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                                                                   EXHIBIT 10.12

                              EMPLOYMENT AGREEMENT
                                       and
                             COVENANT NOT TO COMPETE


         EMPLOYMENT AGREEMENT and COVENANT NOT TO COMPETE (the "Employment
Agreement"), by and between WORLDQUEST NETWORKS, INC. ("WorldQuest") and Victor
E. Grijalva ("Executive"), effective as of May 14, 2003.

                                   WITNESSETH:

         WHEREAS, WorldQuest desires to continue to utilize the services of the
Executive as its Vice President, Chief Financial Officer, Treasurer and
Secretary and the Executive is willing to render such services; and

         WHEREAS, WorldQuest and the Executive desire to evidence in this
Employment Agreement the terms under which the Executive will perform such
services;

         NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, receipt of which is hereby acknowledged, the Executive
and WorldQuest agree as follows:

         1. Title and Duties

                  (a) The Executive's title will be Vice President, Chief
         Financial Officer, Treasurer and Secretary of WorldQuest. The
         Executive's duties and responsibilities will be as described in
         WorldQuest's Bylaws (as in effect as of the date of this Employment
         Agreement) and the Executive shall at all times report directly to the
         President and Chief Executive Officer and the Board of Directors of
         WorldQuest, or as otherwise agreed by the Executive. The Executive will
         exercise due diligence and reasonable care in the performance of the
         Executive's duties under this Employment Agreement.

         2. Term

                  (a) Unless earlier terminated as provided for herein, the term
         of this Employment Agreement will be for three years, beginning on
         April 14, 2003, and ending on April 13, 2006 (the "Term").

                  (b) If the Executive's employment with WorldQuest is
         terminated by the Executive due to the Executive's voluntary
         resignation (other than voluntary resignation following "Constructive
         Termination", as defined below) or by WorldQuest for "Cause" (as
         defined below), this Employment Agreement shall terminate immediately
         (except for the provisions of Paragraphs 4, 5, 6 and 7). For purposes
         of this Employment Agreement, the Executive may be terminated for
         "Cause" by majority vote of (excluding the Executive) the Board of
         Directors of WorldQuest as a result of (i) refusal to implement or
         adhere to policies or directives of the Board of Directors of
         WorldQuest; or (ii) gross negligence that is materially injurious to
         the operations or financial condition of WorldQuest; and such conduct
         or condition causing termination for Cause is not cured within thirty
         days after written notice is delivered to the Executive from
         WorldQuest. For these purposes, no refusal to act or failure to adhere
         shall be considered as grounds for Cause unless it is done, or omitted
         to be done, in bad faith without reasonable belief that the action or
         omission was in the best interest of WorldQuest. In the event
         corrective action is not satisfactorily taken by the Executive, a final
         written notice of termination shall be provided to the Executive by
         WorldQuest.

                  (c) If the Executive's employment is terminated during the
         Term of this Employment Agreement due to resignation following
         "Constructive Termination" (as defined below) or for any other reason
         other than the Executive's voluntary resignation or discharge for
         Cause, this Employment Agreement shall terminate immediately (except
         for the confidentiality provisions of Paragraph 4(a) and the provisions
         of Paragraphs 5, 6 and 7) and the Executive shall receive:

                           (i) The Executive's Base Salary as described in
                  Paragraph 3(a) through the date of termination;


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                           (ii) the Executive's regular Base Salary will be
                  continued for a period of six months;

                           (iii) to the extent determined by the stock plan
                  committee, in its sole discretion, full vesting in all stock
                  options previously granted to the Executive (irrespective of
                  the date of the grant of such stock options and irrespective
                  of the vesting schedule otherwise applicable to such stock
                  options; to the extent determined by the stock plan committee,
                  in its sole discretion, the Executive shall be permitted to
                  retain such options for future exercise or sell such stock
                  received on exercise as though the Executive had remained in
                  the employment of WorldQuest until the end of the regular
                  Term, and WorldQuest shall take such actions as are permitted
                  by applicable law to cause such vesting and option retention;
                  and

                           (iv) additionally, the provisions of Paragraphs 7(g)
                  and 7(h) shall remain in effect as though this Employment
                  Agreement expired at the end of its regular Term described in
                  Paragraph 2(a), irrespective of its earlier termination.

                  For purposes of this Employment Agreement a "Constructive
         Termination" shall be deemed to have occurred in the event that (i) the
         Executive's Base Salary as defined in Paragraph 3(a), bonus
         compensation under Paragraph 3(b), other compensation as described in
         Paragraphs 3(c) and 3(d) is reduced; (ii) a significant diminution in
         the Executive's responsibilities, authority or scope of duties is
         effected by the Board of Directors and such diminution is made without
         the Executive's written consent (without regard to whether or not any
         change is made to the Executive's title); (iii) WorldQuest materially
         breaches this Employment Agreement or (iv) a Change in Control of
         WorldQuest occurs. For purposes of this Employment Agreement, a "Change
         in Control of WorldQuest" means the occurrence of any of the following
         events after the date hereof: (a) any "person" or "group" (as such
         terms are used in Sections 13(d) and 14(d) of the Securities Exchange
         Act of 1934, as amended (the "Exchange Act")) is or becomes the
         "beneficial owner" (as defined in Rule l3d-3 under the Exchange Act),
         directly or indirectly, of more than 20% of the total voting stock of
         WorldQuest; (b) WorldQuest is merged with or into or consolidated with
         another person and, immediately after giving effect to the merger or
         consolidation, (A) less than 80% of the total voting power of the
         outstanding voting stock of the surviving or resulting person is then
         "beneficially owned" (within the meaning of Rule l3d-3 under the
         Exchange Act) in the aggregate by (x) the stockholders of WorldQuest
         immediately prior to such merger or consolidation, or (y) if a record
         date has been set to determine the stockholders of WorldQuest entitled
         to vote with respect to such merger or consolidation, the stockholders
         of WorldQuest as of such record date and (B) any "person" or "group"
         (as defined in Section 13(d)(3) or 14(d)(2) of the Exchange Act) has
         become the direct or indirect "beneficial owner" (as defined in Rule
         l3d-3 under the Exchange Act) of more than 20% of the voting power of
         the voting stock of the surviving or resulting person; (c) WorldQuest,
         either individually or in conjunction with one or more of its
         subsidiaries, sells, assigns, conveys, transfers, leases or otherwise
         disposes of, or the subsidiaries sell, assign, convey, transfer, lease
         or otherwise dispose of, all or substantially all of the properties and
         assets of WorldQuest and the subsidiaries, taken as a whole (either in
         one transaction or a series of related transactions), to any person
         (other than WorldQuest or a wholly owned subsidiary); or (d) the
         liquidation or dissolution of WorldQuest. Any resignation by the
         Executive as a result of assertion of a Constructive Termination shall
         be communicated by delivery to the President and Chief Executive
         Officer of WorldQuest of thirty days' advance written notice of such
         Constructive Termination and the grounds therefor, during which period
         WorldQuest shall be entitled to cure or remedy the matters set forth in
         such notice to the Executive's reasonable satisfaction. Unless the
         Executive shall withdraw such notice prior to the expiration of such
         thirty day period, such resignation shall take effect upon the
         expiration of thirty days from the date of the delivery of such notice.
         Any other resignation by the Executive shall be communicated by thirty
         days' advance written notice.

                  (d) If the Executive shall die, or become disabled and cannot
         perform the Executive's duties, this Employment Agreement shall
         terminate immediately. For purposes of this Employment Agreement, the
         Executive shall be disabled as of the first date on which the Executive
         shall become eligible to receive disability benefits under WorldQuest's
         long-term disability plan (or Social Security disability benefits at a
         time when WorldQuest does not maintain a long-term disability plan or
         such plan is not available to the Executive). WorldQuest will maintain
         for a period of twenty-four months from the date of the Executive's
         death or disability, all Directors and Officers Liability Insurance
         that WorldQuest was maintaining for the Executive and/or the
         Executive's estate as of the date of the Executive's death or
         disability.


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         3. Compensation

                  (a) Each year during the Term hereof, the Executive will be
         paid a base salary of $150,000 per annum ("Base Salary"), payable in
         accordance with WorldQuest's payroll guidelines, subject to applicable
         tax and benefit plan withholding. Increases may be made to the
         Executive's Base Salary at the discretion of the President and Chief
         Executive Officer, based upon the Executive's individual performance.

                  (b) The Executive shall be a participant in any incentive
         compensation plan sponsored by WorldQuest, at the highest level of
         executive participation.

                  (c) The Executive shall be designated as a participant in one
         or more option or stock-based compensation plans established by
         WorldQuest, and shall be entitled to purchase shares of common stock of
         WorldQuest provided thereunder.

                  (d) The Executive shall be entitled to participate in all of
         WorldQuest's benefit programs for senior management executives. The
         Executive shall participate in, and be eligible to receive benefits
         under, any "employee welfare benefit plans" and "employee pension
         benefit plans" (as such terms are defined in the Employee Retirement
         Income Security Act of 1974, as amended) and business travel insurance
         plans and programs as shall apply to general and/or executive employees
         of WorldQuest.

                  (e) The Executive shall be entitled to participate in such
         other compensation arrangements and receive such other perquisites as
         the Board of Directors of WorldQuest in its sole discretion determines,
         provided that WorldQuest shall pay or reimburse the Executive for all
         reasonable business, travel or entertainment expenses incurred in
         connection with the performance of services under this Employment
         Agreement. WorldQuest shall furnish the Executive with an office
         commensurate with the Executive's title and adequate for the
         performance of the Executive's duties, and with secretarial assistance
         and similar services.

         4. Confidentiality and Non-Competition

                  (a) The Executive recognizes and acknowledges that the
         Executive will have access to certain information concerning WorldQuest
         that is confidential and proprietary and constitutes valuable and
         unique property of WorldQuest. The Executive agrees that the Executive
         will not at any time, either during or after the Executive's
         employment, disclose to others, use, copy or permit to be copied,
         except pursuant to the Executive's duties on behalf of WorldQuest or
         its successors, assigns or nominees, any secret or confidential
         information of WorldQuest (whether or not developed by the Executive)
         without the prior written consent of the Board of Directors of
         WorldQuest.

                  (b) The Executive and WorldQuest agree that the Executive, by
         virtue of his position with WorldQuest, is in possession of highly
         sensitive information regarding WorldQuest's investors, contracts,
         plans and operations, and those of its corporate affiliates, that the
         Executive is WorldQuest's representative to current and potential
         clients, that other entities each compete vigorously with WorldQuest
         throughout various portions of WorldQuest's area of operations, and the
         Executive's use of such knowledge for the benefit of a competitor of
         WorldQuest would provide a competitive advantage to a competitor that
         would be highly detrimental to WorldQuest. The Executive's skills,
         knowledge and services are unique, and the success or failure of
         WorldQuest is dependent upon the Executive's services. The Executive
         agrees that WorldQuest has a legitimate business interest in protecting
         this information and preventing competitors from utilizing such
         information. Therefore, the Executive agrees that, for a period of
         twelve months following the termination of this Employment Agreement by
         the Executive other than due to Constructive Termination or discharge
         without Cause, the Executive will not engage in any Prohibited
         Competitive Activities as provided in Paragraph 4(c) below.


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                  (c) During the time period specified in Section 4(b), the
         Executive shall not:

                           (1) Directly or indirectly own, operate, manage,
                  consult with, control, participate in the management or
                  control of, be employed by, maintain or continue any interest
                  whatsoever in any international interest telephony and/or
                  money transfer business or enterprise the principal markets of
                  which are the United States and/or India; or

                           (2) Directly or indirectly solicit business from any
                  individual or entity doing regular and substantial business
                  with WorldQuest in the United States and/or India at any time
                  during the Term of this Employment Agreement.

                  Such activities are defined as "Prohibited Competitive
         Activities".

                  (d) WorldQuest and the Executive agree that money damages may
         not be adequate to compensate WorldQuest for the Executive's breach of
         any provision of this Paragraph 4 and that WorldQuest therefor will be
         entitled to a decree for specific performance of other appropriate
         remedy, including injunctive relief, to enforce the Executive's
         performance of any such provision. The Executive expresses, agrees and
         acknowledges that this Covenant Not to Compete is necessary for the
         protection of WorldQuest because of the nature and scope of its
         business and the Executive's position with, and services for,
         WorldQuest. The Executive acknowledges that any breach of this Covenant
         Not to Compete would result in irreparable damage to WorldQuest.

                  (e) The Executive expressly agrees and acknowledges as
         follows:

                           (1) This Covenant Not to Compete is reasonable as to
                  time and geographical area and does not place any unreasonable
                  burden upon the Executive;

                           (2) The general public will not be harmed as a result
                  of enforcement of this Covenant Not to Compete;

                           (3) The Executive has requested or has had the
                  opportunity to request that his personal legal counsel review
                  this Covenant Not to Compete; and

                           (4) The Executive understands and hereby agrees to
                  each and every term and condition of this Covenant Not to
                  Compete.

         5. Indemnification

                  If, at any time during or after the Term of this Employment
         Agreement, the Executive is made a party to, or is threatened to be
         made a party in, any civil, criminal or administrative action, suit or
         proceeding by reason of the fact that the Executive is or was a
         director, officer, employee, or agent of WorldQuest, or of any other
         corporation or any partnership, joint venture, trust or other
         enterprise for which the Executive served as such at the request of
         WorldQuest, then the Executive shall be indemnified by WorldQuest
         against expenses actually and reasonably incurred by the Executive or
         imposed on the Executive in connection with, or resulting from, the
         defense of such action, suit or proceeding, or in connection with, or
         resulting from, any appeal therein if the Executive acted in good faith
         and in a manner the Executive reasonably believed to be in or not
         opposed to the best interest of WorldQuest, and, with respect to any
         criminal action or proceeding, had no reasonable cause to believe the
         Executive's conduct was unlawful, except with respect to matters as to
         which it is adjudged that the Executive is liable to WorldQuest or to
         such other corporation, partnership, joint venture, trust or other
         enterprise for gross negligence or willful misconduct in the
         performance of the Executive's duties. As used herein, the term
         "expenses" shall include all obligations actually and reasonably
         incurred by the Executive for the payment of money, including, without
         limitation, attorney's fees, judgments, awards, fines, penalties and
         amounts paid in satisfaction of a judgment or in settlement of any such
         action, suit or proceeding, except amounts paid to WorldQuest or such
         other corporation, partnership, joint venture, trust or other
         enterprise by the Executive.


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         6. Arbitration

                  Except as provided in Paragraph 4, any controversy or claim
         arising out of or relating to this Employment Agreement, or any breach
         thereof, except as provided in Paragraph 4 shall be adjudged only by
         arbitration in accordance with the rules of the American Arbitration
         Association, and judgment upon such award rendered by the arbitrator
         may be entered in any court having jurisdiction thereof. The
         arbitration shall be held in the City of Dallas, Texas, or such other
         place as may be agreed upon at the time by the parties to the
         arbitration. The arbitrator(s) shall, in their award, allocate between
         the parties the costs of arbitration, which shall include reasonable
         attorneys' fees of the parties, as well as the arbitrators' fees and
         expenses, in such proportions as the arbitrator(s) deem just.

         7. Other Provisions

                  (a) This Employment Agreement will be governed by, and
         construed and enforced in accordance with, the laws of the State of
         Texas, excluding any conflicts of law, rule or principle that might
         otherwise refer to the substantive law of another jurisdiction.

                  (b) Except as otherwise indicated, this Employment Agreement
         is not assignable without the written authorization of both parties;
         provided that WorldQuest may assign this Employment Agreement to any
         entity to which WorldQuest transfers substantially all of its assets or
         to any entity which is a successor to WorldQuest by reorganization,
         incorporation, merger or similar business combination. In the event of
         any such transfer or assignment by WorldQuest, the rights and
         privileges of the Board hereunder shall be vested in the Board of
         Directors or other governing body of the transferee or successor
         entity. However, notwithstanding anything to the contrary contained
         herein, this Employment Agreement will be binding upon any successor
         (whether direct or indirect, by purchase, merger, consolidation or
         otherwise) to all or substantially all of the business and/or assets of
         WorldQuest, and WorldQuest will require any such successor by
         agreement, in form and substance satisfactory to the Executive, to
         expressly assume and agree to perform this Employment Agreement in the
         same manner and to the same extent that WorldQuest would be required to
         perform if no such succession had taken place. In addition to the
         Executive's rights above, if a Change in Control of WorldQuest occurs
         as described in Paragraph 2(c) above, the failure of WorldQuest to
         obtain such agreement prior to the effectiveness of any such succession
         shall be a breach of this Employment Agreement and shall entitle the
         Executive to compensation from WorldQuest in the same amount and on the
         same terms as the Executive would be entitled to hereunder if the
         Executive resigned from the Executive's employment due to a
         Constructive Termination, as described in Paragraph 2(c) above, except
         that for purposes of implementing the foregoing, the date on which any
         such succession becomes effective shall be deemed the date of
         termination. As used in this Employment Agreement, "WorldQuest" shall
         mean WorldQuest as hereinbefore defined and any successor to its
         business and/or assets as aforesaid which executes and delivers the
         agreement provided for in this Paragraph 7(b) or which otherwise
         becomes bound by all the terms and provisions of this Employment
         Agreement by operation of law. This Employment Agreement and all rights
         of the parties hereto shall inure to the benefit of and be enforceable
         by the parties hereto, their assigns, personal or legal
         representatives, executors, administrators, successors, heirs,
         distributees, devises and legatees.

                  (c) Except as otherwise provided herein, the provisions of
         Paragraphs 4, 5 and 6 of this Employment Agreement shall survive the
         termination of this Employment Agreement.

                  (d) Upon commencement of the term of this Employment
         Agreement, this Employment Agreement supersedes all previous employment
         agreements, written or oral, between WorldQuest and the Executive. This
         Employment Agreement may be amended only by written amendment duly
         executed by both parties hereto or their legal representatives and
         authorized by action of the Board. Except as otherwise specifically
         provided in this Employment Agreement, no waiver by either party hereto
         of any breach by the other party hereto of any condition or provision
         of this Employment Agreement to be performed by such other party shall
         be deemed a waiver of a subsequent breach of such condition or
         provision or a waiver of a similar or dissimilar provision or condition
         at the same or at any prior or subsequent time.

                  (e) Any notice or other communication required or permitted
         pursuant to the terms of this Employment Agreement shall be in writing
         and shall be deemed to have been duly given when delivered or mailed by
         United States mail, first class, postage prepaid and registered with
         return receipt requested, addressed


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         to the intended recipient at his or its address set forth below and, in
         the case of a notice or other communication to WorldQuest, directed to
         the attention of the Board of Directors with a copy to the Secretary of
         WorldQuest, or to such other address as the intended recipient may have
         theretofore furnished to the sender in writing in accordance herewith,
         except that until any notice of change of address is received, notices
         shall be sent to the following addresses:

                  If to the Executive:          If to WorldQuest

                  Victor E. Grijalva            WorldQuest Networks, Inc.
                  449 Avalon Lane               Attn:  President and
                  Coppell, Texas  75019         Chief Executive Officer
                                                14911 Quorum Drive, Suite 140
                                                Dallas, Texas  75254

                  (f) If any one or more of the provisions or parts of a
         provision contained in this Employment Agreement including, without
         limitation, the restrictions contained in Paragraph 4, shall for any
         reason be held to be invalid, illegal or unenforceable in any respect,
         such invalidity or unenforceability shall not affect any other
         provision or part of a provision of this Employment Agreement, but this
         Employment Agreement shall be reformed and construed as if such invalid
         or illegal or unenforceable provision or part of a provision had never
         been contained herein and such provisions or part thereof shall be
         reformed so that it would be valid, legal and enforceable to the
         maximum extent permitted by law.

                  (g) The Executive shall not be required to mitigate damages
         (or the amount of any compensation provided under this Employment
         Agreement to be paid) following the Executive's termination of
         employment, by seeking employment or otherwise.

                  (h) WorldQuest shall maintain during the Term of this
         Employment Agreement and for a period of twenty-four months thereafter
         Directors and Officers Liability Insurance covering the Executive (or
         the Executive's estate, if the Executive is deceased or incompetent),
         which provides coverage at least as favorable to the Executive (or the
         Executive's estate, if the Executive is deceased or incompetent), as
         coverage under WorldQuest's policy in effect on the date of execution
         of this Employment Agreement, and which coverage shall be increased
         from time to time in such amounts as the Board may determine to be
         appropriate in light of WorldQuest's operations.

                  (i) WorldQuest will not amend the provisions of its governing
         documents which pertain to the Executive's indemnification in the
         Executive's capacity as an officer and/or member of the Board of
         WorldQuest except to substitute therefor provisions which are more
         favorable to the Executive, except as otherwise required by law or the
         rules of any securities exchange or similar entity, or by applicable
         law.


                                  WorldQuest Networks, Inc.


                                  By:  /s/ R. Stephen Polley
                                     ------------------------------------------
                                     R. Stephen Polley
                                     Its: President and Chief Executive Officer


AGREED AND ACCEPTED this 14th
day of April, 2003
and effective as of April 14, 2003.


/s/ Victor E. Grijalva
---------------------------------
Victor E. Grijalva



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