liability or warranty claim attributable to any product or
component of a product that was processed or manufactured by the Company, SDIF,
SDIBC, or any predecessor of the Company, SDIF or SDIBC;

(c)   any product liability or warranty claim attributable to any product or
component of a product that was processed or manufactured on or before September
12, 2001, whether sold on, before, or after September 12, 2001; and

(d)   any claim by a finder, broker, financial advisor, investment banker, or
other intermediary for a fee, commission, or other remuneration with respect to
this Agreement or the Transactions based on services allegedly performed for or
at the behest of the Company, any Subsidiary, or any Managing Shareholder.

B. Reimbursement. The Sureties shall promptly reimburse a Beneficiary on demand
for any and all costs (as defined in section 1.B of this Agreement) that are
incurred by the Beneficiary in connection with investigating, preparing to
defend, settling, or defending any Proceeding that is subject to indemnification
under this section 12, whether or not a Beneficiary is a party or potential
party to it.

C.

Contribution. If the indemnification or advancement and reimbursement of costs
provided in this Agreement is either unavailable to any Beneficiary for any
reason or insufficient to hold a Beneficiary harmless to the extent contemplated
by this Agreement, then each Surety otherwise obligated to provide the
indemnification or reimbursement of costs shall contribute to the Beneficiary
pro rata the amount paid or payable by the Beneficiary for which indemnification
reimbursement of costs is unavailable or insufficient.

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If the foregoing contribution is not permitted by applicable law, the Sureties
shall contribute to the amount paid or payable by the Beneficiary for which
indemnification or reimbursement of expenses is unavailable or insufficient an
amount that is appropriate to reflect their relative fault in the event, matter,
proposal, or transaction for which indemnification and reimbursement of expenses
is unavailable or insufficient.

D.

Payment of Indemnification Claims. The Sureties shall pay every indemnification
claim, without any set-off, defense, deduction, or counterclaim, within 20 days
after their receipt of written notice of the indemnification claim from a
Beneficiary, unless the validity or amount of the indemnification claim is
disputed by the Surety or the indemnification claim pertains to a Proceeding
that is subject to a defense, in which case the Surety shall pay the
indemnification claim within 30 days after the amount or validity of the
indemnification claim is finally determined. However, the preceding sentence
does not affect the Sureties' obligation to advance or promptly reimburse a
Beneficiary for costs incurred by the Beneficiary in connection with the defense
of any Proceeding. If a Beneficiary is entitled to indemnification under this
Agreement for only a portion of a loss, the Sureties shall indemnify the
Beneficiary for that portion of the Indemnified Loss. If a Beneficiary pays an
Indemnified Loss with the approval of a Surety, or if a Beneficiary becomes
legally obligated to pay an Indemnified Loss, the Sureties shall reimburse the
Beneficiary for the Indemnified Loss, or pay it on behalf of the Beneficiary, in
accordance with this Agreement within 20 days after the date when the
Beneficiary notifies the Sureties of its request for payment or reimbursement of
the Indemnified Loss. The obligations of the Sureties under this Agreement are
absolute, irrevocable, and unconditional, are not subject to any set-off,
defense, deduction, or counterclaim based on a claim that any Surety might have
against any Beneficiary and are not limited or affected in any way by any other
agreement, any right of audit or investigation granted to Investor or Phillips
by the Company, the Subsidiaries, or the Managing Shareholders, or any
information obtained by Investor or Phillips or available to it or him as a
result of exercising any right of audit or investigation, whether before or
after the Execution Date. Every amount paid to a Beneficiary by or on behalf of
a Surety pursuant to an indemnification claim will be treated by the parties to
this Agreement as an adjustment of the purchase price for the SailTech Shares.
The Sureties jointly and severally shall pay to a Beneficiary, on demand,
interest on the amount of any Indemnified Loss that is not paid when due, from
the date when due until paid, at the annual rate then provided by Florida law
for the payment of interest on judgments.

E.

Defense of Third-Party Claims. A Surety is entitled to employ at its own cost
and expense separate counsel and participate at its own cost and expense in the
defense of any Proceeding for which a Beneficiary has requested or is entitled
to indemnification or reimbursement of reasonable costs pursuant to this
Agreement, or, at the request of that Beneficiary, shall assume the defense of
the Proceeding with legal counsel selected by the Surety, but reasonably
satisfactory to that Beneficiary.

If a Surety assumes the defense of any Proceeding, the Sureties jointly and
severally shall reimburse the Beneficiaries for all costs incurred by them in
connection with the Proceeding before the Sureties assumed control of the
defense of it, and the Beneficiaries may elect to participate in the defense of
the Proceeding at their own cost with legal counsel selected by them in their
sole discretion. However, any party who elects to participate at its own cost in
the defense of any Proceeding for which a Beneficiary has requested, or intends
to request, indemnification or the advancement and reimbursement of costs under
this Agreement shall cooperate, and shall cause its legal counsel to cooperate,
in defending the Proceeding with the party who is responsible for controlling
the defense of the Proceeding and its legal counsel.

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Even if the Sureties assume the defense of a Proceeding, a Beneficiary will be
entitled to jointly control the defense, compromise, and settlement of the
Proceeding at the expense of the Sureties, if any of the following conditions or
circumstances exist: (i) the Sureties have agreed to pay the fees and expenses
of the Beneficiary's separate counsel; (ii) a court having jurisdiction rules
that the Sureties have failed or are failing to defend the Proceeding, in which
case the Beneficiary will be entitled to assume control of the defense of the
Proceeding and the Sureties shall pay the reasonable fees and expenses of the
separate counsel employed by the Beneficiary for that purpose; or (iii) a
Beneficiary reasonably determines based on the advice of outside counsel that
having common counsel with the Sureties would present an actual conflict of
interest under applicable principles of legal ethics, in which case the
Beneficiary may employ separate counsel to represent or defend it in the
Proceeding, and the Sureties shall pay the reasonable fees and expenses of not
more than one separate counsel in addition to local counsel for the Beneficiary
in connection with any single Proceeding or separate but related or similar
Proceeding involving claims arising out of the same general allegations or
circumstances.

If a Beneficiary employs separate counsel and participates in a Proceeding for
which the Surety has assumed the defense, the Beneficiary shall cooperate and
shall cause its legal counsel to cooperate, with the Surety and its legal
counsel in the defense of the Proceeding assumed by the Surety. If the Surety
does not assume the defense of a Proceeding for which a Beneficiary has
requested indemnification, or if the Surety is otherwise obligated to pay the
fees and costs of any separate counsel employed by a Beneficiary to defend or
represent it in a Proceeding, each Beneficiary who is entitled to employ
separate counsel to defend or represent it in the Proceeding at the expense of
the Surety shall obtain the Surety's advance written approval of the legal
counsel to be engaged by the Beneficiary to defend or represent it in the
Proceeding (which the Surety shall not unreasonably delay or withhold).

F.

Settlement of Claims. The Sureties shall not, and they shall not permit any of
their respective agents, officers, directors, employees, or shareholders to,
settle, compromise, or admit civil liability in any pending or threatened
Proceeding for which a Beneficiary has requested or is entitled to
indemnification under this Agreement, unless either (a) the Sureties obtain the
advance written consent of every Beneficiary who requested or is entitled to
indemnification or advancement and reimbursement of costs pursuant to this
Agreement (which consent they shall not unreasonably delay or withhold) or (b)
the settlement, compromise, or admission of civil liability includes the
unconditional release of all the Beneficiaries from all liability arising out of
the Proceeding.

13. Termination.

Notwithstanding anything contained in this Agreement to the contrary, this
Agreement may be terminated, and the Transactions abandoned by all the parties
to this Agreement, at any time on or before the Closing Date, whether or not
this Agreement is approved by any lender, third party, or the directors or
shareholders of the Company or any Subsidiary:

(a)   By a written agreement of Investor and the Company;

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(b)   By Investor, if any representation or warranty of the Company, the
Subsidiaries, or the Managing Shareholders in this Agreement is inaccurate in
any material respect as of the Execution Date or as of the Closing Date, or if
the Company, either of the Subsidiaries, or any of the Managing Shareholders
breach in any material respect any obligation that is required by this Agreement
to be performed or satisfied by any of them on or before the effective date of
the termination and the breach is not cured within ten days after Investor gives
them written notice of the breach;

(c)   By Investor, if any event or circumstance exists or has occurred that
makes it impossible to satisfy on the Closing Date any condition precedent to
its obligation to close the Transactions that is set forth in section 8 and has
not been waived in writing by it, or if any condition precedent to its
obligation to close the Transactions that is set forth in section 8 has not been
satisfied or waived by it on or before the Closing Date, but only in each case
if Investor has not otherwise breached in any material respect any of its
warranties, obligations, or representations under this Agreement and the
inability or failure to satisfy the condition precedent is not attributable to
the action or inaction of Investor;

(d)   By the Company, if any representation or warranty of Investor in this
Agreement is inaccurate in any material respect as of the Execution Date or as
of the Closing Date, or if Investor breaches in any material respect any
obligation that is required by this Agreement to be performed or satisfied by it
on or before the effective date of the termination and the breach is not cured
within ten days after the Company gives Investor notice of the breach;

(e)   By the Company, if any event or circumstance exists or has occurred that
makes it impossible to satisfy on the Closing Date any condition precedent to
its obligation to close the Transactions that is set forth in section 7 and has
not been waived by it, or if any condition precedent to its obligation to close
the Transactions that is set forth in section 7 has not been satisfied or waived
by it on or before the Closing Date, but only in each case if none of the
Company, the Subsidiaries, or the Managing Shareholders has not otherwise
breached in any material respect any of its respective warranties, obligations,
or representations under this Agreement and the inability or failure to satisfy
the condition precedent is not attributable to the action or inaction of the
Company, a Subsidiary, or any of the Managing Shareholders;

Termination of this Agreement by any party pursuant to clauses (b) through (e)
above will be valid only if a notice of termination signed by or on behalf of
the party electing the termination is provided to all the other parties to this
Agreement. Termination of this Agreement in accordance with clause (a) above
will be effective as of the date specified in the parties' written agreement of
termination. Termination of this Agreement pursuant to any other clause above
will be effective when the notice of termination is given to the other parties
to this Agreement by the party electing the termination.

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14. Effect of Termination by Company.

If this Agreement is terminated by the Company for any reason, Investor shall
have the unconditional right to acquire from the Company within 60 days of the
date of termination, 7,500,000 shares of common stock of the Company at the
price of $.001 per share (the "Breakup Shares"). The Breakup Shares shall have
full anti-dilution and registration rights, consistent with the rights granted
to Investor under the Stock Purchase Agreement and the exhibits thereunder. This
remedy is in addition to any other remedy to which Investor is entitled under
this Agreement, in law or in equity as a result of termination of this
Agreement.

15. Cancellation of Warrant.

Effective as of the Closing, the Warrant Certificate issued by the Company to
Investor as of September 12, 2001, will be of no further force and effect.

16. Cancellation of Option.

Effective as of the Closing, the Stock Option Agreement issued by the Company to
Investor as of September 12, 2001, will be of no further force and effect.

17. Cancellation of Security Agreement.

Effective as of the Closing, the Security Agreement executed on September 12,
2001 by Investor, Phillips, the Company, SDIF and SDIBC will be of no further
force and effect solely with respect to the Company and SDIBC, but not with
respect to SDIF.

18. Cancellation of License Agreement

.

Effective as of the Closing, the License Agreement executed on September 12,
2001 by Investor, the Company, SDIF and SDIBC will be of no further force and
effect.

19.

Voluntary Acceptance of Agreement.

In entering into this Agreement, the parties acknowledge and represent that they
have had the opportunity to seek the advice of attorneys of their own choosing
if so desired and, to the extent that any party did not seek legal advice, it
did so knowingly and voluntarily. The parties acknowledge and represent that the
terms of this Agreement are fully understood and voluntarily accepted by them.

20.

Binding Effect.

This Agreement shall inure to the benefit of, and be binding on, the parties and
their respective heirs, agents, assigns, attorneys, representatives,
predecessors in interest, and successors in interest.

21.

Attorneys' Fees and Costs to Enforce Agreement.

In any mediation, arbitration, or litigation arising out of this Agreement or
the Transactions, the losing party or parties shall reimburse the prevailing
party or parties, on demand for all costs (as defined in section 1.B) incurred
by them in connection with mediation, arbitration, or litigation.

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22.

Authorship.

Each of the parties has jointly participated in the negotiation and drafting of
this Agreement. If an ambiguity or question of intent or interpretation arises,
this Agreement will be construed as if drafted jointly by the parties to it, and
no presumptions or burdens of proof will arise favoring any party by virtue of
the authorship of any of the provisions of this Agreement.

23.

Agreement to Cooperate.

The parties shall cooperate with each other, including providing or signing
necessary consents, representations, or documents to carry out the intent and
purpose of this Agreement and to consummate the Transactions.

24.

Integration.

This Agreement records the entire understanding among the parties with respect
to the subject matter of it and supersedes any other previous or contemporaneous
agreement, understanding, or representation, oral or written, by any of the
parties.

25.

Waiver and Amendment.

An amendment, modification, or termination of this Agreement will be valid and
effective only if it is in writing and signed by or on behalf of each party to
this Agreement. In addition, a waiver of any provision of this Agreement will be
valid and effective only if it is signed by the party against whom it will be
enforced; and a written waiver of any provision of this Agreement will not
operate as a waiver of any other provision, a waiver of a succeeding application
of the provision, or a waiver of the provision itself.

26. Assignment.

This Agreement is not assignable by any party without the advance signed written
consent of every other party, which it may refuse in its sole discretion, and
any attempted assignment without the advance signed written consent of the
parties will be invalid and unenforceable against a non-consenting party.

27. Public Announcements.

Investor, the Company, the Subsidiaries, and the Managing Shareholders shall not
make any public statement or announcement concerning this Agreement or the
Transactions without the advance written consent of each other party to this
Agreement, except as required by law.

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"COMPANY"

 

SAILTECH INTERNATIONAL, INC.

2964 63rd Avenue East
Bradenton, Florida 34203
Telecopy: (941) 752-3275

ATTEST:

By: /s/ Gunter Richtler (SEAL)
Gunter Richtler
President

______________________________
Secretary

 

Executed:

August ____, 2002

STATE OF FLORIDA
COUNTY OF MANATEE

The foregoing Agreement was acknowledged before me on August 27, 2002 by Gunter
Richtler, as President of SailTech International, Inc., a Nevada corporation, on
behalf of the corporation. He produced a Florida drivers' license as
identification.

 

/s/ Barbra H. Muffman
Notary Public, State of Florida
Notarial Stamp: [SEAL]

 

"SUBSIDIARIES"

 

SAILTECH DESIGN, INC.

,
a Florida corporation
2964 63rd Avenue East
Bradenton, Florida 34203
Telecopy: (941) 752-3275

ATTEST:

By: Gunter Richlter (SEAL)
Name: Gunter Richtler
Title: President

______________________________
Secretary

 

Executed:

August ____, 2002

STATE OF FLORIDA
COUNTY OF MANATEE

The foregoing Agreement was acknowledged before me on August ___, 2002 by
________________, as _____________ of SailTech Design, Inc., a Florida
corporation, on behalf of the corporation. He produced a Florida drivers'
license as identification.

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____________________________________
Notary Public, State of Florida
Notarial Stamp:

 

SAILTECH DESIGN, INC.

,
a British Columbia corporation
1040-609 Granville Street
Vancouver, B.C.
V7Y 1G5 CANADA

ATTEST:

By: /s/ Gunter Richtler(SEAL)
Name: Gunter Richtler
Title: President

______________________________
Secretary

 

Executed:

August ____, 2002

PROVINCE OF BRITISH COLUMBIA
CITY OF VANCOUVER

The foregoing Agreement was acknowledged before me on August ___, 2002 by
________________, as _____________ of SailTech Design, Inc., a British Columbia
corporation, on behalf of the corporation. He produced a Florida drivers'
license as identification.

 

____________________________________
Name:______________________________
Notary Public, State of _________________
Notarial Seal or Stamp:

 

"MANAGING SHAREHOLDERS"

WITNESSES:

/s/ Kimberly L. Smeltzer
Name: Kimberly L. Smeltzer

/s/ Gunter Richtler
GUNTER RICHTLER
#209-230 Ash St.
New Westminster, BC
V3M 3M3 CANADA

 

Telecopy: [941] 704-2691

/s/ Lissette Rein

Executed:

August ____, 2002

Name: Lissette Rein

STATE OF [FLORIDA]
COUNTY OF _________________

The foregoing Agreement was acknowledged before me on August ___, 2002 by Gunter
Richtler. He produced a _______________ drivers' license as identification.

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____________________________________
Name:______________________________
Notary Public, State of _________________
Notarial Seal or Stamp:

WITNESSES:

______________________________
Name: ________________________

/s/ Barry Girling
W. BARRY GIRLING
200-580 Hornby St.
Vancouver BC
V6C 3B6 CANADA

 

Telecopy: [__________]

______________________________

Name: ________________________

Executed:

August 27, 2002

PROVINCE OF BRITISH COLUMBIA
CITY OF VANCOUVER

The foregoing Agreement was acknowledged before me on August 27, 2002 by
W. Barry Girling. He produced a BCDL3013907 drivers' license as identification.

 

/s/ Graham Carrothers
Name:_Graham Carrothers
Notary Public, State of _________________
Notarial Seal or Stamp: [SEAL]

 

"INVESTOR"

PHILLIPS FAMILY LIMITED PARTNERSHIP
c/o Darrell A. Jesse
600 Stevens Port Drive, Suite 105
Dakota Dunes, SD 57049
Telecopy: (605) 232-8931

WITNESSES:

By:

/s/ Carey M. Phillips
Carey M. Phillips
General Partner

/s/ Sharon K. Phillips
Name: Sharon K. Phillips

 

Executed: August 29, 2002

______________________________

Name: ________________________

 

 

STATE OF FLORIDA
COUNTY OF MANATEE

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The foregoing Agreement was acknowledged before me on August ___, 2002 by Carey
M. Phillips, as General Partner of Phillips Family Limited Partnership, on
behalf of the partnership. He produced a Florida drivers' license as
identification.

 

____________________________________
Notary Public, State of Florida
Notarial Stamp:

WITNESSES:

By:

/s/ Carey M. Phillips
Carey M. Phillips

/s/ Sharon K. Phillips
Name: Sharon K. Phillips

Executed: August 29, 2002

______________________________
Name: ________________________

 

STATE OF FLORIDA
COUNTY OF MANATEE

The foregoing Agreement was acknowledged before me on July ___, 2002 by Carey M.
Phillips, a Florida resident, on behalf of the partnership. He produced a
Florida drivers' license as identification.

 

_______________________________
Notary Public, State of Florida
Notarial Stamp: