Document:

<PAGE>   1

                    RESTATED BRIDGE LOAN FINANCING AGREEMENT

       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

<PAGE>   2

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

                                       2
<PAGE>   3

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.

                                       3
<PAGE>   4

              (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

                                       4
<PAGE>   5

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.

                                       5
<PAGE>   6

              (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

                                       6
<PAGE>   7

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

                                       7
<PAGE>   8

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.

                                       8
<PAGE>   9

              (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.

                                       9
<PAGE>   10

       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

                                       10
<PAGE>   11

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

                                       11
<PAGE>   12

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 supercedes
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.

                                       12
<PAGE>   13

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       13
<PAGE>   14

       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:

                                       14
<PAGE>   15

                                                        Exhibit A to Bridge Loan
                                                        Financing Agreement

                                  FORM OF NOTE

       THIS NOTE HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
       EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR UNDER
       THE SECURITIES ACT OF 1933, AS AMENDED. THE NOTE MAY NOT BE OFFERED,
       RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT PURSUANT
       TO REGISTRATION OR EXEMPTION OR SAFE HARBOR THEREFROM.

No. ___________                                           US $_________

                              XYBERNAUT CORPORATION

                   RESTATED 8% SECURED NOTE DUE MARCH 31, 2000

       THIS Note is one of a duly authorized issue of up to $1,000,000 of
XYBERNAUT CORPORATION, a corporation organized and existing under the laws of
the State of Delaware (the "Company") designated as its 8% Secured Notes.

       FOR VALUE RECEIVED, the Company promises to pay to CRYSTALITE INVESTMENTS
LTD., the registered holder hereof (the "Holder"), the principal sum of
________________________________ Dollars (US $___________) on ______________,
and to pay interest on the principal sum outstanding from time to time in
arrears on ______________ (the "Maturity Date"), at the rate of 8% per annum
accruing from the date of initial issuance of this Note (the "Issue Date").
Accrual of interest shall commence on the first such business day to occur after
the date hereof and shall continue until payment in full of the principal sum
has been made or duly provided for. The principal of, and interest on, this Note
are payable in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts, at the
address last appearing on the Note Register of the Company as designated in
writing by the Holder from time to time. The Company will pay the principal of
and interest upon this Note on the Maturity Date, less any amounts required by
law to be deducted, to the registered holder of this Note as of the tenth day
prior to the Maturity Date and addressed to such holder at the last address
appearing on the Note Register. The forwarding of such check shall constitute a
payment of principal and interest hereunder and shall satisfy and discharge the
liability for principal and interest on this Note to the extent of the sum
represented by such check plus any amounts so deducted.

       This Note is subject to the following additional provisions:

       1.     This Note is issuable in denominations of Ten Thousand Dollars
(US$10,000) and integral multiples thereof at the request of the holder. This
Note is exchangeable for an equal

                                       1
<PAGE>   16
                                                        Exhibit A to Bridge Loan
                                                        Financing Agreement

aggregate principal amount of Notes of different authorized denominations, as
requested by the Holder surrendering the same. No service charge will be made
for such registration or transfer or exchange.

       2.     The Company shall be entitled to withhold from all payments of
principal of, and interest on, this Note any amounts required to be withheld
under the applicable provisions of the United States income tax laws or other
applicable laws at the time of such payments, and Holder shall execute and
deliver all required documentation in connection therewith.

       3.     This Note has been issued subject to investment representations of
the original purchaser hereof and may be transferred or exchanged only in
compliance with the Securities Act of 1933, as amended (the "Act"), and other
applicable state and foreign securities laws. In the event of any proposed
transfer of this Note, the Company may require, prior to issuance of a new Note
in the name of such other person, that it receive reasonable transfer
documentation including legal opinions that the issuance of the Note in such
other name does not and will not cause a violation of the Act or any applicable
state or foreign securities laws. Prior to due presentment for transfer of this
Note, the Company and any agent of the Company may treat the person in whose
name this Note is duly registered on the Company's Note Register as the owner
hereof for the purpose of receiving payment as herein provided and for all other
purposes, whether or not this Note be overdue, and neither the Company nor any
such agent shall be affected by notice to the contrary.

       4.     Subject to the terms of the Bridge Loan Financing Agreement dated
as of October 18, 1999 (the "Agreement") as restated, between the Company and
the Holder (or the Holder's predecessor in interest), no provision of this Note
shall alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of, and interest on, this Note at the time,
place, and rate, and in the coin or currency, herein prescribed. This Note is a
direct obligation of the Company.

       5.     No recourse shall be had for the payment of the principal of, or
the interest on, this Note, or for any claim based hereon, or otherwise in
respect hereof, against any incorporator, shareholder, officer or director, as
such, past, present or future, of the Company or any successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.

       6.     The Holder of the Note, by acceptance hereof, agrees that this
Note is being acquired for investment and that such Holder will not offer, sell
or otherwise dispose of this Note except under circumstances which will not
result in a violation of the Act or any applicable state Blue Sky or foreign
laws or similar laws relating to the sale of securities.

       7.     This Note 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

                                       2
<PAGE>   17

                                                        Exhibit A to Bridge Loan
                                                        Financing Agreement

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.

       8.     The following shall constitute an "Event of Default":

              a.     The Company shall default in the payment of principal or
                     interest on this Note and same shall continue for a period
                     of five (5) days; or

              b.     Any of the representations or warranties made by the
                     Company herein, in the Agreement, or in any certificate or
                     financial or other written statements heretofore or
                     hereafter furnished by the Company in connection with the
                     execution and delivery of this Note or the Agreement shall
                     be false or misleading in any material respect at the time
                     made; or

              c.     The Company shall fail to perform or observe, in any
                     material respect, any other covenant, term, provision,
                     condition, agreement or obligation of this Note (as defined
                     in the Agreement, which term includes this Note) and such
                     failure shall continue uncured for a period of thirty (30)
                     days after written notice from the Holder of such failure;
                     or

              d.     The Company shall fail to perform or observe, in any
                     material respect, any covenant, term, provision, condition,
                     agreement or obligation of the Company under the Agreement,
                     and such failure shall continue uncured for a period of
                     thirty (30) days after written notice from the Holder of
                     such failure; or

              e.     The Company shall (1) admit in writing its inability to pay
                     its debts generally as they mature; (2) make an assignment
                     for the benefit of creditors or commence proceedings for
                     its dissolution; or (3) apply for or consent to the
                     appointment of a trustee, liquidator or receiver for its or
                     for a substantial part of its property or business; or

              f.     A trustee, liquidator or receiver shall be appointed for
                     the Company or for a substantial part of its property or
                     business without its consent and shall not be discharged
                     within ninety (90) days after such appointment; or

              g.     Any governmental agency or any court of competent
                     jurisdiction at the instance of any governmental agency
                     shall assume custody or control of the whole or any
                     substantial portion of the properties or assets of the
                     Company and shall not be dismissed within ninety (90) days
                     thereafter; or

              h.     Any money judgment (other than as set forth on Schedule
                     4(d) to the Agreement), writ or warrant of attachment, or
                     similar process in excess of

                                       3
<PAGE>   18

                                                        Exhibit A to Bridge Loan
                                                        Financing Agreement

                     Two Hundred Thousand ($200,000) Dollars in the aggregate
                     shall be entered or filed against the Company or any of its
                     properties or other assets and shall remain unpaid,
                     unvacated, unbonded or unstayed for a period of ninety (90)
                     days or in any event later than five (5) days prior to the
                     date of any proposed sale thereunder; or

              i.     Bankruptcy, reorganization, insolvency or liquidation
                     proceedings or other proceedings for relief under any
                     bankruptcy law or any law for the relief of debtors shall
                     be instituted by or against the Company and, if instituted
                     against the Company, shall not be dismissed within ninety
                     (90) days after such institution or the Company shall by
                     any action or answer approve of, consent to, or acquiesce
                     in any such proceedings or admit the material allegations
                     of, or default in answering a petition filed in any such
                     proceeding; or

              j.     The Company shall have its Common Stock suspended or
                     delisted from an exchange or over-the-counter market from
                     trading for in excess of two trading days.

Then, or at any time thereafter, and in each and every such case, unless such
Event of Default shall have been waived in writing by the Holder (which waiver
shall not be deemed to be a waiver of any subsequent default) at the option of
the Holder and in the Holder's sole discretion, the Holder may consider the
Redemption Amount of this Note immediately due and payable within five (5) days
of notice, without presentment, demand, protest or notice of any kinds, all of
which are hereby expressly waived, anything herein or in any note or other
instruments contained to the contrary notwithstanding, and the Holder may
immediately enforce any and all of the Holder's rights and remedies provided
herein or any other rights or remedies afforded by law.

       9.     Nothing contained in this Note shall be construed as conferring
upon the Holder the right to vote or to receive dividends or to consent or
receive notice as a shareholder in respect of any meeting of shareholders or any
rights whatsoever as a shareholder of the Company, unless and to the extent
converted in accordance with the terms hereof.

       10.    The obligation of the Company for payment of principal, interest
and all other sums hereunder is secured by Security Interest Provisions between
the Company and the Holder as set forth in the Annex to the Bridge Loan
Financing Agreement.

       IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.

Dated: ________________, 1999

                                         XYBERNAUT CORPORATION

                                       4
<PAGE>   19

                                                        Exhibit A to Bridge Loan
                                                        Financing Agreement

                                         By:
                                            -----------------------------------

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

                                         --------------------------------------
                                         (Title)<PAGE>   1

                              EMPLOYMENT AGREEMENT

         EMPLOYMENT AGREEMENT dated as of January 1, 2000 (this "Agreement"),
by and between JOHN F. MOYNAHAN (the "Executive"), and XYBERNAUT CORPORATION, a
Delaware Corporation (the "Company").

         WHEREAS, the Executive has been employed as a Senior Vice President
and the Chief Financial Officer of the Company; and

         WHEREAS, the Company desires to continue to employ the Executive as a
Senior Vice President and the Chief Financial Officer of the Company and the
Executive desires to continue his employment with the Company in the
aforementioned capacity, all upon the terms and provisions, and subject to the
conditions set forth in this Agreement.

         NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

         Section 1.        Definitions.  As used in this Agreement the
following terms shall have the meanings set forth in this Section 1:

         (a)      "Affiliate" of any Person means any stockholder or person or
entity controlling, controlled by under common control with such Person, or any
director, officer or key executive of such Person or any of their respective
relatives. For purposes of this definition, "control," when used with respect
to any Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings that correspond to the foregoing.

         (b)      "Cause" shall mean (i) the Company being subjected to any
criminal liability under any applicable law as a result of any action or
inaction on the part of the Executive, which the Executive did not, at the
time, reasonably believe to be in the best interests of the Company; (ii) the
conviction or admission of the Executive of, or plea by the Executive of nolo
contendre to, a felony or crime involving moral turpitude which the Board of
Directors concludes is likely to have a material and adverse effect on the
reputation of the Company; (iii) if the Executive is chronically addicted to
any narcotic or other illegal or controlled substance or repeatedly abuses any
alcoholic product or any prescription stimulants or depressant, as determined
by a physician designated by the Company, which in the reasonable opinion of
the Board of Directors of the Company materially interferes with Executive's
performance of his duties and obligations hereunder; (iv) the Executive
committing fraud, or stealing or misappropriating any asset or property of the
Company, including, without limitation, any theft

<PAGE>   2

or embezzlement; or (v) a breach of a material term or provision of this
Agreement by the Executive which is not cured by the Executive within ten (10)
business days after written notice of such breach from the Company is received
by the Executive; or (vi) the willful failure of the Executive to follow the
directives of the Chief Executive Officer of the Company or the Board of
Directors of the Company; provided, such directives are lawful and consistent
with the Company's policies and generally accepted accounting principles and
tax principles (if applicable).

         (c)      "Change of Control" shall mean the occurrence of any of the
following: (i) a Person or group of Persons, other than any current member of
the Board of Directors, obtains beneficial ownership of at least thirty percent
(30%) of the outstanding capital stock of the Company; or (ii) a change in the
membership of more than fifty percent (50%) of the current Board of Directors
in any twelve (12) month period.

         (d)      "Common Stock" shall mean the common stock, par value $.01
per share, of the Company, and any other class of common stock of the Company
created after the date of this Agreement in accordance with the Company's
Certificate of Incorporation and applicable law.

         (e)      "Competing Business" shall mean any business, enterprise or
other Person that as one of its businesses or activities, is engaged in the
business of manufacturing, selling, marketing, licensing or distributing
wearable computers or the solutions associated therewith that are provided by
the Company.

         (f)      "Confidential and Proprietary Information" shall mean any and
all (i) confidential or proprietary information or material not in the public
domain about or relating to the business, operations, assets or financial
condition of the Company or any Affiliate of the Company or any of the
Company's or any such Affiliate's trade secrets, including, without limitation,
research and development plans or projects; data and reports; computer
materials such as programs, instructions and printouts; formulas; product
testing information; business improvements, processes, marketing and selling
strategies; strategic business plans (whether pursued or not); budgets;
unpublished financial statements; licenses; pricing, pricing strategy and cost
data; information regarding the skills and compensation of executives; the
identities of clients and potential clients; intellectual property strategies
and any work on any patents, trademarks and tradenames, prior to any filing or
the use thereof in commerce; pricing, timing, sales terms, service plans,
methods, practices, strategies, forecasts, know-how and other marketing
techniques; and (ii) information, documentation or material not in the public
domain by virtue of any action by or on the part of the Executive, the
knowledge of which gives or may give the Company or any Affiliate of the
Company an advantage over any Person not possessing such information. For
purposes hereof, the term Confidential and Proprietary Information shall not
include any information or material (i) that is known to the general public
other than due to a breach of this Agreement by the Executive or (ii) was
disclosed to the Executive by a Person who the Executive did not reasonably
believe was bound to a confidentiality or similar agreement with the Company.

                                       2

<PAGE>   3

         (g)      "CPI" shall have the meaning given to that term in Section
4(a) hereof.

         (h)      "Discretionary Bonus" shall have the meaning given to that
term in Section 4(c) hereof.

         (i)      "Employment Term" shall have the meaning given to that term
in Section 2 hereof.

         (j)      "GAAP" shall mean generally accepted United States accounting
principles, as from time to time in effect.

         (k)      "Good Reason" shall mean a substantial change to or reduction
in the duties or responsibilities of the Executive such that the
responsibilities of the Executive are no longer commensurate with the
Executive's office with the Company as set forth herein, or the occurrence of
Change of Control or a change in the Executive's office from that of Senior
Vice President and Chief Financial Officer of the Company which is not
concurred in by the Executive within three (3) months of its occurrence or the
breach of a material term or provision of this Agreement by the Company which
is not cured by the Company within ten (10) business days after written notice
of such breach from the Executive is received by the Company. The failure to
renew this Agreement after the expiration of the Employment Term, shall not
constitute Good Reason.

         (l)      "Gross Revenues" for each fiscal year during the Term shall
have the meaning of gross revenues of the Company set forth in the audited
annual financial statements of the Company for the applicable fiscal year and
which shall be determined in accordance with GAAP applied on a consistent
basis.

         (m)      "Incapacity" shall mean any illness or mental or physical
incapacity or disability which prevents the Executive from performing his
duties or obligations hereunder for a continuous period of one hundred twenty
(120) consecutive days or for shorter periods aggregating one hundred eighty
(180) days within any consecutive twelve (12) month period.

         (n)      "Inventions" shall mean inventions, discoveries, concepts and
ideas, whether patentable or not, patents, patent applications, copyrights and
other intellectual property, including, without limitation, processes, methods,
formulae and techniques, and improvements thereof or know-how related thereto,
concerning any business activity of the Company or any Affiliate of the
Company, with which the Executive becomes, directly or indirectly, involved as
a result in whole or in part, directly or indirectly, of the Executive's
employment by the Company, or any Affiliate of the Company, and whether
conceived of solely by the Executive or jointly with the efforts of others.

         (o)      "Market Cap" shall mean the aggregate market value of all of
the Company's issued and outstanding shares of Common Stock as of the date of
determination.

                                       3

<PAGE>   4

         (p)      "Performance Bonus" shall have the meaning given to that term
in Section 4(d) hereof.

         (q)      "Person" shall mean, without limitation, any natural person,
corporation, partnership, limited liability company, joint stock company, joint
venture association, trust or other similar entity or firm.

         (r)      "Salary" shall have the meaning given to that term in Section
4(a) hereof.

         (s)      "Signing Bonus" shall have the meaning given to that term in
Section 4(b) hereof.

         (t)      "Without Cause" shall mean the termination of the Executive's
employment hereunder by the Company, other than termination by the Company due
to the Executive's death or Incapacity or based upon Cause.

         Section 2. Employment and Term. The Company hereby employs the
Executive as a Senior Vice President and the Chief Financial Officer of the
Company and the Executive hereby accepts such employment in that capacity, upon
the terms and provisions, and subject to the conditions, set forth in this
Agreement, for a term of three (3) years, commencing on January 1, 2000, and
terminating on December 31, 2002, unless earlier terminated as provided in this
Agreement (the "Employment Term").

         Section 3. Executive's Duties. (a) The Executive shall be the senior
financial executive officer of the Company responsible for the Company's
financial operations including, but not limited to, internal and external
financial reporting, accounting, taxation and cash management. The Executive
shall report directly to the Chief Executive Officer of the Company. The
Executive shall perform such other duties as may reasonably be assigned to the
Executive by the Company's Chief Executive Officer or the Board of Directors of
the Company.

         (b)      The Executive shall devote all of his business time, effort,
skill and attention exclusively to the business, operations and affairs of the
Company and to the furtherance of the interests, business and prospects of the
Company. The Executive shall perform the Executive's duties and obligations
hereunder diligently, competently, faithfully and to the best of his ability.
Subject to disclosure to the Company's general corporate counsel, the Executive
may serve on the board of directors or other governing boards of other
corporations or businesses or industry organizations; provided that such
service does not materially interfere with the Executive's performance of his
duties and obligations hereunder. The Company acknowledges that the Executive
serves on the board of directors of the corporations set forth on Schedule A
attached hereto, and the Company hereby consents to the Executive serving on
such boards.

                                       4

<PAGE>   5

         (c)      The Executive agrees to execute policy statements and
agreements that the Company may, from time to time, reasonably require all of
its senior executive officers to execute.

         Section 4. Compensation. (a) In consideration of the performance of
all of the duties and obligations to be performed by the Executive hereunder,
the Company agrees to pay, and the Executive agrees to accept, for the first
year of the Employment Term a salary (the "Salary") at an annual rate of
$170,000, payable in accordance with the Company's regular payroll practices as
from time to time in effect, less all withholdings and other deductions
required to be deducted in accordance with any applicable federal, state, local
or foreign law, rule or regulation. In addition, the amount of the Executive's
salary for the period from October 1, 1999 through December 31, 1999 shall be
retroactively adjusted to be at an annual rate of $170,000, any differential
owing to the Executive as a result of such adjustment shall be paid to the
Executive promptly after the execution and delivery of this Agreement. After
the first year during the Employment Term, the annual Salary for each
successive year will be increased by the lesser of (i) 10% and (ii) the
percentage increase, if any, in the CPI for each year just completed measured
for the entire twelve (12) month period, plus three percent (3%). For purposes
hereof, the term "CPI" means the Consumer Price Index for all Urban Consumers
for the United States for the Washington, D.C. metropolitan area prepared by
the Bureau of Labor Statistics of the U.S. Department of Labor, or if such
index is not then being published, by the U.S. Department of Labor, the most
nearly comparable successor index that the parties may agree upon.

         (b)      In consideration of the Executive's execution and delivery of
this Agreement, upon the execution and delivery of this Agreement the Company
shall make a cash payment of $25,000 (the "Signing Bonus"). By this Agreement,
the Company confirms: its prior grant to the Executive on May 10, 1999 to
purchase 150,000 shares of stock at the closing price on that date with 50,000
shares vesting on May 10, 2000, 50,000 shares vesting on May 10, 2001 and 50,000
shares vesting on May 10, 2002; and its prior grant to the Executive on
September 24, 1999 in respect of salary deferral by the Executive of 31,741
shares of stock with a strike price of $1.78 with 10,580 vested immediately upon
grant, 10,580 vesting on September 24, 2000 and 10,581 vesting on September 24,
2001; and the prior grant to the Executive of options on December 3, 1999 to
purchase 150,000 shares of stock at the closing price on that grant date, with
50,000 shares vesting immediately upon grant, 50,000 shares vesting on December
3, 2000 and 50,000 shares vesting on December 3, 2001. The shares vesting on
December 3, 2000 and December 3, 2001 shall only vest if the Executive has
performed his duties in a manner reasonably satisfactory to the Compensation
Committee of the Board of Directors of the Company. In the event that the Board
of Directors of the Company determines that the performance of the Executive is
not reasonably satisfactory, it shall so inform the Executive in writing setting
forth the reasons for the unsatisfactory performance. If the Compensation
Committee determines that the Executive has not satisfied the performance
criteria, it will notify the Executive within thirty (30) days of the applicable
December 3 grant and the Executive shall have the right for a period of thirty
(30) days to cure the performance deficiencies to the reasonable satisfaction of
the Compensation Committee. All of the options set forth in this

                                       5

<PAGE>   6

Section 4(b) shall fully vest upon the occurrence of a Change in Control or
upon a termination of this Agreement by the Executive for Good Reason.

         (c)      At the sole discretion of the Board of Directors of the
Company the Executive may be paid, in cash, Common Stock, options to purchase
Common Stock or any combination thereof, an annual bonus for the Company's
fiscal years of 2001 and 2002, in such an amount, if any, and based upon such
criteria as the Board of Directors of the Company Compensation Committee may
from time to time consider appropriate based upon the Executive's performance
during each such year (the "Discretionary Bonus"). The options granted pursuant
to this Section 4(b) shall be vested as of the date hereof, and shall be
subject to all of the terms and provisions of the Company's 1997 Stock Option
Plan, the Company's 1999 Stock Option Plan or any subsequently enacted stock
option plan, as applicable, except that they may be exercised in any amount at
any time after being vested until three (3) years from date of termination of
employment and shall be irrevocable during that period. Should there not be
sufficient options available or useable under said stock option Plans then,
unless otherwise agreed to by the Executive, the Company will nonetheless issue
said options to Executive, outside of said Plans, and register the shares of
Common Stock underlying the options within 180 days of their being issued.

         (d)      As additional consideration for Executive's services to the
Company hereunder, the Company shall pay Executive an annual bonus (the
"Performance Bonus"), based upon the Company's performance during the
Employment Term, commencing with the fiscal year from January 1, 2000 through
December 31, 2000, and for each fiscal year during the Employment Term
thereafter, if earned, in the form of options to purchase shares of the
Company's Common Stock, in an amount equal to one quarter of one percent
(0.25%) of the Revenue Goal (as hereinafter defined), if the Revenue Goal is
attained; or (ii) three-eighths of one percent (0.375%) of the increase, if
any, in the Market Cap from January 1 through December 31 of the applicable
fiscal year during the Employment Term. For purposes hereof, the term "Revenue
Goal" shall mean eighty-five percent (85%) of the Company's revenue goal for
each fiscal year during the Employment Term occurring after the Initial Period,
as set forth in its business plan for such year; provided that for the fiscal
year from January 1, 2000 through December 31, 2000 the Revenue Goal shall be
$20,000,000. For purposes hereof, the Market Cap Test shall be based on the
average of the number of shares outstanding and closing prices for the
Company's Common Stock for the thirty (30) days ended December 31 of the
applicable year compared to the same thirty (30) day period in the prior year.
The calculation of whether any Performance Bonus is due for any fiscal year
during the Employment Term occurring thereafter, as applicable, shall be made
by the Board of Directors promptly after the end of the fiscal year in respect
of the Market Cap test and upon the Company's issuance of its audited annual
financial statements in respect of the Revenue Goal test. The Performance
Bonus, if earned, shall be paid in the form of options to purchase shares of
the Company's Common Stock valued at an exercise price equal to the average of
the closing market price of the shares of the Company's Common Stock for the
thirty (30) days prior to the end of the applicable fiscal year. Any options
issued in respect of the Performance Bonus shall be subject to all of the terms
and provisions of the Company's 1999 Stock Option Plan or, if no shares are
available under such

                                       6

<PAGE>   7

Plan, or any subsequently enacted stock option plan, as applicable, except that
they may be exercised in any amount, at any time after being vested until three
(3) years from date of termination of employment and are irrevocable during
that period. Should there not be sufficient options available or useable under
said Stock Option Plan, the Company will use its best efforts to cause a new
Stock Option Plan to be adopted which cover the shares.

         (e)      Notwithstanding anything set forth in Section 4(c), in no
event shall the options granted to the Executive, if any, as the Performance
Bonus with respect to any fiscal year during the Employment Term exceed the
greater of (i) options exercisable into 100,000 shares of Common Stock or (ii)
one third of one percent (0.33%) of the Company's outstanding shares of capital
stock.

         (f)      Should there be a Change of Control of the Company or any
other transaction in which the Company is not the surviving entity during the
Employment Term, then as part of that transaction, the Company will require the
surviving entity to modify the Agreement in an equitable manner to provide the
Executive the same type of benefits that he is entitled to earn pursuant to
Section 4(c) of this Agreement.

         Section 5. Benefits, Vacation. (a) During the Employment Term, the
Executive shall be entitled to such insurance and health and medical benefits
as are generally made available to the senior executives of the Company, as a
group, pursuant to such plans as are from time to time maintained by the
Company; provided, however, that the Executive shall be required to comply with
the conditions of coverage attendant to such plans.

         (b)      During each contract year of the Employment Term, the
Executive shall be entitled to four (4) weeks of vacation. The Executive shall
take vacation at such time or times as the Executive desires, subject to the
concurrence of the Company based upon the then current business needs and
activities of the Company. Vacation shall accrue if unused during the term of
employment.

         (c)      During the Employment Term, the Executive shall be eligible
to participate in the profit sharing and other benefit plans that the Company
from time to time makes available to the senior executives of the Company as a
group, subject to the terms, provisions and conditions of such plans,
including, without limitation, any vesting periods and eligibility criteria.

         (d)      During the Employment Term, the Company shall pay to the
Executive a monthly car and non-accountable expense allowance of $2,250 per
month. In addition, the Company shall also pay reasonable legal and estate
planning expenses of Executive in an amount not to exceed $2,500 for each
calendar year during the Employment Term. The amounts paid and/or provided for
in this Section 5(d) shall be reported by the Company on Internal Revenue
Service Form 1099.

                                       7

<PAGE>   8

         (e)      The Company agrees to maintain in full force and effect the
life insurance policy in the face amount aggregating seven hundred and fifty
thousand dollars ($750,000.00), which are made payable to such beneficiary or
beneficiaries who are designated by the Executive. The Company shall pay all
premiums due on such policies during the Employment Term. After the termination
or expiration of the Employment Term, at the request of the Executive, the
Company shall assign such insurance policies to the Executive.

         Section 6. Business Expenses. The Executive shall be entitled to
reimbursement for ordinary, necessary and reasonable business expenses actually
incurred by the Executive during the Employment Term in the performance of the
Executive's duties hereunder, if supported by such reasonable documentation as
may be required by the Company in accordance with the Company's policies.

         Section 7. Termination of Employment Term. (a) In the event of the
death of the Executive during the Employment Term, the Executive's employment
hereunder shall automatically terminate as of the date of death; provided,
however, that the Executive's estate or legal representative, as the case may
be, shall be entitled to receive, and the Company shall pay, any accrued and
unpaid Salary for a two (2) year period following the date of death, any
Performance Bonus that would be payable for the one (1) year period in which
the Executive died which are properly owing to the Executive pursuant to
Section 6 hereof.

         (b)      In the event of the Executive's Incapacity, the Company may,
in its sole discretion, terminate the Executive's employment hereunder upon
written notice to the Executive; provided, however, that the Executive or the
Executive's legal representative, as the case may be, shall be entitled to
receive, and the Company shall pay, (i) any accrued and unpaid Salary for a two
(2) year period from the date of termination, less any amounts received by the
Executive under any disability insurance policy maintained by the Company; and
(ii) any Performance Bonus that would be payable for the one (1) year period
after the Executive's employment is terminated due to Incapacity and
reimbursement of business expenses which are properly owing to the Executive
pursuant to Section 6 hereof, through the date of termination; provided that in
no event shall the amount of the Performance Bonus be less than fifty percent
(50%) of what it would have been for the entire year.

         (c)      The Company shall have the right to terminate the Executive's
employment under this Agreement at any time for Cause upon written notice to
the Executive. In the event the Executive's employment hereunder is terminated
by the Company for Cause, the Company shall only be obligated to pay accrued
and unpaid Salary through the date of termination and the Company shall pay any
accrued and unreimbursed business expenses which are properly owing to the
Executive pursuant to Section 6 hereof through the date of termination.

         (d)      The Company shall have the right to terminate the Executive's
employment hereunder Without Cause at any time upon ten (10) days' prior
written notice to the Executive. If the Company terminates the Executive's
employment hereunder Without Cause, the Company shall (i) continue to pay
Salary to the Executive provided for hereunder for a

                                       8

<PAGE>   9

period equal to the greater of (x) two (2) years from the date of termination
and (y) the remaining period of the Employment Term and (ii) pay any
unreimbursed business expenses which are properly owing to the Executive
pursuant to Section 6 hereof through the date of termination. In addition,
should the Executive's employment hereunder be terminated Without Cause, the
Company shall pay to the Executive the Performance Bonus, if any, for the
entire contract year in which the termination of the Executive's employment
with the Company hereunder occurs and for the contract year following the year
in which the termination occurred. The Executive shall not be under any
obligation to mitigate the Company's obligation pursuant to this Section 7(d)
by securing other employment or otherwise.

         (e)      The Executive shall have the right to terminate his
employment with the Company hereunder for Good Reason, upon not less than
thirty (30) days prior written notice to the Company. Should the Executive
terminate his employment hereunder for Good Reason, the Company shall be
obligated to make the payments to the Executive provided for in Section 7(d)
hereof upon the termination of the Executive's employment by the Company
Without Cause.

         (f)      The failure of the Company to continue the employment of the
Executive upon expiration of the entire three (3) year Employment Term shall
not be considered a termination of employment for purposes of this Agreement.
The Company's obligations with respect to the Performance Bonus for the last
year of the Employment Term, if any, shall survive the expiration of this
Agreement.

         Section 8. Inventions. Any Inventions originated or conceived by the
Executive related to the Company's business during his employment by the
Company or any Affiliate of the Company or with the use or assistance of the
facilities, materials or personnel of the Company or any Affiliate of the
Company, either solely or jointly with others, during the Employment Term shall
be the sole and exclusive property of the Company. The Executive hereby
irrevocably assigns and transfers to the Company and agrees to transfer and
assign to the Company all of his right, title and interest in and to all
Inventions, and to applications for patents and patents granted upon such
Inventions and to all copyrightable material related thereto developed by the
Executive or under his supervision. The Executive agrees for himself and his
heirs and personal representatives, upon the request of the Company and at the
Company's expense, to do such acts, to execute such documents and instruments
and to participate in such legal proceedings as from time to time may be
necessary or required to apply for, secure, maintain, reissue, extend or defend
the worldwide rights of the Company in the Inventions. The Executive here
grants to the Company a power of attorney, which is irrevocable and coupled
with an interest, to execute any such documents and instruments if the
Executive is unable or fails to do so, after the request by the Company as
provided in the immediately preceding sentence. The Executive shall have no
right to receive any royalties or other payments from the Company with respect
to any inventions.

         Section 9. Restrictions Respecting Competing Businesses, Confidential
Information, etc. The Executive acknowledges and agrees that by virtue of the
Executive's position and involvement with the business and affairs of the
Company, the Executive will

                                       9

<PAGE>   10

develop substantial expertise and knowledge with respect to all aspects of the
Company's business, affairs and operations and will have access to all
significant aspects of the business and operations of the Company and to
Confidential and Proprietary Information. The Executive acknowledges and agrees
that the Company will be damaged if the Executive were to breach any of the
provisions of this Section 9 or if the Executive were to disclose or make
unauthorized use of any Confidential and Proprietary Information. Accordingly,
the Executive expressly acknowledges and agrees that the Executive is
voluntarily entering into this Agreement and that the terms, provisions and
conditions of this Section 9 are fair and reasonable and necessary to
adequately protect the Company.

         (a)      The Executive hereby covenants and agrees that, during the
Employment Term and thereafter, unless otherwise authorized by the Company in
writing, the Executive shall not, directly or indirectly, under any
circumstance: (i) disclose to any other Person (other than in the regular
course of business of the Company) any Confidential and Proprietary
Information, other than pursuant to applicable law, regulation or subpoena or
with the prior written consent of the Company; (ii) act or fail to act so as to
impair the confidential or proprietary nature of any Confidential and
Proprietary Information; (iii) use any Confidential and Proprietary Information
related to the Company's business other than for the sole and exclusive benefit
of the Company; or (iv) offer or agree to, or cause or assist in the inception
or continuation of, any such disclosure, impairment or use of any Confidential
and Proprietary Information. Following the Employment Term, the Executive shall
return all documents, records and other items containing any Confidential and
Proprietary Information to the Company (regardless of the medium in which
maintained or stored), without retaining any copies, notes or excerpts thereof,
or at the request of the Company, shall destroy such documents, records and
items (any such destruction to be certified by the Executive to the Company in
writing).

         (b)      The Executive covenants and agrees that, while the Executive
is employed by the Company and for one (1) year after the Executive ceases to
be employed by the Company, if the Executive (i) voluntarily terminates his
employment with the Company for Good Reason or (ii) is terminated by the
Company for Cause, the Executive shall not, directly or indirectly, manage,
operate or control, or participate in the ownership, management, operation or
control of, or otherwise become interested in (whether as an owner,
stockholder, partner, lender, consultant, Executive, agent, supplier,
distributor or otherwise) any Competing Business or, directly or indirectly,
induce or influence any customer or other Person that has a business
relationship with the Company, or any Affiliate of the Company, to discontinue
or reduce the extent of such relationship; provided that in the case of a
termination by the Executive pursuant to clause (i) the Company at all times
continues to pay the amounts owing to the Executive pursuant to Section 7(b)
hereof. For purposes of this Agreement, the Executive shall be deemed to be
directly or indirectly interested in a business if he is engaged or interested
in that business as a stockholder, director, officer, Executive, agent,
partner, individual proprietor, consultant, advisor or otherwise, but not if
the Executive's interest is limited solely to the ownership of not more than 5%
of the securities of any class of equity securities of a corporation or other
Person whose shares are listed or admitted to trade on a national securities
exchange or are quoted on NASDAQ or a similar means if NASDAQ is no longer
providing such information.

                                       10

<PAGE>   11

         (c)      While the Executive is employed by the Company and for one
(1) year after the Executive ceases to be an employed by the Company, the
Executive shall not, directly or indirectly, solicit to employ for himself or
others any employee of the Company or any Affiliate of the Company who was an
employee of the Company or any Affiliate of the Company as of the date of the
termination of the Executive's employment with the Company, or to solicit any
such employee to leave such employee's employment or join the employ of
another, then or at a later time; provided that the foregoing shall not apply
to any family member of the Executive who is employed by the Company or any
such Affiliate or the Executive's administrative assistant.

         (d)      The parties agree that nothing in this Agreement shall be
construed to limit or negate the common law of torts, confidentiality, trade
secrets, fiduciary duty and obligations where such laws provide the Company
with any broader, further or other remedy or protection than those provided
herein.

         (e)      Because the breach of any of the provisions of this Section 9
may result in immediate and irreparable injury to the Company for which the
Company may not have an adequate remedy at law, the Company shall be entitled,
in addition to all other rights and remedies, to a decree of specific
performance of the restrictive covenants contained in this Section 9 and to a
temporary and permanent injunction enjoining such breach, without posting a
bond or furnishing similar security.

         Section 10. Severability. Each term and provision of this Agreement is
severable; the invalidity, illegality or unenforceability or modification of
any term or provision of this Agreement shall not affect the validity, legality
and enforceability of the other terms and provisions of this Agreement, which
shall remain in full force and effect. Since it is the desire and intent of the
parties that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought, should any particular provision of this Agreement
be deemed invalid, illegal or unenforceable, the same shall be deemed reformed
and amended to delete that portion that is adjudicated to be invalid, illegal
or unenforceable and the deletion shall apply only with respect to the
operation of such provision and to the extent of such provision and, to the
extent that a provision of this Agreement would be deemed unenforceable by
virtue of its scope, but may be made enforceable by limitation thereon, each
party agrees that this Agreement shall be reformed and amended so that the same
shall be enforceable to the fullest extent permissible under the laws and
public policies applied in the jurisdiction in which enforcement is sought.

         Section 11. Assignment. This Agreement and the rights and obligations
of the parties hereto shall bind and inure to the benefit of each of the
parties hereto, the heirs, executors, administrators and legal representatives
of the Executive and the successors and permitted assigns of the Company.
Neither this Agreement nor any rights or benefits hereunder may be assigned by
the Executive or the Company without the prior written consent of the other
party hereto, except that the Company may assign any of its rights or
obligations hereunder to any other Person which purchases all or substantially
all of the common stock or assets of the

                                       11

<PAGE>   12

Company or is the successor to the Company by merger, consolidation or other
similar transaction.

         Section 12. Amendment; Entire Agreement. This Agreement may not be
modified, amended, altered or supplemented except by a written agreement
executed by the parties hereto. This Agreement contains the entire agreement
and understanding of the parties hereto with respect to the subject matter of
this Agreement and supersedes all prior and/or contemporaneous agreements and
understandings of any kind and nature (whether written or oral) between the
parties with respect to such subject matter, all of which are merged herein,
except that nothing herein shall amend or modify that certain Agreement dated
_____________, between the Executive and the Company relating to the assignment
of intellectual property by the Company.

         Section 13. Waivers. Waiver by either party of either breach of or
failure to comply with any provision of this Agreement by the other party shall
not be construed as, or constitute, a continuing waiver of such provision, or a
waiver of any other breach of, or failure to comply with, any other provision
of this Agreement, any such waiver must be in writing to be limited to the
specific matter and instance for which it is given. No waiver of any such
breach or failure or of any term or condition of this Agreement shall be
effective unless in a written instrument and signed by the waiving party and
delivered, in the manner required for notices generally, to the affected party.

         Section 14. Notices. All notices, consents, directions, approvals,
instructions, requests and other communications required or permitted by the
terms of this Agreement to be given to any person shall be in writing, and
shall be delivered personally or sent by certified mail, return receipt
requested (postage prepaid) or by telecopy, to the parties at the following
addresses or telecopy numbers, as applicable:

                                       12

<PAGE>   13

         If to the Executive:

                  Mr. John F. Moynahan
                  Xybernaut Corporation
                  12701 Fair Lakes Circle
                  Suite 550
                  Fairfax, VA  22033
                  Telecopier: (703) 631-3903

         If to the Company:

                  Xybernaut Corporation
                  12701 Fair Lakes Circle
                  Suite 550
                  Fairfax, VA  22033
                  Attention:  Secretary
                  Telecopier:  (703) 631-7070

         With a copy to:

                  Parker Chapin Flattau & Klimpl, LLP
                  1211 Avenue of the Americas
                  New York, NY  10036
                  Attention:  Martin Eric Weisberg, Esq.
                  Telecopier:  (212) 704-6288

or to such other address as a party may have furnished to the other parties in
writing in accordance herewith. Any notice, consent, direction, approval,
instruction, request or other communication given in accordance with this
Section 14 shall be effective after it is received by the intended recipient.

         Section 15. Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF VIRGINIA
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THAT STATE, WITHOUT REGARD
OR REFERENCE TO ITS PRINCIPLES OF CONFLICTS OF LAWS. THIS AGREEMENT SHALL BE
CONSTRUED AND INTERPRETED WITHOUT REGARD TO ANY PRESUMPTION AGAINST THE PARTY
CAUSING THIS AGREEMENT TO BE DRAFTED. EACH OF THE PARTIES UNCONDITIONALLY AND
IRREVOCABLY CONSENT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
VIRGINIA AND THE FEDERAL DISTRICT COURT FOR THE NORTHERN DISTRICT OF VIRGINIA
WITH RESPECT TO ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, AND EACH OF THE PARTIES WAIVE ANY RIGHT TO CONTEST THE VENUE OF
SAID COURTS OR TO CLAIM THAT SAID COURTS CONSTITUTE AN

                                       13

<PAGE>   14

INCONVENIENT FORUM. EACH OF THE PARTIES UNCONDITIONALLY AND IRREVOCABLY WAIVES
THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT.

         Section 16. Headings; Counterparts. The headings contained in this
Agreement are inserted for reference purposes only and shall not in any way
affect the meaning, construction or interpretation of this Agreement. This
Agreement may be executed in two (2) counterparts, each of which when executed
shall be deemed to be an original, but both of which, when taken together,
shall constitute one and the same document.

         IN WITNESS WHEREOF, the Executive and the Company have executed this
Agreement as of the date first above written.

                           ----------------------------------------
                           John F. Moynahan

                           XYBERNAUT CORPORATION

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

                                       14

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00003-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00003-of-00352.parquet"}]]