Stereotaxis
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S-1/A
STEREOTAXIS, INC. filed this Form S-1/A on 05/12/2004
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In the event that Supplier becomes unable for any reason to produce and deliver
Items per this Agreement, Stereotaxis may review and purchase from Supplier its
intellectual property (as above) at a price of [***].

3. OPERATION OF AGREEMENT

3.1 PURCHASE ORDERS

Stereotaxis will issue firm Purchase Orders for Items, providing Supplier with
sufficient lead-time to manufacture Items. Supplier will identify the lead-time
to be used for planning purposes by Stereotaxis.

Stereotaxis will provide monthly, rolling six-month delivery forecasts to be
used for the purposes of providing guidance to Supplier for scheduling its
production and procurement. This is not intended to serve as a purchase
commitment.

Stereotaxis does not commit to buy a specific volume of any part number or Item
from Supplier, except as detailed in Purchase Orders issued by Stereotaxis to
Supplier.

3.2 PURCHASE ORDER CANCELLATIONS AND SCHEDULE PUSH-OUTS

If Purchase Orders are canceled, Supplier may invoice Stereotaxis for all
reasonable materials, direct, indirect, and overhead costs incurred to the date
of cancellation with a margin of [***], plus reasonable costs for disposal
and/or destruction of items that are in completed or semi-completed form, if
applicable. Supplier shall provide Stereotaxis with a detailed breakdown of
costs incurred, and explain its efforts to mitigate these costs at notice of
Purchase Order cancellation. Stereotaxis reserves the right to physically audit
Items and WIP for which reimbursement claims have been submitted and to take
possession and ownership of Item, WIP and relevant raw materials for which it
pays reimbursement claims.

Any amount for reimbursement of costs associated with excess, obsolete or
cancelled Items shall be paid as if such claim were an invoice pursuant to
Section 5.

Purchase Order delivery schedules may be modified upon mutual written agreement.
Specific time fences will be mutually established to allow quantity changes to
be made and the charges associated with each time fence will be established.
However Stereotaxis may not delay the delivery date of items against any
Purchase Order by more than six (6) months from the original delivery dates
without incurring holding costs.

3.3. DISPOSAL OF MATERIALS RELATING TO PURCHASE ORDER CANCELLATIONS

Supplier agrees to physically dispose of all excess and obsolete Items as
directed by Stereotaxis' authorized purchasing representative. Excess and
obsolete Items that are to be delivered to Stereotaxis' facilities must be
delivered in accordance with the requirements of this Agreement and/or any
supplemental instructions provided by Stereotaxis' authorized purchasing
representative. In lieu of delivery to Stereotaxis, Stereotaxis may require that
Supplier destroy or otherwise scrap these Items so that they are non-functional.
Supplier agrees to destroy or otherwise scrap these Items in a manner that is
satisfactory to Stereotaxis and to provide Stereotaxis with a certification of
destruction and/or evidence of proper disposal of such Items. Costs for the
disposal or destruction of such Items (including costs for demagnetization if
necessary) shall be reimbursed to Supplier as in 3.2 above.

3.4 DELIVERY REQUIREMENTS

Supplier will manufacture, sell and deliver all Items to Stereotaxis for which a
Purchase Order has been issued subject to the other provisions of this
Agreement. Shipments to Stereotaxis, or to other locations specified by
Stereotaxis, by Supplier will be delivered in the correct quantities ordered by
Stereotaxis.


[*** Indicates portions of this exhibit that have been omitted and filed 
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.]


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