EMPLOYMENT AGREEMENT
 
AGREEMENT, made and entered into as of January 31, 2006 by and between GVI
Security Solutions Inc., a Delaware corporation (the “Company”), and Steven E.
Walin (the “Executive”).
 
WITNESSETH:
 
WHEREAS, the Company desires to employ the Executive and to enter into an
agreement embodying the terms of such employment (this “Agreement”) and the
Executive desires to enter into this Agreement and to accept such employment,
subject to the terms and provisions of this Agreement;
 
NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the receipt of which is
mutually acknowledged, the Company and the Executive (individually a “Party” and
together the “Parties”) agree as follows:
 
1.  Definitions.
 
(a)  “Affiliate” of a specified person or entity shall mean a person or entity
that directly or indirectly controls, is controlled by, or is under common
control with, the person or entity specified.
 
(b)  “Annual Bonus” shall have the meaning ascribed to such term in Section 5(b)
below.
 
(c)  “Base Salary” shall mean the annualized salary provided for in Section 4
below.
 
(d)  “Board” shall mean the Board of Directors of the Company.
 
(e)  “Cause” shall mean:
 
(i)  a material breach by the Executive of any provision of this Agreement,
including but not limited to a breach of Section 3(a) below, which, if curable,
is not substantially cured within 30 days after the Executive’s receipt of
written notice from the Company;
 
(ii)  any conduct, action or behavior by the Executive that has or may
reasonably be expected to have a material adverse effect on the reputation of
the Company (including, without limitation, the commission of any felony or any
act involving moral turpitude or dishonesty, whether or not in connection with
the Executive’s employment hereunder); or
 

--------------------------------------------------------------------------------

 
(iii)  commission of any act by the Executive of gross negligence, willful
malfeasance, reckless nonfeasance or malfeasance or any willful violation of
law, in performance of his duties with the Company.
 
Anything herein to the contrary notwithstanding, the Company shall not be
entitled to terminate the Executive’s employment for Cause unless the Company
gives the Executive written notice of the event constituting “Cause” within 60
days after the Company becomes aware of such event and, if curable, the
Executive fails to cure such event within 30 days after receipt of such notice.
 
(f)  “Change in Control” shall mean any of the following:
 
(i)  any “person” (as such term is used in Sections 3(a)(9) and 13(d) of the
Securities Exchange Act of 1934, as amended), but excluding a person who owns
more than 5% of the outstanding shares of the Company as of the Commencement
Date, becomes a “beneficial owner” (as such term is used in Rule 13d-3
promulgated under that Act), of more than 50% of the Voting Stock of the
Company;
 
(ii)  the majority of the members of the Board consists of individuals other
than Incumbent Directors, which term means the members of the Board as of the
Commencement Date; provided that any individual becoming a director subsequent
to such date whose election or nomination for election as a director was
supported by a majority of the directors who were Incumbent Directors at the
time of such election or nomination shall be an Incumbent Director; or
 
(iii)  all or substantially all of the assets of the Company are disposed of
pursuant to a merger, consolidation or other transaction (unless the
stockholders of the Company immediately prior to such merger, consolidation or
other transaction beneficially own, directly or indirectly, in substantially the
same proportion as they owned the Voting Stock of the Company, all of the Voting
Stock or other ownership interests of the entity or entities, if any, that
succeed to the business of the Company).
 
For purposes of this Change in Control definition, “Voting Stock” shall mean the
capital stock of any class or classes having general voting power, in the
absence of specified contingencies, to elect the directors of the Company.
 
(g)  “Closing Price” shall mean the closing price for the common stock of the
Company as officially reported on the relevant date (or if there were no sales
on such date, the next preceding date on which the closing price was recorded)
by the principal national securities exchange (including, for purposes hereof,
the Nasdaq Stock Market) on which the common stock of the Company is listed or
admitted to trading or, if the common stock is not listed or admitted to trading
on any national securities exchange, the closing price as furnished by the
National Association of Securities Dealers, Inc. through Nasdaq or a similar
organization if Nasdaq is no longer reporting such information. If, on any such
date the common stock is not listed or admitted to trading on any United States
national securities exchange and is not quoted by Nasdaq or any similar
organization, the fair value of a share of common stock of the Company on such
date, as determined in good faith by the Board.
 
2

--------------------------------------------------------------------------------

(h)  “Commencement Date” shall mean March 6, 2006.
 
(i)  “Date of Termination” shall mean:
 
(i)  if the Executive’s employment is terminated by the Company, the date the
Company informs the Executive that his employment is so terminated;
 
(ii)  if the Executive voluntarily resigns his employment, the date stated as
his Date of Termination in a written notice to the Company (provided, that the
Company may accelerate the Date of Termination to an earlier date by providing
the Executive with notice of such action, or, alternatively, the Company may
place the Executive on paid leave during such period);
 
(iii)  if the Executive’s employment is terminated by reason of death, the date
of death; or
 
(iv)  if the Executive resigns his employment for Good Reason, 30 days after
receipt by the Company of timely written notice from the Executive in accordance
with Section 1(k) below unless the Company cures the event or events giving rise
to Good Reason within 30 days after receipt of such written notice.
 
(j)  “Disability” shall mean the Executive’s inability, due to physical or
mental incapacity, to substantially perform his duties and responsibilities for
a period of 90 consecutive days as determined by a medical doctor selected by
the Company and reasonably acceptable to the Executive.
 
(k)  “Good Reason” shall mean the occurrence of any of the following without the
Executive’s consent:
 
(i)  a material diminution in the Executive’s authority, duties or
responsibilities as normally associated with the position of Chief Executive
Officer in a company the size and nature of the Company;
 
(ii)  a reduction in the Executive’s Base Salary or bonus opportunity, or any
failure by the Company to grant the Initial Option or the Second Option in
accordance with Section 6(a) and (b) below, respectively;
 
3

--------------------------------------------------------------------------------

(iii)  a material breach by the Company of any provision of this Agreement
which, if curable, is not substantively cured within 30 days after the Company’s
receipt of written notice from the Executive;
 
(iv)  a change without the consent of the Executive, in the location of
employment to greater than 50 miles of the Company’s Florida office;
 
(v)  a change in reporting structure so that the Executive reports to someone
other than the Chairman of the Board or the Board; or
 
(vi)  the failure by the Company to nominate or renominate the Executive as a
Director, or the removal by the Company of the Executive as Chief Executive
Officer of the Company.
 
Anything herein to the contrary notwithstanding, the Executive shall not be
entitled to resign for Good Reason unless the Executive gives the Company
written notice of the event constituting “Good Reason” within 60 days after the
Executive becomes aware of such event and, if curable, the Company fails to cure
such event within 30 days after receipt of such notice.
 
(l)  “Initial Option” shall have the meaning ascribed to such term in Section 6
(a) below.
 
(m)  “Second Option” shall have the meaning ascribed to such term in Section 6
(b) below.
 
(n)  “Signing Bonus” shall have the meaning ascribed to such term in Section
5(b) below.
 
(o)  “Term” shall have the meaning ascribed to such term in Section 2 below.
 
2.  Term of Employment.
 
The term of the Executive’s employment hereunder shall begin on the Commencement
Date and end at the close of business on the day before the third anniversary of
the Commencement Date (the “Term”). Within 90 days of the end of the Term, the
Company shall notify the Executive in writing whether or not it intends to
negotiate a new employment agreement with him. Notwithstanding the foregoing,
the Term shall end on the date on which the Executive’s employment is terminated
by either Party in accordance with the provisions herein. If the Executive’s
employment with the Company continues after the end of the Term, the Executive’s
employment shall be on an “at will” basis and his salary, benefits and annual
bonus opportunity during such continued employment shall not be less than his
salary, benefits and annual bonus opportunity at the expiration of the Term.
 
3.  Position; Duties and Responsibilities.
 
(a)  During the Term, the Executive shall be employed as the Chief Executive
Officer of the Company and shall be responsible for the general management of
the affairs of the Company and shall perform such other duties and
responsibilities as reasonably determined by the Chairman of the Board
consistent with the duties and responsibilities normally associated with such
positions in a company the size and nature of the Company. It is also the
intention of the Parties that the Executive shall be nominated by the Company
for election as a member of the Board. The Executive, in carrying out his duties
under this Agreement, shall report to the Chairman of the Board. Subject to the
approval of the Board, the Executive shall be responsible for hiring the senior
managers of the Company, including, but not limited to, a Chief Financial
Officer, Chief Operating Officer and Vice President of Sales, and shall
recommend appropriate compensation packages for such senior management to the
Board.
 
4

--------------------------------------------------------------------------------

(b)   The Executive agrees to devote all of his business time, energies, skills,
efforts and attention to his duties hereunder, and will not, without the prior
written consent of the Company, render any material services to any other
business concern. The Executive will use his best efforts and abilities
faithfully and diligently to promote the Company's business interests.
 
(c)  Anything herein to the contrary notwithstanding, nothing shall preclude the
Executive from (i) subject to the reasonable approval of the Board, serving on
the boards of directors of trade associations and/or charitable organizations,
(ii) engaging in charitable activities and community affairs and (iii) managing
his personal investments and affairs, provided that the activities described in
the preceding clauses (i) through (iii) do not interfere with the proper
performance of his duties and responsibilities for the Company.
 
4.  Base Salary.
 
During the Term, the Executive shall be paid an annualized Base Salary of
$375,000, payable in accordance with the regular payroll practices of the
Company. During the Term, the Base Salary may be increased, but not decreased,
from time to time by the Board. The Executive shall not be entitled to any
compensation for service as a member of the Board or for service as an officer
or member of any board of directors of any Affiliate.
 
5.  Bonuses.
 
(a)  Signing Bonus. The Executive shall be entitled to a signing bonus (the
“Signing Bonus”) of $100,000, $50,000 of which shall be payable to the Executive
on the Commencement Date and $50,000 shall be payable on July 1, 2006.
 
(b)  Annual Incentive Award. During the Term, the Executive shall be eligible to
receive an annual incentive award (“Annual Bonus”) of up to 50% of Base Salary
based on the Executive’s achievement of annual performance and other targets
approved by the Board. The amount and payment of any such Annual Bonus shall be
determined in accordance with the Company’s practices for awarding annual
incentive awards to senior executives. Notwithstanding the foregoing, the
Executive shall be entitled to a guaranteed Annual Bonus with respect to the
first nine months of the Term equal to 50% of Base Salary for such period. Any
Annual Bonus shall be payable when bonuses for the applicable performance period
are paid to other senior executives of the Company; provided, however, the
guaranteed Annual Bonus with respect to the first nine months of the Term shall
be payable quarterly. Notwithstanding the foregoing, the Board, in its sole
discretion, may provide the Executive an Annual Bonus greater than 50% of Base
Salary with respect to any year.
 
5

--------------------------------------------------------------------------------

6.  Stock Option Grants.
 
(a)  Initial Stock Option Grant. The Company shall grant the Executive on the
Commencement Date a 10-year option to purchase in the aggregate 3,000,000 shares
of the Company’s common stock (the “Initial Option”). The exercise price per
share with respect to 1,000,000 shares of the Initial Option (“Traunch I Option
Shares”) shall be equal to the Closing Price of a share of the Company’s common
stock on the day before the Commencement Date. The exercise price per share with
respect to 1,000,000 shares of the Initial Option (“Traunch II Option Shares”)
shall be equal to the greater of (i) the Closing Price of a share of the
Company’s common stock on the day before the Commencement Date or (ii) $.52. The
exercise price per share with respect to the final 1,000,000 shares of the
Initial Option (“Traunch III Option Shares”) shall be equal to the greater of
(iii) the Closing Price of a share of the Company’s common stock on the day
before the Commencement Date or (iv) $.80 One hundred percent of the Traunch I
Option Shares and fifty percent of each of the Traunch II Option Shares and the
Traunch III Option Shares shall be immediately exercisable and an additional 25%
of the Traunch II Option Shares and the Traunch III Option Shares shall become
exercisable on each of the first and second anniversary of the Commencement
Date, provided the Executive is employed by the Company on such date.
 
(b)  Second Stock Option Grant. Upon the closing of the Company’s first capital
raise after the Commencement Date, the Company shall grant the Executive a
10-year option to purchase in the aggregate that number of shares of the
Company’s common stock equal to 5% of the number of shares of common stock of
the Company (or the common stock underlying convertible securities) sold by the
Company pursuant to such offering (the “Second Option”). The exercise price per
share with respect to the shares of the Second Option shall be equal to the
Closing Price of the Company’s common stock on the day before (i) the
Commencement Date or (ii) the grant of the Second Option, whichever is greater.
The Executive’s right to be granted the Second Option under this Section 6(b)
shall terminate if the Company has not closed on a capital raise before the
second anniversary of the Commencement Date. Fifty percent of the shares of the
Second Option shall be immediately exercisable and an additional 25% of the
Second Option shall become exercisable on each of the first and second
anniversary of the grant of the Second Option, provided the Executive is
employed by the Company on such date.
 
(c)  Other Conditions. The Executive shall be subject to the equity ownership,
retention and other requirements applicable to senior executives of the Company.
Except as otherwise expressly provided herein, the Initial Option and the Second
Option shall be governed by the applicable plan and option agreement. During the
Term, the Board may, in its sole discretion, grant the Executive additional
options to acquire the Company’s common stock.
 
6

--------------------------------------------------------------------------------

7.  Employee Benefit Programs.
 
During the Term, the Executive shall be entitled to participate in all employee
savings and welfare benefit plans and programs made available to the Company’s
senior-level executives on a basis no less favorable than provided to other
similarly-situated executives, as such plans or programs may be in effect from
time to time, includ-ing, without limitation, savings and other retire-ment
plans or programs, medical, dental, hospitalization, short-term and long-term
disability and life insurance plans, accidental death and dismemberment
protection, travel accident insurance, and any other pension or retire-ment
plans or programs and any other employee welfare benefit plans or programs that
may be sponsored by the Company from time to time.
 
8.       Reimbursement of Business and Other Expenses; Perquisites; Vacations. 
 
(a)  During the Term, the Executive is authorized to incur reasonable expenses
in carrying out his duties and responsibilities under this Agreement, including
but not limited to, reasonable travel and living expenses incurred by the
Executive while the Company’s executive offices are located in Dallas, and the
Company shall promptly reimburse him for all business and entertainment expenses
incurred in connection with carrying out the business of the Company, subject to
documentation in accordance with the Company’s policy. In addition, the Company
will reimburse the Executive for his legal and other professional fees incurred
in negotiating this Agreement up to a maximum of $10,000.
 
(b)  The Executive shall be entitled to the perquisites provided to other
senior-level executives. The Executive shall also be entitled to a car allowance
of $1,500 per month.
 
(c)  The Executive shall be entitled to four weeks paid vacation per year.
 
9.  Termination of Employment.
 
(a)  Termination Without Cause by the Company or Resignation for Good Reason by
the Executive prior to a Change in Control. In the event, prior to a Change in
Control, the Executive’s employment during the Term is terminated without Cause
by the Company or the Executive resigns for Good Reason, the Executive shall be
entitled to:
 
(i)  Base Salary through the Date of Termination;
 
(ii)  any unpaid Annual Bonus earned with respect to any fiscal year preceding
the Date of Termination and any unpaid portion of the Signing Bonus;
 
(iii)  a pro rated Annual Bonus for the fiscal year in which the Date of
Termination occurs (determined by multiplying the amount the Executive would
have received had employment continued through the end of such fiscal year by a
fraction, the numerator of which is the number of days during such fiscal year
that the Executive is employed by the Company and the denominator of which is
365), payable when bonuses for such fiscal year are paid to other Company
executives;
 
7

--------------------------------------------------------------------------------

(iv)  payment of Base Salary as salary continuation and, to the extent permitted
under the terms of the relevant plans and arrangements, all welfare benefits
described in Paragraph 7 for a period of 12 months; provided, however, if the
terms of the Company’s group medical plan does not permit the continued coverage
of the Executive in the plan after his termination of employment, the Company
shall pay for his premiums for continuing coverage under COBRA; provided,
further, the obligation of the Company to provide welfare benefits under this
clause (iv) (including the obligation to pay COBRA premiums) shall terminate
upon the Executive becoming eligible for welfare benefits from another employer;
 
(v)  with respect to each of the Initial Option and the Second Option, provided
at least six months has expired since the date on which shares subject to the
applicable option last became exercisable (the “Previous Scheduled Date”), a pro
rated portion of the shares that would become exercisable on the next scheduled
date for shares to become exercisable (the “Next Scheduled Date”) shall become
immediately exercisable (determined by multiplying the number of shares subject
to the option that would have become exercisable had employment continued
through the Next Scheduled Date by a fraction, the numerator of which is the
number of days between the Previous Scheduled Date and the Date of Termination
and the denominator of which is 365; provide, further, that if the termination
occurs after the first anniversary of the Commencement Date, 100% of the Initial
Option and the Second Option shall become immediately exercisable;
 
(vi)  any amounts earned, accrued or owing to the Executive but not yet paid
under Section 8 above, including accrued vacation; and
 
(vii)  except as otherwise provided in Section 9(e) below, any additional
payment and benefit in accordance with the applicable plans and programs of the
Company.
 
(b)  Termination upon Death or Disability. In the event the Executive’s
employment during the Term is terminated upon death or Disability, the Executive
(or his estate or legal representative, as the case may be) shall be entitled
to:
 
(i)  Base Salary through the Date of Termination;
 
(ii)  any unpaid Annual Bonus earned with respect to any fiscal year preceding
the Date of Termination and any unpaid portion of the Signing Bonus;
 
8

--------------------------------------------------------------------------------

(iii)  a pro rated Annual Bonus for the fiscal year in which the Date of
Termination occurs (determined by multiplying the amount the Executive would
have received had employment continued through the end of such fiscal year by a
fraction, the numerator of which is the number of days during such fiscal year
that the Executive is employed by the Company and the denominator of which is
365), payable when bonuses for such fiscal year are paid to other Company
executives;
 
(iv)  any amounts earned, accrued or owing to the Executive but not yet paid
under Section 8 above, including accrued vacation; and
 
(v)  any additional payment and benefit in accordance with applicable plans or
programs of the Company.
 
(c)  Termination by the Company for Cause or a Voluntary Resignation by the
Executive. If, during the Term, the Company terminates the Executive’s
employment for Cause or the Executive voluntarily resigns, the Executive shall
be entitled to:
 
(i)  Base Salary through the Date of Termination;
 
(ii)  any amounts earned, accrued or owing to the Executive but not yet paid
under Section 8 above, including accrued vacation; and
 
(iii)  any additional payment and benefit in accordance with the applicable
plans or programs of the Company.
 
(d)  Termination Without Cause by the Company or Resignation for Good Reason by
the Executive on or after a Change in Control. If, during the Term, the
Executive’s employment is terminated on or within 12 months after a Change in
Control without Cause by the Company or the Executive resigns for Good Reason,
the Executive shall be entitled to:

(i)  Base Salary through the Date of Termination;
 
(ii)  any unpaid Annual Bonus earned with respect to any fiscal year preceding
the Date of Termination and any unpaid portion of the Signing Bonus;
 
(iii)  a pro rated Annual Bonus for the fiscal year in which the Date of
Termination occurs (determined by multiplying one-half of the Executive Base
Salary by a fraction, the numerator of which is the number of days during such
fiscal year that the Executive is employed by the Company and the denominator of
which is 365);
 
(iv)  a payment of 200% Base Salary and to the extent permitted under the terms
of the relevant plans and arrangements, all welfare benefits described in
Paragraph 7 for a period of 24 months; provided, however, if the terms of the
Company’s group medical plan does not permit the continued coverage of the
Executive in the plan after his termination of employment, the Company shall pay
for his premiums for continuing coverage under COBRA; provided, further, the
obligation of the Company to provide welfare benefits under this clause (iv)
(including the obligation to pay COBRA premiums) shall terminate upon the
Executive becoming eligible for welfare benefits from another employer;
 
9

--------------------------------------------------------------------------------

(v)  all of the shares subject to the Initial Option and the Second Option shall
become immediately exercisable;
 
(vi)  any amounts earned, accrued or owing to the Executive but not yet paid
under Section 8 above, including accrued vacation; and
 
(vii)  except as otherwise provided in Section 9(e) below, any additional
payment and benefit in accordance with the applicable plans and programs of the
Company.
 
Subject to the provisions of Section 9(h) below, the payments described in
clauses (i), (ii) and (iii) of this Section 9(d) shall be payable to the
Executive within 30 days of the Date of Termination.
 
(e)  Exclusivity of Benefits; Release of Claims. Any payments provided pursuant
to Section 9(a) or (d) above shall be in lieu of any salary continuation
arrangements under any other severance program of the Company. Notwithstanding
anything herein to the contrary, in order to be entitled to the payments, rights
and other entitlements in Section 9(a) or (d) above, the Executive shall be
required to execute and deliver a general release of claims against the Company
in the form supplied by the Company and not revoke such release within the
applicable revocation period.
 
(f)  Nature of Payments. Any amounts due under this Section 9 are in the nature
of severance payments considered to be reasonable by the Company and are not in
the nature of a penalty.
 
(g)  Resignation. Notwithstanding any other provision of this Agreement, upon
the termination of the Executive’s employment for any reason, unless otherwise
requested by the Board, he shall immediately resign from the Board, from all
boards of directors of any Affiliate of the Company of which he may be a member,
and as a trustee of, or fiduciary to, any employee benefit plans of the Company
or any Affiliate. The Executive hereby agrees to execute any and all
documentation of such resignations upon request by the Company, but he shall be
treated for all purposes as having so resigned upon termination of his
employment, regardless of when or whether he executes any such documentation.
 
(h)  This Agreement is intended to comply with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”). Notwithstanding any provision
herein to the contrary, this Agreement shall be interpreted, operated and
administered consistent with this intent. In that regard, any payment in
connection with the Executive’s termination of employment shall not be made
earlier than six (6) months after the Date of Termination to the extent required
by Code Section 409A(a)(2)(B)(i).
 
10

--------------------------------------------------------------------------------

10.  Confidentiality; Assignment of Rights.
 
(a)  During the Term and thereafter, other than in the ordinary course of
performing his duties for the Company or as required in connection with
providing any cooperation to the Company pursuant to Section 13 below, the
Executive agrees that he shall not disclose to anyone or make use of any trade
secret or proprietary or confidential information of the Company or any
Affiliate of the Company, including such trade secret or proprietary or
confidential information of any customer or other entity to which the Company
owes an obligation not to disclose such information, which he acquires during
the course of his employment, including, but not limited to, records kept in the
ordinary course of business, except when required to do so by a court of law, by
any governmental agency having supervisory authority over the business of the
Company or by any administrative or legislative body (including a committee
thereof) with apparent or actual jurisdiction to order him to divulge, disclose
or make accessible such information. In the event the Executive is requested to
disclose information as contemplated in the preceding sentence, the Executive
agrees, unless otherwise prohibited by law, to give the Company prompt written
notice of any request for disclosure in advance of the Executive making such
disclosure in order to permit the Company a reasonable opportunity to challenge
such disclosure. The foregoing shall not apply to information that (i) was known
to the public prior to its disclosure to the Executive; or (ii) becomes known to
the public subsequent to disclosure to the Executive through no wrongful act of
the Executive or any representative of the Executive.
 
(b)  The Executive hereby sells, assigns and transfers to the Company all of his
right, title and interest in and to all inventions, discoveries, improvements
and copyrightable subject matter (the “rights”) which during the course of his
employment are made or conceived by him, alone or with others, and which are
within or arise out of any general field of the Company’s business or arise out
of any work he performs, or information he receives regarding the business of
the Company, while employed by the Company. The Executive shall fully disclose
to the Company as promptly as available all information known or possessed by
him concerning the rights referred to in the preceding sentence, and upon
request by the Company and without any further remuneration in any form to him
by the Company, but at the expense of the Company, execute all applications for
patents and for copyright registration, assignments thereof and other
instruments and do all things which the Company may deem necessary to vest and
maintain in it the entire right, title and interest in and to all such rights.
 
(c)  Except as otherwise may be required by law, the Executive agrees that at
the time of the termination of employment, whether at the instance of the
Executive or the Company, and regardless of the reasons therefore, or at any
other time requested by the Company, he will deliver to the Company, and not
keep or deliver to anyone else, any and all notes, files, memoranda, papers and,
in general, any and all physical matter and computer files containing
information, including any and all documents relating to the conduct of the
business of the Company or any of its Affiliates which are in his possession or
control, except for (i) any documents for which the Company has given written
consent to removal at the time of termination of the Executive’s employment and
(ii) any information the Executive reasonably believes may be necessary for his
tax purposes.
 
11

--------------------------------------------------------------------------------

11.  Non-Competition; Non-Solicitation.
 
(a)  In consideration of any severance or change in control payments the
Executive may receive pursuant to this Agreement, during the Term and for 12
months following the termination of the Executive’s employment with the Company
or the end of the originally scheduled Term, whichever occurs first, and whether
or not the Executive is entitled to severance or change in control payments, the
Executive agrees that he shall not, other than in the ordinary course of
performing his duties hereunder or as agreed by the Company in writing, engage
in a “Competitive Business,” directly or indirectly, as an individual, partner,
shareholder, director, officer, principal, agent, employee, trustee, consultant,
or in any relationship or capacity, in any geographic location in which the
Company or any of its Affiliates is engaged in business. The Executive shall not
be deemed to be in violation of this Section 11(a) by reason of the fact that he
owns or acquires, solely as an investment, up to two percent (2%) of the
outstanding equity securities (measured by value) of any entity. Notwithstanding
the foregoing, the provisions of this Section 11(a) shall not extend beyond the
end of the originally scheduled Term. With respect to an entity which is engaged
in both a Competitive Business and a non-Competitive Business, the Executive may
provide services to the non-Competitive Business provided that the Competitive
Business is not the principal or predominant business of such entity and the
Executive does not render any services or advice, directly or indirectly, to the
Competitive Business. Notwithstanding the foregoing, if, following the
expiration of the Term, a Change of Control occurs and the Executive’s “at will”
employment with the Company is thereafter terminated by the Company without
Cause, the provisions of this Section 11(a) shall cease to be effective.
 
“Competitive Business” shall mean a business that the Company or any of its
Affiliates is engaged in or intending to enter at the time of the alleged
violation.
 
(b)  The Executive agrees that during the Term and for a period of 12 months
following the termination of the Executive’s employment with the Company, he
will not, without the prior written consent of the Company, directly or
indirectly, hire any employee or independent contractor of the Company or any of
its Affiliates, or knowingly solicit or encourage any such employee or
independent contractor to leave the employ of the Company or its Affiliates, as
the case may be.
 
(c)  The Executive agrees that during the Term and for a period of 12 months
following the termination of the Executive’s employment with the Company, he
will not, without the prior written consent of the Company, knowingly solicit or
encourage any customer or supplier of the Company or any of its Affiliates to
reduce or cease its business with the Company or any such Affiliate or otherwise
knowingly interfere with the relationship of the Company or any Affiliate with
its customers or suppliers. Notwithstanding the foregoing, if, following the
expiration of the Term, a Change in Control occurs and the Executive’s “at will”
employment with the Company is thereafter terminated by the Company without
Cause, or Executive resigns for Good Reasons, the provisions of this Section
11(c) shall be effective only with respect to the four largest customers of the
Company (measured by Company revenues) at the time of the termination of
employment.
 
12

--------------------------------------------------------------------------------

12.  Injunctive and Other Relief.
 
The Executive expressly agrees and acknowledges any breach or threatened breach
of any obligation under Section 10, 11 or 14 hereof will cause the Company
irreparable harm for which there is no adequate remedy at law, and as a result
of this the Company shall be entitled to the issuance by a court of competent
jurisdiction of an injunction, restraining order or other equitable relief in
favor of itself, without the necessity of posting a bond, restraining the
Executive from committing or continuing to commit any such violation. If the
Company defers or withholds payment of any amount otherwise payable under this
Agreement on the basis of an asserted violation of any provision of Section 10,
11 or 14, and it is subsequently finally determined that the Executive did not
commit such violation, the Company shall promptly pay all such unpaid amounts to
the Executive from the date such payments should have been made under this
Agreement until the date they are actually paid, together with interest at the
prime rate set by the Citibank.
 
13.  Cooperation.
 
Following the Date of Termination, upon reasonable request by the Company, the
Executive shall cooperate with the Company with respect to any litigation or
other dispute relating to any matter in which he was involved or had knowledge
during his employment with the Company. The Company shall reimburse the
Executive for all reasonable out-of-pocket costs, such as travel, hotel and meal
expenses, incurred by the Executive in providing any cooperation pursuant to
this Section 13. The Company shall make its attorney available to advise the
Executive or if, in the reasonable opinion of the Company’s attorney, a conflict
arises which would prevent the Company’s attorney from advising the Executive,
the Company shall reimburse the Executive for reasonable legal fees incurred in
providing any cooperation pursuant to this Section 13.
 
14.  Non-Disparagement.
 
The parties hereto shall not during the Term or thereafter denigrate, ridicule
or intentionally criticize each other, their Affiliates or any of their
respective products, services, employees, officers or directors, including,
without limitation, by way of news interviews or the expression of personal
views, opinions or judgments to the media.
 
15.  The Executive’s Representations.
 
The Executive represents and warrants to the Company that his entering into and
performing his obligations under this Agreement will not violate any agreement
between the Executive and any other person, firm or organization. The Executive
also represents and warrants that he will not use or disclose any confidential
or proprietary information of any prior employer in the course of performing his
duties for the Company or any of its Affiliates.
 
13

--------------------------------------------------------------------------------

16.  Assignability; Binding Nature.
 
This Agreement shall be binding upon and inure to the benefit of the Parties and
their respective successors, heirs (in the case of the Executive) and assigns.
For purposes of this Section 16, a successor to the Company shall be limited to
an entity which shall have acquired substantially all of the business and/or
assets of the Company and shall have expressly assumed (whether by agreement or
operation of law) and agreed to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform if no such
succession had taken place. No rights or obligations of the Executive under this
Agreement may be assigned or transferred by the Executive other than his rights
to compensation and benefits, which may be transferred only by will, operation
of law or in accordance with Section 23 below.
 
17.  Payroll Deductions.
 
All applicable federal, state and local withholding taxes, and deductions
authorized by the Executive or by law, shall be deducted from all payments set
forth in this Agreement.
 
18.  Entire Agreement.
 
This Agreement contains the entire understanding and agreement between the
Parties concerning the subject matter hereof and supersedes all prior
agreements, understandings, discussions, negotiations and undertakings, whether
written or oral, between the Parties with respect thereto. In the event of any
inconsistency between any provision of this Agreement and any other provision of
any other plan, policy or program of, or other agreement with, the Company, the
provisions of this Agreement shall control.
 
19.  Amendment or Waiver.
 
No provision in this Agreement may be amended unless such amendment is agreed to
in writing and signed by the Executive and an authorized officer of the Company.
No waiver by either Party of any breach by the other Party of any condition or
provision contained in this Agreement to be performed by such other Party shall
be deemed a waiver of a similar or dissimilar condition or provision at the same
or any prior or subsequent time. Any waiver must be in writing and signed by the
Party against whom it is being enforced (either the Executive or an authorized
officer of the Company, as the case may be).
 
20.  Severability.
 
In the event that any provision or portion of this Agreement shall be determined
to be invalid or unenforceable for any reason, in whole or in part, the
remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
 
21.  Survivorship.
 
The respective rights and obligations of the Parties hereunder, including,
without limitation, Section 9 (termination of employment), Section 10
(confidentiality; assignment of rights), Section 11 (non-competition;
non-solicitation), Section 12 (injunctive and other relief), Section 13
(cooperation), Section 14 (non-disparagement), Section 22 (indemnification and
liability insurance) and Section 25 (resolution of disputes), shall survive any
termination of the Executive’s employment to the extent necessary to the
intended preservation of such rights and obligations.
 
14

--------------------------------------------------------------------------------

22.  Indemnification and Liability Insurance.
 
The Company hereby agrees that through out the Term, the Executive shall be
covered by any general liability insurance policy that other directors and
officers of the Company are covered by and agrees to indemnify the Executive and
hold him harmless, both during the Term and thereafter, to the fullest extent
permitted by law and under the by-laws of the Company against and in respect to
any and all actions, suits, proceedings, claims, demands, judgments, costs,
expenses (including reasonable attorneys’ fees), losses, and damages resulting
from the Executive’s good faith performance of his duties as an officer or
director of the Company.
 
23.  Beneficiaries/References.
 
The Executive shall be entitled, to the extent permitted under applicable plans,
agreements or law, to select and change a beneficiary or beneficiaries to
receive any compensation or benefit payable hereunder following the Executive’s
death by giving the Company written notice thereof. In the event of the
Executive’s death or a judicial determination of his incompetence, reference in
this Agreement to the Executive shall be deemed, where appropriate, to refer to
his beneficiary, estate or other legal representative.
 
24.  Governing Law.
 
This Agreement shall be governed by and construed and interpreted in accordance
with the laws of Florida without reference to principles of conflicts of law,
provided, however, that Federal law shall apply to the interpretation or
enforcement of Section 25 below.
 
25.  Resolution of Disputes.
 
Except as otherwise provided in Section 12 above, any dispute arising under or
relating to this Agreement shall be resolved by confidential and binding
arbitration, to be held in the County of Palm Beach in the state of Florida
before a single arbitrator in accordance with the rules and procedures of the
Commercial Arbitration Rules of the American Arbitration Association. Judgment
upon the award rendered by the arbitrator(s) may be entered in any court having
jurisdiction thereof. Each Party shall be responsible for its own costs and
expenses, including attorneys’ fees incurred in connection with the arbitration,
and neither Party shall be liable for punitive or exemplary damages.
 
15

--------------------------------------------------------------------------------

26.  Notices.
 
Any notice given to a Party shall be in writing and shall be deemed to have been
given (i) when delivered personally, (ii) three days after being sent by
certified or registered mail, postage prepaid, return receipt requested or (iii)
two days after being sent by overnight courier (provided that a written
acknowledgement of receipt is obtained by the overnight courier), with any such
notice duly addressed to the Party concerned at the address indicated below or
to such other address as such Party may subsequently give such notice of in
accordance with this Section 26:
 

If to the Company:
GVI Security Solutions Inc.

 
2801 Trade Center Drive

 
Carrolton, TX 75007

 
Attention: Chairman of the Board of Directors

 

If to the Executive:
Steven E. Walin

 
2600 NW 49th Street

 
Boca Raton, FL 33434

 
 

27.  Excise Tax.
 
Notwithstanding anything in this Agreement to the contrary, in the event that
any payment, distribution, grant, vesting or benefit made or provided to or for
the benefit of the Executive in connection with this Agreement or his employment
with the Company or the termination thereof (a “Change in Control Payment”) is
determined to be subject to any excise tax (“Excise Tax”) imposed by Section
4999 of the Code (or any successor to such section), if it is determined that,
on an after-Excise Tax basis, the Executive’s economic benefit would be
increased if the Company reduced the Change in Control Payments to be provided
to the Executive to the extent necessary to avoid the imposition of the Excise
Tax, the Company shall reduce such Change in Control Payments to the Executive.
The determination regarding the Excise Tax will be made by an expert on the
issues related to the Excise Tax selected by the Company and approved by the
Executive. The same expert will be used for the determination of any other
Excise Taxes due relating to a Change in Control for any other employee of the
Company. In making its determination regarding the Excise Tax, the expert shall
take into account all facts and circumstances, including without limitation, the
fact that part of the Change in Control Payments is being paid by the Company to
the Executive in consideration for the non-compete and non-solicitation
covenants contained in Section 11 hereof.
 
28.  Headings.
 
The headings of the sections contained in this Agreement are for convenience
only and shall not be deemed to control or affect the meaning or construction of
any provision of this Agreement.
 
29.  Counterparts.
 
This Agreement may be executed in two or more counterparts.
 
16

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
first written above.
 

        GVI SECURITY SOLUTIONS INC.  
   
   
    By:      

--------------------------------------------------------------------------------

Name:   Title: 

 

        THE EXECUTIVE  
   
   
         

--------------------------------------------------------------------------------

Steven E. Walin    

 
17

--------------------------------------------------------------------------------