Stereotaxis
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S-1/A
STEREOTAXIS, INC. filed this Form S-1/A on 05/12/2004
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      1.    Develop a set of consolidated requirement documents, standards, and
            plans addressing product functionality; testing and integration
            standards, installation and support plans, regulatory approval plans
            and the clinical validation process

      2.    Provide these requirements to a second dedicated team, spanning
            multiple disciplines, which will create a joint system concept
            including x-ray system magnetic and physical range of motion
            compatibility

Upon completion of Phase 1 (as certified in writing by Stereotaxis and confirmed
thereafter in writing by Philips) Philips will pay Stereotaxis the calculated
expenditures of the R&D Milestone Payment by Stereotaxis for Phase 1 as
reflected in the specified Stereotaxis invoice, in accordance with the
calculations set out below and a prepayment of [***]$ in respect of Phase 2 and
provided that in no event will Philips be required to pay Stereotaxis an
aggregate of more than $[***] for all phases)


      PHASE 2. DETAILED DESIGN. Working in full coordination with the dedicated
      Philips' integration team during Phase 2, Stereotaxis will:

      1.    Expand this team to address the detailed system design, including
            unique user interface components, joint installation planning
            documents, design validation and verification testing, production,
            and support process development

      2.    Progress the software design effort concurrently to address
            real-time motion feedback, collision avoidance, X-ray graphic
            overlays, and image registration issues

Upon completion of Phase 2 (as certified in writing by Stereotaxis and confirmed
thereafter in writing by Philips) Philips will pay Stereotaxis a prepayment of
[***]$ in respect of Phase 3 and the calculated expenditures of the R&D
Milestone Payment by Stereotaxis for Phase 2 as reflected in the specified
Stereotaxis invoice, in accordance with the calculations set out below and
provided that in no event will Philips be required to pay Stereotaxis an
aggregate of more than $[***] for all phases)


      PHASE 3. TESTING AND VALIDATION; REGULATORY. Working in full coordination
      with the dedicated Philips' integration team during Phase 3, Stereotaxis
      will: Provide dedicated systems support to the joint integration testing
      and the regulatory design validation process as well as the ongoing
      sustaining engineering efforts

      1.    In parallel, preparing for market introduction activities through
            production and support groups including installer taming, support
            engineering processes, parts logistics and service agreements

      2.    Beta installations and testing, final design freeze no later than 6
            months after first beta installation

Upon completion of Phase 3 (as certified in writing by Stereotaxis and confirmed
thereafter in writing by Philips) Philips will pay Stereotaxis the calculated
expenditures of the R&D Milestone Payment by Stereotaxis for Phase 3 as
reflected in the specified Stereotaxis invoice, less any underage left over
from, or plus any overage above, the prepayments already made for prior phases,
in accordance with the calculations set out below and provided that in no event
will Philips be required to pay Stereotaxis an aggregate of more than $[***]
million for all phases)

Initial Philips:                                            Initial Stereotaxis:

/s/ JURGEN TIEMANN                                             /s/ BEVIL HOGG


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


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