Stereotaxis
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S-1/A
STEREOTAXIS, INC. filed this Form S-1/A on 05/12/2004
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            set forth in Section 8.7 below. If a Party rejects a shipment before
            the date on which payment therefore is due, it may withhold payment
            for such shipment or the rejected portion thereof. The limited
            warranties given by each of the Parties in Section 10 will survive
            any failure to reject by the other Party under this Section 8.6.
            Each Party will use commercially reasonable efforts to replace the
            quantities of Daughter Products or Components returned by the other
            Party within the shortest possible time, but no later than sixty
            (60) days from the return of such quantities.

8.6.1       If a Party fails to replace returned Daughter Products or
            Components, as the case may be, within ninety (90) days from the
            date such Daughter Products or Components are returned, the
            purchasing Party will have the right to:

8.6.1.1     cancel such replacement shipment by written notice; and

8.6.1.2     reclaim immediately the Daughter Product Transfer Price paid to
            Biosense or the Component Transfer Price paid to Stereotaxis, as the
            case may be, with respect to the Daughter Products or Components
            that were returned but not replaced, if payment for such Daughter
            Products or Components had already been made to Stereotaxis or
            Biosense.

8.7         Rejection by Lot. In the event that Biosense or Stereotaxis rejects
            an entire lot pursuant to Sections 8.6 and 8.8 (the "Rejecting
            Party"), the Parties will take the following actions. The rejecting
            Party will ship back to supplier an agreed upon sample size from
            such lot with written notice setting forth the reason for such
            rejection. Within fifteen (15) Business Days of receipt of the
            sample, Biosense or Stereotaxis, (the "Supplier"), will test the
            sample and provide notice of its determination to Rejecting Party.
            If, after testing the sample, Supplier determines that the lot was
            improperly rejected, the Supplier will so notify the rejecting
            Party. If the Parties cannot resolve the discrepancies within
            fifteen (15) Business Days, the Supplier will dispatch a quality
            assurance representative to the Rejecting Party's location. Such
            quality assurance representative will work with the Rejecting Party
            to determine the discrepancy in the finding with regards to the lot.
            If the Supplier representative and the Rejecting Party
            representative cannot come to agreement on the disposition of the
            lot within ten (10) days, then the matter will be submitted to an
            independent lab for determination.

8.8         Rejection Procedure. With respect to Daughter Products and
            Components which a Party intends to reject pursuant to Sections 8.6
            or 8.7 above, the Rejecting Party will, within thirty (30) days
            following receipt of such Daughter Products or Components, as the
            case may be, give written notice to the Supplier specifying the
            manner in which such Daughter Products of Components, as the case
            may be, fail to conform to the Quality Guidelines set forth in
            Section 8.4 and in conjunction with such notice, the Rejecting Party
            will request authorization from the supplier prior to the return of
            each lot of such Daughter Products or Components, as the case may
            be. Upon such request, the Supplier will provide the Rejecting Party
            with an RMA tracer number to be prominently displayed on the
            shipping container for the returned Daughter Products or Components,
            as the case may be. The foregoing thirty (30) day period may be
            extended for up to an additional thirty (30) days upon written
            request by the Rejecting Party to the supplier if received prior to
            the expiration of the original notice period and stating a
            legitimate reason for such request for extension. If returned
            Daughter Products or Components,



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