Document:

CONFIDENTIAL

     

    Exhibit
      10.1

     

    DISTRIBUTORSHIP
      AGREEMENT

    

    This
      AGREEMENT made and entered into on this October
      2, 2006
      (“Effective Date”), by and between SAMSUNG ELECTRONICS CO., LTD. having its
      place of business at 416 Maetan 3-Dong, Yeongtong-Gu, Suwon City, KyungKi-Do,
      KOREA (hereinafter referred to as the “Seller”), and GVI SECURITY INC. having
      its place of business at 2801 Trade Center Drive, Suite 120, Carrollton, Texas.
      75007, U.S.A (hereinafter referred to as the “Distributor”), hereinafter jointly
      referred to as the PARTIES.

     

    WITNESSETH

    

    WHEREAS,
      the Seller is engaged in manufacturing and marketing of CCTV and Security
      Surveillance Equipment, the details of which is defined as below (hereinafter
      referred to as the “Products”), and whereas, the Distributor desires to purchase
      and market such Products under the terms and conditions of this Agreement;
      

    

    WHEREAS,
      the parties entered into Distributor Agreement generally describing, and
      providing certain obligations and rights of the parties relating to
      distributorship in effective August 31, 2004, and terminating on October 2,
      2006. (“Previous Agreement”) 

    

    WHEREAS,
      the parties wish to enter into a distribution arrangement by entering into
      this
      Agreement, which shall define and provide more detailed rights and obligations
      of the parties;

    

    NOW
      THEREFORE, in consideration of the promise and mutual covenants hereunder set
      forth, the Parties hereto agree as follows:

    

    ARTICLE
      1. SCOPE OF AGREEMENT

    

    
      
        	1.1	
                The
                  Seller entrusts the distributor with the Right to sell “SAMSUNG” CCTV and
                  SECURITY SURVEILLANCE PRODUCTS in the territory(s) of North, Central
                  and
                  South America.(“Territory”) During the Term of this Agreement the
                  Distributor is authorized to publicly define its activity with
                  the
                  following statement:
                  Authorized
                  Distributor of SAMSUNG ELECTRONICS CO., LTD. CCTV and SECURITY
                  SURVEILLANCE PRODUCTS. Samsung grants the Distributor the right
                  to sell,
                  market, lease and distribute the Products in the Territory. Samsung
                  will
                  not compete and sell Products directly or indirectly, through other
                  distributors, or Samsung business units, to the Top 25 customers
                  of
                  Distributor. (The list of Top 25 customers set forth in the Attachment
                  1 “
                  Top 25 customers”). 

              

      

    

    

    
      
        	1.2	
                Unless
                  otherwise specified in Section 1.1, Seller reserves the rights
                  to sell and
                  distribute in the Territory either directly or, through any third
                  party
                  any products under its trademarks or any other private brand names
                  to any
                  person, agent or distributor in the Territory without any liability
                  to the
                  Distributor. 

              

      

    

    

    
      
        	1.3	
                "Products",
                  which are covered by this Agreement, shall exclusively mean the
                  following
                  types of products manufactured by the Seller under "Samsung"
                  trademarks:

              

      

    

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

        CONFIDENTIAL

      

    

     

    1)
      Complete Professional security product line 

    

    ARTICLE
      2. SALE AND PURCHASE OF PRODUCTS 

     

    
      
        	2.1	
                Subject
                  to the terms and conditions of this Agreement, The Seller agrees
                  to sell
                  to the Distributor and the Distributor agrees to purchase Products
                  from
                  The Seller.

              

      

    

    

    
      
        	2.2	
                No
                  order from the Distributor is binding on the Seller until the Seller
                  gives
                  the Distributor a confirmation of an acceptance of the order issued
                  by the
                  Distributor. In no event the Distributor shall rescind or amend
                  any order
                  which is accepted by the
                  Seller.

              

      

    

    

    
      
        	2.3	
                The
                  Distributor shall issue to the Seller its purchase order for the
                  Products
                  at least forty five (45) days prior to the shipment of the
                  Products.

              

      

    

    

    
      
        	2.4	
                The
                  Seller shall use its best effort to accept any reasonable orders
                  for the
                  products placed by the Distributor, provided that it shall not
                  be required
                  to accept a Distributor’s order or any part thereof
                  when:

              

      

    

    

    
      	(a)  	
              the
                Seller has discontinued the manufacture or sale of the Products ordered
                at
                the time the order is received, (provided, however, that Distributor
                must
                be notified 90 days in advance of any discontinued products),
                or

            

    

    

    
      	(b)  	
              the
                Distributor has defaulted upon any of Sections of this
                Agreement;

            

    

     

    ARTICLE
      3. TERMS OF AGREEMENT - UNDERTAKINGS AND PROHIBITIONS 

    

    
      
        
          	3.1	
                  This
                    Agreement shall remain in full force and effect from the Effective
                    Date
                    until December 31, 2010, unless sooner terminated pursuant to
                    terms and
                    conditions of this Agreement. This Agreement may be renewed or
                    extended
                    only by mutual written agreement of the parties within sixty
                    (60) days
                    prior to the relevant expiration of this Agreement.
                    

                

        

      

    

    

    
      
        
          	3.2	
                  The
                    Distributor must reach a Minimum Annual Purchase Objective of
                    U$  

                

        

      

    

    (on
      the
      basis of actual shipping) for the specified Agreement period as follows
      ;

    

    U$
      Million

    
      
        
          	
                  Year

                	 	
                  Annual
                    Total

                	 	
                  Remark

                	 
	
                  2006

                	 	 	
                  21

                	 	 	
                  
                  

                	 
	
                  2007

                	 	 	
                  27

                	 	 	
                  
                  

                	 
	
                  2008

                	 	 	
                  
                  

                	 	 	
                  
                  

                	 
	
                  2009

                	 	 	
                  
                  

                	 	 	
                  
                  

                	 
	
                  2010

                	 	 	 	 	 	 	 

        

      
 

    
      
        	3.3	
                The
                  Minimum Purchase Objective of the year of 2008, 2009 and 2010 shall
                  be
                  automatically increased 20% each year from the base year of 2007.
                  In case
                  the market growth rate of the preceding year (“Market Growth Rate”) is
                  more than 20%, which is based on the data and information provided
                  by
                  market survey institutes with international repute such as IMS
                  or JP
                  Freeman, the Minimum Purchase Objective shall be automatically
                  increased
                  by [the Market Growth Rate + (Market Growth Rate*30%)].
                  

              

      

    

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

        CONFIDENTIAL

      

    

     

    
      
        	3.4	
                For
                  the purposes of this Section, the Products shall be deemed to have
                  been
                  purchased when Products have been shipped to Distributor from Seller’s
                  factory. 

              

      

    

    

    
      
        	3.5	
                This
                  Agreement can be terminated by Seller at any time if the Distributor
                  does
                  not attain the Minimum Annual Purchase Objective in each given
                  year.

              

      

    

     

    ARTICLE
      4. MARKET DEVELOPMENT FUND 

    

    
      
        	4.1	
                Subject
                  to Distributor’s satisfactory account status, , the Seller shall support
                  the Distributor by providing Quarterly Market Development Fund
                  (hereinafter referred to MDF) for its Samsung brand marketing and
                  promotion in Territory such as advertising in magazines or attending
                  exhibitions as follows ; 

              

      

    

    

    
      
        	
              	4.1.1	
                When
                  the distributor reaches the Minimum Annual Purchase Objective referred
                  to
                  the above Article 3.2, the seller shall provide the distributor
                  with
                  3%
                  of
                  the Minimum Annual Purchase in the following year as
                  MDF.

              

      

    

    

    
      
        	
              	4.1.2	
                When
                  the distributor reaches80%
                  ~ 99% of
                  the Minimum Annual Purchase Objective referred to the above Article
                  3.2,
                  the seller shall provide the distributor with 2.5%
                  of
                  the Minimum Annual Purchase in the following year as
                  MDF.

              

      

    

    

    
      
        	
              	4.1.3	
                When
                  the distributor reaches less than 80%
                  of
                  the Minimum Annual Purchase Objective referred to the above Article
                  3.2,
                  the seller shall provide the distributor with 2%
                  of
                  the Minimum Annual Purchase in the following year as
                  MDF.

              

      

    

    

    
      
        	
              	4.1.4	
                Seller
                  agrees to reimburse Distributor 50% of total cost of the ISC West
                  trade
                  show and will further provide products and on site engineering
                  support for
                  the ASIS show.

              

      

    

     

    ARTICLE
      5. Responsibilities
      of Distributor

    

    
      
        	5.1	
                The
                  Distributor
                  shall perform all of its obligations under the Agreement and
                  shall
                  make commercially reasonable efforts to promote, market and sell
                  the
                  quantity of Products, and shall conduct its business consistent
                  with the
                  reputation for quality enjoyed by Seller and its products. 

              

      

      	 	 

      	 	The
              Distributor undertakes to focus its marketing effort on Seller’s products
              but not to the exclusion of other products sold by the Distributor
              and
              recognizes that the level of investment required to properly support
              the
              Products is substantial. 

    

     

    
      
        	5.2	
                The
                  Distributor shall: (a) conduct its business in a manner that reflects
                  favorably on the Products and on the good name, goodwill and reputation
                  of
                  the Seller; (b) avoid deception, misleading or unethical practices;
                  and
                  (c) promote and further the interest of the Seller, its name and
                  Products.

              

      

    

    

    
      
        	5.3	
                The
                  Distributor may contact the Seller for assistance, and shall do
                  so in the
                  event a defect can not be resolved by the distributor within a
                  reasonable
                  period of time or to the satisfaction of the Distributor's customer.
                  Nothing herein, however, shall be interpreted as creating any obligation
                  or liability for the Seller to provide, or to provide free of charge,
                  any
                  service or assistance to any customer of the Distributor, unless
                  specifically agreed otherwise by the Seller in
                  writing.

              

      

    

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

        CONFIDENTIAL

      

    

     

    
      
        	5.4	
                The
                  Distributor shall maintain an inventory of spare parts and Product
                  components sufficient to be able to maintain the Products in serviceable
                  condition throughout the Term of this Agreement. The Distributor
                  shall
                  have the opportunity to order within six (6) months after termination
                  or
                  expiration of this Agreement the requisite quantity of spare parts
                  and
                  Product components or, if such products are no longer manufactured
                  by the
                  Seller, functionally equivalent units in order to fulfill its obligations,
                  against then Distributor pricing.
                  .

              

      

    

    

    
      
        	5.5	
                The
                  relationship hereby established between SAMSUNG and Distributor
                  during the
                  term of this Agreement shall be solely that of seller and buyer,
                  and
                  nothing herein contained shall be deemed to authorize or empower
                  Distributor to act as agent nor employee of SAMSUNG. Distributor
                  shall not
                  enter into any contract or agreement or make any commitment,
                  representation, guarantee or warranty, except the warranty provisions,
                  ,
                  which binds or will bind SAMSUNG or otherwise act in the name of
                  or on
                  behalf of SAMSUNG without specific written approval of
                  SAMSUNG. 

              

      

    

    

    
      
        	5.6	
                If
                  and when SAMSUNG indicates or makes an inquiry as to the quality
                  of
                  services provided or rendered by Distributor, Distributor shall
                  immediately investigate and take proper corrective measures, and
                  following
                  such implementation of the corrective measures shall report to
                  SAMSUNG of
                  such measures.

              

      

    

    

    
      
        	5.7	
                Distributor
                  shall at all times comply with all applicable laws, regulations
                  and orders
                  in force in the Territory.

              

      

    

    

    
      
        	5.8	
                The
                  details of Seller’s warranty obligation shall be determined by the
                  Warranty Service Agreement to be made and entered into separately
                  with
                  this Agreement between Seller and
                  Distributor.

              

      

    

     

    ARTICLE
      6. PROPRIETARY AND INTELLECTUAL PROPERTIES

    

    
      
        	6.1	
                The
                  Distributor acknowledges and agrees that all information disclosed
                  directly and or indirectly by the Seller or embodied in the Products
                  and
                  relating in any way to the markets, products, plans and business
                  of the
                  Seller or the designs and technical data relating to the Products,
                  other
                  than information in general circulated published form or specifically
                  designated as non-confidential by the Seller, is confidential and
                  proprietary to the Seller. 

              

      

    

    

    ARTICLE
      7. PRICES AND TERMS OF PAYMENT

    

    
      
        	7.1	
                Prices
                  for the Products and other options shall be as set forth in the
                  current
                  price list, excluding of the applicable discount entitled to the
                  Distributor. The Seller, at its sole discretion, may change the
                  prices of
                  the Products. In the event of a price increase, Seller will provide
                  advance notice to Distributor of 30 days for new purchase orders.
                  However,
                  the Distributor may negotiate the price on the basis of the market
                  situation. The Seller shall endeavor to notify the Distributor
                  of any
                  change in pricing by written notice made at least 30 (thirty) days
                  prior
                  to the effective date. Seller agrees to provide Distributor with
                  best
                  pricing given to other distributors and customers within the
                  Territory.

              

      

    

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

        CONFIDENTIAL

      

    

     

    
      
        	7.2	
                Prices
                  for spare parts shall be in accordance with the Spare Parts Price
                  List
                  less Distributor’s discount issued from time to
                  time.

              

      

    

    

    
      
        	7.3	
                All
                  Payments shall be made in United
                  States Dollars (USD).
                  The payment shall be in full amount for all purchases affected
                  hereunder
                  according to the terms and conditions agreed. The Seller shall
                  make
                  commercially reasonable efforts to deliver the Products on a timely
                  manner
                  as reflected within the delivery schedule.

              

      

    

    

    
      
        	7.4	
                All
                  prices are quoted by the Seller on the basis of FOB China or Korea
                  Port(s), unless otherwise
                  agreed.

              

      

    

    

    
      
        	7.5	
                The
                  Distributor shall pay the Seller the amounts due for Products ordered
                  hereunder by Telegraphic Transfer within
                  90 days from the date of shipment. 

              

        	 	 

        	7.6 	 

      

    

     

    ARTICLE
      8. TERMINATION 

    

    
      
        	8.1	
                Seller
                  shall have the right to terminate this Agreement
                  if:

              

      

    

    
    

     

    
      	a)  	
              Seller
                can no longer retain the distributorship due to Seller’s policy or any
                governmental policies or regulations; 

            

      	 	 

    

    
      	b)  	
              Seller
                determines that invalidation or retraction of Distributor’s
                distributorship is warranted due to failure or breach of Distributor’s
                obligations of this Agreement;

            

      	 	 

    

    
      	c)  	
              Seller
                terminates or no longer engages in its CCTV business in the Territory
                or
                transfers substantial portion of its CCTV business to an unaffiliated
                third party.

            

    

    

    Upon
      termination of this Agreement pursuant to Section 8.1, neither party shall
      be
      liable to the other, either for compensation or for damages of any kind or
      character whatsoever, on account of the loss by Seller or Distributor and/or
      Distributor of present or prospective profits on sales or anticipated sales,
      good will, or expenditures, investments or commitments made in connection
      therewith or in connection with the establishment, development or maintenance
      of
      distributor’s/Distributor’s business, except that termination shall not
      prejudice or otherwise affect the rights or liabilities of the parties with
      respect to Products sold under this Agreement or any indebtedness then owing
      by
      either party to the other

    

    
      
        	8.2	
                Upon
                  termination or expiration of the Agreement for whatever reason,
                  Seller
                  will have no obligation to grant negotiation or offer to
                  Distributor/Distributor an extension or renewal to this Agreement
                  or any
                  other new distributorship
                  agreement.

              

      

    

    

    
      
        
          	8.3	
                  This
                    Agreement may be terminated at the option of the non-defaulting
                    party,
                    effective immediately upon a prior written notice of termination
                    given to
                    the other party, in each of the following
                    events:

                

        

      

    

    

    
      	1.
                	
              When
                the other party becomes bankrupt or insolvent or has its business
                placed
                in the hands of receiver, assignee or trustee, whether by voluntary
                act or
                otherwise; 

            

      	 	 

    

    
      	2.
                	
              When
                the other party attempts to assign this Agreement or any rights hereunder
                to a third party without the party’s prior written consent;
                

            

      	 	 

    

    
      	3.
                	
              If
                the other party ceases to function as a going concern or to conduct
                its
                operations in the normal course of business, as this is described
                in the
                terms of this agreement; 

            

    

    
    

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

        CONFIDENTIAL

      

    

     

    
      	4.
                	
              If
                the other party shall not have remedied a breach or failure to perform
                or
                observe its obligations under this Agreement within thirty (30) days
                of a
                written notice requiring the remedy of such breach or failure;
                

            

      	 	 

    

    
      	5.
                	
              If
                Distributor breaches its obligations regarding the confidentiality
                information as provided in Article 9; 

            

      	 	 

    

    
      	6.
                	
              If
                Distributor breaches its obligations of the Minimum Annual Purchase
                as
                provided in Article 3

            

      	 	 

    

    
      	7.
                	
              If
                Distributor breaches its obligations of the Payment as provided in
                Article
                7.

            

    

     

    ARTICLE
      9. CONFIDENTIALITY

    

    Distributor
      and Seller shall not be allowed to make use of any business or trade secrets
      or
      other information of the Seller or to pass those secrets on to any third party
      without prior written consent of the Seller. Distributor
      and Seller shall not disclose to any third party without the prior written
      consent of Seller, nor use for any purpose other than the performance of the
      obligations under this Agreement, any confidential information concerning the
      Products or business affairs of Seller (including but not limited to prices,
      discounts, terms and conditions of sales, customers, business affairs, Products,
      or Product specification) which it receives directly or indirectly from Seller,
      or which it requires or develops in the course of its transactions with Seller.
      The obligation herein provided shall survive the termination or expiration
      of
      this Agreement for five (5) years.
      The
      Seller Price Lists for Products and Spare Parts shall be deemed as Confidential
      Information, remain as the property of the Seller and must be kept private
&
confidential.

    

    ARTICLE
      10. FORCE MAJEURE 

    

    
      
        	10.1	
                Either
                  party shall be excused from and bear no liability for any delay
                  or failure
                  to perform any obligations relating to this Agreement or any purchase
                  order hereunder due to causes beyond its reasonable control, including,
                  but not limited to, acts of God, natural disasters, earthquakes,
                  fire,
                  riots, flood, material shortages, strikes, delays in transportation
                  or
                  inability to obtain labor or materials through its regular sources.
                  The
                  time for performance of any such obligation shall be extended for
                  the time
                  period lost by reason of the
                  delay.

              

      

    

    

    ARTICLE
      11. Governing Law and Dispute Resolution 

    

    
      
        	11.1	
                This
                  Agreement shall be governed by and construed in accordance with
                  the laws
                  of the State of New York, USA. Any dispute, controversy or difference
                  which may arise between the parties, out of or in relation to or
                  in
                  connection with this Agreement or for the breach hereof which cannot
                  be
                  settled amicably shall be finally settled by arbitration in the
                  place and
                  country of the respondent in accordance with the rules of International
                  Chamber of Commerce, whose award shall be final and binding upon
                  both
                  parties. 

              

      

    

    
 

    ARTICLE
      12. MISCELLANEOUS 

    

    
      
        	12.1	
                Entire
                  Agreement / Amendments: This
                  Agreement constitutes the entire understanding between Seller and
                  Distributor with respect to the subject matter hereof and shall
                  supersede
                  and revoke all prior agreements, representations, communications,
                  oral or
                  written, between the parties hereto. No amendment, modification or
                  alteration of any terms of this Agreement shall be binding on either
                  party
                  unless the same shall be made in writing dated subsequent to the
                  date
                  hereof and executed by or on behalf of the parties
                  hereto.

              

      

    

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

        CONFIDENTIAL

      

    

     

    
      
        	12.2	
                Waiver: Failure
                  or delay by either party to assert any of its rights on any one
                  occasion
                  under this Agreement shall in no way be construed as a waiver of
                  such
                  rights on any other future occasion, nor shall delay on the part
                  of either
                  party to act upon any breach be deemed a waiver thereof nor shall
                  a waiver
                  of any right by either party constitute or be deemed a waiver of
                  any other
                  right expect for the conditions as described in Section
                  3.4.

              

      

    

     

    
      
        	12.3	
                Severability:  The
                  terms and conditions of this Agreement shall be applicable severally
                  to
                  each Product, if more than one, and any dispute affecting either
                  party's
                  rights or obligations as to one or more Product(s) shall not affect
                  the
                  rights granted hereunder as to any other Product. If any provision
                  of this
                  Agreement is held to be invalid or unenforceable by a court of
                  competent
                  jurisdiction, then the remaining provisions will nevertheless remain
                  in
                  full force and effect, and the parties will negotiate in good-faith
                  a
                  substitute, valid and enforceable provision which most nearly effects
                  the
                  parties' intent in entering into this Agreement.
                  

              

      

    

    

    
      
        	12.4	
                References:
                  All references in this Agreement to "days" shall, unless otherwise
                  specified herein, mean calendar
                  days.

              

      

    

    

    
      
        	12.5	
                Headings:
                  The Section headings used in this Agreement are for convenience
                  of
                  reference only. They shall not limit or extend the meaning of any
                  provision of this Agreement, and shall not be relevant in interpreting
                  any
                  provision of this Agreement.

              

      

    

    

    
      
        	12.6	
                Product
                  Use: Products are manufactured for standard commercial use and
                  are not
                  intended to be sold or licensed for use in such applications as
                  critical
                  safety systems in nuclear
                  facilities.

              

      

    

    

    
      
        	12.7	
                No
                  License: Neither this Agreement, nor the sale of Products under
                  it, will
                  be deemed to give either party any licenses, immunities or other
                  rights,
                  directly or by implication under the trademarks, trade names, patents,
                  copyrights or any other intellectual property rights of other,
                  except as
                  provided in this Agreement.

              

      

    

    

    
      
        	12.8	
                Independent
                  Contractor: This
                  Agreement does not create or should not be construed to create
                  an agency
                  relationship between Seller and
                  Distributor.

              

      

    

    

    
      
        	12.9	
                Further
                  Assurances: Each Party hereby covenants and agrees that it shall
                  execute
                  and deliver such deeds and other documents as may be required to
                  implement
                  any of the provisions of this
                  Agreement.

              

      

    

    

    
      
        	12.10	
                No
                  Assignment: Distributor may, directly or indirectly, in whole or
                  in part,
                  neither by operation of law or otherwise, assign or transfer this
                  Agreement or delegate any of its obligations under this Agreement
                  without
                  Seller’s written consent. Any attempted assignment, transfer or delegation
                  without such prior written consent will be
                  void.

              

      

    

     

    IN
      WITNESS WHEREOF, the Parties hereto have caused this Agreement the day and
      year
      first written below.

    

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

        CONFIDENTIAL

      

    

    

    
      	
              The
                seller 

              SAMSUNG
                ELECTRONICS CO., LTD

            	 	 	The
              distributor,
	 	 	 	 
	 	 	 	 
	
              

            	 	 	
              

            
	
              By
                :  
Position
                :  

              Date
                :          2006

            	 	 	
              By:
                Steven E. Walin

              Position:
                CEO

              Date:      
                     2006

            

    

     

    This
      Agreement is executed in two original copies.

    

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

        CONFIDENTIALExhibit
      10.2

    

    OMNIBUS
      AMENDMENT AND CONSENT

     

    This
      Omnibus Amendment and Waiver (this “Amendment”), dated as of October 3, 2006, by
      and between GVI SECURITY SOLUTIONS, INC.., a Delaware corporation (the
“Company”)
      and
      Laurus Master Fund, Ltd., a Cayman Islands company (“Laurus”),
      amends that certain (i) Securities Purchase Agreement, dated as of May 27,
      2004,
      by and between the Company and Laurus (as amended, modified or supplemented
      from
      time to time, the “Securities
      Purchase Agreement”);
      (ii)
      that certain Secured Convertible Term Note, made as of May 27, 2004 by the
      Company in favor of Laurus in the initial face amount of $5,000,000 (as amended,
      modified or supplemented from time to time, the “Term
      Note”);
      (iii)
      that certain Security Agreement, dated as of May 27, 2004 between the Company
      and Laurus (as amended, modified or supplemented from time to time, the
“Security
      Agreement”),
      (iv)
      that certain Secured Convertible Minimum Borrowing Note, made as of May 27,
      2004
      by the Company in favor of Laurus in the initial face amount of $5,000,000
      (as
      amended, modified or supplemented from time to time, the “Minimum
      Borrowing Note”);
      (v)
      that certain Secured Revolving Note, made as of May 27, 2004 by the Company
      in
      favor of Laurus in the initial face amount of $5,000,000 (as amended, modified
      or supplemented from time to time, the “Revolving
      Note”
and,
      together with the Securities Purchase Agreement, the Term Note, the other
      Related Agreements (as defined in the Securities Purchase Agreement), the
      Security Agreement, the Minimum Borrowing Note and the other Ancillary
      Agreements (as defined in the Security Agreement, the “Funding
      Documents”).
      Capitalized terms used but not defined herein shall have the meanings given
      them
      in the Securities Purchase Agreement and/or the Security Agreement, as
      applicable.

     

    WHEREAS,
      the Company has requested that Laurus consent to (i) an additional financing
      whereby the Company would issue to new investors (the “Holders”)
      up to
      $5,000,000 in aggregate principal amount of Subordinated Secured Promissory
      Notes of the Company dated as of the date hereof (the “Subordinated Notes”)
      and
      (ii) the grant by the Company and its subsidiaries of Liens against
      substantially all of their assets and property to W-net, Inc., California
      corporation, as collateral agent for the Holders (the “Agent”
and,
      together with the Holders, the “Subordinated
      Lenders”
and
      each, a “Subordinated
      Lender”)
      on a
      subordinated basis to those Liens granted by the Company to Laurus;
      and

     

    WHEREAS,
      the Company and Laurus have agreed to make certain changes to the Securities
      Purchase Agreement, the Term Note, the Security Agreement, the Minimum Borrowing
      Note and the Revolving Note.

     

    NOW,
      THEREFORE, in consideration of the above, and for other good and valuable
      consideration, the receipt and sufficiency of which is hereby acknowledged,
      the
      parties hereto agree as follows:

     

    CONSENT

    

    1. Laurus
      hereby consents to (i) the issuance of the Subordinated Notes to the
      Subordinated Lenders to the extent that the terms and conditions of such
      Subordinate Notes and the other documentation entered into in connection
      therewith conform in all material respects to the terms and conditions set
      forth
      in the Term Sheet attached hereto as Exhibit
      A,
      and
      that such issuance and the issuance of Common Stock as provided in the Term
      Sheet shall not be deemed to result in a change in the controlling ownership
      of
      the Company, and (ii) the grant by the Company and its subsidiaries to the
      Agent, as collateral agent on behalf of the Subordinated Lenders, of a Lien
      on
      substantially all of the assets and property of the Company and its subsidiaries
      to the extent subordinated in favor of Liens granted by the Company and its
      subsidiaries to Laurus pursuant to the Subordination Agreement attached hereto
      as Exhibit
      B
      (the
“Subordination
      Agreement”);

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    AMENDMENTS

     

    2. The
      Securities Purchase Agreement is hereby amended and restated in the form
      attached hereto as Exhibit
      C
      (the
“Amended
      and Restated Securities Purchase Agreement”);
      

     

    3. The
      Term
      Note is hereby amended and restated in the form attached hereto as Exhibit
      D
      (the
“Amended
      and Restated Term Note”).
      For
      the avoidance of doubt, the amendment and restatement of the Term Note as set
      forth in this Section 3 shall be in substitution for and not in satisfaction
      of
      the Term Note;

     

    4. The
      Security Agreement is hereby amended and restated in the form attached hereto
      as
Exhibit
      E
      (the
“Amended
      and Restated Security Agreement”).

     

    5. The
      Minimum Borrowing Note is hereby amended and restated in the form attached
      hereto as Exhibit
      F
      (the
“Amended
      and Restated Minimum Borrowing Note”).
      For
      the avoidance of doubt, the amendment and restatement of the Minimum Borrowing
      Note as set forth in this Section 5 shall be in substitution for and not in
      satisfaction of the Minimum Borrowing Note;

     

    6. The
      Revolving Note is hereby amended and restated in the form attached hereto as
      Exhibit
      G
      (the
“Amended
      and Restated Revolving Note”).
      For
      the avoidance of doubt, the amendment and restatement of the Revolving Note
      as
      set forth in this Section 6 shall be in substitution for and not in satisfaction
      of the Revolving Note;

     

    MISCELLANEOUS

     

    7. Each
      amendment and consent set forth herein shall only be effective as of the first
      date upon which (the “Amendment
      Effective Date”):
      (i)
      the Company shall have duly executed, witnessed (where applicable) and delivered
      to Laurus each of the Amended and Restated Term Note, the Amended and Restated
      Minimum Borrowing Note and the Amended and Restated Revolving Note, (ii) each
      of
      the Company, the Agent and each other Subordinated Lender shall have duly
      executed and delivered to Laurus the Subordination Agreement and
      (iii) the
      Company and Laurus shall have executed and the Company shall have delivered
      to
      Laurus its respective counterpart to this Amendment.

    

    8. Except
      as
      specifically set forth in this Amendment, there are no other amendments,
      modifications or waivers to the Funding Documents, and all of the other forms,
      terms and provisions of the Funding Documents remain in full force and
      effect.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    9. The
      Company hereby represents and warrants to Laurus that (i) no Event of Default
      exists on the date hereof, after giving effect to this Amendment, (ii) on the
      date hereof, after giving effect to this Amendment, all representations and
      warranties made by the Company in connection with the Funding Documents are
      true, correct and complete and (iii) on the date hereof, after giving effect
      to
      this Amendment, all of the Company’s covenant requirements have been
      met.

    

    10. From
      and
      after the Amendment Effective Date, all references in the Funding Documents
      shall be deemed to be references to the Funding Documents as modified
      hereby.

    

    11. The
      Company understands that it has an affirmative obligation to make prompt public
      disclosure of material agreements and material amendments to such agreements.
      It
      is the Company’s determination that this Amendment is material. The Company
      agrees to file an 8-K within 2 days of the date hereof and in the form otherwise
      prescribed by the SEC.

    

    12. This
      Amendment shall be binding upon the parties hereto and their respective
      successors and permitted assigns and shall inure to the benefit of and be
      enforceable by each of the parties hereto and their respective successors and
      permitted assigns. THIS
      AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY
      THE
      LAW OF THE STATE OF NEW YORK. This
      Amendment may be executed in any number of counterparts, each of which shall
      be
      an original, but all of which shall constitute one instrument. 

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF,
      each
      Company and Laurus has caused this Amendment to the Funding Documents to be
      signed in its name effective as of this __ day of October 2006.

     

    
      	 	 	 
	 	GVI
              SECURITY SOLUTIONS, INC.
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:

              Title:

            
	 	 

    

    
      	 	 	 
	 	LAURUS
              MASTER FUND, LTD.
	 
 	 
 	 
 
	 	By:  	 
	 	
              

              Name:

              Title:

            
	 	 

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

     

    Term
      Sheet

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

     

    Subordination
      Agreement

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    EXHIBIT
      C

     

    Form
      of Amended and Restated Securities Purchase Agreement

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    EXHIBIT
      D

     

    Form
      of Amended and Restated Term Note

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    EXHIBIT
      E

     

    Form
      of Amended and Restated Security Agreement

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    EXHIBIT
      F

     

    Form
      of Amended and Restated Minimum Borrowing Note

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    EXHIBIT
      G

     

    Form
      of Amended and Restated Revolving Note 

     

    
      
        
        

      

      
        11

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