Exhibit 10.1


                             SLS International, Inc.
                                3119 South Scenic
                              Springfield, MO 65807



July 17, 2002

Alfred V. Greco PLLC
666 Fifth Avenue
New York, NY  10103
Attn: Alfred V. Greco

         Re:      Alfred V. Greco v. SLS International, Inc.
                  (Settlement Agreement)

Gentlemen,

This letter memorializes the terms and concept agreed on for the settlement of
the captioned action between Alfred V. Greco PLLC ("Greco") and SLS
International, Inc. (the "Company").

         1.       The Company and Greco agree to settle the captioned action for
                  $40,000, in the form of a credit account with the Company in
                  favor of Greco. The Company shall not be required to pay all
                  or any portion of such amount to Greco, but Greco shall only
                  be permitted to use the amount of such credit account in
                  payment of the exercise price of Company stock options issued
                  to Greco for future services performed by Greco. In a separate
                  agreement, Greco and the Company have agreed upon the services
                  to be rendered by Greco, and the terms of the options to be
                  granted for such services, with an aggregate exercise price
                  equal to $40,000.

         2.       In consideration for the Company's agreement to settle the
                  claim for $40,000 as set forth herein, and as a condition to
                  the Company's agreements contained herein, (a) simultaneously
                  herewith, Greco and AVG shall sign the General Release in the
                  form attached hereto as Exhibit A; and (b) Greco and AVG shall
                  sign the Stipulation in the form attached hereto as Exhibit B,
                  to be held in escrow by Greco's and AVG's attorney, Milton
                  Teicher ("Teicher"). Teicher shall deliver the General Release
                  to the Company, and Teicher shall file the Stipulation with
                  the Supreme Court of the State of New York, County of New
                  York, promptly following the parties' agreement on the
                  services to be performed pursuant to item 1 above, Greco's
                  performance of such services, and the Company's delivery of
                  the options as compensation for such services in accordance
                  with item 1 above.

                         [Signatures on following page.]


<PAGE>



                                            Very truly yours,
                                            SLS International,
                                            Inc.:

                                            By
                                              ----------------------------
                                                     John Gott, President

Accepted and Agreed:

Alfred V. Greco PLLC


By
  ----------------------------------
         Alfred V. Greco, Principal




-----------------------                              -----------------------
Alfred V. Greco                                      Milton Teicher