[LOGO] ATLAS CAPITAL SERVICES, INC.
November 15, 2001
Xybernaut Corporation
12701 Fair Lakes Circle
Fairfax, VA 22033
Dear Steve:
The purpose of this letter is to confirm the understanding and
agreement (this "Agreement") by and between Atlas Capital Services, Inc. ("Atlas
Capital Services") and Xybernaut Corporation (the "Company") as follows:
1) Engagement. The Company hereby engages Atlas Capital Services, for a
period of thirty (30) days from the date of the signing of this Agreement
(the "Engagement Period"), as its non-exclusive finder in connection with
a proposed private placement (the "Private Placement") of up to $5.25
million of the Company's securities comprised of the Company's common
stock and warrants to purchase such common stock (the "Securities") to a
limited number of institutional or accredited investors (the "Investors"),
on terms and conditions acceptable to the Investors and the Company. The
Private Placement would be made pursuant to the exemptions afforded by the
Securities Act of 1933, as amended, and applicable state securities laws.
2) No Due Diligence Obligation. The Company acknowledges and agrees that
Atlas Capital Services will not undertake any "due diligence"
investigation and will be using and relying upon the information supplied
by the Company and its officers, agents and others, the Placement
Materials, and any other publicly available information concerning the
Company's assets.
3) Compensation. In consideration of Atlas Capital Services services, if the
Company closes on not less than $5.25 million in the Private Placement
during the Engagement Period, Atlas Capital Services shall be entitled to
receive, and the Company hereby agrees to pay to Atlas Capital Services,
the following:
a) Upon the closing of the Private Placement, at the minimum amount,
as aforesaid, the Company will pay a cash fee of $157,500 to Atlas
Capital Services.
b) Upon the closing of the Private Placement, at the price as
effective, the Company shall issue to Atlas Capital Services
and/or its designees warrants (the "Warrants") to purchase 61,765
shares of the Company's common stock on the same terms as the
warrants issued to the Investors in the Private Placement.
4) Intentionally omitted.
5) Miscellaneous.
a) No provision of this Agreement may be amended, modified or waived,
except in a writing signed by all of the parties hereto.
b) This Agreement may be executed in any number of counterparts, each
of which together shall constitute one and the same original
document.
c) This Agreement shall be construed in accordance with and governed
by the laws of the State of New York without giving effect to its
conflict of law principles. The parties hereby agree that
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225 Broadway, Suite 910 New York, NY 10007 U.S.A. Phone: 212.267.3500 Fax: 212.267.3501
[LOGO] ATLAS CAPITAL SERVICES, INC.
any dispute which may arise between them arising out of or in
connection with this Agreement shall be adjudicated before a court
located in New York City, and they hereby submit to the exclusive
jurisdiction of the courts of the State of New York located in New
York, New York and of the federal courts located in the Southern
District of New York with respect to any action or legal
proceeding commenced by any party, and irrevocably waive any
objection they now or hereafter may have respecting the venue of
any such action or proceeding brought in such a court or
respecting the fact that such court is an inconvenient forum,
relating to or arising out of this Agreement, and consent to the
service of process in any such action or legal proceedings by
means of registered or certified mail, return receipt requested,
in care of the address set forth on the signature page hereto.
d) The parties hereby waive by jury in any action or proceeding
involving, directly, or indirectly, any matter in any way arising
out of or in connection with this Agreement.
e) Atlas Capital Services shall perform its services hereunder as an
independent contractor and not as an employee, partner,
co-venturer of the Company or an affiliate thereof. It is
expressly understood and agreed to by the parties hereto that
Atlas Capital Services shall have no authority to act for,
represent or bind the Company or any affiliate thereof in any
manner.
f) Nothing herein contained shall be construed to limit or restrict
Atlas Capital Services in conducting such business with respect to
others, or in rendering such advice to others, except as such
advice may relate to matters relating to the Company's business
and properties.
g) The Company hereby represents that it is a sophisticated business
enterprise that has retained Atlas Capital Services for the
limited purposes set forth in this letter, and the parties
acknowledge and agree that their respective rights and obligations
are contractual in nature. Each party disclaims an intention to
impose fiduciary obligations on the other by virtue of the
engagement contemplated by this letter.
h) The Company shall not issue any press release or other information
regarding the Private Placement or Atlas Capital Services without
the prior written consent of Atlas Capital Services, which consent
shall not be unreasonably withheld.
Atlas Capital Services is delighted to accept this engagement and looks
forward to working with you on this assignment. Please confirm that the
foregoing correctly sets forth our agreement by signing the enclosed duplicate
of this letter in the space provided and returning it, whereupon this letter
shall constitute a binding agreement as of the date first above written.
ATLAS CAPITAL SERVICES, INC.
By: ______________________________
Name: Scot Cohen
Title: Vice President
ACCEPTED AND AGREED:
Xybernaut Corporation
By:_____________________________
Name: Steven Newman
Title: Vice-Chairman
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225 Broadway, Suite 910 New York, NY 10007 U.S.A. Phone: 212.267.3500 Fax: 212.267.3501