EXHIBIT 10.2

                    RESTATED BRIDGE LOAN FINANCING AGREEMENT
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         THIS RESTATED BRIDGE LOAN FINANCING AGREEMENT  ("Financing  Agreement")
is dated as of  October  18,  1999,  by and  between  XYBERNAUT  CORPORATION,  a
Delaware  corporation,  with  headquarters  located at 12701 Fair Lakes  Circle,
Suite 550, Fairfax,  Virginia 22033 (the "Company"),  and CRYSTALITE INVESTMENTS
LTD.,  having  an  office  at  111  Arlosorov  Street,  Tel  Aviv,  Israel  (the
"Investor").
                               W I T N E S S E T H
         WHEREAS,  the  Company  wishes to induce  the  Investor  to loan to the
Company,  and the  Investor  is willing to loan to the  Company,  subject to the
terms and conditions set forth herein, up to One Million ($1,000,000) Dollars.

         NOW, THEREFORE, for and in consideration of the premises and the mutual
agreement  contained herein and for other good and valuable  consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereto
agree as follows:

         1. LOAN.  Subject to the terms and  conditions  set forth  herein,  the
Investor shall loan to the Company One Million ($1,000,000) Dollars (the "Loan")
in one or more  installments,  by delivery of such amount to the Company in same
day U.S. funds by wire transfer to an account designated by the Company.

         2. NOTE.  The terms of the Loan shall be set forth in and  evidenced by
one or more Secured Promissory Note in substantially the form attached hereto as
Exhibit A in the aggregate

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amount of One Million ($1,000,000) Dollars, payable to the order of the Investor
or its assignees (the "Notes").

         3.       MUTUAL DELIVERIES.
                  ------------------

                  (a) Upon the  delivery by the  Investor  of the loan  proceeds
from time to time, as provided in Section 1 above,  the Company shall deliver to
the Investor the Notes.

                  (b) The Company shall also deliver,  or cause to be delivered,
the original or execution  copies of the following  instruments  and  agreements
duly executed by all parties thereto other than the Investor  (together with the
Notes - the "Related Agreements"):

                     (i) this  Agreement with the Security  Interest  Provisions
(Exhibit A);

                     (ii) the  Xybernaut  Common  Stock  Purchase  Warrants  for
1,000,000 shares in the form attached hereto as Exhibit B (the "Warrants"); and

                     (iii) the opinion of counsel in the form annexed  hereto as
Exhibit C.

         4.   REPRESENTATIONS  AND  WARRANTIES  OF  THE  COMPANY.   The  Company
represents and warrants to the Investor that:


                  (a) The Company has the corporate power and authority to enter
into this  Financing  Agreement  and the Related  Agreements  and to perform its
obligations hereunder and thereunder.  The execution and delivery by the Company
of this Financing  Agreement and the Related  Agreements and the consummation by
the Company of the transactions  contemplated  hereby and thereby have been duly
authorized by all necessary  corporate  action on the part of the Company.  This
Financing  Agreement  and the Related  Agreements  have been duly  executed  and
delivered by the Company and  constitute  valid and binding  obligations  of the
Company  enforceable  against  it in  accordance  with their  respective  terms,
subject to the effects of any
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applicable bankruptcy,  insolvency,  reorganization,  moratorium or similar laws
affecting  creditors'  rights  generally  and to the  application  of  equitable
principles in any proceeding (legal or equitable).

                  (b) The execution,  delivery and performance by the Company of
this Financing  Agreement and the Related Agreements and the consummation of the
transactions  contemplated  hereby  and  thereby  do not and will not  breach or
constitute a default under any applicable law or regulation or of any agreement,
judgment,  order, decree or other instrument binding on the Company which breach
or default could reasonably by expected to have a material adverse effect on the
Company.

                  (c) Except as set forth in Schedule  4(d) hereto,  the Company
is in material  compliance  with all applicable  laws,  regulations,  judgments,
decrees and orders material to the conduct of its business.

                  (d) Except as set forth in Schedule  4(d) hereto,  there is no
pending,   or  to  the   knowledge   of  the  Company,   threatened,   judicial,
administrative  or arbitral  action,  claim,  suit,  proceeding or investigation
which might affect the validity or enforceability of this Financing Agreement or
the Related  Agreements  or which  involves  the Company and which if  adversely
determined,  could  reasonably be expected to have a material  adverse effect on
the Company.

                  (e) No  consent or  approval  of, or  exemption  by, or filing
with,  any party or  governmental  or public  body or  authority  is required in
connection  with the execution,  delivery and  performance  under this Financing
Agreement  or the Related  Agreements  or the taking of any action  contemplated
hereunder or thereunder.
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                  (f)  The  Company  has  been  duly  organized  and is  validly
existing as a corporation in good standing under the laws of the jurisdiction of
its  incorporation.  The  Company is duly  qualified  and  licensed  and in good
standing  as a foreign  corporation  in each  jurisdiction  in which its current
ownership  or  leasing  of any  properties  or its  ownership  or leasing of any
properties or the character of its  operations as currently  conducted  requires
such  qualification  or  licensing,  except where the failure to be so qualified
would not have a material  adverse  effect on the  Company.  The Company has all
corporate  power and authority,  and has obtained all necessary  authorizations,
approvals,  orders, licenses,  certificates,  franchises and permits of and from
all  governmental or regulatory  officials and bodies  necessary to own or lease
its  properties  and  conduct  its  business  other than  those  authorizations,
approvals  and such other  documents  the lack of which could not  reasonably be
expected to have a material  adverse  effect on the Company.

                  (g) The execution,  delivery and performance of this Agreement
by the Company and the Related  Agreements  to be  delivered  hereunder  and the
consummation of the transactions  contemplated  hereby and thereby will not: (i)
violate any provision of the Company's articles of incorporation or bylaws, (ii)
violate, conflict with or result in the breach of any of the terms of, result in
a material modification of the effect of, otherwise,  give any other contracting
party the right to terminate,  or constitute (or with notice or lapse of time or
both  constitute) a default under,  any contract or other agreement to which the
Company is a party or by or to which the Company or any of the Company's  assets
or  properties  may be bound or  subject,  (iii)  violate  any order,  judgment,
injunction,  award  or  decree  of any  court,  arbitrator  or
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governmental  or  regulatory  body  by  which  the  Company,  or the  assets  or
properties of the Company are bound,  (iv) to the Company's  knowledge,  violate
any statute, law or regulation.

                  (h) Except as set forth in  Schedule  4(d)  hereto,  there has
been no material  change in the  capitalization,  assets,  or liabilities of the
Company  since the issuance of the financial  statements,  for the period ending
June 30, 1999, delivered to Investor.

         5. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.  The Investor hereby
represents and warrants to the Company that:

                  (a) The  Investor  has the  corporate  power and  authority to
enter into this  Financing  Agreement and the Related  Agreements and to perform
its  obligations  hereunder  and  thereunder.  The execution and delivery by the
Investor  of  this  Financial  Agreement  and  the  Related  Agreements  and the
consummation by the Investor of the transactions contemplated hereby and thereby
have been duly authorized by all necessary  corporate  action on the part of the
Investor.  This Financing  Agreement and the Related  Agreements  have been duly
executed  and  delivered  by the  Investor  and  constitute  valid  and  binding
obligations  of the Investor,  enforceable  against it in accordance  with their
respective  terms,  subject  to  the  effects  of  any  applicable   bankruptcy,
insolvency,  reorganization,  moratorium  or similar laws  affecting  creditors'
rights  generally  and  to  the  application  of  equitable  principles  in  any
proceeding (legal or equitable).

                  (b) The execution, delivery and performance by the Investor of
this Financing  Agreement and the Related Agreements and the consummation of the
transactions  contemplated  hereby  and  thereby  do not and will not  breach or
constitute a default under any applicable law or regulation or of any agreement,
judgment, order, decree or other instrument binding on the Investor.

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                  (c) There is no pending,  or to the knowledge of the Investor,
threatened, judicial, administrative or arbitral action, claim, suit, proceeding
or  investigation  which might  affect the  validity or  enforceability  of this
Financing Agreement or the Related Agreements.

                  (d) No  consent or  approval  of, or  exemption  by, or filing
with,  any party of  governmental  or public  body or  authority  is required in
connection  with the execution,  delivery and  performance  under this Financing
Agreement  or the Related  Agreements  or the taking of any action  contemplated
hereunder or thereunder.

                  (e) The Investor has prior substantial  investment experience,
including investment in non-listed and non-registered securities and has had the
opportunity  to engage  the  services  of an  investment  advisor,  attorney  or
accountant  to read all of the  documents  furnished  or made  available  by the
Company to the Investor in connection  with this  investment and to evaluate the
merits and risks of this investment.

         6. COVENANTS OF THE COMPANY.  The Company covenants and agrees that, so
long as the Note shall be  outstanding,  except as otherwise  required under the
Related Agreements, the Company shall:

                  (a) Promptly pay and discharge  all lawful taxes,  assessments
and  governmental  charges  or levies  imposed  upon it or upon its  income  and
profits, or upon any of its property, before the same shall become in default as
well as all lawful material  claims for labor,  materials and supplies which, if
unpaid,  might become a lien or charge upon such properties or any part thereof;
provided,  however,  that it shall not be required to pay and discharge any such
tax, assessment,  charge, levy or claim so long as the validity thereof shall be
contested in good

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faith by appropriate  proceedings,  and the Company shall set aside on its books
adequate  reserves  with respect to any such tax,  assessment,  charge,  levy or
claim so contested.

                  (b) Pay, or cause to be paid,  all material debts and perform,
or cause to be performed,  all material  obligations  promptly and in accordance
with the respective terms thereof.

                  (c) Implement and maintain a standard  system of accounting in
accordance with generally accepted accounting principles ("GAAP").

                  (d)  Provide to the  Investor  the  following:

                     (i) as soon as available  after the end of each fiscal year
of the Company,  a  consolidated  balance  sheet of the Company as at the end of
that fiscal year and the related statement of earnings, stockholders' equity and
changes in financial position of the Company for such fiscal year, in accordance
with GAAP and audited by independent  certified public accountants of recognized
standing; and

                     (ii) as soon as available  and in any event  within  ninety
(90) days after the end of each of the first three  quarters of each fiscal year
(commencing the quarter ending  September 30, 1999),  an unaudited  consolidated
balance  sheet of the  Company as of the end of that  quarter,  and the  related
unaudited statement of earnings of the Company for the period from the beginning
of that  fiscal  year to the end of that  quarter,  certified  by the  principal
financial  officer of the Company as having been  prepared  in  accordance  with
GAAP, subject to normal year-end adjustments.

                  (e) Do, or cause to be done,  all things that may be necessary
to (i) maintain its due  organization,  valid  existence and good standing under
the laws of its state of incorporation; (ii) preserve and keep in full force and
effect all qualifications,  registrations and licenses in those

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jurisdictions  in which  the  failure  to do so could or would  have a  material
adverse  effect;  (iii) maintain its power or authority to carry on its business
as now  conducted;  and (iv) use its best efforts to keep available the services
of its key present  employees and agents and maintain its current relations with
suppliers,  customers,  distributors and joint venture partners  (subject to the
business judgment of executive management).

                  (f) At all times maintain, preserve, protect and keep material
property used and useful in the conduct of its business in good repair,  working
order and  condition  (subject to normal  wear and tear),  and from time to time
make all needful and proper  repairs,  renewals,  replacements,  betterment  and
improvements  thereto,  so that the business carried on in connection  therewith
may be properly conducted at all times.

                  (g)  Keep  adequately  insured  all  property  of a  character
usually  insured by similar  corporations  and carry such other  insurance as is
usually carried by similar corporations.

                  (h) At all reasonable  times upon the  Investor's  request and
upon advance notice to the Company and for good reason,  permit  representatives
designated  by the Investor to have access to the books and records  relating to
the  operations  and  procedures  of  the  Company   (subject  to  execution  of
confidentiality  undertakings).

                  (i) Not assume, guaranty or otherwise, directly or indirectly,
become liable or responsible  for the obligations of any other person or entity,
except  for 75% or  greater  owned  subsidiaries,  for the  purpose of paying or
discharging  the  obligations  of such person or entity  unless such  guarantees
relate to the  business of the Company,  are incurred in the ordinary  course of
its business and do not exceed in the aggregate $100,000.

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                  (j) Not declare or pay any cash dividends or authorize or make
any other distribution on any class of equity securities of the Company,  except
for the Series D and Series E Convertible Preferred Stock.

                  (k) Not  consolidate  with or merge with or into any entity or
sell, lease, transfer, exchange or otherwise dispose of any material part of its
properties and assets except in the ordinary  course of business,  however,  the
Company  may  engage  in any of the  foregoing  transactions  with a  parent  or
subsidiary  of the  Company  so long as such  parent  or  subsidiary  is no less
creditworthy  than the  Company  and  such  parent  or  subsidiary  assumes  the
obligations of the Company hereunder.

                  (l) To  pay  to  the  Investor,  fifty  (50%)  percent  of the
proceeds  (after  related  expenses)  in excess of  $1,000,000  from any and all
financings, whether in the form of debt or equity.

         7. ASSIGNMENT.  This Financing Agreement and the Related Agreements may
be assigned by the Investor to  transferees  or assignees of the Note,  provided
that  the  Company  consents  to  the  assignment,  which  consent  will  not be
unreasonably  withheld, and that the Company is, prior to or simultaneously with
such  transfer,  furnished  with written  notice of the name and address of such
transferee or assignee,  and such assignee  agrees in writing to be bound by the
terms  hereof  and  provided  further  that,  if the  Note is only  assigned  or
transferred  in part,  then  such  assignment  shall  only be made in part on an
appropriate  proportionate  basis. If there is a conflict between this provision
and any provision of the Related Agreements, this provision shall govern.
<PAGE>

                  As a condition  to any such  assignment,  the  assignee  shall
warrant,  represent and acknowledge to the Company and to the Investor that: (i)
such assignee has adequate means of providing for its current needs and possible
contingencies,  and anticipates no need now or in the foreseeable future to sell
its shares of Common  Stock,  (ii) such assignee has had an  opportunity  to ask
questions of and receive  answers from the Company  concerning its investment as
evidenced by the Loan and Warrant (hereinafter  referred to as the "Investment")
in the  Company,  and  all  such  questions  have  been  answered  to  its  full
satisfaction, (iii) such assignee intends to hold the Warrant, and any shares of
the Common Stock issued upon the exercise of the Warrant, of the Company for its
own  account  for  investment,  and not with a view  toward  any resale or other
distribution of such Common Stock, (iv) the Investment in the Company involves a
high degree of risk, no tax  advantages  will result from the  Investment in the
Company,  and such  assignee  must be able to bear the economic risk of complete
loss of the  Investment  in the  Company,  (v) such  assignee  has  received  no
representations and warranties from Company other than those otherwise set forth
herein, and (vi) such assignee has the knowledge and experience in financial and
business  matters  and is  capable  of  evaluating  the  merits and risks of the
Investment, provided, however, if such assignee does not have such knowledge and
experience,  such assignee has consulted  with an attorney,  accountant or other
financial  consultant  or advisor,  as its  Purchaser  Representative,  and such
person is capable of evaluating  the risk of the  Investment  and of so advising
such assignee thereof.

         8. NOTICES.  Any notice required or permitted  hereunder shall be given
in writing (unless otherwise  specified herein) and shall be deemed  effectively
given upon personal  delivery or seven business days after deposit in the United
States  Postal  Service,  by (a) advance copy by

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fax, and (b) mailing by express  courier or  registered  or certified  mail with
postage  and fees  prepaid,  addressed  to each of the other  parties  thereunto
entitled at the following  addresses,  or at such other addresses as a party may
designate  by ten days  advance  written  notice  to each of the  other  parties
hereto.

COMPANY:          XYBERNAUT CORPORATION
                           12701 Fair Lakes Circle
                           Suite 550
                           Fairfax, Virginia 22033
                           ATT: Mr. Steven Newman, Vice Chairman
                           Telephone No.: (703) 631-6925
                           Facsimile No.:  (703) 631-6734
                           with a copy to:

                           Parker Chapin Flattau & Klimpl, LLP
                           1211 Avenue of the Americas
                           New York, New York 10036
                           ATTN: Martin Eric Weisberg, Esq.
                           Telephone No.: (212) 704-6000
                           Facsimile No.:  (212) 704-6288


PURCHASER:        At the address set forth on the signature page of this
                  Agreement.


ESCROW AGENT:     Krieger & Prager, Esqs.
                           39 Broadway, Suite 1440
                           New York, New York 10006
                           Telephone No.: (212) 363-2900
                           Facsimile No.: (212) 363-2999

         9. SEVERABILITY.  If a court of competent jurisdiction  determines that
any provision of this Financing  Agreement is invalid,  unenforceable or illegal
for any  reason,  such  determination  shall not affect or impair the  validity,
legality and enforceability of the other provisions of this Financing Agreement.
If any such  invalidity,  unenforceability  or illegality of a
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provision of this  Financing  Agreement  becomes known or apparent to any of the
parties  hereto,  the parties shall  negotiate  promptly and in good faith in an
attempt  to  make   appropriate   changes  and  adjustments  to  such  provision
specifically  and this  Financing  Agreement  generally to achieve as closely as
possible,  consistent  with  applicable  law,  the  intent  and  spirit  of such
provision specifically and this Financing Agreement generally.

         10. EXECUTION IN COUNTERPARTS. This Financing Agreement may be executed
in  counterparts,  each of which shall be deemed an  original,  but all of which
together shall constitute the same Financing Agreement.

         11. The Company  shall pay all fees and  disbursements  of the Investor
with  respect to the  preparation  and  enforcement  of this  Agreement  and the
Related Agreements.

         12.  GOVERNING LAW. This Agreement and the Related  Agreements shall be
governed by and construed in accordance  with the laws of the State of New York.
Each of the parties  consents to the  jurisdiction  of the federal  courts whose
districts  encompass any part of the City of New York or the state courts of the
State of New York sitting in the City of New York in connection with any dispute
arising under this Agreement and hereby waives,  to the maximum extent permitted
by law, any objection,  including any objection based on forum non coveniens, to
the bringing of any such proceeding in such jurisdictions.

         13. RESTATED AGREEMENT.  As hereby restated,  this Agreement supersedes
any prior  agreement  between the  parties  with  respect to the subject  matter
hereof,  and the Notes heretofore  delivered pursuant to this Agreement shall be
deemed amended in accordance with the provisions hereof.

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         IN  WITNESS  WHEREOF,  the  parties  have  executed  this  Bridge  Loan
Financing Agreement as of the date first written above.

                                     XYBERNAUT CORPORATION



                                     By: ______________________________________
                                          Name: Steve Newman
                                          Title: Vice Chairman


                                    CRYSTALITE INVESTMENTS LTD.



                                     By: ______________________________________
                                         Name:
                                         Title: