EXHIBIT 4.11
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[LOGO] ATLAS CAPITAL SERVICES, INC.
May 1, 2001
Xybernaut Corporation
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Dear ▇▇▇▇▇:
The purpose of this letter is to confirm the understanding and agreement (this "Agreement") by and
between Atlas Capital Services, Inc. ("Atlas Capital Services") and Xybernaut Corporation (the "Company") as
follows:
1) Engagement. The Company hereby engages Atlas Capital Services, for a period of thirty (30) days from the
date of the signing of this Agreement (the "Engagement Period"), as its non-exclusive finder in
connection with a proposed private placement (the "Private Placement") of up to $11 million of the
Company's securities comprised of the Company's common stock and warrants to purchase such common stock
(the "Securities") to a limited number of institutional or accredited investors (the "Investors"), on
terms and conditions acceptable to the Investors and the Company. The Private Placement would be made
pursuant to the exemptions afforded by the Securities Act of 1933, as amended, and applicable state
securities laws.
2) No Due Diligence Obligation. The Company acknowledges and agrees that Atlas Capital Services will not
undertake any "due diligence" investigation and will be using and relying upon the information supplied
by the Company and its officers, agents and others, the Placement Materials, and any other publicly
available information concerning the Company's assets.
3) Compensation. In consideration of Atlas Capital Services services, if the Company closes on not less
than $10 million in the Private Placement during the Employment Period, Atlas Capital Services shall be
entitled to receive, and the Company hereby agrees to pay to Atlas Capital Services, the following:
a) Upon the closing of the Private Placement, at the minimum amount, as aforesaid, the Company will
pay a cash fee of $350,000 to Atlas Capital Services.
b) Upon the closing of the Private Placement, at the price as effective, the Company shall issue to
Atlas Capital Services and/or its designees warrants (the "Warrants") to purchase 45,000 shares of
the Company's common stock on the same terms as the warrants issued to the Investors in the Private
Placement.
4) Indemnification. The Company shall indemnify Atlas Capital Services under its standard indemnification
provisions attached hereto as Schedule A and made a part hereof.
5) Miscellaneous.
a) No provision of this Agreement may be amended, modified or waived, except in a writing signed by
all of the parties hereto.
b) This Agreement may be executed in any number of counterparts, each of which together shall
constitute one and the same original document.
c) This Agreement shall be construed in accordance with and governed by the laws of the State of New
York without giving effect to its conflict of law principles. The parties hereby agree that
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[LOGO] ATLAS CAPITAL SERVICES, INC.
any dispute which may arise between them arising out of or in connection with this Agreement shall
be adjudicated before a court located in New York City, and they hereby submit to the exclusive
jurisdiction of the courts of the State of New York located in New York, New York and of the
federal courts located in the Southern District of New York with respect to any action or legal
proceeding commenced by any party, and irrevocably waive any objection they now or hereafter may
have respecting the venue of any such action or proceeding brought in such a court or respecting
the fact that such court is an inconvenient forum, relating to or arising out of this Agreement,
and consent to the service of process in any such action or legal proceedings by means of
registered or certified mail, return receipt requested, in care of the address set forth on the
signature page hereto.
d) The parties hereby waive by jury in any action or proceeding involving, directly, or indirectly,
any matter in any way arising out of or in connection with this Agreement.
e) Atlas Capital Services shall perform its services hereunder as an independent contractor and not as
an employee, partner, co-venturer of the Company or an affiliate thereof. It is expressly
understood and agreed to by the parties hereto that Atlas Capital Services shall have no authority
to act for, represent or bind the Company or any affiliate thereof in any manner.
f) Nothing herein contained shall be construed to limit or restrict Atlas Capital Services in
conducting such business with respect to others, or in rendering such advice to others, except as
such advice may relate to matters relating to the Company's business and properties.
g) The Company hereby represents that it is a sophisticated business enterprise that has retained
Atlas Capital Services for the limited purposes set forth in this letter, and the parties
acknowledge and agree that their respective rights and obligations are contractual in nature. Each
party disclaims an intention to impose fiduciary obligations on the other by virtue of the
engagement contemplated by this letter.
h) The Company shall not issue any press release or other information regarding the Private Placement
or Atlas Capital Services without the prior written consent of Atlas Capital Services, which
consent shall not be unreasonably withheld.
Atlas Capital Services is delighted to accept this engagement and looks forward to working with you on
this assignment. Please confirm that the foregoing correctly sets forth our agreement by signing the enclosed
duplicate of this letter in the space provided and returning it, whereupon this letter shall constitute a
binding agreement as of the date first above written.
ATLAS CAPITAL SERVICES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇
Title: Vice President
ACCEPTED AND AGREED:
Xybernaut Corporation
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice-Chairman
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[LOGO] ATLAS CAPITAL SERVICES, INC.
Schedule A
Atlas Capital Services, Inc. May 1, 2001
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Ladies and Gentlemen:
In connection with our engagement of Atlas Capital Services Inc. ("Atlas Capital Services")
as finder, we hereby agree to indemnify and hold harmless Atlas Capital Services and its affiliates,
and the respective directors, officers, shareholders, agents and employees of Atlas Capital Services
(collectively the "Indemnified Persons"), from and against any and all claims, actions, suits,
proceedings (including those of shareholders), damages, liabilities and expenses as incurred by any of
them (including the reasonable fees and expenses of counsel) which (A) relate to or arise out of (i)
any actions taken or omitted to be taken (including any untrue statements made to any Indemnified
Person in connection with our engagement of Atlas Capital Services, or (B) otherwise relate to or
arise out of Atlas Capital Services' activities on our behalf under Atlas Capital Services'
engagement, and we shall reimburse any Indemnified Person for all expenses (including the reasonable
fees and expenses of counsel) as incurred by such Indemnified Person in connection with investigating,
preparing or defending any such claim, action , suit or proceeding (collectively a "Claim"), in
connection with pending or threatened litigation in which any Indemnified Person is a party. We will
not, however, be responsible for any Claim which is finally judicially determined to have resulted
exclusively from the gross negligence of willful misconduct of any person seeking indemnification
hereunder. We further agree that no Indemnified Person shall have any liability to us for or in
connection with our engagement of Atlas Capital Services except for any Claim incurred by us solely as
a direct result of any Indemnified Person's gross negligence or willful misconduct.
We further agree that we will not, without the prior written consent of Atlas Capital Services, settle,
compromise or consent to the entry of any judgment in any pending or threatened Claim in respect of which
indemnification may be reasonably sought hereunder (whether or not any Indemnified Person is an actual or
potential party to such Claim), unless such settlement, compromise or consent includes an unconditional,
irrevocable release of each Indemnified Person against whom such claim may be brought hereunder from any and
all liability arising out of such claim.
Promptly upon receipt by an Indemnified Person of notice of any complaint or the assertion or
institution of any Claim with respect to which indemnification is being sought hereunder, such Indemnified
Person shall notify us in writing of such complaint or of such assertion or institution but failure to do so
notify us shall not relieve us from any obligations we may have hereunder, unless and only to the extent such
failure results in the forfeiture by us of substantial rights and defenses, and will not in any event relieve
us from any other obligation or liability we may have to any Indemnified Person, we will assume the defense
of such Claim, including the employment of counsel reasonably satisfactory to such Indemnified Person and the
payment of reasonable fees and expenses of such counsel. In the event, however, that such Indemnified Person
reasonably determines that having common counsel with the Company and/or another Indemnified Person would
present such counsel with a conflict of interest or if the defendant in, or target of, any such Claim,
includes an Indemnified Person and us, and such Indemnified reasonably concludes that there may be legal
defenses available to it or other Indemnified Persons different from or in addition to those available to us,
then such Indemnified Person may employ its own separate counsel to represent or defend it in any such Claim
and we shall pay the reasonable fees and expenses of such counsel. Notwithstanding anything herein to the
contrary, if we fail timely or diligently to defend, contest, or otherwise protect against any Claim, the
relevant Indemnified Person shall have the right, but not the obligation, to defend, contest, compromise,
settle, assert crossclaims, or counterclaims or otherwise protect against the same, and shall be fully
indemnified by us therefore, including without limitation, for the reasonable fees and expenses of its
counsel and all amounts paid as a result of such Claim or the compromise or settlement thereof. In any Claim
in which we assume the defense, the Indemnified Person shall have the right to participate in such Claim and
to retain its own counsel therefore at its own expense.
We agree that if any indemnity sought by an Indemnified Person hereunder is held by a court to be
unavailable for any reason, then (whether or not Atlas Capital Services is the Indemnified Person), we and
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[LOGO] ATLAS CAPITAL SERVICES, INC.
Atlas Capital Services shall contribute to the Claim for which such indemnify is held unavailable in such
proportion as is appropriate to reflect the relative benefits to us, on the one hand, and Atlas Capital
Services on the other, in connection with Atlas Capital Services' engagement referred to above, and the
relative fault, as between us and the Indemnified Person in respect of the Claim, subject to the limitation
that in no event shall the amount of Atlas Capital Services' contribution to such Claim exceed the amount of
fees actually received by Atlas Capital Services from us pursuant to Atlas Capital Services' engagement. We
hereby agree that the relative benefits to us, on the one hand, and Atlas Capital Services on the other, with
respect to Atlas Capital Services' engagement shall be deemed to be in the same proportion as (a) the total
value paid or proposed to be paid or received by us or our stockholders as the case may be, pursuant to the
transaction (whether or not consummated) for which you are engaged to render services bears to (b) the fee
actually paid to Atlas Capital Services in connection with such engagement; provided, however, that under no
circumstances whatsoever shall Atlas Capital Services be required to contribute to any such claim any amount
in excess of the fee actually paid in connection with such engagement.
Our indemnity, reimbursement and contribution obligations under this Agreement shall be in addition to,
and shall in no way limit or otherwise adversely affect, any rights that any Indemnified Party may have at
law or at equity.
We hereby consent to personal junction and service of process and venue in any court in the State of New
York in which any claim for indemnity is brought by and Indemnified Person.
It is understood that, in connection with Atlas Capital Services' engagement, Atlas Capital Services may
be engaged to act in one or more additional capacities and that the terms of the original engagement or any
such additional engagement may be embodied in one or more separate written agreements. The provisions of this
Agreement shall apply to the original engagement, any such additional engagement and any modifications of the
original engagement or such additional engagement and shall remain in full force and effect following the
completion or termination of Atlas Capital Services' engagement(s).
Very truly yours,
Xybernaut Corporation
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice-Chairman
Confirmed and agreed to:
ATLAS CAPITAL SERVICES, INC.
By:/s/ ▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇
Title: Vice President
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