AGREEMENT FOR PAYMENT OF ACCOUNT
THIS Agreement for Payment of Account ("Agreement"), is entered into this
November 27, 2001 by and between Xybernaut Corporation, a Delaware corporation
("Xybernaut"), and frog werk, Inc., a California Corporation ("frog").
WHEREAS, frog and Xybernaut entered into a Creative Convergence
Agreement dated May 18, 2001 under which Xybernaut engaged the services of frog
under various work orders upon the terms and conditions contained in the
Creative Convergence Agreement, (the "CC Agreement"); and
WHEREAS, Xybernaut has fallen behind on payment for services received
from frog and wishes to reach an agreement on an alternative payment plan to
compensate frog for the balance owed to date, provide for payment over time of
the balance and re-engage frog to complete services; and
WHEREAS, the parties have reached agreement on the terms for
satisfaction of the balance due, for payment over time, and for frog to continue
to provide requested services.
NOW, THEREFORE, for good and valuable consideration, the receipt and
legal sufficiency of which is hereby acknowledged as had and received, the
Parties agree as follows:
1. Payment of Account: The total balance of the account owed by
Xybernaut to frog, including but not limited to all services, goods, expenses,
and products provided by frog to Xybernaut from May 18, 2001 through and up to
the date of this Agreement is $506,498.89 (the "Balance"). frog agrees to
receive as payment in full of the Balance, a cash payment of one-third (1/3) of
the Balance in the amount of $168,832.96 (the "Cash Payment") and receive
compensation for the remaining two-thirds (2/3) of the Balance, (a total of
$337,665.93) by way of a grant of Xybernaut common stock, pursuant to the terms
and conditions contained herein.
2. Cash Payment: Xybernaut will make the Cash Payment of $168,832.96
in installments pursuant to the following schedule: $50,000 paid at the time
this Agreement is executed and the remaining $118,832.96 shall be paid in
increments of $20,000, paid bi-weekly on December 7 and December 21, 2001 and
January 4, January 18, and February 1 with the Cash Payment paid in full with a
final $18,832.96 payment on February 15, 2002 (the "Final Payment"). After
receipt by frog of the $50,000 payment, the remaining balance on the Cash
Payment will bear simple interest at the rate of 10% per annum (computed on the
basis of a year of 365 days). This interest will be paid in a single installment
of $1,891.51 no later than February 15, 2002.
3. Grant of Stock: The remaining two-thirds (2/3) of the Balance will
be paid in full by a grant of shares of Xybernaut common stock of a value
equivalent to $337,665.93 discounted
fifteen percent (15%) from the $2.27 closing market price of Xybernaut's common
stock on November 26, 2001 for a total of 174,956 shares at a price of $1.93 per
share.
4. Registration of Shares: Xybernaut hereby grants to frog piggyback
registration rights with respect to the common stock issued to frog herein,
under the next registration statement filed by Xybernaut with respect to its
common stock (other than another registration statement on Form S-4 or Form S-8
or any successor thereto). Xybernaut will advise frog about any such
registration statement and, if frog requests in writing that the shares are to
be included in such registration statement, Xybernaut shall use its reasonable
best efforts to cause the registration statement to be declared effective by the
Securities and Exchange Commission (the "Commission"). If Xybernaut does not
file a registration statement which includes the shares, Xybernaut will, prior
to ninety (90) days from the date hereof, file a registration statement with
respect to the shares and use its reasonable best efforts to cause the
registration statement to be declared effective by the Commission. Xybernaut
shall be responsible for the compliance of any such registration statement with
applicable securities laws; provided that frog shall be responsible for any
information about frog specifically required by applicable securities laws. All
fees and expenses incident to the registration of the shares shall be borne by
Xybernaut. If the frog registration statement is not declared effective within
fifty (50) days after the filing thereof, Xybernaut will increase or recommence,
whichever may be applicable at the time, the bi-weekly payments to frog
identified in paragraph 2 of this Agreement, by $40,000 bi- weekly until the
remainder of the Balance is repaid. In the event bi-weekly payments are
increased or commenced under this provision such installments will bear simple
interest at the rate of 10% per annum (computed on the basis of a year of 365
days).
5. frog Services: Immediately upon receipt of the $50,000 payment
referenced in paragraph 1 herein, frog will commence work under all outstanding
and new Xybernaut work orders pursuant to the terms and conditions of the CC
Agreement. Except for those terms expressly amended herein, the parties agree
that the CC Agreement remains in full force and effect and is not otherwise
merged or amended by this Agreement.
6. frog Release: Provided Xybernaut is not in breach under the terms
of this Agreement, frog shall forebear and suspend any legal, equitable or other
action against Xybernaut for collection of the Balance. Upon receipt by frog of
the Final Payment and the grant, registration of shares pursuant to paragraphs 3
and 4 herein, frog shall release Xybernaut, its subsidiaries, officers,
directors, employees, agents, successors and assigns from any and all claims,
damages, liabilities, actions or causes of action for money owed by Xybernaut to
frog, its subsidiaries, officers, directors, employees, agents, successors and
assigns for services rendered pursuant to the CC Agreement during the period
from May 18, 2001 through the date of this Agreement.
7. Miscellaneous: This Agreement shall be controlled by California law
without regard to California's conflicts of law provisions. In the event either
party must take legal action to enforce the terms of this Agreement, the
prevailing party in any such action shall be entitled to recover its reasonable
attorney's fees and costs related to such enforcement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their authorized agents as of the date first written above.
XYBERNAUT CORPORATION frog werk Inc.
By:________________________________ By:______________________________
Name: ____________________________ Name:____________________________
Title: ____________________________ Title:___________________________
Date:___________________ Date:_______________