Mitsubishi Heavy Industries and Xybernaut Corporation Enter Into Joint Development Agreement; Mitsubishi to Support Xybernaut Research and Development Efforts.

Business Editors & High-Tech Writers

FAIRFAX, Va. & YOKOHAMA, JAPAN--(BUSINESS WIRE)--Oct. 9, 2002

Mitsubishi Heavy Industries (MHI) and Xybernaut(R) Corporation (NASDAQ: XYBR) today announced that their previously-reported (July 17, 2002) advanced discussions have moved into the next stage of cooperation between the companies.

Under the terms of this agreement, MHI will provide funding and staff for some of Xybernaut's key research and development efforts.

In most cases, the total contribution from MHI for the joint projects will be less than one million dollars, and will additionally involve one to three MHI assignees to Xybernaut teams in the USA.

Initial projects may include mobile inspections solutions as well as security or first responder solutions for deployment worldwide. Under separate agreement, MHI is moving ahead with plans for deploying Xybernaut equipment and solutions throughout its operations.

Dr. Ayao Tsuge, technical director and representative director of the MHI board of directors, stated, "The relationship between MHI and Xybernaut continues to grow. Our objective to build a very close and trusted, and formal, relationship with Xybernaut remains unchanged and it strengthens daily. I am looking forward to Xybernaut management assisting me greatly in the 21st century transformation of MHI, and our sister operations, into higher levels of productivity, competitiveness and profitability."

Ed Newman, chairman, president and CEO of Xybernaut, added, "We both remain committed to achieving a very beneficial relationship in the form of a dynamic, effective and highly productive business combination. The two companies complement each other perfectly. Our shared vision of the future, and our ability to work closely together in a completely trusted manner, will help maintain and grow our leadership positions around the world."

About Mitsubishi Heavy Industries (MHI):

Global Headquarters Located at: 5-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo, Japan

Established: 1950

Employees: over 37,000

Sales: 2,637.7 billion yen (April 1, 2000-March 31, 2001)

Primary Products and Services: Shipbuilding, Steel Structures, Power Systems & Nuclear Energy Systems, Aircraft & Space Systems, Chemical Plants, Environmental Systems, Transportation Systems, Machinery for Industrial and General use, Paper & Printing Machinery, Machine Tools, Air-conditioners and many others.

About Xybernaut:

Xybernaut Corporation is the leading provider of wearable/mobile computing hardware, software and services, bringing communications and full-function computing power in a hands-free design to people when and where they need it. Headquartered in Fairfax, Virginia, Xybernaut has offices and subsidiaries in Europe (Germany) and Asia (Japan). Visit Xybernaut's Web site at www.xybernaut.com.

Xybernaut, the Xybernaut logo and Mobile Assistant(R) V (MA(R) V) are trademarks or registered trademarks of Xybernaut Corporation in the USA and other countries. All other brand and product names are or may be trademarks of, and are used to identify products or services of, their respective owners.

This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995 (the "Act"). In particular, when used in the preceding discussion, the words "plan," "confident that," "believe," "scheduled," "expect," or "intend to," and similar conditional expressions are intended to identify forward-looking statements within the meaning of the Act and are subject to the safe harbor created by the Act. Such statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward-looking statements. Such risks and uncertainties include, but are not limited to, market conditions, the availability of components and successful production of the Company's products, general acceptance of the Company's products and technologies, competitive factors, timing, and other risks described in the Company's SEC reports and filings.