Document:

Exhibit 10.2

THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT
AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO GVI SECURITY SOLUTIONS, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.

                         SECURED CONVERTIBLE TERM NOTE

      FOR VALUE RECEIVED, GVI SECURITY SOLUTIONS, INC., a Delaware corporation
(the "BORROWER"), hereby promises to pay to LAURUS MASTER FUND, LTD., c/o
Ironshore Corporate Services Ltd., P.O. Box 1234 G.T., Queensgate House, South
Church Street, Grand Cayman, Cayman Islands, Fax: 345-949-9877 (the "HOLDER") or
its registered assigns or successors in interest, on order, the sum of Five
Million Dollars ($5,000,000), together with any accrued and unpaid interest
hereon, on May 27, 2007 (the "MATURITY DATE") if not sooner paid.

      Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in that certain Securities Purchase Agreement dated as of
the date hereof between the Borrower and the Holder (the "PURCHASE AGREEMENT").
This is the Note referred to in the Purchase Agreement, and all forms, terms and
provisions thereof are expressly incorporated herein by reference.

The following terms shall apply to this Note:

                                    ARTICLE I
                             INTEREST & AMORTIZATION

      1.1(a) Interest Rate. Subject to Sections 4.11 and 5.6 hereof, interest
payable on this Note shall accrue at a rate per annum (the "INTEREST Rate")
equal to the "prime rate" published in The Wall Street Journal from time to
time, plus two percent (2.0%). The Interest Rate shall be increased or decreased
as the case may be for each increase or decrease in the prime rate in an amount
equal to such increase or decrease in the prime rate; each change to be
effective as of the day of the change in such rate. Subject to Section 1.1(b)
hereof, the Interest Rate shall not be less than six percent (6.0%). Interest
shall be (i) calculated on the basis of a 360 day year, (ii) payable monthly, in
arrears, commencing on June 1, 2004 and on the first business day of each
consecutive calendar month thereafter until the Maturity Date (and on the
Maturity Date), whether by acceleration or otherwise (each, a "REPAYMENT DATE").

<PAGE>

      1.1 (b) Interest Rate Adjustment. The Interest Rate shall be calculated on
the last business day of each month hereafter until the Maturity Date (each a
"DETERMINATION DATE") and be subject to adjustment as set forth herein. If (i)
the Borrower shall have an effective registration statement under the Securities
Act of 1933, as amended, with respect to the shares of the Borrower's common
stock, par value $.001 per share ("COMMON STOCK") issuable upon (x) conversion
of the Note, and (y) exercise of that certain warrant of even date herewith
issued to Holder (collectively, the "UNDERLYING SHARES"), and (ii) the average
closing market price (the "MARKET PRICE") of the Common Stock as reported by
Bloomberg, L.P. on the Principal Market (as defined below) for the five (5)
trading days immediately preceding a Determination Date exceeds the then
applicable Fixed Conversion Price by at least twenty five percent (25%), the
Interest Rate for the succeeding calendar month shall automatically be reduced
by 200 basis points (200 b.p.) (2.0%) for each incremental twenty five percent
(25%) increase in the Market Price of the Common Stock above the then applicable
Fixed Conversion Price. If (i) the Borrower shall not have an effective
registration statement with respect to the Underlying Shares, and (ii) the
Market Price of the Common Stock as reported by Bloomberg, L.P. on the Principal
Market for the five (5) trading days immediately preceding a Determination Date
exceeds the then applicable Fixed Conversion Price by at least twenty five
percent (25%), the Interest Rate for the succeeding calendar month shall
automatically be decreased by 100 basis points (100 b.p.) (1.0%) for each
incremental twenty five percent (25%) increase in the Market Price of the Common
Stock above the then applicable Fixed Conversion Price.

      1.2 Minimum Monthly Principal Payments. Amortizing payments of the
aggregate principal amount outstanding under this Note at any time (the
"PRINCIPAL AMOUNT") shall begin on the first business day in September, 2004 and
shall recur and be due and payable on the first business day of each succeeding
month thereafter until the Maturity Date (each, an "AMORTIZATION DATE") as set
forth in the table below:

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       Month         Principal Amount           Month        Principal Amount
--------------------------------------------------------------------------------
        9/04               $75,000              4/06              $150,000
--------------------------------------------------------------------------------
       10/04               $75,000              5/06              $150,000
--------------------------------------------------------------------------------
       11/04               $75,000              6/06              $190,000
--------------------------------------------------------------------------------
       12/04               $75,000              7/06              $190,000
--------------------------------------------------------------------------------
        1/05               $75,000              8/06              $190,000
--------------------------------------------------------------------------------
        2/05               $75,000              9/06              $190,000
--------------------------------------------------------------------------------
        3/05               $75,000              10/06             $190,000
--------------------------------------------------------------------------------
        4/05               $75,000              11/06             $190,000
--------------------------------------------------------------------------------

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--------------------------------------------------------------------------------
        5/05               $75,000              12/06             $190,000
--------------------------------------------------------------------------------
        6/05              $150,000              1/07              $190,000
--------------------------------------------------------------------------------
        7/05              $150,000              2/07              $190,000
--------------------------------------------------------------------------------
        8/05              $150,000              3/07              $190,000
--------------------------------------------------------------------------------
        9/05              $150,000              4/07              $190,000
--------------------------------------------------------------------------------
       10/05              $150,000              5/07              $435,000
--------------------------------------------------------------------------------
       11/05              $150,000
--------------------------------------------------------------------------------
       12/05              $150,000
--------------------------------------------------------------------------------
        1/06              $150,000
--------------------------------------------------------------------------------
        2/06              $150,000
--------------------------------------------------------------------------------
        3/06              $150,000
--------------------------------------------------------------------------------

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

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      Subject to Section 3 below, beginning on the first Amortization Date, the
Borrower shall make monthly payments to the Holder on each Repayment Date, each
in the amount set forth above, together with any accrued and unpaid interest to
date on such portion of the Principal Amount plus any and all other amounts
which are then due and owing under this Note but have not been paid
(collectively, the "MONTHLY AMOUNT"). Any Principal Amount that remains
outstanding on the Maturity Date shall be due and payable on the Maturity Date.

                                   ARTICLE II
                              CONVERSION REPAYMENT

      2.1 (a) Payment of Monthly Amount in Cash or Common Stock. Each month, no
later than the fifth (5th) business day prior to each Amortization Date (the
"NOTICE DATE"), subject to 2.1(b), the Holder shall deliver to Borrower a
written notice in the form of Exhibit B attached hereto stating the Monthly
Amount payable on the next Repayment Date in cash or converted into Common
Stock, or a combination of both (each, a "REPAYMENT NOTICE"). Subject to Section
2.1(b), if a Repayment Notice is not delivered by the Holder on or before the
applicable Notice Date for such Repayment Date, then the Borrower shall pay the

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<PAGE>

Monthly Amount due on such Repayment Date in cash. If the Holder converts all or
a portion of the Monthly Amount into shares of Common Stock as provided herein,
the number of such shares to be issued by the Borrower to the Holder on such
Repayment Date shall be the number determined by dividing (x) the portion of the
Monthly Amount to be paid in shares of Common Stock, by (y) the then applicable
Fixed Conversion Price. For purposes hereof, the initial "FIXED CONVERSION
PRICE" means $2.70

      (b) Monthly Amount Conversion Guidelines. Subject to Sections 2.1(a), 2.2,
and 3.2 hereof, the Holder shall convert all or a portion of the Monthly Amount
due on each Repayment Date into shares of Common Stock if the average closing
price of the Common Stock as reported by Bloomberg, L.P. on the Principal Market
for the five (5) trading days immediately preceding the applicable Repayment
Date is greater than or equal to 110% of the Fixed Conversion Price, so that the
Holder shall be paid the Monthly Amount due to the Holder on such Repayment Date
in shares of Common Stock, provided, however, that the amount of the Monthly
Amount payable in Common Stock on the applicable Repayment Date shall, if
applicable, be limited to thirty five percent (35%) of the aggregate dollar
trading volume of the Common Stock for the ten (10) day trading period
immediately preceding the applicable Notice Date. Any part of the Monthly Amount
due on a Repayment Date that the Holder has not converted into Common Stock
pursuant to this Section 2.1(b) shall be paid by the Borrower in cash within
three (3) Business Days of the applicable Repayment Date.

      2.2 No Effective Registration. Notwithstanding anything to the contrary
herein, none of the Borrower's obligations to the Holder may be paid in shares
of Common Stock unless (i) either (x) an effective current Registration
Statement (as defined in the Registration Rights Agreement) covering the shares
of Common Stock issuable upon conversion of this Note exists or (y) an exemption
from registration of the Common Stock is available to the Holder pursuant to
Rule 144 of the Securities Act and (ii) no Event of Default hereunder exists and
is continuing, unless such Event of Default is cured within any applicable cure
period or is otherwise waived in writing by the Holder in whole or in part at
the Holder's option.

      Any amounts paid in shares of Common Stock pursuant to this Section 2.2
shall be deemed to constitute payments of outstanding fees, interest and
principal arising in connection with Monthly Amounts for the remaining Repayment
Dates, in chronological order.

      2.4 Optional Redemption in Cash. The Borrower will have the option of
prepaying this Note ("OPTIONAL REDEMPTION") by paying to the Holder a sum of
money equal to one hundred twenty percent (120%) of the principal amount then
outstanding under this Note together with accrued but unpaid interest thereon
and any and all other sums due, accrued or payable to the Holder arising under
this Note, the Purchase Agreement, or any Related Agreement (the "REDEMPTION
AMOUNT") outstanding on the Redemption Payment Date (defined below) specified in
the written notice of redemption (the "NOTICE OF REDEMPTION"). The Notice of
Redemption shall specify the date for such Optional Redemption (the "REDEMPTION
PAYMENT DATE") which date shall be seven (7) business days after the date of the

                                       4
<PAGE>

Notice of Redemption (the "REDEMPTION PERIOD"). A Notice of Redemption shall not
be effective with respect to any portion of this Note for which the Holder has
previously delivered a Notice of Conversion (defined below), or for any portion
of this Note for which a Notice of Conversion is delivered during the Redemption
Period. The Redemption Amount shall be determined as if the Holder's conversion
elections had been completed immediately prior to the date of the Notice of
Redemption. On the Redemption Payment Date, the Redemption Amount must be paid
in good funds to the Holder. In the event the Borrower fails to pay the
Redemption Amount on the Redemption Payment Date as set forth herein, then such
Redemption Notice will be null and void.

                                  ARTICLE III
                               CONVERSION RIGHTS

      3.1. Holder's Conversion Rights. The Holder shall have the right, but not
the obligation, to convert all or any portion of the then aggregate outstanding
principal amount of this Note, together with interest and fees due hereon, into
shares of Common Stock subject to the terms and conditions set forth in this
Article III. The shares of Common Stock to be issued upon such conversion are
herein referred to as the "Conversion Shares." The Holder may exercise such
right by delivery to the Borrower of a written notice of conversion not less
than one (1) day prior to the date upon which such conversion shall occur.

      3.2 Conversion Limitation. Notwithstanding anything contained herein to
the contrary, the Holder shall not be entitled to convert pursuant to the terms
of this Note an amount that would be convertible into that number of Conversion
Shares which would exceed the difference between the number of shares of Common
Stock beneficially owned by such Holder or issuable upon exercise of warrants
held by such Holder and 4.99% of the outstanding shares of Common Stock of the
Borrower. For the purposes of the immediately preceding sentence, beneficial
ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and Regulation 13d-3 thereunder. The Holder may void the Conversion Share
limitation described in this Section 3.2 upon 75 days prior notice to the
Borrower or without any notice requirement upon an Event of Default.

      3.3 Mechanics of Holder's Conversion. (a) In the event that the Holder
elects to convert this Note into Common Stock, the Holder shall give notice of
such election by delivering an executed and completed notice of conversion
("NOTICE OF CONVERSION") to the Borrower and such Notice of Conversion shall
provide a breakdown in reasonable detail of the Loans, accrued interest and fees
that are being converted. On each Conversion Date (as hereinafter defined) and
in accordance with its Notice of Conversion, the Holder shall make the
appropriate reduction to the Loans outstanding hereunder, accrued interest and
fees as entered in its records and shall provide written notice thereof to the
Borrower within two (2) business days after the Conversion Date. Each date on
which a Notice of Conversion is delivered or telecopied to the Borrower in
accordance with the provisions hereof shall be deemed a Conversion Date (the
"CONVERSION Date"). A form of Notice of Conversion to be employed by the Holder
is annexed hereto as Exhibit A. Pursuant to the terms of the Notice of
Conversion, the Borrower will within one (1) Business Day of the date of the

                                       5
<PAGE>

delivery to Borrower of the Notice of Conversion, instruct its counsel to issue
an opinion with respect to the issuance of the Conversion Shares, and instruct
the transfer agent to transmit the certificates representing the Conversion
Shares to the Holder either by hand delivery, or if it is capable, by crediting
the account of the Holder's designated broker with the Depository Trust
Corporation ("DTC") through its Deposit Withdrawal Agent Commission ("DWAC")
system within three (3) Business Days after receipt by the Borrower of the
Notice of Conversion. In the case of the exercise of the conversion rights set
forth herein the conversion privilege shall be deemed to have been exercised and
the Conversion Shares issuable upon such conversion shall be deemed to have been
issued upon the date of receipt by the Borrower of the Notice of Conversion. The
Holder shall be treated for all purposes as the record holder of such Common
Stock, unless the Holder provides the Borrower written instructions to the
contrary.

      (b) Late Payments. The Borrower understands that a delay in the delivery
of the shares of Common Stock in the form required pursuant to this Article
beyond three (3) Business Days after Borrower's receipt of the Conversion Notice
(the "DELIVERY DATE") could result in economic loss to the Holder. As
compensation to the Holder for such loss, in the event Borrower fails to
instruct the transfer agent or its counsel within one (1) Business Day as
required by Section 3.3, and as a result thereof, certificates representing the
Conversion Shares are not delivered to the Holder on or before the Delivery
Date, the Borrower agrees to pay late payments to the Holder for late issuance
of such shares in the form required pursuant to this Article III upon conversion
of the Note, in the amount equal to $500 per Business Day for each day Borrower
fails to provide such instructions to its transfer agent and/or its counsel, but
solely if Borrower fails to provide such instructions to its transfer agent
and/or its counsel as provided in Section 3.3 above. The Borrower shall pay any
payments incurred under this Section in immediately available funds upon demand.

      3.4   Conversion Mechanics.

      (a) The number of shares of Common Stock to be issued upon each conversion
of this Note shall be determined by dividing that portion of the principal and
interest and fees to be converted, if any, by the then applicable Fixed
Conversion Price. In the event of any conversions of outstanding principal
amount under this Note in part pursuant to this Article III, such conversions
shall be deemed to constitute conversions of outstanding principal amount
applying to Monthly Amounts for the remaining Repayment Dates in chronological
order. By way of example, if the original principal amount of this Note is
$5,000,000 and the Holder converted $200,000 of such original principal amount
prior to the first Repayment Date, then (1) the principal amount of the Monthly
Amount due on the first Repayment Date would equal $0, (2) the principal amount
of the Monthly Amount due on the second Repayment Date would equal $0 and (3)
the principal amount of the Monthly Amount due on the third Repayment Date would
be $50,000.

      (b) The Fixed Conversion Price and number and kind of shares or other
securities to be issued upon conversion is subject to adjustment from time to
time upon the occurrence of certain events, as follows:

                                       6
<PAGE>

      A. Reclassification, etc. If the Borrower at any time shall, by
reclassification or otherwise, change the Common Stock into the same or a
different number of securities of any class or classes, this Note, as to the
unpaid Principal Amount and accrued interest thereon, shall thereafter be deemed
to evidence the right to purchase an adjusted number of such securities and kind
of securities as would have been issuable as the result of such change with
respect to the Common Stock immediately prior to such reclassification or other
change.

      B. Stock Splits, Combinations and Dividends. If the shares of Common Stock
are subdivided or combined into a greater or smaller number of shares of Common
Stock, or if a dividend is paid on the Common Stock in shares of Common Stock,
the Fixed Conversion Price or the Conversion Price, as the case may be, shall be
proportionately reduced in case of subdivision of shares or stock dividend or
proportionately increased in the case of combination of shares, in each such
case by the ratio which the total number of shares of Common Stock outstanding
immediately after such event bears to the total number of shares of Common Stock
outstanding immediately prior to such event.

      C. Share Issuances. Subject to the provisions of this Section 3.4, if the
Borrower shall at any time prior to the conversion or repayment in full of the
Principal Amount issue any shares of Common Stock or securities convertible into
Common Stock to a person other than the Holder (except (i) pursuant to
Subsections A or B above; (ii) pursuant to options, warrants, or other
obligations to issue shares outstanding on the date hereof as disclosed to
Holder in writing; (iii) pursuant to options that may be issued under any
employee incentive stock option and/or any qualified stock option plan adopted
by the Borrower; (iv) in connection with an underwritten public offering of the
Borrower's securities; (v) pursuant to a merger or acquisition transaction
approved by Borrower's Board of Directors; (vi) to a "strategic partner" as
determined by Borrower's Board of Directors; or (vii) to Holder or any of its
Affiliates) for a consideration per share (the "Offer Price") less than the
Fixed Conversion Price in effect at the time of such issuance, then the Fixed
Conversion Price shall be immediately reset pursuant to the formula below.

            If the Company issues any additional shares pursuant to Section 3.4
above then, and thereafter successively upon each such issue, the Fixed
Conversion Price shall be adjusted by multiplying the then applicable Fixed
Conversion Price by the following fraction:

        -------------------------------
                  A + B
        -------------------------------

        (A + B) +  [((C  - D) x B) / C]
        -------------------------------

            A = Total amount of shares convertible pursuant to this Note.

            B =  Actual shares sold in the offering

            C = Fixed Conversion Price

            D = Offering price

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<PAGE>

      D. Computation of Consideration. For purposes of any computation
respecting consideration received pursuant to Subsection C above, the following
shall apply:

            (a) in the case of the issuance of shares of Common Stock for cash,
the consideration shall be the amount of such cash, provided that in no case
shall any deduction be made for any commissions, discounts or other expenses
incurred by the Borrower for any underwriting of the issue or otherwise in
connection therewith;

            (b) in the case of the issuance of shares of Common Stock for a
consideration in whole or in part other than cash, the consideration other than
cash shall be deemed to be the fair market value thereof as determined in good
faith by the Board of Directors of the Borrower (irrespective of the accounting
treatment thereof); and

            (c) Upon any such exercise, the aggregate consideration received for
such securities shall be deemed to be the consideration received by the Borrower
for the issuance of such securities plus the additional minimum consideration,
if any, to be received by the Borrower upon the conversion or exchange thereof
(the consideration in each case to be determined in the same manner as provided
in clauses (a) and (b) of this Subsection (D)).

      E. Reservation of Shares. During the period the conversion right exists,
the Borrower will reserve from its authorized and unissued Common Stock a
sufficient number of shares to provide for the issuance of Common Stock upon the
full conversion of this Note. The Borrower represents that upon issuance, such
shares will be duly and validly issued, fully paid and non-assessable. The
Borrower agrees that its issuance of this Note shall constitute full authority
to its officers, agents, and transfer agents who are charged with the duty of
executing and issuing stock certificates to execute and issue the necessary
certificates for shares of Common Stock upon the conversion of this Note.

      3.5 Issuance of New Note. Upon any partial conversion of this Note, a new
Note containing the same date and provisions of this Note shall, at the request
of the Holder, be issued by the Borrower to the Holder for the principal balance
of this Note and interest which shall not have been converted or paid. The
Borrower will pay no costs, fees or any other consideration to the Holder for
the production and issuance of a new Note.

                                       8
<PAGE>

                                   ARTICLE IV
                                EVENTS OF DEFAULT

      Upon the occurrence and continuance of an Event of Default beyond any
applicable grace period, the Holder may make all sums of principal, interest and
other fees then remaining unpaid hereon and all other amounts payable hereunder
immediately due and payable. In the event of such an acceleration, within five
(5) days after written notice from Holder to Borrower (each occurrence being a
"DEFAULT NOTICE PERIOD") the amount due and owing to the Holder shall be 115% of
the outstanding principal amount of the Note (plus accrued and unpaid interest
and fees, if any) (the "DEFAULT PAYMENT"). If, with respect to any Event of
Default, the Borrower cures the Event of Default, the Event of Default will be
deemed to no longer exist and any rights and remedies of Holder pertaining to
such Event of Default will be of no further force or effect. The Default Payment
shall be applied first to any fees due and payable to Holder pursuant to the
Note or the Related Agreements, then to accrued and unpaid interest due on the
Note and then to outstanding principal balance of the Note.

      The occurrence of any of the following events set forth in Sections 4.1
through 4.10, inclusive, is an "EVENT OF DEFAULT":

      4.1 Failure to Pay Principal, Interest or other Fees. The Borrower fails
to pay when due any installment of principal, interest or other fees hereon in
accordance herewith, or the Borrower fails to pay when due any amount due under
any other promissory note issued by Borrower to Holder, and in any such case,
such failure shall continue for a period of three (3) days following the date
upon which any such payment was due.

      4.2 Breach of Covenant. The Borrower breaches any material covenant or any
other material term or condition of this Note or the Purchase Agreement in any
material respect, or the Borrower or any of its Subsidiaries breaches any
material covenant or any other material term or condition of any Related
Agreement in any material respect and, any such case, such breach, if subject to
cure, continues for a period of fifteen (15) days after notice from Holder of
the occurrence thereof.

      4.3 Breach of Representations and Warranties. Any material representation
or warranty made by the Borrower in this Note or the Purchase Agreement, or by
the Borrower or any of its Subsidiaries in any Related Agreement, shall, in any
such case, be false or misleading in any material respect on the date that such
representation or warranty was made or deemed made.

      4.4 Receiver or Trustee. The Borrower or any of its Subsidiaries shall
make an assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its
property or business; or such a receiver or trustee shall otherwise be
appointed.

                                       9
<PAGE>

      4.5 Judgments. Any money judgment, writ or similar final process shall be
entered or filed against the Borrower or any of its Subsidiaries or any of their
respective property or other assets for more than $250,000, and shall remain
unvacated, unbonded or unstayed for a period of thirty (30) days.

      4.6 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation
proceedings or other proceedings or relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Borrower or any
of its Subsidiaries.

      4.7 Stop Trade. An SEC stop trade order or Principal Market trading
suspension of the Common Stock shall be in effect for five (5) consecutive days
or five (5) days during a period of ten (10) consecutive days, excluding in all
cases a suspension of all trading on a Principal Market, provided that the
Borrower shall not have been able to cure such trading suspension within thirty
(30) days of the notice thereof or list the Common Stock on another Principal
Market within sixty (60) days of such notice. The "Principal Market" for the
Common Stock shall include the over-the-counter market, the NASD OTC Bulletin
Board, NASDAQ SmallCap Market, NASDAQ National Market System, American Stock
Exchange, or New York Stock Exchange (whichever of the foregoing is at the time
the principal trading exchange or market for the Common Stock), or any
securities exchange)or other securities market on which the Common Stock is then
being listed or traded.

      4.8 Failure to Deliver Transfer Agent Instructions. The Borrower shall
fail to instruct the transfer agent to deliver the Common Stock to the Holder as
required by this Note or Section 9 of the Securities Purchase Agreement, and as
a result thereof, certificates representing such shares of Common Stock are not
delivered to the Holder within ten business days after the date Borrower was
required to so instruct the transfer agent.

      4.9 Default Under Related Agreements or Other Agreements. The occurrence
and continuance of any Event of Default (as defined in any Related Agreement) or
any event of default (or similar term) under any other indebtedness which
results in the acceleration of obligations of the Borrower in the amount of
$250,000.

      4.10 Change in Control. The occurrence of a change in the controlling
ownership of the Borrower; provided, however, that a change in the controlling
ownership of the Borrower shall be deemed not to occur if the person obtaining
such control possessed beneficial ownership, directly or indirectly, as of the
date hereof, of 35% or more of Borrower's outstanding shares of Common Stock.

                           DEFAULT RELATED PROVISIONS

      4.11 Payment Grace Period. Following the occurrence and continuance of an
Event of Default beyond any applicable cure period hereunder, the Borrower shall
pay the Holder a default interest rate equal to three percent (3%) per annum
above the Interest Rate from time to time in effect on all amounts due and owing
under the Note, which default interest shall be payable upon demand.

                                       10
<PAGE>

      4.12 Conversion Privileges. The conversion privileges set forth in Article
III shall remain in full force and effect immediately from the date hereof and
until this Note is paid in full.

      4.13 Cumulative Remedies. The remedies under this Note shall be
cumulative.

                                   ARTICLE V
                                 MISCELLANEOUS

      5.1 Failure or Indulgence Not Waiver. No failure or delay on the part of
the Holder hereof in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege. All rights and remedies existing
hereunder are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

      5.2 Notices. Any notice herein required or permitted to be given shall be
in writing and shall be deemed effectively given: (a) upon personal delivery to
the party notified, (b) when sent by confirmed telex or facsimile if sent during
normal business hours of the recipient, if not, then on the next business day,
(c) five days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (d) one day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the
Borrower at the address provided in the Purchase Agreement executed in
connection herewith, and to the Holder at the address provided in the Purchase
Agreement for such Holder, with a copy to John E. Tucker, Esq., 825 Third
Avenue, 14th Floor, New York, New York 10022, facsimile number (212) 541-4434,
or at such other address as the Borrower or the Holder may designate by ten days
advance written notice to the other parties hereto. A Notice of Conversion shall
be deemed given when made to the Borrower pursuant to the Purchase Agreement.

      5.3 Amendment Provision. The term "Note" and all reference thereto, as
used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or
supplemented, and any successor instrument issued pursuant to Section 3.5
hereof, as it may be amended or supplemented.

      5.4 Assignability. This Note shall be binding upon the Borrower and its
successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns, and may be assigned by the Holder in accordance with the
requirements of the Purchase Agreement. This Note shall not be assigned by the
Borrower without the consent of the Holder.

      5.5 Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of laws. Any action brought by either party against the other
concerning the transactions contemplated by this Agreement shall be brought only
in the state courts of New York or in the federal courts located in the state of
New York. Both parties and the individual signing this Note on behalf of the
Borrower agree to submit to the jurisdiction of such courts. The prevailing
party shall be entitled to recover from the other party its reasonable

                                       11
<PAGE>

attorney's fees and costs. In the event that any provision of this Note is
invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law. Any such provision which may prove invalid or unenforceable under any law
shall not affect the validity or unenforceability of any other provision of this
Note. Nothing contained herein shall be deemed or operate to preclude the Holder
from bringing suit or taking other legal action against the Borrower in any
other jurisdiction to collect on the Borrower's obligations to Holder, to
realize on any collateral or any other security for such obligations, or to
enforce a judgment or other court in favor of the Holder.

      5.6 Maximum Payments. Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Borrower to the Holder and thus refunded to the
Borrower.

      5.7 Security Interest and Guarantee. The Holder has been granted a
security interest (i) in certain assets of the Borrower and its Subsidiaries as
more fully described in the Master Security Agreement dated as of the date
hereof and (ii) pursuant to the Stock Pledge Agreement dated as of the date
hereof. The obligations of the Borrower under this Note are guaranteed by
certain Subsidiaries of the Borrower pursuant to the Subsidiary Guaranty dated
as of the date hereof.

      5.8 Construction. Each party acknowledges that its legal counsel
participated in the preparation of this Note and, therefore, stipulates that the
rule of construction that ambiguities are to be resolved against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against the other.

      5.9 Cost of Collection. If default is made in the payment of this Note,
the Borrower shall pay to Holder reasonable costs of collection, including
reasonable attorney's fees.

      [Balance of page intentionally left blank; signature page follows.]

                                       12
<PAGE>

      IN WITNESS WHEREOF, the Borrower has caused this Convertible Term Note to
be signed in its name effective as of this 27th day of May, 2004.

                                          GVI SECURITY SOLUTIONS, INC.

                                          By:
                                             -----------------------------------
                                          Name:
                                               ---------------------------------
                                          Title:
                                                --------------------------------

WITNESS:

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

                                       13
<PAGE>

                                   EXHIBIT A

                              NOTICE OF CONVERSION

(To be executed by the Holder in order to convert all or part of the Note into
Common Stock

[Name and Address of Holder]

The Undersigned hereby converts $_________ of the principal due [plus $_________
of interest and fees] under the Convertible Term Note issued by GVI SECURITY
SOLUTIONS, INC. dated May __, 2004 by delivery of shares of Common Stock of GVI
SECURITY SOLUTIONS, INC. on and subject to the conditions set forth in Article
III of such Note.

1.    Date of Conversion
                               ---------------------------

2.    Shares To Be Delivered:
                               ---------------------------

                                     By:
                                        -----------------------------------
                                     Name:
                                          ---------------------------------
                                     Title:
                                           --------------------------------

                                       14
<PAGE>

                                   EXHIBIT B

                                REPAYMENT NOTICE

(To be executed by the Holder in order to convert  all or part of a Monthly
Amount into Common Stock)

[Name and Address of Holder]

Holder hereby elects to be repaid $_________ of the Monthly Amount due on
[specify applicable Repayment Date] under the Convertible Term Note issued by
GVI SECURITY SOLUTIONS, INC. dated _______, 200__ by delivery of Shares of
Common Stock of GVI SECURITY SOLUTIONS, INC. on and subject to the conditions
set forth in Article III of such Note.

1.    Fixed Conversion Price: $
                               ---------------------------------------

2.    Amount to be paid:      $
                               ---------------------------------------

3.    Shares To Be Delivered (2 divided by 1):
                                                ----------------------

4.    Cash payment to be made by Borrower :    $
                                                ----------------------

Date:                                     LAURUS  MASTER FUND, LTD.
     --------------

                                          By:
                                             -----------------------------------
                                          Name:
                                               ---------------------------------
                                          Title:
                                                --------------------------------

                                       15Exhibit 10.3

      THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
      THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
      1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE
      COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
      OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
      EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT
      AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
      REASONABLY SATISFACTORY TO GVI SECURITY SOLUTIONS, INC. THAT SUCH
      REGISTRATION IS NOT REQUIRED.

       Right to Purchase up to 940,000 Shares of Common Stock of GVI
                          Security Solutions, Inc.
                 (subject to adjustment as provided herein)

                       COMMON STOCK PURCHASE WARRANT

No. 1                                                   Issue Date: May 27, 2004

      GVI SECURITY SOLUTIONS, INC., a corporation organized under the laws of
the State of Delaware ("GVIS"), hereby certifies that, for value received,
LAURUS MASTER FUND, LTD., or assigns (the "Holder"), is entitled, subject to the
terms set forth below, to purchase from the Company (as defined herein) from and
after the Issue Date of this Warrant and at any time or from time to time before
5:00 p.m., New York time, through the close of business on May 27, 2011 (the
"Expiration Date"), up to 940,000 fully paid and nonassessable shares of Common
Stock (as hereinafter defined), $0.001 par value per share, at the applicable
Exercise Price per share (as defined below). The number and character of such
shares of Common Stock and the applicable Exercise Price per share are subject
to adjustment as provided herein.

      As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:

            (a) The term "Company" shall include GVIS and any corporation which
      shall succeed, or assume the obligations of, GVIS hereunder.

            (b) The term "Common Stock" includes (i) the Company's Common Stock,
      par value $0.001 per share; and (ii) any other securities into which or
      for which any of the securities described in (a) may be converted or
      exchanged pursuant to a plan of recapitalization, reorganization, merger,
      sale of assets or otherwise.

            (c) The term "Other Securities" refers to any stock (other than
      Common Stock) and other securities of the Company or any other person
      (corporate or otherwise) which the holder of the Warrant at any time shall
      be entitled to receive, or shall have received, on the exercise of the
      Warrant, in lieu of or in addition to Common Stock, or which at any time
      shall be issuable or shall have been issued in exchange for or in
      replacement of Common Stock or Other Securities pursuant to Section 4 or
      otherwise.

<PAGE>

            (d) The "Exercise Price" applicable under this Warrant shall be
      $3.50 for all shares acquired hereunder.

      1. Exercise of Warrant.

            1.1 Number of Shares Issuable upon Exercise. From and after the date
hereof through and including the Expiration Date, the Holder shall be entitled
to receive, upon exercise of this Warrant in whole or in part, by delivery of an
original or fax copy of an exercise notice in the form attached hereto as
Exhibit A (the "Exercise Notice") and payment of the Exercise Price as provided
in Section 2.2, shares of Common Stock of the Company, subject to adjustment
pursuant to Section 4.

            1.2 Fair Market Value. For purposes hereof, the "Fair Market Value"
of a share of Common Stock as of a particular date (the "Determination Date")
shall mean:

            (a) If the Company's Common Stock is traded on the American Stock
      Exchange or another national exchange or is quoted on the National or
      SmallCap Market of The Nasdaq Stock Market, Inc. ("Nasdaq"), then the
      closing or last sale price, respectively, reported for the last business
      day immediately preceding the Determination Date.

            (b) If the Company's Common Stock is not traded on the American
      Stock Exchange or another national exchange or on the Nasdaq but is traded
      on the NASD OTC Bulletin Board, then the mean of the average of the
      closing bid and asked prices reported for the last business day
      immediately preceding the Determination Date.

            (c) Except as provided in clause (d) below, if the Company's Common
      Stock is not publicly traded, then as the Holder and the Company agree or
      in the absence of agreement by arbitration in accordance with the rules
      then in effect of the American Arbitration Association, before a single
      arbitrator to be chosen from a panel of persons qualified by education and
      training to pass on the matter to be decided.

            (d) If the Determination Date is the date of a liquidation,
      dissolution or winding up, or any event deemed to be a liquidation,
      dissolution or winding up pursuant to the Company's charter, then all
      amounts to be payable per share to holders of the Common Stock pursuant to
      the charter in the event of such liquidation, dissolution or winding up,
      plus all other amounts to be payable per share in respect of the Common
      Stock in liquidation under the charter, assuming for the purposes of this
      clause (d) that all of the shares of Common Stock then issuable upon
      exercise of the Warrant are outstanding at the Determination Date.

            1.3 Company Acknowledgment. The Company will, at the time of the
exercise of the Warrant, upon the request of the holder hereof acknowledge in
writing its continuing obligation to afford to such holder any rights to which
such holder shall continue to be entitled after such exercise in accordance with
the provisions of this Warrant. If the holder shall fail to make any such
request, such failure shall not affect the continuing obligation of the Company
to afford to such holder any such rights.

                                       2
<PAGE>

            1.4 Trustee for Warrant Holders. In the event that a bank or trust
company shall have been appointed as trustee for the holders of the Warrant
pursuant to Subsection 3.2, such bank or trust company shall have all the powers
and duties of a warrant agent (as hereinafter described) and shall accept, in
its own name for the account of the Company or such successor person as may be
entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 1.

      2. Procedure for Exercise.

            2.1 Delivery of Stock Certificates, Etc., on Exercise. The Company
agrees that the shares of Common Stock purchased upon exercise of this Warrant
shall be deemed to be issued to the Holder as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares in accordance herewith. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within three (3) business days thereafter, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder, or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share, together with any other stock or other
securities and property (including cash, where applicable) to which such Holder
is entitled upon such exercise pursuant to Section 1 or otherwise.

            2.2 Exercise. Payment may be made either (i) in cash or by certified
or official bank check payable to the order of the Company equal to the
applicable aggregate Exercise Price, (ii) by delivery of the Warrant, or shares
of Common Stock and/or Common Stock receivable upon exercise of the Warrant in
accordance with the formula set forth below in this Section 2.2, or (iii) by a
combination of any of the foregoing methods, for the number of shares of Common
Stock specified in such Exercise Notice (as such exercise number shall be
adjusted to reflect any adjustment in the total number of shares of Common Stock
issuable to the Holder per the terms of this Warrant) and the Holder shall
thereupon be entitled to receive the number of duly authorized, validly issued,
fully-paid and non-assessable shares of Common Stock (or Other Securities)
determined as provided herein. Notwithstanding any provisions herein to the
contrary, if the Fair Market Value of one share of Common Stock is greater than
the Exercise Price (at the date of calculation as set forth below), in lieu of
exercising this Warrant for cash, the Holder may elect to receive shares equal
to the value (as determined below) of this Warrant (or the portion thereof being
exercised) by surrender of this Warrant at the principal office of the Company
together with the properly endorsed Exercise Notice in which event the Company
shall issue to the Holder a number of shares of Common Stock computed using the
following formula:

      X = Y    (A-B)
              -------
                 A

                                       3
<PAGE>

      Where X =   the  number of  shares  of Common  Stock to be issued to the
                  Holder

      Y =         the number of shares of Common Stock purchasable under the
                  Warrant or, if only a portion of the Warrant is being
                  exercised, the portion of the Warrant being exercised (at the
                  date of such calculation)

      A =         the Fair Market Value of one share of the Company's Common
                  Stock (at the date of such calculation)

      B =         Exercise Price (as adjusted to the date of such calculation)

      3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.

            3.1 Reorganization, Consolidation, Merger, Etc. In case at any time
or from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder of this
Warrant, on the exercise hereof as provided in Section 1 at any time prior to
the Expiration Date and after the consummation of such reorganization,
consolidation or merger or the effective date of such dissolution, as the case
may be, shall receive, in lieu of the Common Stock (or Other Securities)
issuable on such exercise prior to such consummation or such effective date, the
stock and other securities and property (including cash) to which such Holder
would have been entitled upon such consummation or in connection with such
dissolution, as the case may be, if such Holder had so exercised this Warrant,
immediately prior thereto, all subject to further adjustment thereafter as
provided in Section 4.

            3.2 Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, concurrently with any distributions made to holders of its Common
Stock, shall at its expense deliver or cause to be delivered to the Holder the
stock and other securities and property (including cash, where applicable)
receivable by the Holder of the Warrant pursuant to Section 3.1, or, if the
Holder shall so instruct the Company, to a bank or trust company specified by
the Holder and having its principal office in New York, NY as trustee for the
Holder of the Warrant (the "Trustee").

            3.3 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 3, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 4. In the
event this Warrant does not continue in full force and effect after the
consummation of the transactions described in this Section 3, then the Company's
securities and property (including cash, where applicable) receivable by the
Holders of the Warrant will be delivered to Holder or the Trustee as
contemplated by Section 3.2.

                                       4
<PAGE>

      4. Extraordinary Events Regarding Common Stock. In the event that the
Company shall (a) issue additional shares of the Common Stock as a dividend or
other distribution on outstanding Common Stock, (b) subdivide its outstanding
shares of Common Stock, or (c) combine its outstanding shares of the Common
Stock into a smaller number of shares of the Common Stock, then, in each such
event, the Exercise Price shall, as of the record date for such dividend or
distribution or as of the effective date of such event, as applicable, be
adjusted by multiplying the then Exercise Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such event and the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such event, and the product so
obtained shall thereafter be the Exercise Price then in effect. The Exercise
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein in this Section 4. The number
of shares of Common Stock that the holder of this Warrant shall thereafter, on
the exercise hereof as provided in Section 1, be entitled to receive shall be
increased to a number determined by multiplying the number of shares of Common
Stock that would otherwise (but for the provisions of this Section 4) be
issuable on such exercise by a fraction of which (a) the numerator is the
Exercise Price that would otherwise (but for the provisions of this Section 4)
be in effect, and (b) the denominator is the Exercise Price in effect on the
date of such exercise.

      5. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrant, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of the Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price
and the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant. The Company will forthwith
mail a copy of each such certificate to the holder of the Warrant and any
Warrant agent of the Company (appointed pursuant to Section 11 hereof).

      6. Reservation of Stock, Etc., Issuable on Exercise of Warrant. The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of the Warrant, shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of the Warrant.

      7. Assignment; Exchange of Warrant. Subject to compliance with applicable
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a "Transferor") in whole or in
part. On the surrender for exchange of this Warrant, with the Transferor's
endorsement in the form of Exhibit B attached hereto (the "Transferor
Endorsement Form") and together with evidence reasonably satisfactory to the
Company demonstrating compliance with applicable securities laws, which shall
include, without limitation, the provision of a legal opinion from the
Transferor's counsel (at the Company's expense) that such transfer is exempt
from the registration requirements of applicable securities laws, and with

                                       5
<PAGE>

payment by the Transferor of any applicable transfer taxes) will issue and
deliver to or on the order of the Transferor thereof a new Warrant of like
tenor, in the name of the Transferor and/or the transferee(s) specified in such
Transferor Endorsement Form (each a "Transferee"), calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for on
the face or faces of the Warrant so surrendered by the Transferor.

      8. Replacement of Warrant. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

      9. Registration Rights. The Holder of this Warrant has been granted
certain registration rights by the Company. These registration rights are set
forth in a Registration Rights Agreement entered into by the Company and
Purchaser dated as of even date of this Warrant.

      10. Maximum Exercise. The Holder shall not be entitled to exercise this
Warrant on an exercise date, in connection with that number of shares of Common
Stock which would be in excess of the sum of (i) the number of shares of Common
Stock beneficially owned by the Holder and its affiliates on an exercise date,
and (ii) the number of shares of Common Stock issuable upon the exercise of this
Warrant with respect to which the determination of this proviso is being made on
an exercise date, which would result in beneficial ownership by the Holder and
its affiliates of more than 4.99% of the outstanding shares of Common Stock of
the Company on such date. For the purposes of the proviso to the immediately
preceding sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation
13d-3 thereunder. Notwithstanding the foregoing, the restriction described in
this paragraph may be revoked upon 75 days prior notice from the Holder to the
Company and is automatically null and void upon an Event of Default under the
Note.

      11. Warrant Agent. The Company may, by written notice to the each Holder
of the Warrant, appoint an agent for the purpose of issuing Common Stock (or
Other Securities) on the exercise of this Warrant pursuant to Section 1,
exchanging this Warrant pursuant to Section 7, and replacing this Warrant
pursuant to Section 8, or any of the foregoing, and thereafter any such
issuance, exchange or replacement, as the case may be, shall be made at such
office by such agent.

      12. Transfer on the Company's Books. Until this Warrant is transferred on
the books of the Company, the Company may treat the registered holder hereof as
the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.

      13. Notices, Etc. All notices and other communications from the Company to
the Holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such Holder or, until any such Holder furnishes to the
Company an address, then to, and at the address of, the last Holder of this
Warrant who has so furnished an address to the Company.

                                       6
<PAGE>

      14. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.

      15. Miscellaneous. This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought. This Warrant shall be governed by and construed in accordance with
the laws of State of New York without regard to principles of conflicts of laws.
Any action brought concerning the transactions contemplated by this Warrant
shall be brought only in the state courts of New York or in the federal courts
located in the state of New York; provided, however, that the Holder may choose
to waive this provision and bring an action outside the state of New York. The
individuals executing this Warrant on behalf of the Company agree to submit to
the jurisdiction of such courts and waive trial by jury. The prevailing party
shall be entitled to recover from the other party its reasonable attorney's fees
and costs. In the event that any provision of this Warrant is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of this Warrant.
The headings in this Warrant are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision hereof. The Company acknowledges that
legal counsel participated in the preparation of this Warrant and, therefore,
stipulates that the rule of construction that ambiguities are to be resolved
against the drafting party shall not be applied in the interpretation of this
Warrant to favor any party against the other party.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
                            SIGNATURE PAGE FOLLOWS.]

                                       7
<PAGE>

      IN WITNESS WHEREOF, the Company has executed this Warrant as of the date
first written above.

                                         GVI SECURITY SOLUTIONS, INC.

WITNESS:
                                         By:
                                                 -------------------------------
                                         Name:
                                                 -------------------------------
                                         Title:
--------------------------------------           -------------------------------

                                       8
<PAGE>

                                   EXHIBIT A

                              FORM OF SUBSCRIPTION
                   (To Be Signed Only On Exercise Of Warrant)

TO:   GVI Security Solutions, Inc.

      Attention:  Chief Financial Officer

      The undersigned, pursuant to the provisions set forth in the attached
Warrant (No.____), hereby irrevocably elects to purchase (check applicable box):

                    shares of the Common Stock covered by such Warrant; or
--------    --------

            the maximum number of shares of Common Stock covered by such Warrant
            pursuant to the cashless exercise procedure set forth in Section 2.
--------

      The  undersigned  herewith  makes payment of the full Exercise Price for
such  shares at the price per share  provided  for in such  Warrant,  which is
$___________.  Such payment takes the form of (check applicable box or boxes):

            $           in lawful money of the United States; and/or
--------     ----------

            the cancellation of such portion of the attached Warrant as is
--------    exercisable for a total of _______ shares of Common Stock (using a
            Fair Market Value of $_______ per share for purposes of this
            calculation); and/or

            the cancellation of such number of shares of Common Stock as is
--------    necessary, in accordance with the formula set forth in Section 2.2,
            to exercise this Warrant with respect to the maximum number of
            shares of Common Stock purchasable pursuant to the cashless exercise
            procedure set forth in Section 2.

      The undersigned requests that the certificates for such shares be issued
in the name of, and delivered to ______________________________________________
whose address is
___________________________________________________________________________.

      The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the "Securities Act") or pursuant to an exemption from
registration under the Securities Act.

Dated:
      ------------------------        ------------------------------------------
                                      (Signature must conform to name of holder
                                      as specified on the face of the Warrant)

                                      Address:
                                               ---------------------------------

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

                                      A-1
<PAGE>

                                   EXHIBIT B

                         FORM OF TRANSFEROR ENDORSEMENT
                   (To Be Signed Only On Transfer Of Warrant)

      For value received, the undersigned hereby sells, assigns, and transfers
unto the person(s) named below under the heading "Transferees" the right
represented by the within Warrant to purchase the percentage and number of
shares of Common Stock of GVI Security Solutions, Inc. into which the within
Warrant relates specified under the headings "Percentage Transferred" and
"Number Transferred," respectively, opposite the name(s) of such person(s) and
appoints each such person Attorney to transfer its respective right on the books
of GVI Security Solutions, Inc. with full power of substitution in the premises.

                                                       Percentage      Number
Transferees                 Address                    Transferred   Transferred
-----------                 -------                    -----------   -----------

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

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

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

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

Dated:
      ------------------------        ------------------------------------------
                                      (Signature must conform to name of holder
                                      as specified on the face of the Warrant)

                                      Address:
                                               ---------------------------------

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

                                      SIGNED IN THE PRESENCE OF:

                                      ------------------------------------------
                                                        (Name)
ACCEPTED AND AGREED:
[TRANSFEREE]

--------------------------------------
               (Name)

                                      B-1

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