* Editor's Note *

A news article featuring Xybernaut, which appeared in this week's issue of the Virginia-Israel Alliance newsletter, was one of the most popularly read articles. Unfortunately, because of an editing error, portions of the article were inadvertently omitted. I've attached below the article in its entirety. This is a great story about the wonderful business opportunities for U.S. companies in Israel and how Xybernaut was able to establish some of those relationships through our annual VITTS conference.

Speaking of our VITTS conference, to be held in Israel June 17-18 , we are working hard toward finalizing the list of participating companies, and I will be keeping everyone posted on the latest about the upcoming conference in our next newsletter.

Take care,

Ralph

XYBERNAUT: A VITTS SUCCESS STORY

VITTS Paves Way Into Israel For Leading U.S. Developer of Wearable/Mobile Computing Devices

by Ben Merritt

Wearable computing is the wave of the future, and Tamra, a mid-size city in Northern Israel, is riding that wave, thanks to Xybernaut and VITTS.

And it all started with an introduction between Xybernaut and the mayor of Tamra made at last year's VITTS conference. Beyond its business ties to Tamra, VITTS has opened some incredible doors for Xybernaut into Israel, and today Israel is one of Xybernaut's leading international markets outside of the U.S.

"VITTS was incredibly valuable to us for business development purposes, helping us get into some of Israel's leading small to midsize companies while opening initial doors for dialogue with large Israeli companies," said Yossi Ben-Dak, executive vice president and Xybernaut's chief scientist. "The primary value of VITTS is the way it is structured, which is so unlike any other conference or trade summit I have ever attended, and I have attended a lot of these events."

In Tamra, high schools today are about to start teaching courses using wearable computing, and the city has plans to implement the latest in wearable computing technology throughout the region, in hospitals, in security operations, and in vital communications.

"Tamra, an Arab city in Northern Israel, sees technology as a way to bridge its past with its future, while at the same time acting as a great equalizer in bringing all people together, which can ultimately help to promote peace.

Toward that end, Xybernaut is seen as a key partner, providing the people of Tamra with computer and communications capabilities wherever they go," said Ben-Dak.

VITTS draws on its huge database of companies to hone in on the right companies and to target the right set of people, including all levels of top management and government.

"They also helped us do our homework, working with us early on to identify and focus on the right set of companies in a field that is so rapidly changing," says Ben-Dak. "Then they provided us with the critical intelligence and prompt answers that allowed us to really leverage the conference to our advantage. At VITTS, you certainly walk away with more than just exchanging business cards. You're well on your way to defining deals."

Xybernaut, a fast growing company that is traded on the Nasdaq exchange, is the world leader in wearable computing and communication. To work with its intellectual property, its newly developed military and consumer or education products, Israel represents an incredibly important "partnership
pool" that is critical to its business success. Not only was Israel important in terms of R&D, but also for developing strategic utilities that are newly defined in Israel in multidisciplinary and "hybrid product" innovation.

Ben-Dak was brought into Xybernaut in 1999 as its chief scientist to define the company's technology blueprint for the next decade. Ben-Dak is one of the world's foremost technology evaluators, a pioneer in
telecommunications base technologies and higher learning in less developed countries. He has taught management and science policy in some 12 universities, and has received numerous awards and distinctions in his 25-year career, including the National Academy of Science Award in Peace Studies in 1971 and Eleanor Roosevelt Institute International Service Award in 1997.

Ben-Dak says that although Israel only has a population of 6 million people, living in a country that is the size of the state of New Jersey, it is incredibly rich with highly creative and talented people.

"Unfortunately, a lot of companies here in the U.S. look offshore to countries like China or Brazil to get their needs met. But those same U.S. companies are also finding that doing business in those countries is often a hit-or-miss situation, because the talent is so scattered and it often winds up being a waste of time," says Ben-Dak. "Here, in Israel, that's not the case: the talent is very concentrated, and some of the leading, renowned experts live only a few miles apart, or even on the same street. It really boils down to your odds of finding the best people in a country with a population of 1 billion or a country of 6 million."

Not only has VITTS helped open doors for Xybernaut in Israel, and for Israel in Xybernaut, says Ben-Dak, but it has also helped the company personnel understand how to speak Israel's business language, which is of equal importance once the right connections have been made. Ben-Dak says Xybernaut executives
experienced this first-hand and considered this a huge value-add to the event.

"Be prepared for the roughness of the culture: people speak their minds--they are very frank. But also realize that's the way they were brought up, which leads to lots of creativity, lots of unorthodox, out of the box thinking," says Ben-Dak. "When dealing with Israelis, U.S. companies should learn to take full advantage of their feedback, which is usually instant, very complete and spot on."

Ben-Dak says Xybernaut benefited by VITTS and sees their missions to Israel as a must-attend for anyone trying to do business in Israel or trying to gain new insights into R&D, manufacturing, or the latest advances in technology and applications. Israeli businesses' deep roots in the Israeli military, as well as the high concentration of leading Russian Jewish scientists and engineers, all make it an attractive place for U.S. companies seeking new business opportunities. Israel is also a major gateway for
trade with Eastern Europe, and with the former Soviet republics.

"We believe wholeheartedly in what VITTS is doing," says Ben-Dak. Xybernaut benefited tremendously from the interfaces and I would highly recommend it to any company that wants to expand technology and market reach. VITTS provides a unique service for companies, and what's even better is that VITTS takes care of everything, so companies don't have to spend a lot of time -- or money -- to get high impact results."

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GLOBAL SECURITY & DISASTER RESPONSE SUMMIT
March 24-26, 2002
Washington Convention Center
Washington, D.C.

The Israeli community will have a strong presence at the upcoming Global Security & Disaster Response Summit (http://globalsecurity.bz/section/summit.html) . In addition to the Virginia Israel Advisory Board serving as a Supporting Organization of the conference, the Israeli Embassy will sponsor an Israeli Pavilion on March 25 at 3:00 pm.

Edny Raz, Economic & Trade Officer at the Israeli Embassy, will moderate a discussion on the increasing security needs in Israel and effective planning tools to prepare for and respond to disasters.

Speakers will include:
* Arie Amit, former Chief of Police for the Jerusalem District
* Major General Yoram Yair (ret.), Chairman of SuperGum, Ltd.
* Zohar Rubinstein, Director of the Israeli Institute of Organizational Studies
* Dubi Peled, CEO of Demko

The following companies are scheduled to participate in the Pavilion:
* Galdor/Secotec
* IMI Israel Military Industries, ISSG
* Mul-T-Lock Technologies
* N.W.S. Security Consulting
* OzVision Remote Video Viewing
* S.A. 8 High Buildings Rescuing Systems
* Shalon Chemical Industries Ltd.
* SIBAT
* Supergum Ltd.
* Tandu Technologies & Security Systems Security Consulting
* Trans Security Systems & Technology Ltd. Electronic Fences
* Vectop Video Recording Systems

The pavilion will be presented by the Israeli Defense Military Department and the Israeli Export Institute. If you're interested in learning more about the conference, please visit the website at http://globalsecurity.bz/section/summit.html .
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THE ISRAEL HIGH-TECH CONFERENCE 2002
VENTURE CAPITAL - ENGINE OF GROWTH
April 13-15
Tel Aviv, Israel

The conference will bring together industry leaders in venture capital, finance and technology and will showcase the latest technological innovations of the Israeli start-up community.

The conference program is designed to examine the changes in the industry and the subsequent impact this has had on the new playing fields as well as the growing importance of the venture investors' role. Over 500 leaders of the high-tech and VC industries from Israel and abroad will be participating in the conference.

According to Zeev Holtzman, Chairman & CEO of Giza Venture Capital, "This conference offers a great opportunity to strengthen connections with foreign investors and to bring them together with major players and leading technologies of the future. That is our chance to personally introduce them to the huge potential latent in the Israeli business and high-tech industry."

For more information, email Mr. Etan Hilman: iva@netvision.net.il, Executive Director of the Israel Venture Association.