  Based on density functional theory calculations, we here show that the
formation of a fullerene C$_{60}$ carbon "nanobud" (CNB) on carbon nanotube
(CNT) caps is energetically more favorable than that on CNT sidewalls. The
dominant CNB formation mode for CNT caps is found to be the [2+2] cycloaddition
reaction as in the conventional CNT sidewall case. However, it is identified to
be exothermic in contrast to the endothermic reaction on CNT sidewalls.
Computed reaction pathways further demonstrate that the formation
(dissociation) barrier for the CNT cap-based CNB is slightly lower
(significantly higher) than that of the CNT sidewall-based CNB, indicating an
easier CNB formation as well as a higher structural stability. Additionally,
performing matrix Green's function calculations, we study the charge transport
properties of the CNB/metal electrode interfaces, and show that the C$_{60}$
bonding to the CNT cap or open end induces resonant transmissions near the
Fermi level. It is also found that the good electronic linkage in the CNT
cap-C$_{60}$ cycloaddition bonds results in the absence of quantum interference
patterns, which contrasts the case of the CNB formed on an open-ended CNT that
shows a Fano resonance profile.
