EXECUTION COPY

                    SETTLEMENT AGREEMENT AND GENERAL RELEASE

      This Agreement (this "AGREEMENT") is made as of the 13th day of October,
2004, by and among GVI Security Solutions, Inc., a Delaware corporation
("GVIS"), GVI Security, Inc., a Delaware corporation ("GVI" and, together with
GVIS, the "COMPANIES"), William A. Teitelbaum ("TEITELBAUM") and Alarmax
Distributors, Inc. ("ALARMAX").

                               W I T N E S S E T H

      WHEREAS, Teitelbaum is the holder of 13,493,932 shares of the common
stock, par value $.001 per share (the "COMMON STOCK") of GVIS (the "TEITELBAUM
INITIAL SHARES");

      WHEREAS, Teitelbaum contends that on May 10, 2000 he was issued a five
year warrant to purchase 32,857 shares of common stock of GVI, at an exercise
price of $0.10 per share (the "Warrant"), which Warrant is currently exercisable
for 4,030,637 shares of Common Stock (after giving effect to the subsequent
one-for-65 reverse stock split) at an aggregate exercise price of $3,285.70;

      WHEREAS, the Companies dispute the validity of the Warrant;

      WHEREAS, Alarmax commenced an action against GVIS in the Court of Common
Pleas of Allegheny County, Pennsylvania, at GD-04-9170 which GVIS has removed to
the United States District Court for the Western District of Pennsylvania (the
"COURT") at 04-CV-0844 (the "ACTION") in which, among other things, Alarmax
disputes the validity of the Receivable and alleges that GVIS has breached
certain provisions of that certain Supplier Agreement dated as of April 30, 2001
(the "SUPPLY AGREEMENT");

      WHEREAS, GVI has denied all liability in the Action and has asserted a
counterclaim (the "COUNTERCLAIM") against Alarmax asserting that Alarmax is
obligated to GVI in the amount of approximately $203,000 in respect of certain
goods sold to Alarmax by GVI (such obligation, the "RECEIVABLE");

      WHEREAS, GVIS has entered into a letter agreement dated August 5, 2004
with C.E. Unterberg, Towbin LLC, relating to the private placement of up to $30
million of GVIS Common Stock (the "UNTERBERG PRIVATE PLACEMENT");

      WHEREAS, upon the terms and subject to the conditions set forth herein
GVIS desires to use a portion of the proceeds from the Private Placement to
purchase from Teitelbaum, and Teitelbaum desires to sell to GVIS, up to $10
million of the Teitelbaum Initial Shares;

      WHEREAS, GVI is the wholly owned subsidiary of GVIS;

      WHEREAS, Teitelbaum is the principal stockholder of Alarmax; and

      WHEREAS, the parties desire to resolve any controversy between them upon
the terms set forth in this Agreement.

<PAGE>

      NOW, THEREFORE, in consideration of the foregoing, of the mutual promises,
releases, representations, covenants and obligations hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound,
hereby agree as follows:

      1. Shares Delivery. GVIS shall deliver to Teitelbaum 650,000 shares of
Common Stock (the "SETTLEMENT SHARES" and together with the Teitelbaum Initial
Shares, the "TEITELBAUM SHARES").

      2. Receivable Settlement. Concurrently herewith, Alarmax shall pay to GVI
$145,000 in full settlement of the Receivable.

      3. Amendment of 13D. Teitelbaum hereby covenants and agrees to file with
the Securities and Exchange Commission ("SEC"), immediately following the date
hereof, an amendment to the Schedule 13D filed with the SEC on March 1, 2004,
and a Form 4, which filings shall disclose that Teitelbaum's ownership of GVIS
securities consists solely of 14,143,932 shares of Common Stock.

      4. BMW. No later than thirty (30) days following the date hereof,
Teitelbaum shall return to GVI that certain BMW automobile (VIN
5UXFA53512LP46193) (the "BMW") financed by GVI.

      5. Release and Covenant by Teitelbaum and Alarmax.

            (a) Concurrently herewith, Teitelbaum on his behalf and on behalf of
any and all entities controlled by Teitelbaum, exclusive of Alarmax, voluntarily
releases and forever discharges each of the Companies and their respective
subsidiaries, affiliates, directors, officers, employees, shareholders, agents
and representatives, and each of their successors and assigns (the "GVIS
Releasees") from, and covenants not to sue or proceed against (or to encourage
or induce any other person or entity to sue or proceed against) any of the GVIS
Releasees on the basis of, any and all claims, contentions, rights, debts,
liabilities, demands, accounts, reckonings, obligations, duties, promises,
costs, expenses (including, but not limited to, attorneys' fees), liens,
damages, losses, actions, and causes of action, of any kind whatsoever
(hereinafter referred to as "CLAIMS") whether due or owing in the past, asserted
or not, present or future and whether based upon contract, tort, statute or any
other legal or equitable theory of recovery, and whether known or unknown,
suspected or unsuspected, fixed or contingent, matured or unmatured, with
respect to, pertaining to, or arising from any matters, acts, omissions, events,
conduct or occurrences at any time prior to the date of this Agreement,
including, without limiting the generality of the foregoing provisions, any and
all causes of action or Claims which were asserted or could have been asserted
in connection with the Warrant, the Action, his employment with GVI, the Action
or the Supply Agreement; but excluding any Claims arising out of or related to
any breach of this Agreement, the Note (as defined herein) (to the extent
applicable), the Subordination Agreement (as defined herein) (to the extent
applicable) or that certain Registration Rights Agreement dated February 19,
2004, as amended from time to time, between GVIS, Teitelbaum and other
signatories thereto (the "REGISTRATION RIGHTS AGREEMENT"). Teitelbaum represents
and warrants to each of the GVIS Releasees that Teitelbaum has not transferred
or assigned any such Claims to any other person or entity.


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<PAGE>

            (b) Concurrently herewith, Alarmax on its behalf and on behalf of
any and all entities controlled by it, voluntarily releases and forever
discharges the GVIS Releasees from, and covenants not to sue or proceed against
(or to encourage or induce any other person or entity to sue or proceed against)
any of the GVIS Releasees on the basis of, any and all Claims, whether due or
owing in the past, asserted or not, present or future and whether based upon
contract, tort, statute or any other legal or equitable theory of recovery, and
whether known or unknown, suspected or unsuspected, fixed or contingent, matured
or unmatured, with respect to, pertaining to, or arising from any matters, acts,
omissions, events, conduct or occurrences at any time prior to the date of this
Agreement, including, without limiting the generality of the foregoing
provisions, any and all causes of action or Claims, arising out of or related to
the Supply Agreement, the Action, the disputed Receivable, and alleged breach of
the Supply Agreement for which Alarmax asserted claims against GVI in the Action
and the Counterclaim. This release specifically excludes any Claims arising out
of or related to any breach of this Agreement. This release further excludes any
and all Claims against the GVIS Releasees which are in any way related to, or
arise out of, claims by third parties concerning the products of the Companies
supplied to Alarmax pursuant to the Supply Agreement ("PRODUCT AND WARRANTY
CLAIMS"), including, but not limited to, warranty claims (express or implied),
negligence claims, product defect claims, claims for contribution and indemnity,
claims for business loss, business interruption, personal injury and/or property
damage, and any other tort, contract, statutory and/or equitable claim and/or
claims arising out of Section 6 or 7 of the Supply Agreement. It is further
agreed that (x) the preceding sentence is a reservation of rights that Alarmax
may have under the Supply Agreement and at law or otherwise and is not intended
to provide Alarmax with any additional rights and remedies, and (y) Alarmax
expressly reserves and does not release any and all of such Product and Warranty
Claims against the GVIS Releasees. Within five days of the date hereof, Alarmax
shall file a Stipulation with the Court to have the Action dismissed with
prejudice and take such other action and file such other documents with the
Court as shall be necessary to terminate the Action.

      6. Release and Covenant Not to Sue by the Companies.

            (a) Concurrently herewith, each of the Companies, on their behalf
and on behalf of any and all entities controlled by them, respectively,
voluntarily releases and forever discharges Teitelbaum and each entity
controlled by him other than Alarmax, from, and covenants not to sue or proceed
against Teitelbaum on the basis of, any and all Claims, whether due or owing in
the past, present or future and whether based upon contract, tort, statute or
any other legal or equitable theory of recovery, and whether known or unknown,
suspected or unsuspected, fixed or contingent, matured or unmatured, with
respect to, pertaining to, or arising from any matters, acts, omissions, events,
conduct or occurrences at any time prior to the date of this Agreement,
including, without limiting the generality of the foregoing provisions, any and
all causes of action or Claims which were asserted or could have been asserted
in connection with the Warrant, the Action, Teitelbaum's employment with GVI, or
the Supply Agreement; but excluding any Claims arising out of or related to (i)
any breach of this Agreement, the Note (to the extent applicable), the
Subordination Agreement (to the extent applicable) or the Registration Rights
Agreement, and (ii) the BMW or the finance agreement with respect to the BMW,
except for regular monthly payments due under the finance agreement through the
delivery of the BMW in accordance with Section 4 hereof. Each of the Companies
represents and warrants to Teitelbaum that neither GVIS nor GVI has transferred
or assigned any such Claims to any other person or entity.


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<PAGE>

            (b) Concurrently herewith, the Companies on their behalf and on
behalf of any and all entities controlled by them, voluntarily releases and
forever discharges Alarmax and its respective subsidiaries, affiliates,
directors, officers, employees, shareholders, agents and representatives, and
each of their successors and assigns (the "ALARMAX RELEASEES") from, and
covenants not to sue or proceed against (or to encourage or induce any other
person or entity to sue or proceed against) any of the Alarmax Releasees on the
basis of, any and all Claims, whether due or owing in the past, asserted or not,
present or future and whether based upon contract, tort, statute or any other
legal or equitable theory of recovery, and whether known or unknown, suspected
or unsuspected, fixed or contingent, matured or unmatured, with respect to,
pertaining to, or arising from any matters, acts, omissions, events, conduct or
occurrences at any time prior to the date of this Agreement, including, without
limiting the generality of the foregoing provisions, any and all causes of
action or Claims, arising out of or related to the Supply Agreement, the Action,
the disputed Receivable, and alleged breach of the Supply Agreement for which
Alarmax asserted claims against GVI in the Action and the Counterclaim. This
release specifically excludes any Claims arising out of or related to any breach
of this Agreement. This release further excludes any and all Product and
Warranty Claims against the Alarmax Releases which are in any way related to, or
arise out of, claims concerning the products of the Companies, including, but
not limited to, warranty claims (express or implied), negligence claims, product
defect claims, claims for contribution and indemnity, claims for business loss,
business interruption, personal injury and/or property damage, and any other
tort, contract, statutory and/or equitable claim and/or claims arising out of
Section 6 or 7 of the Supply Agreement. It is further agreed that (x) the
preceding sentence is a reservation of rights that the Companies may have under
the Supply Agreement and at law or otherwise and is not intended to provide the
Companies with any additional rights and remedies and (y) the Companies
expressly reserve and do not release any and all such Product and Warranty
Claims against the Alarmax Releasees.

      7. Confidentiality of Agreement. Except as may be required by law
(including in any securities filings by GVIS or Teitelbaum), the terms and
conditions of this Agreement are and shall be deemed confidential and shall not
be disclosed by the Companies, Teitelbaum or Alarmax to any other person or
entity, except to accountants, tax advisors or immediate family members,
provided they agree to maintain the confidentiality of this Agreement.

      8. Non-disparagement. Each of the parties hereto agrees not to publish or
communicate to any person or entity any Disparaging (as defined below) remarks,
comments or statements concerning the other parties and/or their present and
former respective members, managers, partners, director, shareholders, officers,
employees, agents, attorneys, successors and assigns. "Disparaging" remarks,
comments or statements are those that impugn the character, honesty, integrity
or morality or business acumen or abilities in connection with any aspect of the
operation of business of the individual or entity being disparaged.

      9. Representations, Warranties and Covenants of the Companies.


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<PAGE>

            (a) Each of the Companies hereby jointly and severally represents
and warrants to Teitelbaum and Alarmax that:

                  (i) Each of the Companies has the requisite power and
authority and legal capacity to enter into this Agreement and to carry out its
obligations thereunder and to consummate the transactions contemplated hereby.
All necessary corporate proceedings of the Companies have been duly taken to
authorize the execution, delivery and performance of this Agreement, including,
without limitation, the approval by the Board of Directors of GVIS. This
Agreement has been duly and validly executed and delivered by each of the
Companies and constitutes the legal, valid and binding agreement of each of the
Companies, enforceable against each of them in accordance with its terms. Except
for the required amendment to the lock-up provision of the Registration Rights
Agreement permitting Teitelbaum's sale of the Teitelbaum Shares to GVIS as
provided herein, no consent of any party to any contract, agreement, instrument,
or understanding to which any of the Companies is a party, or by which any of
their properties or assets is bound, is required for the execution, delivery or
performance by the Companies of this Agreement and to consummate the
transactions contemplated hereby.

                  (ii) None of the execution and delivery by either of the
Companies of this Agreement, the performance of its obligations hereunder or the
consummation of the transactions contemplated hereby will (1) conflict with the
Certificate of Incorporation or Bylaws of the Companies, (2) violate, result in
the breach of or conflict with any law, rule, regulation order, judgment or
decree binding on the Companies or which any of their operations, business,
properties or assets is subject or (3) with or without notice, the passage of
time or both, constitute a breach or violation of, be in conflict with or
constitute or create a default under any material agreement to which either of
the Companies is a party or by which either of them or any of their respective
properties are bound.

            (b) GVIS represents and warrants to Teitelbaum that the Settlement
Shares have been duly authorized by GVIS and, when issued and delivered in
accordance with the terms of this Agreement, will be validly issued and
delivered and fully paid and nonassessable shares of Common Stock.

            (c) GVIS has filed all forms, reports, statements and other
documents required by law to be filed with the SEC including, without
limitation, (1) all Annual Reports on Form 10-KSB, (2) all Quarterly Reports on
Form 10-QSB, (3) all Reports on Form 8-K, (4) all other reports or registration
statements and (5) all amendments and supplements to all such reports and
registration statements (collectively referred to as the "REPORTS"). The Reports
(i) were prepared in all material respects in accordance with the requirements
of applicable law (including the Securities Act of 1933, as amended (the
"SECURITIES ACT"), and the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Reports) and (ii) to the Company's knowledge, did
not at the time they were filed contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. In addition, since the last quarterly
report of GVIS on Form 10-QSB filed with the SEC on August 23, 2004, there have
been no material events that require disclosure under the Exchange Act that have
not been disclosed.


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<PAGE>

            (d) GVIS has provided Teitelbaum with copies of all comment letters
from the SEC with respect to the Registration Statement on Form SB-2 (File No.
333-117064) (the "REGISTRATION STATEMENT") and advised Teitelbaum as to the
status of the Registration Statement and GVIS shall continue to keep Teitelbaum
advised of such matters. Teitelbaum acknowledges that such information may be
material non-public information. Teitelbaum confirms to GVIS that he is aware
that the United States securities laws restrict persons with material non-public
information about a company obtained directly or indirectly from that company or
from a person or entity having a fiduciary relationship or contractual
non-disclosure arrangement or agreement with that company from purchasing or
selling securities (or any interests therein) of such company, or from
communicating such information to any other person under circumstances in which
he is reasonably foreseeable that such person is likely to purchase or sell such
securities (or any interests therein). Teitelbaum hereby confirms that he is
aware of its responsibilities under such securities laws.

            (e) GVIS covenants and agrees that there will be no selling
stockholders with respect to the Unterberg Private Placement or any other
Private Placement and that except for the purchase of the Teitelbaum Initial
Shares none of the proceeds of the Unterberg Private Placement or any other
Private Placement will be used to repurchase any outstanding GVIS securities
except that such proceeds may be used to repay securities issued in a bridge
financing consummated in anticipation of a Private Placement.

            (f) GVIS represents and warrants that as of the date hereof it has
provided Teitelbaum with true, complete and correct copies of the engagement
letter and term sheet (each dated August 5, 2004) with respect to the Unterberg
Private Placement, and, except as may be amended by this Agreement and with
respect to the lock-up provisions, such documents have not as of the date hereof
been amended, modified, supplemented or superseded (orally or in writing). GVIS
further represents and warrants that as of the date hereof it has not been
notified by C.E. Unterberg, Towbin LLC, either orally or in writing, that the
Unterberg Private Placement shall not proceed.

      10. Representations, Warranties and Covenants of Teitelbaum.

            (a) Teitelbaum represents and warrants to each of the Companies that

                  (i) he is the sole owner of all rights, title and interest in
and to the Teitelbaum Initial Shares and the Warrant free and clear of all Liens
(as defined in Section 13 below);

                  (ii) subject to the lock-up provision of the Registration
Rights Agreement, which shall be (or has been) amended to permit Teitelbaum's
sale of the Teitelbaum Shares to GVIS as provided herein, Teitelbaum has the
unrestricted right to sell, assign, transfer, convey and deliver to GVIS all
right, title and interest in and to the Teitelbaum Shares without penalty or
other adverse consequences, and upon the closing of any Teitelbaum Sale, GVIS
will own the Teitelbaum Shares free and clear of all Liens;


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<PAGE>

                  (iii) he does not own, beneficially or otherwise, direct or
indirectly, and has no claims to own, any equity interest or interest
convertible into an equity interest in the Companies other than the Teitelbaum
Shares and the Warrant, and he has no preemptive rights, rights of first refusal
or similar rights with respect to any securities of the Companies; and

                  (iv) that the Settlement Shares are being acquired for his own
account and not with a view to distribution within the meaning of the Securities
Act

            (b) Notwithstanding any rights Teitelbaum may have pursuant to the
Registration Rights Agreement or otherwise, Teitelbaum covenants and agrees that
as of the earlier of (i) the effectiveness of the Registration Statement and
(ii) the closing of the Private Placement, he will not, without the consent of
GVIS, offer, sell, contract to sell, pledge or otherwise dispose of, file (or
enter into any transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or effective
economic disposition due to cash settlement or otherwise) by Teitelbaum or any
of his affiliates or any person in privity with Teitelbaum or any of his
affiliates), directly or indirectly, including the filing or participation in
the filing of a registration statement with the SEC in respect of, or establish
or increase a put equivalent position or liquidate or decrease a call equivalent
position within the meaning of Section 16 of the Securities Exchange Act of
1934, as amended, and the rules and regulations of the SEC promulgated
thereunder with respect to, any shares of Common Stock of GVIS or any securities
convertible into or exercisable or exchangeable for such Common Stock, now owned
or hereafter acquired by Teitelbaum or any of his affiliates, including the
Teitelbaum Initial Shares and the Settlement Shares, or publicly announce an
intention to effect any such transaction, until the date which is fifteen months
after the closing of the Private Placement (the "LOCK-UP TERMINATION DATE").
GVIS may impose stock transfer instructions with respect to such shares of
Common Stock to enforce Teitelbaum's obligations under this Section 10(b). After
the Lock-up Termination Date, Teitelbaum covenants and agrees that all sales
shall be made pursuant to registration under the Securities Act and applicable
state securities laws or an applicable exemption from such registration. The
Company agrees that after the Lock-up Termination Date, Teitelbaum shall no
longer be bound by the lock-up provisions then in effect pursuant to the
Registration Rights Agreement. In the event that there is no closing of the
Private Placement resulting in the purchase in accordance with Section 13 hereof
by GVIS of at least $5 million of Teitelbaum Initial Shares ($2.5 million in
cash and $2.5 million in principal amount of the Note) by the Early Termination
Date, Teitelbaum shall no longer be subject to the lock-up provisions contained
in this Section 10(b) and he shall be free to sell the Teitelbaum Initial Shares
and the Settlement Shares subject to the terms of the Registration Rights
Agreement and the lock-up provisions of Section 6 thereof. The Early Termination
Date shall be December 31, 2004, unless extended as set forth in Section 10(c).
Prior to the date hereof, GVIS has provided Teitelbaum with copies of all
amendments to the Registration Rights Agreement and GVIS agrees, that, without
the written consent of Teitelbaum, the lock-up provisions set forth in Section 6
of the Registration Rights Agreement will not be further amended to reduce the
percentage of shares available for sale by Teitelbaum below 4% in any 90-day
period.


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<PAGE>

            (c) In the event that the effectiveness of the Registration
Statement occurs before the closing of the Private Placement, the lock-up
restrictions during the period between the effectiveness of the Registration
Statement until the closing of the Private Placement pertaining to Teitelbaum as
set forth in Section 10(b) hereof (the "PRIVATE PLACEMENT RESTRICTION PERIOD")
are specifically subject to an amendment to the Registration Rights Agreement
which has been duly executed by holders of a majority of the Registrable
Securities (as defined in the Registration Rights Agreement) restricting each
signatory to the Registration Rights Agreement (except Europa International,
Inc. and Thinking Technologies, L.P.), from selling any securities of GVIS
during the Private Placement Restriction Period (the "MAJORITY HOLDERS
LOCK-UP"). A copy of the executed amendment been provided to counsel for
Teitelbaum. The limitations described in the preceding sentence shall in no way
limit the lock-up restrictions contained in Section 10(b) hereof following the
closing of a Private Placement. Further, the Early Termination Date may be
extended by GVIS from December 31, 2004 to March 31, 2005 (such period the
"EXTENSION PERIOD") if (i) beginning at December 31, 2004 GVIS continues to use
commercially reasonable efforts to offer and sell securities in the Unterberg
Private Placement during the Extension Period or GVIS has entered in an
engagement letter with another placement agent no later than December 31, 2004
with respect to a Private Placement of GVIS securities and is using commercially
reasonable efforts to offer and sell the securities in the Private Placement
during the Extension Period and (ii) the Registration Rights Agreement is
further amended to extend the Majority Holders Lock-up to be restricted from
selling any securities of GVIS owned by them during the Extension Period. GVIS
shall provide Teitelbaum with (x) reasonable written notice, no later than
January 6, 2005, if it decides to exercise the Extension Period and (y)
reasonable documentation that the conditions set forth in the preceding sentence
have been satisfied.

      11. Representations and Warranties of Alarmax. Alarmax hereby represents
and warrants to each of the Companies that:

            (a) Alarmax has the requisite power and authority and legal capacity
to enter into this Agreement and to carry out its obligations hereunder and to
consummate the transactions contemplated hereby. All necessary corporate
proceedings of Alarmax have been duly taken to authorize the execution, delivery
and performance of this Agreement. This Agreement has been duly and validly
executed and delivered by Alarmax and constitutes the legal, valid and binding
agreement of Alarmax, enforceable against Alarmax in accordance with its terms.
No consent of any party to any contract, agreement, instrument, or understanding
to which Alarmax is a party, or by which any of its properties or assets is
bound, is required for the execution, delivery or performance by Alarmax of this
Agreement and to consummate the transactions contemplated hereby.

            (b) Neither the execution and delivery by Alarmax of this Agreement,
the performance of its obligations hereunder nor the consummation of the
transactions contemplated hereby will (i) conflict with its Certificate of
Incorporation or Bylaws or (ii) violate, result in the breach of or conflict
with any law, rule, regulation order, judgment or decree binding on it or which
any of its operations, business, properties or assets is subject or (iii) with
or without notice, the passage of time or both, constitute a breach or violation
of, be in conflict with or constitute or create a default under any material
agreement to which Alarmax is a party or by which it or any of its properties
are bound.


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<PAGE>

      12. Certain Deliveries. On the date hereof:

            (a) Teitelbaum will deliver to the Companies (i) (x) the Warrant for
cancellation or a (y) duly executed Affidavit of Loss and Indemnity, and (ii)
duly executed transfers of title and such other documents as may be necessary to
transfer the BMW to the Companies;

            (b) Alarmax will pay GVI $145,000 by check of immediately available
funds to an account designated by GVI;

            (c) GVIS will (i) deliver to Teitelbaum an executed copy of
instructions to the transfer agent of GVIS directing the issuance to Teitelbaum
of a certificate for 650,000 shares of Common Stock (representing the Settlement
Shares) and (ii) pay to Teitelbaum by check the sum of $40,000 to reimburse
Teitelbaum for legal fees and expenses pursuant to Section 15(j); and

            (d) each party will deliver such other documents reasonably
requested of it to be delivered to effectuate the transactions contemplated by
this Agreement.

      13. GVIS Stock Sale.

            (a) Upon completion by GVIS of the Private Placement raising Net
Proceeds (defined below) of $20 million or more, GVIS shall, subject to the
provisions set forth below, at such place and date designated below, use the Net
Proceeds from the Private Placement to purchase, and Teitelbaum shall sell, $10
million of Teitelbaum Initial Shares at the same price per share of Common Stock
(with no value allocated to any warrants which may be issued in the Private
Placement) sold by GVIS in the Private Placement. GVIS shall deliver notice (the
"PURCHASE NOTICE") to Teitelbaum upon its reasonable belief that it will have an
obligation to purchase the Teitelbaum Initial Shares in accordance with this
Section 13(a). The Purchase Notice shall set forth the amount of Teitelbaum
Initial Shares GVIS is obligated to purchase and the price per share. The
purchase price and the consideration to be paid by GVIS shall consist of cash
payable at closing in the amount of $5 million and a subordinated promissory
note (the "NOTE") in the principal amount of $5 million a copy of which is
attached hereto as Exhibit A; provided, however, for each dollar of Net Proceeds
raised in the Private Placement in excess of $20 million and less than $25
million the cash portion of the purchase price shall be increased by $0.50 and
the principal amount of the Note shall be decreased by $0.50; provided, further,
for each dollar of Net Proceeds raised in the Private Placement of $25 million
or more and less than or equal to $27.5 million, the cash portion of the
purchase price shall be increased by $1.00 and the principal amount of the Note
shall be decreased by $1.00. Notwithstanding anything to the contrary in this
Agreement, in the event the price per share of the Common Stock in any Private
Placement is $1.75 or less, Teitelbaum shall not be obligated to sell the
Teitelbaum Initial Shares to GVIS in accordance with this Section 13(a);
further, in the event Teitelbaum decides not to sell his Teitelbaum Initial
Shares to GVIS in accordance with this sentence, GVIS shall no longer be
obligated to purchase the Teitelbaum Initial Shares in accordance with this
Section 13(a). "NET PROCEEDS" for purposes of this Agreement shall mean the
gross proceeds from the sale of securities in the Private Placement less the
cash commission compensation payable to the placement agent for such Private
Placement.


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<PAGE>

            (b) Upon the completion by GVIS of the Private Placement raising Net
Proceeds of less than $20 million, GVIS shall, subject to the provisions set
forth below, at such place and date designated below, use the Net Proceeds from
the Private Placement to purchase, and Teitelbaum shall sell, such number of
Teitelbaum Initial Shares as may be purchased with 50% of the Net Proceeds of
Private Placement at the same price per share of Common Stock (with no value
allocated to any warrants which may be issued in the Private Placement) sold by
GVIS in the Private Placement. The purchase price and the consideration to be
paid by GVIS shall consist of (x) cash payable at closing in the amount of 50%
of the aggregate purchase price of the Teitelbaum Initial Shares required to be
purchased under this Section 13(b) (25% of the Net Proceeds) and (y) a Note in
the principal amount of 50% of the aggregate purchase price of the Teitelbaum
Initial Shares required to be purchased under this Section 13(b) (25% of the Net
Proceeds). GVIS shall deliver a Purchase Notice to Teitelbaum upon its
reasonable belief that it will have an obligation to purchase the Teitelbaum
Initial Shares in accordance with this Section 13(b). The Purchase Notice shall
set forth the amount of Teitelbaum Initial Shares GVIS is obligated to purchase
and the price per share. Notwithstanding anything to the contrary in this
Agreement, in the event the price per share of the Common Stock in any Private
Placement is $1.75 or less, Teitelbaum shall not be obligated to sell the
Teitelbaum Initial Shares to GVIS in accordance with this Section 13(b);
further, in the event Teitelbaum decides not to sell his Teitelbaum Initial
Shares to GVIS in accordance with this sentence, GVIS shall no longer be
obligated to purchase the Teitelbaum Initial Shares in accordance with this
Section 13(b).

            (c) Teitelbaum acknowledges that the Unterberg Private Placement is
being sold on a "best efforts" basis and there is no certainty as to the amount
of the proceeds, if any, of the Unterberg Private Placement or from any other
Private Placement. In the event the Private Placement is not consummated, the
releases and covenants provided by Teitelbaum in this Agreement, except as
otherwise expressly provided herein, shall remain in full force and effect and
GVIS shall have no further obligation to purchase any Teitelbaum Initial Shares
hereunder.

            (d) In the event that Teitelbaum receives less than $650,000 as
consideration for the purchase of the Teitelbaum Initial Shares pursuant to this
Agreement by March 31, 2005 (the "PURCHASE DEADLINE"), GVIS, at the option of
Teitelbaum, shall purchase from Teitelbaum at such place and date designated
below, such number of additional Teitelbaum Initial Shares, or 650,000
Teitelbaum Initial Shares if no Teitelbaum Initial Shares have been purchased by
the Purchase Deadline, at a purchase price of $1.00 per share (subject to
adjustment for any stock split, recapitalization, combination or similar event
effecting the Common Stock of GVIS occurring after the date hereof) so that GVIS
has purchased an aggregate of $650,000 of Teitelbaum Initial Shares. Teitelbaum
shall deliver written notice to GVIS upon his election for GVIS to purchase such
shares no later than 3 business days after the Purchase Deadline. Any purchase
by GVIS in accordance with this Section 13(d) shall not count toward the 4%
limitation in the lock-up provisions in Section 6 of the Registration Rights
Agreement.


                                       10
<PAGE>

            (e) For purposes of this Agreement, the term "PRIVATE PLACEMENT"
shall mean the Unterberg Private Placement or one or more sales by GVIS of its
Common Stock or securities convertible into Common Stock consummated no later
than March 31, 2005 for the purpose of raising equity capital; provided,
however, the term Private Placement shall not include any issuance or sale of
(i) securities to Laurus Master Fund, Ltd ("LAURUS") or its affiliates in
connection with conversion of debt with respect to the financing completed on
May 27, 2004 with Laurus or additional sums borrowed from Laurus in accordance
with the $5 million Secured Revolving Note and the accounts receivable facility
as set forth in that certain Security Agreement by and between GVIS and Laurus
dated May 27, 2004, (ii) debt securities exclusive of any equity securities or
securities convertible into equity or (iii) securities in connection with any
bridge financing consummated prior to December 21, 2004 in anticipation of
either the (A) Unterberg Private Placement or (B) a Private Placement in which
Oppenheimer or its affiliates acts as placement agent.

            (f) The indebtedness of the Companies to Teitelbaum under the Note
shall be subordinated to the indebtedness of the Companies to Lauras in
accordance with a subordination agreement, reasonably satisfactory to the
Teitelbaum and the Companies to be entered into by the Companies, Teitelbaum and
Lauras (to the extent applicable) (the "SUBORDINATION AGREEMENT") at the Stock
Closing (as defined below) with respect to the Teitelbaum Initial Shares. The
Subordination Agreement is attached hereto as Exhibit B.

            (g) GVIS agrees that it will direct the placement agent in any
Private Placement to deposit in escrow with Kronish Lieb Weiner and Hellman,
LLP, or a bank of national standing reasonably satisfactory to Teitelbaum at the
time of closing of the Private Placement such cash amount from the Net Proceeds
of the Private Placement which are necessary to repurchase the Teitelbaum
Initial Shares in accordance with this Agreement.

            (h) The closing of the purchase of the Teitelbaum Initial Shares
shall be held at the offices of Kronish Lieb Weiner & Hellman LLP, 1114 Avenue
of the Americas, New York, New York 10036 or such other place as GVIS and
Teitelbaum shall agree no later than the next business day following a closing
of the Private Placement triggering the purchase of the Teitelbaum Initial
Shares pursuant to Sections 13(a) or 13(b) hereof. The Stock Closing with
respect to the purchase and sale of Teitelbaum Initial Shares as provided in
Section 13(d) hereof shall occur no later than five business days after the
Purchase Deadline. At each Stock Closing, Teitelbaum shall deliver to GVIS (i) a
certificate or other instrument executed by Teitelbaum containing
representations to the effect that (x) Teitelbaum owns all right title and
interest in and to such shares as may transferred at any such closing, free and
clear of all liens, encumbrances, security interests, mortgages, hypothecations,
pledges, restrictions, option agreements or arrangements, rights of first
refusal, charges, claims or other rights of any kind (collectively, "LIENS") and
(y) Teitelbaum has the unrestricted right to sell, assign, transfer, convey and
deliver to GVIS all right, title and interest in and to the Teitelbaum Initial
Shares, as may be transferred at such closing without penalty or other adverse
consequences, and upon the Stock Closing, GVIS will own the Teitelbaum Initial
Shares free and clear of all Liens, (ii) such other documents as may be
reasonably requested by GVIS and (iii) duly executed stock powers and such other
documents as may be necessary to transfer the Teitelbaum Initial Shares being
then sold to GVIS. GVIS shall wire to an account designated by Teitelbaum
payment of the purchase price in immediately available funds. There may be more
than one Stock Closing. Each such closing described in this Section 13(h) shall
be referred to as a "STOCK CLOSING" hereunder.

      14. Indemnification.


                                       11
<PAGE>

            (a) Indemnification by Teitelbaum. Teitelbaum agrees to indemnify
and hold harmless the Companies, their officers and directors, employees, agents
and representatives and affiliates and each other person, if any, who controls
any thereof, against any loss, liability, claim, damage and expense whatsoever
(including, but not limited to, any and all expenses whatsoever reasonably
incurred in investigating, preparing or defending against any litigation
commenced or threatened or any claim whatsoever) arising out of or based upon
any untruth, inaccuracy, or breach of any of the representations, warranties,
covenants or agreements of Teitelbaum contained in this Agreement, the Note (to
the extent applicable), the Subordination Agreement (to the extent applicable)
or in any other document furnished by Teitelbaum to any of the foregoing in
connection with this transaction.

            (b) Indemnification by Alarmax. Alarmax agrees to indemnify and hold
harmless the Companies, their officers and directors, employees, agents and
representatives and affiliates and each other person, if any, who controls any
thereof, against any loss, liability, claim, damage and expense whatsoever
(including, but not limited to, any and all expenses whatsoever reasonably
incurred in investigating, preparing or defending against any litigation
commenced or threatened or any claim whatsoever) arising out of or based upon
any untruth, inaccuracy, or breach of any of the representations, warranties,
covenants or agreements of Alarmax contained in this Agreement or in any other
document furnished by Alarmax to any of the foregoing in connection with this
transaction.

            (c) Indemnification by the Companies. The Companies agree to
indemnify and hold harmless Teitelbaum and Alarmax, its officers and directors,
employees, agents, representatives and affiliates and each other person, if any,
who controls any thereof, against any loss, liability, claim, damage and expense
whatsoever (including, but not limited to, any and all expenses whatsoever
reasonably incurred in investigating, preparing or defending against any
litigation commenced or threatened or any claim whatsoever) arising out of or
based upon any untruth, inaccuracy, or breach of any of the representations,
warranties, covenants or agreements of the Companies contained in this
Agreement, the Note (to the extent applicable), the Subordination Agreement (to
the extent applicable) or in any other document furnished by the Companies to
any of the foregoing in connection with this transaction.

            (d) Notices of Claims. Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in Section 14(a), 14(b) or 14(c) such indemnified party will,
if a claim in respect thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action; provided,
however, that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under this
Section 14, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. In case any such action is brought
against an indemnified party, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation; provided, however, that if the indemnified party reasonably
believes it is advisable for it to be represented by separate counsel because
there exists a conflict of interest between its interests and those of the
indemnifying party with respect to such claim, or there exist defenses available
to such indemnified party which may not be available to the indemnifying party,
or if the indemnifying party shall fail to assume responsibility for such
defense, the indemnified party may retain counsel satisfactory to it and the
indemnifying party shall pay all fees and expenses of such counsel. No
indemnifying party shall be liable for any settlement of any action or
proceeding effected without its written consent, which consent shall not be
unreasonably withheld or delayed. No indemnifying party shall, without the
consent of the indemnified party, consent to entry of any judgment or enter into
any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation or which requires action
other than the payment of money by the indemnifying party. Each indemnified
party shall furnish such information regarding itself or the claim in question
as an indemnifying party may reasonably request in writing and as shall be
reasonably requested in connection with the defense of such claim and litigation
resulting therefrom.


                                       12
<PAGE>

      15. Miscellaneous.

            (a) Entire Agreement; Amendment. This Agreement supersedes all prior
oral and written agreements between the parties and their affiliates with
respect to the subject matter hereof. This Agreement and the other documents and
agreements between the parties and their affiliates which are referred to herein
or executed contemporaneously herewith set forth the entire agreement among the
parties with respect to the subject matter hereof and thereof. No agreement
shall be effective to change, modify, waive, release, amend, terminate,
discharge or effect an abandonment of this Agreement, in whole or in part,
unless such agreement is in writing, refers expressly to this Agreement and is
signed by the party against whom enforcement of the change, modification,
waiver, release, amendment, termination, discharge or effectuation of the
abandonment is sought.

            (b) Survival of Representations and Warranties. The representations
and warranties of the Companies, Teitelbaum and Alarmax contained in or made
pursuant to this Agreement, shall survive the execution and delivery of such
documents and the Closing for a period of 15 months and shall in no way be
affected by any investigation of the subject matter thereof made by or on behalf
of the Companies, Teitelbaum or Alarmax.

            (c) Counterparts. This Agreement may be executed in one or more
counterparts, each of which together shall constitute one and the same
agreement. This Agreement shall be binding on the parties hereto notwithstanding
that the parties are not all signatories to the same counterpart so long as each
party shall have executed and delivered a counterpart of this Agreement. The
transmission of a signed counterpart of this Agreement by telecopier shall
constitute sufficient delivery hereof.

            (d) Governing Law. This Agreement is made under and shall be
governed by and construed in accordance with the internal laws of the State of
New York without regard to the conflict of laws principles thereof; provided,
however, this Agreement as between Alarmax and the Companies shall be governed
by and construed in accordance with the governing law provisions set forth in
Section 13 of the Supply Agreement.


                                       13
<PAGE>

            (e) Successors and Assigns; Assignment. This Agreement and the
provisions hereof shall be binding upon, and inure to the benefit of, and be
enforceable by, the parties hereto and their respective successors, heirs,
beneficiaries, personal representatives, executors, successors and permitted
assigns (and in the case of indemnities to benefits of all persons indemnified).
This Agreement and the rights and obligations hereunder shall not be assigned by
any party hereto without the prior written consent of the other parties hereto;
except that GVIS may assign this Agreement without the consent of any party
hereto in the case of a merger of GVIS in which GVIS is not the surviving
entity.

            (f) Further Assurances. Each party shall, at any time and from time
to time after the date hereof, do, execute, acknowledge and deliver, or cause to
be done, executed, acknowledged and delivered, all such further acts, deeds,
assignments, transfers, conveyances, powers of attorney, receipts,
acknowledgments, acceptances and assurances as may be reasonably required to
procure for any party, and his, her or its successors and assigns, the benefits
intended to be conferred upon such party under this Agreement.

            (g) Severability. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by reason of any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions or agreements of the parties contemplated hereby
are not affected in any manner materially adverse to any party; provided,
however, that upon a finding by a court of competent jurisdiction that any of
the releases and covenants provided for in Sections 5 through 6 hereof are
illegal, void, or unenforceable, the Companies, Teitelbaum or Alarmax, as the
case may be, agrees to execute a release, waiver and/or covenant that is legal
and enforceable. Upon the determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in a mutually acceptable manner.

            (h) Jurisdiction, Venue, Service of Process. Any action or
proceeding with respect to this Agreement shall be brought exclusively in the
courts of the state of New York residing in the borough of Manhattan or of the
United States of America for the Southern District of New York, in the borough
of Manhattan, and, by execution and delivery of this Agreement, each party
hereto hereby accepts for itself and in respect of its property, generally and
unconditionally, the exclusive jurisdiction of the aforesaid courts; provided;
however, any action or proceeding with respect to this Agreement or the matters
reserved by the Companies or Alarmax in Sections 5(b) or 6(b) shall be brought
in accordance with the jurisdiction procedures set forth in Section 13 of the
Supply Agreement. Each party hereto hereby waives, and agrees not to assert, as
a defense in any action, suit or proceeding for the interpretation or
enforcement of this Agreement or any related document, that it is not subject
thereto or that such action, suit or proceeding may not be brought or is not
maintainable in said courts or that this Agreement or any related document may
not be enforced in or by said courts or that its property is exempt or immune
from execution, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or proceeding is improper
or (provided that process shall be served in any manner referred to in the
following sentence) that service of process upon such party is ineffective. Each
party hereto agrees that service of process in any such action, suit or
proceeding against it with respect to this Agreement may be made upon it in any
manner permitted by the laws of the state of New York or the federal laws of the
United States or as follows: (i) by personal service or by certified or
registered mail to the party's designated agent for such service in such state,
or (ii) by certified or registered mail to the party at its address provided for
in subsection (i) below. Service of process in any manner referred to in the
preceding sentence shall be deemed, in every respect, effective service of
process upon such party.


                                       14
<PAGE>

            (i) Notices. Any and all notices, requests, demands, consents and
other communications required or permitted under this Agreement shall be in
writing, signed by or on behalf of the party by which given, and shall be
considered to have been duly given when (i) delivered by hand, (ii) sent by
telecopier (with receipt confirmed), provided that a copy is mailed (on the same
date) by first class mail, postage prepaid, or (iii) delivered to the addressee,
if sent by Express Mail, Federal Express or other reputable express delivery
service (receipt requested), or by first class certified or registered mail,
return receipt requested, postage prepaid, in each case to the appropriate
addresses and telecopier numbers set forth as follows:

                  If to any of the Companies:

                           GVI Security Solutions, Inc.
                           1621 West Crosby Road, Suite 104
                           Carrollton, Texas 75006
                           Fax: (972) 245-7333
                           Attn: Nazzareno Paciotti

                  with a copy to:

                           Kronish Lieb Weiner & Hellman LLP
                           1114 Avenue of the Americas
                           New York, New York 10036
                           Fax: (212) 479-6275
                           Attn:  Alison Newman, Esq.

                  If to Teitelbaum:

                           William Teitelbaum
                           4 Winston Court
                           Dix Hills, New York 11746


                                       15
<PAGE>

                  with a copy to:

                 Olshan Grundman Frome Rosenzweig & Wolosky LLP
                           Park Avenue Tower
                           65 East 55th Street
                           New York, New York 10022
                           Fax: (212) 451-2222
                           Attn: James F. Gellman, Esq. and Sam Schwartz, Esq.

                  If to Alarmax:

                           Alarmax Distributors, Inc.
                           Building 9, Suite 310
                           Foster Plaza
                           750 Holiday Drive
                           Pittsburgh, PA 15220
                           Fax:  (412) 921-4333
                           Attn:  Roger Graf

                  with a copy to:

                           Reed Smith LLP
                           435 Sixth Avenue
                           Pittsburgh, PA 15219
                           Fax:  (412) 288-3063
                           Attn: Joseph F. Rodkey, Jr. Esq.

or to such other addresses and telecopier numbers as a party may from time to
time designate as to itself by notice similarly given to the other parties in
accordance herewith. A notice of change of address shall not be deemed given
until delivered to the addressee.

            (j) Expenses. Except as provided herein, each party will be liable
for its own costs and expenses incurred in connection with the negotiation,
preparation, execution or performance of this Agreement and with the
transactions contemplated hereby including, without limitation, all fees of
legal counsel, auditors and financial advisors; provided; however, the Companies
agree to reimburse Teitelbaum concurrently herewith for the actual, documented
and reasonable legal costs and expenses incurred by him in connection with the
negotiation, preparation, execution or performance of this Agreement (and all
prior negotiations with respect thereto, including, without limitation, the
settlement agreement contemplated by the parties hereto with respect to the Term
Sheet executed in May 2004) and with the transactions contemplated hereby, up to
$40,000, in accordance with invoices previously delivered by Teitelbaum.

            (k) Headings. The headings of sections in this Agreement are for
reference only and shall not limit or control the meaning thereof.

                            [Signature Page Follows]


                                       16
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.


                                                 GVI SECURITY SOLUTIONS, INC.


                                                 By:____________________________
                                                 Name:
                                                 Title:



                                                 GVI SECURITY, INC.


                                                 By:____________________________
                                                 Name:
                                                 Title:


                                                 ALARMAX DISTRIBUTORS, INC.


                                                 By:____________________________
                                                 Name:
                                                 Title:


                                                 -------------------------------
                                                 William A. Teitelbaum