Xybernaut Selected By Vneshtorgbank -- Russia's 'Bank for Foreign Trade' -- for Information Technology Solutions and Systems to Enhance Efficiency and Productivity.

FAIRFAX, Va. & MOSCOW -- Vneshtorgbank Engages Xybernaut for Hardware, Software and Solution Services to Streamline Business Operations and Customer Services

Xybernaut(R) Corporation (NASDAQ:XYBR), today announced that the Vneshtorgbank (VTB), Russia's second largest bank and officially designated "Bank for Foreign Trade," has selected Xybernaut as an information technology (IT) provider for a variety of improvements to business operations, customer services and bank efficiency.

The agreement, which outlines interest in Xybernaut expertise and know-how calls assigns Xybernaut as a technical services provider and contractor-integrator for hardware, software and solutions services. The agreement outlines a series of phases of IT enhancements for the bank's computing architecture throughout 2005 and beyond.

In related news, VTB has already completed similar agreements with IBM, HP, Cisco and Microsoft -- American companies that will also be part of the IT team for this initiative. VTB has also chosen Russian IT companies who will lead the various integration efforts through 2006. These companies include: "Compulink", a partner of Avaya and IBM, "i-Teco", a partner of HP and Microsoft, "Jet Infosystems", a partner of Sun Microsystems, and "Microtest", a partner of Cisco Systems.

VTB estimates that the bank currently spends $30-40 million on Information and Telecommunications Infrastructure (ITT) development every year. According to VTB's management, intends to become the most technological bank in Russia in three years. In fact, the VTB formally documented IT strategy indicates that the banks' management plans to spend more than $100 million on ITT enhancements to achieve these objectives.

"This ITT enhancement initiative is a critical step for VTB and we anticipate measurable benefits to our operational efficiency and quality of customer service," stated Andrey Korotkov, senior vice president for VTB. "Xybernaut was chosen as a member of this technology team because of their proven success in mobile/wearable computing with large government customers and Fortune 500 enterprises. We are not only interested in Xybernaut hardware and systems but in its know-how, intellectual property and solutions services. This mix of capabilities was an important differentiator in our selection process. We have already identified several IT objective that Xybernaut has been selected to accomplish."

Xybernaut and VTB's other ITT development partners, plan to employ a staged approach to bank-wide implementation using pilot-programs, testing/evaluations, reports and refinements related to areas such as integration with existing VTB information technologies, performance measurements, training factors and return on investment (ROI) studies.

"VTB is putting together a stellar team of IT providers and we look forward to contributing with expertise, experience and technologies that will truly make a difference for VTB," stated Steven A. Newman, president and COO of Xybernaut. "Successes in the banking and finance sector, such as our Atigo deployments for NYMEX member-company MBF Clearing Corp., are providing valuable perspective and metrics that can be used for strategic planning and evaluation of efforts for VTB."

VTB currently has 48 regional representative offices in 11 time zones and over 1000 branches throughout Russia. Recently, VTB has acquired several banks in the Top 30 rating among Russian banks. Integration of these and additional merged banks is one area in which the enhanced ITT strategy is expected to deliver considerable benefit.

Among Russian banks VTB has the broadest network of correspondents. The international network of the Bank is represented by five subsidiaries in Zurich (Switzerland), in Limassol (Cyprus), in Vienna (Austria), in Luxembourg and in Erevan (Armenia), associated bank in Frankfurt-on-Main (Germany), representative offices in Milan (Italy), Beijing (China), Kiev (Ukraine) and Minsk (Belarus).

In addition to traditional banking services, VTB also actively develops retail markets, small business crediting, commercial and residential mortgages, while managing a full service insurance company and a variety of leasing companies. Additional VTB information can be found at http://eng.vtb.ru.

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 and China). Visit Xybernaut on the Internet 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.