EXHIBIT 4.10
AGREEMENT FOR PAYMENT OF ACCOUNT
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AGREEMENT FOR PAYMENT OF ACCOUNT dated as of June 4, 2002 (this
"Agreement"), by and between XYBERNAUT CORPORATION, a Delaware corporation
("Xybernaut"), and XXXXXXX X. XXXXXX., an individual ("Xxxxxx").
WHEREAS, Xxxxxx and Xybernaut entered into a Master Consulting
Agreement dated February 1, 2002 (the "Master Agreement"), pursuant to which
Xybernaut engaged the services of Xxxxxx upon the terms and conditions contained
in the Master Agreement; and
WHEREAS, Xybernaut wishes to reach an agreement on an alternative
payment plan to compensate Xxxxxx for balances owing to Xxxxxx arising from the
Master Agreement as of June 4, 2002; and
WHEREAS, Xybernaut and Xxxxxx have reached agreement on the terms and
provisions of such alternative payment plan.
WHEREAS, Xxxxxx became an employee of Xybernaut on May 13, 2002.
NOW, THEREFORE, for good and valuable consideration, the receipt and
legal sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Balance: The total unpaid balance of the account owed by
Xybernaut to Xxxxxx, including, but not limited to, all services,
goods, expenses, and products provided by Xxxxxx to Xybernaut pursuant
to the Master Agreement, through and up to June 4, 2002, is for all
purposes agreed by the parties to be $9,068.18 (the "Balance"). The
Balance excludes any compensation that may be owed to Xxxxxx in his
capacity as an employee of Xybernaut beginning on May 13, 2002 and
relates soley to balances accrued under the Master Agreement.
2. Payment of Balance: Xxxxxx will accept as payment in full for
the Balance the issuance of shares of Xybernaut common stock, par
value $0.01 per share (the "Common Stock") for the full Balance as
provided for herein (the "Stock Grant").
3. Stock Grant: The Stock Grant will be satisfied by Xybernaut
issuing Ten Thousand Nine Hundred and Ninety Nine (10,999) shares of
Common Stock (the "Shares") to Xxxxxx based upon a value of $0.8245
per share (the "Agreed Upon Value Per Share"), which amount represents
a fifteen percent (15%) discount from the $0.97 closing market price
of the Common Stock on June 3, 2002 (the last trading day preceding
the date of this Agreement). The issuance of the Stock Grant, as is
the case with all stock grants by Xybernaut, is subject to the
approval of Xybernaut's Board of Directors. Promptly after the receipt
of such approval, Xybernaut shall cause a stock certificate
representing the Shares to be issued in the name of Xxxxxxx X. Xxxxxx.
4. Registration of the Shares: Xybernaut hereby grants to Xxxxxx
"piggyback registration rights" with respect to the Shares to be
issued to Xxxxxx hereunder in respect of the Stock Grant in the next
registration statement filed by Xybernaut with respect to its Common
Stock (other than a registration statement on Form S-4 or Form S-8 or
any successor thereto) immediately following the issuance of the
Shares. Xybernaut will furnish Xxxxxx with written notice concerning
any such registration statement reasonably in advance of the filing
thereof. If Xxxxxx notifies Xybernaut in writing, such notice to be
given within seven (7) business days after receipt of Xybernaut's
written notice, that Xxxxxx desires its Shares to be included in such
registration statement (which request shall specify the number of
Shares that Xxxxxx wishes to have included in the registration
statement), Xybernaut shall use its reasonable best efforts to cause
such Shares to be included in the registration statement and to cause
the registration statement to be declared effective by the Securities
and Exchange Commission (the "Commission"). Notwithstanding the
foregoing, Xybernaut shall have the right to exclude such number of
the Shares from the registration statement as Xybernaut or
the managing underwriter(s), if applicable, may reasonably determine
would have an adverse affect on the registration statement, the
likelihood of the Commission to declare the registration statement
effective or the price to be received by Xybernaut or the other
selling shareholders for the other shares of Common Stock covered by
the registration statement. If Xybernaut cuts-back the number of
Shares requested by Xxxxxx to be included in the registration
statement for which Xxxxxx has exercised its piggyback registration
rights, as permitted in the immediately preceding sentence, Xxxxxx
shall continue to have piggyback registration rights for succeeding
registration statements until all of the Shares have been registered.
Xybernaut shall be responsible for the compliance of any such
registration statement with applicable securities laws until all of
the Shares have been registered; provided that Xxxxxx shall be
responsible for any information about Xxxxxx specifically required by
applicable securities laws. Xxxxxx shall indemnify and hold harmless
Xybernaut (and its directors, officers, employees, control persons and
agents and their respective successors and assigns) from and against
any claim, action, suit, proceeding, damage, liability, loss, penalty,
cost and expense (including without limitation, reasonable attorneys'
fees and expenses) incurred by any of them as a result of, or based
upon, a misstatement of a material fact or omission of a material fact
regarding Xxxxxx which is furnished to Xybernaut by Xxxxxx or omitted
to be furnished to Xybernaut for inclusion in any registration
statement which includes any of the Shares. All fees and expenses
incident to the registration of the Shares shall be borne by
Xybernaut. Notwithstanding anything set forth herein, Xybernaut shall
not be required to include any Shares in a registration statement, if
such shares are eligible to be sold pursuant to Rule 144 promulgated
under the Securities Act of 1933, as amended (the "Act"), based upon
the holding period for the Shares.
5. Representations and Warranties: Xxxxxx represents and warrants
to Xybernaut as follows: (a) Xxxxxx is a sophisticated investor who
either (i) has such knowledge and experience in financial and business
matters (including without limitation, knowledge and experience
investing in "restricted securities", as that term is defined in the
Regulation D promulgated under the Act, and the risks
associated with such an investment) such that it is capable of
evaluating the merits and risks of its investment in the Company and
the Shares, (ii) has obtained independent professional financial
advice, from a investment advisor, sufficient to enable it to evaluate
the merits and risks of its investment in the Company and Shares,
and/or (iii) it is an "accredited investor," which is defined under
Rule 501(a)(3) of the Act; (b) it is acquiring the Shares for its own
account and not with a view to their distribution within the meaning
of Section 2(11) of the Act; (c) it has no present intention to
distribute any of the Shares publicly and has no present agreement,
understanding or arrangement to subdivide, sell, assign, transfer or
otherwise dispose of all or any of the Shares to any other person or
entity; and (d) it understands that it may be necessary to bear the
economic risk of the investment in the Shares for an indefinite period
of time indefinitely because the Shares may not be sold, hypothecated,
transferred, pledged, gifted or otherwise disposed of unless
registered under the Act and all applicable state securities laws or
an exemption from such registration is available and is fully complied
with by Xxxxxx. Notwithstanding the above, it is acknowledged that
Xxxxxx may publicly sell shares of Common Stock in the open market
without restriction through its broker if a registration statement
covering the Shares is declared effective by the Commission pursuant
to Section 5 hereof. Xxxxxx acknowledges and agrees that Xybernaut
will be relying on the representations and warranties of Xxxxxx set
forth in this Section 6 in issuing the Shares which are the subject of
the Stock Grant to Xxxxxx pursuant to an exemption from registration
under the Act and applicable state securities laws. The certificate
for the Shares issued to Xxxxxx shall bear the following restrictive
legend.
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED,
SOLD, TRANSFERRED, HYPOTHECATED, PLEDGED, GIFTED OR
OTHERWISE DISPOSED OF, IN WHOLE OR IN PART, UNLESS THE
SHARES ARE REGISTERED UNDER THE ACT, OR IN THE ABSENCE
OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO
SUCH SECURITIES UNDER THE ACT,
UNLESS XYBERNAUT CORPORATION (THE "COMPANY") HAS
RECEIVED THE WRITTEN OPINION OF THE COMPANY'S COUNSEL
THAT, AFTER INVESTIGATION OF THE RELEVANT FACTS,
COUNSEL IS OF THE OPINION THAT SUCH TRANSACTION IS
EXEMPT FROM REGISTRATION UNDER THE ACT AND UNDER
APPLICABLE STATE SECURITIES LAWS."
6. Xxxxxx Services: Except as expressly modified herein, the
parties agree that the Master Agreement remains in full force and
effect and is not otherwise merged or amended by this Agreement.
7. Xxxxxx Release: Upon the execution and delivery of the
Agreement and provided that Xybernaut is not in material breach of
this Agreement Xxxxxx shall forebear and suspend any and all actions,
suits or other proceedings threatened or pending against Xybernaut for
collection of the Balance. Upon the later of the date of the date that
(y) the Stock Grant contemplated herein is completed and (z) the
registration of the Shares as provided for in Sections 3 and 4 hereof
(if such registration is requested) (the "Release Date"), Xxxxxx shall
forever release Xybernaut and its subsidiaries and their respective
present and future officers, directors, employees, representatives and
agents and the respective successors and assigns of each of them (each
a "Releasee"), from any and all claims, suits, debts, damages,
liabilities, actions or causes of action, demands, obligations,
promises, costs and expenses (including, without limitation,
attorneys' fees and expenses) of any nature and description, in law or
in equity, whether known or unknown, known in the future, fixed or
contingent, suspected, disclosed or undisclosed, against any Releasee
that Xxxxxx or any of its subsidiaries or any of their respective
present and former officers, directors, employees, representatives,
agents, their respective successors and assigns may have against any
Releasee from the beginning of time through the Release Date based
upon, arising out of or in any way relating to the Balance, this
Agreement or the matters contemplated hereby relates.
8. Governing Law; Jurisdiction. This Agreement shall be governed
by and construed in accordance with the law of the Commonwealth of
Virginia, without regard to Virginia's conflicts of law principles.
This Agreement shall not be interpreted or construed with any
presumption against the party that caused this Agreement to be
drafted. Xxxxxx and Xybernaut hereby unconditionally and irrevocably
consent to the jurisdiction of the Federal District Court of the
Northern District of Virginia with respect to any action, suit or
other proceeding arising out of or relating to this Agreement. The
prevailing party in any such action, suit or proceeding shall be
entitled to receive reimbursement of all of its attorneys' fees and
expenses incurred in connection with such action, suit or proceeding.
9. Miscellaneous:
(a) This Agreement may not be amended, modified or waived, except
by an instrument in writing signed by each of the parties hereto. This
Agreement constitute the entire understanding and agreement of the
parties with respect to the subject matter hereof and its supercedes
all prior and/or contemporaneous understandings and agents (whether
written or oral) all of which are merged herein.
(b) Should there be any conflict between the terms and provisions
of the Master Agreement and this Agreement, the terms and provisions
of this Agreement shall govern and be controlling.
(c) This Agreement may not be assigned by either party without
the prior written consent of the other party hereto. This Agreement
shall be binding upon and inure to the benefit of the parties hereto
and their successors and permitted assigns.
(d) This Agreement may be executed in two (2) or more
counterparts, each of which shall be an original, and when taken
together, shall constitute owe and the same agreement. Section
headings are included herein for
convenience of reference only, and they shall not effect the
construction or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their authorized officers as of the date first written above.
XYBERNAUT CORPORATION XXXXXXX X. XXXXXX
By: By: ________________________
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Name: Name: Xxxxxxx X. Xxxxxx
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Title: Title: An Individual
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