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                                                                    EXHIBIT 10.2

                           INDEMNIFICATION AGREEMENT

     THIS INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered into 
as of September 11, 1998, by and between Sunterra Corporation, a Maryland 
corporation (the "Company"), and L. Steven Miller ("Miller").

                                    RECITALS

     A.   Miller has served heretofore as Chief Executive Officer of Resort 
Condominiums International, LLC ("RCI"), and is a party to a Management 
Confidentiality, Non-Competition and Consultancy Agreement with RCI dated 
January 21, 1991 (the "RCI Consulting Agreement").

     B.   The Company seeks to employ Miller as Chief Executive Officer and 
President of the Company, and in connection therewith Miller has been advised 
by RCI that RCI intends to enforce its rights under the RCI Consulting 
Agreement.

     C.   As an inducement to Miller to accept the Company's offer of 
employment, the Company has offered to indemnify Miller to the extent and 
subject to the conditions set forth in this Agreement.

     NOW THEREFORE, in consideration of the premises and the covenants in this 
Agreement, and intending to be legally bound, the Company and Miller do hereby 
covenant and agree as follows.

     Section 1. Indemnification. Company shall indemnify Miller and hold Miller 
harmless to the fullest extent permitted by applicable law in effect on the 
date hereof or as such laws may from time to time be amended (but, in the case 
of any such amendment and subject to applicable law, only to the extent that 
such amendment permits the Company to provide broader indemnification rights 
than the Company was permitted to provide prior to the amendment) with respect 
to any and all claims relating to or arising from the RCI Consulting Agreement 
("Covered Claims"). The indemnification provided herein shall include all 
Expenses and Liabilities actually and reasonably incurred by Miller or on his 
behalf in connection with the investigation, defense, settlement or appeal of a 
Proceeding.

     Section 2. Advancement of Expenses and Costs. To the fullest extent 
permitted by applicable law, all reasonable Expenses incurred by or on behalf 
of Miller in connection with any Covered Claim shall be advanced by the Company 
to Miller within 20 days after the receipt by the Company of a written request 
for an advance or advances of Expenses from time to time, whether prior to or 
after final disposition of a Proceeding (unless there has been a final 
determination that Miller is not entitled to be indemnified for such Expenses), 
including without limitation any Proceeding brought by or in the right of the 
Company. Miller's entitlement to
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advancement of Expenses shall include those incurred in connection with any 
Proceeding by Miller seeking an adjudication or award in arbitration pursuant 
to this Agreement. The requests shall reasonably evidence the Expenses incurred 
by Miller in connection therewith. If required by law at the time of such 
advance, Miller hereby undertakes to repay the amounts advanced if it is 
ultimately determined that Miller is not entitled to be indemnified pursuant to 
the terms of this Agreement.

     Section 3. Defense of Claims.

     (a)  After receipt by Miller of notice of the assertion or commencement of
any claim against Miller that Miller believes to be a Covered Claim, Miller
shall give the Company reasonably prompt notice thereof, but in any event no
later than 10 days after the receipt of that notice; provided, that the failure
to give the notice within the time specified shall not relieve the Company of
any obligation hereunder except to the extent that the Company is prejudiced
thereby. The notice shall describe the claim in reasonable detail and be
accompanied by copies of any documents delivered to Miller in connection with
the claim. The Company shall have 10 days following the delivery of the notice
to notify Miller (i) whether the Company disputes Miller's right of
indemnification with respect to the claim, and (ii) if the Company does not
dispute such right of indemnification, whether or not it desires to defend
Miller against that claim.

     (b)  If the Company notifies Miller that (i) the Company does not dispute 
Miller's right of indemnification and (ii) the Company desires to defend 
against the claim, then the Company shall have the right to assume and control 
the defense of the claim by appropriate proceedings with counsel reasonably 
acceptable to Miller at the Company's sole cost and expense. Miller may 
participate in, but not control, any such defense at his sole cost and expense.

     (c)  If the Company (i) disputes Miller's right of indemnification with 
respect to a claim, (ii) does not dispute such right but fails to promptly 
assume and prosecute the defense of the claim, or (iii) does not dispute such 
right but, in the sole reasonable judgment of Miller, a conflict or potential 
conflict exists between the Company and Miller, then Miller shall be entitled 
to assume and control the defense of the claim with counsel reasonably 
acceptable to the Company. If the Company does not assume the defense of the 
claim for any reason, it may still participate in, but not control, the defense 
of the claim at its sole cost and expense.

     (d)  Miller and the Company shall render to each other such assistance and 
access to records as the other may reasonably request in connection with the 
defense of any claim.

     (e)  Neither Miller nor the Company shall enter into any settlement of any 
Covered Claim without the prior written consent of the other party, which 
consent shall not be reasonably withheld.

     Section 4. Presumptions and Effect of Certain Proceedings. Miller shall be 
presumed to be entitled to indemnification and the other benefits under this 
Agreement and the Company shall

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have the burden of proof to overcome that presumption in reaching any contrary 
determination. The termination of any Proceeding by judgment, order, 
settlement, arbitration award or conviction, or upon a plea of nolo contendere 
or its equivalent, shall not of itself (a) adversely affect the rights of 
Miller to indemnification, or (b) create a presumption that Miller did not meet 
any standard of conduct required by applicable law as a condition to 
indemnification.

        Section 5. Remedies of Miller in Cases of Determination Not to
Indemnify or to Advance Expenses

        (a)    in the event that (i) an initial determination is made that
Miller is not entitled to indemnification, (ii) advances are not made pursuant
to this Agreement, (iii) payment has not been timely made following a
determination of entitlement to indemnification pursuant to this Agreement or
(iv) Miller otherwise seeks enforcement of this Agreement, Miller shall be
entitled to a final adjudication in an appropriate court of the State of Florida
of his entitlement to such indemnification, advance or other rights under this
Agreement or otherwise. Alternatively, Miller may seek an award in arbitration
to be conducted by a single arbitrator pursuant to the commercial arbitration
rules of the American Arbitration Association now in effect, which award is to
be made within sixty (60) days following the filing of the demand for
arbitration. The Company shall not oppose Miller's right to seek any such
adjudication or arbitration award. In any such proceeding or arbitration Miller
shall be presumed to be entitled to indemnification under this Agreement and the
Company shall have the burden of proof to overcome that presumption.

        (b)    In the even an initial determination has been made, in whole or
in part, that Miller is not entitled to indemnification or other benefit
hereunder, the decision in the judicial proceeding or arbitration provided in
paragraph (a) of this Section shall be made de novo and Miller shall not be
prejudiced by reason of a determination that he is not entitled to
indemnification or other benefit hereunder.

        (c)    If an initial determination is made or deemed to have been made
pursuant to the terms of this Agreement that Miller is entitled to
indemnification or other benefit hereunder (unless, by its terms, that initial
determination is an interim determination only), the Company shall be bound by
such determination in the absence of (i) a misrepresentation of a material fact
by Miller or (ii) a specific finding (which has become final) that all or any
part of such indemnification or other benefit hereunder is prohibited by law.

        (d)    Expenses reasonably incurred by Miller in connection with his
request for indemnification or other benefit hereunder, or for seeking
enforcement of or to recover damages for breach of this Agreement, shall be
borne by the Company.

        Section 6. Not Exclusive. Miller's rights of indemnification,
exculpation and advancement of expenses provided by this Agreement shall not be
deemed exclusive of any other rights to which Miller may now or in the future be
entitled under applicable law, the Charter or


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By-laws of the Company, or any agreement, vote of stockholders, resolution of 
directors or otherwise.

     Section 7. Limitation on Indemnity. The Company shall not be liable under 
this Agreement to make any payment to Miller to the extent that Miller has 
already been reimbursed with respect to the subject of a claim for 
indemnification pursuant to any director and officer liability insurance as the 
Company may maintain for Miller's benefit. Notwithstanding the availability of 
insurance, Miller also may claim indemnification from the Company pursuant to 
this Agreement by assigning to the Company any insurance claims to the extent 
Miller is paid by the Company.

     Section 8. Duration and Scope of Agreement; Binding Effect. This Agreement 
shall continue so long as Miller shall be subject to any possible Proceeding 
and shall be applicable to Proceedings commenced or continued after execution 
of this Agreement, whether arising from acts or omissions occurring before and 
after execution. This Agreement shall be binding upon the Company and its 
successors and assigns and shall inure to the benefit of Miller and his spouse, 
assigns, heirs, devisees, executors, administrators and other legal 
representatives.

     Section 9. Severability. If any provision or provisions of this Agreement 
(or any portion thereof) shall be held to be invalid, illegal or unenforceable 
for any reason whatsoever: (a) the validity, legality and enforceability of the 
remaining provisions of this Agreement shall not in any way be affected or 
impaired thereby; and (b) to the fullest extent possible, the provisions of 
this Agreement shall be construed so as to give effect to the intent manifested 
by the provision(s) held invalid, illegal or unenforceable.

     Section 10. Identical Counterparts. This Agreement may be executed in one 
or more counterparts, each of which shall for all purposes be deemed to be an 
original but all of which together shall constitute one and the same Agreement. 
Only one counterpart signed by the party against whom enforceability is sought 
needs to be produced to evidence the existence of this Agreement.

     Section 11. Interpretation of Agreement. It is understood that the parties
hereto intend this Agreement to be interpreted and enforced so as to provide
indemnification to Miller to the fullest extent now and hereafter permitted by
law (but, in the case of any changes in the law and subject to applicable law,
only to the extent that such changes permit the Company to provide broader
indemnification or exculpation). Therefore, to the maximum extent permitted by
applicable law, Miller shall be entitled to indemnification, exculpation and
other benefits hereunder irrespective of the nature of the legal or equitable
basis or theory upon which a claim is made, including, without limitation,
negligence, breach or duty, mismanagement, waste, breach of contract, breach of
warranty, strict liability, violation of federal or state securities laws, ERISA
or any other federal or state law.

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        Section 12. Headings. The headings of the Section and paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction thereof.

        Section 13. Definitions. For purposes of this Agreement:

        (a)     "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.

        (b)     "Expenses" shall include all direct and indirect costs
(including, without limitation, attorneys' fees, retainers, court costs,
transcripts, fees of experts, witness fees, travel expenses, duplicating costs,
printing and binding costs, telephone charges, postage, delivery service fees,
all other disbursements or out-of-pocket expense and reasonable compensation for
time spent by Miller for which he is otherwise not compensated by the Company
or any third party) actually and reasonably incurred in connection with either
the investigation, defense, settlement or appeal of a Proceeding or establishing
or enforcing a right to indemnification, advancement of expenses or other
benefit under this Agreement, applicable law or otherwise.

        (c)     "Liabilities" shall mean liabilities of any type whatsoever,
including, but not limited to, judgments, fines, excise taxes and penalties
(including ERISA taxes and penalties), and amounts paid in settlement.

        (d)     "Proceeding" shall mean any threatened, pending or completed
action, claim, suit, arbitration, alternate dispute resolution mechanism,
investigation, administrative hearing or any other proceeding whether civil,
criminal, administrative or investigative, in each case relating to a Covered
Claim.

        Section 14. Pronouns. Use of the masculine pronoun shall be deemed to
include usage of the feminine pronoun whenever appropriate.

        Section 15. Modification and Waiver. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by both
of the parties to this Agreement. No waiver of any provision of this Agreement
shall be deemed to constitute a waiver of any other provision hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.

        Section 16. Notices. All notices, request, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if (i) delivered by hand and receipted for by the party to whom said
notice or other communication shall have been directed or (ii) mailed by
certified or registered mail with postage prepaid, on the third business day
after the date on which it is so mailed:

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      (a)   If to Miller, to:

            841 Alverna
            Indianapolis, Indiana 46260

      (b)   If to the Company, to:

            Sunterra Corporation
            5933 W. Century Blvd.
            Los Angeles, California 90045
            Attn: Steven C. Kenninger, Chairman of the Board

or to such other address as may have been furnished to Miller by the Company or 
to the Company by Miller, as the case may be.

      SECTION 17. Governing Law. The parties agree that this Agreement shall be 
governed by and construed and enforced in accordance with, the laws of the 
State of Maryland, as applied to contracts between Maryland residents entered 
into and to be performed entirely within Maryland.

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the 
date first set forth above.

                                          /s/ L. STEVEN MILLER 
                                          -------------------------------------
                                          L. Steven Miller


                                          Sunterra Corporation


                                          By: /s/ STEVEN C. KENNINGER
                                              ---------------------------------
                                                Steven C. Kenninger,
                                                President

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