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S-1/A
STEREOTAXIS, INC. filed this Form S-1/A on 05/12/2004
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As filed with the Securities and Exchange Commission on May 12, 2004
Registration No. 333-115253



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Pre-Effective Amendment No. 1

to

Form S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Stereotaxis, Inc.

(Exact name of registrant as specified in its charter)
         
Delaware   3845   94-3120386
(State or other jurisdiction of
Incorporation or organization)
  (Primary Standard Industrial
Classification Code Number)
  (I.R.S. Employer
Identification No.)

4041 Forest Park Avenue

St. Louis, Missouri 63108
(314) 615-6940
(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)

Bevil J. Hogg

President and Chief Executive Officer
Stereotaxis, Inc.
4041 Forest Park Avenue
St. Louis, Missouri 63108
(314) 615-6940
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies of all correspondence to:

     
James L. Nouss, Jr., Esq.
Robert J. Endicott, Esq.
Bryan Cave LLP
One Metropolitan Square
211 North Broadway, Suite 3600
St. Louis, Missouri 63102-2750
(314) 259-2000
(314) 259-2020 (fax)
  Carlos J. Spinelli-Noseda, Esq.
Sullivan & Cromwell LLP
125 Broad Street
New York, New York 10004
(212) 558-4000
(212) 558-3588 (fax)

         Approximate date of commencement of proposed sale to public: As soon as practicable after this registration statement becomes effective.

         If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

         If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

         If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

         If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

         If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.    o

         The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.




 

EXPLANATORY NOTE

This Pre-Effective Amendment No. 1 to the Registration Statement on Form S-1 (File No. 333-115253) is being filed solely to file additional exhibits for which we have requested confidential treatment from the Securities and Exchange Commission and to modify certain information in Item 13 of Part II of the Registration Statement. Pre-Effective Amendment No. 1 does not modify any provision of the Prospectus constituting Part I of the Registration Statement or Items 14, 15 or 17 of Part II of the Registration Statement. Accordingly, such Prospectus has not been included herein.


 

Part II

INFORMATION NOT REQUIRED IN PROSPECTUS

 
Item 13. Other Expenses of Issuance and Distribution

       The following table sets forth the costs and expenses, other than underwriting discounts and commissions, payable by Stereotaxis in connection with the sale of the common stock being registered hereby, other than underwriting commissions and discounts. All amounts are estimates except the SEC Registration Fee and the NASD filing fee.

         
SEC Registration fee
  $ 14,570.50  
NASD filing fee
    12,000.00  
Nasdaq National Market listing
fee*
       
Blue Sky fees and expenses*
       
Printing and engraving expenses*
       
Legal fees and expenses*
       
Accounting fees and expenses*
       
Transfer agent and registrar fees*
       
Miscellaneous expenses*
       
     
 
Total*
  $    
     
 


To be supplied by amendment.

       We intend to pay all expenses of registration, issuance and distribution.

 
Item 14. Indemnification of Officers and Directors

       Our amended and restated certificate of incorporation provides that, to the fullest extent permitted by the Delaware General Corporation Law as the same exists or may hereafter be amended, our directors shall not be liable to the Company or our stockholders for monetary damages for breach of fiduciary duty as a director. In addition, our certificate of incorporation provides that we may, to the fullest extent permitted by law, indemnify any person made or threatened to be made a party to an action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that such person or his or her testator or intestate is or was a director, officer or employee of the Company, or any predecessor of the Company, or serves or served at any other enterprise as a director, officer or employee at the request of the Company.

       Our amended and restated bylaws provide that the Company shall indemnify our directors and officers to the fullest extent not prohibited by the Delaware General Corporation Law or any other law. We are not required to indemnify any director or officer in connection with a proceeding brought by such director or officer unless (i) such indemnification is expressly required by law; (ii) the proceeding was authorized by our board of directors; or (iii) such indemnification is provided by the Company, in its sole discretion, pursuant to the powers vested in the Company under the Delaware General Corporation Law or any other applicable law. In addition, our bylaws provide that the Company may indemnify its employees and other agents as set forth in the Delaware General Corporation Law or any other applicable law.

       We have also entered into separate indemnification agreements with our directors that require us, among other things, to indemnify each of them against certain liabilities that may arise by reason of their status or service with the Company or on behalf of the Company, other than liabilities arising from willful misconduct of a culpable nature. The Company is not required to indemnify under the agreement for (i) actions initiated by the director without the authorization of consent of the board of

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directors; (ii) actions initiated to enforce the indemnification agreement unless the director is successful; (iii) actions resulting from violations of Section 16 of the Exchange Act in which a final judgment has been rendered against the director; and (iv) actions to enforce any non-compete or non-disclosure provisions of any agreement.

       The indemnification provided for above provides for reimbursement of all losses of the indemnified party including, expenses, judgment, fines and amounts paid in settlement. The right to indemnification set forth above includes the right for us to pay the expenses (including attorneys’ fees) incurred in defending any such proceeding in advance of its final disposition in certain circumstances.

       The Delaware General Corporation Law provides that indemnification is permissible only when the director, officer, employee, or agent acted in good faith and in a manner reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe the conduct was unlawful. The Delaware General Corporation Law also precludes indemnification in respect of any claim, issue, or matter as to which an officer, director, employee, or agent shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine that, despite such adjudication of liability, but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court deems proper.

       We have agreed to indemnify the underwriters and their controlling persons, and the underwriters have agreed to indemnify us and our controlling persons, against certain liabilities, including liabilities under the Securities Act. Reference is made to the Underwriting Agreement filed as part of the exhibits hereto.

       See Item 17 for information regarding our undertaking to submit to adjudication the issue of indemnification for violation of the securities laws.

 
Item 15. Recent Sales of Unregistered Securities

       During the past three years, the registrant has issued and sold the following securities that were not registered under the Securities Act, as amended. Unless expressly provided otherwise, amounts have not been adjusted to reflect the reverse stock split which will be effective upon completion of this offering.

         1. From May 1, 2001 through April 30, 2004, the registrant granted options to purchase 8,386,500 shares of its common stock to employees, consultants and directors pursuant to its stock option plans. Options to purchase an aggregate of 1,460,997 shares have been canceled without being exercised, options to purchase an aggregate of 2,445,880 shares have been exercised, options to purchase an aggregate of 66,355 shares have been repurchased.
 
         2. In November and December 2001, the registrant issued and sold to a group of accredited investors 10,052,020 shares of its Series D-1 preferred stock, convertible into 10,052,020 shares of its common stock, for approximately $21.8 million.
 
         3. In November and December 2001, in connection with the sale of the Series D-1 preferred stock, the registrant issued and sold to the same group of accredited investors warrants to purchase an aggregate of 1,507,791 shares of its common stock for approximately $23,000. Unless previously exercised, the warrants will be automatically exercised on a cashless basis at an exercise price of $2.17 per share upon completion of this offering.
 
         4. In connection with entering into a credit facility with Silicon Valley Bank, on January 31, 2002 the registrant issued warrants to purchase 50,692 shares of its Series D-1 preferred stock to the bank. The warrants are exercisable at any time prior to January 31, 2007 at an exercise price of $2.17 per share.

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         5. In connection with entering into a credit facility with Silicon Valley Bank, on March 19, 2002 the registrant issued warrants to purchase 36,868 shares of its Series D-1 preferred stock to the bank. The warrants are exercisable at any time prior to March 20, 2007 at an exercise price of $2.17 per share.
 
         6. In connection with entering into a credit facility with Silicon Valley Bank, on September 30, 2002 the registrant issued warrants to the bank to purchase 18,000 shares of its Series D-1 preferred stock. The warrants are exercisable at any time prior to September 31, 2007 at an exercise price of $2.17 per share.
 
         7. In December 2002 and January 2003, the registrant issued and sold to a group of accredited investors 10,705,929 shares of its Series D-2 preferred stock, convertible into an aggregate of 10,705,929 shares of its common stock, for approximately $23.2 million.
 
         8. In December 2002 and January 2003 in connection with the sale of the Series D-2 preferred stock, the registrant issued and sold to the same group of accredited investors warrants to purchase an aggregate of 1,605,874 shares of its common stock for approximately $24,000. Unless previously exercised, the warrants will be automatically exercised on a cashless basis at an exercise price of $2.17 per share upon completion of this offering.
 
         9. In June 2003, the registrant issued and sold to an accredited investor 3,412,970 shares of its Series E preferred stock, convertible into an aggregate of 3,412,970 shares of its common stock, for approximately $10 million.
 
         10. In August 2003, the registrant issued and sold to one private investor a cumulative convertible pay-in-kind note in the aggregate principal amount of $2.0 million which bears interest at 8% per year and is due on August 1, 2006. Upon completion of this offering, the note will automatically convert into the number of shares of the registrant’s common stock that is equal to the outstanding principal and accrued and unpaid interest on the note divided by the public offering price per share in this offering.
 
         11. In December 2003, the registrant issued and sold to an accredited investor 3,242,321 shares of its Series E-1 preferred stock, convertible into an aggregate of 3,242,321 shares of its common stock, for approximately $9.5 million.
 
         12. In January and February 2004, the registrant issued and sold to a group of accredited investors 5,380,830 shares of its Series E-2 preferred stock, convertible into an aggregate of 5,380,830 shares of its common stock, for approximately $15.8 million.
 
         13. In January and February 2004 in connection with the sale of the Series E-2 preferred stock, the registrant issued and sold to the same group of accredited investors warrants to purchase an aggregate of 1,076,170 shares of its common stock. Unless previously exercised, the warrants will be automatically exercised on a cashless basis at an exercise price of $2.93 per share upon completion of this offering.

       The sales and issuances of securities described in item 1 above were deemed to be exempt from registration under the Securities Act by virtue of Rule 701 of the Securities Act in that they were offered and sold either pursuant to a written compensatory benefit plan or pursuant to a written contract relating to compensation, as provided by Rule 701. The sales of the securities described in items 2 through 13 above were deemed to be exempt from registration under the Securities Act in reliance on Section 4(2) of the Securities Act, or Regulation D promulgated thereunder. With respect to the grant of options described in item 1, an exemption from registration was unnecessary in that none of the transactions involved a “sale” of securities as such term is used in Section 2(3) of the Securities Act.

       The recipients of securities in each such transaction represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the share certificates and warrants issued in such

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transactions. All recipients had adequate access, through their relationships with the Company, to information about the registrant.
 
Item 16. Exhibits and Financial Statements Schedules

       (a) The following is a list of exhibits filed as a part of this Registration Statement:

         
Exhibit
No. Description


  1 .1*   Form of Underwriting Agreement
  3 .1**   Amended and Restated Certificate of Incorporation of the Registrant dated January 27, 2004
  3 .2**   Bylaws of the Registrant as currently in effect
  3 .3**   Form of Amended and Restated Certificate of Incorporation of the Registrant, to be effective upon the closing of this offering
  3 .4**   Form of Amended and Restated Bylaws of the Registrant, to be effective upon the closing of this offering
  4 .1*   Specimen Stock Certificate
  4 .2**   Second Amended and Restated Stockholders’ Agreement, dated December 17, 2002 by and among the Registrant and certain stockholders
  4 .3**   Fourth Amended and Restated Investor Rights Agreement, dated December 17, 2002 by and among Registrant and certain stockholders
  4 .4**   Joinder Agreement to Series D-2 Preferred Stock Purchase Agreement, Fourth Amended and Restated Investor Rights Agreement and Amendment to Second Amended and Restated Stockholders’ Agreement dated January 21, 2003 by and among Registrant and certain stockholders
  4 .5**   Joinder and Amendment to Second Amended and Restated Stockholders’ Agreement and Fourth Amended and Restated Investor Rights Agreement, dated May 27, 2003 by and among Registrant and certain stockholders
  4 .6**   Second Joinder and Amendment to Second Amended and Restated Stockholders’ Agreement and Fourth Amended and Restated Investor Rights Agreement, dated December 22, 2003 by and among Registrant and certain stockholders
  4 .7**   Third Joinder and Amendment to Second Amended and Restated Stockholders’ Agreement and Fourth Amended and Restated Investor Rights Agreement, dated January 28, 2004 by and among Registrant and certain stockholders
  4 .8**   Form of Warrant Agreement issued to Series D-1 investors
  4 .9**   Warrant Agreement issued to Silicon Valley Bank dated January 31, 2002
  4 .10**   Form of Warrant Agreement issued to Series D-2 investors
  4 .11**   Form of Warrant Agreement issued to Series E-2 investors
  4 .12**   8% Convertible Promissory Note dated August 1, 2003 issued by the Registrant in favor of Siemens AG
  4 .13**   Warrant Agreement issued to Silicon Valley Bank dated March 19, 2002
  4 .14**   Warrant Agreement issued to Silicon Valley Bank dated September 30, 2002
  5 .1*   Opinion of Bryan Cave LLP
  10 .1**   1994 Stock Option Plan
  10 .2**   2002 Stock Incentive Plan
  10 .3**   2004 Employee Stock Purchase Plan
  10 .4**   2002 Non-Employee Directors’ Stock Plan
  10 .5**   Employment Agreement dated June 23, 1997 between Bevil J. Hogg and the Registrant
  10 .6**   Employment Agreement dated April 4, 2001 between Douglas M. Bruce and the Registrant
  10 .7**   Employment Agreement dated February 16, 2001 between Melissa Walker and the Registrant

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Exhibit
No. Description


  10 .8**   Employment Agreement dated April 17, 2002 between Michael P. Kaminski and the Registrant
  10 .9†   Collaboration Agreement dated June 8, 2001 between the Registrant and Siemens AG, Medical Solutions
  10 .10†   Extended Collaboration Agreement dated May 27, 2003 between the Registrant and Siemens AG, Medical Solutions
  10 .11†   Development and Supply Agreement dated May 7, 2002 between the Registrant and Biosense Webster, Inc.
  10 .12†   Amendment to Development and Supply Agreement dated November 3, 2003 between the Registrant and Biosense Webster, Inc.
  10 .13†   Supply Agreement dated July 1, 2003 between the Registrant and Magnet Sales & Manufacturing Inc.
  10 .14**   Form of Indemnification Agreement between the Registrant and its directors and executive officers
  10 .15**   Lease, having an effective date of August 15, 2001, between the Registrant and Emerging Technologies Building II, LLC
  10 .16†   Letter Agreement, dated September 12, 2003, between the Registrant and Philips Medizin Systeme G.m.b.H.
  10 .17**   Employment Agreement dated March 22, 2004 between Timothy J. Mortenson and the Registrant
  10 .18†   Software Distribution Agreement dated March 3, 2004 between the Registrant and Siemens Aktiengesellschaft
  10 .19†   Third Party Service Agreement dated August 5, 2002 between the Registrant and Siemens Medical Solutions USA, Inc.
  10 .20†   Research Agreement between the Registrant, Siemens AG and Landesbetrieb Krankenhauser
  10 .21**   Loan and Security Agreement dated January 31, 2002 between the Registrant and Silicon Valley Bank
  10 .22**   Loan Modification Agreement dated May 14, 2002 between the Registrant and Silicon Valley Bank
  10 .23**   Second Loan Modification Agreement dated July 11, 2002 between the Registrant and Silicon Valley Bank
  10 .24**   Loan and Security Agreement dated September 30, 2002 between the Registrant and Silicon Valley Bank
  10 .25**   Second Loan Modification Agreement dated September 30, 2002 to Equipment Loan and Security Agreement dated January 31, 2002 and Third Loan Modification Agreement to Revolving Loan and Security Agreement dated March 19, 2002
  10 .26**   Third Loan Modification Agreement dated December 31, 2002 to Equipment Loan and Security Agreement dated January 31, 2002 and Fourth Loan Modification Agreement to Revolving Loan and Security Agreement dated March 19, 2002 and First Loan Modification Agreement to Equipment Loan and Security Agreement dated September 30, 2002 between the Registrant and Silicon Valley Bank
  10 .27**   Fourth Loan Modification Agreement dated April 2003 to Equipment Loan and Security Agreement dated January 31, 2002 and Fifth Loan Modification Agreement to Revolving Loan and Security Agreement dated March 19, 2002 and Second Loan Modification Agreement to Equipment Loan and Security Agreement dated September 30, 2002
  10 .28*   Loan and Security Agreement dated April 30, 2004 between the Registrant and Silicon Valley Bank
  10 .29†   Distributor Agreement dated September 17, 2003 between the Registrant and AB Medica

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Exhibit
No. Description


  10 .30**   Promissory Note dated November 20, 2001 by Douglas M. Bruce payable to the order of Stereotaxis, Inc.
  10 .31   Retirement and Consulting Agreement between the Registrant and Nicola J.H. Young
  23 .1**   Consent of Ernst & Young LLP
  23 .2*   Consent of Bryan Cave LLP (included in the opinion filed as Exhibit 5.1)
  24 .1**   Powers of Attorney (see signature page)


  To be filed by amendment to this registration statement

**  Previously filed

 †  Confidential treatment requested as to certain portions, which portions are omitted and filed separately with the Securities and Exchange Commission.

       (b) Financial Statement Schedule

Stereotaxis, Inc.

Schedule of Accounts Receivable and Inventory Reserves

Three months ended March 31, 2004 and years ended December 31, 2003, 2002 and 2001
                                           
Additions
Balance at Charged to Foreign Balance at
Beginning Costs and Deductions Currency End of
of Period Expenses Describe Translation Period





Accounts Receivable Reserves:
                                       
Three Months Ended March 31, 2004
                                       
 
Sales Allowances
  $ (14,975 )   $ (79,122 )   $ 34,255 (1)   $     $ (59,842 )
 
Bad Debt Reserve
    (101,750 )     (70,497 )                 (172,247 )
     
     
     
     
     
 
    $ (116,725 )   $ (149,619 )   $ 34,255     $     $ (232,089 )
     
     
     
     
     
 
Year Ended December 31, 2003
                                       
 
Sales Allowances
  $     $ (17,607 )   $ 2,632 (1)   $     $ (14,975 )
 
Bad Debt Reserve
    (1,650 )     (100,100 )                 (101,750 )
     
     
     
     
     
 
    $ (1,650 )   $ (117,707 )   $ 2,632     $     $ (116,725 )
     
     
     
     
     
 
Year Ended December 31, 2002
                                       
 
Sales Allowances
  $     $     $     $     $  
 
Bad Debt Reserve
          (1,650 )                 (1,650 )
     
     
     
     
     
 
    $     $ (1,650 )   $     $     $ (1,650 )
     
     
     
     
     
 
Year Ended December 31, 2001
                                       
 
Sales Allowances
  $     $     $     $     $  
 
Bad Debt Reserve
                             
     
     
     
     
     
 
    $     $     $     $     $  
     
     
     
     
     
 
Inventory Reserves:
                                       
Three Months Ended March 31, 2004
                                       
 
Inventory Reserve
  $ (105,750 )   $ (13,844 )   $ 2,503 (2)   $     $ (117,090 )
     
     
     
     
     
 

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Additions
Balance at Charged to Foreign Balance at
Beginning Costs and Deductions Currency End of
of Period Expenses Describe Translation Period





Year ended December 31, 2003
                                       
 
Inventory Reserve
  $ (51,000 )   $ (123,534 )   $ 68,784 (2)   $     $ (105,750 )
     
     
     
     
     
 
Year ended December 31, 2002
                                       
 
Inventory Reserve
  $     $ (51,000 )   $     $     $ (51,000 )
     
     
     
     
     
 
Year ended December 31, 2001
                                       
 
Inventory Reserve
  $     $     $     $     $  
     
     
     
     
     
 


(1)  Sales allowance and product returns
 
(2)  Write-off of obsolete inventory and physical inventory adjustments
 
Item 17.  Undertakings.

       The undersigned registrant hereby undertakes to provide to the Underwriters at the closing specified in the Underwriting Agreement certificates in such denominations and registered in such names as required by the Underwriters to permit prompt delivery to each purchaser.

       Insofar as indemnification by the registrant for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the provisions described in Item 14 or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

       The undersigned registrant hereby undertakes that:

         (1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in the form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
 
         (2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of Prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

       Pursuant to the requirements of the Securities Act, the registrant has duly caused this pre-effective amendment no. 1 to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of St. Louis, State of Missouri, on the 12th day of May, 2004.

  STEREOTAXIS, INC.

  By:  /s/ BEVIL J. HOGG
 
  Bevil J. Hogg
  President and Chief Executive Officer

       Pursuant to the requirements of the Securities Act, this pre-effective amendment no. 1 to the registration statement has been signed by the following persons in the capacities and on the dates indicated:

             
Signatures Title Date



 
/s/ FRED A. MIDDLETON*

Fred A. Middleton
  Chairman of the Board of Directors   May 12, 2004
 
/s/ BEVIL J. HOGG

Bevil J. Hogg
  President, Chief Executive Officer and Director (Principal Executive Officer)   May 12, 2004
 
/s/ CHRISTOPHER ALAFI*

Christopher Alafi
  Director   May 12, 2004
 
/s/ JOHN C. APLIN*

John C. Aplin
  Director   May 12, 2004
 
/s/ RALPH G. DACEY, JR.*

Ralph G. Dacey, Jr.
  Director   May 12, 2004
 
/s/ GREGORY R. JOHNSON*

Gregory R. Johnson
  Director   May 12, 2004
 
/s/ WILLIAM M. KELLEY*

William M. Kelley
  Director   May 12, 2004
 
/s/ RANDALL D. LEDFORD*

Randall D. Ledford
  Director   May 12, 2004
 
/s/ ABHIJEET J. LELE*

Abhijeet J. Lele
  Director   May 12, 2004
 
/s/ WILLIAM C. MILLS III*

William C. Mills III
  Director   May 12, 2004

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Signatures Title Date



 
/s/ DAVID J. PARKER*

David J. Parker
  Director   May 12, 2004
 
/s/ TIMOTHY J. MORTENSON

Timothy J. Mortenson
  Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)   May 12, 2004
 
*By:   /s/ BEVIL J. HOGG

Bevil J. Hogg
Attorney-In-Fact
       

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EXHIBIT INDEX

         
Exhibit
No. Description


  1 .1*   Form of Underwriting Agreement
  3 .1**   Amended and Restated Certificate of Incorporation of the Registrant dated January 27, 2004
  3 .2**   Bylaws of the Registrant as currently in effect
  3 .3**   Form of Amended and Restated Certificate of Incorporation of the Registrant, to be effective upon the closing of this offering
  3 .4**   Form of Amended and Restated Bylaws of the Registrant, to be effective upon the closing of this offering
  4 .1*   Specimen Stock Certificate
  4 .2**   Second Amended and Restated Stockholders’ Agreement, dated December 17, 2002 by and among the Registrant and certain stockholders
  4 .3**   Fourth Amended and Restated Investor Rights Agreement, dated December 17, 2002 by and among Registrant and certain stockholders
  4 .4**   Joinder Agreement to Series D-2 Preferred Stock Purchase Agreement, Fourth Amended and Restated Investor Rights Agreement and Amendment to Second Amended and Restated Stockholders’ Agreement dated January 21, 2003 by and among Registrant and certain stockholders
  4 .5**   Joinder and Amendment to Second Amended and Restated Stockholders’ Agreement and Fourth Amended and Restated Investor Rights Agreement, dated May 27, 2003 by and among Registrant and certain stockholders
  4 .6**   Second Joinder and Amendment to Second Amended and Restated Stockholders’ Agreement and Fourth Amended and Restated Investor Rights Agreement, dated December 22, 2003 by and among Registrant and certain stockholders
  4 .7**   Third Joinder and Amendment to Second Amended and Restated Stockholders’ Agreement and Fourth Amended and Restated Investor Rights Agreement, dated January 28, 2004 by and among Registrant and certain stockholders
  4 .8**   Form of Warrant Agreement issued to Series D-1 investors
  4 .9**   Warrant Agreement issued to Silicon Valley Bank dated January 31, 2002
  4 .10**   Form of Warrant Agreement issued to Series D-2 investors
  4 .11**   Form of Warrant Agreement issued to Series E-2 investors
  4 .12**   8% Convertible Promissory Note dated August 1, 2003 issued by the Registrant in favor of Siemens AG
  4 .13**   Warrant Agreement issued to Silicon Valley Bank dated March 19, 2002
  4 .14**   Warrant Agreement issued to Silicon Valley Bank dated September 30, 2002
  5 .1*   Opinion of Bryan Cave LLP
  10 .1**   1994 Stock Option Plan
  10 .2**   2002 Stock Incentive Plan
  10 .3**   2004 Employee Stock Purchase Plan
  10 .4**   2002 Non-Employee Directors’ Stock Plan
  10 .5**   Employment Agreement dated June 23, 1997 between Bevil J. Hogg and the Registrant
  10 .6**   Employment Agreement dated April 4, 2001 between Douglas M. Bruce and the Registrant
  10 .7**   Employment Agreement dated February 16, 2001 between Melissa Walker and the Registrant
  10 .8**   Employment Agreement dated April 17, 2002 between Michael P. Kaminski and the Registrant
  10 .9†   Collaboration Agreement dated June 8, 2001 between the Registrant and Siemens AG, Medical Solutions
  10 .10†   Extended Collaboration Agreement dated May 27, 2003 between the Registrant and Siemens AG, Medical Solutions


 

         
Exhibit
No. Description


  10 .11†   Development and Supply Agreement dated May 7, 2002 between the Registrant and Biosense Webster, Inc.
  10 .12†   Amendment to Development and Supply Agreement dated November 3, 2003 between the Registrant and Biosense Webster, Inc.
  10 .13†   Supply Agreement dated July 1, 2003 between the Registrant and Magnet Sales & Manufacturing Inc.
  10 .14**   Form of Indemnification Agreement between the Registrant and its directors and executive officers
  10 .15**   Lease, having an effective date of August 15, 2001, between the Registrant and Emerging Technologies Building II, LLC
  10 .16†   Letter Agreement, dated September 12, 2003, between the Registrant and Philips Medizin Systeme G.m.b.H.
  10 .17**   Employment Agreement dated March 22, 2004 between Timothy J. Mortenson and the Registrant
  10 .18†   Software Distribution Agreement dated March 3, 2004 between the Registrant and Siemens Aktiengesellschaft
  10 .19†   Third Party Service Agreement dated August 5, 2002 between the Registrant and Siemens Medical Solutions USA, Inc.
  10 .20†   Research Agreement between the Registrant, Siemens AG and Landesbetrieb Krankenhauser
  10 .21**   Loan and Security Agreement dated January 31, 2002 between the Registrant and Silicon Valley Bank
  10 .22**   Loan Modification Agreement dated May 14, 2002 between the Registrant and Silicon Valley Bank
  10 .23**   Second Loan Modification Agreement dated July 11, 2002 between the Registrant and Silicon Valley Bank
  10 .24**   Loan and Security Agreement dated September 30, 2002 between the Registrant and Silicon Valley Bank
  10 .25**   Second Loan Modification Agreement dated September 30, 2002 to Equipment Loan and Security Agreement dated January 31, 2002 and Third Loan Modification Agreement to Revolving Loan and Security Agreement dated March 19, 2002
  10 .26**   Third Loan Modification Agreement dated December 31, 2002 to Equipment Loan and Security Agreement dated January 31, 2002 and Fourth Loan Modification Agreement to Revolving Loan and Security Agreement dated March 19, 2002 and First Loan Modification Agreement to Equipment Loan and Security Agreement dated September 30, 2002 between the Registrant and Silicon Valley Bank
  10 .27**   Fourth Loan Modification Agreement dated April 2003 to Equipment Loan and Security Agreement dated January 31, 2002 and Fifth Loan Modification Agreement to Revolving Loan and Security Agreement dated March 19, 2002 and Second Loan Modification Agreement to Equipment Loan and Security Agreement dated September 30, 2002
  10 .28*   Loan and Security Agreement dated April 30, 2004 between the Registrant and Silicon Valley Bank
  10 .29†   Distributor Agreement dated September 17, 2003 between the Registrant and AB Medica
  10 .30**   Promissory Note dated November 20, 2001 by Douglas M. Bruce payable to the order of Stereotaxis, Inc.
  10 .31   Retirement and Consulting Agreement between the Registrant and Nicola J.H. Young
  23 .1**   Consent of Ernst & Young LLP
  23 .2*   Consent of Bryan Cave LLP (included in the opinion filed as Exhibit 5.1)
  24 .1**   Powers of Attorney (see signature page)


 


  To be filed by amendment to this registration statement

**  Previously filed

  †  Confidential treatment requested as to certain portions, which portions are omitted and filed separately with the Securities and Exchange Commission.
<PAGE>

                                                                    EXHIBIT 10.9

                                                                          LS Med
                                                                              Kb
                                                                      28.05.2001

                                    Vers.08

                            COLLABORATION AGREEMENT



                                 by and between


STEREOTAXIS, INC A CORPORATION DULY ORGANIZED AND EXISTING UNDER THE LAWS OF 
             DELAWARE AND HAVING ITS HEADQUARTERS AT ST. LOUIS, USA

                     (hereinafter referred as "Stereotaxis")


                                      and


SIEMENS AKTIENGESELLSCHAFT, MEDICAL SOLUTIONS, A CORPORATION DULY ORGANIZED AND
  EXISTING UNDER THE LAWS OF GERMANY AND HAVING OFFICES AT FORCHHEIM, GERMANY

                     (hereinafter referred to as "Siemens")


 on the integration of the Stereotaxis magnetic guiding component (NIOBE) [***]
       with Siemens Cardiac, Angio and Neuro X-Ray and Imaging components


[*** 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.]



<PAGE>
                                       2


TABLE OF CONTEXT
----------------

PREAMBLE

1.       DEFINITIONS

2.       DEVELOPMENT WORK

3.       SALES AND EXCLUSIVITY

4.       LOGISTICS

5.       INSTALLATION AND SERVICE

6.       SECRECY

7.       WARRANTIES AND LIMITATION OF LIABILITIES

8.       DEVELOPMENT RESULTS, INFORMATION AND RIGHTS THEREUNDER

9.       TERM AND TERMINATION

10.      ARBITRATION

11.      SUBSTANTIVE LAW

12.      MISCELLANEOUS

<PAGE>

                                       3

PREAMBLE 

The mutual goal of the collaboration is the integration of the Stereotaxis
System and Siemens X-Ray System
 to provide a unique solution to clinicians by
creating an advanced interventional suite ("cath lab") with integration of
digital instrument control and X-Ray imaging via a common interface ("the
PRODUCT" as defined below): firstly in the field of cardiology; and secondly in
neuro radiology and neuro surgery [***]

A Cath lab including the integrated Stereotaxis System, Siemens X-Ray System and
the Product is referred to as an "Integrated Cath Lab". Initial Integrated Cath
Lab placements will be used to assess the clinical value of the integrated
solution, and will include one promotional Integrated Cath Lab provided free of
charge by the parties to a mutually agreed site. It is anticipated that [***] or
(such greater number of shipments as is mutually agreed) will be shipped to
customer sites. Siemens will provide support in the field for all systems of
Integrated Labs in the manner set out below.

A Neuro lab including the integrated Stereotaxis System, Siemens X-Ray System
and common interface is referred to as an "Integrated Neuro Lab". Initial
Integrated Neuro Lab placements will be used to assess the clinical value of
the integrated solution.

[***]

1. DEFINITIONS

1.1      The terms "Stereotaxis System", "Siemens X-Ray System", and "Product"
mean:

1.1.1    The "Stereotaxis System" means Stereotaxis' digital instrument control
system, which allows navigation and control of guidewires, catheters and other
instruments (with the NIOBE system or equivalent) [***], in the body by external
magnetic forces.

1.1.2    The "Siemens X-Ray System" means Siemens Card, Angio and Neuro imaging
systems.

1.1.3    The "PRODUCT" means a user-friendly common interface necessary for the
integration of Stereotaxis Systems and Siemens X-Ray System that is designed to
ensure effective and safe
   
[*** 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.]

<PAGE>
                                       4


use of the integrated imaging and guidance system. The PRODUCT will be 
specified fully in mutual understanding between the parties in a separate 
document later to be attached to this Agreement as an Annex.

1.2  The term "INFORMATION" means written and/or oral technical information 
     with regard to the components mentioned in Section 1.1 herein above, such 
     information being available to one party at any time during the term of 
     this Agreement and not resulting from performing DEVELOPMENT WORK.

1.3  The term "DEVELOPMENT WORK" means any and all development work to be 
     performed by the parties for the PRODUCT in accordance with Section 2 
     below.

1.4  The term "DEVELOPMENT RESULTS" means any and all results, whether 
     patentable or not, in written or oral form, achieved by performing 
     DEVELOPMENT WORK.

1.5  The term "LAB" or "INTEGRATED LAB" represents an Integrated Cath Lab or an 
     Integrated Neuro Lab [***].

2.   CARRYING OUT OF THE DEVELOPMENT WORK

2.1  Details of the DEVELOPMENT WORK are set forth in Annex 1 hereto.

2.2  Each party, insofar as it lawfully may, shall make available to the other 
     within a reasonable period of time following the Effective Date of this 
     Agreement, and from time to time during the carrying out of the DEVELOPMENT
     WORK its INFORMATION and DEVELOPMENT RESULTS insofar as it considers such 
     INFORMATION and DEVELOPMENT RESULTS necessary for the other party for 
     carrying out the DEVELOPMENT WORK.

     Disclosure of INFORMATION and DEVELOPMENT RESULTS will be effected without 
     charges to the receiving party.

2.3  The DEVELOPMENT WORK will be carried out in close cooperation between the 
     parties and in a joint effort to keep cost and expenditures to a minimum.

2.4  Each party undertakes to carry out the DEVELOPMENT WORK as stipulated in 
     this Agreement. Each party shall make a faithful effort to arrive at a 
     successful completion of the relevant DEVELOPMENT WORK.


[*** 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.]

<PAGE>
                                       5

2.5      The DEVELOPMENT WORK shall be regarded as being completed successfully
         if the PRODUCT fulfills the specifications as agreed upon in accordance
         with Section 1.1. Time for the completion of the DEVELOPMENT WORK,
         including final system testing and readiness for shipment of the system
         to the customer is May 31, 2002

2.6      Each party shall bear the costs incurred by such party for its efforts
         under or in connection with the DEVELOPMENT WORK.

3. SALES AND EXCLUSIVITY

3.1      Stereotaxis' systems for magnetic navigation (represented by NIOBE,
         including equivalent, enhancements, new developments thereto whether
         sold under NIOBE or other trademarks) [***] shall not be sold in a form
         that is integrated with third party imaging components comparable or
         competitive to the Siemens X-Ray System through a common or integrated
         user interface during the period from the date hereof to the date 30
         months from the date hereof and this period of exclusivity
         ("Exclusivity Period") shall relate to all fields of medical
         application. Basis for this exclusivity is Siemens effort to define and
         develop in cooperation with Stereotaxis the PRODUCT and the provision
         of the INFORMATION, which represents considerable valuable know-how,
         which is normally not accessible to third parties and is dependent on
         the supply to Stereotaxis customers of Siemens' components of
         Integrated Labs (including the PRODUCT) [***] (or such other maximums
         as are mutually agreed) on a competitive basis and in timely fashion
         and the provision of support in the field as provided for herein.
         Without limitation to the foregoing, in the event Siemens reasonably
         determines it is unable to so supply such Siemens' components of
         Integrated Labs it will promptly inform Stereotaxis of the same, in
         which event the Exclusivity Period will lapse. Upon written request
         from Stereotaxis from time to time, Siemens will provide a prompt
         written response indicating whether it reasonably determines it will be
         able to so supply such components. Further, where Stereotaxis
         reasonably determines (upon request by Siemens from time to time or
         otherwise) that it is unable to so supply its components of such
         installations, it will promptly inform Siemens of the same, in which
         event Siemens may elect that the Exclusivity Period and its obligations
         in respect of the Development Work will lapse.


[*** 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.]


<PAGE>

                                       6
         [***]

3.2      

3.2.1    The Exclusivity Period shall not apply in respect of neuro applications
         if and as soon as Stereotaxis can evidence that there is a
         substantially superior Flat Panel Detector available to Stereotaxis on
         the market. "Substantially superior" as used herein shall mean that the
         detector shows in specifications and in practical use superiority in
         all materially significant respects over the Siemens detector.

3.2.2    Stereotaxis and Siemens agree that there will be reasonable
         compensation of licensing to third party vendors the Siemens
         intellectual property regarding the Product (and compatibility and
         interface of the Stereotaxis and Siemens components) after expiration
         of the Exclusivity Period and Siemens will so license to Stereotaxis
         and/or third parties on request to enable them to make, use and sell
         the Product or modifications thereof based on such compensation. The
         value of such Siemens intellectual property has to be defined on a case
         by case during the engineering process. The compensation per unit will
         be [***] of the total of such Siemens intellectual property value (to
         be determined as mutually agreed) sold in combination with or by non
         Siemens vendors, but will in no event exceed [***] of the sales price
         of the Stereotaxis System being sold in conjunction with the Product or
         modification thereof. The parties will, no later than 6 months prior to
         the termination of the Exclusivity Period, confer and mutually agree a
         final determination of the level of such compensation.

3.2.3    This agreement covers magnetic guiding (represented by NIOBE, including
         equivalent systems, enhancements, and new developments thereto whether
         sold under NIOBE or other trademarks) [***]

3.3      As appropriate, customer sales approach can be jointly or separately by
         each party. Where the Exclusivity Period applies each party shall
         inform the other promptly of any potential customer in respect of in
         respect of Integrated Lab(s) and each party agrees to fully cooperate
         with the other in respect of reasonable requests for coordination of
         customer sales efforts, provided that the parties continue to maintain
         distinct and separate business and sales operations and identities and
         that the distinct separation


[*** 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.]


<PAGE>
                                      7

         between the customer's purchase of Integrated Lab components from
         Stereotaxis and from Siemens will be evident to the customer.

3.4      Sales brochures, bid specification and customer payment will be made
         in a way that a distinct separation between the Stereotaxis components
         and Siemens components is evident to the customer.
         Notwithstanding the above, there is a joint document for room planning
         and installation instructions.

3.5      Siemens will provide to the customer project management on site 
         addressing room preparation, shipment and installation.

3.6      The countries listed in Annex 2 are excluded from this Agreement and
         the Exclusivity Period does not apply in respect of such countries. 
         Section 3.2.2 will apply.

3.7      Contracts with customers will be signed by each party for their 
         respective components to be delivered.

3.8      Siemens will manufacture, warrant, sell and deliver the Product in 
         accordance with reasonable industry practices. For a period of 12 
         months after the Exclusivity Period, Siemens will continue to so 
         manufacture, warrant, sell and deliver the Product and other Siemens
         components of Integrated Labs based on customer purchase orders for 
         the same.

3.9      Further details on the sales cooperation will be agreed to by a 
         "collaborative sales working group" to be established after the
         signing of this Agreement, the object being to promote sales and
         promotions cooperation between the parties while continuing to maintain
         distinct and separate business and sales operations and identities.

4. LOGISTICS
         Stereotaxis as well as Siemens will ship directly to the customer 
         site. Time schedule is coordinated by the Siemens project manager.
         The first Integrated Labs will be tested in Siemens AX before shipment
         to the customer to assure compatibility.
         The number of units which have to pass the compatibility test after the
         first units testing will be defined separately and mutually agreed.

         

<PAGE>
                                       8

         Further details on logistics will be agreed to by a "collaborative
         logistics working group" to be established after the signing of this 
         Agreement.


5.    INSTALLATION AND SERVICE

5.1      For installation at least one Stereotaxis person is on the customer 
         site at Stereotaxis cost and expense. Siemens will support the 
         installation of Stereotaxis components to Siemens' system.

5.2      Service on site will be done by Siemens in accordance with a service 
         contract between the customer and Siemens and Stereotaxis, on 
         commercially reasonable terms to be mutually agreed.

         Such service will include Stereotaxis' components. To enable Siemens 
         to perform service Stereotaxis shall provide Siemens at no cost with 
         INFORMATION necessary for Siemens to perform service on Stereotaxis' 
         components and shall train at no cost to Siemens a reasonable number 
         of Siemens' specialists in the service of Stereotaxis' components. 
         Furthermore, Stereotaxis and Siemens shall cooperate to provide 
         service call center support as well as spare parts in respect of 
         Integrated Labs.

         Details regarding service, including but not limited to response time 
         and spare part logistics, will be handled agreed to by a  
         "collaborative service working group" to be established after the 
         signing of this Agreement.

         Siemens agrees to provide such service on such terms for a period of 
         at least 12 months following the expiration of the Exclusivity Period 
         and for such additional term as may be mutually agreed.

6.    SECRECY

6.1      Either Party expressly undertakes to retain in confidence, to protect 
         with the same degree of care used in protecting its own INFORMATION 
         and not to use for other purposes than contemplated by this Agreement 
         or to disclose to any third party all INFORMATION in a written or 
         other tangible form supplied by the other Party in relation to this 
         Agreement and clearly marked as being "Confidential". Oral INFORMATION 
         of a Party that is confidential and is restricted in use shall be 
         reproduced in writing marked as being "Confidential" and sent to the 
         other Party within one (1) month after its communication to the other 
         Party. The receiving Party agrees to restrict access of such 
         Confidential Information to employees and agents who have a need to 
         know pursuant to their scope of employment or agency arrangement and 
         further agrees to instruct its

            

<PAGE>
                                       9


         employees and agents having access to such Confidential INFORMATION OF 
         receiving Party's confidentiality obligations.

6.2      The aforementioned obligation shall not apply to INFORMATION which is:

6.2.1    published or otherwise made available to the public other than by a 
         breach of this Agreement; or

6.2.2    rightfully received by a Party from a third party without confidential
         obligation; or

6.2.3    shown through competent evidence to have been independently developed
         by the other Party without reference to the INFORMATION; or to have
         been known by the receiving Party prior to its first receipt of such
         INFORMATION from the other Party; or

6.2.4    required to be disclosed pursuant to a legal, judicial, or
         administrative proceeding, or by law; or

6.2.5    approved for disclosure by prior written consent of an authorized
         corporate representative of the disclosing Party.

6.3      The aforementioned obligations do apply accordingly with regard to
         DEVELOPMENT RESULTS of the other Party.

6.4      The non-disclosure obligations set forth in this Section 6 shall
         survive expiration or termination of this Agreement by three (3) years.

6.5      Press releases or other information on the conclusion/content of this
         Agreement shall only be made available to third parties/press agencies
         (other than disclosure by Stereotaxis in relation to raising private
         equity funds or as legally required pursuant to an initial public
         offering of equity) with the prior written consent of the other Party
         hereto such consent not to be unreasonably withheld.


7.       WARRANTIES AND LIMITATION OF LIABILITIES

7.1      Provided it complies with the provisions of Section 2.4 above, no party
         shall be liable towards the other party in the case that the
         DEVELOPMENT WORK cannot be successfully completed as per Section 2.5.

7.2      The sole obligation of each party with respect to its INFORMATION and
         DEVELOPMENT RESULTS shall be to forward same to the other party as
         provided in this Agreement, and, to correct errors that might have
         occurred in this INFORMATION and DEVELOPMENT RESULTS without undue
         delay after such errors become known to the party which forwarded the
         relevant INFORMATION or DEVELOPMENT RESULTS.

<PAGE>

                                       10

7.3      THE WARRANTIES SET FORTH IN THIS SECTION 7 APPLY TO ALL INFORMATION AND
         DEVELOPMENT RESULTS LICENSED OR KNOWINGLY DISCLOSED HEREUNDER AND ARE
         IN LIEU OF ALL WARRANTIES EXPRESS OR IMPLIED INCLUDING WITHOUT
         LIMITATION THE WARRANTIES THAT INFORMATION AND DEVELOPMENT RESULTS CAN
         BE USED WITHOUT INFRINGING STATUTORY AND OTHER RIGHTS OF THIRD PARTIES.

7.4      Warranties and liabilities regarding the delivery of the components of
         each party shall be governed by the contracts between each such party
         and the respective customer.

7.5      Should a customer forward a warranty or any liability claim - including
         product liability claims - to either party then such party shall be
         responsible for such claims only to the extent such claims relate to
         the components such party has delivered to the customer. Each party
         shall indemnify and hold the other party harmless from any claim,
         costs, expenses, and damages resulting from such claims if the claims
         relate to components delivered by the respective other party, provided
         however that the one party
         
         a)       notifies the other party of such claim, dispute or proceeding 
                  without undue delay,

         b)       does not admit liability on the claims,

         c)       provides the other party with the sole authority - as far as
                  legally possible - to defend and settle such claim, dispute,
                  or proceeding with counsel of its choice (the other party may
                  participate at its costs with counsel of its choice), and

         d)       cooperates as reasonably requested by the other party.

7.6      Each party shall secure and maintain, for the useful life of the
         components delivered by it, a product liability insurance policy
         providing full coverage for product liability exposure (including
         negligence and strict liability) to third parties anywhere in the world
         for any defects whatsoever (such as design-, manufacture-, instruction
         defects) resulting from defects in the components supplied hereunder in
         the minimum of US $ [***]. At either party's request the other party
         shall prove compliance with the obligation to insure as hereinstated.

7.7      NEITHER PARTY SHALL HAVE ANY LIABILITY TO THE OTHER FOR ANY
         CONSEQUENTIAL, INCIDENTAL, PUNITIVE, INDIRECT OR SPECIAL DAMAGES BY
         REASON OF ANY ACT OR OMISSIONS OR ARISING OUT OF OR IN CONNECTION WITH
         THIS AGREEMENT OR ITS USE OR OPERATION, INCLUDING BUT WITHOUT
         LIMITATION ANY LOSS OF USE, LOSS OF INFORMATION AND DATA, LOST
         REVENUES, LOST PROFITS, COSTS OF CAPITAL, COSTS OF SUBSTITUTE 


[*** 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.]

            

<PAGE>
                                       11


     PRODUCTS, FACILITIES, OR SERVICES, COSTS OF REPLACEMENT POWER, COST 
     ASSOCIATED WITH DOWN TIME, AND ANY SIMILAR AND DISSIMILAR LOSSES, COSTS 
     AND DAMAGES.

7.8  The provisions of this Section 7. shall survive any termination of this 
     Agreement.


8.   DEVELOPMENT RESULTS, INFORMATION AND RIGHTS THEREUNDER

8.1  The DEVELOPMENT RESULTS shall, at the time they are made, become the sole 
     property of such party, the employees of which have generated the 
     respective DEVELOPMENT RESULTS. DEVELOPMENT RESULTS made jointly by 
     employees of both parties shall become the joint ownership of both 
     parties. In case DEVELOPMENT RESULTS consist of joint inventions, the 
     parties shall agree on whether, and if so, where and at whose cost and 
     expense statutory protection rights will be filed for. Joint DEVELOPMENT 
     RESULTS, including any and all statutory protection issuing thereon, if 
     any, may be used by each party in its field of activities.

8.2  Under its INFORMATION and DEVELOPMENT RESULTS each party hereby grants to 
     the other party the non-exclusive, non-transferable, royalty free right to 
     use same during the term of this Agreement for the purpose of carrying out 
     the DEVELOPMENT WORK and thereafter to the extent necessary for the 
     exploitation of the DEVELOPMENT RESULTS of the other party or of the joint 
     DEVELOPMENT RESULTS.

8.3  Notwithstanding ownership under DEVELOPMENT RESULTS and the rights granted 
     hereunder, the exclusivity granted under Section 3.1 shall prevail.

8.4  The stipulations of this Section 8. shall survive any termination of this 
     Agreement.

9.   TERM AND TERMINATION

9.1  This Agreement shall become effective on the date it is signed by both 
     parties (Effective Date) and is terminated 30 months after the Effective 
     Date unless renewed 6 months before first expiration.

9.2  This Agreement may be terminated at any time by the one party by giving of 
     not less than four weeks' prior written notice to the other party

<PAGE>

                                      12

         -  if the other party hereto is declared bankrupt or otherwise
            cannot fulfill its financial obligations; or

         -  if the other party hereto substantially defaults in the
            performance of this Agreement and does not remedy the default
            within 4 weeks after receipt of a relevant written request of
            the one party; or

         -  if the other party comes under direct or indirect control or
            direction of any other entity competing with the one party.

9.3      Sections 6,7,8,10 and 11 shall survive termination of this Agreement.

10.      ARBITRATION

10.1     Any differences or disputes arising from this Agreement or from
         agreements regarding its performance shall be settled by an amicable
         effort on the part of both parties to the Agreement. An attempt to
         arrive at a settlement shall be deemed to have failed as soon as one of
         the parties to the Agreement so notifies the other party in writing.

10.2     If an attempt at settlement has failed, the disputes shall be
         finally settled under the Rules of Conciliation and Arbitration
         of the International Chamber of Commerce in Paris (Rules) by three
         arbitrators appointed in accordance with the Rules.

10.3     The place of arbitration shall be Berne, Switzerland. The procedural 
         law of this place shall apply where the Rules are silent.

10.4     The arbitral award shall be substantiated in writing. The arbitral
         tribunal shall decide on the matter of costs of the arbitration.

11.      SUBSTANTIVE LAW

         All disputes shall be settled in accordance with the provisions of
         this Agreement and all other agreements regarding its performance, 
         otherwise in accordance with the substantive law in force in the
         Canton of Berne, Switzerland, without reference to other laws.

<PAGE>
                                       13


12.  MISCELLANEOUS

12.1 This Agreement may not be released, discharged, abandoned, changed or 
     modified in any manner, except by an instrument in writing signed on 
     behalf of each of the parties hereto by their duly authorized 
     representatives.

12.2 The failure of any party hereto to enforce at any time any of the 
     provisions of this Agreement shall in no way be construed to be a waiver 
     of any such provision, nor in any way to affect the validity of this 
     Agreement or any part thereof or the right of any party thereafter to 
     enforce each and every such provision. No waiver of any breach of this 
     Agreement shall be held to be a waiver of any other or subsequent breach.

12.3 All notices or other communications required or permitted hereunder with 
     regard to the interpretation, validity etc. of the Agreement shall be in 
     writing and shall be given by certified mail addressed, if to Stereotaxis

     Stereotaxis, Inc.
     Attn. CEO
     4041 Forest Park AVE.
     St. Louis, MO 63108
     U.S.A.



     and, if to Siemens:
     Siemens Aktiengesellschaft
     Legal Services Med
     Werner von Siemens Str. 50
     91052 Erlangen
     Germany


     or to such other address that the parties might identify to each other for 
     this purpose and with reference to this Agreement.

12.4 Subject to Section. 6.5 above, no party hereto shall issue any press 
     release or public announcement or otherwise divulge the existence of this 
     Agreement or the transactions contemplated hereby without the prior 
     approval of the other party hereto.

<PAGE>

                                       14


12.5     This Agreement shall be binding upon and inure to the benefit of the
         parties hereto and the successors or assigns of the parties hereto.

12.6     Titles and headings to Sections herein are inserted for the convenience
         or reference only and are not intended to be a part of or to affect the
         meaning or interpretation of this Agreement.

12.7     This Agreement may be executed in one or more counterparts, all of
         which shall be considered one and the same agreement.


IN WITNESS WHEREOF, the parties have executed these presents on the dates 
specified below.


St. Louis, 8th June 2001            Forchheim, 30.05.01
          --------------                      ---------

Stereotaxis, Inc.                   Siemens Aktiengesellschaft


/s/BEVIL J. HOGG                     Illegible
------------------------            --------------------------
Bevil J. Hogg                        Illegible


<PAGE>
                                       15

                                    ANNEX 1

                                DEVELOPMENT WORK

Interface specification will include:

-    Mechanical interface addressing magnetic compatibility and collision 
     protection

-    Workflow and User Interface addressing the aspects of determining magnetic 
     field vectors from image information and user control of magnetic fields

-    IT integration for assessment and clinical outcome documentation.

-    Integration capability for third party cath lab localization systems (such 
     as Biosense, [***], etc.)

And may also include, as mutually agreed (following successful collaborative 
research):

-    Image fusion of pre-operative 3D data from MR, CT, etc.

Common Stereotaxis/Siemens interface specifications will be defined in the 
"Requirement Specification". This document will be jointly created and will be 
reviewed and released by both parties.

The compatibility of both components will be tested in a "System test". Results 
have to be documented and are the base for a joint release for shipment to 
customers.

Each of the two parties is responsible for their own component.

Details will be agreed by a "collaborative engineering working group" to be 
established after signing of this Agreement.        


[*** 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.]


<PAGE>
                                       16


                                    ANNEX 2

                               EXCLUDED COUNTRIES



<PAGE>
                                                                   EXHIBIT 10.10


Extended COLLABORATION AGREEMENT



by and between

STEREOTAXIS, INC. A CORPORATION DULY ORGANIZED AND EXISTING UNDER THE LAWS OF 
DELAWARE AND HAVING ITS HEADQUARTERS AT ST. LOUIS, USA

(hereinafter referred as "Stereotaxis")

and

SIEMENS AKTIENGESELLSCHAFT, MEDICAL SOLUTIONS, A CORPORATION DULY ORGANIZED AND 
EXISTING UNDER THE LAWS OF GERMANY AND HAVING OFFICES AT FORCHHEIM, GERMANY

(hereinafter referred to as "Siemens")

on

the integration of the Stereotaxis magnetic guiding component (NIOBE) with 
Siemens Imaging Technology

<PAGE>

                                       2


PREAMBLE

Pursuant the COLLABORATION AGREEMENT of June 8, 2001 ("COLLABORATION 
AGREEMENT"), Siemens and Stereotaxis have integrated the NIOBE SYSTEM and the 
ARTIS dFC FLUOROSCOPY SYSTEM to provide an integrated interventional suite 
("INTEGRATED CATH LAB") in the field of cardiology, providing unique clinical 
capabilities by integration of digital instrument control and X-ray imaging via 
the COMMON USER INTERFACE (defined below). Under the COLLABORATION AGREEMENT, 
Siemens and Stereotaxis have also coordinated their marketing, promotions and 
sales activities in respect of the INTEGRATED CATH LAB to facilitate placements 
at leading interventional
 institutions.

Siemens and Stereotaxis' mutual goal is to extend their collaboration:

         (i)      To co-develop and commercialize an advanced cardiology cath
                  lab ("ADVANCED CARDIOLOGY CATH LAB") providing unique three
                  dimensional navigation solutions to clinicians in endocardial
                  electrophysiology (and where mutually agreed by the parties in
                  writing, pediatric cardiology and interventional cardiology)
                  by adding to the INTEGRATED CATH LAB (and where applicable,
                  the NEXT GENERATION INTEGRATED CATH LAB defined below) the
                  capability of navigating by utilization of proprietary
                  Siemens' endocardial ultrasound integration technology or by
                  utilization of proprietary Siemens' advanced registration of
                  PRE-operative CT or MRI Imaging, that is registered to the
                  ARTIS dFC FLUOROSCOPY SYSTEM (collectively, "PROPRIETARY
                  SIEMENS REGISTERED IMAGING", as defined in more detail below);

         (ii)     To address the co-development and commercialization of an
                  advanced interventional radiology cath lab ("ADVANCED IR LAB")
                  providing such unique clinical solutions to clinicians in
                  interventional radiology by way of adding specialized features
                  to the INTEGRATED CATH LAB (and where applicable, the NEXT
                  GENERATION INTEGRATED CATH LAB defined below), whether by way
                  of utilization of PROPRIETARY SIEMENS REGISTERED IMAGING or
                  otherwise, as are mutually agreed in writing by the parties in
                  accordance with the terms of this Agreement;

         (iii)    [***]

         (iv)     To increase coordination of marketing, promotions and sales
                  LABs by establishing co-sponsored Exhibition Sites and Centers
                  of Excellence at selected leading electrophysiology and
                  interventional cardiology sites, by increasing





[*** 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.]



<PAGE>

                                       3

                  coordination of sales force incentives, sales force and
                  customer training and conference presentations and
                  publications;

         (v)      To provide for global first level service by Siemens of LABs;
                  and

         (vi)     to provide for collaboration of the parties in respect of new
                  technologies applicable to LABs by mutual agreement from time
                  to time:

         in the manner set out below.

1. DEFINITIONS

1.1      The terms "NIOBE SYSTEM", ARTIS dFC FLUOROSCOPY SYSTEM", and "COMMON
         USER INTERFACE" mean:

1.1.1    The "NIOBE SYSTEM" means Stereotaxis' digital instrument control system
         and subsequent generations of that system whether sold under NIOBE or
         other trademarks, which allows navigation and control of guidewires,
         catheters and other instruments in the body by external magnetic
         forces. Unless the context requires otherwise, this will be taken to
         include major accessories designed to be used with such system.

1.1.2    The "ARTIS dFC FLUOROSCOPY SYSTEM" means Siemens' ARTIS dFC digital
         cardiology X-ray imaging system and subsequent generations of Siemens
         digital cardiology X-ray system whether sold under ARTIS or other
         trademarks. Unless the context requires otherwise, this will be taken
         to include major accessories designed to be used with such system.

1.1.3    The "COMMON USER INTERFACE" means the common interface developed by the
         parties pursuant to the COLLABORATION AGREEMENT for the integration of
         the NIOBE SYSTEM and the ARTIS dFC FLUOROSCOPY SYSTEM to comprise the
         INTEGRATED CATH LAB.

1.2      The term "INFORMATION" means written and/or oral technical information
         with regard to the components mentioned in Section 1.1 herein above,
         such information being available to one party at any time during the
         term of this Agreement and not resulting from performing DEVELOPMENT
         WORK.

1.3      The term "ADVANCED CARDIOLOGY CATH LAB DEVELOPMENT WORK" means any and
         all development work to be performed by the parties to develop the
         ADVANCED CARDIOLOGY CATH LAB by adding to the INTEGRATED CATH LAB the
         capability of navigating using PROPRIETARY SIEMENS REGISTERED IMAGING,
         in accordance with Section 2 below.

<PAGE>
                                       4


1.4  The term "ADVANCED IR LAB DEVELOPMENT WORK" means any and all development 
     work to be performed by the parties to develop the ADVANCED IR LAB, which 
     will include (without being limited to) enhanced three dimensional imaging 
     capabilities for applications that may include solutions for liver 
     embolization and uterus myoma treatment and may additionally include 
     applications for interventional neuroradiology including arteriovenous 
     malformations and aneurysm.

1.5  The term "NEXT GENERATION NIOBE SYSTEM" means Stereotaxis' next commercial 
     release of the NIOBE SYSTEM that has been integrated with a digital 
     fluoroscopy system and designed to contain: (i) more compact magnet 
     systems; and (ii) a primary set of rotational and other axes of motion for 
     the magnets; both of which are contained in enclosed pods that can be 
     affixed to secondary, external positioners. [***]

1.6  [***]

1.7  The term "DEVELOPMENT WORK" means either of ADVANCED CARDIOLOGY CATH LAB 
     DEVELOPMENT WORK, ADVANCED IR LAB DEVELOPMENT WORK [***].

1.8  The term "DEVELOPMENT RESULTS" means any and all results, whether 
     patentable or not, in written or oral form, achieved by performing 
     DEVELOPMENT WORK.

1.9  [***]

1.10 The term "LAB" represents an INTEGRATED CATH LAB, an ADVANCED CARDIOLOGY 
     CATH LAB, an ADVANCED IR LAB and/or a NEXT GENERATION INTEGRATED CATH LAB.

1.11 The term "PROPRIETARY SIEMENS REGISTERED IMAGING" has the meaning set 
     forth in the paragraph (i) of the preamble to this Agreement and 
     (notwithstanding anything contained elsewhere in this agreement): (i) will 
     not be taken to include registration of output of rotational angiography 
     conducted in a cath lab with a cath lab x-ray/fluoroscopy system; (ii) 
     will be taken to include registration of such additional imaging 
     modalities as is mutually agreed in writing by the parties; (iii) may 
     include such advanced registration or integration technology as far as 
     owned by Siemens alone or together with partners; and


[*** 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.]


<PAGE>
                                       5

                  (iv)  will not be taken to include imaging solutions that have
                        become common practice or commonly available in the cath
                        lab industry.

         1.122.   Carrying out of the DEVELOPMENT WORK

         2.1      Details of the DEVELOPMENT WORK are set forth in Annex 1 
                  hereto, which may be amended from time to time in writing by 
                  the parties.

         2.2      [***]

         2.3      [***]

         2.4      The ADVANCED CARDIOLOGY CATH LAB DEVELOPMENT WORK will be 
                  undertaken by the parties in an expeditious fashion and the 
                  parties will use all reasonable commercial efforts to achieve 
                  completion of such work so as to enable the commercial 
                  introduction of the ADVANCED CARDIOLOGY CATH LAB during 2004. 
                  The ADVANCED CARDIOLOGY CATH LAB DEVELOPMENT WORK shall be 
                  regarded as being completed successfully if ADVANCED 
                  CARDIOLOGY CATH LAB fulfills the specifications as agreed 
                  upon in accordance with Section 1.1 and when final system 
                  testing and readiness for shipment of the system to the 
                  customer is achieved.

         2.4.1    Stereotaxis agrees that from the date hereof until the 
                  expiration of the period of 12 months following the placement 
                  of the first ADVANCED CARDIOLOGY CATH LAB at a customer site 
                  or until year end 2005, whichever is the earlier, it will not 
                  place my NIOBE SYSTEMs or NEXT GENERATION NIOBE SYSTEMs that 
                  are integrated with a third party x-ray imaging system in a 
                  manner that incorporates registration to such x-ray imaging 
                  system of three dimensional pre-operative imaging so as to 
                  provide advanced electrophysiology solutions that are 
                  substantially comparable to advanced electrophysiology 
                  solutions provided by the ADVANCED CARDIOLOGY CATH LAB by 




[*** 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.]


<PAGE>
                                       6


         reason of integration of PROPRIETARY SIEMENS REGISTERED IMAGING
         pursuant to this Agreement.

2.5      [***]

2.5.1    [***]

2.6      Subject to Section 2.3, the ADVANCED IR LAB DEVELOPMENT WORK will be
         undertaken by the parties in an expeditious fashion and the parties
         will use all reasonable commercial efforts to achieve completion of
         such work so as to enable the commercial introduction of the ADVANCED
         IR LAB during 2004. The ADVANCED IR LAB DEVELOPMENT WORK shall be
         regarded as being completed successfully if the ADVANCED IR LAB
         fulfills the specifications as agreed upon in accordance with Section
         1.1 and when final system testing and readiness for shipment of the
         system to the customer is achieved.

2.7      Stereotaxis agrees that during the period commencing on the date hereof
         and ending 12 months following the placement of the first ADVANCED IR
         LAB at a customer site or until year end 2005, whichever is the
         earlier, it will not place any NIOBE SYSTEMs or NEXT GENERATION NIOBE
         SYSTEMs that are integrated with a third party x-ray imaging system
         and provide proprietary solutions that are substantially comparable to
         the proprietary advanced interventional radiology solutions provided
         by the ADVANCED IR CATH LAB. Each party shall bear the costs incurred
         by such party for its efforts under or in connection with the
         DEVELOPMENT WORK.

2.8      Each party, insofar as it lawfully may, shall make available to the
         other within a reasonable period of time following the Effective Date
         of this Agreement, and from time to time during the carrying out of
         the DEVELOPMENT WORK its INFORMATION and DEVELOPMENT RESULTS insofar
         as it considers such INFORMATION and DEVELOPMENT RESULTS necessary for
         the other party for carrying out the


[*** 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.]


<PAGE>
                                       7

         DEVELOPMENT WORK. Disclosure of INFORMATION and DEVELOPMENT RESULTS
         will be effected without charges to the receiving party.

2.9      The DEVELOPMENT WORK will be carried out in close cooperation between
         the parties and in a joint effort to keep cost and expenditures to a
         minimum.

2.9.1    Each party undertakes to carry out the DEVELOPMENT WORK as stipulated
         in this Agreement.

3.       CERTAIN ITEMS REGARDING LAB PLACEMENTS AND SALES

3.1      The parties' goal is to achieve installation of [***] and the parties
         will coordinate and use all reasonable commercial efforts to achieve
         these goals. Siemens and Stereotaxis will each provide their components
         of LABs to customers on commercially reasonable terms and on a
         competitive basis and in timely fashion and together with the provision
         of service for LABs as provided for herein. For purposes of this
         Section 3.1, components will be offered on a competitive basis where
         provided on terms that are: (i) where applicable, reasonably comparable
         to the basis upon which such components or their equivalent are
         provided to customers for placements that are not integrated in LABs;
         or (ii) for components of a type that are unique to LABs, based on
         margins that are reasonably comparable margins generally achieved on
         other components of LABs.

3.2      Stereotaxis will not make available to third parties via integration of
         the NIOBE SYSTEM or otherwise any proprietary Siemens PROPRIETARY
         SIEMENS REGISTERED IMAGING. Section 6.4 shall apply accordingly.

3.3      [***]

3.4      As appropriate, customer sales approach in respect of LABs can be
         jointly or separately by each party. Each party shall inform the other
         promptly of any potential customer and each party agrees to fully
         cooperate with the other in respect of reasonable requests for 


[*** 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.]

<PAGE>
                                      8

coordination of customer sales efforts, provided that the parties continue to 
maintain distinct and separate business and sales operations and identities and 
that the distinct separation between the customer's purchase of components from 
Stereotaxis and from Siemens will be evident to the customer:

         (i)      In respect of INTEGRATED CATH LABs, as set forth in the
                  COLLABORATION AGREEMENT;
         (ii)     [***]
         (iii)    In respect of ADVANCED CARDIOLOGY CATH LABs and ADVANCED IR
                  LABs, until such time as either party provides the other with
                  written notice to the contrary.

3.5      For placements of LABS, sales brochures, bid specification and 
customer payment will be made in a way that a distinct separation between the 
Stereotaxis components and Siemens components is evident to the customer.

         (i)      Notwithstanding the above, there is a joint document for 
                  room planning and installation instructions.
         (ii)     Siemens will provide to the customer project management on 
                  site addressing room preparation, shipment and installation.
         (iii)    Contracts with customers will be signed by each party for 
                  their respective components to be delivered.
         (iv)     Each party will manufacture, warrant, sell and deliver its
                  components of such LABs in accordance with reasonable industry
                  practices and will not cease to so manufacture, warrant, sell 
                  and deliver such components based on customer purchase orders 
                  without 18 months prior notice to the other party.

3.6      Stereotaxis and Siemens may mutually agree upon cross-incentive 
programs to enhance sales force focus on placement on LABs

3.7      For placements of ADVANCED CARDIOLOGY CATH LABs, Stereotaxis and 
Siemens will cooperate to:

         (i)      Coordinate salesforce and customer training activities;
         (ii)     [***]
         (iii)    Coordinate and facilitate publications and conference
                  presentations as mutually agreed;
         (iv)     Coordinate and establish a minimum of two Exhibition Sites
                  at Barnes in St. Louis and at such other site as mutually
                  agreed (likely at St. Georg in Hamburg) [***]
         

[*** 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.]

     

<PAGE>

                                       9

                           [***] The parties will ensure that at the time of
                           installation and thereafter that their components
                           provided to such LAB have the most up to date
                           software releases installed that are designed for use
                           with such components. Such demonstration site will
                           remain installed until such time as mutually agreed
                           by the parties. [***] and

                  (v)      Coordinate and establish Center of Excellence
                           Clinical Sites targeting key interventional hospitals
                           such as [***] and such other sites as are mutually
                           agreed, the object being to promote the capabilities
                           of the integrated systems and to establish new
                           clinical solutions.

                  Further details on the sales cooperation will be agreed to by
                  a "collaborative sales working group" to be established after
                  the signing of this Agreement, the object being to promote
                  sales and promotions cooperation between the parties while
                  continuing to maintain distinct and separate business and
                  sales operations and identities.

4.       LOGISTICS

For placements of LABs, Stereotaxis as well as Siemens will ship directly to 
the customer site. Time schedule is coordinated by the Siemens and Stereotaxis 
project managers. The first unit of any LAB will be tested in Siemens AX before 
shipment to the customer to assure successful integration and system 
performance. The number of units that have to pass the compatibility test after 
the first units testing will be defined separately and mutually agreed. Further 
details on logistics will be agreed to by the collaborative logistics working 
group established pursuant to the Collaboration Agreement, which will also be 
used to coordinate logistics issues arising under this Agreement.

5.       INSTALLATION AND SERVICE

5.1      For installations of LABs, at least one Stereotaxis person will be on
         site at the customer facility, at Stereotaxis cost and expense, at the
         time of installation. Siemens will support the installation of
         Stereotaxis components to Siemens' system.

5.2      Service of LABs on site will be done by Siemens in accordance with a
         service contract between the Siemens and Stereotaxis, on commercially
         reasonable terms to be mutually agreed or, where applicable, in
         accordance with existing service contracts in respect of LABs that are
         already in place.

[*** 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.]


<PAGE>
                                       10

         Such service will include Stereotaxis' components of LABs. To enable
         Siemens to perform service Stereotaxis shall provide Siemens at no cost
         with INFORMATION necessary for Siemens to perform service on
         Stereotaxis' components and shall train at no cost to Siemens a
         reasonable number of Siemens' specialists in the service of
         Stereotaxis' components. Furthermore, Stereotaxis and Siemens shall
         cooperate to provide service call center support as well as spare
         parts in respect of LABs.

         Details regarding service of LABs including but not limited to response
         time and spare part logistics, will be agreed to by the collaborative
         service working group established pursuant to the Collaboration
         Agreement, which will also be used to coordinate service issues arising
         under this Agreement.

         Regarding service for LABs, Siemens agrees to provide Stereotaxis with
         no less than 24 months written notice of termination of such service.
         Details regarding the installation will be separately agreed upon.

6.       SECRECY

6.1      Either Party expressly undertakes to retain in confidence, to protect
         with the same degree of care used in protecting its own INFORMATION and
         not to use for other purposes than contemplated by this Agreement or to
         disclose to any third party all INFORMATION in a written or other
         tangible form supplied by the other Party in relation to this Agreement
         and clearly marked as being "Confidential". Oral INFORMATION of a Party
         that is confidential and is restricted in use shall be reproduced in
         writing marked as being "Confidential" and sent to the other Party
         within one (1) month after its communication to the other Party. The
         receiving Party agrees to restrict access of such Confidential
         information to employees and agents who have a need to know pursuant to
         their scope of employment or agency arrangement and further agrees to
         instruct its employees and agents having access to such Confidential
         INFORMATION of receiving Party's confidentiality obligations.

6.2      The aforementioned obligation shall not apply to INFORMATION that is:

6.2.1    published or otherwise made available to the public other than by a 
         breach of this Agreement; or

6.2.2    rightfully received by a Party from a third party without confidential
         obligation; or

6.2.3    shown through competent evidence to have been independently developed
         by the other Party without reference to the INFORMATION; or to have
         been known by the receiving Party prior to its first receipt of such
         INFORMATION from the other Party; or

6.2.4    required to be disclosed pursuant to a legal, judicial, or 
         administrative proceeding, or by law; or

<PAGE>
                                       11


6.2.5    approved for disclosure by prior written consent of an authorized
         corporate representative of the disclosing Party.

6.3      The aforementioned obligations do apply accordingly with regard to
         DEVELOPMENT RESULTS of the other Party.

6.4      The non-disclosure obligations set forth in this Section 6 shall
         survive expiration or termination of this Agreement by three (3) years.

6.5      Press releases or other information on the conclusion/content of this
         Agreement shall only be made available to third parties/press agencies
         (other than disclosure by Stereotaxis in relation to raising private
         equity funds or as legally required pursuant to an initial public
         offering of equity) with the prior written consent of the other Party
         hereto such consent not to be unreasonably withheld.

7.       WARRANTIES AND LIMITATION OF LIABILITIES

7.1      Provided it complies with its development obligations pursuant to
         Section 2, no party shall be liable towards the other party in the case
         that the DEVELOPMENT WORK cannot be successfully completed.

7.2      The sole obligation of each party with respect to its INFORMATION and
         DEVELOPMENT RESULTS shall be to forward same to the other party as
         provided in this Agreement, and, to correct errors that might have
         occurred in this INFORMATION and DEVELOPMENT RESULTS without undue
         delay after such errors become known to the party which forwarded the
         relevant INFORMATION or DEVELOPMENT RESULTS.

7.3      THE WARRANTIES SET FORTH IN THIS SECTION 7 APPLY TO ALL INFORMATION AND
         DEVELOPMENT RESULTS LICENSED OR KNOWINGLY DISCLOSED HEREUNDER AND ARE
         IN LIEU OF ALL WARRANTIES EXPRESS OR IMPLIED INCLUDING WITHOUT
         LIMITATION THE WARRANTIES THAT INFORMATION AND DEVELOPMENT RESULTS CAN
         BE USED WITHOUT INFRINGING STATUTORY AND OTHER RIGHTS OF THIRD PARTIES.

7.4      Warranties and liabilities regarding the delivery of the components of
         each party shall be governed by the contracts between each such party
         and the respective customer.

7.5      Should a customer forward a warranty or any liability claim - including
         product liability claims - to either party then such party shall be
         responsible for such claims only to the extent such claims relate to
         the components such party has delivered to the customer. Each party
         shall indemnify and hold the other party harmless from any claim,
         costs, 

<PAGE>
                                       12


     expenses, and damages resulting from such claims if the claims relate to 
     components delivered by the respective other party, provided however that 
     the one party

     a) notifies the other party of such claim, dispute or proceeding without 
     undue delay,
     b) does not admit liability on the claims,
     c) provides the other party with the sole authority -- as far as legally 
     possible -- to defend and settle such claim, dispute, or proceeding with 
     counsel of its choice (the other party may participate at its costs with 
     counsel of its choice), and
     d) cooperates as reasonably requested by the other party.

7.6  Each party shall secure and maintain, for the useful life of the components
     delivered by it, a product liability insurance policy full coverage for
     product liability exposure (including negligence and strict liability) to
     third parties anywhere in the world for any defects whatsoever (such as
     design-, manufacture-, instruction defects) resulting from defects in the
     components supplied hereunder in the minimum of US [***]. At either party's
     request the other party shall prove compliance with the obligation to
     insure as herein stated.

7.7  NEITHER PARTY SHALL HAVE ANY LIABILITY TO THE OTHER FOR ANY CONSEQUENTIAL, 
     INCIDENTAL, PUNITIVE, INDIRECT OR SPECIAL DAMAGES BY REASON OF ANY ACT OR 
     OMISSIONS OR ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ITS 
     USE OR OPERATION, INCLUDING BUT WITHOUT LIMITATION ANY LOSS OF USE, LOSS 
     OF INFORMATION AND DATA, LOST REVENUES, LOST PROFITS, COSTS OF CAPITAL, 
     COSTS OF SUBSTITUTE PRODUCTS, FACILITIES, OR SERVICES, COSTS OF 
     REPLACEMENT POWER, COST ASSOCIATED WITH DOWN TIME, AND ANY SIMILAR AND 
     DISSIMILAR LOSSES, COSTS AND DAMAGES.

7.8  The provisions of this Section 7. shall survive any termination of this 
     Agreement.

8.   DEVELOPMENT RESULTS, INFORMATION AND RIGHTS THEREUNDER

8.1  The DEVELOPMENT RESULTS shall, at the time they are made, become the sole 
     property of such party, the employees of which have generated the 
     respective DEVELOPMENT RESULTS. DEVELOPMENT RESULTS made jointly by 
     employees of both parties shall become the joint ownership of both 
     parties. In case DEVELOPMENT RESULTS consist of joint inventions, the 
     parties shall agree on whether, and if so, where and at whose cost and 
     expense statutory protection rights will be filed for. Joint DEVELOPMENT 
     RESULTS, including any and all statutory protection issuing thereon, if 
     any, may be used by each party in its field of activities.

[*** 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.]

<PAGE>

                                      13

8.2      Under its INFORMATION and DEVELOPMENT RESULTS each party hereby grants
         to the other party the non-exclusive, non-transferable, royalty free
         right to use same during the term of this Agreement for the purpose of
         carrying out the DEVELOPMENT WORK and thereafter to the extent
         necessary for the exploitation of the DEVELOPMENT RESULTS of the other
         party or of the joint DEVELOPMENT RESULTS.

8.3      Notwithstanding ownership under DEVELOPMENT RESULTS and the rights 
         granted hereunder, the exclusivity granted under Section 3.2 shall 
         prevail.
8.4      The stipulations of this Section 8. shall survive any termination of 
         this Agreement.

9.       JAPANESE MARKET DEVELOPMENT

         Pursuant to an Agreement between the parties of even or approximate
         date herewith, the parties intend to collaborate in respect of Japanese
         market development for LABs. Details will be agreed upon in a separate
         agreement between Stereotaxis and the Siemens affiliated company in
         Japan.

10.      SIEMENS INVESTMENT IN STEREOTAXIS

         This Agreement will be of no force or effect unless and until Siemens'
         investment of $10 million in Stereotaxis Series E Preferred Stock is 
         closed.

11.      TERM AND TERMINATION

11.1     This Agreement shall become effective on the date it is signed by both
         parties (Effective Date) and is terminated or expires in accordance
         with the terms hereof, in any event no later than 36 months after
         becoming effective. No later than 12 months before the end of this 36
         month period, both parties will commence in good faith negotiations on
         extending the collaboration.

11.2     This Agreement may be terminated at any time by the one party by 
         giving of not less than four weeks' prior written notice to the other 
         party.

         -  if the other party hereto is declared bankrupt or otherwise cannot
            fulfill its financial obligations; or

         -  if the other party hereto substantially defaults in the performance
            of this Agreement and does not remedy the default within 4 weeks 
            after receipt of a relevant written request of the one party; or

         -  if the other party comes under direct or indirect control or 
            direction of any other entity competing with the one party.

<PAGE>

                                       14

11.3     Sections 6, 7, 8, 11, 12 shall survive termination of this Agreement.

12.      ARBITRATION

12.1     Any differences or disputes arising from this Agreement or from
         agreements regarding its performance shall be settled by an amicable
         effort on the part of both parties to the Agreement. An attempt to
         arrive at a settlement shall be deemed to have failed as soon as one of
         the parties to the Agreement so notifies the other party in writing.

12.2     If an attempt at settlement has failed, the disputes shall be finally
         settled under the Rules of Conciliation and Arbitration of the
         International Chamber of commerce in Paris (Rules) by three arbitrators
         appointed in accordance with the Rules.

12.3     The place of arbitration shall be Berne, Switzerland. The procedural
         law of this place shall apply where the Rules are silent.

12.4     The arbitral award shall be substantiated in writing. The arbitral
         tribunal shall decide on the matter of costs of the arbitration.

13.      SUBSTANTIVE LAW

         All disputes shall be settled in accordance with the provisions of this
         Agreement and all other agreements regarding its performance, otherwise
         in accordance with the substantive law in force in the Canton of Berne,
         Switzerland, without reference to other laws.

14.      MISCELLANEOUS

14.1     This Agreement may not be released, discharged, abandoned, changed or
         modified in any manner, except by an instrument in writing signed on
         behalf of each of the parties hereto by their duly authorized
         representatives.

14.2     The failure of any party hereto to enforce at any time any of the
         provisions of this Agreement shall in no way be construed to be a
         waiver of any such provision, nor in any way to affect the validity of
         this Agreement or any part thereof or the right of any party thereafter
         to enforce each and every such provision. No waiver of any breach of
         this Agreement shall be held to be a waiver of any breach of this
         Agreement shall be held to be a waiver of any other or subsequent
         breach.




<PAGE>
                                       15


14.3 All notices or other communications required or permitted hereunder with 
     regard to the interpretation, validity, etc. of the Agreement shall be in 
     writing and shall be given by certified mail addressed, if to Stereotaxis

     Stereotaxis, Inc.
     Attn. Chief Executive Officer
     Atten Chief Financial Officer
     4041 Forest Park AVE.
     St. Louis, MO 63108
     U.S.A.



     and, if to Siemens:
     Siemens Aktiengesellschaft
     Legal Services Med
     Werner von Siemens Str. 50
     91052 Erlangen
     Germany


     or to such other address that the parties might identify to each other for 
     this purpose and with reference to this Agreement.

14.4 Subject to Section. 6.5 above, no party hereto shall issue any press 
     release or public announcement or otherwise divulge the existence of this 
     Agreement or the transactions contemplated hereby without the prior 
     approval of the other party hereto.

14.5 This Agreement shall be binding upon and inure to the benefit of the 
     parties hereto and the successors or assigns of the parties hereto.

14.6 Titles and headings to Sections herein are inserted for the convenience or 
     reference only and are not intended to be a part of or to affect the 
     meaning or interpretation of this Agreement.

14.7 This Agreement may be executed in one or more counterparts, all of which 
     shall be considered one and the same agreement.


IN WITNESS WHEREOF, the parties have executed these presents on the dates 
specified below.

<PAGE>
                                       16


St. Louis,  27 May 2003                 Forchheim, 27.05.2003
          ------------------                      ------------------
Stereotaxis, Inc.                       Siemens Aktiengesellschaft


      /s/ BEVIL J. HOGG                         illegible
----------------------------            ----------------------------

                                                illegible

<PAGE>
                                       17

ANNEX 1

DEVELOPMENT WORK

ADVANCED CARDIOLOGY CATH LAB DEVELOPMENT WORK RELATING TO PROPRIETARY SIEMENS 
REGISTERED IMAGING

Subject to the results of determining the feasibility of this project, image 
registration and integration of PROPRIETARY SIEMENS REGISTERED IMAGING that 
will include:

         1.       Allowing target based navigation from a CT or MRI
                  pre-operative image that is registered to the fluoroscopy
                  output. Included in this approach would be a fluoroscopy image
                  that is registered to a pre-operative image which in turn may
                  be registered to a Biosense CARTO map

Additional consideration will be given as to include navigational control using 
endocardial ultrasound

Common Stereotaxis/Siemens image integration specifications will be defined in 
the "Requirement Specification". This document will be jointly created and will 
be reviewed and released by both parties. The image integration will be tested 
in a "System test" applied to both the Stereotaxis and Siemens components of 
the ADVANCED CARDIOLOGY CATH LAB. Results have to be documented and are the 
base for a joint release for shipment to customers. Each of the two parties is 
responsible for their own component. Details will be agreed by a "collaborative 
3D engineering working group" to be established after signing of this Agreement.

[***]

ADVANCED IR LAB DEVELOPMENT WORK

Subject to the results of determining the feasibility of this project, common 
Stereotaxis/Siemens specifications for unique clinical solutions in 
interventional radiology comprised in the ADVANCED IR LAB will be defined in 
the "Requirement Specification". This document will be 


[*** 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.]

<PAGE>
                                       18


jointly created and will be reviewed and released by both parties. The ADVANCED 
IR LAB configuration will be tested in a "System test" applied to both the 
Stereotaxis and Siemens components. Results have to be documented and are the 
base for a joint release for shipment to customers. Each of the two parties is 
responsible for their own component. Details will be agreed by a "collaborative 
ADVANCED IR LAB configuration working group" to be established after signing of 
this Agreement.


<PAGE>
                                                                   EXHIBIT 10.11



                   Development Alliance and Supply Agreement

                                 by and between
                                        
                             Biosense Webster, Inc.
                                        
                                      and
                                        
                               Stereotaxis, Inc.
                                        
                               Dated May 7, 2002

<PAGE>
                               TABLE OF CONTENTS
<Caption>

<Table>
                                                                       PAGE
                                                                      ------
<S>      <C>      <C>                                                  <C>
1        DEFINITIONS....................................................1
         
         1.1      Construction......................................... 1
         1.2      Definitions.......................................... 2
                                             
2        LICENSE GRANTS................................................ 8
         
         2.1      Licenses Granted; Appointment.......................  8
         2.2      License Grant to Stereotaxis........................  9
         2.3      Exclusivity......................................... 10
         2.4      Stereotaxis Permitted Activities.................... 10
         2.5      Preferred Partner and Third Party Integrations...... 12
         2.6      Single Purchase Offers.............................. 14
         2.7      Latest Localization Platform........................ 14

3        DEVELOPMENT AND OVERSIGHT.................................... 14
         
         3.1      Joint Steering Committee............................ 14
         3.2      Development of the Compatible 
                  CARTO System and Compatible NIOBE System............ 15
         3.3      Development of the Daughter Products and 
                  Consulting.......................................... 17
         3.4      Additional Daughter Products........................ 17
         3.5      Major Delays........................................ 18
         3.6      Failure to Obtain Approval.......................... 18

4        MARKETING, DISTRIBUTION AND MANUFACTURE...................... 18
         
         4.1      Biosense as Manufacturer............................ 18
         4.2      Marketing and Promotions, Distribution 
                  Obligations......................................... 18
         4.3      Forecast............................................ 19
         4.4      Identification of Stereotaxis and Biosense.......... 20
         4.5      Product Labeling.................................... 20 

5        STEREOTAXIS COMPONENT SUPPLY..................................21
         
         5.1      Manufacture of Components........................... 21
         5.2      Forecasts........................................... 21
         5.3      Pricing............................................. 21 
         5.4      Vendor Requirements................................. 21 
         5.5      Purchase Orders..................................... 21 
         5.6      Terms............................................... 21 
         5.7      Taxes............................................... 21 
</Table>


<PAGE>


<Table>
<S>  <C>   <C>                                                               <C>

     5.8   Conflicting
 Terms ................................................22
     5.9   Annual Stereotaxis Reports and Audits ............................22

6    STEREOTAXIS MARKETING AND DISTRIBUTION .................................22

     6.1   Right to Distribute ..............................................22
     6.2   Forecasts ........................................................22
     6.3   Pricing ..........................................................22
     6.4   Purchase Orders ..................................................23
     6.5   Terms ............................................................23
     6.6   Taxes ............................................................23
     6.7   Conflicting Terms ................................................23
     6.8   Annual Stereotaxis Reports .......................................23

7    REVENUE SHARE ..........................................................24

     7.1   Daughter Product Sales ...........................................24
     7.2   Compatible NIOBE System ..........................................24
     7.3   Discounting ......................................................25
     7.4   Exchange Rates ...................................................25
     7.5   Payment ..........................................................25
     7.6   Annual Biosense Reports and Audits ...............................25

8    MANUFACTURING QUALITY AND ACCEPTANCE ...................................26

     8.1   Conformance with Specifications ..................................26
     8.2   Manufacturing Specifications .....................................26
     8.3   Packaging of Lots and Lot Sizes ..................................27
     8.4   Quality Guidelines ...............................................27
     8.5   Quality Control ..................................................27
     8.6   Rejection ........................................................27
     8.7   Rejection by Lot .................................................28
     8.8   Rejection Procedure ..............................................28
     8.9   Presence At Facility .............................................29
     8.10  Exchange of Information ..........................................29

9    REGULATORY MATTERS .....................................................29

     9.1   Regulatory Approvals .............................................29
     9.2   Cooperation to Obtain and Maintain Approvals .....................30
     9.3   Exchange of Information ..........................................30
     9.4   Inspections ......................................................30

10   REPRESENTATIONS AND WARRANTIES .........................................30

     10.1  Stereotaxis ......................................................30
     10.2  Biosense .........................................................31
     10.3  Sole Remedy ......................................................32
     10.4  Warranty Procedures ..............................................32
</Table>


                                      iii


<PAGE>

     10.5  Recalls ................................................ 33
     10.6  Correction of Flaws .................................... 33
     10.7  LIMITATION OF WARRANTIES ............................... 34
11   INDEMNIFICATION .............................................. 34
     11.1  Indemnity .............................................. 34
     11.2  Procedure .............................................. 34
     11.3  Remedy ................................................. 34
     11.4  Indemnity .............................................. 34
     11.5  Procedure .............................................. 34
     11.6  Remedy ................................................. 35
12   PROPRIETARY RIGHTS ........................................... 35
     12.1  Stereotaxis ............................................ 35
     12.2  Biosense ............................................... 35
     12.3  Joint Ownership ........................................ 35
     12.4  Developed Intellectual Property ........................ 37
13   CONFIDENTIALITY .............................................. 38
     13.1  Definition ............................................. 38
     13.2  Protection of Information .............................. 39
14   TERM AND TERMINATION ......................................... 40
     14.1  Term ................................................... 40
     14.2  Termination ............................................ 40
     14.3  Effect of Termination or Expiration - Survival ......... 41
15   DISPUTE RESOLUTION ........................................... 41
16   ASSIGNMENT ................................................... 42
17   GENERAL ...................................................... 42
     17.1  Force Majeure .......................................... 42
     17.2  Insurance .............................................. 43
     17.3  Notices ................................................ 43
     17.4  Entire Agreement ....................................... 43
     17.5  Captions and Section Headings .......................... 44
     17.6  Partial Invalidity ..................................... 44
     17.7  Presumptions ........................................... 44
     17.8  Waiver ................................................. 44
     17.9  Cumulative Remedies .................................... 44
     17.10 Independent Contractors ................................ 44
     17.11 Confidentiality of Agreement ........................... 44
     17.12 Authority .............................................. 45




                                       iv

<PAGE>

<Table>
<S>   <C>                                                                <C>
17.13 Counterparts...................................................... 45
</Table>










                                       v

<PAGE>
                                                                  EXECUTION COPY

                    DEVELOPMENT ALLIANCE AND SUPPLY AGREEMENT

         This Development Alliance and Supply Agreement (the "Agreement") is
made and entered into on May          2002 (the "Effective Date") by and between
Biosense Webster, Inc., a California corporation, having a place of business at
3333 Diamond Canyon Rd., Diamond Bar CA 91765 ("Biosense") and Stereotaxis, 
Inc., a Delaware corporation, having a principal place of business at 4041 
Forest Park Avenue, St. Louis, MO, 63108 ("Stereotaxis").

                                    RECITALS

         WHEREAS, Stereotaxis has developed a computerized instrument control
system. ("Stereotaxis NIOBE System", as defined below) that enables navigation
utilizing externally applied magnetic fields of inter alia associated
proprietary, interventional, disposable, electrophysiology devices;

         WHEREAS, Biosense has developed and commercialized an electrophysiology
mapping and Localization system known as the CARTO(TM) system ("CARTO System",
as defined below) and associated proprietary, interventional, disposable,
electrophysiology devices;

         WHEREAS Stereotaxis and Biosense desire to jointly develop a Compatible
NIOBE - CARTO System (as defined below) and to jointly develop certain
associated proprietary, interventional, disposable, electrophysiology devices
("Daughter Products", as defined below) and to manufacture, market and sell such
Daughter Products; and

         "WHEREAS Biosense will contribute to the costs of the development of
the Compatible NIOBE - CARTO System and the Daughter Products by inter alia
providing development facilities, manufacturing, engineering and administrative
support, regulatory resources and intellectual property rights and Biosense will
also contribute certain costs allocated to the marketing, promotions and
distribution of products as set forth in this Agreement;

         WHEREAS Stereotaxis will contribute inter alia intellectual property
rights and certain development support and financial contributions to the
development of the Compatible NIOBE - CARTO Systems (it being acknowledged by
the parties that certain financial burdens in accordance with this Agreement
also rest with Biosense);

         NOW THEREFORE, in consideration of the mutual promises, covenants and
conditions herein, the Parties agree as follows:

                                    AGREEMENT

1 DEFINITIONS

1.1 Construction. All references in this Agreement to "Articles" "Sections and
"Exhibit" refer to the articles, sections and exhibits of this Agreement.



                                       1

<PAGE>





1.1.1    As used in this Agreement, neutral pronouns and any variations thereof
         shall be deemed to include the feminine and masculine and all terms
         used in the singular shall be deemed to include the plural, and vice
         versa, as the context may require.

1.1.2    The words "hereof", "herein" and "hereunder" and other words of similar
         import refer to this Agreement as a whole, as the same may from time to
         time be amended or supplemented, and not to any subdivision contained
         in this Agreement. 

1.1.3    The word "including" when used herein is not intended to be exclusive 
         and means "including, without limitation."

1.2      Definitions. As used herein:

1.2.1    "510K Submission" will mean acceptance by the U.S. FDA of an
         application for 510K clearance. As used herein, "acceptance" will mean
         that the U.S. FDA has received the application and assigned a control
         number for such application.

1.2.2    "Additional Daughter Products" will have the meaning set forth in
         Section 3.4.

1.2.3    "Affiliates" will mean any corporation or other entity that is directly
         or indirectly controlling, controlled by or under common control with a
         Party. For the purpose of this definition, "control" will mean the
         direct or indirect ownership of more than fifty percent (50%) of the
         capital stock of the subject entity entitled to vote in the election of
         directors (or, in the case of an entity that is not a corporation,
         interests entitled to vote in the election of the corresponding
         managing authority).

1.2.4    "Business Days" will mean any day, other than a Saturday or Sunday, on
         which banks are open for business in New Jersey.

1.2.5    "Restricted Parties" will mean Medtronic, Guidant, St. Jude Medical,
         Boston Scientific and EP Medsystems, their Affiliates and successors in
         interest. The Parties acknowledge that Stereotaxis's existing contract
         Localization developer, Internav Inc., is not a Restricted Party.

1.2.6    "Biosense Field" will mean the field of Localization and
         electrophysiologic mapping technologies for electrophysiology.

1.2.7    "Paragraph Biosense IP" will have the meaning set forth in Section 12.

1.2.8    "CARTO System" will mean the Biosense product that is marketed under
         the name "CARTO XP Navigation System" and any successor name, which is
         an electrophysiologic navigation and mapping technology that inter
         alia associates local electrical activity with catheter location and
         determines the 3D coordinates of catheter location, using proprietary
         catheters and associated products.


                                       2

<PAGE>






1.2.9    "Clinical" will mean in respect of interventional procedures, and
         procedures on human subjects; and "clinic" will have a corresponding
         meaning.

1.2.10   "Commercial Failure" will have occurred (i) if the sales of Daughter
         Products at any time following the first anniversary of the Commercial
         Launch Date are at an aggregate run rate of less than one catheter
         month Compatible NIOBE-CARTO System, provided that Compatible NIOBE
         Systems sold for less than $450,000 will be excluded from such
         calculation; (ii) the Compatible CARTO Installation Ratio is less than
         25%; or (iii) Stereotaxis' installed base of Compatible NIOBE Systems
         comprises less than 25% of the Stereotaxis' forecast provided to
         Biosense in a letter of even date herewith.

1.2.11   "Commercial Launch Date" will mean the first date upon which a Daughter
         Product is made commercially available in the U.S. market (or where
         otherwise specified herein, an alternative geographical market) and on
         which the Compatible CARTO System and the Compatible NIOBE System are
         also commercially available the U.S. market (or where otherwise
         specified herein, an alternative geographical market).

1.2.12   "Components" will mean any components included in the Daughter Products
         that are manufactured by or on behalf of Stereotaxis and supplied to
         Biosense by Stereotaxis hereunder.

1.2.13   "Component Specifications" will mean the specifications for the
         Components agreed upon by the Joint Steering Committee (which will,
         with full cooperation of the Parties, use reasonable efforts to
         integrate into Components improvements in cost, performance or
         reliability of features).

1.2.14   "Component Manufacturing Specifications" means the detailed
         manufacturing release specifications for the Components established in
         accordance with Section 8.

1.2.15   "Component Transfer Price" will have the meaning set forth in
         Section 5.

1.2.16   "Control" of Stereotaxis' will mean a direct or indirect ownership or
         control of more than fifty percent (50%) of the relevant voting stock
         entitled to elect directors, or more than a fifty percent (50%)
         interest in the decision-making authority of such corporation.
         "Relevant voting stock" will be considered stock issued to or acquired
         by venture capital or other financial investors (other than those
         venture capital or financial investors affiliated with a Restricted
         Party), to Stereotaxis management or employees, to Siemens AG, Philips
         Medical System, GE Medical Systems, Toshiba Medical Systems, Meditec
         Corporation (Marubeni affiliate), Sumitomo Corporation, Mitsui Bussain
         Medical Inc., MC Medical, Inc. (Mitsubishi affiliate) and to Hitachi
         Medical Corp., will not be included in calculating whether a change of
         Control of Stereotaxis has occurred.

1.2.17   "Compatible CARTO Installation Ratio" means at any time the aggregate
         number of Compatible CARTO System installations then completed, divided
         by the aggregate number of Compatible NIOBE System installations as at
         the time 6 months prior, provided that



                                       3

<PAGE>






         Compatible NIOBE Systems installed prior to the Commercial Launch Date
         and any Compatible CARTO systems installed together therewith will be
         excluded from such calculation for a period of 2 years from the
         Commercial Launch Date.

1.2.18   "Cost of Goods" will mean, with respect to each Party's relevant cost
         of goods, the cost of goods calculated in accordance with US GAAP,
         applied on a consistent basis and in a manner consistent with
         Stereotaxis' or Biosense's, as the case may be, audited financials. In
         the event that in respect of the Cost of Goods of Daughter Products the
         Parties are unable to agree on the cost of a catheter product or on
         such definition or there is a bona fide dispute as to the application
         of the agreed upon definition, "Cost of Goods" will have the meaning
         set forth in Exhibit B.

1.2.19   "Daughter Product One" will mean Parent Product One modified in such a
         manner as enables it to be navigable and perform its original mapping,
         Localization, ablation or other functions when used with a Compatible
         Stereotaxis NIOBE - CARTO System and in accordance with the terms of
         this Agreement.

1.2.20   "Daughter Product Two" will mean Parent Product Two modified in such a
         manner to enable such product to be navigable and perform its original
         mapping, Localization, ablation or other functions when used with a
         Compatible Stereotaxis NIOBE - CARTO System and in accordance with the
         terms of this Agreement.

1.2.21   "Daughter Products" will mean Daughter Product One, Daughter Product
         Two and any Additional Daughter Products nominated pursuant to Section
         3.4, each of which comprises one of the proprietary, interventional,
         disposable, electrophysiology devices developed or marketed by Biosense
         for use with the CARTO System and modified in such a manner as enables
         it to be navigable and perform its original mapping, Localization,
         ablation or other functions when used with an Compatible Stereotaxis
         NIOBE - CARTO System in accordance with the terms of this Agreement.

1.2.22   "Daughter Products Specifications" will mean the feature specifications
         for Daughter Product Two or any Additional Daughter Products to be 
         determined by the Joint Steering Committee (which will, with full
         cooperation of the Parties, use reasonable efforts to integrate into
         Daughter Products improvements in cost performance or reliability of
         features) as the same may be revised from time to time and provided
         that such specifications will be revised in timely fashion to reflect
         such modifications to the corresponding Parent Products as are of
         material clinical or commercial relevance to the usage of the Daughter
         Products

1.2.23   "Daughter Products Transfer Price" will have the meaning set forth in
         Section 6.3.

1.2.24   "Defects" will mean defects contained in Daughter Products or
         Components, as the case may be, prior to delivery of such Daughter
         Products to Stereotaxis or Components to Biosense, latent or non-latent
         consisting of the failure of Daughter Products or Components to comply
         with the applicable Manufacturing Specifications, or any requirement
         the FDC Act, including



                                       4

<PAGE>



         without limitation, of FDA QSR or other regulatory agency requirements
         with which the relevant Party has agreed to comply, or is obligated to
         comply, pursuant to Section 8.

1.2.25   "Distribute" shall mean, in respect of a product, its distribution to
         customers, including (subject to the terms of this Agreement) setting
         pricing policy, taking purchase orders, delivering and effecting
         transfer of title, either directly or through multiple tiers of
         distribution. "Distribution" shall have a corresponding meaning.

1.2.26   "electrophysiology" will mean in respect of the electrical
         characteristics and activity of the heart. "Electrophysiological" and
         "electrophysiologic" will have corresponding meanings.

1.2.27   "electrophysiologic mapping" will mean using a catheter having a
         transmitter or receiver at the distal tip to record, in respect of
         points or areas of heart tissue, the electrical signals being generated
         by such tissue.

1.2.28   "FDA QSR" will mean the U.S. FDA medical device Quality System
         Regulations, as amended from time to time, and any successor 
         regulations or comparable regulations of any successor agency(ies) 
         thereafter.

1.2.29   "Gross Profits" will mean, with respect to each Party's relevant gross
         profits, gross profits calculated in accordance with U.S. GAAP, applied
         on a consistent basis and in a manner consistent with such Party's
         audited financials. In the event that the Parties are unable to agree
         on such definition or there is a bona fide dispute as to the
         application of the agreed upon definition, "Gross Profits" will have
         the meaning set forth in Exhibit B.

1.2.30   "Initial Daughter Products" will mean Daughter Product One and Daughter
         Product Two.

1.2.31   "Compatible CARTO System" will mean the CARTO System, made compatible
         with the Compatible Stereotaxis NIOBE System in accordance with the
         Compatible CARTO Specifications and the terms of Exhibit A.

1.2.32   "Compatible CARTO Specifications" will mean the feature specifications
         for the Compatible CARTO System to be determined by Biosense in
         consultation with the Joint Steering Committee and in a manner
         consistent with Exhibit A, as the same may be revised from time to
         time. Upon completion of such specification it will be deemed an
         Exhibit to this Agreement.

1.2.33   "Compatible NIOBE System" will mean the Stereotaxis NIOBE System,
         including such modifications as determined by Stereotaxis in
         consultation with the Joint Steering Committee, as are reasonably
         required to make it compatible with Compatible CARTO System.

1.2.34   "Compatible NIOBE-CARTO System" will mean a Compatible computerized
         interventional electrophysiological Localization, mapping, ablation and
         instrument control system comprising one Compatible NIOBE System and
         one Compatible CARTO System.




                                       5

<PAGE>



1.2.35   "Intellectual Property Rights" will mean all rights in or arising
         under: (i) Patents; (ii) all copyrights in both published and
         unpublished works, all registrations and applications therefor and all
         associated moral rights; (iii) all know-how, trade secrets,
         confidential information, software, technical information, data,
         process technology, plans, drawings and blueprints required to be
         disclosed by the Parties to one another hereunder; and (iv) databases,
         data compilations and collections and technical data; and (v) any other
         similar rights in or arising under Technology worldwide, in each case,
         whether arising under the laws of the United States or any other state,
         country or jurisdiction.

1.2.36   "Joint IP" will have the meaning set forth in Section 12.3.1.

1.2.37   "Localization" will mean the determination of the three dimensional
         coordinates, relative to a fixed or control point or points, of the
         distal (internal) tip of a catheter where such catheter has a signal
         transmitter and/or receiver in its distal tip which, either directly or
         indirectly through another catheter, sends and/or receives data (that
         is used to determine such three dimensional coordinates) to or from an
         external transmitter and/or receiver via electromagnetic, ultrasound or
         other signals but shall not be taken to include imaging technologies
         such as ultrasonic imaging, imaging through optical fibers or other
         optical means, other imaging modalities or electrophysiologic recording
         systems.

1.2.38   "Marketing and Promotions" will mean in respect of a product (i)
         interacting (using written materials or otherwise) with actual and
         potential customers to facilitate their placing purchase orders for the
         product (and such other activities other than Distribution as are
         generally considered to be marketing activities in respect of a product
         in the medical devices industry); and (ii) conducting promotions (using
         written materials or otherwise) at trade shows and other relevant
         forums (and such other activities as are generally considered to be
         promotions activities in respect of a product in the medical devices
         industry) respectively.

12.39    "Milestones" will mean the development milestones with respect to
         development of the Compatible CARTO System and Daughter Products as set
         forth in Exhibit A and "Milestone" will have a corresponding meaning.

1.2.40   "Net Revenue" for Daughter Products will mean the bona fide price of
         sale or other transfer, after deduction of the following: prompt
         payment discounts, quantity discounts, rebates, returns, refunds and
         other similar discounts or amounts, including taxes, actually allowed
         and given, at which Biosense or any of its Affiliates sells or
         otherwise transfers Daughter Products to its customers (other than
         other Affiliates) as determined in accordance with U.S. GAAP applied on
         a consistent basis and in manner consistent with procedures used by
         Biosense to calculate revenues for its other relevant product lines for
         financial reporting purposes. In the event Daughter Products are
         sold together with other products at a single price, such single price
         will be allocated (pro rata where applicable) among Daughter Products
         and the other products based on the market price for such products when
         sold separately. In reference to products other than Daughter Products,
         "Net Revenue" will have a corresponding meaning.


                                       6

<PAGE>






1.2.41   "Parent Product One" will mean the Biosense Navi-Star catheter used as
         the electrophysiological mapping catheter for data acquisition in the
         CARTO System, which contains a miniature sensor embedded in the
         catheter tip that collects data and relays it to the CARTO System.

1.2.42   "Parent Product Two" will mean the Biosense Navi-Star TC ablation
         catheter used to ablate heart tissue in electrophysiological
         procedures.

1.2.43   "Parent Products" will mean any of the proprietary, interventional,
         disposable, electrophysiology devices developed and/or marketed by
         Biosense for use with the CARTO System, as modified or improved from
         time to time, and includes, without limitation, Parent Product One and
         Parent Product Two.

1.2.44   "Party" will mean a Party to this Agreement. "Parties" will have a
         corresponding meaning.

1.2.45   "Patent Rights" will mean all classes or types of patents, utility
         models and design patents including, without limitation, originals,
         divisions, continuations, continuations-in-part, extensions or reissues
         and patent applications for these classes or types of patent rights, in
         all countries of the world.

1.2.46   "PMA" will mean premarket approval by U.S. FDA in respect of an
         application for such approval pursuant to the Federal Food, Drug, and
         Cosmetic Act.

1.2.47   "preclinical" will mean in respect of procedures or research, animal or
         phantom procedures or other research not conducted on human subjects.

1.2.48   "Revenue Share" will have the meaning set forth in Section 7.

1.2.49   "Stereotaxis Field" will mean the field of computerized control of the
         motion of interventional or other percutaneous devices using externally
         applied magnetic fields.

1.2.50   "Stereotaxis NIOBE System" will mean the NIOBE advanced permanent
         magnet system designed by Stereotaxis that provides computerized remote
         control and guidance of the distal (internal), end of proprietary
         catheters guidewires and other percutaneous devices during certain
         interventional procedures.

1.2.51   "Stereotaxis Localization System" will mean Stereotaxis' catheter-based
         electromagnetic Localization system having only a basic level of
         Localization functionality, as more fully described in Exhibit D.

1.2.52   "Stereotaxis IP" will have the meaning set forth in Section 12.1.

1.2.53   "Target Completion Date" in respect of a Milestone will mean the date
         for such Milestone determined in accordance with Exhibit A.


                                       7

<PAGE>





1.2.54   "Technical Failure" will mean, (i) in respect of the Compatible NIOBE
         -- CARTO System, (a) its failure as reasonably determined by Biosense,
         to perform the functions of the CARTO System and of the NIOBE System in
         accordance with clinically acceptable quality standards or (b) a
         determination by Biosense that the Compatible NIOBE-CARTO will not
         produce acceptable technical results within acceptable budgetary
         limits; or (ii) in respect of the Initial Daughter Products, their
         failure to conform with the relevant Daughter Product Specifications.

1.2.55   "Technology" will mean (i) works of authorship including, without
         limitation, computer programs, algorithms, routines, source code and
         executable code, whether embodied in software or otherwise,
         documentation, designs, files, records and data; (ii) inventions
         (whether or not patentable), improvements, and technology, (iii)
         proprietary and confidential information, including technical data and
         customer and supplier lists, trade secrets, show how, know how and
         techniques; and (iv) processes, devices, prototypes, schematics, bread
         boards, net lists, mask works, test methodologies and hardware
         development tools and all instantiations of the foregoing in any form
         and embodied in any media.

1.2.56   Term" will have the meaning set forth in Section 14.1.

1.2.57   "U.S. FDA" will mean United States Food and Drug Administration, and
         any successor agency thereto.

1.2.58   "Year 1" will mean the twelve (12) months commencing on the first day
         of the first month immediately following the Commercial Launch Date.
         "Year 2", "Year 3", etc. will mean the twelve (12) month periods
         following Year 1, Year 2, etc. respectively.

2        LICENSE GRANTS

2.1      Licenses Granted: Appointment

2.1.1    Daughter Products. Stereotaxis hereby grants to Biosense a limited,
         non-exclusive (subject to Sections 2.4 and 4.4), worldwide,
         non-transferable (except as set forth in Section 2.4 and Article 16),
         license under Stereotaxis' Intellectual Property Rights in and to the
         Stereotaxis' IP, to make, have made, use, import, sell, offer for sale,
         or otherwise dispose of (directly or through multiple tiers of
         distribution) Daughter Products.

2.1.2    Stereotaxis NIOBE System. Stereotaxis hereby grants to Biosense a
         limited, (subject to Sections 2.4 and 4.4), non-transferable (except as
         set forth in Section 2.4 and Article 16), worldwide license, under
         Stereotaxis' Intellectual Property Rights in the Stereotaxis IP, to
         make, have made, use, import, sell, offer for sale, or otherwise
         dispose of (directly or through multiple tiers of distribution) the
         Compatible CARTO Systems for use with the Daughter Products.

2.1.3    Development License. Stereotaxis hereby grants to Biosense a limited,
         non-transferable (except as set forth in Section 2.4 and Article 16),
         worldwide license under Stereotaxis'



                                       8

<PAGE>





         Intellectual Property Rights in the Stereotaxis IP, to use the
         Stereotaxis IP for the purpose of, internally at Biosense, completing
         the development, integration and testing work in connection with
         development of the Compatible CARTO System, the Compatible NIOBE System
         and the Daughter Products as is required to give effect to the terms of
         this Agreement.

2.1.4    No Implied Rights. No rights or licenses are granted hereunder by
         implication, estoppel or otherwise. The only non-exclusive licenses
         granted or to be granted to Biosense pursuant to this Agreement are as
         expressly stated in this Section 2.1.

2.2      License Grant to Stereotaxis.

2.2.1    Daughter Products. For the purposes of giving effect to Section 2.4 and
         4.4 Biosense hereby grants to Stereotaxis a limited, non-exclusive,
         worldwide, non-transferable (except as set forth in Section 2.4 and
         Article 16), license under Biosense' Intellectual Property Rights in
         and to the Biosense' IP, to make, have made, use, import, sell, offer
         for sale, or otherwise dispose of (directly or through multiple tiers
         of distribution) Daughter Products.

2.2.2    CARTO System. Biosense hereby grants to Stereotaxis a limited,
         non-exclusive (subject to Sections 2.4), non-transferable (except as
         set forth in Article 16), worldwide license, under Biosense'
         Intellectual Property Rights in the Biosense IP, to make, have made,
         use, import, sell, offer for sale, or otherwise dispose of (directly or
         through multiple tiers of distribution) the Compatible NIOBE Systems
         for use with the Daughter Products.

2.2.3    Development License. Biosense hereby grants to Stereotaxis a limited,
         non-transferable (except as set forth in Article 16), worldwide license
         under Biosense' Intellectual Property Rights in the Biosense IP, to use
         the Biosense IP for the purpose of, initially at Stereotaxis,
         completing such development, integration and testing work in connection
         with development of the Compatible CARTO System, the Compatible NIOBE
         System and the Daughter Products as is required to give effect to the
         terms of this Agreement.

2.2.4    Localization System Placements. Subject to Section 2.4, Biosense hereby
         grants to Stereotaxis a limited, non-transferable (except as set forth
         in Article 16), worldwide license (the "Localization License"), under
         Biosense's Intellectual Property Rights in the Biosense IP (to the
         extent if any, required) to make, have made, use, import, sell, offer
         for sale or otherwise make available (directly or through multiple
         tiers of distribution) the Stereotaxis Localization System (and
         associated interventional disposable devices) pursuant to the
         provisions, including the royalty provisions, of Section 2.4. For the
         avoidance of doubt, the "associated interventional disposable devices"
         referred to in the above sentence, applies to Stereotaxis developed
         catheters and devices, and not to Biosense developed catheters and
         devices.

2.2.5    No Implied Rights. No other rights or licenses are granted hereunder by
         implication, estoppel or otherwise. The only non-exclusive licenses
         granted or to be granted to Stereotaxis pursuant to this Agreement are
         as expressly stated in this Section 2.2.


                                       9

<PAGE>




2.3      Exclusivity.

2.3.1    Stereotaxis. During the Term (subject to Sections 2.3.4, 2.4 and 4.4),
         Stereotaxis will not engage in research and development, clinical
         development, Marketing and Promotions or Distribution activities in the
         Biosense Field; and

2.3.2    Biosense. During the Term, Biosense will not engage in research and
         development, clinical development or Marketing and Promotions or
         Distribution activities in the Stereotaxis Field.

2.3.3    Clinical Development. Neither Party will be taken to be in breach of
         its obligations pursuant to Sections 2.3.1 and 2.3.2 above by reason of
         any pre-clinical or clinical development activities initiated and
         conducted by a Party or by third party physicians or hospitals with
         technical, systems, service or financial support from such Party,
         provided that the Party is obligated to provide such support pursuant
         to a sponsored research agreement between the Party and such physician
         or hospital and provided that such sponsored research agreement was:
         entered into in the ordinary course; will not delay performance under
         this Agreement; such support is not development engineering services
         provided for a third party; and such support and agreement are
         provided on terms both consistent with past practices of the Party and
         consistent with relevant industry standards.

2.3.4    Termination. This Agreement will terminate (except in respect of any
         antecedent breach) upon the occurrence of:

2.3.4.1  Technical Failure;

2.3.4.2  Commercial Failure; or

2.3.4.3  Seven (7) years from the Effective Date, contingent in respect of that
         during Years Six (6) and Seven (7), on Biosense being generally
         regarded in the field of electrophysiologic Localization as having one
         of the leading market shares, or otherwise as provided for in Section
         14 herein.

2.4      Stereotaxis Permitted Activities.

2.4.1    Own Development. Nothing in this Agreement will be taken to prevent
         Stereotaxis development, Marketing and Promotions, Distribution or
         other activities in respect of catheters or other interventional
         instruments designed for non-Localized electrophysiological procedures.

2.4.1.1  Stereotaxis may continue with its own development program and
         subsequent commercial activities with [***] (or, in the event of a
         technical failure or a commercial failure of the activities with [***],
         as determined by Stereotaxis, with one or more other manufacturers of a
         Localization mechanism, provided that Stereotaxis with use reasonable
         commercial efforts to work with only one such additional manufacturer)
         in respect of the


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



                                       10

<PAGE>






         Stereotaxis Localization System and associated proprietary disposable
         localized devices until such time as the Commercial Launch Date,
         provided that such development program:

2.4.1.2  does not involve collaboration with a Restricted Party, and

2.4.1.3  includes contract development from independent parties.

2.4.2    Localization System Placements.

2.4.2.1  Limit on Number of Placements. In connection with exercising its rights
         under Section 2.4.1 and subject to Section 2.4.2.2, Stereotaxis agrees
         that it may sell and/or license ("Stereotaxis Customer Localization
         License") to third parties (each a "Stereotaxis Customer") only up to,
         but not more than fifty (50) Stereotaxis Localization Systems.

2.4.2.2  The Localization License is granted by Biosense as a limited
         non-exclusive license to Stereotaxis under any necessary Biosense IP at
         a royalty rate according to the table below:

                                     [***]


2.4.2.3   In the case of units sold using a different subcontractor (i.e., other
          than [***]), then the above royalty rates shall be [***]. In addition,
          if:

2.4.2.3.1 Stereotaxis exercises its rights pursuant to the Localization License;
          or

2.4.2.3.2 Biosense loses distribution rights following Commercial Failure,
          Technical Failure or other termination of placements of Compatible
          NIOBE-CARTO Systems pursuant to this Agreement (including expiration
          of the Term),

2.4.2.3.3 then Biosense shall be entitled to [***] of Stereotaxis' Net Revenues
          in respect of it sales of disposable Localization catheters and
          devices comprising Daughter Products or such devices as are utilized
          subject to the Localization License. The Parties recognize that
          Biosense grants the licenses herein only to the extent if any,
          required to permit Stereotaxis to sell Stereotaxis Localization
          Systems and/or grant such Stereotaxis Customer Localization Licenses
          (and licenses in respect of proprietary localized disposable devices
          to be used with the Stereotaxis Localization System) as permitted
          pursuant to this Section 2.4.

2.4.2.4   Conversion of Stereotaxis Customers. Stereotaxis and Biosense will,
          prior to and following the Commercial Launch Date, use all
          commercially reasonable efforts, to convert Stereotaxis Customers to
          usage of the Compatible CARTO System.

[*** 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.]


                                       11

<PAGE>





2.4.2.5  Limits on Localization License. Pursuant to the Localization License,
         each Stereotaxis Customer Localization License (and licenses in respect
         of electrophysiological localized disposable devices to he used with
         the Stereotaxis Localization System) will be limited to a term ending
         24 months following the Commercial Launch Date. Where this limitation
         results in any Stereotaxis Customer having permitted usage of its
         Stereotaxis Localization System for a period of less than five (5)
         years ("Diminished Usage Period"), Biosense will make available to each
         such customer by way of discounts, rebates or otherwise ("Rebate") in
         respect of the Compatible CARTO System or other Biosense products
         (other than the Daughter Products) purchased by the customer, a
         reasonable discount to its list price on such products, such discount
         pro rated inversely to the number of years of ownership by the customer
         of the Stereotaxis Localization System.

2.4.3    Technical Failure. Commercial Failure or Delay.

2.4.3.1  Additional Stereotaxis Localization System Placements. In the event of
         Technical Failure or Commercial Failure or delay in the Commercial
         Launch Date for Compatible NIOBE-CARTO Systems (with relevant
         disposable products that customers can use therewith) beyond April 30,
         2004 ("Delay"), Stereotaxis will have the right to place additional
         Stereotaxis Localization Systems (and proprietary localized disposable
         devices to be used therewith) in the manner set out in this Section
         2.4.3.

2.4.3.2  Failure. In the event of Technical Failure or Commercial Failure or
         other termination as referred to in Section 14.2.3, Stereotaxis will
         have the right to grant up to 500 licenses to third parties under its
         Localization License having terms ending no later than three (3) years
         following the date of such Technical Failure or Commercial Failure in
         order to enable Stereotaxis to secure access to an alternative catheter
         based Localization system that is compatible with the Stereotaxis NIOBE
         System. The parties recognize herein that after the expiration of the
         three (3) year period following any Commercial Failure or Technical
         Failure, the Localization Licenses under the Biosense IP shall no
         longer exist.

2.4.3.3  Delay. In the case of Delay, Stereotaxis will have the right to grant
         up to 500 licenses pursuant to Section 2.4.3.2 until such time as the
         Commercial Launch Date.

2.4.3.4  Biosense Distribution. In the case of Technical Failure, Commercial
         Failure or Delay, Biosense will have the right to act as sole
         distributor of such additional Stereotaxis Localization Systems (and
         proprietary electrophysiological localized disposable devices to be
         used therewith), based on reasonable commercial terms to be mutually
         agreed upon by Biosense and Stereotaxis.

2.5      Preferred Partner and Third Party Integrations.

2.5.1    Outside Biosense Field. The Parties shall use reasonable commercial
         efforts to cooperate (but without obligation) to bring the integration
         of the Compatible NIOBE-CARTO System with additional imaging and
         information modalities relevant to electrophysiology (including,
         without limitation, digital x-ray fluoroscopy and intraoperative and
         pre-operative 3D data



                                       12

<PAGE>




         sets). Biosense will be Stereotaxis's preferred partner for the
         Localization of Stereotaxis' medical devices outside of the Biosense
         Field. Accordingly, Stereotaxis will grant Biosense a right of first
         notice for all product development activities that are undertaken by
         Stereotaxis relating to Localization of Stereotaxis' medical devices
         outside of the Biosense Field as set forth in Section 2.5.2.
         Additionally, the Parties will, within a reasonable period after the
         Effective Date, enter into good faith discussions to consider
         collaboration in the fields of neurology and interventional
         neuroradiology.

2.5.2    Notice.

2.5.2.1  During the Term, at least sixty (60) days prior to Stereotaxis entering
         into material and substantial negotiations regarding a potential
         agreement regarding the Localization of medical devices outside of the
         Biosense Field Stereotaxis agrees to notify Biosense in writing,
         together with a summary description of the proposed potential agreement
         that would be the subject of such negotiations ("Initial Notice"). Upon
         request by Biosense given within ten (10) days of the date of such
         Initial Notice, Stereotaxis and Biosense will discuss the terms and
         conditions under which Stereotaxis and Biosense would enter into an
         agreement like the proposed potential agreement with a third party. In
         the event that Stereotaxis and Biosense have not agreed upon such terms
         and conditions within thirty (30) days after the date Stereotaxis
         provided the Initial Notice to Biosense, Stereotaxis will be free to
         enter into such agreement with a third party without further
         obligations to Biosense, and on any terms that Stereotaxis considers
         appropriate. It is understood that, because Stereotaxis will be
         providing the Initial Notice to Biosense prior to the commencement of
         material and substantial negotiations with a third party, Stereotaxis
         may not be able to define the entire or exact scope of the rights and
         obligations of the potential agreement, and accordingly, so long as the
         Initial Notice describes in general terms a product, field or rights
         that overlap with the product, field or rights actually negotiated
         with, or granted to, a third party, Stereotaxis will be deemed to have
         satisfied its obligations, under this Section 2.5.2; also, it is
         understood that Stereotaxis need only provide one (1) such Initial
         Notice in any twelve (12) month period before engaging in such material
         and substantial negotiations with any third party or parties.

2.5.2.2  Stereotaxis also agrees to notify Biosense in the event that
         Stereotaxis reasonably considers it is engaged in substantive
         discussions in respect of the sale of the company or substantially all
         of its assets. For the avoidance of doubt, the provisions of Section
         2.5.2.1 will not apply in respect of any such notice.

2.5.2.3  No Implied Obligation. The only obligations of Biosense and Stereotaxis
         under this Section 2.5.2 are as expressly stated herein, and there are
         no further implied obligations relating to the matters contemplated
         therein. Without limiting the foregoing, it is further acknowledged and
         agreed that this Section 2.5.2:

2.5.2.3.1 will not be deemed to apply to a change of Control of Stereotaxis; and

2.5.2.3.2 Stereotaxis is not obligated under this Section 2.5.2 to provide to
          Biosense any particular information other than as expressly stated in
          this Section 2.5.2.



                                       13

<PAGE>


2.5.2.3.3 If Biosense disputes Stereotaxis' right to proceed with a transaction
          with a third party, Biosense will request that such dispute be
          resolved in accordance with Section 15.

2.6       Single Purchase Offers. The parties agree to discuss in good faith
          whether to implement distribution arrangements whereby customers are
          provided with a single offer to purchase a Compatible NIOBE-CARTO
          system.

2.7       Latest Localization Platform. The Parties acknowledge that the latest
          generation Biosense's Localization technology platform used as of the
          Effective Date is the CARTO XP system. In the event that Biosense at
          any time during the Term launches a new Localization technology
          platform Biosense will use reasonable efforts to develop and commence
          distribution of a NIOBE compatible upgrade to the new Localization
          technology platform. In such case the parties will enter into good
          faith negotiations to determine the technically feasible and
          commercially reasonable development cycle for such upgrade and to
          determine the contributions of the Parties to its development funding,
          provided that in the event the new Localization technology platform
          includes technologies that are reasonably determined by Biosense as
          not being reasonably capable of being made compatible with the NIOBE
          System, Biosense will notify Stereotaxis in writing of the same (and
          of the reasons therefor) at the earliest practicable opportunity in
          the development cycle of the new Localization technology platform and
          the Parties will enter into good faith negotiations to consider
          amending this Agreement in a manner that adequately and reasonably
          addresses any substantially negative consequences for Stereotaxis as a
          result of the such incompatibility. This Section 2.7 will apply to any
          new Localization technology platform in the same manner as it is
          applicable to the Compatible CARTO System.

3         DEVELOPMENT AND OVERSIGHT

3.1       Joint Steering Committee.

3.1.1     Establishment. The Parties will establish a Joint Steering Committee.
          Each Party may appoint up to three (3) representatives to the Joint
          Steering Committee. The initial representatives of each Party are as
          set forth in Exhibit E. Subject to the foregoing, replacement
          representatives maybe appointed by either Party on written notice to
          the other Party. All decisions of the Joint Steering Committee shall
          be taken by a majority vote of all of the representatives on the Joint
          Steering Committee and in the event of deadlock after ninety (90)
          days, either Party may refer that decision in question to settlement
          by the presidents of the Parties. In the event the presidents are
          unable to agree within a period of ninety (90) days after being
          presented with the question, a Party may elect to take the matter to
          arbitration on the terms set out in Section 15 or otherwise as
          mutually agreed in writing by the parties. The Joint Steering
          Committee shall not meet or take any actions unless at least one
          representative of each Party is in attendance.

3.1.2     Responsibilities. Each Party's representative to the Joint Steering
          Committee will act reasonably and in good faith. The Joint Steering
          Committee will oversee the Parties' performance in accordance with
          Agreement including, without limitation:


                                       14

<PAGE>





3.1.2.1  coordinating the Parties' activities and responsibilities under the
         Agreement;

3.1.2.2  encouraging and facilitating ongoing cooperation between the Parties;

3.1.2.3  subject to the guidelines set forth in Section 9.1.2, determining the
         regulatory strategy and timetable in respect of the Daughter Products
         and allocating responsibilities for effecting the same between the
         Parties;

3.1.2.4  determining the development strategy and timetable in respect of the
         Daughter Products and the Daughter Product Specifications, and
         allocating responsibilities for effecting the same between the Parties;

3.1.2.5  subject to the provisions of Exhibit A and Section 9.1.2, determining
         the regulatory strategy and timetable in respect of the Compatible
         CARTO System and, where applicable, the Compatible NIOBE System, and
         allocating responsibilities for effecting the same between the Parties;

3.1.2.6  subject to the guidelines set forth in Exhibit A, determining the
         development strategy and timetable in respect of the Compatible CARTO
         System and consulting with Stereotaxis as to the development strategy
         and timetable for the Compatible NIOBE System, and allocating
         responsibilities for affecting the same between the Parties;

3.1.2.7  discussing with Biosense once per quarter Biosense's then current sales
         forecasts (whether finalized or preliminary) for the Daughter Products
         and in respect of the placement of Compatible NIOBE--CARTO Systems for
         each quarter in the next 12 months, and where available, the next 24
         months. Biosense agrees to reasonably cooperate in this regard, but
         will be under no obligation to take account of input from the Joint
         Steering Committee in relation to any such forecasts; and

3.1.2.8  Where appropriate requesting Biosense to provide relevant information
         to the Joint Steering Committee in respect of the issue of whether a
         Technical Failure has occurred.

3.1.3    Meetings. The Joint Steering Committee will hold its first meeting
         within thirty (30) days of the Effective Date. Thereafter, the Joint
         Steering Committee will determine its meeting schedule, provided that
         it will meet at least monthly by teleconference and semi-annually with
         personal attendance of representatives (where reasonably practicable).

3.2      Development of the Compatible CARTO System and Compatible NIOBE System.

3.2.2.   Development.

3.2.2.1  Biosense will use reasonable commercial efforts to develop the
         Compatible CARTO System in accordance with the Compatible CARTO
         Specifications and the Milestones and four development stages
         ("Development Stage") described in Exhibit A and otherwise in the
         manner determined by the Joint Steering Committee pursuant to Section
         3.1.2.6 and in this



                                       15

<PAGE>



         regard Biosense will be responsible for providing all development
         engineers and other personnel, facilities, Biosense IP and Biosense
         Intellectual Property Rights and relevant regulatory resources required
         for the development of the Compatible CARTO System. Stereotaxis will be
         responsible for coordinating with and providing such information to
         Biosense in respect of the such development as may be reasonably
         required and further will make payments contributing to the costs of
         the development of the Compatible CARTO System in accordance with the
         terms of this Section 3.2 and with the terms and payment schedule set
         forth in Exhibit A. Stereotaxis's contribution to funding of
         development of the Compatible CARTO System will not exceed a maximum of
         [***]. All payments will be made in US Dollars ($). Subject to Section
         3.1.2.6, Stereotaxis will be responsible for developing the Compatible
         NIOBE System.

3.2.2.2  Parties also agree to use reasonable commercial efforts to cooperate
         (but without obligation) to consider the development of a hybrid
         Compatible NIOBE System utilizing Biosense mapping and software and
         Stereotaxis Localization System hardware for the purpose of providing
         expedited entry to human clinical procedures by key common physician
         customers. In the event of Technical Failure that leads to the
         termination of the Development Program prior to the Critical Design
         Review milestone outlined in Exhibit A, Biosense will bear no risk of
         loss, but in any case, any unused portion of the finds provided to
         Biosense will be refunded to Stereotaxis.

3.2.2.3  In the event of Technical Failure that leads to the termination of the
         Development Program after the Critical Design Review milestone outlined
         in Exhibit A, Biosense will promptly refund to Stereotaxis and unused
         portion of its contribution to development funding of the Compatible
         CARTO System (which will be calculated by crediting to Stereotaxis
         amounts in the same manner as set out in Section 3.2.3 below) and also
         promptly refund to Stereotaxis one half of Stereotaxis' aggregate
         contribution for the period beyond the Critical Design Review milestone
         outlined in Exhibit A, to development funding of the Compatible CARTO
         System not otherwise repaid to Stereotaxis pursuant to Section 323
         below.

3.2.3    Invoicing of Expenditures. Within ten (10) days of completion of each
         Development Stage, Biosense will provide Stereotaxis a written invoice
         stating the approximate the sum and breakdown of the following
         development expenditures ("Expenditures") incurred by Biosense in such
         stage:

3.2.3.1  [***]

3.2.3.2  [***]

3.2.3.3  [***]

[*** 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.]

                                       16

<PAGE>





3.2.3.4  [***]

3.2.3.5  [***]

3.2.4    Diligence. Each Party will complete its responsibilities hereunder in
         respect of the Milestones set forth in Exhibit A and bring about
         completion of such Milestones on a timely basis. Each Party will
         promptly inform the other Party if it reasonably believes that there
         will be a delay in meeting any Milestone, and keep the other Party
         apprised of its progress in completing its responsibilities in respect
         of such Milestone.

3.3      Development of the Daughter Products and Consulting. Biosense agrees to
         coordinate with and provide information to Stereotaxis to an extent
         reasonably required to allow Stereotaxis to develop the Daughter
         Products in accordance with the Daughter Products Specifications, the
         Milestones described in Exhibit A and otherwise as determined by the
         Joint Steering Committee pursuant to Section 3.1.4 and will use
         diligent efforts in this regard to complete its responsibilities and
         bring about completion of such Milestones on a timely basis. Each Party
         will promptly inform the other Party if it reasonably believes that
         there will be a delay in meeting any Milestone, and keep the other
         Party apprised of its progress in completing its responsibilities in
         respect of such Milestone. At Stereotaxis' election, Biosense will
         provide Stereotaxis with consulting on development and manufacturing of
         non-localized disposable devices on a reasonable consulting fee basis
         (to be mutually agreed upon).

3.4      Additional Daughter Products. Biosense agrees to coordinate with and
         provide information to Stereotaxis to an extent reasonably required to
         allow Stereotaxis to develop such additional Daughter Products
         ("Additional Daughter Products", which will be deemed to include any
         Localized devices developed or to be developed by Stereotaxis and
         having no corresponding Parent Products (but only products developed
         based on Stereotaxis IP and not including any products developed in
         concert with or based on the intellectual property of third parties))
         as are reasonably nominated in writing by either Party, and to complete
         such development and relevant regulatory filings for clinical or
         commercial use (as the case may be) within a maximum period of one (1)
         year from the date of such nomination. Biosense will have the right to
         decline to distribute any such Additional Daughter Product, provided
         that in such event, Stereotaxis will have the right to distribute such
         product directly, through contract sales or

[*** 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.]


                                       17

<PAGE>

         through other third party distribution but not through a Restricted
         Party. Development, manufacture by Biosense and purchase by Stereotaxis
         from Biosense of any such Additional Daughter Products will be
         accomplished in accordance with the provisions of this Agreement.

3.5      Major Delays. In the event Biosense fails to meet a Milestone on
         Exhibit A within six (6) calendar months after the Target Completion
         Date for such Milestone, or in aggregate the period of delay in meeting
         Target Completion Dates exceeds nine (9) months, Stereotaxis will have
         the right to terminate this Agreement immediately upon written notice.

3.6      Failure to Obtain Approval. In the event that the Parties fail to
         obtain applicable 510K, PMA and CE Mark regulatory approvals or
         clearances required by U.S. FDA or the relevant Notified Body in
         Europe, in respect of the Compatible NIOBE-CARTO System or components
         thereof prior to April 30, 2005, or in respect of the Initial Daughter
         Products, on April 30 2005, have not obtained or do not have prospects
         for obtaining such approvals or clearances in the near term (and
         thereafter do not obtain such approvals or clearances in the near
         term), then either Party may terminate this Agreement immediately upon
         written notice.

4        MARKETING, DISTRIBUTION AND MANUFACTURE

4.1      Biosense as Manufacturer. Daughter Products used for clinical trials
         and research in respect of the Daughter Products will be manufactured
         and supplied by Stereotaxis unless otherwise determined by the Joint
         Steering Committee. The Parties agree that Biosense will serve as
         manufacturer of the Daughter Products for commercial sale. To the
         extent required, the Parties agree to fully cooperate in the transfer
         of manufacturing know-how in respect of Daughter Products from
         Stereotaxis to Biosense in advance of commercialization thereof.

4.2      Marketing and Promotions, Distribution Obligations.

4.2.1    Daughter Products.

4.2.1.1  Biosense will Distribute and conduct Marketing and Promotions in
         respect of the Daughter Products and will use all reasonable commercial
         efforts in this regard to maximize the dollar sales volume of the
         Daughter Products. Biosense will be solely responsible for all costs
         and expenses related to the Marketing and Promotions and Distribution
         of Daughter Products and for performing its obligations and exercising
         its rights hereunder. Biosense agrees to provide at least the same
         economic incentives to its sales force to distribute Daughter Products
         as apply to comparable Biosense products.

4.2.1.2  Stereotaxis will have the right (at its own expense unless otherwise
         determined by the Joint Steering Committee), to conduct supplementary
         Marketing and Promotions in respect of the, Daughter Products. In
         exercising this right, Stereotaxis will consult in advance, to the
         extent permissible under relevant law, and thereafter on a regular
         basis, with the Joint Steering Committee to ensure that such
         Stereotaxis' Marketing and Promotions activities are sufficiently
         coordinated with Biosense' Marketing and Promotions activities in
         respect of the Daughter Products to avoid creating customer confusion
         or other negative effects.


                                       18

<PAGE>


         Stereotaxis will be solely responsible for all costs and expenses
         related to performing its obligations and exercising its rights
         hereunder.

4.2.2    Compatible Stereotaxis NIOBE-CARTO Systems.

4.2.2.1  Biosense will be solely responsible for all costs and expenses related
         to the Marketing and Promotions and Distribution the Compatible CARTO
         System.

4.2.2.2  Stereotaxis will be solely responsible for all costs and expenses
         related to the Marketing and Promotions and Distribution of the
         Compatible NIOBE System.

4.2.2.3  The Parties further agree to cooperate in a commercially reasonable
         manner in respect of optimizing the number Compatible Stereotaxis
         NIOBE-CARTO Systems installed at hospital sites.

4.2.3    Biosense will provide commercially reasonable written proposals for
         sales of Compatible CARTO Systems to customers nominated by Stereotaxis
         within 45 days of such request. Such written proposals will be preceded
         or followed by at least the reasonable and customary level of Biosense
         sales force interaction with the prospective customer site as is
         typically required to secure sale of a CARTO System.

4.2.4    Biosense Distribution of Products. The parties recognize that in the
         event that Biosense is permitted to distribute any products under this
         Agreement, Biosense will be the Party solely responsible for setting
         price on products it distributes.

4.2.5    Stereotaxis Distribution of Products. In the event Stereotaxis has the
         right to distribute products under this Agreement (for instance, as
         specifically provided for, or by agreement of the Parties) Stereotaxis
         herein agrees that it shall not distribute any such products through a
         Restricted Party, except in the event where Stereotaxis is acquired by
         such Restricted Party. The parties recognize that in the event that
         Stereotaxis permitted to distribute any products under this Agreement,
         Stereotaxis will be the Party solely responsible for setting price on
         products it distributes.

4.2.6    Placement of Compatible CARTO Systems. In the event that the Compatible
         CARTO Installation Ratio is [***], Biosense agrees that it will sell
         Compatible CARTO Systems to Stereotaxis at [***] per system for resale
         to prior users of any CARTO system, and at [***] per system for resale
         to new users of the CARTO System, until such time as a [***] is
         reached.

4.3      Forecast. Ninety (90) days prior to the beginning of each calendar
         quarter, Biosense will provide Stereotaxis with a non-binding twelve
         (12) month rolling forecast (for the period commencing at the beginning
         of such calendar quarter) of Biosense's anticipated unit and dollar
         volume sales of Daughter Products in respect of each month and quarter
         during the such twelve month period. Additionally, in the event that
         Stereotaxis Distributes Daughter Products in accordance with the terms
         of this Agreement, Stereotaxis will provide a non-binding twelve


[*** 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.]

                                       19

<PAGE>


         (12) month rolling forecast to Biosense in the same manner. Biosense
         will consult with the Joint Steering Committee in respect of
         preparation of such forecasts.

4.4      Identification of Stereotaxis and Biosense.

4.4.1    The packaging and package insert for the Daughter Products will
         incorporate Stereotaxis's name and logo (which will be in a form as
         provided by Stereotaxis to Biosense from time to time). The size,
         prominence, location and other aspects of the incorporation of the
         Stereotaxis name and logo into such packaging and package insert will
         be at least of the size and prominence as is reasonable and customary
         for arrangements of this type and in any event will be co-located with
         the relevant Biosense' name and logo and not less than seventy-five
         percent (75%) of the size of such Biosense' name and logo.

4.4.2    Each Party agrees to incorporate the name and logo of the other Party,
         where reasonably practicable, into the visual and written output of its
         Compatible NIOBE System and Compatible CARTO System (at the case may
         be) in respect of electrophysiological procedures for which such
         systems are utilized together as an Compatible NIOBE System CARTO
         System. The size, prominence, location and other aspects of the
         incorporation of such other Party's name and logo into such output will
         be at least of the size and prominence as is reasonable and customary
         for arrangements of this type and in any event will be co-located with
         the relevant first Party's name and logo and not less than seventy-five
         percent (75%) of the size of such first Party's name and logo.

4.4.3    Each Party will submit all materials of any kind containing the other
         Party's Trademarks to the other Party before release to the public for
         inspection, and such other Party will have the right to approve such
         material prior to its distribution, and in absence of prompt approval
         will be deemed to have provided approval. Each Party agrees that their
         respective products and/or services that are associated with the other
         Party's Trademarks shall meet the same general level of quality as is
         provided by the other Party in connection with its own Trademarks.
         Except as set forth in this Section, nothing in this Agreement shall
         grant or shall be deemed to grant to one Party any right, title or
         interest in or to the other Party's Trademarks. All use by each Party
         of the other Party's Trademarks (including any goodwill associated
         therewith) shall inure to the benefit of the Party that owns such
         Trademarks.

4.5      Product Labeling. Biosense will be responsible for developing all
         product packaging and labeling, including without limitation,
         Instructions for Use which will comply with all applicable laws for all
         Daughter Products. Biosense will include Stereotaxis patent and patent
         pending labeling on the Daughter Products or Compatible CARTO System as
         applicable. Stereotaxis will include Biosense patent and patent pending
         labeling on the Compatible NIOBE System as applicable.


                                       20

<PAGE>

5        STEREOTAXIS COMPONENT SUPPLY

5.1      Manufacture of Components. Stereotaxis, at the direction of the Joint
         Steering Committee, will manufacture and supply to Biosense such
         Components as are specified by the committee provided that Biosense
         will have the option to source directly from relevant vendors.

5.2      Forecasts. Ninety (90) days prior to the beginning of each calendar
         quarter, Biosense will provide Stereotaxis with a non-binding twelve
         (12) month rolling forecast of Biosense's anticipated requirements for
         delivery of Components in each respective quarter ("Component 
         Forecast").

5.3      Pricing. Biosense will pay Stereotaxis a transfer price for each
         Stereotaxis Component equal to the Stereotaxis's Cost of Goods for such
         Components (including packaging) plus [***] in respect of delivery
         costs ("Component Transfer Price").

5.4      Vendor Requirements. Stereotaxis will conform to Biosense's vendor
         requirements set forth in Exhibit C.

5.5      Purchase Orders. Stereotaxis will accept all Biosense Purchase Orders
         that comply in all material respects with the terms of this Agreement.
         Stereotaxis will deliver a written acknowledgment of such a Purchase
         Order within ten (10) Business Days of receipt of the Purchase Order.
         No Biosense Purchase Order may modify or changes the terms set forth
         herein and any such terms changing or purporting to change the terms
         hereof are hereby rejected.

5.6      Terms. All prices set forth in this Section 5 will be F.O.B. Irwindale,
         California ("Biosense Delivery Point"). All Components delivered under
         this Agreement will be suitably packed for shipment, marked for
         shipment to the address specified in Biosense's written purchase order
         ("Purchase Order"), and delivered at the Delivery Point to a carrier or
         forwarding agent chosen by Biosense, at which time risk of loss and
         title pass to Biosense. Should Biosense fail to designate a carrier,
         forwarding agent or type of conveyance, Stereotaxis will make such
         designation in conformance with its standard shipping practices. All
         freight, insurance and other shipping expenses, as well as any special
         packing expenses, incurred prior to delivery at the Biosense Delivery
         Point will be incurred by Stereotaxis, and after delivery to the
         Biosense Delivery Point will be borne by Biosense. Stereotaxis will use
         reasonable efforts to ship all Components within the same calendar
         month as the Biosense Delivery Date as defined in Section 5.5.1.

5.7      Taxes. Biosense will be responsible for the payment of any excise,
         sales, use, value added, withholding or other taxes, tariffs or duties
         that may be applicable on the transfer of Components to Biosense at the
         Delivery Point, all of which will be Biosense's responsibility, and the
         amounts owing to Stereotaxis hereunder will be paid without deduction
         for, or with respect to, any of the foregoing.


[*** 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.]

                                       21

<PAGE>


5.8      Conflicting Terms. In ordering and delivering the Components, Biosense
         and Stereotaxis may use their standard forms, but nothing in such forms
         will be construed to amend or modify the terms of this Agreement and in
         case of conflict herewith, the terms of this Agreement will control. No
         Biosense Purchase Order may modify or changes the terms set forth
         herein and any such terms changing or purporting to change the terms
         hereof are hereby rejected.

5.9      Annual Stereotaxis Reports and Audits.

5.9.1    Reports. Within forty-five (45) days after the close of each
         Stereotaxis fiscal year, Stereotaxis will provide a report to Biosense
         which sets forth the Cost of Goods for Components, including a
         breakdown of the components and assumptions used to calculate such Cost
         of Goods and a schedule of the number of Components sold to Biosense
         during the applicable period.

5.9.2    Audits. Stereotaxis will keep accurate records in sufficient detail to
         enable the Cost of Goods for the Components to be determined. Upon the
         request of Biosense, Stereotaxis will permit an independent certified
         public accountant selected by Biosense to have access, once in each
         Biosense fiscal year during regular business hours and upon reasonable
         notice to Stereotaxis, to such of the records of Stereotaxis as may be
         necessary to verify the accuracy of the reports made during the
         previous Biosense fiscal year. The fees and expense of such accountant
         will be paid by Biosense; provided that if the audit reveals that the
         Cost of Goods reported by Stereotaxis are more than one-hundred and
         five percent (105%) of the actual Cost of Goods, such fees and expenses
         will be paid by Stereotaxis. The records from which the reports are
         prepared will be retained by Stereotaxis in keeping with Stereotaxis's
         document retention policy, but in no event less than three (3) years
         after preparation thereof. In the event an adjustment is made to the
         Cost of Goods that results in an adjustment to the applicable Component
         Transfer Price, Biosense will promptly pay Stereotaxis any
         underpayments resulting from such adjustment.

6.       STEREOTAXIS MARKETING AND DISTRIBUTION

6.1      Right to Distribute. If Stereotaxis exercises its right to distribute
         the Daughter Products pursuant to this Agreement, Biosense will fulfill
         Stereotaxis' order for the Daughter Products in a timely manner as set
         forth in this Section 6, subject to a minimum order of at least 60
         catheters per type per month for each year, to be transferred to
         Stereotaxis at Biosense's cost plus [***].

6.2      Forecast. Ninety (90) days prior to the beginning of each calendar
         quarter, Stereotaxis will provide Biosense with a non-binding twelve
         (12) month rolling forecast of Stereotaxis' anticipated requirements
         for delivery of Daughter Products in each respective quarter ("Daughter
         Product Forecast").

6.3      Pricing. Stereotaxis will pay Biosense a transfer price for each
         Daughter Product equal to [***] of the Cost of Goods (provided that in
         calculating the transfer price for the Daughter Product as a whole, the
         cost for Components will be deemed equal to their actual


[*** 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.]

                                       22

<PAGE>



         transfer price to Biosense from Stereotaxis) for a unit of such
         Daughter Product ("Daughter Product Transfer Price").

6.4      Purchase Orders.

6.4.1    Each delivery of the Daughter Products will be initiated by a written
         or electronic Stereotaxis Purchase Order in accordance with Section
         6.4.2 below. All Purchase Orders will state unit quantities, unit
         descriptions, Purchase Order coverage dates, and shipping instructions;
         and all Purchase Orders will also state the requested delivery date for
         the Daughter Products ("Delivery Date").

6.4.2    Stereotaxis will accept all Stereotaxis Purchase Orders that comply in
         all material respects with the terms of this Agreement. Stereotaxis
         will deliver a written acknowledgment of such a Purchase Order within
         ten (10) Business Days of receipt of the Purchase Order.

6.5      Terms. All prices set forth in this Section 6 will be F.O.B. Irwindale
         CA ("Biosense Delivery Point"). All Daughter Products delivered under
         this Agreement will be suitably packed for shipment, marked for
         shipment to the address specified in Stereotaxis' written purchase
         order ("Purchase Order"), and delivered at the Biosense Delivery Point
         to a carrier or forwarding agent chosen by Stereotaxis, at which time
         risk of loss and title pass to Stereotaxis. Should Stereotaxis fail to
         designate a carrier, forwarding agent or type of conveyance, Biosense
         will make such designation in conformance with its standard shipping
         practices. All freight, insurance and other shipping expenses, as well
         as any special packing expenses, incurred prior to delivery at the
         Biosense Delivery Point will be incurred by Biosense, and after
         delivery to the Biosense Delivery Point will be borne by Stereotaxis.
         Biosense will use reasonable efforts to ship all Daughter Products
         within the same calendar month as the Delivery Date as defined in
         Section 6.4.1.

6.6      Taxes. Stereotaxis will be responsible for the payment of any excise,
         sales, use, value added, withholding or other taxes, tariffs or duties
         that may be applicable on the transfer of Daughter Products to
         Stereotaxis at the Delivery Point, all of which will be Stereotaxis'
         responsibility, and the amounts owing to Stereotaxis hereunder will be
         paid without deduction for, or with respect to, any of the foregoing.

6.7      Conflicting Terms. In ordering and delivering the Daughter Products,
         Biosense and Stereotaxis may use their standard forms, but nothing in
         such forms will be construed to amend or modify the terms of this
         Agreement and in case of conflict herewith, the terms of this Agreement
         will control. No Stereotaxis Purchase Order may modify or changes the
         terms set forth herein and any such terms changing or purporting to
         change the terms hereof are hereby rejected.

6.8      Annual Stereotaxis Reports.

6.8.1    Reports. Within sixty (60) days after the close of each Biosense fiscal
         year, Biosense will provide a report to Stereotaxis which sets forth
         the average Cost of Goods for a unit of each of the Daughter Products,
         including a breakdown of the components and assumptions used to


                                       23

<PAGE>


         calculate such average Cost of Goods and a schedule of the number of
         Daughter Products sold to Stereotaxis during the applicable period.

6.8.2    Audits. Biosense will keep accurate records in sufficient detail to
         enable the average Cost of Goods for the Daughter Products to be
         determined. Upon the request of Stereotaxis, Biosense will permit an
         independent certified public accountant selected by Stereotaxis to have
         access, once in each Biosense fiscal year during regular business hours
         and upon reasonable notice to Biosense, to such of the records of
         Biosense as may be necessary to verify the accuracy of the reports made
         during the previous Stereotaxis fiscal year. The fees and expense of
         such accountant will be paid by Stereotaxis; provided that if the audit
         reveals that the Cost of Goods reported by Stereotaxis are more than
         one-hundred and five percent (105%) of the actual Cost of Goods, such
         fees and expenses will be paid by Biosense. This audit right may not be
         exercised more than once in any one Stereotaxis fiscal year. Biosense
         will retain the records from which the reports are prepared for a
         length of time in keeping with its document retention policy, but in no
         event less than three (3) years after preparation thereof. In the event
         an adjustment is made to the average Cost of Goods for the Daughter
         Products that results in an adjustment to the applicable Daughter
         Product Transfer Price, Biosense will promptly pay Stereotaxis any
         underpayments resulting from such adjustment.

7        REVENUE SHARE

7.1      Daughter Product Sales. In respect of each quarter in each calendar
         year of the Term, Biosense will pay Stereotaxis a revenue share upon
         the sales of Daughter Products according to the following ("Revenue
         Share"):

7.1.1    [***]

7.1.2    [***]

7.2      Compatible NIOBE System.

7.2.1    [***]


[*** 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.]

                                       24

<PAGE>


7.2.2    [***]

7.2.3    [***]

7.2.4    [***]

7.2.5    [***]

7.2.6    [***]

7.3      Discounting. Biosense agrees that for computations made under
         Paragraphs 7.1 and 7.2 hereunder, the average discount applied to the
         list price for the sale of all Daughter Products in any given year will
         not exceed the average discount to the list price for corresponding
         Parent Products during the same period.

7.4      Exchange Rates. If any currency conversion is required to calculate the
         sales applied against the Net Revenue for Daughter Products, such
         conversion will be made by using the exchange rates used by Biosense in
         calculating Biosense's own revenues for financial reporting purposes in
         the United States in accordance with U.S. GAAP. If any currency
         conversion is required to calculate the Cost of Goods for Daughter
         Products, such conversion will be made by using the exchange rates used
         by Stereotaxis in calculating Stereotaxis's own costs for financial
         reporting purposes in the U.S. accordance with U.S. GAAP.

7.5      Payment. Biosense will pay Stereotaxis the applicable Revenue Share on
         a quarterly basis within thirty (30) days of the end of each quarter.
         With each such payment Biosense will include a report that sets forth
         in sufficient detail. the manner in which Biosense calculated the
         Revenue Share for the applicable quarter. All payments will be made in
         US Dollars($).

7.6      Annual Biosense Reports and Audits.

7.6.1    Reports. Within sixty (60) days after the end of each calendar year,
         Biosense will provide a report to Stereotaxis which sets forth: the
         Gross Profits and Cost of Goods, for Daughter Products sold (including
         the calculation thereof), and any difference in the Revenue Share 


[*** 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.]

                                       25

<PAGE>


         payments actually made to Stereotaxis pursuant to Section 7.5 and the
         amounts due per the calculation. The Parties will review such report
         and agree upon the differences in amounts due. In the event the amounts
         of Net Revenue paid by Biosense to Stereotaxis during such fiscal year
         are less than the amounts due, Biosense will pay such difference to
         Stereotaxis within forty-five (45) days of submitting such report to
         Stereotaxis. In the event the amounts paid by Biosense in Revenue Share
         during such fiscal year are greater than the amounts due, Biosense can
         apply such amount to future Revenue Share amounts or, at Stereotaxis
         election, Stereotaxis will pay such difference to Biosense within sixty
         (60) days of receiving such report from Biosense.

7.6.2    Audits. Biosense will keep accurate records in sufficient detail to
         enable the aforesaid payment due under this Agreement to be determined.
         Upon the request of Stereotaxis, Biosense will permit a "big five"
         independent certified public accountant selected by Stereotaxis to have
         access, once in each Biosense fiscal year during regular business hours
         and upon reasonable notice to Biosense, to such of the records of
         Biosense and its Affiliates as may be necessary to verity the accuracy
         of the reports made during the previous Biosense fiscal year as
         provided for under Section 6.8.2.

8        MANUFACTURING QUALITY AND ACCEPTANCE

8.1      Conformance with Specifications. Biosense will manufacture or have
         manufactured Daughter Products, and Stereotaxis will manufacture or
         have manufactured the Components in a competent and workmanlike manner.

8.1.1    All Daughter Products delivered by Biosense to Stereotaxis, if any, and
         Components delivered by Stereotaxis, if any, hereunder will conform in
         all respects to the Daughter Product Specifications or Component
         Specifications, as the case may be, and to all applicable manufacturing
         specifications and all manufacturing processes.

8.1.2    All Daughter Products and Components will comply with all relevant
         provisions of the FDC Act, including without limitation, wherever
         applicable, the FDA QSR and other regulatory agency requirements.

8.1.3    All Daughter Products and Components will be CE-marked and ISO 9001
         certified and not adulterated or misbranded under FDA guidelines.

8.2      Manufacturing Specifications. In the event that Stereotaxis exercises
         its rights to market and distribute the Daughter Products under Section
         4.5, prior to the first delivery to Stereotaxis of Daughter Products,
         Biosense will provide to Stereotaxis a detailed manufacturing
         specification (the "DP Manufacturing Specifications") for the Daughter
         Products. Such DP Manufacturing Specifications will be consistent with
         the Daughter Product Specifications agreed upon by the Parties, and
         will be sufficient in all events to ensure that Daughter Products meet
         all criteria and specifications set forth in the applicable Daughter
         Product Specifications (including without limitation, performance
         specifications). At Biosense's direction, such DP Manufacturing
         Specifications will contain a level of detail necessary to make such
         products. Stereotaxis will 


                                       26

<PAGE>


         provide similar Manufacturing Specifications to Biosense for the
         Components prior to Stereotaxis' first shipment of commercial
         quantities of the Components to Biosense ("Component Manufacturing
         Specifications"). From and after the delivery of such Manufacturing
         Specifications, the Daughter Products and Components will mean for all
         purposes of this Agreement those certain Daughter Products and
         Components reflected by and defined in the Manufacturing
         Specifications. Biosense, in the case of the DP Manufacturing
         Specifications, and Stereotaxis, in the case of the Component
         Manufacturing Specifications, will have the right to modify and will
         modify such Manufacturing Specifications from time to time to reflect
         modifications made by Biosense to the Daughter Products and by
         Stereotaxis to the Components, and in all cases, one party shall
         communicate such changes to the other party. Such modifications will in
         all cases be consistent with all applicable Daughter Product
         Specifications and Component Specifications. Any modifications not
         consistent with such specifications will require the unanimous approval
         of the Joint Steering Committee.

8.3      Packaging of Lots and Lot Sizes. The Daughter Products, in the case of
         Biosense, and Components, in the case of Stereotaxis, will be packaged
         and shipped in lots in accordance with the Daughter Product
         Specifications and the Component Specifications. Biosense will be
         solely responsible for all packaging of Daughter Products and
         Stereotaxis will be solely responsible for packaging of Components.

8.4      Quality Guidelines.

8.4.1    All Components supplied to Biosense by Stereotaxis will meet the
         requirements of the Component Specifications and the Component
         Manufacturing Specifications and the requirements of any applicable
         health regulatory agency.

8.4.2    All Daughter Products supplied by Biosense will be manufactured in
         accordance with the FDC Act, including, without limitation, the FDA QSR
         requirements at Biosense's plant located at Irwindale CA or other
         plants established by Biosense from time to time, including plants of
         Biosense's suppliers, if applicable (the "Facility"). It is understood
         that for all purposes of this Agreement "health regulatory agency" will
         include, without limitation, the European Commission.

8.5      Quality Control. Prior to each shipment of Daughter Products or
         Components, Stereotaxis or Biosense, as the case may be, will perform
         quality control procedures set forth in Section 8.4, to verify that
         such Daughter Products or Components, as the case may be, meet such
         Quality Guidelines and will provide the other Party with a certificate
         of compliance with each lot delivered to it.

8.6      Rejection. Biosense and Stereotaxis will have thirty (30) days
         following its receipt of a shipment of Daughter Products or Components,
         as the case may be, to reject Daughter Products or Components which
         fail to conform to the Quality Guidelines set forth in Section 8.4,
         which rejection will be accomplished in accordance with the provisions
         of Section 8.8 below. Each Party will have the right to reject shipment
         in lots based on prior agreed standards of statistically significant
         rejection rates of samples of such lot in accordance with the
         procedures


                                       27

<PAGE>
            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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<PAGE>

            as the case may be, are determined by the Supplier to conform to the
            applicable Quality Standards set forth in Section 8.4 the Rejecting
            Party will reimburse the Supplier's shipping costs associated with
            the return of such conforming or out-of-warranty Daughter Products
            or Components, as the case may be, and, at the request of the
            Rejecting Party, the Supplier will return such Daughter Products or
            Components, as the case may be, to the Rejecting Party at the
            Rejecting Party's expense. Biosense's and Stereotaxis's sole
            liability and the other Party's exclusive remedy in connection with
            rejected Daughter Products or Components under this Section 8 will
            be replacement of the rejected Daughter Products or Components.

8.9         Presence At Facility. Upon reasonable notice given by one party to
            the other and at reasonable frequency (not more than once per
            calendar year unless the party can demonstrate a reason for more
            frequent audits), such party will have the right to assign no more
            than two employees or consultants of such party to inspect and audit
            the Facility at which a product is manufactured during normal
            business hours; provided, however that:

8.9.1       such employees or consultants will not unreasonably interfere with
            other activities being carried out at the Facility;

8.9.2       such employees or consultants will observe all rules and
            regulations applicable to visitors and to individuals employed at
            the Facility; and

8.9.3       such employees or consultants will be bound by Section 16 hereof.

8.10        Exchange of Information. In the event that Stereotaxis markets and
            distributes the Daughter Products, Biosense agrees to provide
            technical information regarding Daughter Products as needed by
            Stereotaxis for packaging, labeling, package inserts, and customer
            support.

9           REGULATORY MATTERS

9.1         Regulatory Approvals.

9.1.1       Manufacturing. Biosense will obtain and maintain all regulatory
            licenses, permits and registrations necessary to manufacture the
            Daughter Products and Compatible CARTO System and Stereotaxis will
            obtain and maintain such regulatory licenses, permits and
            registrations as are necessary to manufacture the Components, in
            each case to supply them for sale in the United States and such
            other countries as are mutually agreed upon in writing-by the
            Parties.

9.1.2       U.S. 510K and/or PMA Clearance/Approval. Biosense will be
            responsible for obtaining 510K Clearance or, where applicable, PMA
            approval the Compatible CARTO System in the United States and, at
            Stereotaxis expenses, for the Daughter Products in the United States
            and Stereotaxis will be responsible for obtaining any such approvals
            required in respect of the Compatible NIOBE System; provided that
            the Parties agree to fully cooperate and coordinate their activities
            in order to achieve the most expeditious regulatory mechanisms
            reasonably available in respect of the Daughter Products, the
            Compatible NIOBE System and the



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<PAGE>


            Compatible CARTO System, including coordinating with one another so
            as to jointly manage clinical and regulatory activities including
            without limitation protocol selection and site selection and so as
            to jointly participate, where practicable, in communications with
            FDA, provided that in case of disagreement in any respect, the final
            decision will be made by the sponsor of the relevant regulatory
            submission

9.1.3       Foreign Approvals. Subject to the direction of the Joint Steering
            Committee or as mutually agreed by the Parties, the Parties will
            file for and pursue applications for regulatory approval to sell the
            Daughter Products (at Stereotaxis expense) and Compatible CARTO
            System and Compatible NIOBE System in countries outside the United
            States comprising at least the filing and pursuing a CE Mark in
            Europe for such products.

9.2         Cooperation to Obtain and Maintain Approvals. The Parties agree to
            maintain all information regarding the Daughter Products and
            Compatible CARTO System and the Compatible NIOBE System filed with
            the FDA and other regulatory bodies current and reflective of
            current manufacturing practices and product specifications and to
            update this information as required. From time to time dining the
            term of this Agreement, Stereotaxis and Biosense will provide such
            further letters of authorization, instruments and/or documents, and
            take such other actions, as the other may reasonably request for
            purposes of obtaining regulatory approvals, in accordance with this
            Article 9, to Distribute the Daughter Products.

9.3         Exchange of Information. Each Party will keep appropriate records
            relating to its activities with respect to regulatory approvals
            hereunder and will report to the other Party on the status of such
            activities on a regular basis.

9.4         Inspections. The Parties will permit (and will use commercially
            reasonable efforts to cause its vendors to permit) the FDA and other
            regulatory agencies to conduct such inspections of the facilities at
            which the products are manufactured pursuant to this Agreement upon
            request by such agencies and will cooperate with the FDA or such
            other regulatory agencies with respect to such inspections and any
            related matters. Each Party will give the other Party prompt written
            notice of any such inspections and will keep such other Party
            informed about the results and conclusions of each such regulatory
            inspection, including actions taken by the relevant Party or Parties
            to remedy conditions cited in such inspections. Each Party will
            provide the other Party with copies of any written inspection
            reports issued by such agencies and all correspondence between it
            and the agency involved pertaining to such inspections or products.

10          REPRESENTATIONS AND WARRANTIES 

10.1        Stereotaxis. Stereotaxis represents and warrants that:

10.1.1      it has full power to enter into the Agreement and to perform its
            obligations hereunder, 

10.1.2      it has obtained all necessary corporate approvals to enter and
            execute into this Agreement;



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<PAGE>

10.1.3      it is the owner or licensee of the Intellectual Property Rights in
            and to the Stereotaxis IP and has the right to grant to Biosense the
            rights granted herein;

10.1.4      to the best of Stereotaxis' knowledge, use, manufacture, sale, offer
            for sale or importation of the NIOBE System does not infringe any
            patent rights, trade secrets or other proprietary rights of any
            third party;

10.1.5      it has not previously granted and, subject to Sections 2.4 and 4.4,
            will not grant in the future, any rights that conflict with the
            rights and licenses granted to Biosense herein;

10.1.6      all Components sold by Stereotaxis to Biosense will be free from
            Defects in construction, materials, processing and workmanship until
            the end of the applicable warrant period specified by the Joint
            Steering Committee pursuant to this Agreement when used in and
            maintained in accordance with the specifications, instructions and
            packaging therefor.

10.2        Biosense.

10.2.1      General. Biosense represents and warrants that:

10.2.1.1    it has full power to enter into the Agreement and to perform its
            obligations hereunder; and

10.2.1.2    it has obtained all necessary corporate approvals to enter and
            execute into this Agreement.

10.2.2      Ownership. Biosense further represents, warrants and covenants that:

10.2.2.1    it is the owner or licensee of the Intellectual Property Rights in
            and to the Parent Products and CARTO System and has the right to
            grant to Stereotaxis the rights granted herein; and

10.2.2.2    to the best of Biosense's knowledge, use, manufacture, sale, offer
            for sale or importation of the Daughter Products and the CARTO
            System does not infringe any patent rights, trade secrets or other
            proprietary rights of any third party.

10.2.3      Process and Product Warranties. The parties represent, warrant and
            covenant:

10.2.3.1    all products sold by one party to the other hereunder will be free
            from Defects in construction, materials, processing and workmanship
            until the expiration date affixed thereto which date will be
            determined;

10.2.3.2    all products sold by one party to the other hereunder will comply in
            all material respects with the Specification, Manufacturing
            Specifications, the FDC Act including, without limitation, all FDA
            QSR requirements, for the products, and any other regulatory agency
            requirements agreed to by the Parties in accordance with Section 9
            above;

10.2.3.3    all of the products sold by one party to the other hereunder will
            have been manufactured, packaged stored and shipped in conformance
            with the FDC Act including, without limitation, all applicable
            current FDA QSR or similar regulations which are hereinafter



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            adopted by the FDA or any successor agency thereto and any other
            regulatory agency requirements agreed to by the Parties in
            accordance with Section 9 above; and

10.2.3.4    title to all products sold by one party to the other hereunder will
            pass to such party as provided herein free and clear of any security
            interest, lien, or other encumbrance.

10.3        Sole Remedy. The foregoing warranties will survive inspections,
            acceptance and payment by Biosense and Stereotaxis. Subject to
            Section 12, each Party's sole and exclusive remedy for breach of the
            warranty in this Section 10 will be:

10.3.1      to have replaced products which are the subject of the warranty
            claim in accordance with the provisions of Section 10.4; and

10.3.2      return and have replaced unused Daughter Products and Components,
            as the case may be, with respect to which Biosense or Stereotaxis
            has discovered Defects upon inspection in accordance with the
            provisions of Section 10.4, as applicable.

10.3.3      Each Party will use its commercially reasonable efforts to provide
            replacement products within the shortest possible time, but no later
            than sixty (60) days from return.

10.4        Warranty Procedures.

10.4.1      The following warranty procedures will apply with respect to a
            product or component of a product sold by one party to the other:
            first, a party will provide the other with written notice of such
            claims. After receiving such notice, the receiving party will
            provide the reporting party with a Return Materials Authorization
            ("RMA") number, after which the reporting party will return the
            defective product or component to the manufacturing party. The
            returning party will display the RMA number prominently on the
            packaging, and must return the product or component in its original
            packaging, with shipping charges prepaid. The parties will not
            accept collect shipments. The receiving party in its sole discretion
            may refuse any product or component not returned in accordance with
            the terms of this Agreement.

10.4.1.1    In the event that the party determines that a returned product or
            component is defective, the party will have the right, at its sole
            option, to either:

10.4.1.2    repair or remedy the Defects; or

10.4.1.3    replace with conforming product or component. The foregoing sets
            forth the parties' sole remedy and sole liability, for any breach of
            the warranty set forth in this Section 10.

10.4.2      Daughter Products. The following warranty procedures will apply with
            respect to Daughter Products marketed and sold by Stereotaxis that
            are the subject of a customer complaint under the applicable
            Daughter Product warranty. Stereotaxis will notify Biosense of such
            Daughter Products to be replaced in response to customer complaints
            (and return of product) and



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<PAGE>


            Biosense will replace all such products without charge to
            Stereotaxis or the customer and will bear all costs associated with
            such replacement.

10.5        Recalls.

10.5.1      In the event that any recall of Daughter Products supplied
            by Biosense hereunder is

10.5.1.1    required by the US FDA; or

10.5.1.2    mutually agreed upon, in writing, by Biosense and Stereotaxis, which
            agreement will not be unreasonably withheld by either Party,

10.5.1.3    the Parties will confer for the purpose of determining how to
            conduct the recall in an efficient and economic manner prior to
            commencement of such recall.

10.5.2      The costs of any such recall will be allocated as follows:

10.5.2.1    to the extent that such recall is due to Biosense's failure to meet
            the Quality Guidelines set forth in Section 8.1.5 in manufacturing
            Daughter Products, the manufacture or sale of such products by
            Biosense, or the design of the Parent Product despite modification
            thereof to create the Daughter Product, Biosense will be responsible
            for all of the reasonably incurred costs of effecting such recall
            and will use commercially reasonable efforts to replace the
            defective Daughter Products within the shortest possible time, but
            no later than sixty (60) days following such recall;

10.5.2.2    to the extent that such recall is due to Stereotaxis' mislabeling,
            mishandling, modification or promotion of any Daughter Product sold
            hereunder (except if caused by incorrect information provided by
            Biosense), or the design of the Daughter Products, Stereotaxis will
            be responsible for the costs of such recall; or

10.5.2.3    if neither 10.5.2.1 nor 10.5.2.2 above is applicable:

10.5.2.3.1  in the event of a mutually agreed upon recall, the Parties will
            share equally in the costs of such recall (including, without
            limitation, the cost of replacement Daughter Products and Biosense's
            normal and customary catheter replacement and communications
            costs); or

10.5.2.3.2  in the event that either Party does not agree that a recall should
            be conducted, the other Party may trigger the recall at its own
            expense.

10.5.2.4    The Parties will cooperate and mutually agree upon the manner in
            which the recall is conducted; provided that in all cases, Biosense
            will have the first right to conduct the recall.

10.6        Correction of Flaws. Biosense will on a regular basis provide to
            Stereotaxis a summary of its customer error reports highlighting the
            most regularly occurring concerns reported by customers regarding
            Daughter Products



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10.7        LIMITATION OF WARRANTIES. NEITHER PARTY MAKES ANY REPRESENTATIONS OR
            WARRANTIES OTHER THAN THOSE EXPRESSLY STATED IN THIS SECTION 10,
            AND EACH PARTY SPECIFICALLY DISCLAIMS ALL OTHER EXPRESS OR IMPLIED
            WARRANTIES OF NONINFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A
            PARTICULAR PURPOSE. STEREOTAXIS EXPRESSLY DISCLAIMS ANY AND ALL
            WARRANTIES REGARDING THE PARENT PRODUCTS, CARTO SYSTEM, DAUGHTER
            PRODUCTS AND COMPATIBLE CARTO SYSTEM.

11          INDEMNIFICATION

11.1        Indemnity. Biosense will indemnify, defend and hold harmless
            Stereotaxis, its directors, officers, employees and agents (each a
            "Stereotaxis Indemnitee") from and against any liabilities
            (including without limitation damages awarded to third parties),
            expenses or costs (including reasonable attorneys' and professional
            fees) ("Liabilities") resulting from any claim(s) brought by a third
            party against a Stereotaxis Indemnitee relating to the manufacture,
            marketing, promotion, sale or use of the Daughter Products,
            Compatible CARTO System or Biosense IP.

11.2        Procedure. In connection with indemnification under Section 11.1
            Stereotaxis will:

11.2.1      provide Biosense with prompt notice of any such claim, demand or
            cause of action;

11.2.2      give Biosense sole control of the defense and all related settlement
            negotiations at Biosense's expense (which expenses will be included
            in the calculation of Liabilities hereunder); and

11.2.3      provide Biosense, at Biosense's reasonable expense, all assistance,
            information, and authority reasonably requested by Biosense to
            perform the foregoing.

11.3        Remedy. In the event the use, sale or manufacture of Daughter
            Products is enjoined, the indemnifying Party will use diligent
            efforts to either:

11.3.1      procure a license to allow the indemnified Party or to enjoy the
            rights granted under this Agreement, or

11.3.2      modify the Daughter Products to make them non-infringing.

11.4        Indemnity. Stereotaxis will indemnify, defend and hold harmless
            Biosense, its directors, officers, employees and agents (each a
            "Biosense Indemnitee") from and against any liabilities (including
            without limitation damages awarded to third parties), expenses or
            costs (including reasonable attorneys' and professional fees)
            ("Liabilities") resulting from any claim(s) brought by a third party
            against a Biosense Indemnitee relating to the manufacture,
            marketing, promotion, sale or use of the Compatible NIOBE System or
            Stereotaxis IP.

11.5        Procedure. In connection with indemnification under Section 11.4,
            Biosense will:



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11.5.1      provide Stereotaxis with prompt notice of any such claim, demand or
            cause of action;

11.5.2      give Stereotaxis sole control of the defense and all related
            settlement negotiations at Stereotaxis' expense (which expenses will
            be included in the calculation of Liabilities hereunder); and

11.5.3      provide Stereotaxis, at Stereotaxis' reasonable expense, all
            assistance, information, and authority reasonably requested by
            Stereotaxis to perform the foregoing.

11.6        Remedy. In the event the use, sale or manufacture of Components is
            enjoined, the indemnifying Party will use diligent efforts to
            either:

11.6.1      procure a license to allow the indemnified Party or to enjoy the
            rights granted under this Agreement; or

11.6.2      modify the Components to make them non-infringing.

12          PROPRIETARY RIGHTS

12.1        Stereotaxis. The Parties agree that, as between them, Stereotaxis
            retains all right, title, and interest in and to the Technology and
            Intellectual Property Rights that Stereotaxis owned prior to the
            commencement of this Agreement, including, without limitation, the
            Stereotaxis NIOBE System and all Intellectual Property Rights in or
            arising from such Technology and to all Technology and Intellectual
            Property Rights that which are created or made during the term of
            this Agreement by Stereotaxis, its employees, agents or other third
            parties acting under the authority from Stereotaxis working on
            matters relating to this Agreement ("Stereotaxis Personnel") (all
            such Technology and Intellectual Property Rights collectively
            "Stereotaxis IP").

12.2        Biosense. The Parties agree that, as between the Parties, Biosense
            retains all right, title, and interest in and to the Technology and
            Intellectual Property Rights that Biosense owned prior to the
            commencement of this Agreement, including, without limitation, the
            CARTO System, the Parent Products and all Intellectual Property
            Rights in or arising from such Technology and to all Technology and
            Intellectual Property Rights which are created or made during the
            term of this Agreement by Biosense, its employees, agents or other
            third parties acting under the authority from Biosense working on
            matters relating to this Agreement ("Biosense Personnel") (all such
            Technology and Intellectual Property Rights collectively "Biosense
            IP").

12.3        Joint Ownership.

12.3.1      Joint IP. The Parties will own jointly any Technology or
            Intellectual Property Rights made or created jointly by Biosense
            Personnel and Stereotaxis Personnel ("Joint IP"). For the purposes
            of the foregoing, a Patent will be considered to have been jointly
            created if at least one employee of Stereotaxis and Biosense are
            named inventors on such Patent as issued and a copyrighted work will
            be considered to be jointly created if it is a joint work within the



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            meaning of the United States Copyright Act. Except as set forth in
            this Section 12.3.1, the Parties intend that each Party hereto will
            have an equal and undivided joint ownership interest in the Joint IP
            related thereto. Each Party will have the right to use and exploit
            such Joint IP subject to the provisions of Sections 2.3, 2.4 and 4.5
            and subject to each Party's obligations of confidentiality under
            Section 13. Neither Party will have any duty of accounting to the
            other Party with respect to such joint ownership interest. Each
            Party hereby unconditionally and irrevocably assigns to the other
            Party the joint ownership interest set forth in this Section 12.3.1
            with respect to the portions of the Joint IP developed by such
            Party.

12.3.2      Licenses.

12.3.2.1    Stereotaxis hereby grants Biosense a non-exclusive, irrevocable,
            worldwide, non-transferable (except as set forth in Section 16.2),
            fully paid up, royalty-free, perpetual and sub-licensable right and
            license under all of its Intellectual Property Rights in and to its
            equal and undivided interest in the Joint Technology, to use,
            manufacture, have manufactured, sell, have sold and import products
            in the Biosense Field.

12.3.2.2    Biosense hereby grants Stereotaxis a non-exclusive, irrevocable,
            worldwide, non-transferable (except as set forth in Section 16.2),
            fully paid up, royalty-free, perpetual, and sub-licensable right and
            license under all of its Intellectual Property Rights in and to its
            equal and undivided interest in the Joint Technology, to use,
            manufacture, have manufactured, sell, have sold and import products
            in the Stereotaxis Field.

12.3.3      Applications and Registrations. To the extent that an application,
            registration, or other governmental procedure (collectively, a
            "Procedure") is required to obtain, perfect, or protect any
            Intellectual Property Right in the Joint Technology that the Parties
            may jointly own pursuant to Section 12.3.1 and either Party desires
            to pursue such Procedure, such Party will first consult with the
            other Party. If the other Party desires to participate in such
            Procedure, the Parties will then jointly and cooperatively pursue
            such Procedure, in which event they will bear all costs equally and
            jointly own any rights thereby obtained. If a Party declines to
            participate in such Procedure, the other Party will then have the
            right to pursue such Procedure alone, in which case such other Party
            will bear all costs of and, notwithstanding Section 12.3.1,
            exclusively own all rights resulting from, such Procedure.

12.3.4      Actions Against Third Party Infringers. Each Party will promptly
            notify the other Party if such former Party becomes aware of any
            possible infringement or misappropriation by a third Party of any of
            the Joint IP in which the Parties share a joint ownership interest
            under this Section 12. If either Party desires to take any action
            against such an infringing or misappropriating third Party, such
            Party will first notify the other Party hereto and consult with such
            other Party regarding such action. If the other Party desires to
            participate in such action, the Parties will then jointly and
            cooperatively pursue such action, in which event they will bear all
            costs equally and share in any damages or other recoveries equally.
            Either Party may at any time decide not to participate further in
            any such action, in which case any further costs will be borne by
            and all damages and other recoveries will be received by the Party
            that



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<PAGE>

            continues to pursue such action. If a Party declines to participate
            in any such action, the other Party will then have the right to
            pursue such action alone, and will bear all costs of and receive all
            damages and other recoveries from such action. Notwithstanding the
            foregoing, if a Party declines to participate in such an action or
            withdraws from such an action, such Party will nevertheless, at the
            request of the other Party, cooperate with the other Party, at the
            cost of the other Party and subject to any reasonable conditions
            (including indemnification against counterclaims by the third
            party), to the extent necessary to enable the other Party to pursue
            such action effectively.

12.3.5      Cooperation. Each Party will execute all documents and take such
            further actions as may be reasonably required to evidence, perfect,
            or enforce any assignment of rights set forth in this Section 12.

12.4        Developed Intellectual Property.

12.4.1      Subject to the provisions in this Agreement, Biosense hereby grants
            to Stereotaxis a fully paid, irrevocable, nonexclusive license under
            any Biosense Improvement Patents, to make, use, sell, offer to sell
            and import any product (or component for a product) that is
            substantially similar to the Stereotaxis NIOBE System.

12.4.2      "Biosense Improvement Patents" will mean any Patent rights of any
            kind that cover an invention made by Biosense Personnel that would
            infringe any Stereotaxis Intellectual Property Rights or an
            improvement based on any Stereotaxis IP during the term of this
            Agreement.

12.4.3      The license granted to Stereotaxis hereunder will include the right
            to grant and authorize sublicenses, but only in connection with the
            grant by Stereotaxis of a right to make, use and/or sell any product
            (or component for a product) that is substantially similar to the
            Stereotaxis NIOBE System. It is understood that the foregoing
            restriction on sublicensing will not impair Stereotaxis' rights
            under the license grant to have products or components thereof
            manufactured for Stereotaxis.

12.4.4      Subject to the provisions in this Agreement, Stereotaxis hereby
            grants to Biosense a fully paid, irrevocable, nonexclusive license
            under any Stereotaxis Improvement Patents, to make, use, sell, offer
            to sell and import any product (or component for a product) that is
            substantially similar to the CARTO System.

12.4.5      "Stereotaxis Improvement Patents" will mean any patent rights of any
            kind that cover an invention made by Stereotaxis Personnel that
            would infringe any Biosense Intellectual Property Rights or an
            improvement based on any Biosense IP or Intellectual Property Rights
            during the term of this Agreement.

12.4.6      The license granted to Biosense hereunder will include the right to
            grant and authorize sublicenses, but only in connection with the
            grant by Biosense of a right to make, use and/or sell any product
            (or component for a product) that is substantially similar to the
            CARTO



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<PAGE>





            System. It is understood that the foregoing restriction on
            sublicensing will not impair Biosense's rights under the license
            grant to have products or components thereof manufactured for
            Biosense.

13          CONFIDENTIALITY

13.1        Definition.

13.1.1      "Confidential Information" as used herein will include:

13.1.1.1    written, recorded, graphical or other information in tangible form
            disclosed, during the term of this Agreement, by one Party to the
            other Party which is stamped "Proprietary," "Confidential," or with
            a similar legend denoting the proprietary interest therein of the
            disclosing Party,

13.1.1.2    oral information which is disclosed by one Party to the other Party
            to the extent it is identified as "Proprietary" or "Confidential" at
            the time of oral disclosure, is reduced to written or other tangible
            form within thirty (30) days of oral disclosure, and such written or
            tangible form is stamped "Proprietary", "Confidential", or with a
            similar legend denoting the proprietary interest therein of the
            disclosing Party;

13.1.1.3    the following information, whether or not marked "Proprietary" or
            "Confidential": any reports or forecasts provided hereunder;

13.1.1.4    information, data, or know-how derived from any information
            contained in items this Section 13.1.1 ("Derivative Information").

13.1.2      Notwithstanding the above, Confidential Information will not include
            information:

13.1.2.1    In the possession of the receiving Party prior to its disclosure by
            the disclosing Party and not subject to other restrictions on
            disclosure;

13.1.2.2    is or later becomes part of the public domain through no fault of
            the recipient Party;

13.1.2.3    independently developed by the receiving Party;

13.1.2.4    publicly disclosed by the disclosing Party;

13.1.2.5    rightfully received by the receiving Party from a third party
            without restrictions on disclosure; or

13.1.2.6    approved for unrestricted release or unrestricted disclosure by the
            disclosing Party.



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13.2        Protection of Information.

13.2.1      Period of Protection. The Parties agree to comply with the
            obligations set forth herein regarding the other Party's
            confidential information for a period of ten (10) years from the
            date of disclosure.

13.2.2      Method of Protection. To protect the other Party's Confidential
            Information each Party agrees:

13.2.2.1    that it will not disclose to any third party, any Confidential
            Information of the disclosing Party without the disclosing Party's
            prior written consent;

13.2.2.2    to limit dissemination of the other Party's Confidential Information
            to only those of the receiving Party's officers, directors, agents
            and employees who require access thereto to perform their functions
            regarding the purposes of this Agreement;

13.2.2.3    to ensure that each person (including without limitation all
            individuals (excluding employees who are, as a condition to their
            employment, required to maintain the confidentiality of third party
            confidential information), corporations, partnerships and other
            entities) who receives or has access to Confidential Information has
            previously executed a written nondisclosure agreement containing
            terms substantially similar to those contained herein; and

13.2.2.4    to return to the disclosing Party, or destroy, all Confidential
            Information of the disclosing Party upon receipt of a written
            request therefor from the disclosing Party, without retaining any
            copy thereof, with the exception of documents containing Derivative
            Information which a receiving Party has a right to retain.

13.2.3      Standard of Care. The standard of care to be exercised by the
            receiving Party to meet these obligations will be the standard
            exercised by the receiving Party with respect to its own proprietary
            information of a similar nature, but in no event less than due care.

13.2.4      Exceptions. Nothing contained in this Section 13 will prevent
            either Party from disclosing any Confidential Information of the
            other Party:

13.2.4.1    to regulatory agencies for the purpose of obtaining approval to
            distribute and market Daughter Products and Compatible CARTO System
            which are the subject of this Agreement; provided, however, that all
            reasonable steps are taken to maintain the confidentiality of such
            Confidential Information to be disclosed;

13.2.4.2    to accountants, banks, or another financing source (or their
            advisors) or in connection with a merger, acquisition or securities
            offering, subject in each case to the recipient entering into an
            confidentiality agreement containing terms substantially similar to
            those contained herein to protect such Confidential Information from
            disclosure; or



                                       39


<PAGE>


13.2.4.3    it is required by law or regulation to be disclosed; provided,
            however, that the Party subject to such disclosure requirement has
            provided written notice to the other Party promptly upon receiving
            notice of such requirement in order to enable the other Party to
            seek a protective order or otherwise prevent disclosure of the other
            Party's Confidential Information.

13.2.5      Proprietary Notices. Any reproduction of any Confidential
            Information by the receiving Party to the extent permitted under
            this Agreement will contain any and all confidential or proprietary
            notices or legends, which appear on the original.

13.2.6      Biosense IP. In order to ensure that the Biosense IP is not
            disseminated unintentionally or otherwise by Stereotaxis to any
            permitted Localization contract developer, Stereotaxis agrees that
            during the Term:

13.2.6.1    In respect of material communications, it will communicate with the
            developer only in writing.

13.2.6.2    All such written communications will be copied to Biosense. and

13.2.6.3    Any such communication that contains, or could reasonably be
            interpreted as disclosing information comprised in the Biosense IP
            or Biosense Intellectual Property will be submitted for pre-approval
            by Biosense (which approval will not be unreasonably withheld and
            which will be provided within twenty-four (24) hours of written
            request from Stereotaxis to Biosense' such employee or employees as
            nominated by Biosense from time to time for the purpose of
            responding to such requests) before being sent to such Localization
            contractor. Email will comprise written communication for the
            purposes hereof.

14          TERM AND TERMINATION

14.1        Term. This Agreement will become effective on the Effective Date and
            will remain in force and effect for seven (7) years or until
            terminated pursuant to the terms hereof, including pursuant to the
            provisions of Sections 2.3,4 and 14.2 (such period to be referred to
            as the "Term").

14.2        Termination.

14.2.1      For Breach. Either Party may terminate this Agreement effective upon
            written notice to the other if the other Party materially breaches
            any provision herein in any or fails to make any payment when due
            (provided such payment is not subject to bona fide dispute of which
            prior written notice has been given), which breach is not cured
            within thirty (30) days from the non-defaulting Party stating its
            intention to terminate this Agreement by reason of that default or
            failure or, provided that the defaulting Party has taken significant
            steps toward remedying the default, such longer period of time as is
            reasonably necessary defaulting Party to cure.



                                       40


<PAGE>


14.2.2      Change of Control to Restricted Party. In the event of a Change of
            Control of Stereotaxis to a Restricted Party, either Party may
            terminate this Agreement effective upon written notice to the other
            Party within ninety (90) days of the Change of Control becoming
            effective. In the event that one Party exercises the provisions of
            this Section 14.2.2, the Termination shall become effective one year
            after the Change of Control. In the event that Stereotaxis exercises
            its right under this Section 14.2.2, then Stereotaxis will pay a
            one-time cash termination fee to Biosense of five percent (5%) of
            the total equity valuation of Stereotaxis in the Change of Control
            transaction, up to a maximum of Ten Million Dollars (US)
            ($10,000,000).

14.2.3      For Commercial Failure, Technical Failure, Delay or Expiration of
            the Term and Certain Change of Control. In the event there has not
            been a termination according to Section 14.2.2 above, and this
            Agreement is terminated in accordance with the provisions of
            Sections 2.3.4 and Section 3.7 (in respect of Technical Failure,
            Commercial Failure, expiration of the Term, or Delay) or where
            terminated by Stereotaxis for breach pursuant to Section 14.2.1
            above, the Localization License granted herein will continue for a
            period of three (3) years as provided for in Section 2.4.3, provided
            that where a Change of Control of Stereotaxis to a Restricted Party
            occurs within such three (3) year period, such license will continue
            until the earlier of one (1) year after such Change of Control or
            the expiration of such three (3) year period. For the avoidance of
            doubt, such license is, as provided herein, limited only to the
            Stereotaxis Localization System and not to any third party system.
            Thereafter, at its option, each Party will continue to have the
            right to distribute Daughter Products on a non-exclusive basis.

14.3        Effect of Termination or Expiration - Survival. The respective
            rights and obligations of the Parties under the provisions of
            Sections 2.4.3 , 3.2.2.3, 7.6, 10.4, 10.5, 12.3.2, 14.2.3 and all of
            Articles 11, 13 and 15 will survive any termination or expiration of
            this Agreement In addition, in case of termination by either Party,
            Biosense will have the right to continue to Distribute then
            commercially available Daughter Products to customers, for use with
            Compatible NIOBE -- CARTO Systems installed or purchased prior to
            such termination, on reasonable commercial terms (and, where
            applicable, on terms consistent with its then commercial practice in
            respect of like products) during the commercial life of such
            systems.

15          DISPUTE RESOLUTION

Any controversy or claim arising out of or relating to this Agreement or the
validity, inducement, or breach thereof, shall be settled by arbitration before
a single arbitrator in accordance with the Commercial Arbitration Rules of the
American Arbitration Association ("AAA") then pertaining, except where those
rules conflict with this provision,- in which case this provision controls. The
decision of such arbitrator will be final and binding and will not be subject to
appeal except in the case of substantive evidence that such decision was tainted
by Wand. The parties hereby consent to the jurisdiction of the Federal District
Court for the District of Delaware for the enforcement of these provisions and
the entry of judgment on any award rendered hereunder. Should such court for any
reason lack jurisdiction, any court with jurisdiction shall enforce this clause
and enter judgment on any award. The arbitrator shall be an attorney
specializing in business litigation who has at least 15



                                       41


<PAGE>



years of experience with a law firm of over 25 lawyers or was a judge of a court
of general jurisdiction. The arbitration shall be held in Chicago IL, and the
arbitrator shall apply the substantive law of Illinois, except that the
interpretation and enforcement of this arbitration provision shall be governed
by the Federal Arbitration Act. Within 30 days of initiation of arbitration, the
parties shall reach agreement upon and thereafter follow procedures assuring
that the arbitration will be concluded and the award rendered within no more
than six months from selection of the arbitrator. Failing such agreement, the
AAA will design and the parties will follow such procedures. Each party has the
right before or during the arbitration to seek and obtain from the appropriate
court provisional remedies such as attachment, preliminary injunction, replevin,
etc., to avoid irreparable harm, maintain the status quo or preserve the subject
matter of the arbitration. THE ARBITRATOR SHALL NOT AWARD ANY PARTY PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES, AND EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT TO SEEK SUCH DAMAGES.

16          ASSIGNMENT

Neither Party may assign this Agreement without the prior written consent of the
other Party, except that each Party may assign this Agreement to a person or
entity into which it has merged or which has otherwise succeeded to all or
substantially all of its business or assets and which has assumed in writing or
by operation of law its obligations under this Agreement. Each Party agrees that
in any merger in which it is not the surviving company, the surviving company
will assume, in writing or by operation of law, such Party's obligations under
this Agreement. Any purported assignment in violation of the foregoing will be
null and void. Subject to the foregoing, the provisions of this Agreement will
apply to and bind the successors and permitted assigns of the Parties. Upon a
permitted assignment of this Agreement, all references to the assigning Party
herein will be deemed references to the assignee.

17          GENERAL

17.1        Force Majeure. Either Party will be excused from any delay or
            failure in performance hereunder, caused by reason of any occurrence
            or contingency beyond its reasonable control, including but not
            limited to, acts of God, earthquake, floods, lightning, labor
            disputes and strikes, other labor or industrial disturbances, riots,
            war, acts of the public enemy, insurrections, embargoes, blockages,
            regulations or orders of any government, agency or subdivision
            thereof, shortage of materials, rationing, utility or communication
            failures, casualty, and governmental requirements. The obligations
            and rights of the Party so excused will be extended on a day-to-day
            basis for the period of time equal to that of the underlying cause
            of the delay; provided that such Party will give notice of such
            force majeure event to the other Party and cure such delay as soon
            as reasonably possible. In the event such force majeure event does
            result or would result in an inability of Stereotaxis to supply
            Components to Biosense or Biosense to supply the Daughter Products
            to Stereotaxis for a period greater than ninety (90) days, the
            Parties agree to discuss in good faith alternate solutions to
            restore supply to Biosense or Stereotaxis as the case may be.



                                       42


<PAGE>



17.2        Insurance. During the Term, Stereotaxis will maintain liability
            insurance of not less than one million dollar ($1,000,000) per
            occurrence and five million dollars ($5,000,000) in aggregate.

17.3        Notices. All notices, payments, reports and other communications
            required or permitted hereunder will be in writing and will be
            mailed by first class, certified mail, postage prepaid, or otherwise
            delivered by hand, by messenger (including express mail courier
            services) or by facsimile, addressed to the addresses first set
            forth above or at such other address furnished with a notice in
            manner set forth herein. Such notices will be deemed to have been
            served when delivered or, if delivery is not accomplished by reason
            of some fault of the addressee, when tendered. Notices will be
            addressed as follows:

            If to Stereotaxis:


                 Stereotaxis, Inc.
                 4041 Forest Park Avenue
                 St. Louis, MO, 63108
                 Attn.: Chief Executive Officer 
            With copy to: Chief Financial Officer, at the same address.

            If to Biosense:


                 Biosense Webster, Inc.
                 3333 Diamond Canyon Rd.
                 Diamond Bar CA 91765
                 Attn.: Vice President, New Business Development


            With copy to:


                 Office of General Counsel
                 Johnson & Johnson
                 1 Johnson & Johnson Plaza
                 New Brunswick NJ 08933

17.4        Entire Agreement. This Agreement sets forth the entire agreement and
            understanding between the Parties as to the subject matter hereof
            and merges all prior discussions between them, and neither of the
            Parties will be bound by any conditions, definitions, warranties,
            understandings or representations with respect to such subject
            matter other than as expressly provided herein or as duly set forth
            on or subsequent to the Effective Date in writing and signed by a
            proper and duly authorized representative of the Party to be bound
            thereby. No provision appearing on any



                                       43

<PAGE>


             form originated by either Party will be applicable unless such
             provision is expressly accepting in writing by the other Party.

      17.5   Captions and Section Headings. The captions and section and
             paragraph headings used in this Agreement are inserted for
             convenience only and will not affect the meaning or interpretation
             of this Agreement.

      17.6   Partial Invalidity. If any paragraph, provision, or clause thereof
             in this Agreement will be found or be held to be invalid or
             unenforceable in any jurisdiction, in which this Agreement is being
             performed, the remainder of this Agreement will be valid and
             enforceable and the Parties will negotiate, in good faith, a
             substitute, valid and enforceable provision that most nearly
             reflects the Parties' intent in entering into this Agreement.

      17.7   Presumptions. In construing the terms of this Agreement, no
             presumption will operate in either Party's favor as a result of its
             counsel's role in drafting the terms or provisions hereof.

      17.8   Waiver. The failure of either Party to enforce at any time the
             provisions of this Agreement, or the failure to require at any time
             performance by the other Party of any of the provisions of this
             Agreement, will in no way be construed to be a present or future
             waiver of such provisions, nor in any way affect the right of
             either Party to enforce each and every such provision thereafter.
             The express waiver by either Party of any provision, condition or
             requirement of this Agreement will not constitute a waiver of any
             future obligation to comply with such provision, condition or
             requirement.

      17.9   Cumulative Remedies. The remedies under this Agreement will be
             cumulative and not alternative and the election of one remedy for a
             breach will not preclude pursuit of other remedies unless as
             expressly provided in this Agreement.

      17.10  Independent Contractors. In performing their respective services
             hereunder, each of the Parties will operate as, and have the status
             of, an independent contractor and will not act as or be an agent,
             partner, co-venturer or employee of the other Party. Neither Party
             will have the right or authority to assume or create any
             obligations or to make any representations or warranties on behalf
             of any other Party, whether express or implied, or to bind the
             other Party in any respect whatsoever.

      17.11. Confidentiality of Agreement. Each Party agrees that the terms and
             conditions of this Agreement will be treated as confidential
             information and that neither Party will disclose the terms or
             conditions to any third party without the prior written consent of
             the other Party; provided, however, that each Party may disclose
             the terms and conditions of this Agreement, to the extent
             necessary;

      17.11.1 as required by any court or other governmental body;

      17.11.2 as otherwise required by law;



                                       44



<PAGE>


      17.11.3   to legal counsel of the Parties, accountants, and other
                professional advisors;

      17.11.4   in confidence:

      17.11.4.1 to banks, investors and other financing sources and their
                advisors, or

      17.11.4.2 to Parties with whom the disclosing Party has or is proposing to
                enter into a business relationship not prohibited by the terms
                of this Agreement and only to the extent such Parties have a
                need to know such terms and conditions in order to conduct or
                assess such business relationship.

      17.11.5   in connection with the enforcement of this Agreement or rights
                under this Agreement; or

      17.11.6   in confidence, in connection with an actual or prospective
                merger or acquisition or similar transaction

      17.11.7   With respect to disclosure required by a court order, the
                disclosing Party will provide prior notification of such
                impending disclosure to the non-disclosing Party. All reasonable
                efforts to preserve the confidentiality of the terms of this
                Agreement will be expended by the disclosing Party in complying
                with such an order, including obtaining a protective order to
                the extent reasonably possible. The Parties will cooperate in
                preparing and releasing an announcement or other form of
                publicity, if any, relating to this Agreement.

      17.12     Authority. Each Party represents that all corporate action
                necessary for the authorization, execution and delivery of this
                Agreement by such Party and the performance of its obligations
                hereunder has been taken.

      17.13     Counterparts. This Agreement may be executed in two (2) or more
                counterparts, all of which, taken together, will be regarded as
                one and the same instrument.

         IN WITNESS WHEREOF, the Parties hereto have caused this Development and
      Supply Agreement to be signed by duly authorized officers or
      representatives.


         STEREOTAXIS, INC.                    BIOSENSE WEBSTER, INC.

      By: /s/ BJ HOGG                         By: /s/ GUY LEBEAU
         -------------------------------         -------------------------------
      Print Name:   BJ Hogg                   Print Name:   Guy Lebeau
                 -----------------------                 -----------------------
      Title:           CEO                    Title:     WW President
            ----------------------------            ----------------------------
      Date:       May 9, 2002                 Date:          May 9, 2002
           -----------------------------           -----------------------------


                                       45



<PAGE>


                                    EXHIBIT A

               GUIDELINES FOR COMPATIBLE CARTO SYSTEM DEVELOPMENT
                        AND DEVELOPMENT PAYMENT SCHEDULE

                                     [***]


[*** 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.]

                                       A-1



<PAGE>
                                     [***]




[*** 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.]




                                       A-2


<PAGE>
                                     [***]




[*** 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.]

                                       A-3


<PAGE>
                                     [***]




[*** 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.]




                                       A-4



<PAGE>


                                   EXHIBIT B

                  DEFINITION OF GROSS PROFIT AND COST OF GOODS

       The default calculation of Gross Profits and/or Costs of Goods, will be
according to the following formulas:

                                     [***]




[*** 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.]

                                      B-1


<PAGE>
                                     [***]




[*** 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.]


                                      B-2

<PAGE>


                                    EXHIBIT C

                          BIOSENSE VENDOR REQUIREMENTS

The following requirements must be achieved and maintained in order for
Stereotaxis to become and remain an Approved Supplier for Products.

1.    Quality System Requirements

1.1   Assessment: Biosense Webster will perform a Quality System Audit of
      Stereotaxis' quality systems to determine that the requirements of this
      section have been satisfied. Once the Biosense Webster auditor has
      performed the audit with satisfactory results, Biosense Webster will
      notify Stereotaxis in writing that the supplier approval process is
      complete. Minor deficiencies or non-conformances identified during these
      audits that are not indicative of a lack of control and will not preclude
      Stereotaxis from supplier approval. However, such observations will be
      brought to the attention of Stereotaxis and Biosense Webster and
      Stereotaxis will identify actions that will be taken to correct these
      items and agree upon a time schedule in which these actions will be
      implemented.

1.2   Stereotaxis will attain a general state of compliance with the FDA and
      international medical device requirements.

1.3   Stereotaxis will have, or will develop, quality systems which comply with
      current GMP QSR (CFR 820), ISO9000, ISO14001, and EN46001, as determined
      by Biosense Webster and or FDA or EC Notified Body assessment. However,
      the development of appropriate quality systems will occur in a timely
      fashion so as to permit commercialization of Products as soon as other
      factors permit.

1.4   Written requirements, including but not limited to specifications,
      drawings, test methods and procedures, will be utilized by Stereotaxis for
      all Products manufactured for Biosense Webster. All requirements will be
      mutually developed and agreed upon by Stereotaxis and Biosense Webster.

1.5   Stereotaxis will not make any changes to components, processes, systems
      (e.g. quality, measurement, testing) which are relevant to the admission
      of the products or suppliers used to produce, test and or release Products
      manufactured for Biosense Webster without prior written approval from
      Biosense Webster Quality Assurance management.

1.6   Stereotaxis will establish and implement a system that ensures Device
      History Records (DHR) for each batch, lot, or unit are created to
      demonstrate that the Product is manufactured in accordance with all
      applicable specifications and requirements.

1.6.1 DHR's will contain adequate information to provide traceability of all
      components and manufacturing aids (if any) used in the manufacture of a
      finished Product.


                                      C-1


<PAGE>

1.6.2 DHR's will contain adequate information to identify the processing methods
      and personnel involved in the manufacture of a finished Product.

1.6.3 DHR's will contain adequate information to demonstrate that the
      manufactured Product was evaluated (tested and/or inspected) and found to
      meet the appropriate specifications.

1.7   Stereotaxis will establish written requirements, including specifications
      and drawings, for purchased materials and components and will implement a
      system to ensure that the materials and components supplied meet these
      specifications.

1.8   Stereotaxis will obtain agreements with suitable suppliers for all
      components, materials and services used in the manufacture of Products and
      that no changes in the goods or services supplied will be made without
      adequate notification to Stereotaxis.

1.9   Stereotaxis will have a system for assisting Biosense Webster with
      handling customer complaints.

1.9.1 All complaints involving Products supplied to Biosense Webster will be
      initially reported to Biosense Webster customer service. Stereotaxis will
      be promptly informed if the complaint involves a product supplied by
      Stereotaxis, and within seven (7) calendar days, provide a written
      preliminary investigation report to Biosense Webster Quality Assurance.
      This preliminary report will include an initial assessment of device
      reporting under MDR or Vigilance reporting requirements.

1.9.2 Stereotaxis will cooperate fully and promptly in the investigation of
      complaints involving supplied Products. All complaints should be
      investigated and a written response provided to Biosense Webster Quality
      Assurance within thirty (30) days of receipt. All correspondence with the
      complainant will be handled by Biosense Webster, unless other arrangements
      are made by Stereotaxis with Biosense Webster on a case-by-case basis.

1.9.3 Biosense Webster will be responsible for filing any device report under
      MDR or Vigilance reporting requirements.

1.9.4 In the event that corrective actions are warranted as the result of
      customer complaints for the supplied Products, these corrective actions
      will be incorporated and tracked as part of the Biosense Webster
      Corrective Action system.

1.10  If a problem that potentially affects the safety, efficacy or reliability
      of the Products is identified by either Stereotaxis or Biosense Webster,
      the problem and all known facts will be brought to the attention of both
      company's Quality Assurance management as soon as possible, but within 24
      hours of the identification of the problem. In the event that a field
      action is contemplated, Biosense Webster and Stereotaxis will work
      together to determine whether a field action should take place; however,
      the final decision to implement a field action will be made by the
      Biosense Webster Quality Management. Biosense Webster will be responsible
      for implementing any


                                       C-2



<PAGE>


      field action, including informing customers and defining the logistics of
      the field action. Stereotaxis will cooperate fully in the implementation
      of any field action.

1.11  Stereotaxis will establish a document retention procedure to ensure that
      all documents required to meet the quality requirements herein set forth,
      including distribution records, are retained for a minimum of 5 years
      from the date of Product, including but not limited to Design History
      Files and Complaint Files will be retained for a minimum of 10 years.

1.12  Biosense Webster may provide assistance to conduct interim audits of
      Stereotaxis' quality systems to ensure that those systems are being
      developed in accordance with Biosense Webster's supplier qualification
      requirements.

1.13  Stereotaxis will maintain 97% on time delivery and 99% quality acceptance
      of Products.

2  PRODUCT REQUIREMENT

Assessment. Biosense Webster will conduct Design Validation, Design Verification
and Product Performance Qualification (PPQ) testing to determine if the Current
Products or Modified Products meet their pre-established specifications and
quality attributes. Once the Products have successfully met all requirements of
the Design Validation Verification and PPQ testing, and all Quality Systems
Requirements stated above have been met, Stereotaxis will be considered a
Qualified Supplier and added to the Biosense Webster QSIL (Qualified Supplier
Items List).

                                       C-3

<PAGE>


                                   EXHIBIT D

                 DESCRIPTION OF STEREOTAXIS LOCALIZATION SYSTEM

1     Hardware

The Stereotaxis Localization System (currently being developed by a Stereotaxis
subcontractor) is designed to use AC magnetic fields to localize single coil
receivers, and provides five degree-of-freedom Localization for up to six coils.
The sample rate is 50 samples per second per channel.

2     Applications currently targeted

2.1   Expected to be in the clinic (i.e. human clinical trials) by Q3 2002: User
      interface for electrophysiology navigation in which the system changes the
      magnet field in real-time in response to input from the user, via a 3D
      input device. The catheter advancer will also be fully compatible into the
      user interface to provide telemetric control to the physician. Other
      features include three dimensional (3D) point capture and tissue contact
      estimation.

2.2   Expected to be in the clinic by Q4 2002: This phase adds 3D visualization
      and target-based navigation. A pre-operative CT will be imported to the
      system and registered, such that the localized EP catheter can be
      graphically rendered within the 3D CT heart chamber rendering. This
      enables the physician to visualize precisely where the catheter lies,
      relative to the complex anatomy he/she is trying to ablate. Additionally
      the physician will be able to point-and-click on 3D anatomic targets
      within the image, and the system will, via the magnet field.

                                       D-1


<PAGE>


                                    EXHIBIT E

                INITIAL JOINT STEERING COMMITTEE REPRESENTATIVES

Biosense:

       1.   Shlomi Nachman,

       2.   Uri Yaron

       3.   Avinoam Dayan


Stereotaxis:

       1.   Doug Bruce, Senior Vice President, Research & Development

       2.   Paul Burmeister, Vice President, Product Development

       3.   Nicola Young, Chief Financial Officer


                                       E-1


<PAGE>
                                                                   EXHIBIT 10.12

                  AMENDMENT TO DEVELOPMENT AND SUPPLY AGREEMENT

         This amendment ("Amendment") is made this 3rd day of November 2003 to
the Development and Supply Agreement (the "Master Collaboration Agreement")
between Biosense Webster, Inc. ("Biosense Webster") and Stereotaxis, Inc.
("Stereotaxis").

PREAMBLE

         Pursuant to this Amendment, Biosense Webster and Stereotaxis set forth
the principal terms and conditions for an expanded strategic alliance for the
development of new technologies focusing on the key role of Biosense Webster's
catheter technology and Stereotaxis' NIOBE System in the integrated digital
"Catheterization lab of the future" through the combination of Stereotaxis'
advanced programmatic digital instrument control technology and Biosense
Webster's advanced catheter technology in electrophysiology mapping and
ablation.

                                    RECITALS

         WHEREAS Stereotaxis and Biosense Webster have pursuant to the Master
Collaboration Agreement agreed to jointly develop a Compatible NIOBE -- CARTO
System and to jointly develop certain associated proprietary, interventional,
disposable, electrophysiology devices and to manufacture, market and sell such
products

         WHEREAS, Stereotaxis and Biosense
 Webster desire to extend their
alliance under the Master Collaboration Agreement to include collaboration in
respect of the development and commercialization of non-Localized
electrophysiology ablation and mapping comprising devices described in or
pursuant to the Appendix ("Partnered NL Catheters") having the functionality of
non-Localized electrophysiology devices that are products of Biosense Webster
("Biosense Webster NL Catheters") and that are navigable with the NIOBE System;
and

         WHEREAS, Stereotaxis has developed a computerized instrument control
system known as the NIOBE System(TM) that enables navigation utilizing
externally applied magnetic fields of inter alia associated proprietary,
interventional, disposable, electrophysiology devices; 

         WHEREAS, Biosense Webster has developed and commercialized an
electrophysiology mapping and Localization system known as the CARTO(TM) system
and associated proprietary, interventional, disposable, electrophysiology
devices; and

         WHEREAS Biosense Webster will contribute to the costs of the
development and commercialization of the Partnered NL Catheters by inter alia
providing development support, manufacturing, engineering and administrative
support, regulatory resources and intellectual property rights and Biosense
Webster will also contribute certain costs allocated to the marketing,
promotions and distribution of products and Stereotaxis will contribute inter
alia intellectual property




<PAGE>


and certain development and regulatory resources, certain supplemental
promotions and marketing as set forth in and pursuant to this Amendment;

NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES, COVENANTS AND CONDITIONS
HEREIN, THE PARTIES AGREE AS FOLLOWS:

AMENDMENT

1A. Interpretation: Terms and definitions used in the Master Collaboration
Agreement will have the same meaning in this Amendment unless otherwise
indicated and references herein to this Amendment or provisions thereof include
references to terms of the Master Collaboration Agreement incorporated herein by
reference. Unless expressly provided for herein, the Master Collaboration
Agreement remains in full force and effect. In the event of conflict between
this Amendment and the Master Collaboration Agreement, this Amendment will
control.

1B. For purposes of giving effect to this Amendment, references in the Master
Collaboration Agreement to Daughter Products contained in the definitions
"Components", "Defects" and "Net Revenue" will be taken to include references to
Partnered NL Catheters (as that term is defined in the Amendment) in addition
to Daughter Products.

1C. The definition in the Master Collaboration Agreement of "Daughter Product
Specifications", is amended to include a reference to Partnered NL Catheters and
Additional Partnered NL Catheters in addition to references to Daughter Product
One and Daughter Product Two and Additional Daughter Products.

1D. The definition in the Master Collaboration Agreement of "Technical Failure"
is amended to include a reference to all catheters sold under this Agreement by
Biosense, including Partnered NL Catheters and other Stereotaxis Catheters as
well as the reference to Initial Daughter Products.

1E. Where applicable for purposes of giving effect to Section 2
below of this Amendment, references in Section 7 of the Master Collaboration
Agreement to Parent Products are taken to comprise references to Biosense NL
Catheters

1F. Further Definitions

         (i) "Additional Partnered NL Catheters" shall have the meaning set
forth in Section 12 below.

         (ii) "Amendment Exclusivity Period" shall have the meaning set forth in
Section 5 below.

         (iii) "Biosense NL Catheters" shall have the meaning set forth in the
Recitals above.

         (iv) "Delay Date" shall have the meaning set forth in Section 6 below.

         (v) "High Technology Partnered NL Catheter" shall have the meaning set
forth in Section 2.1 below.



<PAGE>



         (vi) "Partnered NL Catheters" shall have the meaning set forth in the
Recitals above. Upon consultation with Biosense Webster, Stereotaxis shall have
the ability to amend the identification of Partnered NL Catheters at any time
within three (3) months of the signing of this Amendment, such that the
catheters so identified are of similar scope and function as those currently
identified in the Appendix attached hereto.

         (vii) "Partnered NL Catheter Launch Date" shall have the meaning set
forth in Section 5.3 below. 

         (viii) "Standard Partnered NL Catheter" shall have the meaning set
forth in Section 2.1 below.

         (ix) "Stereotaxis Catheters" shall mean any interventional
non-Localized electrophysiology mapping or ablation devices that have been
commercialized by Stereotaxis at the Partnered NL Catheter Launch Date (and,
upon regulatory clearance for commercial use, any such devices for which
Stereotaxis has applied for such regulatory clearance prior to such date.)

         (x) "Utilization Management Committee" has the meaning set forth in
Section 7 below.

LICENSE GRANTS

2. Intellectual Property Rights: Section 2.1.1 of the Master Agreement is
amended to include references to Partnered NL Catheters and Stereotaxis
Catheters in addition to Daughter Products. Sections 2.1.3, 2.2.1 and 2.2.3 are
amended to include references to Partnered NL Catheters in addition to Daughter
Products.

3. Development and Distribution Collaboration Regarding Certain Non-Localized
Devices: Sections 3.1.2.3, 3.1.2.4 and 3.1.2.7, 3.3 and 3.4. Sections 4.1
(subject to Section 3 of this Amendment), 4.2.1, 4.3, 4.4.1, 4.4.3, 4.5, Section
6, Section 7, Section 8, Section 9 (subject to Section 6 of this Amendment),
Section 10 and Section 11 of the Master Collaboration Agreement are amended to
include references to Partnered NL. Catheters in addition to references to
Daughter Products and to include references to Additional Partnered NL Catheters
in addition to Additional Daughter Products (in all events as appropriate to
give meaning to this Amendment); and in any event the Parties agree to cooperate
in the same manner (where applicable) as set forth in the Master Collaboration
Agreement in respect of Daughter Products (developed from Parent Products) to
develop and commercialize Partnered NL Catheters (developed from Biosense
Webster NL Catheters) and for purposes of giving effect to the foregoing such
applicable terms of the Master Collaboration Agreement. Biosense Webster
acknowledges and agrees that, in accordance with this Amendment and Sections 3
and 4 of the Master Collaboration Agreement it will inter alia:

         (i) serve as sole manufacturer of the Partnered NL Catheters for
         commercial use;

         (ii) distribute and conduct marketing and promotions in respect of
         Partnered NL Catheters, and will use all reasonable commercial efforts
         in this regard to maximize the sales volume of the Partnered NL
         Catheters; and






<PAGE>




           (iii) coordinate with and provide information to Stereotaxis to an
           extent reasonably required to allow Stereotaxis to develop the
           Partnered NL Catheters.

Without limitation to the foregoing, the average selling price(s) of Partnered
NL Catheter(s) will not be greater than the lesser of: (a) [***] of the average
selling price of corresponding Biosense Webster NL Catheter(s) during the past
[***] months (provided that such pricing is sufficiently profitable in order to
achieve compliance with relevant laws); and (b) in the event that Biosense
Webster is generally regarded in the electrophysiology industry as having exited
the relevant segment of the electrophysiology ablation business, [***] of the
average selling price of corresponding manually navigable non-localized
electrophysiology catheter(s) marketed by a Restricted Party (provided such
catheter(s) are generally regarded in the electrophysiology industry as having a
significant market share) that are available in the marketplace. The Parties
acknowledge that the average selling price of any such Restricted Party
competitive catheters may not be publicly available and agree that they will,
upon written request by either Party, mutually determine in good faith within
one month of such written request a reasonable estimate of such average selling
price.

3.1. During the Term (as defined below), Biosense Webster will provide Biosense
Webster NL Catheters (and at such time as Biosense Webster is manufacturing
Partnered NL Catheters, Partnered NL Catheters) to Stereotaxis, for purposes of
Stereotaxis' development of Partnered NL Catheters and for limited promotions
with NIOBE System customers provide that such promotions will be reasonably
coordinated with Biosense Webster in terms of development, clinical and
promotional activities, the greater of (i) up to 500 units per calendar year; or
(ii) up to 10 units per installed NIOBE System per calendar year (where an
installed NIOBE System comprises any NIOBE System that is commercially
operational during such calendar year); at a transfer price of [***].

3.2. Stereotaxis acknowledges and agrees that it will use all reasonable
commercial efforts to develop the Partnered NL Catheters together with Biosense
Webster and to devote appropriate resources to such development and clinical
activities (which may include, for example, an appropriate subset of such
resources as specified in the current Stereotaxis operating budget for
electrophysiology device development). Stereotaxis will utilize Biosense Webster
as an exclusive subcontractor for Stereotaxis' responsibilities in respect of
development of Partnered NL Catheters on commercially reasonable terms to be
mutually agreed and subject to reasonable budgetary constraints.

4. Revenue Share to Stereotaxis For Partnered NL Catheters: Stereotaxis Revenue
Share will be as follows:

4.1. Where a Partnered NL Catheter comprises a magnetically navigable version
of a Parent Product that is based on highly differentiated technology compared
with competitive products in the marketplace ("High Technology Partnered NL
Catheter") then Stereotaxis' Revenue Share in respect of such High Technology
Partnered NL Catheter shall be the same as is set forth in the Master
Collaboration Agreement for Daughter Products. Without limitation to the
foregoing, examples of High Technology Partnered NL Catheters include
magnetically navigable catheters utilizing Biosense Webster' irrigated catheter
technology;

[*** 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.]



<PAGE>


4.1.1. Where a Partnered NL Catheter comprises a magnetically navigable version
of a Parent Product that does not contain a differentiated technology compared
with competitive products in the marketplace, ("Standard Partnered NL Catheter")
then in recognition that the Stereotaxis IP comprised in such Standard Partnered
NL Catheter could provide a degree of differentiation for the Standard Partnered
NL Catheter in the marketplace and of Stereotaxis commitment of resources to
develop such Standard Partnered NL Catheter, Stereotaxis' Revenue Share in
respect of such Standard Partnered NL Catheter will be: (i) the same as provided
for in the Master Collaboration Agreement regarding Daughter Products (excepting
[***]; plus (ii) an additional [***].

4.1.2. In the event that no corresponding Biosense Webster NL Catheter referred
to above is distributed by Biosense Webster or in the event that Biosense
Webster is generally regarded in the electrophysiology industry as having exited
the relevant segment of the electrophysiology ablation business, then the
pricing premium (if any) for the relevant Partnered NL Catheter referred to in
Section 4.1.1 above will be calculated with reference to the average selling
price of corresponding manually navigable non-localized electrophysiology
catheters marketed by a Restricted Party (provided such catheters are generally
regarded in the electrophysiology industry as having a significant market share)
that are available in the marketplace. The Parties acknowledge that the average
selling price of any such Restricted Party competitive catheters may not be
publicly available and agree that they will, upon written request by either
Party, mutually determine in good faith within one month of such written request
a reasonable estimate of such average selling price.

5. Biosense Webster as Manufacturer.

5.1 Biosense Webster will manufacture Partnered NL Catheters used for clinical
trials and research unless it notifies Stereotaxis otherwise in writing and in
such case Stereotaxis will manufacture such Partnered NL Catheters.

5.2 Stereotaxis Catheters used for clinical trials and research will be
manufactured by Stereotaxis unless otherwise agreed in writing by the Parties.

5.3 The Parties agree that Biosense will serve as exclusive manufacturer of
Partnered NL Catheters (and at Biosense written election, Stereotaxis Catheters)
for commercial sale and Section 4.1 of the Master Collaboration Agreement is
amended to include references to Partnered NL Catheters (and where applicable,
Stereotaxis Catheters) in addition to Daughter Products and without limitation,
to the extent required, the Parties agree to fully cooperate in the transfer of
manufacturing

[*** 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.]



<PAGE>








know-how in respect of Stereotaxis Catheters from Stereotaxis to Biosense in
advance of commercialization thereof.

5.4 Manufacturing subcontractors that Stereotaxis may utilize to give effect to
this Amendment shall be those that are reasonably acceptable to Biosense
Webster.

6. Certain Amendment Exclusivity: The Parties agree, subject to the terms of
this Amendment, that: 

6.1. Certain Amendment Exclusivity During The Term: During the Amendment
Exclusivity Period (as defined below), Stereotaxis will not engage in any
development or commercialization activities with respect to interventional
non-Localized electrophysiology mapping or ablation devices in concert or
cooperation or otherwise with any Restricted Party or other material competitor
to Biosense Webster regarding devices of such type;

6.2. Amendment Exclusivity Period. The Partnered NL Catheter Amendment
Exclusivity Period is six (6) years from the date of this Amendment, provided
that in respect of any Additional Partnered NL Catheter, the Amendment
Exclusivity Period for that catheter will comprise 5 years from the date of
first commercial sale of such Additional Partnered NL Catheter in accordance
with the provisions of this Amendment and provided that such catheters are
commercialized expeditiously in a reasonable commercial manner and in good faith
by the Parties.

6.3. Certain Exclusive Distribution: Except as expressly set forth herein:

6.3.1. Subject to Section 6.3.3 below, until the date of the first commercial
sale of a Partnered NL Catheter in the U.S. ("Partnered NL Catheter Launch
Date"), Stereotaxis will continue its commercialization of interventional
non-Localized electrophysiology mapping and ablation devices;

6.3.2. Subject to Section 6.3.3 below, during the period commencing on the date
of the Partnered NL Catheter Launch Date and ending at the expiration of the
Term, Stereotaxis will not engage in any commercialization activities in respect
of interventional non-Localized electrophysiology mapping or ablation devices;

6.3.3. At its election (by written notice to Stereotaxis) Biosense Webster may
conduct exclusive Marketing and Promotions and Distribution (subject to
Stereotaxis rights under Section 4.2.1.2 of the Master Collaboration Agreement)
of some or all Stereotaxis Catheters (and associated non-exclusive Marketing and
Promotions and Distribution of the Stereotaxis CardioDrive(TM) disposable device
in the manner set out below) in some or all markets prior to the Partnered NL
Catheter Launch Date, provided that Stereotaxis may continue its clinical
development activities in close coordination with Biosense Webster in respect of
the Stereotaxis Catheters during this period (which will include investigational
use of a catheter for an application regardless of whether the catheter has been
cleared for commercial use for any other application in the relevant market)

6.3.4. Upon the Partnered NL Catheter Launch Date, Biosense Webster will
conduct exclusive commercial Marketing and Promotions and Distribution of the
Stereotaxis Catheters (subject to Stereotaxis rights under Section 4.2.1.2 of
the Master Collaboration Agreement).






<PAGE>



6.4. Distribution of Stereotaxis' Catheters

6.4.1. The transfer price paid by Biosense Webster to Stereotaxis for
Stereotaxis Catheters that are manufactured by Stereotaxis shall be as mutually
agreed in writing by the parties on reasonable commercial terms but not to
exceed [***]. Notwithstanding the foregoing, Biosense Webster will be under no
obligation to continue such Marketing and Promotions and sales of any
Stereotaxis Catheter in a market in which an equivalent Partnered NL Catheter is
commercially available (provided that Biosense Webster will fulfill specific
customer orders requesting any such Stereotaxis Catheter thereafter). An example
of equivalency (for purposes of the foregoing only) would be a Partnered NL
Catheter that is a 4mm temperature sensing ablation catheter and a Stereotaxis'
4mm temperature sensing ablation catheter.

6.4.2. Upon the Partnered NL Catheter Launch Date and during the Term, in order
to avoid customer confusion regarding the manner of use of certain devices,
Stereotaxis agrees that Biosense Webster (upon its election) may conduct
Marketing and Promotions and Distribution of the Stereotaxis' CardioDrive(TM)
catheter advancer disposable on a non-exclusive basis, provided that such
Marketing, Promotions and Distribution is solely targeted at the use of such
product in conjunction with Partnered NL Catheters and/or Stereotaxis Catheters,
and in no other fashion, and that such devices will be (again, upon Biosense
Webster election) co-branded by the parties, provided that the foregoing will
not limit Sections 4.4 and 4.5 of the Master Collaboration Agreement.

6.4.3. Biosense Webster may procure such CardioDrive(TM) devices from
Stereotaxis at a transfer price per quarter comprising [***] of the average
selling price to end users of such devices in such quarter (which price will be
estimated in good faith by the parties for purposes of invoicing at the time of
procurement and will be subject to prompt adjustment based upon actual pricing
data when available) and otherwise on relevant terms set forth in the Master
Collaboration Agreement If either: there is no average selling price to end
users; or [***] of the average selling price of the CardioDrive(TM) to end users
is less than [***], then the price to Biosense Webster shall be [***].

6.4.4. In the event there are regulatory agency requirements pertaining to the
Marketing and Promotions and Distribution of the CardioDrive(TM) devices by
Biosense Webster in the manner set out above, then Section 9 of the Master
Collaboration Agreement will be taken to apply to the CardioDrive device in
addition to Partnered NL Catheters.

6.5. Certain Training and Promotions: The Parties will mutually determine in
good faith and cooperate to implement appropriate training programs for the
Biosense Webster non-Localized electrophysiology disposables salesforce and the
Stereotaxis systems and software salesforce in order to facilitate the
Distribution of Partnered NL Catheters in accordance with the terms of this
Amendment.

6.6. Certain Development Conditions: The Parties acknowledge and agree that: (i)
in order to evaluate the suitability of certain candidate interventional
non-Localized electrophysiology mapping

[*** 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.]






<PAGE>


or ablation devices as Additional Partnered NL Catheters; and (ii) to ensure
expeditious availability of such candidate devices for non-commercial clinical
use where such expeditious availability is a significant factor in facilitating
adoption or utilization of NIOBE Systems by customers; then Stereotaxis may
during the Term develop such devices and make them available for non-commercial
clinical use in close coordination with Biosense Webster representatives;
provided that Stereotaxis will consult with Biosense Webster regarding such
clinical use and evaluation of the results thereof for purposes of determining
whether such device is nominated as an Additional NL Partnered Catheter.

7. Regulatory: Pursuant to the provisions of Section 9 of the Master
Collaboration Agreement, the Parties will pursue expeditious regulatory approval
of Partnered NL Catheters in the USA and Europe and subject to mutual agreement
in foreign countries (provided that Stereotaxis may in its discretion elect that
the Parties will also pursue regulatory clearance in Japan) and the provisions
related to Marketing, Promotions and Distribution and otherwise as applicable in
this Amendment will apply in respect of such foreign territories; provided
that Stereotaxis, as the Party with primary development responsibility for
Partnered NL Catheters, may elect in its discretion to pursue its own PMA or
other applicable FDA marketing authorization as the filing entity (naming
Biosense Webster as Distributor, as applicable) for any Partnered NL Catheter.
In the event that relevant regulatory approval in the U.S. of a Partnered NL
Catheter comprising a magnetically navigable non-Localized 4mm thermocouple
ablation catheter, or a magnetically navigable non-Localized 8mm thermocouple
ablation catheter or a magnetically navigable non-Localized irrigated catheter
is not achieved by 30 months from the date hereof ("Delay Date"), then either
Party may elect that this Amendment will no longer be of any force or effect,
provided that where at the Delay Date the Parties have reasonable prospects of
obtaining such approval in the near term (to be considered within six (6) months
of the expiration of the thirty (30) month Delay Date expiration), such period
will be extended for an additional 6 months. If at the end of the first six (6)
month extension period, approval is not yet obtained, but it appears the Parties
have reasonable prospects of obtaining such approval within the next six months,
the period will be extended for an additional six (6) months. No further
extensions will be allowed unless the parties agree to such an extension in
writing.

8. Pacing and Other Devices Excluded: For the avoidance of doubt and
notwithstanding anything elsewhere contained in this Amendment, nothing
contained in this Amendment will restrict Stereotaxis in any way in respect of
development and commercialization of: (i) devices used for the delivery of
pacing leads in electrophysiology or comprising such leads or associated with
the placing of any such leads; or (ii) other devices used outside the field of
endovascular ("interventional") non-Localized electrophysiology mapping and
ablation (including without limitation in the fields of surgery, interventional
cardiology, interventional radiology and interventional neuroradiology); or
(iii) accessories to the NIOBE System including without limitation components of
the Stereotaxis' CardioDrive catheter advancement mechanism; and this Amendment
does not relate to or establish any rights or restrictions in respect of such
devices.

8.1. During the Term, at least thirty (30) days (or sixty (60) days in the case
of a Restricted Party) prior to Stereotaxis entering into material and
substantial negotiations regarding a potential agreement for magnetically
enabling interventional devices in cardiology fields outside of non-Localized
electrophysiology and mapping (other than: supply agreements with non-Restricted
Parties related to this field; or the field of delivery of pacing leads)
Stereotaxis agrees to notify


<PAGE>


Biosense Webster in writing, together with a summary description of the proposed
potential agreement that would be the subject of such negotiations ("Initial
Notice"). Stereotaxis herein assures Biosense Webster that any agreement
referred to in this Section 8.1 will provide that such agreement shall be
terminable on reasonable commercial terms following a change of control of
Stereotaxis. Upon request by Biosense Webster given within fifteen (15) days of
the date of such Initial Notice, Stereotaxis and Biosense Webster will discuss
the terms and conditions under which Stereotaxis and Biosense Webster would
enter into an agreement like the proposed potential agreement with a third
party. In the event that Stereotaxis and Biosense Webster have not agreed upon
such terms and conditions within fifteen (15) days (or forty (40) days in the
case of a Restricted Party) after the date Stereotaxis provided the Initial
Notice to Biosense Webster, Stereotaxis will be free to enter into such
agreement with a third party without further obligations to Biosense Webster,
and on any terms that Stereotaxis considers appropriate. It is understood that,
because Stereotaxis will be providing the Initial Notice to Biosense Webster
prior to the commencement of material and substantial negotiations with a third
party, Stereotaxis may not be able to define the entire or exact scope of the
rights and obligations of the potential agreement, and accordingly, so long as
the Initial Notice describes in general terms a product, field or rights that
overlap with the product, field or rights actually negotiated with, or granted
to, a third party, Stereotaxis will be deemed to have satisfied its obligations,
under this Section 6.1; also, it is understood that Stereotaxis need only
provide one (1) such Initial Notice in any twelve (12) month period before
engaging in such material and substantial negotiations with any third party or
parties.

9. Utilization Management:

         i.       The Parties will establish a Utilization Management Committee
                  comprising two appointees from either Party that will, subject
                  to the terms of this Amendment, meet quarterly to review
                  utilization of Partnered NL Catheters and Stereotaxis
                  Catheters with NIOBE Systems and discuss in good faith
                  strategies for mutual cooperation and coordination of the
                  Parties in order to drive increased utilization of NIOBE
                  Systems.

         ii.      Without limitation to the foregoing, the Utilization
                  Management Committee will consider from time to time at the
                  request of either Party whether inclusion of Stereotaxis
                  catheter advancer disposables in the packaging of Partnered NL
                  Catheters would increase utilization of NIOBE Systems in
                  electrophysiology. Where the committee determines that
                  utilization is reasonably likely to be thereby increased, it
                  will recommend to the Parties for their consideration in good
                  faith a proposal for such inclusion of catheter advancer
                  disposables in packaging and an appropriate payment to
                  Biosense Webster

         iii.     In its role of conducting Marketing, Promotions and
                  Distribution of the Partnered NL Catheters and Stereotaxis
                  Catheters pursuant to this Amendment, Biosense Webster will in
                  good faith but in its sole discretion determine any
                  implementation of such strategies (excepting in respect of the
                  potential inclusion of the catheter advancer disposable in
                  packaging of Partnered NL Catheters, which will be determined
                  by Stereotaxis in good faith but in its sole discretion)

         iv.      Either Party may convene a special meeting of the Utilization
                  Management Committee upon 7 days written notice to the other.





<PAGE>


         v.       The Utilization Management Committee will on a quarterly basis
                  (commencing immediately after signing of this Amendment)
                  confer in good faith in order to recommend to Biosense Webster
                  and Stereotaxis goals to be mutually agreed upon for selling
                  Partnered NL Catheters and, where applicable, Stereotaxis
                  Catheters that are mutually agreed in writing by the Parties.

10. Fulfillment of Orders: Biosense Webster will fulfill orders for Partnered NL
Catheters and Stereotaxis Catheters without substitutions and with the same
degree of promptness and customer responsiveness as for Parent Products,
Biosense NL Catheters and other comparable Biosense Webster products. Without
limitation, Biosense will fulfill orders whether such orders are placed directly
with Biosense Webster by a customer or where placed with Biosense Webster
through Stereotaxis on a customer's behalf

10.1. Biosense Webster will utilize such inventory control and management
policies in respect of Partnered NL Catheters as are used in the rest of its
interventional devices business and will accordingly maintain levels of
inventory and parts for Partnered NL Catheters relative to anticipated demand
that are no lower than for such other interventional devices.

10.2. Without limitation to the above provisions of this Section 10, at the
written request of Stereotaxis Biosense Webster agrees to maintain an inventory
cage at its site of stock purchased by Stereotaxis from Biosense to be used as
an emergency inventory supply in case of unforeseen delays in supply and further
to allow Stereotaxis to maintain a similar emergency inventory supply that is
purchased by Stereotaxis at Stereotaxis' own facilities.

10.3. In the event Biosense Webster has not fulfilled any customer order for
Partnered NL Catheters within the period specified in such order (or where no
period is specified, within 7 days) and has not cured such failure within
ninety-six (96) hours ("Cure Period") of written notice from the customer (or
Stereotaxis on a customer's behalf), then Stereotaxis may fulfill such order
from inventory maintained at Stereotaxis' own facility, and Biosense will
reimburse Stereotaxis for its reasonable expenses relating to this transaction.

10.4. Inventory maintained by Stereotaxis in accordance with Sections 10.2
and 10.3 above will be purchased by Stereotaxis at the average selling
prices for such items in the quarter in which such inventory is acquired by
Stereotaxis, which average selling prices will be estimated in good faith by the
Parties for purposes of invoicing and subject to prompt adjustment based on
actual selling price data for the relevant quarter. The Revenue Share to
Stereotaxis for sale of such inventory to customers will be calculated in the
same manner as if such devices had been sold by Biosense Webster in accordance
with this Amendment.

11. Certain Supply of Catheters To Stereotaxis:

11.1 Upon a Change of Control of Stereotaxis, Biosense Webster will cease to
conduct Marketing or Promotions for, or Distribute, Partnered NL Catheters and
Stereotaxis Catheters and will for a period of three years (or until the First
Competitive Sale Date, as defined below, or a period of three years after
termination of this Amendment, whichever is the earlier) after such Change of
Control



<PAGE>

manufacture and supply Stereotaxis with Partnered NL Catheters by fulfilling
orders from Stereotaxis in the same manner as set out in Section 6(i) above and
those provisions of this Amendment required for purpose of giving effect to the
foregoing will continue in force and effect and other provisions of this
Amendment) will no longer be of force or effect except in respect of any
antecedent breach. The transfer price and revenue share to Biosense Webster will
be the same as set forth in the Master Collaboration Agreement relating to any
distribution of Daughter Products by Stereotaxis, provided that in order to
provide incentive to Stereotaxis to expedite occurrence of the First Competitive
Sale Date, a premium of [***] of cost of goods sold to be included in the
calculation of such transfer price will be added in respect of each of the last
three 6-month periods of such three year period. The "First Competitive Sale
Date" means the date following a Change of Control of Stereotaxis upon which
Stereotaxis or its affiliates first sell magnetically navigable
electrophysiology mapping or ablation catheters other than those acquired from
Biosense Webster in accordance with this Section 11.

11.2. Upon expiration of the Term or other termination of this Amendment (other
than via a Change of Control pursuant to Section 11.1 above) and in order to
ensure continuity of supply for customers, Biosense Webster agrees that it will
supply to customers (or in lieu thereof will supply to Stereotaxis for supply to
customers) Partnered NL Catheters on the same terms as set forth in this
Amendment (other than those relating to Amendment Exclusivity and new product
development and subject to relevant minimum order volumes set forth in the
Master Collaboration Agreement) for a 3 year period.

11.3. Certain Supply of Catheters to Customers: Following termination or
expiration of the Master Collaboration Agreement, Biosense Webster will supply
to customers (or in lieu thereof will supply to Stereotaxis for supply to
customers that acquired a Compatible NIOBE System or issued a purchase order for
a Compatible NIOBE System prior to such expiration or termination) Daughter
Products in the same manner as set out in such agreement (including minimum
order volumes) for a period of 3 years.

12. Additional Partnered NL Catheters: For purposes of this Amendment,
Additional Partnered NL Catheters in respect of non-Localized electrophysiology
catheters will have a corresponding meaning to Additional Daughter Products in
respect of Localized electrophysiology catheters. In the same manner as the
Parties may nominate Additional Daughter Products pursuant to the Master
Collaboration Agreement, Stereotaxis has the right to nominate Additional
Partnered NL Catheters (without limitation, based either on Stereotaxis IP or
intellectual property licensed in by Stereotaxis from third parties other than
Restricted Parties), which will then be developed and commercialized in the same
manner as described for Additional Daughter Products under the Master
Collaboration Agreement. In the event Biosense Webster elects not to distribute
any such Additional Partnered NL Catheter in accordance with the foregoing, it
may also decline to manufacture such device, in which case Stereotaxis may
manufacture or procure manufacture of such device (other than through a
Restricted Party).

13. Master Collaboration Agreement: In the event of early termination for any
reason (other than Change of Control) of the Master Collaboration Agreement,
Stereotaxis may elect to terminate this Amendment at any time within 12 months
after any such early termination of the Master Collaboration Agreement.


[*** 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.]




<PAGE>




14. Force and Effect of This Amendment: This Amendment will be of no force or
effect unless and until Biosense Webster executes the Purchase Agreement,
Joinder Agreement and Amended Certificate of Incorporation regarding the
investment by Biosense Webster or its Affiliate of $9.5 million in preferred
stock of Stereotaxis. Stereotaxis agrees to provide executed copies of the same
to Biosense Webster for its countersignature immediately upon written notice by
Biosense Webster that it is prepared to execute the same; provided that in the
event that such documents have not been so executed by the parties prior to
December 31, 2003, this Amendment will be of no force or effect.

         IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be
signed by duly authorized officers or representatives.

STEREOTAXIS, INC.                             BIOSENSE WEBSTER INC.

By: /s/ BEVIL J. HOGG                         By: /s/ RON T. TANAKA 
   ------------------------------                ------------------------------
Print Name: BEVIL J. HOGG                     Print Name: RON T. TANAKA
           ----------------------                        ----------------------
Title: CEO/PRESIDENT                          Title: PRESIDENT             
      ---------------------------                   ---------------------------
Date: NOVEMBER 3, 2003                        Date: NOVEMBER 3, 2003           
     ----------------------------                  ----------------------------


<PAGE>

                                    APPENDIX

                                     [***]

[*** 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.]

<PAGE>
                                     [***] 

[*** 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.]


<PAGE>
                                                                   EXHIBIT 10.13

                                SUPPLY AGREEMENT

This Supply Agreement ("Agreement") dated July 1, 2002 is by and between
Stereotaxis, a Missouri corporation, having places of business at 4041 Forest
Park Ave, St Louis, MO 63108 and Magnet Sales & Manufacturing Inc., ("Supplier),
a California corporation, having its place of business at 11250 Playa Court,
Culver City, CA 90230.

In consideration of the mutual promises and consideration provided for in the
Agreement, the parties agree as follows:

1. GENERAL

1.1 DESCRIPTION OF AGREEMENT PRINCIPLES

This Agreement defines the relationship and requirements between Stereotaxis and
Supplier to ensure a consistent supply of Items that meet Stereotaxis'
Specifications. Stereotaxis may, from time to time, issue Purchase Orders to
Supplier for the purchase of Items. Supplier agrees that it shall, throughout
the term of this Agreement, sell and deliver such Items under the terms and
provisions of this Agreement. All Items delivered under this Agreement shall
comply with the requirements of this Agreement.

1.2 ENTIRE AGREEMENT

This Agreement, including any Exhibits or Attachments which are incorporated by
reference into this Agreement, sets forth the entire understanding and agreement

of the parties as to the subject matter of this Agreement and supersedes all
prior agreements, understandings, negotiations and discussions between the
parties as to the subject matter. No amendment to or modification of this
Agreement will be binding unless in writing and signed by a duly authorized
representative of each party.

1.3 ITEMS COVERED

All Items supplied to Stereotaxis by Supplier will be covered by this Agreement.
The list of Items covered by this Agreement is shown in Attachment 1. New Items
may be added to Attachment 1 upon mutual written agreement of Stereotaxis and
Supplier from time to time.

1.4 DURATION OF AGREEMENT

This Agreement commences on and as of the date of the later of the two
signatures shown in Section 13, provided each party shall have executed and
delivered one or more counterparts of this Agreement to the other (the
"Effective Date").

This Agreement will remain in effect for a term of two (2) years from the
Effective Date (the "Initial Term") unless earlier terminated in accordance with
its provisions. At any time before expiration of the Initial Term, Stereotaxis
may, at Stereotaxis' option, extend the term of this Agreement subject to all
other provisions of this Agreement for an additional period of up to 2 years, by
notifying Supplier in writing of such extension.

2. CONFIDENTIAL INFORMATION

Both Stereotaxis and Supplier have executed mutual Non-Disclosure Agreements
with respect to their respective proprietary and confidential information.

Stereotaxis has developed magnets and control systems that are its intellectual
property and proprietary to it.

Supplier has developed manufacturing and assembly methods for such Stereotaxis
designed magnets that are its intellectual property and are proprietary to it.

Stereotaxis and Supplier acknowledge such confidential and proprietary
information and agree to be bound by the Non-Disclosure Agreements that have
been signed and are in force.



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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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3.5 PERFORMANCE CONSTRAINTS

Supplier is responsible for anticipating (1) any inability on its part to
perform its obligations and (2) any limitations in meeting the objectives of
this Agreement with regard to manufacturing, delivery and other required
performance. Supplier is also responsible for informing Stereotaxis when such
constraints will occur and initiating action plans to resolve them. Typical
constraints might include, but are not limited to:

         (a)      Quality problems

         (b)      Capacity/production problems

         (c)      Sub-tier supplier supply-chain management problems

         (d)      Other business issues

3.6 RESOLUTION OF PERFORMANCE CONSTRAINTS

Supplier will notify the Supplier Account Team Lead as soon as a constraint is
identified and promptly advise Stereotaxis of an action plan to resolve the
constraint without impacting Supplier's performance obligations under this
Agreement.

3.7 PACKAGING REQUIREMENTS

Supplier will have all Items packaged "ready for use" in accordance with
Stereotaxis' packaging specifications. Packaging specifications shall be
supplied by Stereotaxis for each type of shipment to be made by Supplier (for
example, via truck, via sea freight, or via airfreight). Supplier will mark and
identify every Item in compliance with Stereotaxis' part marking identification
specifications and requirements. In addition, Stereotaxis may require and
specify specific fit-for-use packaging for certain Items and/or deliveries.

3.8 TRANSPORTATION REQUIREMENTS

Supplier must include a valid packing slip number or package ID on each package
or shipment.

Supplier shall ship all Items "F.O.B. Origin". Stereotaxis will specify the
applicable destination point, which may be a Stereotaxis Facility or another
location. Supplier shall ship all Items in accordance with Stereotaxis' Routing
Guide, including use of approved carriers. In the absence of such a Routing
Guide, Supplier shall select appropriate carriers for shipment of Items.
Supplier shall produce and ship all Items to accomplish delivery of all Items at
the applicable destination point on time.

Stereotaxis may require, from time to time, the Supplier to ship to locations
outside of the United States of America. Supplier will prepare the export
paperwork and be the exporter of record. Supplier must utilize Stereotaxis'
preferred carriers for the export of the Items. Stereotaxis will pay the
freight charges based on Stereotaxis' rates with its preferred carriers.
Stereotaxis will be responsible for importing the goods into the destination
country.

3.9 FREIGHT AND DELIVERY COSTS

All freight and delivery costs for Items shall be specified as "Freight Prepaid"
on bills of lading, to be paid directly by Supplier and billed to Stereotaxis.

3.10 TITLE AND RISK OF LOSS

For all Items shipped Stereotaxis shall bear all risk of loss as to such Items
while in transit. For those Items where Stereotaxis has provided prior written
agreement that Supplier will ship Items using Supplier owned trucks, Supplier
shall bear all risk of loss as to all such Items while in transit and continuing
until Stereotaxis or its designee has received the Items at the specified
destination point and Stereotaxis has acknowledged receipt of the Items.



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4. QUALITY REQUIREMENTS

4.1 CERTIFICATIONS AND ACCEPTANCE TESTS

Supplier agrees to certify that Items have passed all production acceptance
tests and configuration requirements as specified by Stereotaxis and to provide
to Stereotaxis, if required, raw materials certifications for all magnet
materials used in Items, a Certificate of Conformance and documentary evidence
of passing any specified Acceptance Test Procedures.

4.2 QUALITY REQUIREMENTS DOCUMENT

Stereotaxis will develop a quality requirements document for each Item pursuant
to this Agreement, defining all quality requirements and including all
applicable elements of the Item (a "Quality Requirements Document"). Supplier
will provide reasonable assistance to Stereotaxis in its development of a
Quality Requirements Document. Supplier agrees to comply with all quality
requirements defined by such Quality Requirements Document.

4.3 QUALITY SYSTEM

Supplier's quality system must be in compliance with ISO 9000. Certification to
ISO 9000 is desired.

4.4 QUALITY PROBLEMS

Should Stereotaxis identify a quality issue or problem on a component or
subassembly and request Supplier to implement containment action on the part
failure, Supplier shall, within 3 business days after receipt of Stereotaxis'
request, deliver to Stereotaxis a documented containment plan. Stereotaxis will
review the proposed plan and will promptly notify Supplier of acceptance or
revisions to the plan. Upon acceptance of the containment plan Supplier shall
commence implementation of plan and diligently proceed with implementation of
plan to completion. Supplier will substantiate this containment plan with a
closed loop corrective action identifying a permanent fix. Additionally,
Supplier will implement a preventative action plan, as necessary, to prevent the
occurrence of a quality issue or problem on a component or subassembly.

4.5 SUPPLIER AUDITS

At its option, Stereotaxis may conduct audits to ensure a high level of quality
of parts and assemblies purchased from Supplier. Such audit may include product,
process and/or system audits.

4.6 SOURCE INSPECTION

All Items purchased under this Agreement may be subject to source inspection and
test by Stereotaxis at Supplier's facilities at any time, including during the
period of manufacture and anytime prior to Stereotaxis' final acceptance.
Supplier will provide all reasonable facilities and assistance for the safety
and convenience of Stereotaxis' inspectors at no charge to Stereotaxis. The
parties may agree to conduct source inspection and test at an alternate
location. No preliminary inspection or test shall constitute acceptance. Records
of all inspection work shall be kept complete and available to Stereotaxis
during performance under this Agreement and for such further period as
Stereotaxis may determine. Performance of source inspection does not constitute
acceptance of the Items nor waive Supplier's responsibility for any defects that
might subsequently be identified by Stereotaxis or its customers.

4.7 SUB-TIER SUPPLIER QUALITY CONTROL

Supplier agrees to provide Stereotaxis with a quality plan for the selection,
control and maintenance of its sub-tier suppliers (which shall include special
process suppliers). The quality plan will include requirements for Supplier to
conduct periodic quality testing of sub-tier supplier parts and to validate
compliance with Stereotaxis' Specifications. Supplier shall demonstrate
compliance to its quality plan by (i) establishing and maintaining an approved
supplier list of sub-tier suppliers that have passed an on-site quality audit
and (ii) confirming that there are no open corrective actions resulting from
Supplier's audit of sub-tier suppliers. Supplier will, upon Stereotaxis'
request, provide evidence that Supplier quality representatives have conducted
periodic sub-tier supplier on-site audits and have confirmed with sub-tier
suppliers that all sub-tier supplier corrective actions resulting from Supplier
quality audits are closed in a timely manner. At



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Stereotaxis' request, Supplier will ensure Stereotaxis' access to any sub-tier
supplier facility for the purpose of conducting on-site quality audits of such
sub-tier supplier.

4.8 ITEM QUALITY CONTROL

Supplier agrees to provide Stereotaxis with a quality plan that will include a
timeline showing critical milestones for the implementation of all the
requirements of the Quality Requirements Document. Periodic assessment of this
quality plan may be conducted by Stereotaxis' quality organization to ensure
conformance to requirements.

4.9 FIRST ARTICLE INSPECTIONS

First Article inspections for Items shall be conducted by Supplier in compliance
with the Quality Requirements Document.

A new component, a component with revised drawings, or components manufactured
after a change in Supplier's manufacturing location or other changes as
delineated in the Quality Requirements Document, must have a First Article of
such component evaluated and accepted by Supplier, prior to incorporation into
Items. Supplier will maintain a First Article qualifications/evidence data file
with content as defined by Stereotaxis for the components. Stereotaxis may
conduct a First Article validation on any subassembly or component at any time.

5. PAYMENT

5.1 DEPOSITS

In recognition of the complexity of the Items to be produced and the long
lead-times associated with production of Items, Stereotaxis agrees that certain
deposits shall be made upon placement of Purchase Orders and upon completion of
certain milestones. Such deposits and their application to invoices are detailed
in Attachment 2.

5.2 INVOICES

All invoices must be sent directly to Stereotaxis' Accounts Payable Department.
Invoices shall contain the following information: Purchase Order number, Item
number, description, sizes, quantities, unit prices, and extended totals in
addition to tax amounts and any other information requested. Stereotaxis'
payment of an invoice or other account does not in itself represent
unconditional acceptance of Items and Stereotaxis may revoke acceptance at any
time until final inspection and acceptance of Items. All payments made prior to
receipt, inspection, and final acceptance by Stereotaxis will be subject to
adjustment for errors, shortages, non-conformities or defects. Stereotaxis shall
not be required to elect among its remedies, including revocation of acceptance
and remedies for breach of warranty or non-conformity.

5.3 PAYMENT TERMS

Payment will be made net forty-five (45) days from receipt of invoice, in form
and substance acceptable to Stereotaxis. Supplier shall generate invoices upon
evidence being sent to Stereotaxis of satisfactory completion of Acceptance Test
Procedure on Items.

Stereotaxis may request Supplier to store completed Items until Supplier is
instructed to ship Items to locations specified by Stereotaxis.

5.4 METHOD OF PAYMENT

Stereotaxis is authorized by Supplier to make payments under this Agreement by
either check or electronic funds transfer. Supplier will provide Stereotaxis
with the required bank routing coordinates and other information that may be
required by Stereotaxis to establish electronic funds transfer capability. All
payments will be made in United States currency.

Supplier shall quote all prices in US dollars; prices for foreign manufactured
Items will not be adjusted to reflect changes in the exchange rate.



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5.5 EFFECT OF PAYMENT

The time and method of payment shall not alter the time at which title to Items
passes to Stereotaxis nor shall it preclude revocation of acceptance as
permitted by law. As to Items that are non-conforming, Stereotaxis may revoke
acceptance, recover and offset or adjust payments in respect of such Items, and
return same to Supplier, in which case title shall revert to Supplier, or
Stereotaxis may enforce any of its other remedies for non-conforming Items,
including warranty remedies.

6. PRICING FRAMEWORK

Attachment 1 contains Contract Prices for all Items.

Any remaining balance of undelivered Items on open Purchase Orders as of the
date of this Agreement will not become subject to the Contract Prices on the
Effective Date of this Agreement.

Specific circumstances may result in mutual review and mutually agreed written
changes of Agreement terms, including Contract Prices. These circumstances
include, but are not limited to:

         (a)      Volume increases or decreases resulting in an increase or
                  decrease in the value of the Agreement value of over [***]
                  (subsequent to completion of negotiations on the existing
                  prices);

         (b)      Addition or subtraction of Items to the Agreement increasing
                  or decreasing the value of the Agreement over [***];

         (c)      Cost reductions/savings in Supplier's performance plan; and

         (d)      Changes in market prices for equivalent materials and
                  services.

Unless otherwise indicated, prices are exclusive of all city, state and federal
taxes. Any taxes which Supplier may be required to pay or collect under any
existing or future law upon or with respect to the sale, purchase delivery,
storage, processing, use or consumption of any of the material covered hereby,
including taxes upon or measured by the receipts from the sale, thereof, shall
be for the account of Stereotaxis and Stereotaxis shall promptly pay such amount
to Supplier upon demand.

Both Stereotaxis and Supplier will separately and jointly work towards
identifying process and product changes that will reduce cost. Supplier will
participate in benefits of cost savings under Contract Prices so as to preserve
a commercially reasonable profit margin to Supplier.

7. TECHNICAL ISSUES

7.1 ENGINEERING CHANGE ORDERS

Stereotaxis may change its drawings, design, and Specifications at any time and
generate a proposed Engineering Change Order (ECO). A Stereotaxis supplier
engineer will review with Supplier all proposed ECO's that affect the form, fit,
or function of Items. Stereotaxis will provide, in writing, approved ECO's
indicating the effective dates of all changes. Unless otherwise notified,
Stereotaxis' receiving inspection will inspect to the latest revision in effect
at the time of receipt of Items.

Supplier may submit requests for engineering changes to an Item, submitting the
proposed change and reasons for change. Reasons for change may include but are
not limited to:

         (a)      Manufacturability of Items

         (b)      Cost reduction opportunities

         (c)      Enhanced reliability of Items

         (d)      Safety of manufacture, transportation or use of items

Such changes may include without limitation changes in component parts, testing
or manufacturing procedures or cosmetic changes.

[*** 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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Supplier shall request any such engineering changes via a detailed letter and
shall submit such request to Stereotaxis designated buyer who shall submit such
request to the appropriate Stereotaxis engineering personnel.

The Supplier shall not implement any changes (and Supplier shall not ship any
Items with any such changes) until written permission to proceed is given by
Stereotaxis' authorized purchasing representative and the Purchase Order is
modified accordingly.

7.2 TOOLING

Any tooling which is built or procured by Supplier and which is unique to the
Items and/or relevant to the manufacture, testing, maintenance, repair or
troubleshooting of Items and has not previously been charged to Stereotaxis
will, upon Stereotaxis' request, be sold to Stereotaxis by Supplier at [***].

Supplier agrees to provide a separate line Item quote for tooling. Stereotaxis
will, upon its agreement to a quote for tooling, pay for the tooling cost
separately. Title to any non-unique tooling shall remain with Supplier, unless
required to allow production continuation as described in Section 2.

Supplier shall not at any time use the tools (including test fixtures) furnished
by or purchased from or by Stereotaxis ("Stereotaxis tooling") for the
production of goods for persons other than Stereotaxis or in any manner other
than in performance of this Agreement without Stereotaxis' written approval.
Supplier will use commercially reasonable best efforts to maintain the
Stereotaxis tooling in good condition and repair and to provide all necessary
calibration services for the Stereotaxis tooling. Stereotaxis and Supplier agree
to execute a tooling loan agreement as set out in Attachment 3 for any
Stereotaxis tooling in Supplier's possession. Supplier will be responsible for
obtaining the requisite insurance coverage and conducting appropriate
inspections for such loaned tooling.

7.3 DESIGN CHANGES

For the term of this Agreement, Supplier will not make changes to the design of
any Item that may alter the Specifications, form, fit, function or manufacturing
process of such Items, without first submitting a detailed written description
of proposed changes to Stereotaxis' authorized representative. Supplier may make
such authorized design changes only upon obtaining prior written approval from
Stereotaxis' authorized purchasing representative and modification of Purchase
Orders relating to the Item in question.

If Stereotaxis' design changes affect the pricing, delivery, lead-time, or other
terms and conditions of this Agreement and the parties cannot agree upon
alternate terms, then Stereotaxis may remove the affected Items from this
Agreement without affecting the remaining Items.

7.4 PROCESS CHANGES

Supplier agrees to inform Stereotaxis of any process or sub-tier supplier
changes to Items, including without limitation any changes in the manufacturing
process of a sub-tier supplier, even when Specifications are being met. Supplier
must receive approval in writing from Stereotaxis before implementing such
changes.

7.5 SUPPLIER'S SUBCONTRACTS

Supplier shall not subcontract for components, processes or completed or
substantially completed Items supplied to Stereotaxis without prior written
approval from Stereotaxis. Supplier will ensure that all sub-tier suppliers of
Supplier who have access (directly or indirectly) to Stereotaxis' specifications
or internal Stereotaxis data or other Confidential Information will sign and be
governed by an Non-Disclosure Statement (NDA) that is similar in form and
substance to Stereotaxis' NDA with Supplier. Approval by Stereotaxis of a
subcontractor selected by Supplier shall not alter Supplier's obligations to
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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7.6 FIRST ARTICLE AND SOURCE INSPECTIONS

First Article and Source Inspections shall be conducted in compliance with the
quality provisions of this Agreement (Section 4).

7.7 PRODUCT SUPPORT

Supplier agrees to maintain capability to provide Items and technical and
service support to Stereotaxis for all of the Items for a minimum of five (5)
years from the date of final shipment of an Item to Stereotaxis. Alternatively,
the parties may agree to establish a product support period of less than five
(5) years, provided that Supplier agrees to sell to Stereotaxis as part of such
alternative a non-exclusive, irrevocable, royalty free, worldwide and
transferable license of intellectual property to make, or have made the Items,
in a form and on terms acceptable to Stereotaxis.

8. NONCONFORMANCE

8.1 SUPPLIER NON-CONFORMANCE AND CORRECTIVE ACTION

All Items are warranted to meet all applicable Stereotaxis Specifications as
stated in this Agreement (including all Attachments, technical Specifications
and manufacturing work instructions). Supplier will replace or repair defective
Items at Supplier's expense within the time period necessary to meet
Stereotaxis' production requirements. Supplier is required to use the most
expeditious manner possible to effect the corrections; at Stereotaxis' request,
in certain circumstances, Suppliers may be asked to provide new Items in lieu of
repairing a part to ensure immediate corrective action or credit for the failed
part.

Stereotaxis will notify Supplier of defects and obtain a Return Material
Authorization number from the Supplier. Stereotaxis will then return the Item to
the Supplier together with a discrepant material report ("DMR"). Supplier will
promptly respond as appropriate to meet the production or repair requirements of
Stereotaxis. A corrective action process to resolve nonconformance will be
documented and used by the parties. In addition, Supplier will participate in
continuous improvement plans and programs as defined by Stereotaxis and
Supplier.

Should any Item fail to conform to the Specifications established in this
Agreement, in addition to any other remedies in this Agreement, Stereotaxis may
purchase products comparable to the items or substitutes for Items in the open
market or from other suppliers as necessary to meet its requirements.

8.2 STEREOTAXIS NON-CONFORMANCE AND CORRECTIVE ACTION

Stereotaxis will, at its option, return at its expense Items that do not conform
to Stereotaxis' requirements due to Stereotaxis' errors. These Items will be
returned to Supplier for repair or potential rework. Stereotaxis and Supplier
will agree in advance of repairs on "standard" repair costs (labor, Items and
freight) for Items not covered under warranty.

Prior to Supplier's return of a repaired Item to Stereotaxis, Supplier will mark
such Item with Stereotaxis' part number, and serial number. Stereotaxis shall
bear the risk of loss or damage during transit of repaired or reworked Items
whether or not the Items meet warranty or other requirements.

8.3 WARRANTY

Supplier warrants (a) that, for a period of 12 months from delivery to
Stereotaxis, all Items delivered to Stereotaxis (i) will be free from defects in
workmanship, material, and manufacture, (ii) will comply with the requirements
of this Agreement, and (iii) to the extent design is Supplier's responsibility,
will be free from defects in design and (b) that all services will be performed
in a competent, professional and workmanlike manner, free from defects and in
accordance with the best professional practices in the industry. Supplier
further warrants that all Items purchased or repaired will consist of new
materials (not used, recycled or of such age as to impair its 



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usefulness or safety, except as may be approved in advance by Stereotaxis).
These warranties are in addition to all other warranties, whether expressed or
implied, and will survive any delivery, inspection, acceptance, or payment by
Stereotaxis. If any Items delivered by Supplier do not meet the warranties
specified herein or otherwise applicable, Stereotaxis may, at its option, take
one or more of the following actions and/or any other action permitted by law or
equity:

         (i)      Require Supplier to correct at no cost to Stereotaxis any
                  defective or nonconforming Items by repair or replacement;

         (ii)     Return such defective or nonconforming Item at Supplier's
                  expense to Supplier and recover from Supplier the purchase
                  price thereof; or

         (iii)    Notify the Supplier that Stereotaxis will correct the
                  defective or nonconforming Item itself and charge Supplier
                  with the reasonable cost of such correction.

Stereotaxis' approval of Supplier's material or design will relieve Supplier of
the warranties established in this agreement. If Stereotaxis waives any drawing
or specification requirement for one or more of the Items, it will not
constitute a waiver of all requirements for the remaining Items to be delivered
unless stated by Stereotaxis in writing.

9. TERMINATION

9.1 TERMINATION BY STEREOTAXIS

This Agreement may be terminated by Stereotaxis if:

         a)       Supplier fails to perform its obligations to deliver Items
                  that meet the specifications agreed upon by Stereotaxis and
                  Supplier, and fails to cure such deficiencies within 30 days
                  of Stereotaxis' written notice;

         b)       Supplier fails to perform its obligations to deliver Items
                  within the agreed upon delivery schedule, for reasons that are
                  within its control, and fails to cure such deficiencies within
                  30 days of Stereotaxis' written notice; or,

         c)       Supplier fails to meet documented market prices received from
                  other potential suppliers that are capable of producing Items,
                  with terms, conditions, and specifications being materially
                  the same as those offered by Supplier. In this case,
                  Stereotaxis will provide Supplier evidence of market pricing,
                  name the potential competition, provide Supplier with evidence
                  of potential supplier's capability to produce Items, and allow
                  Supplier 30 days to study its own cost model in order to
                  respond to such pricing.

9.2 TERMINATION BY SUPPLIER

This Agreement may be terminated by Supplier if:

         a)       Stereotaxis fails to make payments as they become due
                  (provided such payments are not subject to bona fide dispute)
                  and fails to cure such breach of this Agreement within 30 days
                  of receipt of written notification by Supplier. By termination
                  the Agreement for this reason, Supplier does not relinquish
                  its rights under law to collect payments as properly due. In
                  this case, Supplier reserves the right to charge a financing
                  charge of 1.5% per month until amounts properly due are
                  collected.

9.3 NOTICE AND PERIOD TO CURE

Stereotaxis and Supplier shall each provide the other with notice of any of the
termination events described above and provide the other with an opportunity to
cure such default within 30 days or within such other time period as the parties
may mutually agree.



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10. AMENDMENTS AND MODIFICATIONS

Amendments or revisions to this Agreement must be in writing, signed by both
Stereotaxis and Supplier duly authorized representatives, traced by revision
numbers and attached to this original Agreement. The master copy of this
Agreement and any revisions are to be maintained by Stereotaxis and Supplier.
Captions in this Agreement are for the convenience of the parties only and shall
not affect the interpretation or construction of this Agreement. The provisions
of this Agreement (including Exhibits and Attachments) shall be construed as a
whole, each supplementing the other. In the event any provision of this
Agreement is held to be invalid or unenforceable, such provision shall be
severed from the remainder of this Agreement, and such remainder will remain in
force and effect. This Agreement, including also any Purchase Order issued for
Items, shall control over any invoice, delivery ticket, or other document issued
by Supplier, and Supplier's acceptance of this Agreement shall constitute
agreement to the terms set out in this Agreement.

11. LIABILITY

11.1 SUPPLIER ASSUMES NO LIABILITY ON USE OF ITEMS

Stereotaxis unconditionally releases Supplier, its raw material suppliers, and
other sub-tier suppliers from all liabilities that may occur in the use of Items
by Stereotaxis for whatever purpose.

SUPPLIER ASSUMES NO LIABILITY FOR CONSEQUENTIAL DAMAGES. UNDER NO CIRCUMSTANCES
SHALL SUPPLIER BE LIABLE TO STEREOTAXIS OR ANY OTHER PERSON FOR ANY SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION, DAMAGES
BASED UPON USE OF ITEMS FOR WHATEVER PURPOSE, LOST GOODWILL, LOST SALES OR
PROFITS, WORK STOPPAGES, DELAY WHETHER ARISING OUT OF BREACH OF WARRANTY, BREACH
OF CONTRACT, NEGLIGENCE OF OTHERWISE, and in any case, Supplier's liability for
any and all losses and damages sustained by the Stereotaxis and others, arising
out of or by reason of this Agreement shall not exceed the original purchase
price of the products upon which liability is founded.

11.2 FORCE MAJEURE.

Failure of Supplier to deliver hereunder, or delay in making shipments, if
occasioned by fire, explosion, flood, earthquake, war, riots, insurrection,
civil disturbance, accident, storm, interruption or delay in transportation,
shortage, strike or other labor dispute, inability to obtain materials and
supplies, acts of government, any act of God, or any other causes of like or
different character beyond Supplier's control shall not subject Supplier to any
liability to Stereotaxis.

12. NOTICES

Revisions, updates or other amendments or modifications to this Agreement
(including Exhibits and Attachments) may be communicated via memos sent by mail,
fax or e-mail, or by other electronic transaction means, where authorized, to
the individuals listed below. Each party shall advise the other in writing of
any change to such party's contact persons.

All notices shall be delivered as follows:

If to Supplier:
Anil Nanji
Magnet Sales & Manufacturing Inc.
11250 Playa Court
Culver City CA 90230
Phone: 310-391-7213
Fax:310-390-4357
E-Mail:aniln@magnetsales.com



                                    Page 10

<PAGE>


If to Stereotaxis
Contact Name:
Attention: Chief Financial Officer;
Attention: Messrs. Jim Eby and Doug Bruce
Address: 4041 Forest Park Avenue
         St. Louis, MO. 63108
Phone: 314-615-6924
Fax: 314-615-6948
E-Mail:


13. ACCEPTANCE

The signature below show acceptance of this Agreement in its entirety by
Stereotaxis and Supplier.


Stereotaxis:                       Magnet Sales & Manufacturing Inc. (Supplier):

/s/ NICOLA YOUNG                    /s/ ANIL NANJI 

Signature NICOLA YOUNG             Signature 
Its CFO                            Its President
Dated: 6/17/03                     Dated: 7-01-03




                                    Page 11

<PAGE>



                                  ATTACHMENT 1
                    DESCRIPTION OF ITEMS AND PRICING SCHEDULE

PRICING SCHEDULE


<Table>
<Caption>
STEREOTAXIS                                                          
ITEM NUMBER      REVISION            DESCRIPTION          QUARTER    VOLUME      UNIT PRICE
------------     --------      ----------------------     -------    -------     ----------
<S>              <C>           <C>                        <C>        <C>         <C>
635-003701-1        -          Assy, Permanent Magnet      Q4-03     [***]          [***]  
635-003701-1        -          Assy, Permanent Magnet      Q1-04     [***]          [***] 
635-003701-1        -          Assy, Permanent Magnet      Q2-04     [***]          [***]
635-003701-1        -          Assy, Permanent Magnet      Q3-04     [***]          [***]
635-003701-1        -          Assy, Permanent Magnet      Q4-04     [***]          [***]
</Table>


DELIVERY SCHEDULE FOR FIRST PURCHASE ORDER - Q4-03 & Q1-04


<Table>
<Caption>
QTY TO DELIVER       DELIVERY DATE      QTY TO DELIVER        DELIVERY DATE
--------------       -------------      --------------        -------------
<S>                  <C>                <C>                  <C> 
    [***]                [***]               [***]                [***]   
    [***]                [***]               [***]                [***]   
    [***]                [***]               [***]                [***]   
    [***]                [***]               [***]                [***]   
    [***]                [***]           
    [***]                [***]           
</Table>


The above "Description of Items and Pricing Schedule" is intended to portray a
schedule of Stereotaxis' intent of procurement and an integrated Magnetics
commitment to pricing based on that intent. Stereotaxis will place an original
Purchase Order for the Q4-03 and Q1-04 quantities and pricing for a total of
[***] magnets for a total price of [***]. As time passes and deliveries are
made, Stereotaxis intends to place additional purchase orders based on updated
forecasts and requirements, but specific purchase orders will be released to
firm those commitments. Stereotaxis will maintain purchase order commitments to
cover periods not less than the following:

Magnet material commitments for 5 months in the future and completed magnet
assembly commitments of 5 months in the future. For example when the delivery
date of the last magnet on purchase order is five (5) months away, Stereotaxis
will place a purchase order for additional magnet material to cover at least 1
more month worth of magnets. When the delivery date of the last magnet on
purchase order is three (3) months away, Stereotaxis will place a purchase order
for additional magnets to cover at least 1 more month worth of magnets. If
finished magnets are not ordered to consume the committed magnet material within
a period of four (4) months, Stereotaxis will pay for the committed material.

Stereotaxis may adjust the quantity of magnets on purchase order to correspond
to the requirements of sales orders. Deliveries may be delayed up to six (6)
months from the above schedule (i.e., deliveries could be rescheduled out
through [***]). Changes in delivery shall require a minimum of three (3) months
notice, Pricing of the magnets will correspond to the quarter in which they are
scheduled for delivery on the purchase order, provided that the quantities
ordered are within 20% of the quantities forecasted. Magnets that are scheduled
for delivery in 2005 shall be priced at the Q4-04 price in the table above.

CREDITS

Stereotaxis shall receive a credit of [***] for each complete magnet crate that
is returned to Supplier. Partial magnet crates shall be saved until a complete
crate can be assembled, at which time Stereotaxis shall receive the [***]
credit.


[*** 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.]


                                    Page 12

<PAGE>



                                  ATTACHMENT 2
       DEPOSIT AMOUNTS, SCHEDULE, AND APPLICATION OF DEPOSITS TO INVOICES


<Table>
<Caption>
  PURCHASE ORDER
      VALUE                    DEPOSIT         WHEN PAID     
-------------------           ---------       -----------    
<S>                           <C>             <C>            
  Q4-03 and Q1-04
  quantities and                 [***]        Upon Order     
      pricing                                                
</Table>



APPLICATION OF DEPOSIT AMOUNTS:

Deposit amounts shall be applied to invoices for the first [***] magnets of this
agreement at a rate of [***] per magnet.

[*** 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.]


                                    Page 13

<PAGE>


                                  ATTACHMENT 3
             STEREOTAXIS OWNED TOOLING LOAN AGREEMENT WITH SUPPLIER

Stereotaxis may, at its option, loan Supplier special tooling, owned by
Stereotaxis, in order to assist in the manufacture, assembly, inspection, or
test of Items. Supplier shall be responsible for storing such tooling safely in
a manner that shall preserve its functionality. Supplier shall be responsible
for maintaining such tooling per instructions of Stereotaxis or manufacturer of
tooling as appropriate. Supplier shall be responsible for providing adequate
insurance coverage for such tooling in case of loss or damage. All such tooling
shall be clearly marked with a tag showing the part number, revision, date
received, and that it is owned by Stereotaxis.

Stereotaxis may at any time audit the condition of such loaned tooling to ensure
that it is stored and maintained in an acceptable manner.

Supplier shall reimburse Stereotaxis if such tooling is lost or damaged while in
Supplier's possession, unless damage has occurred upon use of tooling at
Stereotaxis' specific instructions.






                                    Page 14


<PAGE>
                                                                   EXHIBIT 10.16

                                LETTER AGREEMENT
         STEREOTAXIS, INC. ("STEREOTAXIS") AND PHILIPS MEDICAL SYSTEMS
                              DMC GMBH ("PHILIPS")


1.    PREAMBLE

PURSUANT TO THIS LETTER AGREEMENT, PHILIPS AND STEREOTAXIS SET FORTH THE BINDING
HEADS OF AGREEMENT OUTLINING THE PRINCIPAL TERMS AND CONDITIONS FOR THEIR
STRATEGIC ALLIANCE FOR THE DEVELOPMENT OF IMPORTANT NEW TECHNOLOGIES FOCUSING ON
THE KEY ROLE OF PHILIPS' INTEGRIS ALLURA FLAT DETECTOR CATH LAB SYSTEM AND
STEREOTAXIS' NIOBE SYSTEM IN INTEGRATED DIGITAL CATH LAB OF THE FUTURE, ALL TO
BE FURTHER ELABORATED IN A DETAILED CO-DEVELOPMENT AND COMMERCIAL AGREEMENT
("DETAILED AGREEMENT") TO BE NEGOTIATED IN GOOD FAITH AND TO BE AGREED UPON
BETWEEN THE PARTIES AS PART OF THE DEVELOPMENT PROGRAM. The Detailed Agreement
shall contain commercially reasonable terms, conditions, representations,
warranties and covenants customary and appropriate for a transaction of the type
contemplated, that will be subject to and including those summarized in this
Letter Agreement.

The parties initial alliance focus is in the field of interventional cardiology,
with additional emphasis in the field of electrophysiology and on the
development of unique solutions as mutually agreed
 in the fields of
interventional radiology, interventional neuro-radiology and on potential
applications for their combined digital platform in additional fields of
medicine.

The parties agree to collaborate on the integration of a modified version of the
Stereotaxis' NIOBE System (an FDA cleared medical device) and Philips' latest
generation Integris Allura flat detector Cath lab system ("Philips X-Ray") to
provide clinicians with a user-friendly advanced interventional suite with
integration of digital instrument control and X-ray imaging comprising an
integrated system (collectively, "Integrated Cath Lab") and designed to ensure
effective and safe use of integrated imaging and instrument control.

The intention of the parties is that the Integrated Cath Lab will primarily be
designed to focus on interventional cardiology applications, while also
including features making the system suitable for use in electrophysiology
(including integration capability for third party three dimensional instrument
localization systems) and, to the extent mutually agreed by the parties from
time to time, in writing, in interventional radiology, interventional
neuro-radiology or other applications.

Features of the parties' collaborative alliance include, without limitation:

      o     Development of Integrated Cath Labs;

      o     Co-placement and co-marketing of Integrated Cath Labs;

      o     Co-development of new solutions & technologies (as mutually agreed
            in writing from time to time and primarily comprising applications
            for Integrated Cath Labs, primarily focusing in interventional
            cardiology as noted above);

      o     Service, training and support for Integrated Cath Labs;

      o     Development funding for Integrated Cath Labs;

and otherwise as set out below or agreed between the parties.


Initial Philips:                                            Initial Stereotaxis:

/s/ JURGEN TIEMANN                                             /s/ BEVIL HOGG



                                        1



<PAGE>

1.    INTEGRATION SCHEDULE AND JOINT DEVELOPMENT PLAN

o     The parties will use all reasonable commercial efforts and will coordinate
      and cooperate in good faith to achieve completion of the Integrated Cath
      Lab so as to allow demonstration of the first customer-ready system by TCT
      in September, 2004 or earlier

o     Immediately after signing of this Letter Agreement each party will appoint
      and will notify the other in writing of its integration project manager
      responsible for coordinating integration development work

o     The project managers will promptly coordinate and prepare a detailed
      schedule and joint development plan for achieving development of the
      Integrated Cath Labs, focusing in particular on inclusion of features
      tailored for high volume and important interventional cardiology
      applications and compliance with the integration schedule designated
      above. Such detailed schedule and joint development plan shall be subject
      to review and written approval of duly authorized officers of both
      parties.

2.    DEVELOPMENT WORK.

o     The development work will be carried out in close cooperation between the
      parties and based on a joint development plan which includes appropriate
      milestones in an effort to keep cost and expenditures to a minimum

o     The parties intend to negotiate in good faith regarding mutually agreeable
      research and development collaborations for future generations of the
      Integrated Cath Lab.

o     Guiding principles for the development work will be that Stereotaxis
      undertakes all work required to modify the NIOBE System (including user
      interface software compatibility, mechanical integration required to
      achieve requisite magnetic and C-arm angles for interventional cardiology
      etc.) and Philips undertakes all work required to modify the Philips X-Ray
      (user interface software compatibility, C-arm motion integration, magnetic
      shielding etc.). Each party provides the other with requisite permissions
      (and represents that is has associated authority) to integrate its
      products with those of the other party as comprised in the Integrated Cath
      Lab in the manner contemplated by this Letter Agreement.

o     Philips will pay Stereotaxis for its engineering and other resources and
      costs of the integration and related research and development work via a
      milestone driven research and development payment up to a maximum of
      $[***] ("R&D Milestone Payment") as set out below. Both parties will
      provide all commercially reasonable and expeditious completion of its
      development work and coordination with the other party in good faith in
      order to facilitate completion of development work by both parties.
      Stereotaxis' deliverables set out below are subject to change by mutual
      written agreement based upon the detailed schedule and joint development
      plan as referred to above or otherwise. Within 30 days of signing of this
      Letter Agreement, Philips will pay Stereotaxis [***]$ by way of prepayment
      of the estimated development work. The parties agree that any prepayment
      of research and development funding set out below are repayable to Philips
      in absence of fulfillment of Stereotaxis' contractual obligations in
      respect of research and development work pursuant to this agreement.

o     Development work to be undertaken by Stereotaxis will comprise:


          PHASE 1. CONCEPT & FEASIBILITY, INITIAL DESIGN.

          Working in full coordination with the dedicated Philips' integration
          team, during Phase 1 Stereotaxis will:


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.]


                                        2



<PAGE>

      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.]


                                       3

<PAGE>






3.    INVOICING OF DEVELOPMENT EXPENDITURES

Within ten (10) days of completion of each Phase of integration Research and
Development, Stereotaxis will provide Philips a written invoice stating the
approximate sum and breakdown of the following development expenditures
("Expenditures") incurred by Stereotaxis in such stage:

      1.    The number of Stereotaxis employees allocated to the development
            work in such Phase and their titles;

      2.    The percentage of each such employees' time allocated to work on the
            Phase (on a monthly basis);

      3.    The remuneration (on a fully loaded basis) of each such employee in
            the pertinent Phase;

      4.    A statement of related materials and/or other related third party
            costs expended during such Development Phase as included in the
            invoice.

4.    CENTERS OF EXCELLENCE

The parties will establish a minimum of three promotional "Center of Excellence"
Integrated Cath Labs. The parties intend that the Centers of Excellence will be
the focus of development of unique solutions in areas of technology leadership
to be mutually agreed. The Centers of Excellence will be installed at mutually
agreed sites, which could include:

      o     St. Georg, Hamburg

      o     University of California at San Francisco

      o     Others to be determined.

The installation timeline for Centers of Excellence will be mutually agreed
promptly after signing of this Letter Agreement.

Philips will purchase a maximum of three NIOBE Systems (comprising components of
Integrated Cath Labs to be placed by Philips at Centers of Excellence) by
purchase order issued by no later than December 31, 2004 (or, at Stereotaxis
election, January 1, 2005) each system individually payable in three terms
(first term upon placing the order, second term upon delivery of the system and
a final term upon hand-over to the customer) at [***].

5. CO PLACEMENTS

      o     The parties will work together to maximize sales through
            co-placement and co-marketing of Integrated Cath Labs, including
            cooperating in good faith to achieve co-ordination and cooperation
            of sales forces to facilitate co-placements at mutually agreed
            targeted sites, provided that the parties continue to maintain
            distinct and separate sales operations and identities

      o     Philips will provide project management at customer sites for
            Integrated Cath Labs addressing room preparation and installation

      o     By way of sharing of co placement economics Philips will pay to
            Stereotaxis a co placement fee according to the following schedule:

                  o     [***]

                  o     [***]

                  o     [***]


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.]

                                        4



<PAGE>



      o     The total amount as at the date of signing of this Letter Agreement,
            and based upon commercially reasonable principles of calculation, of
            the sum of: (i) the aggregate R&D Milestone Payment; (ii) the
            aggregate payments per co placement to Stereotaxis; and (iii) the
            aggregate purchase price of the three NIOBE System purchased by
            Philips for placement in Centers of Excellence described above will
            never exceed 7.5M$

6.    [***]

7.    FIELD SERVICE

The parties will co-ordinate installation of delivery of their respective
components of Integrated Cath Labs.

Stereotaxis will provide service and support for its components of not less than
three of installations of Integrated Cath Labs for initial periods after
installation to be mutually agreed.

Philips to provide service for Integrated Cath Labs other than at mutually
agreed sites and geographies on commercially reasonable terms.

Stereotaxis' to provide training for a reasonable number of Philips' specialists
in the service of Stereotaxis' components of Integrated Cath Labs.

Stereotaxis to provide a commercially reasonable level of helpdesk service as
backup support for Philips service of Stereotaxis components of Integrated Cath
Labs

8.    OPEN ARCHITECTURE

Philips recognizes that Stereotaxis can integrate with third party X-ray systems
without limitation in the same manner as is comprised in Integrated Cath Labs or
otherwise.

9.    LEGAL FEES AND EXPENSES

Each party shall pay its own fees and expenses in connection with this Letter
Agreement including, without limitation, legal fees and other expenses.

10.   LOGISTICS

Each party intends to ship directly to the customer site in accordance with the
schedule coordinated by the Philips' project manager

The first Integrated Cath Labs will be tested at Philips before shipment to the
customer to assure compatibility

11.   CONFIDENTIALITY

The parties agree that they shall not disclose and shall keep confidential any
information furnished to them by the other party in connection with the alliance
set forth in this Letter Agreement and as elaborated in the mutual Non
Disclosure Agreement between the parties dated January 24th 2003 and will not
make any disclosure in relation to the alliance without the prior written
consent of the other. The parties will mutually agree an announcement regarding
their strategic alliance on signing of this Letter Agreement.

The parties acknowledge and agree that regulatory constraints including in the
U.S. and Europe, prohibit their promoting or marketing either directly or
indirectly, through announcements, sales force representations or otherwise the
specifications, functionality, anticipated time to market or other details of
any jointly developed products pursuant to this strategic alliance prior to
relevant regulatory

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.]

                                       5

<PAGE>

clearances being obtained and each party will take all steps required to ensure
that it and its representatives comply with all such regulatory constraints.

12.   AMENDMENT

This Letter Agreement may not be amended without the written consent of the
parties

13.   ASSIGNMENT TO PHILIPS' SUBSIDIARY/ASSOCIATED COMPANY

Philips shall have the right to assign its rights and obligations hereunder to
any of its subsidiaries and/or associated companies

14.   GOVERNING LAW

This Letter Agreement and the Detailed Agreement contemplated herein shall be
governed by and construed in accordance with the laws of Germany without regard
to the conflicts of laws provisions thereof. This Term Sheet is executed in the
English language version which version shall prevail over any translation
hereof.




AGREED:

SIGNATURE: /s/ JURGEN TIEMANN

NAME: JURGEN TIEMANN

TITLE: EXECUTIVE VICE PRESIDENT & CEO

COMPANY: PHILIPS MEDICAL SYSTEMS DMC GMBH

DATE SIGNED: 15 SEPT. 2003



SIGNATURE: /s/ BEVIL HOGG



NAME: BEVIL HOGG

TITLE: PRESIDENT & CEO

COMPANY: STEREOTAXIS, INC.


DATE SIGNED: 6 OCT. 2003


Initial Philips:                                            Initial Stereotaxis:

                                                               /s/ BEVIL HOGG


                                       6


<PAGE>

                                                                   EXHIBIT 10.18

                         SOFTWARE DISTRIBUTION AGREEMENT

                                 by and between

                   STEREOTAXIS INC., UNITED STATES OF AMERICA

                 - hereinafter referred to as "Stereotaxis" -
                                       and

                 SIEMENS AKTIENGESELLSCHAFT, BERLIN AND MUNCHEN,
                           Federal Republic of Germany

                    - hereinafter referred to as "Siemens" -

           concerning the "3D Pre-Operative Image Navigation" software


<PAGE>

                             CONFIDENTIAL TREATMENT

                         REQUESTED BY STEROTAXIS, INC.



<Table>
<S>          <C>                                                              <C>
ARTICLE 1  - DEFINITIONS ....................................................  3

ARTICLE 2  - LICENSE GRANT ..................................................  5

ARTICLE 3  - COPYRIGHT, TRADEMARKS, TITLE ...................................  6

ARTICLE 4  - SUPPLY OF LICENSED SOFTWARE AND SOFTWARE DOCUMENTATION .........  7

ARTICLE 5  - TIMELINES ......................................................  8

ARTICLE 6  - WARRANTY .......................................................  8

ARTICLE 7  - INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES ..................  9

ARTICLE 8  - PRICE, PAYMENT ................................................. 13

ARTICLE 9  - AUDITING RIGHTS ................................................ 14

ARTICLE 10 - MAINTENANCE .................................................... 14

ARTICLE 11 - CONFIDENTIALITY ................................................ 15

ARTICLE 12 - LIMITATION OF LIABILITY ........................................ 18

ARTICLE 13 - FORCE MAJEURE .................................................. 19

ARTICLE 14 - ARBITRATION .................................................... 19

ARTICLE 15 - SUBSTANTIVE LAW ................................................ 20

ARTICLE 16 - TERM OF THE AGREEMENT .......................................... 20

ARTICLE 17 - TERMINATION .................................................... 20

ARTICLE 18 - EXPORT REGULATIONS ............................................. 22

ARTICLE 19 - MISCELLANEOUS .................................................. 22
</Table>



<PAGE>

PREAMBLE

WHEREAS, Siemens and Stereotaxis have entered into an extended collaboration
agreement to improve interventional procedures in the cardiac cathlab by
enabling visualization
 and navigation with pre-operative anatomical 3D images
(hereinafter referred to as the "Extended Collaboration Agreement");

WHEREAS, Siemens and Stereotaxis do not intend for any provision of this
Agreement to alter or amend the rights or obligations provided under the
Extended Collaboration Agreement;

WHEREAS, Siemens has developed the Siemens "Pre-operative Imaging Component"
software and/or is the owner of or is entitled to dispose of the proprietary
rights of and/or titles to such software product;

WHEREAS, Stereotaxis desires to obtain license and distribution rights in such
software product;

WHEREAS, Siemens is willing to license such software product to Stereotaxis as
consideration for license fees stated herein and on the terms and conditions set
forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein
contained Stereotaxis and Siemens agree as follows:

ARTICLE 1 - DEFINITIONS

Wherever used in this Agreement, unless otherwise indicated expressly in the
context of this Agreement, the following terms shall have the following meanings
ascribed to them:

1.1      "Agreement" shall mean this software distribution agreement including
         all Annexes and any matters specifically incorporated herein by
         reference and made a part hereof.

1.2      "End-user" shall mean the customer of Stereotaxis who uses the Licensed
         Software as embedded within the Product for its own medical or
         scientific purposes.


<PAGE>




                                                          CONFIDENTIAL TREATMENT
                                                  REQUESTED BY STEREOTAXIS, INC.


1.3      "Licensed Software" shall mean the software program presently known as
         3D Pre-Operative Image Navigation V1.00 in Object Code and finally and
         conclusively described in ANNEX 1 and all Updates thereto.

1.4      "Software Documentation" shall mean the information needed to draft
         End-user manuals and all other information related to the Licensed
         Software, as set-out in ANNEX 2 and all Updated Software Documentation
         thereto. Siemens will provide this in machine-readable form.

1.5      "Effective Date" shall mean the date on which the last of the Parties
         has executed this Agreement.

1.6      "Hardware" shall mean the hardware equipment as described in ANNEX 3.

1.7      "Object Code" shall mean code for the Licensed Software resulting from
         translation of source code into machine readable format appropriate for
         operation on the Hardware.

1.8      "Product" shall mean the Stereotaxis Navigant system or similar or 
         extended successor systems.

1.9      "Reference Environment" shall mean a system consisting of the Hardware
         and the software described in ANNEX 1 and shall be used for testing the
         Licensed Software and for communicating, duplicating and reproducing
         errors of the Licensed Software.

1.10     "Updated Software Documentation" shall mean any change in the Software
         Documentation that is needed because of an Update or changes of the 
         Hardware.

1.11     "Update" shall mean a new release of the Licensed Software that
         incorporates error corrections; software changes due to vendor-
         required Hardware changes, or for migration to higher versions of
         Windows software or DICOM networking standard, improved performance
         and other minor changes, none of which will delete any functionality.
         Improved performance will only be part of Updates, if and to the 
         extent Siemens is contractually allowed to license such improvement
         to Stereotaxis. It is designated by a change in the second digit to
         the right of the decimal point in the Licensed Software version
         number.



<PAGE>

1.12 "Affiliate" shall mean a corporation, company or other entity

         (i)      more than fifty percent (50%) of whose outstanding shares or
                  securities representing the right to vote for the election of
                  the board of directors or a similar managing authority or a
                  supervisory board are, or

         (ii)     which does not have outstanding shares or securities, as may
                  be the case in a partnership, joint venture or unincorporated
                  association, but more than fifty percent (50%) of the
                  ownership interest representing the right to make decisions
                  for such entity is

         now or hereafter, owned or controlled directly or indirectly, by
         Stereotaxis or its parent companies or Siemens, respectively, but such
         corporation, company or other entity shall be deemed to be an Affiliate
         only so long as such ownership or control exists.

1.13     "Party" shall mean either Siemens or Stereotaxis.

1.14     "Parties" shall mean both Siemens and Stereotaxis.

ARTICLE 2 - LICENSE GRANT

2.1      Subject to the terms of this Agreement and without limiting the rights
         of the parties under the Extended Collaboration Agreement, Siemens
         hereby grants to Stereotaxis for the term of this Agreement subject to
         the payment of the license fees as set forth in Article 8 a
         non-exclusive, non-transferable, worldwide license to use, copy,
         distribute to End-users and to sublicense End-users the right to use
         the Licensed Software.

2.2      Subject to the terms of this Agreement, Siemens hereby grants to
         Stereotaxis for the term of this Agreement, subject to the payment of
         the license fees as set forth in Article 8, a non-exclusive,
         non-transferable, worldwide license to use, copy, change, translate and
         distribute to End-users the Software Documentation as part of an
         End-user manual that is handed over to the End-user. There shall be no
         reference in End-user manuals as to the origin of the Software
         Documentation.


<PAGE>
                                                          CONFIDENTIAL TREATMENT
                                                  REQUESTED BY STEREOTAXIS, INC.


2.3      Each licensing of Licensed Software to End-users shall be subject to
         legally binding, written license agreements the terms and conditions of
         which shall contain appropriate terms that are substantially similar to
         the terms of Articles 2, 3 and 11 of this Agreement.

2.4      If the Parties agree to incorporate freeware, shareware or open source
         software into the Licensed Software, no license fee shall be charged to
         Stereotaxis for the use of such freeware, shareware or open source
         software. Stereotaxis acknowledges and agrees that Siemens provides no
         warranties and shall have no liability whatsoever in respect of
         Stereotaxis's possession and/or use of the freeware, shareware or open
         source software. Regarding such portions of Licensed Software,
         Stereotaxis hereby accepts the specific license conditions either being
         part of the Software Documentation or accompanying the Hardware ("Open
         Source Conditions"). Upon request of Stereotaxis, Siemens shall provide
         a copy of the source code of the open source software, if required by
         the Open Source Conditions. To the extent there is a conflict between
         this Agreement and the Open Source Conditions, the terms of the Open
         Source Conditions shall prevail over the terms and conditions of this
         Agreement with regard to the open source software.

ARTICLE 3 -- COPYRIGHT, TRADEMARKS, TITLE

3.1      All rights, title and interest in and to the Licensed Software (and any
         part thereof) and the Software Documentation (and any part thereof),
         other than those expressly granted herein, shall remain wholly vested
         in Siemens or its third party licensors. Stereotaxis acknowledges that
         it has no rights whatsoever in respect of the Licensed Software and
         Software Documentation save for those expressly granted to it by this
         Agreement.

3.2      Nothing in this Agreement entitles either Party to use any trademark of
         the other Party or its Affiliates or any other mark confusingly similar
         thereto, without the express written consent of the other Party.

3.3      Stereotaxis shall in any case use reasonable efforts to safeguard the
         Licensed Software and the Software Documentation in its possession and
         control the rights therein with the same degree of case as is used with
         respect to Stereotaxis's own equally important software, documentation
         and rights therein, but at least with 










<PAGE>

         reasonable care.

Other than as permitted hereunder, as contemplated under the Extended
Collaboration Agreement or required by law, Stereotaxis shall not copy,
translate, modify, create derivative works, disassemble, reverse engineer,
decompile, attempt, directly or indirectly, to otherwise obtain or create source
code of the Licensed Software or otherwise use the Licensed Software and
Software Documentation

3.4      Stereotaxis agrees that using, distributing, copying, duplicating or
         otherwise reproducing all or any part of the Licensed Software other
         than in accordance with this Agreement, and Stereotaxis's failure to
         perform its obligations for End-users as set forth in this Agreement,
         may be considered a material breach of this Agreement.

3.6      In case of Siemens' knowledge or reasonable assumption that, as a
         result of an action or inaction by Stereotaxis a third party is using
         or has used the Licensed Software or Software Documentation without
         proper authorization, then upon receipt of written request from
         Siemens, Stereotaxis shall confirm in writing whether such third party
         is an End-user or not. If such third party is an End-user, then Siemens
         and Stereotaxis shall mutually decide on the proper course of action to
         address the potential infringement. If such third party is not an
         End-user, then Stereotaxis shall reasonably assist Siemens in enforcing
         its rights (which assistance shall not include preparation for or
         participation in litigation) against such third party, and shall
         furnish all available information thereto which Stereotaxis is
         permitted to disclose.

ARTICLE 4 - SUPPLY OF LICENSED SOFTWARE AND SOFTWARE DOCUMENTATION

4.1      Siemens will supply to Stereotaxis the Object Code of the Licensed
         Software and Software Documentation on CD or other electronic form as a
         master copy. During the term of this Agreement, Stereotaxis may use,
         copy and distribute the Licensed Software and the Software
         Documentation. Stereotaxis shall provide to Siemens on a quarterly
         basis a list of the number of new End-users. Siemens may audit
         Stereotaxis in accordance with Section 9 below.

4.2      Siemens will without undue delay make available to Stereotaxis any new
         Update for licensing under the terms and conditions of this Agreement.


<PAGE>
                                                          CONFIDENTIAL TREATMENT
                                                  REQUESTED BY STEREOTAXIS, INC.


ARTICLE 5 - TIMELINES

         Both Parties will use commercially reasonable efforts to meet the
         timelines set forth in Annex 1. As part of these efforts, Siemens will
         support Stereotaxis, at no cost to Stereotaxis, in Stereotaxis's
         integration of the Licensed Software into the Product by providing
         assistance with respect to the Licensed Software, including, but not
         limited to, providing error corrections on a timely basis for any
         errors identified in the Licensed Software, during Stereotaxis's
         initial integration testing and subsequent Alpha and Beta testing with
         potential End-users.

ARTICLE 6 - WARRANTY

6.1      Siemens warrants that the Licensed Software: 1) is free of viruses
         and/or programming devices (e.g. license keys) that are designed to (a)
         disrupt the use of the Licensed Software, or any system with which the
         Software operates, or (b) destroy or damage data or make data
         inaccessible or delayed; and 2) as originally delivered by Siemens to
         Stereotaxis, is free from and will remain free from substantial
         non-conformities in design, material and workmanship during the
         warranty period of twelve months from the date of delivery. The
         Licensed Software is considered free from such non-conformities if it
         operates in substantial conformance with the Software Documentation. In
         the event of a breach of the foregoing warranties, Siemens shall
         perform maintenance service as defined in Article 10, below, at no cost
         to Stereotaxis or any End-user, during the warranty period of twelve
         months from the date of delivery and thereafter on a fee-paid basis as
         defined in Article 6.2, below.

6.2      With respect to an End-user, such cost-free maintenance period shall
         start at the time such End-user's sublicense of the Licensed Software
         commences for such End-user. The maintenance shall be provided without
         cost to Stereotaxis or its End-users for twelve (12) months from the
         End-user's sublicensing of the Licensed Software, after which Siemens
         may charge for its performance of maintenance services as described in
         Annex 5.

6.3      UNLESS EXPLICITLY STATED IN THIS AGREEMENT, SIEMENS MAKES NO WARRANTIES
         RELATED TO THE LICENSED SOFTWARE OR SOFTWARE DOCUMENTATION EITHER,
         EXPRESS, STATUTORY, OR IMPLIED INCLUDING



<PAGE>

         BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
         FITNESS FOR A PARTICULAR PURPOSE AND ANY IMPLIED WARRANTIES ARISING
         FROM COURSE OF DEALING OR USAGE OF TRADE.

ARTICLE 7 - INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES

7.1      (A) Except as set forth below in this Article, and subject to the
         conditions and limitations stated below in this Article, Siemens shall
         be liable for any claim, suit, action or proceeding brought against
         Stereotaxis, or an End-user, by a third party to the extent it is based
         on: a) any alleged infringement of patents, trademarks or copyrights of
         a third party and protected under the laws of the USA or Germany b) any
         alleged unlawful or improper disclosure or use or misappropriation of a
         trade secret; or (c) any alleged violation of any other intellectual
         property or moral right, in any such case, asserted against Stereotaxis
         or an End-user by virtue of Stereotaxis's or an End-user's use,
         distribution or possession of the Licensed Software or Software
         Documentation or respective updates as provided in this Agreement
         (hereinafter collectively referred to as "Claim(s)").

         (B) If, as a result of such a Claim, Stereotaxis becomes enjoined or it
         is likely, in Siemens' reasonable opinion, that Stereotaxis will become
         enjoined from using the Licensed Software, Software Documentation,
         Updates and/or Updated Software Documentation, Siemens shall at its
         election and its cost - except as set forth below in this Article, and
         subject to the conditions and limitations stated below in this Article:
         (i) procure for Stereotaxis the right to continue to use the Licensed
         Software, Software Documentation, Updates and/or Updated Software
         Documentation as provided in this Agreement; (ii) provide Stereotaxis
         with a non-infringing replacement product and/or documentation, or
         modify the Licensed Software, Software Documentation, Updates and/or
         Updated Software Documentation so that it becomes non-infringing,
         provided that the replacement/modified Licensed Software and/or Updates
         meet substantially the same performance and functional specifications
         provided in the Software Documentation or Updated Software
         Documentation; or, only if options (i) and (ii) are not possible
         despite the exercise of commercially reasonable efforts, (iii) upon
         return of the infringing Licensed Software at Siemens request, refund
         to Stereotaxis the purchase price actually paid. Except with respect to
         the obligations in the following paragraph (C), upon Siemens' execution
         of one of the options set out in this Section, Siemens shall be
         relieved of any further obligation or liability to Stereotaxis as a
         result


<PAGE>
                                                       CONFIDENTIAL TREATMENT
                                                    REQUEST BY STEREOTAXIS, INC.

         of any such infringement and Siemens shall not be obligated to deliver
         any replacement Licensed Software if Siemens has met the requirements
         to exercise option (iii) above. Any modified or replacement software
         and/or documentation provided under this Article 7 shall be subject to
         all of the terms and conditions of this Agreement, including without
         limitation, the provisions of this Article 7.

         (C) Siemens agrees to defend and to the extent a Claim is asserted
         against Stereotaxis or an End-user, indemnify and hold the End-user and
         Stereotaxis, its officers, directors, shareholders, agents and
         employees (collectively, "Stx Indemnified Parties") harmless from and
         against any and all loss, cost, damage or liability, including counsel
         fees and costs, arising out of or related to any Claim. Siemens shall
         control and direct the investigation, defense and settlement of each
         such Claim and Stereotaxis agrees, at Siemens' request and expense, to
         reasonably cooperate with Siemens in connection with the foregoing and
         in Siemens' efforts to mitigate any potential damages, costs and
         expenses incurred by Siemens under this provision.

7.2      Stereotaxis, the End-user and the Stx Indemnified Parties shall give
         Siemens prompt written notice of any alleged or threatened Claims.
         Stereotaxis, the End-user and the Stx Indemnified Parties shall not
         consent to any judgment or decree or compromise of any Claim without
         first obtaining Seimens' written consent. Siemens shall give prompt,
         written notice to Stereotaxis of any actual or threatened Claim against
         Siemens or customers of Siemens which Siemens, in its reasonable
         discretion, deems to be of importance to Stereotaxis.

7.3      Siemens shall not be liable with respect to any Claim to the extent
         arising out of our relating to either:

         (i)      use or incorporation in any Licensed Software of any design or
                  technique, furnished or requested by Stereotaxis or an
                  End-user; or

         (ii)     the combination with or incorporation of the Licensed Software
                  into the Product, software, or subassembly not supplied or
                  specified by Siemens if such infringement would not have
                  occurred without such combination or use thereof; or

         (iii)    the modification of Licensed Software by Stereotaxis or an
                  End-user unless such modification is in accordance with
                  Siemens' instructions; or



<PAGE>

         (iv)     the use of Licensed Software by Stereotaxis or an End-user
                  other than as permitted under this Agreement; or

         (v)      use or distribution by Stereotaxis of other than the most
                  current Update of the Licensed Software (if such Claim would
                  have been prevented by the use of such Update) after such
                  Update has been made available to Stereotaxis at no additional
                  charge.

7.4      (A) Except as set forth below in this Article, and subject to the
         conditions and limitations stated below in this Article, Stereotaxis
         shall be liable for any claim, suit, action or proceeding brought
         against Siemens by a third party to the extent it is based on: a) any
         alleged-infringement of patents, trademarks or copyrights of a third
         party and protected under the laws of the USA or Germany b) any alleged
         unlawful or improper disclosure or use or misappropriation of a trade
         secret; or (c) any alleged violation of any other intellectual property
         or moral right; in any such case, asserted against Siemens or one of
         the Siemens Indemnified Parties by virtue of Siemens' authorization of
         Stereotaxis for the use, incorporation, combination, distribution or
         possession of the Licensed Software or Software Documentation or
         respective updates as provided in this Agreement (hereinafter referred
         to as "Stx Claim(s)").

         (B) Stereotaxis agrees to defend and to the extent a Stx Claim is
         asserted against Siemens, indemnify and hold Siemens, its officers,
         directors, shareholders, agents, and employees ("Siemens Indemnified
         Parties") harmless from and against any and all loss, cost, damage or
         liability, including counsel fees and costs, arising out of or related
         to any Stx Claim. Stereotaxis shall control and direct the
         investigation, defense and settlement of each such Stx Claim and
         Siemens agrees, at Stereotaxis's request and expense, to reasonably
         cooperate with Stereotaxis in connection with the foregoing and in
         Stereotaxis's efforts to mitigate any potential damages, costs and
         expenses incurred by Stereotaxis under this provision.

7.5      Siemens shall give Stereotaxis prompt written notice of any alleged or
         threatened Stx Claims. Siemens shall not consent to any judgment or
         decree or compromise of any Stx Claim without first obtaining
         Stereotaxis's written consent. Stereotaxis shall give prompt, written
         notice to Siemens of any actual or threatened Stx Claim against
         Stereotaxis which Stereotaxis, in its reasonable discretion, deems to
         be of importance to Siemens.


<PAGE>
7.6      Stereotaxis shall not be liable with respect to any Stx Claim to the 
         extent arising out of or relating to either:

         (i)      the modification of the Product by any person or entity other
                  than Stereotaxis or not in accordance with Stereotaxis's
                  instructions; or

         (ii)     use or modification in the Product of any design or 
                  technique, furnished or requested by Siemens.

7.7      THE FOREGOING SECTIONS STATE THE ENTIRE LIABILITY OF EACH PARTY AND 
         THE EXCLUSIVE PERFORMANCE REMEDY OF THE OTHER PARTY WITH RESPECT TO 
         INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS, EITHER STATUTORY OR 
         EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY PATENT RIGHTS, 
         COPYRIGHTS, UTILITY MODELS, DESIGN PATENTS, MASK WORK RIGHTS, MORAL 
         RIGHTS, TRADE SECRETS, TRADEMARKS, TRADE NAMES, SERVICE MARKS, 
         KNOW-HOW AND ANY OTHER SIMILAR RIGHTS OR INTANGIBLE ASSETS RECOGNIZED 
         UNDER ANY LAWS OR INTERNATIONAL CONVENTIONS, AND IN ANY COUNTRY OR 
         JURISDICTION IN THE WORLD AS INTELLECTUAL CREATIONS TO WHICH RIGHTS OF 
         OWNERSHIP ACCRUE, AND ALL REGISTRATIONS, APPLICATIONS, DISCLOSURES, 
         RENEWALS, EXTENSIONS, CONTINUATIONS OR REISSUES OF THE FOREGOING NOW 
         OR HEREAFTER IN FORCE. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, 
         ALL WARRANTIES AGAINST INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS AS 
         MENTIONED BEFORE ARE HERBY DISCLAIMED TO THE FULLEST EXTENT PERMITTED 
         BY LAW.

7.8      Article 12 (Limitation of Liability) is applicable to Siemens' and 
         Stereotaxis's liability under this Article 7. This Article 7 shall 
         survive any termination or expiration of this Agreement.


ARTICLE 8 - PRICE, PAYMENT


8.1      As compensation for the license rights granted to Stereotaxis under 
         this Agreement,

<PAGE>

         Stereotaxis agrees to pay to Siemens for each copy of the Licensed
         Software that has been licensed by Stereotaxis to and accepted by an
         End-user the license fees as stated in ANNEX 4 under terms and
         conditions detailed therein. There will be no license fee due during a
         trial period for an End-user, which shall not exceed six (6) months.

8.2      Siemens may issue invoices for fees and other amounts due hereunder
         quarterly for Licensed Software, as described in Section 8.1 above, and
         maintenance services. Such invoices shall regularly follow the receipt
         of the list of End-users provided by Stereotaxis in accordance with
         Section 4.1 above. Stereotaxis shall pay to Siemens all undisputed
         amounts set forth on each such invoice within thirty (30) days of
         Stereotaxis's receipt of such invoice.

8.3      Any payments to be made by Stereotaxis to Siemens under or in
         connection with this Agreement, shall be made by Stereotaxis to the
         following bank account of Siemens (until the next payment due after
         written notice of change is given by Siemens):

                                     [***]

8.4      If Stereotaxis fails to make any payment (other than payments
         reasonably disputed by Stereotaxis) in the manner described in this
         Article 8, i.e., within thirty (30) days of Stereotaxis's receipt of
         the corresponding invoice, then Siemens shall notify Stereotaxis in
         writing of the nature of such failure. If Stereotaxis fails to make
         such payment within thirty (30) days of Stereotaxis's receipt of such
         notice from Siemens that a payment has not been made within thirty (30)
         days of Stereotaxis's receipt of the corresponding invoice, then an
         interest at a rate of five percent (5%) per year above the 3 Month US $
         LIBOR rate shall be paid by Stereotaxis on such payment.

ARTICLE 9 - AUDITING RIGHTS

[*** 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.]

<PAGE>
                                                          CONFIDENTIAL TREATMENT
                                                     REQUESTED BY STEREOTAXIS, I

9.1      Stereotaxis shall keep records of all sublicenses granted to 
         End-users. Siemens shall have the right to appoint an independent,
         certified public accounting firm, provided that such firm regularly
         performs audit work for Fortune 500 companies but is not the
         predominant accounting firm of Siemens, to audit such Stereotaxis
         records, as well as such other documents as may be reasonably required,
         solely for the purpose of verifying Stereotaxis's compliance with its
         Licensed Software-related payment obligations hereunder. Such audit
         shall be conducted upon at least five (5) business days notice, during
         Stereotaxis's normal working hours, at the Stereotaxis location where
         such records are maintained and in a manner that will not be unduly
         disruptive to Stereotaxis's operations. The auditor shall prepare a
         report either verifying such compliance or summarizing the total of any
         deviations therefrom, which report shall be furnished to each Party but
         shall be deemed to be the Confidential Information (as defined in
         Article 11 below) of Stereotaxis. Such audit shall be conducted no more
         often than once every twelve (12) months and shall be conducted at
         Siemens' expense, except in those cases where the auditor detects
         deviations that are greater than ten percent (10%) from Stereotaxis's
         payment obligations hereunder to the disadvantage of Siemens, in which
         latter case the cost of the audit shall be borne by Stereotaxis.

9.2      Any and all reports or records or notes other than the report 
         mentioned in Section 9.1 above taken by the auditor shall not be
         disclosed to Siemens and shall be maintained by the auditor in
         confidence as Confidential Information of Stereotaxis, pursuant to a
         written agreement with Stereotaxis that is no less protective of
         Confidential information than the corresponding terms of this
         Agreement.

ARTICLE 10 - MAINTENANCE

10.1     Siemens shall provide software maintenance services as detailed in 
         Annex 5. The maintenance services for the Licensed Software are subject
         to the maintenance fees set out in Annex 5, except as specified
         otherwise in Article 6 above.

10.2     Stereotaxis will communicate to Siemens suspected errors in the 
         Licensed Software along with information reasonably requested by
         Siemens in order to reproduce the errors on the Reference Environment.
         Siemens agrees to respond and correct such 

<PAGE>

         errors without undue delay.

10.3     The Parties will promptly notify each other of any suspected bugs or
         errors in the Licensed Software.

10.4     Notwithstanding any other provision of this Agreement, Siemens shall
         have no obligation to provide maintenance services:

         -    With respect to any non-Siemens computer programs, technology or
              hardware not provided by Siemens; or

         -    With respect to any Licensed Software that is not current within
              two (2) prior Updates of the most recent Updates.

10.5     Siemens represents and warrants that the maintenance services shall be
         provided in accordance with this Agreement and with reasonable care and
         skill.

ARTICLE 11 - CONFIDENTIALITY

11.1     Each Party acknowledges and agrees that it will have access to
         information, including, but not limited to, intellectual property,
         trade secrets, business, commercial or technical information, ideas,
         expressions and the terms of this Agreement, which are represented to
         be proprietary to the other Party, irrespective of the medium in which
         such information or data is embedded which shall - when disclosed in
         tangible form - be marked "Confidential" or with a similar legend by
         the disclosing Party or which shall - when disclosed orally or visually
         - be identified as such prior to disclosure and summarized in writing
         by the disclosing Party and said summary (which shall be marked
         "Confidential" or with a similar legend) is given to the receiving
         Party within thirty (30) days after such disclosure (hereinafter
         referred to as "Confidential Information"). In case of disagreement,
         the receiving Party must present its objections to the summary in
         writing within thirty (30) days of receipt. Confidential Information
         shall include any copies or abstracts made thereof as well as any
         apparatus, modules, samples, prototypes or parts thereof.


<PAGE>

                                                      CONFIDENTIAL TREATMENT
                                                  REQUESTED BY STEREOTAXIS, INC.


11.2     The terms and conditions of this Agreement shall be deemed to be
         Confidential Information of both Parties.

11.3     All Confidential Information exchanged between the Parties:

11.3.1   shall be used by the receiving Party exclusively for the purposes of
         this Agreement, unless otherwise expressly agreed to in writing by the
         disclosing Party;

11.3.2   shall during the term of the Agreement and for a period of 5 years
         after its termination or expiration not be distributed or disclosed in
         any way or form by the receiving Party to anyone except its employees
         or those of an Affiliate, consulting firm, counsel or other
         professional advisors who reasonably need to know such Confidential
         Information for the purposes of this Agreement and who are bound to
         confidentiality either by their employment agreement or otherwise that
         is substantially similar to the confidentiality obligations under this
         Agreement. Prior to any disclosure to its Affiliates or to its
         consulting firms, the receiving Party must have an appropriate
         agreement with any such Affiliate or any such consulting firm
         sufficient to require the Affiliate or the consulting firm to treat
         Confidential Information in accordance with this Agreement. Any
         unauthorized disclosure of the disclosing Party's Confidential
         Information by the receiving Party, its Affiliates or Affiliates'
         employees or by its consultants shall constitute a breach of this 
         Agreement by the receiving Party;

11.3.3   shall be treated by the receiving Party with the same degree of care as
         is used with respect to the receiving Party's own equally important
         confidential information of a similar nature to avoid disclosure to any
         third party, but at least with reasonable care; and

11.3.4   shall remain the property of the disclosing Party.

11.4     The obligations of Section 11.3 above shall, however, not apply to any
         Confidential Information which:

11.4.1   was lawfully in the receiving Party's possession without
         confidentiality obligation prior to receipt from the disclosing Party;

11.4.2   is at this time of disclosure already in the public domain or becomes
         available to the public through no breach by the receiving Party;

<PAGE>

11.4.3   is lawfully obtained by the receiving Party from a third party without
         an obligation of confidentiality, provided such third party is not, to
         the receiving Party's knowledge, in breach of any confidentiality
         obligation relating to such information;

11.4.4   is developed by the receiving Party or its Affiliates independently
         from and without reference to such Confidential Information;

11.4.5   was approved for release by written agreement with the disclosing
         Party.

11.5     The receiving Party will derive no rights of any kind, in particular no
         rights of prior use, from the fact that they as a result of the
         Confidential Information may possibly obtain knowledge of patentable
         inventions for which the disclosing Party may possibly apply for
         intellectual property rights.

11.6     Upon any termination or expiration of this Agreement, unless otherwise
         instructed in writing by the disclosing Party, the receiving Party
         shall cease using any Confidential Information of the disclosing Party
         including such Confidential Information on record-bearing media, as
         well as any copies thereof. Upon request of the disclosing Party, made
         in writing to the receiving Party within ninety (90) days after
         termination of this Agreement the receiving Party shall as per the
         notice either return such Confidential Information to the disclosing
         Party or destroy it. This shall not apply to routinely made back-up
         copies of electronically-exchanged data. In case of a destruction, the
         receiving Party shall confirm in writing such destruction to the
         disclosing Party within fourteen (14) days after receipt of the
         respective request.

11.7     The receiving Party shall not be considered to have breached its
         obligations under this Article for disclosing Confidential Information
         of the other Party if such disclosure is required by law or regulation,
         government authority, duly authorized subpoena or court order or
         regulatory request. Promptly upon receiving notice of any such
         requirement or request and to the extent that it may legally do so,
         such Party shall take reasonable commercial efforts to advise the other
         Party of the required disclosure prior to making such disclosure in
         order to afford the other Party a reasonable opportunity to take such
         action as it deems appropriate to protect such Confidential
         Information.


<PAGE>

Article 12 - Limitation of Liability

12.1     Each Party will without limit be liable for personal injury for which
         such Party can be held responsible. Each Party will be liable for
         damages to the other Party's property for which such Party can be held
         responsible up to a maximum amount of [***] Euro [***] per damage
         event.

12.2     SUBJECT TO THE EXCLUSION OF EACH PARTY'S INDEMNIFICATION OBLIGATIONS
         HEREUNDER, NEITHER PARTY SHALL BE LIABLE, WHETHER IN CONTRACT,
         WARRANTY, TORT (INCLUDING NEGLIGENCE OR STRICT LIABILITY), OR ANY OTHER
         LEGAL OR EQUITABLE THEORY FOR DAMAGE TO OR LOSS OF OTHER PROPERTY OR
         EQUIPMENT, BUSINESS INTERRUPTION OR LOST REVENUE, LOSS OF PROFITS OR
         SALES, COST OF CAPITAL, FOR ANY LOSS OF USE, FOR ANY LOSS OR CORRUPTION
         OF DATA OR FOR ANY SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT OR
         CONSEQUENTIAL DAMAGES OR FOR ANY OTHER LOSS, COSTS OR EXPENSES OF A
         SIMILAR TYPE, EVEN IF THE PARTY SOUGHT TO BE HELD LIABLE HAS BEEN
         ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

12.3     THE LIABILITY OF EACH PARTY FOR ANY ACT OR OMISSION, OR WITH RESPECT TO
         LICENSED SOFTWARE FURNISHED AS WELL AS SERVICES RENDERED UNDER THIS
         AGREEMENT, WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE OR
         STRICT LIABILITY), INDEMNITY, OR ANY OTHER LEGAL OR EQUITABLE THEORY,
         WILL IN NO EVENT EXCEED [***] EURO [***] FOR ALL LIABILITY IN THE
         AGGREGATE.

12.4     The rights and remedies explicitly contained in this Agreement are
         exclusive, not cumulative and the Parties accept these remedies in
         lieu of all rights and remedies available at law or otherwise, in
         contract (including warranty) or in tort (including negligence), for
         any and all claims of any nature arising under this Agreement or any
         performance or breach arising out of this Agreement.

12.5     This Article 12 shall survive any termination or expiration of this
         Agreement.


[*** 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.]


<PAGE>

ARTICLE 13 - FORCE MAJEURE

         Neither Party shall be liable to the other for failure or delay in the
         performance of any of its obligations under this Agreement for the time
         and to the extent such failure or delay is caused by events or
         circumstances beyond the Party's reasonable control such as, but not
         limited to, riots, civil commotions, wars, strikes, lock-outs,
         hostilities between nations, governmental laws, orders or regulations,
         actions by the government or any agency thereof, storms, fires,
         sabotages, explosions or any other contingencies beyond the reasonable
         control of the respective Party and of its sub-contractors (hereinafter
         referred to as "Force Majeure"). In such events, the affected Party
         shall immediately inform the other Party of such circumstances together
         with documents of proof and the performance of obligations hereunder
         shall be suspended during, but not longer than, the period of existence
         of such cause and the period reasonably required to perform the
         obligations in such cases. Unavailability of funds shall not be deemed
         Force Majeure. Notwithstanding the foregoing, the non-affected Party
         may, in its sole discretion, terminate this Agreement if the period of
         delay exceeds six (6) months.

ARTICLE 14 - ARBITRATION

14.1     Any differences or disputes arising from this Agreement or from
         agreements regarding its performance shall be settled by an amicable
         effort on the part of both parties to the Agreement. An attempt to
         arrive at a settlement shall be deemed to have failed as soon as one of
         the parties to the Agreement so notifies the other party in writing.

14.2     If an attempt at settlement has failed, the disputes shall be finally
         settled under the Rules of Conciliation and Arbitration of the
         International Chamber of Commerce in Paris (Rules) by three arbitrators
         appointed in accordance with the Rules.

14.3     The place of arbitration shall be Berne, Switzerland. The procedural
         law of this place shall apply where the Rules are silent.

14.4     The arbitral award shall be substantiated in writing. The arbitral
         tribunal shall decide on the matter of costs of the arbitration.

<PAGE>
                                                          CONFIDENTIAL TREATMENT
                                                  REQUESTED BY STEREOTAXIS, INC.


ARTICLE 15 -- SUBSTANTIVE LAW

         All disputes shall be settled in accordance with the provisions of this
         Agreement and all other agreements regarding its performance, otherwise
         in accordance with the substantive law in force in the Canton of Berne,
         Switzerland, without reference to other laws.


ARTICLE 16 -- TERM OF THE AGREEMENT

         16.1  This Agreement shall commence on the Effective Date and remain in
               effect for a period of six (6) years thereafter, unless
               terminated earlier by either Party as hereinafter provided, and
               shall automatically be renewed for consecutive one (1) year
               periods unless either Party provides written notice to the other
               Party of an intention not to renew at least ninety (90) days
               prior to the end of the original six (6) year period or any
               subsequent one (1) year renewal periods (the original period
               along with any extension periods, the "Term").

         16.2  The rights to use paid-up copies of the Licensed Software will
               not be affected by the expiration hereof pursuant to Section 16.1
               of this Agreement.

ARTICLE 17 -- TERMINATION

         17.1  This Agreement may by written notice be forthwith terminated by a
               Party having such right as herein provided -- and save of any
               other rights such Party may have -- upon the occurrence of either
               one or more of the following events stated below:

               --  by either Party in the event that the other Party has failed
                   in the performance of any material obligation under this
                   Agreement by giving not less than forty-five (45) days
                   written notice specifying any such breach (hereinafter
                   referred to as "Notice") unless within the period of such
                   Notice all breaches specified shall have been remedied or a
                   plan for remedying such breaches has been proposed by the
                   other Party and has been accepted by the first Party
                   mentioned during such forty-five (45) day period, with the
                   understanding that Notice shall not be required for


<PAGE>

               any failure in the performance of any material obligation under
               this Agreement which cannot be remedied or which relates to
               Siemens' warranty or support obligations under this Agreement; or

          -    by either Party in the event that the other Party voluntarily
               files a petition in bankruptcy or has such a petition
               involuntarily filed against it (which petition is not discharged
               within sixty (60) days after filing), or is placed in an
               insolvency proceeding, or if an order is issued appointing a
               receiver or trustee or a levy or attachment is made against a
               substantial portion of its assets which order shall not be
               vacated, or set aside within sixty (60) days from date of
               issuance, or if any assignment for the benefit of its creditors
               is made, or

          -    by either Party if there is a change in control of the other
               Party which in the reasonable opinion of the terminating Party
               adversely affects such Party's position, rights or interests.

17.2     Upon termination or expiration of this Agreement, Stereotaxis shall
         promptly pay Siemens any undisputed amounts due to Siemens and cease
         any use of the Licensed Software, including copies thereof and Software
         Documentation in Stereotaxis's possession. Notwithstanding the
         foregoing, Stereotaxis may continue to provide Licensed Software
         support (including previously received Updates) to existing End-users
         for a period not to exceed six (6) months after such termination or
         expiration but may not sublicense the Licensed Software to any new
         End-users and Siemens is not obligated to provide any continuing
         support. All obligations of either Party accrued prior to termination,
         and those obligations relating to confidentiality, protection of the
         Software and the Software Documentation and restriction to use shall
         survive termination. Any sublicenses granted to End-users prior to the
         termination or expiration of this Agreement shall not be affected by
         such termination or expiration.

ARTICLE 18 - EXPORT REGULATIONS

         Stereotaxis shall comply with all export laws applicable to the
         Licensed Software and/or the Software Documentation in effect from time
         to time. Without limiting the generality of the foregoing, Stereotaxis
         expressly warrants that it will not directly or indirectly


<PAGE>

                                                          CONFIDENTIAL TREATMENT
                                                  REQUESTED BY STEREOTAXIS, INC.


         export, re-export, or tranship the Licensed Software or the Software
         Documentation in violation of any export laws, rules or regulations of
         Germany or the United States.

         Stereotaxis when sublicensing the Licensed Software to End-users shall
         also oblige such End-users to adhere to the aforementioned export
         provision.

         The Licensed Software has no bit encryption.

ARTICLE 19 - MISCELLANEOUS

19.1     Each Party shall name to the other authorized representatives forthwith
         after signing of the Agreement who shall bring about any and all
         decisions in connection with the performance of this Agreement.

19.2     This Agreement shall not be modified or amended except by a written
         agreement dated subsequently to the date of this Agreement and signed
         on behalf of Siemens and Stereotaxis by their respective duly
         authorized representatives as an amendment hereto. This requirement of
         written form can only be waived in writing.

19.3     All Annexes shall be considered as an integral part of this Agreement.

19.4     If Stereotaxis licenses Licensed Software, including Software
         Documentation, to the US Government, the following provisions apply: if
         Licensed Software is supplied to the Department of Defense ("DOD"),
         Licensed Software is subject to "Restricted Rights" including a legend
         to be affixed to the Licensed Software, as that term is defined in the
         DOD Supplement to the Federal Acquisition Regulations ("DFAR") in
         paragraph 252.227-7013(c)(1); if Licensed Software is supplied to any
         unit or agency of the US Government other than DOD, the US Government's
         rights in the Licensed Software will be as defined in paragraph
         52.227-19(c)(2) of the Federal Acquisition Regulations ("FAR"). Any
         failure by Siemens to affix a Restricted Rights legend on Licensed
         Software shall not be deemed to constitute a waiver of any obligation
         of Stereotaxis imposed by this Agreement.

         Under no circumstances shall Siemens be obligated to comply with any
         requirements imposed by the US Government regarding submission of, or
         the request for exemption

                                                                                

<PAGE>

         from, submission of cost or pricing data or cost accounting
         requirements for any distribution or license of Licensed Software that
         would require compliance by Siemens with US Governmental requirements
         relating to cost or pricing data or cost accounting requirements.

19.5     Nothing contained in this Agreement shall be construed as creating a
         joint venture, partnership or employment relationship. Except as
         specified herein, neither Party shall have the right, power or implied
         authority to create any obligation or duty, express or implied, on
         behalf of the other Party hereto.

19.6     Press releases or other information on the conclusion or content of
         this Agreement shall only be made available to third parties, in
         particular press agencies, with the prior written consent of the other
         Party hereto, provided, however, Stereotaxis may disclose this
         Agreement to third parties that have a sincere interest in acquiring
         Stereotaxis or any share of the company exceeding 5% under an
         obligation of confidentiality not less stringent than the provisions
         provided for in Article 11 for purposes of legal or financial due
         diligence after informing Siemens in detail of such event. Neither
         Party will use any of the other Party or its Affiliates' trademarks,
         trade names or representations of the other Party or its Affiliates'
         products or services, or refer directly or indirectly to the other
         Party or its Affiliates', or the products or services of either in
         order to make known and/or publicize its relationship with the other
         Party or its Affiliates' without, in any case, obtaining the prior
         written permission of the other Party and its parent companies, if any.


<PAGE>
                                                          CONFIDENTIAL TREATMENT
                                                  REQUESTED BY STEREOTAXIS, INC.

19.7     Notices and communications between Stereotaxis and Siemens shall be 
         given in writing or by e-mail or facsimile in English language to the
         following addresses of the Parties or to such other address as the
         party concerned may subsequently notify in writing to the other Party:

         If to Stereotaxis:

         Stereotaxis, Inc.
         4041 Forest Park Avenue
         St. Louis, MO 63108
         Attention: Chief Executive Officer and Sr. Vice President of Research 
                    & Development
         Tel. 314-615-6940
         Fax 314-615-6922

         and, if to Siemens:

         Siemens Aktiengesellschaft
         Attn.: Dr. Reinmar Killmann
         SiemensstraBe 1
         91301 Forchheim
         Germany
         Tel. +49 (9191) 18 8979
         Fax +49 (9191) 18 8951
         E-Mail reinmar.killmann@siemens.com

19.8     A waiver of any default by either Party of any of the terms and 
         conditions of this Agreement shall not be deemed to be a continuing
         waiver or a waiver of any other provisions of this Agreement, but shall
         apply solely to the instances to which such waiver is granted.

19.9     Should individual provisions of this Agreement be illegal or 
         unenforceable for legal reasons then, unless the basic intentions of
         the Parties under this Agreement are materially altered, the validity
         of the remaining provisions of this Agreement shall not be 

<PAGE>

         affected thereby. In such a case the Parties shall come to an agreement
         approximating as closely as possible the arrangement originally
         envisaged in this Agreement.

19.10    The titles to the Articles of this Agreement are for convenience or
         reference only and are not part of this Agreement and shall not in any
         way affect the interpretation thereof.

19.11    This Agreement constitutes the entire agreement between the Parties
         hereto with respect to the subject matter hereof and supersedes all
         previous communications, representations, understanding and agreements,
         either oral or written, between the Parties with respect to such
         subject matter hereof. Notwithstanding the foregoing, this Agreement
         shall not alter or amend the rights or obligations of either party as
         set forth in and provided under the Extended Collaboration Agreement.

19.12    Neither the rights nor the obligations of this Agreement may be
         assigned or transferred in any manner, except with the prior written
         consent of the other Party or except as part of a transfer of all or of
         a substantial part of the activities to which the subject matter of
         this Agreement pertains whether by sale, merger or consolidation,
         provided, however, that either Party may assign any and all of its
         rights and obligations without the prior written consent of the other
         Party to an Affiliate. In case of such a transfer the respective Party
         shall ensure that the transferee, assignee or successor will comply
         with the terms of this Agreement.

19.13    Siemens agrees to discuss with Stereotaxis any plans that Siemens may
         now or in the future have to create upgrades that are not specified in
         Annex 1 of the Licensed Software and to offer Stereotaxis the ability
         to negotiate the functionality of any such upgrades on reasonable terms
         and conditions to be agreed upon by the Parties.

19.14    By the signature of each of the representatives of the Parties placed
         on this Agreement, each such signatory represents and warrants that he
         or she is authorized to sign this Agreement on behalf of the Party for
         whom he or she is acting.


<PAGE>
                                                          CONFIDENTIAL TREATMENT
                                                  REQUESTED BY STEREOTAXIS, INC.


IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be signed 
by their respective duly authorized representatives.


Date:                                     Date: 3-March-2004

Stereotaxis Inc.                          Siemens Aktiengesellschaft


/s/ Michael P. Kaminski                   /s/ Dr. Reinmar Killmann
-------------------------                 ----------------------------------
Name:  Michael P. Kaminski                Name:  Dr. Reinmar Killmann
Title: COO                                Med AX PLM-I FC


                                          /s/ Dr. Ralf Thomas
                                          ----------------------------------
                                          Name:  Dr. Ralf Thomas
                                          Med KL AX

        

<PAGE>

ANNEX 1: "LICENSED SOFTWARE"

1. FUNCTIONALITY

The requirements of the Licensed Software are described in the following
document:

Requirement Specification "3D Pre-Operative Image Navigation", V1.0, by Walter
Blume and Jan Boese, released 22.05.2003, signed by Siemens AX, Stereotaxis and
Siemens SCR.

2.DELIVERY

 The Licensed Software will be delivered via CD-ROM. The delivery will include:

     -    binaries (e.g. executables, libraries, OCXs, lib-files, dll-files)

     -    include files

     -    documentation (see Annex 2)

     -    software containing application examples for using the interfaces of
          delivered components

3.SOFTWARE ENVIRONMENT

 The Licensed Software will run under Windows 2000. The Licensed Software is
 intended to run as a component (library) of the software of the Product.


<PAGE>


                                                      CONFIDENTIAL TREATMENT
                                                  REQUESTED BY STEREOTAXIS, INC.


ANNEX 2: "SOFTWARE DOCUMENTATION"

Software Documentation will be delivered as follows:

- Detailed description of the programming interface

  This description will be delivered in form of header files containing 
  description of functions and variables.

       

<PAGE>

ANNEX 3: HARDWARE

The Licensed Software will run as part of the Product on the Product hardware
platform, which is as follows:

PC with the following properties (minimal configuration):

-        CPU                 Intel P4 2GHz

-        Memory              1 Gb Kingston DDR RAM (2x512)

-        CD.RW               IDE 12*10*32 (At least)

-        Graphics Card       OpenGI support of 3d texture rendering required


<PAGE>
                                                      Confidential Treatment
                                              Requested by Stereotaxis, Inc.


ANNEX 4: LICENSE FEES

Fee for one license: [***]


Invoices will be issued in Euro.


[*** 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.]

<PAGE>

ANNEX 5: MAINTENANCE SERVICES AND MAINTENANCE FEES

1. MAINTENANCE SERVICES

Maintenance service covers:

     -    Error correction

     -    Migration to higher versions of Windows compatible operating systems

     -    Migration to higher versions of the DICOM standard in order to
          read/import the actual version of single, static, uncompressed cardiac
          3D DICOM images (CT, MR) 

     -    Vendor-required hardware changes

2. MAINTENANCE FEES

Maintenance service is free for 12 months after sublicensing, as per Article 6
above.

     -    Maintenance fee for one license is [***] E per year.

     -    The above maintenance fees are mandatory for the first three years
          after the one-year period of cost-free maintenance as described in
          article 6.2.

     -    Stereotaxis has the option to extend this pricing after the first
          mandatory 3 years on yearly basis on unchanged conditions (concerning
          maintenance service and maintenance fees) through no less than the end
          of the original six (6) year period of the Term.

3. HOURLY SERVICE

     -    If maintenance service is required due to an event at an End-user site
          at which no service and maintenance contract is in effect between
          Stereotaxis and Siemens (i.e. if the maintenance contract is not
          prolonged after the 3 years of mandatory maintenance), Siemens will
          provide this service to Stereotaxis at an hourly rate of [***] E. This
          service will be provided by Siemens through any of its Affiliates
          deemed to be appropriate by Siemens. This price shall be fixed until
          the end of the original six (6) year period of the Term and subject to
          renegotiation thereafter.

Invoices will be issued in Euro

[*** 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.]


<PAGE>
                                                                   Exhibit 10.19

                         THIRD PARTY SERVICES AGREEMENT

     This THIRD PARTY SERVICES AGREEMENT (the "Agreement") is made as of this
5th day of August, 2002 ("Effective Date") by and between STEREOTAXIS, Inc., a
Delaware corporation with an address at 4041 Forest Park Ave., St. Louis,
Missouri 63108 (hereafter referred to as "Stereotaxis") and SIEMENS MEDICAL
SOLUTIONS USA, Inc., a Delaware corporation with an address at 51 Valley Stream
Parkway, Malvern, PA 19355 (hereafter referred to as "Siemens").

                                   WITNESSETH:

     WHEREAS, Stereotaxis and Siemens Aktiengesellschaft, Medical Solutions,
Forchheim, Germany, have entered into a Collaboration Agreement dated June 8,
2001 ("Collaboration Agreement"), with respect to the integration of
Stereotaxis' magnetic guiding component (NIOBE) [***] (collectively, the
"Stereotaxis Products") with Siemens' Cardiac, Angio and Neuro X-Ray and imaging
components (collectively, the "Siemens Products"); and

     WHEREAS, Stereotaxis will enter into agreements with customers for the
sale, installation and servicing of the Stereotaxis Products; and

     WHEREAS, Stereotaxis has determined that it may be more cost-efficient for
Siemens to provide certain services with respect to the Stereotaxis Products in
conjunction with
 the services that Siemens provides for the Siemens Products;
and

     WHEREAS, Stereotaxis wishes to retain Siemens to provide certain site
planning, project management and equipment maintenance and support services with
respect to the Stereotaxis Products, which Stereotaxis is obligated to provide
under the terms of agreements with its customers;

     NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties agree as follows:

     1.  SCOPE of AGREEMENT. This Agreement has been entered into by the parties
in order to implement some of the requirements of the Collaboration Agreement
and will be read subject to the terms of the Collaboration Agreement. Subject to
the terms and conditions of this Agreement, Stereotaxis hereby engages Siemens
and Siemens hereby accepts such engagement to provide site planning, project
management and equipment maintenance and support services with respect to the
Stereotaxis Products in accordance with the terms of this Agreement and further
in accordance with the terms and conditions set forth in one or more Purchase
Orders to be issued by Stereotaxis to Siemens in accordance with Section 5
hereof (the "Services").

     2.  TERM. The term of this Agreement shall be for a period commencing on 
the Effective Date and ending on December 31, 2004, unless sooner terminated in
accordance with the terms of this Agreement. The term of this Agreement may be
extended for additional periods of one (1) year each upon mutual written consent
of the parties. In the event that Stereotaxis has issued one or more Purchase
Orders to Siemens in accordance with Section 5 of this Agreement and the
Services to be performed by Siemens pursuant to the terms thereof extend beyond
the termination of this Agreement, then Siemens shall continue to act under the
terms of this Agreement until all Services pursuant to any outstanding Purchase
Order(s) have been completed.

     3. PRICING. Prices for the Services are as set forth in Exhibit A
(captioned "Pricing for Services"). Siemens shall provide the Services at the
Prices specified in Exhibit A as ordered by Stereotaxis pursuant to Purchase
Orders issued pursuant to Section 5 of this Agreement.


[*** 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.]



<PAGE>




     4.  PAYMENT TERMS. Siemens shall invoice Stereotaxis for its Services on a
monthly basis. Payment terms are net thirty (30) days from the date of the
invoice. Past due amounts shall bear interest at the rate of 1 1/2% per month
unless subject to bona fide dispute. If Stereotaxis disputes any invoice, it
must notify Siemens in writing within ten (10) days of receipt of the invoice
and must pay the undisputed portion of the invoice in accordance with the terms
of this Agreement. In the event it is determined that the disputed amount is
owed to Siemens, then Stereotaxis shall pay interest on such amount at the rate
set forth of 0.7% per month, which interest shall accrue from the date such
payment was originally due.

     5.  ORDERING OF SERVICES. Siemens agrees to provide the Services described
herein, at such locations and times and in accordance with the specific
requirements set forth in one or more purchase orders ("Purchase Orders") to be
issued by Stereotaxis from time to time during the term of this Agreement and
directed to the attention of William Paines at the Siemens Uptime Service Center
Processing Department (or to such other individual who is designated by
Siemens). Purchase Orders shall refer to and indicate that they are being
submitted subject to the terms and conditions of this Agreement. All Purchase
Orders submitted under this Agreement shall be governed and controlled by the
conditions of this Agreement. In the event of any inconsistency between the
terms of this Agreement and the terms of a specific Purchase Order, the terms of
the Agreement shall prevail.

     6.  TERMINATION.

     (a) It shall constitute a default under the Agreement, with the
corresponding right of termination as stated below, if any of the following
shall occur:

         (i)  In the event of a material violation by a party of any provision
              of this Agreement (the non-payment of undisputed monies due to
              Siemens shall constitute a material violation of the Agreement)
              which violation continues uncured for a period of thirty (30) days
              after written notice to the other party specifying such violation,
              then the Agreement may be immediately terminated by the non-
              breaching party.

         (ii) In the event a party makes an assignment for the benefit of
              creditors, files a voluntary petition in bankruptcy, is
              adjudicated insolvent or bankrupt, a proceeding is filed against
              said party to declare said party a bankrupt and said proceeding is
              not dismissed within thirty (30) days, or said party commences
              any proceeding under any reorganization, arrangement, readjustment
              of debt or similar law or statute of any jurisdiction, then this
              Agreement may be terminated by the other party on five (5) days
              written notice.

     (b) In addition, either party may terminate this Agreement by giving thirty
(30) days prior written notice to the other party in the event that the
obligations in respect of the provision of service to Stereotaxis pursuant to
the Collaboration Agreement expire or terminate, in which case Siemens will
continue to provide through the effective date of termination any Services
accepted and acknowledged prior to its receipt of Stereotaxis' notice or the
date of its notice of termination, and Stereotaxis will accept and pay for all
such Services in accordance with the terms of this Agreement.

     (c) Any termination of this Agreement shall not affect any obligations that
accrued prior to the effective date of termination.

     7.  COOPERATION. The parties will use their reasonable best efforts to
effectuate the purposes of this Agreement and shall cooperate with each other
respecting the same. Specifically, the parties shall cooperate in reviewing and
determining the desired performance level of each item of equipment covered by
this Agreement. Although Siemens shall assume primary responsibility for
assembling the service documentation, Stereotaxis and Siemens agree to cooperate
in this effort. Further, equipment performance and cost analysis will be
reviewed semi-annually and any changes to the Services may be discussed. Each
site may be reviewed and evaluated at this time.

         

                                       2


<PAGE>

     8.  FORCE MAJEURE. Siemens will not be liable for any failure to fulfill 
its obligations under this Agreement due to causes beyond its reasonable control
and without its fault or negligence including, but not limited to, governmental
laws and regulations, acts of God or the public, war or other violence, acts of
terrorism, civil commotion, blockades, embargoes, calamities, floods, fires,
earthquakes, explosions, accidents, storms, strikes, lockouts, work stoppages,
labor disputes, or unavailability of labor, raw materials, power or supplies. In
addition, in the event of any determination pursuant to the provisions of a
collective bargaining agreement preventing or hindering the performance of any
of the obligations of Siemens under this Agreement, or determining that the
performance of any such obligations violates provisions of that collective
bargaining agreement, or in the event a trade union, or unions, otherwise
prevents Siemens from performing any such obligations, then Siemens shall be
excused from the performance of such obligations unless Stereotaxis makes all
required arrangements with the trade union, or unions, to permit Siemens to
perform the work. Any additional costs incurred by Siemens that are related to
such arrangements made by Stereotaxis in respect of such labor dispute(s) shall
be paid by Stereotaxis.

     9.  DEVELOPMENT OF A JOINT PLANNING GUIDE. Stereotaxis shall provide
reasonably sufficient information to jointly develop with Siemens a
site-planning guide for use in preparing customer sites to accept the
Stereotaxis Products. This activity shall consist of reviewing the AXIOM Artis
dFC planning guide 100.891.01 and developing specifications, drawings and
verbiage to describe the required room construction for the Stereotaxis
Products. This data and information shall be incorporated into a joint
site-planning guide and issued by Siemens as a released document with an
assigned Siemens document number. The information to be provided shall include,
but not be limited to, the following:

     o   Structural requirements including:

         o   Component weights and centers of gravity

         o   Desired anchoring methods for the following floor types: 

             o   Slab on grade

             o   Screed floors

             o   Computer flooring

             o   Through bolting

     o   Electrical requirements including:

         o   Power specification(s)

         o   Power Distribution

         o   Cable types and lengths including a connection diagram with fixed 
             points 

         o   Cable separation requirements, if any 

         o   Conduit sizes required 

     o  Environmental requirements including:

         o   Temperature and humidity specification

         o   Temperature and humidity gradients

         o   Heat dissipation of components

         o   Cabinet airflow

         o   Noise

         o   Temperature & Humidity specifications for transport and storage

     o  Room Planning

         o   Minimum and recommended room sizes

         o   Movement ranges of equipment

         o   Service Access

         o   Detailed drawings of equipment sizes

         o   Details of magnetic shielding options

     o  Equipment Transportation & Delivery

         o   Requirements for equipment ingress, weights, sizes, special 
             precautions, etc.

         o   Details of pre-installations kit and required work by the 
             contractor

     10. CREATION OF SITE PLANS.

     (a) SIEMENS' RESPONSIBILITIES. Siemens shall create site plans for customer
installations that include details of room preparation requirements for both the
Stereotaxis Products and the Siemens

                                       3

<PAGE>



Products. These site plans shall be based upon the information provided in the
joint site-planning guide. Siemens shall provide to Stereotaxis details of
turnaround commitments for specific site planning drawings. Siemens shall
provide the estimated amount of extra work (hours) for each site plan over and
above those required in respect of the Siemens Products when including details
for the Stereotaxis Products. Based upon this estimate, the parties shall
negotiate the compensation to be paid to Siemens by Stereotaxis for these
services, which shall be on a time basis at the rate set forth in Exhibit A.
Siemens will use its best efforts to provide Preliminary plans or revisions to
Preliminary plans within a 7 calendar day turnaround time. Siemens will use its
best efforts to provide final plans or revisions to final plans within a 21
calendar day turnaround time.

     (b) STEREOTAXIS' RESPONSIBILITIES. Until such time as Siemens and
Stereotaxis agree upon site planning proficiency, Stereotaxis will review each
site plan involving Stereotaxis Products and will not unreasonably withhold its
approval of same.

     11. PROJECT MANAGEMENT OF THE ROOM PREPARATION.

     (a) SIEMENS' RESPONSIBILITIES. Siemens' project managers shall coordinate
the site construction of the room for both the Stereotaxis Products and the
Siemens Products. Siemens' project managers shall provide Stereotaxis with
weekly updates on current construction projects via e-mail. Should Stereotaxis
choose to initiate visits to a customer site during the construction process,
Siemens' project managers shall assist in facilitating these visits. Siemens'
project managers shall furnish a project timeline for each construction project
including projected installation start dates and such timelines shall be
consistent to the extent reasonably feasible with the installation start dates
agreed to at the time of issuance by the relevant customer of purchase orders to
Stereotaxis and Siemens for the Stereotaxis Products and the Siemens Products.
This timeline shall be updated regularly by Siemens' project managers (no less
than monthly). Siemens shall provide the estimated amount of extra work (hours)
for each site's project management activities over and above those required in
respect of the Siemens Products. Based upon this estimate, the parties shall
negotiate the compensation to be paid to Siemens by Stereotaxis for these
services, which shall be on a time basis at the rate set forth in Exhibit A.

     (b) STEREOTAXIS' RESPONSIBILITIES. Stereotaxis will visit each site one
time at the completion of the site construction to verify that the room is
correctly prepared. Siemens and Stereotaxis will mutually determine if
additional Stereotaxis visits are to be made during the construction phase.
Stereotaxis will provide technical support to Siemens' project managers as
reasonably required. Stereotaxis will provide a dedicated telephone number for
service related issues. Stereotaxis will track all questions and develop a
frequently asked questions list for distribution to Siemens' personnel and
inclusion in the site-planning guide.

     12. PRE-INSTALLATION MATERIALS/DEVELOPMENT OF PRE-INSTALLATION KIT.
Stereotaxis will develop a pre-installation kit for use prior to equipment
delivery. This kit will comprise the following:.

    o  Alignment jig for locating Niobe floor bolt locations relative to the
       AXIOM Artis dFC system. 

    o  All items that can be installed prior to equipment delivery such as floor
       plates, rotational tracks, etc.


The pre-installation kit shall be available for shipment to the customer site as
requested by Siemens' project manager. For the first 5 systems installed, a
Stereotaxis service representative shall visit the site to aid in accurate
installation of the pre-installation kit. Detailed instructions on the
use/installation of the pre-installation kit shall be provided by Stereotaxis in
both English and German.

        13. INSTALLATION SERVICES. Stereotaxis, where commercially feasible,
will contract with the same subcontractor that Siemens uses for the mechanical
installation and cabling part of the equipment installation. Stereotaxis will
provide adequate training and documentation for the subcontractor to perform
these duties in accordance with the required specifications. Stereotaxis will
also provide a field service engineer on site to complete power on, system
verification and calibration. Siemens' customer service engineer ("CSE") shall
be available on site for the duration of this phase for on site training.



                                       4






<PAGE>

     14.  WARRANTY/SUPPORT SERVICES.

     (a) Siemens' CSEs will provide front line (first call) support for the
Stereotaxis Products during the term of this Agreement, including the product
warranty period (generally one year from the date of installation).

     (b) Subject to Section 14(f) below, Siemens will provide the following
break/fix services during the term of this Agreement: (i) initial call receipt
by Siemens UPTIME Service Center (available 24/7 hours); (ii) remote diagnosis,
if available, by Siemens technical support; (iii) dispatch of Siemens CSE to
customer site; (iv) diagnosis of problem and corrective action (no part call);
(v) ordering of necessary part(s), removal and replacement of parts, calibration
and corrective action; (vi) escalation of problems to Stereotaxis that are
beyond the level of training provided to Siemens' CSEs; and (vii) continued
on-site support as required to assist the Stereotaxis field service engineer and
to resolve the customer problem.

     (c) Siemens will install all software and hardware updates as released by
Stereotaxis.

     (d) Siemens will provide reporting of any complaints related to
Stereotaxis' Products to Stereotaxis.

     (e) Reimbursement to Siemens for these services will be on a time basis at
the rates set forth in Exhibit A attached hereto.

     (f) Prior to Siemens dispatching a Siemens CSE to a customer site, as
described in Section 14(b)(iii) above, Siemens shall notify Stereotaxis'
technical support staff and obtain its approval to render such service. In the
event that Stereotaxis fails to respond to Siemens within one (1) hour of such
notification, then Siemens will proceed to render such services. If Siemens
dispatches a CSE to the customer site before receiving the approval of
Stereotaxis or, in the absence of any such approval, before the expiration of
the one (1) hour period, then Siemens will not bill the travel time to
Stereotaxis. The response time for Siemens to provide to any customer the
services described in Sections 14(b)(i) through 14(b)(iii) inclusive shall not
exceed 4 hours during the customer's principal coverage period; provided,
however, that the time during which Siemens is waiting for Stereotaxis' approval
to dispatch a CSE to the customer site shall not count towards the 4 hours'
response time requirement.

     15.  STEREOTAXIS TECHNICAL SUPPORT.

     (a) Stereotaxis will provide 24x7 hours technical support to Siemens' CSEs.
The initial support plan is as follows:

          o    Stereotaxis will create a toll-free, dedicated service support
               telephone number.

          o    This number will ring at key personnel's desks in St. Louis
               during regular work hours. If the line is not answered within 4
               rings or it is after regular business hours, the call will
               forward to an answering service.

          o    The answering service will page the on-call service support
               engineer.

          o    Response time for technical support is within 2 hours of call
               receipt.

          o    Technical support will log all inbound calls including all
               pertinent information such as date, time, customer, problem
               description, problem resolution, etc.

     (b) After Stereotaxis has completed a sufficient number of sales of
Stereotaxis Products, Stereotaxis will investigate the following alternatives
based upon the service needs/frequency of calls/installed base requirements
gathered during the initial sales phase. The preferred option of Stereotaxis
will be discussed and agreed by Siemens before implementation:

     o    Option 1. Establish a dedicated support staff that are available 24x7
          hours and are Stereotaxis employees.

     o    Option 2. Outsource technical support to a 3rd party company that is
          staffed 24x7 hours. This will require in depth training for the 3rd
          party company. Maintain a level 3 support response on an as required
          pager basis.



                                        5

<PAGE>

     o    Option 3. Should after hours support needs be low as the mean time
          between failures ("MTBF") is found to be very high, Stereotaxis may
          elect to stay with after hours technical support provided on an as
          required pager basis.

     16. SPARE PARTS LOGISTICS. All spare parts necessary to repair the
Stereotaxis Products shall be provided to Siemens at no charge.

     (a) SPARE PARTS LIST. Stereotaxis will create a recommended spare parts
list. This list will include anticipated replacement parts items along with
expected MTBF.

     (b) SPARE PARTS INVENTORY. Stereotaxis will maintain an inventory of spare
parts in the United States. Spare parts will be defined and assigned Stereotaxis
and Siemens part numbers according to service needs and requirements. Returnable
parts will be marked with "REP". Spare parts inventory levels will be determined
by Stereotaxis. At a minimum Stereotaxis will review inventory levels annually
and make any necessary adjustments based upon usage. If Siemens elects, it can
stock above the inventory level established by Stereotaxis by purchasing
additional parts from Stereotaxis. Stereotaxis will reimburse Siemens for parts
used from this additional inventory level.

     (c) PARTS ORDERING AND ORDER FULFILLMENT. For the Siemens CSE, the process
for order processing and fulfillment will be the same as for Siemens parts:

          o    Siemens CSE identifies the need for replacement part(s) and
               places an order as with Siemens spare parts.

          o    The order is processed by Siemens and shipped by the order 
               processing and fulfillment center.

          o    Certain pre-selected parts, based upon cost or complexity,
               require pre-approval by Stereotaxis' service personnel to ensure
               complete and accurate troubleshooting has been conducted.

          o    Siemens ships returnable parts (REP) to Stereotaxis.

          o    Stereotaxis repairs returned parts as appropriate and returns
               them to service stock.

     17. TECHNICAL TRAINING.

     (a) In order for Siemens' service personnel to be adequately prepared to
service the Stereotaxis Products, Stereotaxis will provide technical training
classes (including on-site training) for a commercially reasonable number of
Siemens service personnel and will, based on reasonable requests by Siemens,
make such classes available at various locations, including (i) St. Louis (at
the Stereotaxis facility) for Niobe stand alone training, (ii) Forchheim,
Germany (at the Siemens facility) for the first year or until the Niobe system
is de-installed, and (iii) at customer facilities.

     (b) The training materials to be provided by Stereotaxis shall contain, at
a minimum, the following: (i) theory of operation, (ii) installation &
calibration, (iii) interface with Siemens Products, (iv) user interface, (v)
periodic maintenance, (vi) troubleshooting, (vii) hands-on lab time, and (viii)
magnetic precautions and personal safety.

     (c) Course length will vary but will generally consist of 3-5 days of
instruction. Two Siemens CSEs will be trained for each Niobe installation (a
primary and a secondary CSE). Should additional training be required later
(e.g., due to any personnel changes), it will be provided with the next training
class/on site training under the same conditions. All costs for delivering
training shall be borne by Stereotaxis. Travel expenses for Siemens CSEs,
including airfare, meals and lodging, while attending training shall be borne by
Siemens.

     18. FIELD MODIFICATION INSTRUCTIONS AND TRACEABILITY.

     (a) Stereotaxis will maintain files that track software and hardware
revisions for all customers. All installed updates will have return paperwork
that will trigger a revision to this database upon receipt.



                                       6

<PAGE>

     (b) For all Field Modification Instructions (FMIs), Stereotaxis will
contract Siemens to install the updates. Safety FMIs will be installed on an
emergency basis; routine FMIs will be installed at the next routine service
calls. Siemens will be reimbursed for these services on a time basis in
accordance with the rates set forth on Exhibit A attached hereto.

     (c) Distribution of the FMIs and routing of return paperwork for
traceability shall be agreed to by the parties, with the goal of using Siemens
normal distribution channels. Stereotaxis will write the instructions and
Siemens will distribute the FMIs to the responsible person(s) within Siemens. If
parts are needed they will be handled like spare parts with a Siemens Part
number and distributed by the order processing and fulfillment center.

     19. SERVICE DOCUMENTATION. Stereotaxis will develop the following service
documents for the Stereotaxis Products. Stereotaxis will provide a hard copy of
such documents (in English) to each customer and such documents will be provided
in Adobe Acrobat Portable Document Format (PDF) for Siemens" internal use and
distribution.

       Site Planning Guide
       Pre-Installation Manual
       Installation Manual
       Service Manual
       Periodic Maintenance
       Parts & Special Tools Manual
       User Manual
       System Maintenance Requirements, Hazardous Waste Disposal instructions

     20. SERVICE TOOLS. Standard service tools will be used by Siemens during
installation of the Stereotaxis Products prior to the time of magnet mounting.
Specialized tools required for installation of the magnet and for servicing of
the same will be provided by Stereotaxis and will remain on the customer site
after installation is completed. The kit will include the test leads for limit
switch adjustment and a small kit of fuses, drift pins, etc. Stereotaxis will
provide Siemens with a list of part numbers of the specialized tools and the
toll kit in order to expedite any ordering of additional items. Subsequent
service work performed by both Siemens and Stereotaxis can be performed using
standard tools so long as adequate safety precautions are taken. Service
training shall include instruction on such safety precautions.

     21. ACCESS. Stereotaxis will provide Siemens with access to the equipment
being serviced, subject to Stereotaxis' customers' reasonable security
requirements. Stereotaxis' personnel will be available to respond to Siemens'
technicians when Siemens is performing Services.

     22. INSURANCE. At all times throughout the term of this Agreement, Siemens
shall maintain in full force and effect the following insurance coverage, and
shall provide Stereotaxis with a certificate of insurance evidencing such
coverage upon request of Stereotaxis:

     (a) Workman's compensation insurance in accordance with the jurisdiction in
which the work is to be performed.

     (b) General liability Insurance with limits of at least [***] per
occurrence and an annual aggregate of [***].

     23. INDEPENDENT CONTRACTORS. Based solely on this Agreement, and without
regard to relationships based on other agreements to which Siemens and
Stereotaxis may be parties, Siemens and Stereotaxis are independent contractors,
neither is the agent or representative of the other; and neither is authorized
to enter into any agreements to bind the other. The relationship between Siemens
and Stereotaxis based on this Agreement shall remain that of independent
contractors and nothing herein shall create or imply any relationship or
agreement of joint venture, partnership, franchise, or hire. Siemens' personnel
that are assigned to perform any Services hereunder shall be and remain at all
times during such assignment employees of Siemens. Siemens and its employees and
personnel shall be solely responsible for any and all city, state and federal
income taxes, social security


[*** 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.]


                                       7

<PAGE>

withholding taxes and any other tax obligation to which the employees and 
personnel of Siemens may be subject. NEITHER PARTY HAS AUTHORITY TO ASSUME OR 
CREATE ANY OBLIGATIONS ON THE OTHER'S BEHALF, EXPRESS OR IMPLIED, WITH RESPECT 
TO THE PRODUCTS OR OTHERWISE. Without limiting the generality of the foregoing, 
neither party shall make any representation, guarantee or warranty on the other 
party's behalf. Neither party shall use the other party's company name, logo, 
artwork designs or abbreviations thereof in any way which may result in 
confusion as to Stereotaxis and Siemens being separate entities.

         24.      CONFIDENTIAL INFORMATION.  During the term of this Agreement, 
and in fulfilling each party's obligations under this Agreement, the parties 
and their respective employees and agents will be exposed to and learn 
confidential information belonging to the other party. All confidential 
information shall be and remain the sole property of the disclosing party and 
may only be used or disclosed by the receiving party and its employees and 
agents for the sole purpose of fulfilling its obligations under this Agreement 
and for no other purpose. The parties shall use all reasonable precautions to 
assure that the confidential information of the disclosing party is protected 
from unauthorized persons and from unauthorized use or disclosure. The 
restrictions on disclosure of confidential information shall not apply to 
information (i) which is or becomes public knowledge through no fault of the 
receiving party and its employees and agents, or any third party not under an 
obligation of non-disclosure to the disclosing party, (ii) which is made 
available to the receiving party or its employees or agents by an independent 
third party with no obligation of non-disclosure to the disclosing party, (iii) 
which is already in the possession of the receiving party or its employees or 
agents at the time of receipt from the disclosing party (and such prior 
possession can be properly demonstrated by documentary evidence), or (iv) which 
is required by law to be disclosed. Confidential information shall not be 
deemed to be public knowledge merely because any part of said information is 
embodied in general disclosures or because individual features, components or 
combinations thereof are now or become known to the public. The receiving 
party's obligations with respect to confidential information shall continue for 
a period of five (5) years from the expiration or termination of this 
Agreement. For purposes of this Agreement, "confidential information" means any 
information belonging to the disclosing party which it considers to be valuable 
and proprietary including but not limited to, know-how, technical data, 
processes, diagnostic software, techniques, developments, inventions, research 
products, and plans for future developments, and proprietary matter of a 
business or technical nature, including but not limited to information about 
cost, profits, markets, products sales, and names and lists of customers. 
confidential information includes all written materials (including 
correspondence, memoranda, manuals, notes and notebooks) and all computer 
software, models, mechanisms, devices, programs, drawings, or plans which shall 
be disclosed or made available embodying confidential information.

         25.      SOFTWARE LICENSE.

         (a)      To perform its obligations under this Agreement, Siemens may 
need to use certain Stereotaxis software ("Software"). This Software is and 
shall remain included in the definition of Confidential Information. 
Stereotaxis hereby grants to Siemens a royalty-free, non-assignable, 
non-exclusive license to use the Software solely to service equipment as 
required to fulfill Siemens' obligations under this Agreement and for no other 
purpose. Upon termination of this Agreement, the Software (and all full or 
partial copies thereof) will be returned to Stereotaxis or Siemens will certify 
as to the destruction thereof.

         (b)      Except as provided in Section 25(a) above, Siemens has no 
right, title or interest in the Software, including but not limited to, no 
right to (a) make or have made any copy or copies of the Software except as 
otherwise required to perform its obligations under this Agreement, (b) make or 
have made any products incorporating all or any part of the Software, (c) 
modify, adapt, disassemble or create any derivative work or works based on the 
Software, unless in any case consented to by Stereotaxis.

         (c)      Siemens shall use its best efforts to ensure that its 
employees comply with the restrictions herein. Siemens shall make its employees 
aware of the limited scope of this license. Siemens will, at its sole cost and 
expense, upon the written request of Stereotaxis, take any action reasonably 
requested to prevent any unauthorized use of the Software arising out of or 
caused by Stereotaxis' license of the Software to Siemens.

                                       8



<PAGE>

26.  NOTICES. All notices from one party to the other under this Agreement shall
     be in writing and either personally delivered or sent by overnight delivery
     service or certified mail (E-mail or other electronic media are not
     acceptable), postage prepaid and return receipt requested to:

                     Stereotaxis:  Stereotaxis, Inc.
                                   4041 Forest Park Ave. 
                                   St. Louis, MO 63108 
                                   Attn: CEO and CFO

                     Siemens:      Siemens Medical Solutions USA, Inc.
                                   110 MacAlyson Court
                                   Cary, NC 27511-6495
                                   Attn: Richard Kubsch

                     With copy to: Siemens Corporation
                                   Legal Department
                                   Associate General Counsel
                                   51 Valley Stream Parkway
                                   Malvern, PA 19355

or to such other person or places as either party may designate from time to
time by notice hereunder. Such notices shall be deemed effective upon receipt if
sent by personal delivery or by overnight delivery service or three (3) days
after deposit in the mails in accordance herewith.

     27. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey, without giving
effect to choice of laws provisions thereunder.

     28. SEVERABILITY. If any one or more of the provisions, or portions of
provisions, of this Agreement shall be deemed by any court or quasi-judicial
authority to be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions, or portions of
provisions contained herein, shall not in any way be affected or impaired
thereby, so long as the Agreement still expresses the intent of the parties. If
the intent of the parties cannot be preserved, this Agreement shall either be
renegotiated or rendered null and void.

     29. LANGUAGE CONSTRUCTION. The language of this Agreement shall be
construed in all cases, according to its fair meaning, and not for or against
any party hereto. The parties acknowledge that each party and its counsel have
reviewed this Agreement and that the normal rule of construction to the effect
that any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Agreement. 

     30. DISPUTE RESOLUTION. Any disputes or differences arising from or
relating to this Agreement or the breach, termination, or validity thereof,
whether at common law or under statute shall be settled by an amicable effort of
the parties. An attempt to arrive at a settlement shall be deemed to have failed
as soon as one party so notifies the other party in writing. If an attempt at
settlement has failed, such disputes and differences shall be exclusively and
finally settled by arbitration brought before the American Arbitration
Association in New York, New York, according to its Commercial Arbitration
Rules, by three (3) arbitrators appointed in accordance with such Rules. Unless
prohibited or restricted by law, each party agrees to provide to the arbitrators
and to the other party such documents, other evidence or witness testimony as
may reasonably be requested by the other party and as are relevant to the issues
being arbitrated. Such request shall be subject to a strict confidentiality
agreement and shall not affect time limits provided for in such Rules and/or in
this Agreement. The award, determinations and decisions of the arbitrators shall
be substantiated in writing. The arbitration tribunal shall decide on the matter
of costs of the arbitration and which of the parties shall bear the costs or in
what proportions the costs shall be borne by the parties. The award of the
arbitrators shall be final and binding, and no appeal shall lie therefrom.
Judgment on the award or any order final or interim ordered


                                       9


<PAGE>

by the arbitrators may be entered, registered or filed for enforcement purposes
in any court having jurisdiction thereof.

     31. GOVERNMENT ACCESS CLAUSE. Until the expiration of four (4) years after
the furnishing of any services under this Agreement, the parties shall make
available upon written request of the Secretary of Health and Human Services,
the Comptroller General, or any of their duly authorized representatives, this
Agreement and the books, documents and records of the each of the parties that
are necessary to certify the nature and extent of costs incurred under this
Agreement or any agreements that Stereotaxis enters into with customers for the
sale, installation and servicing of the Stereotaxis Products. This clause shall
apply if, and solely to the extent that, Section 1861(V)(1)(I) of the Social
Security Act applies to this Agreement or any agreements that Stereotaxis
enters into with customers for the sale, installation and servicing of the
Stereotaxis Products.

     32. DEBARMENT CERTIFICATION. The parties each represent that (i) neither it
nor any of its employees or agents has been debarred, excluded or suspended
from, or otherwise determined to be ineligible to participate in, Medicare,
Medicaid or any other federal or state health care programs, nor is it or any of
its employees or agents the subject of any inquiry or investigation regarding
participation in such programs which could reasonably lead to suspension,
debarment or exclusion from, or ineligibility to participate in, such programs,
(ii) neither it nor any of its employees or agents has ever been convicted of a
criminal offense related to the provision of health care items or services, and
(iii) it shall not knowingly employ or contract with, with or without
compensation, any individual or entity listed by a federal agency as debarred.
The parties hereby agree to promptly notify the other party of any threatened,
proposed, or actual exclusion from Medicare, Medicaid or any federal or state
health care programs. In the event that a party or any of its employees or
agents is debarred, excluded or suspended from, or otherwise determined to be
ineligible to participate in, Medicare, Medicaid or any federal or state health
care programs during the term of this Agreement, or if at any time after the
Effective Date, it is determined that a party is in breach of this Section 32,
this Agreement shall, at the option of the other party as of the effective date
of such debarment, exclusion, suspension or breach, terminate.

     33. HIPAA. Without limiting the obligations of either party as otherwise
set forth in this Agreement or imposed by applicable law, the parties agree and
acknowledge that they shall comply with all applicable requirements of the
Health Insurance Portability and Accountability Act ("HIPAA"). Without limiting
the generality of the foregoing, the parties represent and warrant that they
will appropriately safeguard protected health information ("PHI") of their 
respective customers that is made available to or obtained by the parties
pursuant to this Agreement or otherwise in the course of performing services
hereunder, and that they shall each indemnify and hold the other party harmless
from any and all claims, liabilities, damages, suits, causes of action,
judgments, penalties, fines, costs and expenses arising from or related to that
party's breach of the foregoing. The parties agree that this Agreement shall be
amended from time to time if, and to the extent required by, the provisions of
HIPAA and regulations promulgated thereunder, in order to assure that this
Agreement is compliant therewith.

     Specifically, each of the parties agrees that it shall:

     (a) not use or further disclose PHI other than as permitted or required by
this Agreement or as required by law; 

     (b) use appropriate safeguards to prevent use or disclosure of PHI other
than as provided for by this Agreement; 

     (c) report to the other party and customer any use or disclosure of PHI of
such customer not provided for by this Agreement of which a party becomes aware;

     (d) ensure that any approved subcontractors who may have access to PHI
agree to the same restrictions and conditions that apply to the parties with
respect to PHI;


                                       10

<PAGE>

     (e) make PHI available to the customer in accordance with applicable law;

     (f) make its internal practices, books, and records relating to the use and
disclosure of PHI received from Siemens or customer available to the Secretary
of the United States Health & Human Services for purposes of determining the
customer's compliance with applicable law; (in addition, a party shall
immediately notify the other party and the customer upon receipt by that party
of any such request, and shall provide the other party with copies of any such
materials);

     (g) make available the information required to provide an accounting of
disclosures of PHI pursuant to applicable law, and

     (h) on termination of this Agreement, return or destroy all PHI that a
party still maintains in any form and retain no copies of PHI.

     34. FURTHER ASSURANCES. Each party agrees to do such further acts, execute
such further documents, secure such written assignments and acknowledgments
necessary to carry out the terms and conditions hereof.

     35. ADDITIONAL DOCUMENTS. Each of the parties hereto agrees to execute any
document or documents that may be reasonably requested from time to time by the
other party to implement or complete such party's obligation pursuant to this
Agreement

     36. WAIVER. No term or provision of this Agreement, or of the Exhibits
attached hereto, shall be deemed to be waived, or a breach excused, unless such
waiver or consent shall be in writing and signed by the party claimed to have
waived or consented. Any waiver of a breach, whether express or implied, shall
not constitute a consent to or waiver of any different or subsequent breach.

     37. ADVERSE ACTS. Each party shall not at any time engage in any acts
(including entry into any agreements or arrangements with third parties) to
oppose, dilute, reduce, defeat, or adversely affect the rights of the other
party under this Agreement.

     38. HEADINGS; NUMBER. The titles or headings used herein are inserted
merely for convenience and shall be given no legal effect. Whenever the context
so requires, the masculine shall include the feminine and neuter, and the
singular shall include the plural, and conversely.

     39. ENTIRE AGREEMENT. This Agreement, together with the attached Exhibits,
each of which is incorporated fully and is made part of this Agreement by this
reference, sets forth the entire and only agreement between Siemens and
Stereotaxis concerning the subject matter hereof. No provisions of this
Agreement can be modified except by a written amendment signed by both parties.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first written above.


SIEMENS MEDICAL SOLUTIONS USA, INC.     STEREOTAXIS, INC.



By:     /s/ Richard Kubsch              By:         /s/ Nicola Young
   --------------------------------         ------------------------------------

Title:       Product Manager            Title:            CFO
       ----------------------------            ---------------------------------

Date:          11-24-02                 Date:           11/18/02
      -----------------------------           ----------------------------------


                                       11

<PAGE>

                        EXHIBIT A -- PRICING FOR SERVICES

CREATION OF SITE PLANS (Reference: Section 10(a) of the Agreement): Stereotaxis
will reimburse Siemens for Site Planning services for all booked orders at the
rate of [***] per hour; Siemens estimates that for most projects the cost of
these services will be [***] (6 hours of work). Preliminary site plans for lost
orders can be billed to Stereotaxis should the quantity of these plans become
excessive.

PROJECT MANAGEMENT (Reference: Section 11(a) of the Agreement): . Stereotaxis
will reimburse Siemens for Project Management services at the rate of [***] per
hour; Siemens estimates that for most projects the cost of these services will
be [***] (34 hours).

WARRANTY/SUPPORT SERVICES (References: Sections 14(e) and 18(b) of the
Agreement): 
Stereotaxis will reimburse Siemens for travel and services performed by Siemens
and referred to in Sections 14(e) and 18(b) of the Agreement at Siemens'
current applicable commercially reasonable hourly rates, which rates, at the
date of the Agreement, are those specified in Schedule 1 for Angio/Cardiac under
the subheadings "All Travel", "Regular", "Overtime", and "Double time", subject
to the following discount schedule:

0 -- 100 hours in 1 year or less: a [***] discount will be granted off the
applicable rates.

101 -- 200 hours in 1 year or less: a [***] discount will be granted off the
applicable rates.

201 hours and more in 1 year or less: a [***] discount will be granted off the
applicable rates.

The hours will be monitored quarterly and the discounts adjusted, if applicable.

SPARE PART LOGISTICS (Reference: Section 16 of the Agreement):
Costs for the handling fees incurred by Siemens for returns processing and to be
paid by Stereotaxis will be determined under separate agreement or amendment to
the Agreement.

[*** 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.]

                                       12


<PAGE>


                                   SCHEDULE 1

HOURLY SERVICE RATES

The following hourly service rates will be in effect as of June 15, 2002. These
rates are subject to change in accordance with the then applicable commercially
reasonable rates of Siemens. 

                                     [***]

GENERAL TERMS

Regular time hours will be in effect from 8:00 AM - 5:00 PM, Monday - Friday,
excluding Siemens holidays.

Overtime hours will be in effect from 5:00 PM -- 8:00 AM, Monday - Friday, and
all day Saturday until 5:00 PM.

Double time hours will be in effect from 5:00 PM Saturday - 8:00 AM Monday, and
on the following Siemens holidays: New Years Day, Memorial Day (observed),
Independence Day, Labor Day, Thanksgiving Day, Christmas Day. If one of the
foregoing holidays falls on a Saturday, then the holiday will be observed on the
previous Friday, and if the holiday falls on a Sunday, the holiday will be
observed on the following Monday.

A minimum charge of 4 hours plus travel time applies for labor requested
outside of regular working or contract coverage hours.

TIME AND MATERIAL CUSTOMERS

Customers will be charged at the applicable billing rate for the hours worked 
at either the regular, overtime or double-time rate plus travel.

[*** 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.]




                                       13


<PAGE>

                                                                   EXHIBIT 10.20

                               RESEARCH AGREEMENT

                                     between

                                   SIEMENS AG
                                MEDICAL SOLUTIONS
                      SIEMENSSTRA(beta)E 1,91301 FORCHHEIM

                                 ("SIEMENS AG")

                                       AND

                                STEREOTAXIS, INC
                              4041 FOREST PARK AVE.
                                  ST. LOUIS, MO
                                      63108

                                 ("STEREOTAXIS")

                                       and

LANDESBETRIEB KRANKENHAUSER, BODY CORPORATE (LBK HAMBURG), REPRESENTED BY ITS
EXECUTIVE BOARD, REPRESENTED BY THE MANAGEMENT OF PRORESEARCH CLINICAL RESEARCH
AND DEVELOPMENT, RUBENKAMP 148,22291 HAMBURG, GERMANY

                                    ("PRORESEARCH")


<PAGE>


                                    PREAMBLE

Stereotaxis intends that the Stereotaxis Niobe magnetic navigation system
("Magnetic Navigation System") will be used in Research Projects and Clinical
Studies in respect of various applications of the Magnetic Navigation System.
The Stereotaxis NIOBE system will be integrated with a Siemens AXIOM Artis dFC
Magnetic Navigation Digital Flat Panel Fluoroscopy System.

Siemens will be the Executive Project Manager for the project. This includes
that Siemens is to built the Laboratory, as well to install the ARTIS - NIOBE
system. Siemens will also be responsible for first level service of NIOBE in
addition to its own products after the installation.

LBK Hamburg, represented by proresearch is interested in conducting this
Research program and wants to form
 this joint research collaboration.

     SECTION 1 PERFORMANCE OF THE RESEARCH PROGRAM AND CONTRACT BASIS

Therefore, Siemens AG and Stereotaxis commission proresearch with the conduct of
a Research Program and proresearch intends to initiate a Center of Excellence
for the Stereotaxis Niobe system in Europe with a focus of electrophysiology and
interventional cardiology. This Center of Excellence shall be directed by:

         Prof. Dr. med. Karl-Heinz Kuck, Head of the Department of Cardiology,

                     AK St. Georg, Lohmuhlenstr. 5, 20099 Hamburg.

The project leader of the research laboratory shall be:

  Dr. rer. physiol. Gabriele Schonharl-Voss, Projectmanager medical products,
                                  proresearch,
                     AK St. Georg, Lohmuhlenstr.5,20099 Hamburg.

For each Research Project or Clinical Study a Subagreement ("Subagreement") will
be generated between proresearch and the respective contract partner 
(hereinafter "the Sponsor").

Based on the Research Agreement the following Attachments will be generated:
Attachment A:

         It regulates in detail the obligations of Siemens AG Medical Solution
         and proresearch.

         Added is an offer from Siemens Med.

Attachment B:

         It regulates the obligations of Stereotaxis Inc. and proresearch, e.g.
         the price and placement conditions for the Niobe system and is based on
         the Stereotaxis placement Agreement.


<PAGE>

Attachment C:

         It regulates in detail the obligations of Siemens SGT and proresearch
         as well as the cost and conditions for the building of the Labratory.

Attachment D:

         It governs the maintenance of the system, e.g. maintenance contracts
         between Siemens Med and proresearch, and Stereotaxis Inc. and
         proresearch, and contains additional agreements like First Level
         Service.

Attachment E:

         Leasing contract

                         SECTION 2 TERM AND TERMINATION

2.1      The term of this Agreement commences on the date it is executed by all
         parties and ends after 60 months. The parties may extend the term of
         this agreement three months before expiration by mutual written consent
         from year to year.

2.2      The completion of the Laboratory and the appropriation of the system
         should take place in the last quarter of the year 2002.

2.3      Should Siemens or Stereotaxis not be able to fulfil its substantial
         obligations, proreseach shall have the right for termination of the
         contract with a notice period of 30 days.

         proresearch may return the NIOBE or AXIOM Artis dFC system, if Siemens
         and/or Stereotaxis during the installation period is not able to fulfil
         its substantial obligations.

         Acceptance of the NIOBE System shall be deemed to have occurred upon
         written notification by Stereotaxis (signed by an officer of
         Stereotaxis) to proresearch that installation is completed in all
         material respects and that Stereotaxis in good faith determines the
         NIOBE System is (i) operating according to specifications and (ii) is
         completely ready for clinical use of following completion of the first
         five animal or human procedures with the NIOBE System (proresearch will
         provide immediate written notice of such completion to Stereotaxis),
         whichever is the earlier.

         Acceptance of AXIOM Artis dFC system is governed by VOL.


<PAGE>

             SECTION 3 FINANCIAL CONSIDERATION AND PAYMENT SCHEDULE

3.1   According to the performance of the research collaboration, Siemens AG/
      Stereotaxis will provide proresearch with the equipments needed by the
      investigators site to carry out the Research Program. The conditions of
      acquirement are agreed upon by the above mentioned attachments
      ("Attachment") to this Research Agreement.

3.2   The costs for the operating Laboratory are:


<TABLE>
<S>                                                                       <C>
Axiom Artis                                                                     [***]
NewCor                                                                          [***]
Niobe                                                                           [***]
Additional equipment                                                            [***]
Building of the laboratory                                                      [***]
                                                                          -----------
                                                                                [***]

Financial Support for Research projects Stereotaxis Inc.                        [***]
Financial Support for Research projects Siemens Med                             [***]
</TABLE>


      (the first rate of [***] for research efforts will be paid by Siemens
      Med within 30 days after acceptance of the system)


<TABLE>
<S>                                                                             <C>
Cost for the Niobe / Artis Laboratory including all services                           [***]
VAT                                                                                    [***]
Total amount incl. VAT                                                                 [***]
</TABLE>


 3.3  For the performance of Research Projects and Clinical Studies proresearch
      will be entitled to the financial compensation according the Payment
      Schedules listed in the Subagreements. The consideration will be remitted
      to the proresearch bank account. Further fee claims are excluded, in
      particular any separate fee agreements with the Director of the Center of
      Excellence or his employees. Payments/ Benefits in kind (congress fees,
      Investigator meetings, appliances etc.) for employees and/ or the
      performing department must be approved by proresearch.

          SECTION 4 OWNERSHIP OF DATA, CONFIDENTIALITY AND PUBLICATION

 4.1  Ownership. All case report forms and other data generated according to the
      Protocol of a Research Project or a Clinical Study (the "Data"), shall be
      the property of the Sponsor of the Subagreement, which may utilize the
      Data in any way it deems appropriate, with the exception that the Sponsor
      shall not sell, transfer, publish, disclose or otherwise make available
      the Data to a competitor of Siemens or 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.]

<PAGE>

 4.2   Confidentiality. All information concerning the Research Program covering
       the Sponsor's operations, such as the Sponsor's patent applications,
       formulas, manufacturing processes, basic scientific data, prior clinical
       data and information regarding the device which is supplied by the
       Sponsor to the investigators site and not previously published are
       considered confidential.

       The provisions in this article 4.2 shall survive the termination or
       expiration of this Research Agreement, the duration of the non-disclosure
       agreement shall be limited to 5 years.

 4.3   Publication. The Center of Excellence , proresearch and the Sponsors
       shall be free to publish any scientific results obtained from the
       evaluation. In doing so, the contribution of each party shall be given
       proper regard and be duly mentioned in all such publications. The content
       and timing so such publications shall be subject to the prior consent of
       the other party, which consent shall not be unreasonably withheld.

                               SECTION 5 PATENTS

 5.1   All points concerning patents will be governed in detail by the
       particular Subagreement for each of the different research projects.

                   SECTION 6 COMPLIANCE WITH APPLICABLE LAWS

proresearch agrees to conduct the Research Projects and Clinical Studies and
maintain records and Data during and after the term of this Service Contract in
compliance with all applicable legal and regulatory requirements.

                               SECTION 7 PUBLICITY

None of the parties shall use the name of any other party for promotional
purposes without the prior written consent of the party whose name is proposed
to be used, nor shall either party disclose the existence or substance of this
Service Contract except as required by law.

                        SECTION 8 INDEPENDENT CONTRACTOR

proresearch is acting in the capacity of an independent contractor hereunder and
not as employee or agent of Siemens AG or Stereotaxis.


<PAGE>

                            SECTION 9 INDEMNIFICATION

11.1   Siemens AG and Stereotaxis shall defend, indemnify and hold harmless
       proresearch, its trustees, officers, agents and their employees
       (collectively the "Indemnitees") from any and all losses, costs,
       expenses, liabilities, claims, actions and damages, including, without
       limitation, interest penalties and reasonable attorney's fees, based on a
       personal injury arising out of or connected with the performance of the
       activities to be carried out pursuant to this Research Agreement.

11.2   The above obligation of Siemens AG or Stereotaxis shall not apply and
       Siemens AG or Stereotaxis shall not be liable for any indemnification or
       expenses for actions or claims in any way arising from or caused by the
       willful, reckless, or negligent acts or omissions, or professional
       malpractice of the Indemnities.

                  SECTION 10 ENTIRE AGREEMENT AND MODIFICATIONS

This Agreement contains the complete understanding between the parties and
supersedes any prior agreement, whether oral or in writing, between the parties,
with the exception that the right on patents will be governed in named
subagreements. It may not be altered, amended or modified except by written
document signed by all parties.

                                SECTION 11 NOTICE

Any notices given hereunder shall be sent by mail, by fax or personally
delivered as follows:

TO:            Siemens AG
               Legal Services Med
               Werner von Siemens Str. 50
               91052 Erlangen
               Germany

TO:            Stereotaxis Inc.
               4041 Forest Park Ave.
               St. Louis, MO 63108
               USA

TO:            LBK Hamburg
               proresearch clinical research and development
               Ruebenkamp 148, Haus 10
               D-22291 Hamburg
               Germany
        Attn: Dr. Gabriele Schonharl-Voss


<PAGE>

                            SECTION 12 GOVERNING LAW

This Research Agreement shall be governed by and construed in accordance with
the laws of Germany.

                             SECTION 13 JURISDICTION

If any provision of this Research Agreement will be or become unenforceable,
this does not effect the validity of the other contract provisions. The invalid
provision shall be replaced by a legally valid provision, the contents of which
will best correspond to the objective of the invalid provision. Siemens AG,
Stereotaxis.Inc. and proresearch undertake to come to an understanding in case
of any queries or conflicts arising from this Research Agreement or from its
execution. Modifications and supplements of this Agreement will be agreed as
amendments and have to be provided in writing.

If the contracting parties consent, disputes arising out of or in connection
with the present Agreement or its validity shall be finally settled in
accordance with the rules of arbitration of the Deutsche Institution fur
Schiedsgerichtsbarkeit e.V. (German Arbitration Institution) in Bonn without the
possibility of recourse legal action. The arbitration court can also make
binding decisions on the validity of this arbitration agreement.

BANK ACCOUNT FOR REMITTING THE FINANCIAL CONSIDERATION

Account holder:     [***]
Account no.:        [***]
Bank:               [***]
Sort code:          [***]



[*** 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.]

<PAGE>

PRORESEARCH CLINICAL RESEARCH AND DEVELOPMENT

              /s/ Jurgen Finsterbusch          /s/ Cornelia Wolf
              ------------------------         ---------------------------
Hamburg,      Jurgen Finsterbusch              Cornelia Wolf
              (Managing Director)              (Manager Administration)

              /s/ Dr. Ralf Thomas              /s/ Hans-Soachim Reich 
              ------------------------         ---------------------------
SIEMENS AG    Dr. Ralf Thomas                  Hans-Soachim Reich
              (Medical solutions, WAX)         (Medical solutions, AXMC)

STEREOTAXIS, LNC.

              /s/ Patricia Kennedy             /s/  Illegible 
              ------------------------         -------------------------



<PAGE>

                                                              EXHIBIT 10.29
                                                                         
                              DISTRIBUTOR AGREEMENT

         This Agreement (this "Agreement") made this 17 day of SEPTEMBER, 2003,
by and between Stereotaxis, Inc., a Delaware corporation ("Stereotaxis") having
its principal place of business at 4041 Forest Park Avenue, St. Louis, MO, 63108
USA, and [AB Medica], a INCORPORATED COMPANY organized under the laws of ITALY
having its principal place of business at VIA NERVIANO 31 LAINATE (H1)
("Distributor"). Stereotaxis and Distributor are sometimes hereinafter referred
to individually as a "Party" and collectively as the "Parties."

I.       Appointment.

         A.       Subject to all the terms and conditions of this Agreement,
                  Stereotaxis hereby appoints Distributor, and Distributor
                  accepts such appointment, as its distributor within the
                  Territory (as defined below) for resale, for use only in the
                  Territory, of those particular products and services (the
                  "Products") described in SCHEDULE ONE attached hereto.
                  Notwithstanding the foregoing, Products shall not include any
                  products or services that are subject to distribution
                  alliances or agreements with major manufacturers of imaging or
                  interventional products including, without limitation, those
                  products or services which are subject to the agreement
 dated
                  May 7, 2002 between Stereotaxis and Biosense Webster, Inc. The
                  list of Products may be enlarged or diminished in respect of
                  the provisions of Section V.E. at any time and from time to
                  time during the term of this Agreement, but only by written
                  notice from an authorized representative of Stereotaxis.

         B.       Stereotaxis and Distributor acknowledge and agree that the
                  foregoing appointment is exclusive, provided that Distributor
                  both (i) at all times and continuously achieves at least one
                  hundred percent (100%) of the sales quota (the "Sales Quota")
                  as set forth below in Section I.C. for the years ending
                  December 31, 2003 and December 31, 2004 and in each and every
                  annual Sales Quota Agreement (as defined below) between the
                  Parties, and (ii) is not at any time in breach of any of its
                  obligations under this Agreement, then Stereotaxis shall not
                  appoint any other distributor for distribution of the
                  Products, nor shall Stereotaxis itself distribute the
                  Products, in the Territory during the term hereof. The
                  preceding sentence contains additional, and not exclusive,
                  remedies available to Stereotaxis in the event that
                  Distributor breaches this Agreement. Notwithstanding the
                  foregoing, Stereotaxis shall be entitled to appoint other
                  distributors within or for the Territory for any of its
                  products not specified in SCHEDULE ONE, including products
                  identical to the Products except for the brand name, during
                  the term hereof, or to sell such products itself in the
                  Territory.

         C.       For the year ending December 31, 2003, the Sales Quota shall
                  equal [***] ordered and installed. For the year ending
                  December 31, 2004, the Sales Quota shall equal


[*** 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.]

<PAGE>


                  [***] It shall be a mutual goal of the Parties that each NIOBE
                  System placed by Distributor hereunder shall be utilized by
                  Distributor's customers for an average of five procedures per
                  week by 12 months following installation, and any NIOBE System
                  which does not reach such level of customer utilization shall
                  not be counted toward Distributor achieving any Sales Quotas
                  hereunder.

II.      Territory. "Territory" shall mean Italy and the following
         [cantons/regions] in Switzerland, which comprise the Italian speaking
         geographic region in Switzerland: [Ticino]. [DISTRIBUTOR TO CONFIRM
         AND/OR COMPLETE WITH ADDITIONAL REFERENCES.]

III.     Certain Covenants of Distributor. Distributor agrees during the term of
         this Agreement, and at its own cost:

         A.       In order to ensure patient safety, not to use or permit others
                  to use the NIOBE System with any disposable devices, software
                  or other accessories except those provided by or approved in
                  writing by Stereotaxis or with any fluoroscopy system other
                  than the Siemens ARTIS digital fluoroscopy system that has
                  been integrated by Stereotaxis and Siemens to allow use with
                  the NIOBE System or any other fluoroscopy system approved in
                  writing by Stereotaxis. Distributor further agrees that it
                  will not, or permit others to, modify the NIOBE System or any
                  of the devices or software provided by Stereotaxis for use
                  with the system;

         B.       To use its best efforts to sell, advertise and otherwise
                  promote the sale and use of the Products throughout the
                  Territory, to maintain a representative, and to fulfill such
                  additional goals as it may agree upon with Stereotaxis;

         C.       To maintain an adequate sales and service staff, as well as
                  adequate facilities;

         D.       To use its best efforts to assist end users in acquiring
                  replacement of defective parts, through Stereotaxis or an
                  approved vendor of Stereotaxis;

         E.       To appoint and supervise such persons as may be necessary to
                  provide adequate sales throughout the Territory and instruct
                  them as to appropriate methods of sales, advertisement,
                  demonstration and promotion of the Products;

         F.       To prepare and transmit to Stereotaxis regular, timely,
                  accurate and complete reports and other information pertinent
                  to the sale of the Products and semi-annual, annual and other
                  statements of its financial condition, all in form and
                  substance satisfactory to Stereotaxis. Such information shall
                  include (i) a quarterly non-binding forecast of Products to be
                  purchased by Distributor (which shall include projected NIOBE
                  System and disposable sales) from Stereotaxis during the
                  following year (on a quarterly basis) and (ii) a list of
                  customers and potential customers of Distributor, including
                  information describing the contacts with such potential
                  customer and the status of the discussions, in reasonable
                  detail;


[*** 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.]

                                       2

<PAGE>

         G.       To pay and perform in a timely and full manner all obligations
                  owing to Stereotaxis at any time. Stereotaxis reserves the
                  right to charge, and Distributor agrees to pay, a finance
                  charge in respect of any past due obligation or indebtedness
                  of 3 months libor $ + spread 4 points on a yearly basis,
                  subject to the maximum amount permitted under Delaware law;

         H.       To comply with any and all Stereotaxis instructions regarding
                  the recall of the Products. In the event Stereotaxis instructs
                  Distributor to recall the Products, Stereotaxis shall
                  reimburse Distributor for direct costs incurred by Distributor
                  in connection with such recall, except those direct costs that
                  Stereotaxis determines, in its reasonable discretion, are
                  outside the scope of the acts required by Distributor to
                  effect the recall. Notwithstanding the foregoing, Distributor
                  shall reimburse Stereotaxis for all costs and expenses of or
                  related to the recall incurred by Stereotaxis if the recall
                  arises in whole or in part from an act or omission of
                  Distributor;

         I.       Beginning on January 1, 2005, and annually thereafter, but in
                  no event later than January 30th of each calendar year, to
                  mutually agree in good faith with Stereotaxis the targeted
                  sales quota for such calendar year (a "Targeted Sales Quota
                  Agreement"), on reasonable commercial terms and substantially
                  in the form attached hereto as SCHEDULE TWO, or in such other
                  form as Stereotaxis may from time to time prescribe. The
                  Targeted Sales Quota Agreements may be amended from time to
                  time by the mutual written consent of the Parties;

         J.       Not to distribute, sell or solicit the sale of the Products
                  outside of the Territory, or for use outside of the Territory,
                  or to any Distributor within the Territory which Distributor
                  has reason to believe intends to use, distribute or resell any
                  of the Products outside of the Territory;

         K.       To pay from its own funds and without reimbursement from
                  Stereotaxis all direct selling, marketing, translation and
                  advertising expenses, costs of all promotional expenses and
                  all general and administrative expenses incurred in connection
                  with the discharge of its duties hereunder;

         L.       To promptly notify Stereotaxis of any complaints from
                  customers regarding the Products and to cooperate with
                  Stereotaxis to administer and resolve any such complaints;

         M.       To protect the proprietary rights of Stereotaxis as specified
                  in this Agreement and agrees to notify Distributor's employees
                  of its obligations specified and enforce their compliance
                  therewith; and

         N.       To promptly notify Stereotaxis of any infringement of the
                  proprietary rights of Stereotaxis that come to Stereotaxis'
                  attention, and to cooperate with Stereotaxis without charge,
                  in any action by Stereotaxis to investigate or remedy any such
                  infringement or said rights.

                                       3

<PAGE>

IV.      Certain Covenants of Stereotaxis.

         A.       Stereotaxis agrees to provide initial training for all sales,
                  marketing and service employees of Distributor, who are
                  employees of the Distributor at the time of execution of this
                  Agreement and who will sell and/or service the Products (the
                  "Initial Training"). Such training shall consist of two
                  sessions, one of which shall relate to the sales and marketing
                  of the Products and one of which shall relate to the servicing
                  of the Products. Distributor shall require its personnel
                  performing functions covered by any such training course to
                  attend such course. The costs of travel and related expenses
                  shall be borne by the Party incurring such travel. The Parties
                  agree that such training shall be provided at locations and
                  with methods that minimize the total cost of travel and
                  location expense. Upon completion of the Initial Training and
                  other than as provided in Section IV.B., Distributor agrees to
                  be responsible for the training of all of its sales, marketing
                  and service employees, including the training of any new
                  employees.

         B.       Distributor shall appoint a marketing or training coordinator
                  in order to supervise the training, including the Initial
                  Training, of such personnel. In connection with any new
                  advancements in technology related to the Products,
                  Stereotaxis agrees to provide additional training to the
                  marketing or training coordinator selected by the Distributor.
                  Distributor shall require its marketing or training
                  coordinator to attend such training. The costs of travel and
                  related expenses of such training shall be borne by the Party
                  incurring such travel. The Parties agree that such training
                  shall be provided at locations and with methods that minimize
                  the total cost of travel and location expense.

         C.       Stereotaxis agrees to provide, or cause to be provided,
                  clinical applications support to the customer for the [***]
                  NIOBE Systems sold by Distributor until the Distributor
                  sells its [***] NIOBE System. Upon the sale by the Distributor
                  of its third NIOBE System, Stereotaxis will cease providing
                  clinical applications support to the customers for any of the
                  NIOBE Systems sold by the Distributor and Distributor agrees
                  to become solely responsible for providing such clinical
                  applications support to such customers for all NIOBE Systems
                  sold by the Distributor. Distributor represents and warrants
                  to Stereotaxis that Distributor will establish and maintain an
                  adequate Stereotaxis trained technically competent staff to
                  provide all required service and support to Distributor's
                  customers. This representation is a material inducement for
                  Stereotaxis to enter into and continue this Agreement.

         D.       Stereotaxis shall have the right to subcontract to Siemens AG
                  or a designated affiliate thereof any services to be performed
                  by Stereotaxis in connection with any NIOBE Systems sold
                  hereunder by Distributor.

[*** 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.]

                                       4

<PAGE>

V.       Sales and Terms.

         A.       Products will initially be sold to Distributor at such prices
                  and terms as set forth on SCHEDULE THREE attached hereto.
                  Thereafter, in November of each year during the term hereof,
                  Stereotaxis shall establish the prices for the Products, which
                  shall be equal to [***] below the net sales price in the US
                  (exclusive of shipping and installation charges). Such prices
                  shall be effective for purchase orders made by the Distributor
                  in the following calendar year, provided that any Products so
                  ordered are shipped within nine months of such order;
                  otherwise the effective price for Products shipped more than
                  nine months after the date of the purchase order shall be the
                  then-prevailing pricing in effect for such Products.
                  Distributor shall submit a written purchase order in
                  substantially the form provided to Distributor by Stereotaxis
                  from time to time, for each of the Products sold hereunder,
                  which shall be subject to the terms and conditions in this
                  Agreement.

         B.       Distributor shall be responsible for and shall defray all
                  costs and expenses pertaining to the importation of the
                  Products into the Territory (including all costs associated
                  with shipping and installation) and shall pay all taxes,
                  duties, fees and charges, including all value added taxes,
                  related to the importation of the Products into the Territory
                  and the conclusion and fulfillment of this Agreement (other
                  than as provided in Section V.G.).

         C.       Sales shall be governed only by this Agreement and
                  Stereotaxis' standard terms and conditions for the Products in
                  effect at the time of shipment. A current form of Stereotaxis'
                  standard terms and conditions is attached hereto as SCHEDULE
                  FOUR and is hereby incorporated by reference into this
                  Agreement. Resales by the Distributor shall also be made
                  subject to Stereotaxis' standard terms and conditions. The
                  terms and conditions of this Agreement take precedence over
                  all purchase orders, acknowledgment forms and other documents
                  between the Parties relating to the Products. The provisions
                  of this Section shall survive termination, for whatever
                  reason, of this Agreement.

         D.       Stereotaxis will endeavor to make the Products available as
                  ordered, but reserves the right to allocate its available
                  Products as it may determine in its sole and absolute
                  discretion, without thereby incurring any liability to
                  Distributor or otherwise provided that the delivery of the
                  ordered Products is not unreasonably delayed and that
                  Stereotaxis, upon written request of the Distributor, is able
                  to indicate an estimated date of delivery and respects such
                  date of delivery. Stereotaxis also reserves the right to add a
                  service charge, or alternatively to refuse orders for Products
                  for less than minimum dollar values or less than standard
                  quantities as established by Stereotaxis from time to time.


[*** 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.]


                                       5

<PAGE>

         E.       Stereotaxis reserves the right from time to time in its sole
                  and absolute discretion, without thereby incurring any
                  liability to Distributor or otherwise, to discontinue or to
                  limit its production of any Product, to alter the design or
                  construction of any Product, and to add new and additional
                  Products. In case Stereotaxis decides to discontinue or limit
                  the Production of any product, then Stereotaxis will need to
                  give the Distributor a sixty (60) day written notice, and will
                  be bound to deliver Distributor any Product ordered prior to
                  the decision to discontinue or limit the production or during
                  the sixty (60) day notice period in order to limit potential
                  liabilities of Distributor toward its Customers.

         F.       Distributor agrees not to sell (i) as Stereotaxis products any
                  merchandise or accessories that have not been made, approved
                  in writing, or supplied by Stereotaxis or (ii) any merchandise
                  or accessories for use with or incorporation onto or into the
                  Products that, in Stereotaxis' sole and absolute discretion,
                  adversely affect the operation or safety of the Products.

         G.       Stereotaxis shall be responsible for using all reasonable
                  commercial efforts to obtain the necessary regulatory approval
                  for the Products from the European Union and shall be
                  responsible for all costs and expenses associated therewith.
                  Distributor and Stereotaxis agree to cooperate with each other
                  in order to obtain such approval.

         H.       Distributor agrees to comply with all laws and regulations of
                  the Territory pertaining to the importation, distribution,
                  sale and marketing of the Product in the Territory and agrees
                  to be responsible for obtaining all necessary regulatory
                  approvals in the Territory (other than as provided in Section
                  V.G.) and agrees to be responsible for all costs and expenses
                  associated therewith. Stereotaxis and Distributor agree to
                  cooperate with each other in order to comply with such laws
                  and regulations. Without limiting the generality of the
                  foregoing, Distributor agrees not to make any incorrect or
                  false claims regarding the features, operations or marketing
                  of any Product(s); not to make any incorrect or false claims
                  regarding the features, operations or marketing of any
                  Product(s); not to employ deceptive, illegal or unethical
                  practices in marketing the Product(s); and to represent
                  Stereotaxis in a way that will protect and enhance the
                  reputation of Stereotaxis.

         I.       The ownership of the legal and beneficial title to, the risk
                  of loss and the right to possession and control over, all of
                  the Products to be distributed by Distributor hereunder shall
                  be F.O.B. Origin (factory).

         J.       Payment for the Products shall be made in U.S. dollars within
                  sixty (60) days following the date of Stereotaxis' invoice.

VI.      Labeling

         A.       Stereotaxis shall provide Distributor with Product information
                  needed by Distributor to prepare labeling in compliance with
                  applicable laws and

                                       6

<PAGE>

                  regulations. For jurisdictions within the Territory where
                  Distributor advises Stereotaxis that Stereotaxis' U.S.
                  labeling is acceptable, Stereotaxis shall be responsible for
                  preparing and attaching said labeling to the Product.
                  Stereotaxis warrants that the content of such labeling shall
                  be in compliance with any applicable U.S. governmental
                  regulations. When Stereotaxis' U.S. labeling is not in
                  compliance with applicable laws and regulations in a
                  particular jurisdiction in the Territory, Distributor shall be
                  responsible, at Distributor's sole cost and expense, for
                  providing Stereotaxis with "camera-ready" label art work and
                  content as required by applicable laws and regulations within
                  such Territory and as reasonably required by Stereotaxis'
                  production schedule, and Stereotaxis shall prepare the
                  labeling in accordance with Distributor's art work and attach
                  said labeling to the Product.

VII.     Installation.

         A.       The installation of the Products covered shall be the
                  responsibility of, and at the expense of, Distributor.
                  Distributor will cause the Products covered hereby and to be
                  installed and connected in accordance with installation
                  specifications supplied by Stereotaxis. Distributor is
                  responsible for ensuring compliance with local regulations
                  relating to installation at its sole cost and expense.

VIII.    Warranties.

         A.       Distributor agrees to make no warranty in respect of the
                  Products to its customers or otherwise in addition to,
                  different from or inconsistent with any warranty contained in
                  Stereotaxis' standard terms and conditions (or in any other
                  applicable Product warranty form of Stereotaxis in effect at
                  the date of sale). The provisions of this Section shall
                  survive termination, for whatever reason, of this Agreement.

         B.       Stereotaxis warrants that the Products manufactured by
                  Stereotaxis and sold hereunder will be free from defects in
                  material or workmanship under normal use and service for the
                  period a period of one year following completion of
                  installation in accordance with the terms hereof, which date
                  will be confirmed in writing by Stereotaxis. Stereotaxis makes
                  no warranty for any Products made by persons other than
                  Stereotaxis, or its affiliates, and Distributor's sole
                  warranty therefore, if any, is the original manufacturer's
                  warranty, which Stereotaxis agrees to pass on it Distributor,
                  as applicable.

         C.       No warranty extended by Stereotaxis will apply to any Products
                  which have been damaged by accident, misuse, abuse,
                  negligence, improper application or alteration or by a force
                  majeure occurrence or by the Distributor's failure to operate
                  the Products in accordance with the manufacturer's
                  instructions or to maintain the recommended operating
                  environment and line conditions; which are defective due to
                  unauthorized attempts to repair, relocate, maintain, service,
                  add to or modify the Products by the Distributor or any third
                  party or due to the attachment and/or use of non-Stereotaxis
                  supplied equipment without Stereotaxis' prior written
                  approval; which failed due to causes from the use of operating

                                       7

<PAGE>

                  supplies or consumable parts not approved by Stereotaxis. In
                  addition and without limitation, no warranty extended by
                  Stereotaxis will apply to any failure to comply with Section
                  III.A or any failure due to events such as cracking from high
                  impact drops, cable rupture from rolling equipment over
                  cables, or delamination from cleaning with inappropriate
                  solutions. Stereotaxis' obligation under this warranty is
                  limited to the repair or replacement, at Stereotaxis' option,
                  of defective parts. Stereotaxis may effectuate such repair at
                  the installed site for any NIOBE System sold, delivered and
                  installed hereunder, provided Stereotaxis is furnished safe
                  and sufficient access for such repair. Repair or replacement
                  may be with parts or products that are new, used or
                  refurbished. Repairs or replacements will not interrupt,
                  extend or prolong the term of the warranty. Distributor will
                  pay Stereotaxis its normal charges for service and parts for
                  any inspection, repair or replacement that is not, in
                  Stereotaxis' sole judgment, required by noncompliance with the
                  warranty set forth in Section VIII.B. Stereotaxis' warranty
                  does not apply to consumable materials, except as specifically
                  stated in writing, nor to products or parts thereof supplied
                  by Distributor.

         D.       This warranty is made on condition that immediate written
                  notice of any noncompliance is given to Stereotaxis and
                  Stereotaxis' inspection reveals that the Distributor's claim
                  is valid under the terms of the warranty (i.e. that the
                  noncompliance is due to traceable defects in original
                  materials and/or workmanship).

         E.       All services performed at times outside of any standard
                  service package purchased by Distributor's customers shall be
                  at an additional charge at Stereotaxis' then current rates.
                  Stereotaxis may utilize sub-contractors for purposes of
                  carrying out warranty service.

         F.       STEREOTAXIS MAKES NO WARRANTY OTHER THAN THE ONE SET FORTH
                  HEREIN, WHICH WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES,
                  EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO ANY EXPRESS
                  OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR
                  PARTICULAR PURPOSES, AND SUCH CONSTITUTES THE ONLY WARRANTY
                  MADE WITH RESPECT TO THE PRODUCTS AND ANY PRODUCT, SERVICE OR
                  OTHER ITEM FURNISHED UNDER THIS AGREEMENT.

         G.       The Parties acknowledge that the Products available for resale
                  by Distributor will include Stereotaxis' standard service
                  maintenance, repair and service plans in effect from time to
                  time (which currently include the "Gold" and, where available,
                  "Platinum" service plans), which will be priced at [***] below
                  the net sales price in the US for such plans, subject to
                  adjustment on an annual basis each November during the term
                  hereof as provide in Section V.A. above.

IX.      LIMITATION OF LIABILITY


[*** 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.]


                                       8

<PAGE>

         A.       In no event will Stereotaxis' liability hereunder exceed the
                  actual loss or damage sustained by Distributor, up to the
                  purchase price of the Products.

         B.       STEREOTAXIS SHALL NOT BE LIABLE FOR ANY LOSS OF USE, REVENUE
                  OR ANTICIPATED PROFITS, LOSS OF STORED, TRANSMITTED OR
                  RECORDED DATA, OR FOR ANY INCIDENTAL, UNFORESEEN, SPECIAL,
                  PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN
                  CONNECTION WITH THIS AGREEMENT OR THE SALE OR USE OF THE
                  PRODUCTS. This provision does not affect third party claims
                  for personal injury arising as a result of Stereotaxis'
                  negligence or product defect. THE FOREGOING IS A SEPARATE,
                  ESSENTIAL TERM OF THIS AGREEMENT AND SHALL BE EFFECTIVE UPON
                  THE FAILURE OF ANY REMEDY, EXCLUSIVE OR NOT.

X.       INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS.

         A.       Infringement by Stereotaxis. Stereotaxis warrants that the
                  Products manufactured by Stereotaxis and sold hereunder do not
                  infringe any patent or copyright in the Territory. If
                  Distributor receives a claim that any such Product, or parts
                  thereof, infringe upon the rights of others under any U.S.
                  patent or copyright, Distributor will notify the Stereotaxis
                  in writing. As to all infringement claims relating to Products
                  or parts manufactured by Stereotaxis or one of its affiliates:

                  (1)      Distributor will give Stereotaxis information,
                           assistance and exclusive authority to evaluate,
                           defend and settle such claims; and

                  (2)      Stereotaxis will then, at its own expense, defend or
                           settle such claims, procure the right to use the
                           Products, or remove or modify them to avoid
                           infringement. If none of these alternatives is
                           available on terms reasonable to Stereotaxis, then
                           Distributor will return (or cause to be returned) the
                           Products to Stereotaxis, and Stereotaxis will refund
                           to Distributor the purchase price paid by the
                           Distributor less reasonable depreciation for
                           Distributor's use of the Products.

         B.       Infringement by Distributor. If some or all of the Products
                  sold hereunder are made by Stereotaxis pursuant to drawings or
                  specifications furnished by the Distributor or one of its
                  customers, or if the Distributor modifies or combines,
                  operates or uses the Products other than as specified by
                  Stereotaxis or with any product, data, software, apparatus or
                  program not provided or approved by Stereotaxis, then the
                  indemnity obligation of Stereotaxis under Section 13.1 will be
                  null and void and should a claim be made that such Products
                  infringe the rights of any third party under patent, trademark
                  or otherwise, then Distributor will indemnify and hold
                  Stereotaxis harmless against any liability or expense,
                  including reasonable attorneys fees, incurred by Stereotaxis
                  in connection therewith.

XI.      DESIGNS AND TRADE SECRETS/LICENSE

                                       9

<PAGE>

         A.       Any drawings, data, designs, software programs or other
                  technical or confidential information supplied by Stereotaxis
                  to Distributor in connection with the sale of the Products are
                  not included in the sale of the Products to Distributor, will
                  remain Stereotaxis' property and will at all times be held in
                  confidence by Distributor. Such information will not be
                  reproduced or disclosed to others without Stereotaxis' prior
                  written consent.

         B.       Distributor acknowledges and agrees that any and all software
                  incorporated into the NIOBE System, or contained or comprised
                  in any Products or other accessories provided by Stereotaxis
                  to Distributor for use with the NIOBE System remains the
                  property of Stereotaxis or where applicable, its licensor(s)
                  and is licensed to Distributor on a non-exclusive,
                  non-transferable basis (for the license fees described in any
                  purchase order), not sold. This software is the confidential
                  information of Stereotaxis and Distributor will not copy or
                  modify this software, reverse engineer, decompile or
                  disassemble or use this software except in conjunction with
                  the NIOBE System at the installation site. Notwithstanding
                  anything else contained in this Agreement there is no warranty
                  or condition of non-infringement, quiet enjoyment or
                  possession or title regarding such software. Distributor
                  acknowledges that the software is of such complexity that it
                  may have inherent or latent defects and agrees that its sole
                  remedy for any defects during the warranty period is that
                  Stereotaxis will correct documented software errors. There are
                  no licenses or rights in respect of software upgrades or
                  future software products implied or provided for by this
                  Agreement

         C.       Distributor agrees that it will not use the Products in a
                  manner that infringes any of Stereotaxis' patents.

XII.     Distributor is not Agent. Distributor is an independent contractor and
         this Agreement does not create the relation of principal and agent
         between Stereotaxis and Distributor. Distributor shall not act or
         assume to act as a representative or agent of Stereotaxis, nor will it
         contract or incur debts or other obligations in the name of or on
         behalf of Stereotaxis. Stereotaxis shall have no obligation to make
         withholdings of any kind from amounts payable to Distributor, including
         without limitation, any obligations for income tax, workers
         compensation or unemployment compensation.

XIII.    Term; Breach and Termination.

         A.       This Agreement shall be effective as of the date first written
                  above upon signature hereof by the Parties and shall remain in
                  effect through December 31, 2004, unless earlier terminated or
                  extended pursuant to the provisions hereof. This Agreement
                  shall be automatically renewed for one (1) year at the end of
                  the initial term hereof and for successive one-year renewal
                  periods thereafter, unless either Party shall provide written
                  notice to the other Party at least ninety (90) days prior to
                  the end of the initial term or any subsequent one-year renewal
                  thereof.

                                       10

<PAGE>

         B.       Stereotaxis shall have the right in its discretion and at its
                  option upon the occurrence of any one or more of the following
                  events, to terminate this Agreement by giving notice of such
                  termination to Distributor, the same to become effective upon
                  the giving of such notice or, if so stated in such notice,
                  upon the termination date specified therein:

                  1.       If the Distributor breaches or fails to perform any
                           term or provision hereof, or covenant or obligation
                           herein, or to pay promptly when due any sum owed to
                           Stereotaxis under this Agreement or otherwise and
                           fails to cure it breach or failure to perform within
                           thirty (30) days from reception of written notice
                           from Stereotaxis;

                  2.       If the Distributor is declared insolvent (however
                           defined or evidenced) or commits an act of bankruptcy
                           or assignment for the benefit of creditors or
                           appoints a committee of creditors or makes or sends
                           notice of an intended bulk transfer or if there shall
                           be convened a meeting of the creditors or principal
                           creditors of Distributor;

                  3.       If any petition or application to any court or
                           tribunal, at law or in equity, by or against
                           Distributor, is made for the appointment of a
                           custodian, receiver or trustee for Distributor or for
                           any substantial portion of the property or assets of
                           Distributor;

                  4.       If Distributor shall cease to function as a going
                           concern or if the usual business of Distributor shall
                           be terminated or suspended; or

                  5.       If any representation or warranty or any other
                           statement of fact made to Stereotaxis at any time,
                           whether in writing or orally, by or on behalf of
                           Distributor pursuant to or in connection with this
                           Agreement or otherwise, shall have been false or
                           misleading in any material respect when made.

         C.       Upon the giving of such notice of termination, Stereotaxis
                  may, at its option, with or without further notice to or
                  demand upon Distributor, declare all obligations of
                  Distributor to Stereotaxis under this Agreement or otherwise,
                  immediately due and payable.

         D.       This Agreement (except those covenants, terms and provisions
                  that are intended to survive termination) may be terminated at
                  any time by either Party hereto, in the event there is a
                  Change in Control of either Party, said termination to be
                  effective immediately. "Change in Control" shall be defined
                  as: (i) any merger or other business combination involving
                  either Party after which the former stockholders of such Party
                  own less than two-thirds of the outstanding stock of the
                  surviving company; (ii) any sale of all or substantially all
                  of the assets of either Party, or any similar transaction; or
                  (iii) any transaction or series of related transactions by a
                  Party in which in excess of 50% of the voting securities of
                  such Party are transferred; but will exclude effects on
                  ownership occurring pursuant to a public offering of
                  securities by a Party.

                                       11

<PAGE>

         E.       The right of termination, as provided herein, is absolute and
                  the parties recognize that termination of this Agreement may
                  result in loss or damage to either Party, but hereby expressly
                  agree that neither Party shall be liable to the other by
                  reason of any loss or damage resulting from the termination of
                  this Agreement by the other for cause including, without
                  limitation, any loss of prospective profits, or any damage
                  occasioned by loss of goodwill or by reason of any
                  expenditures, investments leases or commitments made in
                  anticipation of the continuance of this Agreement. Without
                  limiting the generality of the foregoing reciprocal releases
                  of liability for loss or damage occasioned by termination,
                  Distributor agrees that Stereotaxis may, at any time, be at
                  liberty to negotiate with and appoint any other person, firm
                  or corporation with respect to the replacement of Distributor
                  in whole or in part as a distributor in the Territory, and
                  Stereotaxis shall not be liable or responsible to Distributor
                  for any loss of profits or other damage that may be suffered
                  by Distributor by reason of any publicity attendant upon any
                  such negotiation or appointment or otherwise.

         F.       Any notice of termination shall be deemed fully and completely
                  given upon the posting of the same by registered or certified
                  mail, return receipt requested, in an envelope properly
                  addressed to the other Party at the address set forth above or
                  to such other or further address as such other Party, by like
                  notice, may have theretofore designated or by personal
                  delivery to the office of the other Party.

XIV.     Rights and Obligations of the Parties Upon Termination.

         A.       Upon the giving by either Party of notice of termination,
                  Stereotaxis shall have the following rights, each exercisable
                  in its sole and absolute discretion:

                  1.       to reject, in whole or in part, any order or orders
                           for the Products theretofore submitted by
                           Distributor;

                  2.       Upon termination of the Agreement, the Distributor
                           shall be entitled to receive the products that are
                           necessary to fill valid and binding orders received
                           from its customers before termination and/or to
                           respect contractual obligation undertaken with Public
                           Hospitals through tendering procedures before
                           termination. To this extent, within 20 days from
                           effective termination date, the Distributor will
                           provide Stereotaxis with a detailed list of the
                           binding orders received from its Customers and of the
                           contractual obligation undertaken to Public Hospital
                           before termination, together with an estimate of the
                           requested delivery dates of such products. For these
                           supplies, if termination is a consequence of Ab
                           Medica's breach of its contractual obligations,
                           Stereotaxis will be entitled to demand anticipated or
                           immediate payment of the merchandise to be delivered.

                  3.       to purchase from Distributor at such time or times,
                           within the ninety day period immediately following
                           the termination date or such other period as
                           Stereotaxis in its sole discretion may determine, and
                           on the terms and conditions hereinafter set forth all
                           or any portion of Distributor's inventory

                                       12

<PAGE>

                           of the Products on the termination date, which is
                           defined as the date upon which this Agreement
                           terminates pursuant to any notice of termination
                           provided for by this Agreement.

         B.       The purchase price of such Products as are undamaged, in
                  original packaging and still listed in Stereotaxis' most
                  current price sheets as of the date of such sale by
                  Distributor to Stereotaxis shall be at Stereotaxis' original
                  invoice price to Distributor less a handling and restocking
                  charge in effect at the time of such purchase (which shall in
                  no event be less than [***] of the price as determined above).

         C.       If Stereotaxis elects to purchase the Products as provided
                  above, Distributor shall deliver to Stereotaxis, not more than
                  fifteen days after the termination date, an itemized listing
                  showing all such Products on the termination date, together
                  with serial numbers where appropriate. Distributor shall
                  immediately ship and deliver to Stereotaxis at such shipping
                  point as Stereotaxis may designate, the Products to be
                  purchased by Stereotaxis. Stereotaxis shall have the right to
                  inspect and approve the Products so shipped and the sale shall
                  be complete only upon such inspection and written approval by
                  Stereotaxis.

         D.       The provisions of this Section XI shall survive termination,
                  for whatever reason, of this Agreement.

         E.       From and after the termination of this Agreement, and such
                  termination notwithstanding, the parties shall remain liable
                  to one another for any and all indebtedness incurred prior to
                  the effective date of such termination and for any breach of
                  the Agreement occurring prior thereto, and for the performance
                  of all obligations hereunder that expressly or impliedly are
                  to survive termination of the Agreement.

         F.       The acceptance of any order from, or the sale of any Product
                  to, Distributor shall not be deemed a waiver of the effect of
                  such termination or renewal or extension of this Agreement.

XV.      Advertising. Distributor agrees to provide Stereotaxis with sample
         copies (in English) of advertisements and promotional materials
         prepared by Distributor relating to the Products. Stereotaxis reserves
         the right to disapprove any advertising used by Distributor in
         promoting and selling Products, in which case Distributor shall not
         utilize such advertising. Failure of Stereotaxis to disapprove
         advertising shall not constitute any waiver of its right of approval of
         such advertising.

XVI.     Parts Purchases/Redemption against Warranties. The dollar value of the
         replacement parts charged back to Stereotaxis annually under the
         Product's warranty must not exceed the corresponding dollar value of
         the parts purchased from Stereotaxis during the prior calendar year.
         Distributor agrees that all costs and expenses related to any Product's
         warranty shall be billed to Siemens AG, or a designated affiliate
         thereof, which shall then bill Stereotaxis directly.


[*** 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.]



                                       13

<PAGE>

XVII.    Compliance with Law. In performing under this Agreement and in
         conducting its business, Distributor shall comply, at Distributor's
         cost, with all applicable federal, state and local laws, regulations
         and rules.

XVIII.   Indemnity. Distributor shall indemnify, defend and hold Stereotaxis
         harmless from and against any and all expenses, costs (including
         reasonable attorney's fees), claims, demands, damages, liability, suits
         or the like arising from or related to (a) the failure of Distributor
         to perform any of its obligations hereunder; (b) breach on the part of
         Distributor of any representation, warranty, covenant, term or
         provision herein; (c) provision by Distributor of any services or
         products (other than the Products), including by way of example and not
         limitation, provision of any replacement parts not supplied by
         Stereotaxis; or (d) any act or omission on the part of Distributor or
         its employees, agents or representatives. The provisions of this
         Section shall survive termination, for whatever reason, of this
         Agreement.

XIX.     Agreement Not Assignable. The rights and privileges granted herein are
         personal in character and cannot be assigned or transferred by
         Distributor, by operation of law or otherwise, without the consent in
         writing of an authorized representative of Stereotaxis and any
         purported assignment or transfer without such consent shall have no
         legal effect whatsoever.

XX.      Entire Agreement, etc. This Agreement constitutes the entire
         understanding between the parties and shall be deemed to supersede any
         and all prior agreements, verbal or written, between the parties. All
         previous negotiations and representations not included herein are
         hereby abrogated. Except as provided herein, this Agreement cannot be
         changed, modified or varied, except by a written instrument signed by
         the authorized representatives of the parties hereto. The captions of
         the various sections of this Agreement shall not be construed as a
         waiver of any such term and the right of Stereotaxis thereafter to
         enforce such term.

XXI.     Governing Law. This Agreement shall be exclusively governed by and
         construed in accordance with the laws of the State of Delaware, United
         States of America, without giving effect to any conflict-of-law rules
         requiring the application of the substantive law of any other
         jurisdiction; provided, however, that the United Nations Convention on
         Contracts for the International Sale of Goods shall in no way apply to
         the interpretation of this Agreement.

XXII.    Arbitration.

         A.       All disputes arising out of or in connection with this
                  Agreement (the "Dispute") including the arbitrability of any
                  Dispute, shall be finally settled under the Rules of
                  Arbitration of the International Chamber of Commerce (the
                  "ICC") in effect on the date of this Agreement (the "Rules")
                  by three arbitrators. In the event of a conflict between the
                  Rules and the provisions of this Section, the provisions of
                  this Section shall govern. The place of arbitration shall be
                  in St Louis, Missouri. The arbitration shall be governed by
                  Chapter 2 of the United States Arbitration Act, 9 U.S.C.
                  Sections  201-208. The two arbitrators appointed by the
                  parties shall

                                       14

<PAGE>

                  appoint the third arbitrator, who shall be neither a citizen
                  nor resident of either the United States or the Territory,
                  within thirty (30) days of the appointment of the second
                  arbitrator. The language of the arbitration shall be English,
                  and all three arbitrators must be fluent in English.

         B.       Each Party acknowledges and agrees that arbitration pursuant
                  to this Section shall be the sole and exclusive procedure for
                  resolving any Dispute, and that any award rendered by the
                  arbitral tribunal shall be final and binding upon the parties.
                  Judgment upon the award may be entered, and application for
                  judicial confirmation or enforcement of the award may be made,
                  in any competent court having jurisdiction thereof, and the
                  parties hereto submit to the jurisdiction of such court for
                  purposes of enforcement of this Section and any award rendered
                  hereunder.

         C.       In the event of any Dispute, the parties shall continue to
                  perform their respective obligations under this Agreement
                  during the pendency of arbitration proceedings unless and
                  until the arbitral tribunal otherwise orders.

         D.       The expenses of the arbitration, including all arbitrators'
                  and attorneys' fees, shall be borne by the non-prevailing
                  Party unless the arbitral tribunal determines that it would be
                  unjust or inequitable by reason of the substantive effect of
                  its award to have one Party bear all such expenses and fees,
                  in which case it shall, in its award, so divide and allocate
                  all such expenses on a basis which it determines to be just
                  and equitable in the circumstances.]

                                       15

<PAGE>

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION, WHICH MAY BE ENFORCED
BY THE PARTIES.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers on the date set forth above.

                                         FOR DISTRIBUTOR:

                                         By /s/ Filippo Pacinotti
                                            ------------------------------------
                                         Name: Filippo Pacinotti
                                         Title: Business Manager Robotics
                                         Company: AB Medica

                                         FOR STEREOTAXIS:

                                         By /s/ Michael P. Kaminski
                                            ------------------------------------
                                         Name: Michael P. Kaminski
                                         Title: COO
                                         Company: Stereotaxis, Inc.

                                       16

<PAGE>

                                                      BCLLP DRAFT DATED 07/01/03
                                        [SUBJECT TO E.U./ITALIAN COUNSEL REVIEW]

                            SCHEDULE ONE - PRODUCTS*


<TABLE>
<S>                                                 <C>
NIOBE(TM) MAGNETIC SYSTEM                           001-003000-2

NAVIGANT(TM) ADVANCE USER INTERFACE                 020-004500-2

ENDOCARDIAL(TM) APPSPEC

ENDOVASCULAR(TM) APPSPEC

HELIOS(TM) ABLATION CATHETER                        001-001140-2

HELIOS(TM) CABLE                                    001-001255-1

CRONUS(TM) PROGRAMMABLE GUIDEWIRE FAMILY
   ENDOVASCULAR 210CM FULL COAT                     001-001096-1
   ENDOVASCULAR 300CM FULL COAT                     001-001096-2
   ENDOVASCULAR 210CM PARTIAL COAT                  001-001096-3
   ENDOVASCULAR 300CM PARTIAL COAT                  001-001096-4
   FLOPPY 180CM FULL COAT                           001-001232-1
   FLOPPY 300CM FULL COAT                           001-001232-2
   FLOPPY 180CM PARTIAL COAT                        001-001232-3
   FLOPPY 300CM PARTIAL COAT                        001-001232-4
   I WIRE 210CM FULL COAT                           001-001263-1
   I WIRE 210CM PARTIAL COAT                        001-001263-3

CARDIODRIVE(TM)                                     001-001169-3
CONNEXION(TM) VECTOR PEN                            503-000763-101
</TABLE>


* Products shall not include any products or services which are subject to
distribution alliances or agreements with other distributors, including, without
limitation, those products or services which are subject to the agreement dated
May 7, 2002 between Stereotaxis and Biosense Webster, Inc.


<PAGE>

                                 SCHEDULE TWO -
                         TARGETED SALES QUOTA AGREEMENT

                                                      Date:_____________________

DISTRIBUTOR:____________________________________________________________________

Address:________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________

Distributor Number:_____________________________________________________________

Territory (primary area of responsibility):_____________________________________
________________________________________________________________________________
________________________________________________________________________________

Minimum/Sales Quota:_____________________________________________

Special Notes:__________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________

By:_________________________________
Name:_______________________________
Distributor Representative

By:_________________________________
Name:_______________________________
Stereotaxis Representative


<PAGE>

                                 SCHEDULE THREE -
                                     PRICES


<TABLE>
<S>                                          <C>              <C>
NIOBE(TM) MAGNETIC SYSTEM                    001-003000-2       [***]

NAVIGANT(TM) ADVANCE USER INTERFACE          020-004500-2              
ANNUAL LICENSING FEE AFTER 1ST YEAR                             [***]

HELIOS(TM) ABLATION CATHETER                 001-001140-2       [***]

HELIOS(TM) CABLE                             001-001255-1       [***]

CRONUS(TM) PROGRAMMABLE GUIDEWIRE FAMILY
  ENDOVASCULAR 210CM FULL COAT               001-001096-1       [***]
  ENDOVASCULAR 300CM FULL COAT               001-001096-2       [***]
  ENDOVASCULAR 210CM PARTIAL COAT            001-001096-3       [***]
  ENDOVASCULAR 300CM PARTIAL COAT            001-001096-4       [***]
  FLOPPY 180CM FULL COAT                     001-001232-1       [***]
  FLOPPY 300CM FULL COAT                     001-001232-2       [***]
  FLOPPY 180CM PARTIAL COAT                  001-001232-3       [***]
  FLOPPY 300CM PARTIAL COAT                  001-001232-4       [***]
  I WIRE 210CM FULL COAT                     001-001263-1       [***]
  I WIRE 210CM PARTIAL COAT                  001-001263-3       [***]

CARDIODRIVE(TM)                              001-001169-3       [***]
CONNEXION(TM) VECTOR PEN                     503-000763-101     [***]
</TABLE>


*Pricing on the Niobe Magnetic System is for systems sold through March 2004.


[*** 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.]

<PAGE>

                                 SCHEDULE FOUR -
                          STANDARD TERMS AND CONDITIONS

1.       GENERAL

1.1      Contract Terms

These terms and conditions constitute an integral part of the quotation to which
they are attached ("the Quotation") provided by the Seller to sell products
("Products", which includes the Niobe Magnetic Navigation System) to Purchaser
and will govern the sale of the Products. Seller will not be bound by, and
specifically objects to, any term, condition or other provisions which are
different from or in addition to the provisions of this Agreement (whether or
not it would materially alter this Agreement) which is proffered by Purchaser in
any purchase order, receipt, acceptance, confirmation, correspondence or
otherwise, unless Seller specifically agrees to any such provision in writing
signed by Seller. Products may contain used, reworked or refurbished parts and
components that comply with performance and reliability specifications.
Purchaser acknowledges that this is a commercial and not a consumer transaction.

1.2      Acceptance

Acceptance of an order by Seller is expressly made conditional on Purchaser's
acceptance of these terms and conditions. Purchaser will be deemed to have
assented to Purchaser's completion or execution of this Agreement and
Purchaser's acceptance of all or any part of the Products subject to this
Agreement or by issuance of a purchase order to Seller pursuant to the Quotation
("Purchase Order).

1.3      Authorized Use

In order to ensure patient safety Purchaser agrees that it will not use or
permit others to use the Niobe Magnetic Navigation System with any disposable
devices, software or other accessories except those provided by or approved in
writing by Seller or with any fluoroscopy system other than the Siemens ARTIS FD
digital fluoroscopy system or any other fluoroscopy system approved in writing
by Seller. Purchaser further agrees that it will not modify the Niobe Magnetic
Navigation System or any of devices or software provided by Seller for use with
the system.

2.       PRICING

2.1      Quotations

Unless otherwise agreed to in writing or set forth in the quotation, all prices
quoted by Seller are based on U.S. dollars F.O.B. Seller's facility or other
shipping point and include standard and customary packaging. Domestic prices
apply only to purchasers located in, and who will use the Products in, the U.S.
International prices apply to all purchasers located outside of, or who will use
or ship or facilitate shipment of the Products outside of, the U.S. Unless
otherwise stated, the Quotation will only be valid for forty-five (45) days from
the date thereof.

2.2      Delay in Acceptance of Delivery

Should the agreed delivery date be postponed by Purchaser, Seller will have the
right to delivery to storage at Purchaser's risk and expense, and any payments
due upon delivery will become on the agreed delivery date provided Seller is
ready to deliver.

2.3      Escalation

Unless otherwise agreed to in writing, except as to goods to be delivered within
six (6) months of Seller's acceptance by Seller of Purchaser's order, Seller
reserves the right to increase its prices to those in effect at the time of
shipment.

2.4      Disposable Devices

Seller will make available to Purchaser from during the life of the Niobe
Magnetic Navigation System such disposable devices as are cleared by applicable
regulatory bodies for use with such system on reasonable commercial terms and in
a manner consistent with Seller's then general pricing and other practices in
respect of the same.

3.       TAXES

Any sales, use or manufacturer's tax which may be imposed upon the sale or use
of Products, or any property tax levied after readiness to ship, or any excise
tax, license or similar fee required under this transaction, will be in addition
to the quoted prices and will be paid by Purchaser.

4.       TERMS OF PAYMENT

4.1      Due Date

Unless otherwise set forth in the Quotation, Seller's payment terms are as
follows: an initial deposit of 10% of the purchase price for each Product is due
upon submission of the purchase order, an additional 80% of the purchase price
for each Product is due upon its delivery and the final 10% of purchase price is
due upon completion of installation (or in the case of Products for which no
installation is required, upon delivery of the Product). Unless otherwise
agreed, all payments other than the initial deposit are due net thirty (30) days
from the date of invoice. Unless otherwise agreed to in writing, all amounts
payable pursuant to this Agreement are denominated in United States dollars, and
Purchaser will pay all such amounts in lawful money of the United States.
Partial shipments will be billed as made, and payments for such shipments will
be made in accordance with the foregoing payment terms.

4.2      Late Payment

A service charge of 1 1/2% per month, not to exceed the maximum rate allowed by
law, will be made on any portion of Purchaser's outstanding balance which is not
paid within thirty (30) days after invoice date, which charge will be determined
and compounded on a daily basis from the due date until the date paid. Payment
of such service charge will not excuse or cure Purchaser's breach or default for
late payment. In addition, in the event that Purchaser fails to make any payment
to Seller within this thirty (30) day


<PAGE>

period, including but not limited to any payment with Seller, then Seller will
have no obligation to continue performance under any agreement with Purchaser.

4.3      Payment of Lesser Amount

If Purchaser pays, or Seller otherwise receives, a lesser amount than the full
amount provided for under this Agreement, such payment or receipt will not
constitute or be construed other than as on account of the earliest amount due
Seller. Seller may accept any check or payment in any amount without prejudice
to Seller's right to recover the balance of the amount due or pursue any other
right or remedy. No endorsement or statement on any check or payment will
constitute or be construed as an accord or satisfaction.

4.4      Where Upon Installation or Completion

In respect of amounts payable upon completion of installation, where such
completion is delayed for any reason for which Seller is not responsible, the
Products will be deemed installed within 30 days of delivery and, if no other
terms were agreed in writing by the parties, the balance of payments will be due
no later than thirty (30) days thereafter, regardless of the actual date of
completion of installation.

4.5      Failure of Purchaser to Pay

Upon Purchaser's failure to pay when due any amount required to be paid to
Seller under this Agreement the, at Seller's election: (a) the entire amount of
any indebtedness and obligation due Seller under this Agreement and interest
thereon will become immediately due and payable without notice, demand, or
period of grace; (b) Purchaser will put Seller in possession of the Products
upon demand; (c) Seller may enter any premises where the Products are located
and take possession of the Products without notice or demand and without legal
proceedings; or (d) at the request of Seller, Purchaser will assemble the
Products and make them available to Seller at a place designated by Seller which
is reasonable and convenient to all parties. Where this Agreement is referred to
an attorney for collection or realization then Seller will be entitled to
recover amounts including, without limitation, a reasonable sum for attorneys
fees, expenses of title search, all court costs and other reasonable legal
expenses and where any partial collection is made, Purchaser will pay any
deficiency remaining after collection of or realization by Seller on the
Products.

5.       EXPORT TERMS

5.1      Permits & Licenses

Purchaser will procure all necessary permits and licenses for shipment and
compliance with any governmental regulations concerning control of final
destination of Products.

5.2      Compliance With Regulations

Purchaser will not, directly or indirectly, violate any applicable law,
regulation or treaty, or any other international treaty or agreement relating to
the export or re-export of any Product or associated technical data, to which
the U.S. adheres or with which the U.S. complies. Purchaser will defend,
indemnify and hold Seller harmless from any claim, damage, liability or expense
(including but not limited to reasonable attorney fees) arising out of or in
connection with any violation of the preceding sentence. If Purchaser purchases
a Product at the domestic price and exports such Product, or transfers such
Product to a third party for export, outside of the U.S., Purchaser will pay to
Seller the difference between the domestic price and the international retail
price of such Product pursuant to the payment terms set forth herein. Purchaser
will deliver to Seller, upon Seller's request, written assurance regarding
compliance with this section in form and content reasonably acceptable to
Seller.

6.       DELIVERY, RISK OF LOSS

6.1      Delivery Date

Delivery and completion schedules are approximate only and are based on
conditions at the time of acceptance of Purchaser's order by Seller. Seller will
make every reasonable effort to meet delivery date(s) quoted or acknowledged,
but will not be liable for any failure to meet such date(s). Partial shipments
may be made.

6.2      Risk of Loss, Title

Unless otherwise agreed to in writing, delivery will be complete upon transfer
of possession to common carrier, F.O.B. point of origin, whereupon title to and
all risk of loss, damage to or destruction of the Products will pass to
Purchaser. All freight charges and other transportation, packing and insurance
costs, license fees, customer duties and other similar charges will be the sole
responsibility of the Purchaser unless otherwise agreed to in writing by the
Seller. In the event of any loss or damage to any of the Products during
shipment, Purchaser should make claim against the carrier.

7.       SECURITY AND INTEREST/FILING

Seller will have a purchase money security interest in the Products (and all
accessories and replacements thereto and all proceeds thereof) until payment in
full by Purchaser and satisfaction of all other obligations of Purchaser
hereunder. Purchaser authorizes Seller to file (and Purchaser will promptly
execute, if requested by Seller) and (ii) irrevocably appoints Seller its agent
and attomey-in-fact to execute in the name of Purchaser and file, with such
authorities and at such locations as Seller may deem appropriate, any financing
statements required by applicable regulation with respect to the Products and/or
this Agreement. Purchaser also agrees that an original or a photocopy of this
Agreement (including any addenda, attachments and amendments hereto) may be
filed by Seller as a Uniform Commercial Code financing statement in the U.S.
Purchaser further represents and covenants that (a) it will keep the Products in
good order and repair until the purchase price has been paid in full, (b) it
will promptly pay all taxes and assessments upon the Products or the use
thereof, (c) it will not attempt to transfer any interest in the Products until
the purchase price has been paid in full, and (d) it is solvent and financially
capable of paying the full purchase price for the Products.

8.       CHANGES, CANCELLATION, AND RETURN

8.1      Orders Final

Orders accepted by Seller are not subject to change except upon written
agreement. Orders accepted by Seller are non-cancelable.


<PAGE>

8.2      Design Updates

Seller will have the right to change the manufacture and/or design of its
Products if, in the judgment of Seller, such change does not alter the general
function of the Products.

9.       FORCE MAJEURE

Seller will make every effort to complete shipment, and installation where
indicated, but will not be liable for any loss or damage for delay in delivery,
inability to install or any other failure to perform due to causes beyond its
reasonable control including, but not limited to, acts of government or
compliance with any governmental rules or regulations, acts of God or the
public, war, civil commotion, blockades, embargos, calamities, floods, fires,
earthquakes, explosions, storms, strikes, lockouts, labor disputes, or
unavailability of labor, raw materials, power or supplies. Should such a delay
occur, Seller may reasonably extend delivery or production schedules or, at its
option, cancel the order in whole or part without liability other than to return
any unearned deposit or prepayment.

10.      WARRANTY

10.1     Seller warrants that the Products manufactured by Seller and sold
hereunder will be free from defects in material or workmanship under normal use
and service for the period a period of one year following completion of
installation in accordance with 12.6 hereof, which date will be confirmed in
writing by Seller. Seller makes no warranty for any Products made by persons
other than Seller, or its affiliates, and Purchaser's sole warranty therefore,
if any, is the original manufacturer's warranty, which Seller agrees to pass on
it Purchaser, as applicable.

10.2     No warranty extended by Seller will apply to any Products which have
been damaged by accident, misuse, abuse, negligence, improper application or
alteration or by a force majeure occurrence as described in Section 9 hereof or
by the Purchaser's failure to operate the Products in accordance with the
manufacturer's instructions or to maintain the recommended operating environment
and line conditions; which are defective due to unauthorized attempts to repair,
relocate, maintain, service, add to or modify the Products by the Purchaser or
any third party or due to the attachment and/or use of non-Seller supplied
equipment without Seller's prior written approval; which failed due to causes
from the use of operating supplies or consumable parts not approved by Seller.
In addition and without limitation, no warranty extended by Seller will apply to
any failure to comply with Section 1.3 or any failure due to events such as
cracking from high impact drops, cable rupture from rolling equipment over
cables, or delamination from cleaning with inappropriate solutions. Seller's
obligation under this warranty is limited to the repair or replacement, at
Seller's option, of defective parts. Seller may effectuate such repair at
Purchaser's facility, and Purchaser will furnish Seller safe and sufficient
access for such repair. Repair or replacement may be with parts or products that
are new, used or refurbished. Repairs or replacements will not interrupt, extend
or prolong the term of the warranty. Purchaser will pay seller its normal
charges for service and parts for any inspection, repair or replacement that is
not, in Seller's sole judgment, required by noncompliance with the warranty set
forth in Section 10.1. Seller's warranty does not apply to consumable materials,
except as specifically stated in writing, nor to products or parts thereof
supplied by Purchaser.

10.3     This warranty is made on condition that immediate written notice of any
noncompliance is given to Seller and Seller's inspection reveals that the
Purchaser's claim is valid under the terms of the warranty (i.e. that the
noncompliance is due to traceable defects in original materials and/or
workmanship).

10.4     Warranty service will be provided without charge during Seller's
regular working hours (8:30 - 5:00), Monday through Friday, except Seller's
recognized holidays. If Purchaser requires that service be performed other than
during these times, such service can be made available at an additional charge,
at Seller's then current rates. Seller may utilize sub-contractors for purposes
of carrying out warranty service.

SELLER MAKES NO WARRANTY OTHER THAN THE ONE SET FORTH HEREIN, WHICH WARRANTY IS
IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED
TO ANY EXPRESS OR IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR PARTICULAR
PURPOSES, AND SUCH CONSTITUTES THE ONLY WARRANTY MADE WITH RESPECT TO THE
PRODUCTS AND ANY PRODUCT, SERVICE OR OTHER ITEM FURNISHED UNDER THIS AGREEMENT.

11.      LIMITATION OF LIABILITY

11.1     In no event will Seller's liability hereunder exceed the actual loss or
damage sustained by Purchaser, up to the purchase price of the Products.

11.2     SELLER SHALL NOT BE LIABLE FOR ANY LOSS OF USE, REVENUE OR ANTICIPATED
PROFITS, LOSS OF STORED, TRANSMITTED OR RECORDED DATA, OR FOR ANY INCIDENTAL,
UNFORESEEN, SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR THE SALE OR USE OF THE PRODUCTS. This
provision does not affect third party claims for personal injury arising as a
result of Seller's negligence or product defect. THE FOREGOING IS A SEPARATE,
ESSENTIAL TERM OF THIS AGREEMENT AND SHALL BE EFFECTIVE UPON THE FAILURE OF ANY
REMEDY, EXCLUSIVE OR NOT.

12.      INSTALLATION

12.1     General

Unless otherwise expressly stipulated in writing, the Products covered hereby
will be installed (where applicable) by and at the expense of Seller.

12.2     Installation bv Seller.

Subject to fulfillment of the obligations set forth in 12.4 below, Seller will
install the Products covered hereby and connect same to the requisite safety
switches and power lines to be installed by Purchaser. Except as otherwise
specified below, if such installation and connection are performed by Seller's
technical personnel, prices shown include the cost thereof, provided that the
installation


<PAGE>

and connection can be performed during normal business hours. Any overtime
charges or other special expenses will be additional charges to the prices show.

12.3     Trade Unions

If a trade union, or unions, prevents Seller from performing the above work, the
Purchaser will make all required arrangements with the trade union, or unions,
to permit Seller completion of said work. Moreover, any additional costs related
to such any such arrangements or labor disputes will be paid by the Purchaser
and Seller's obligations under such circumstances will be limited to providing
engineering supervision of installation and connection of Seller equipment to
existing wiring.

12.4     Purchaser's Obligations

Purchaser will, at its expense, provide all proper and necessary labor and
materials for plumbing service, carpentry work, conduit wiring, and other
preparations required for such installation and connection. All such labor and
materials will be completed and available at the time of delivery of the
Products by Seller. Additionally, the Purchaser will provide free access to the
premises of installation and, if necessary, safe and secure space thereon for
storage of Products and equipment prior to installation by Seller. If any
special work of any type must be performed in order to comply with requirements
of any governmental authority, including procurement of special certificates,
permits and approvals, the same will be performed or procured by Purchaser at
Purchaser's expense. Purchaser will provide a suitable environment for the
Products and will ensure, at its sole cost and expense, that its premises are
free of asbestos, hazardous conditions and any concealed dangerous conditions
and that all site requirements are met. Purchase is responsible for ensuring
compliance with local regulations relating to installation. Seller is not an
architect and all drawings furnished by Seller are not construction drawings.

12.5     Regulatory Reporting

Seller will only report activity performed by its authorized personnel and in
all other respects Purchaser will be responsible for fulfilling any and all
regulatory reporting requirements.

12.6     Completion of Installation

Installation will be complete upon the conclusion of final calibration and
checkout under Seller standard procedures to verify that the Products meet
applicable written performance specifications. Notwithstanding the foregoing,
first use of the Products by Purchaser, its agents or employees for any purpose
after delivery will constitute completion of installation.

13.      INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS

13.1     Infringement by Seller.

Seller warrants that the Products manufactured by Seller and sold hereunder do
not infringe any patent or copyright in the country of the installation site
identified in the Quotation. If Purchaser receives a claim that any such
Product, or parts thereof, infringe upon the rights of others under any U.S.
patent or copyright Purchaser will notify the Seller in writing. As to all
infringement claims relating to Products or parts manufactured by Seller or one
of its affiliates:

         (a) Purchaser will give Seller information, assistance and exclusive
authority to evaluate, defend and settle such claims; and

         (b) Seller will then, at its own expense, defend or settle such claims,
procure for the Purchaser the right to use the Products, or remove or modify
them to avoid infringement. If none of these alternatives is available on terms
reasonable to Seller, then Purchaser will return the Products to Seller and
Seller will refund to Purchaser the purchase price paid by the Purchaser less
reasonable depreciation for Purchaser's use of the Products.

13.2     Infringement bv Purchaser

If some or all of the Products sold hereunder are made by Seller pursuant to
drawings or specifications furnished by the Purchaser, or if the Purchaser
modifies or combines, operates or uses the Products other than as specified by
Seller or with any product, data, software, apparatus or program not provided or
approved by Seller, then the indemnity obligation of Seller under Section 13.1
will be null and void and should a claim be made that such Products infringe the
rights of any third party under patent, trademark or otherwise, then Purchaser
will indemnify and hold Seller harmless against any liability or expense,
including reasonable attorneys fees, incurred by Seller in connection therewith.

14.      DESIGNS AND TRADE SECRETS/LICENSE

14.1     Any drawings, data, designs, software programs or other technical or
confidential information supplied by Seller to Purchaser in connection with the
sale of the Products are not included in the sale of the Products to Purchaser,
will remain Seller's property and will at all times be held in confidence by
Purchaser. Such information will not be reproduced or disclosed to others
without Seller's prior written consent.

14.2     Purchaser acknowledges and agrees that any and all software
incorporated into the Niobe Magnetic Navigation System, or contained or
comprised in any Products or other accessories provided by Seller to Purchaser
for use with the Niobe Magnetic Navigation System remains the property of Seller
or where applicable, its licensor(s) and is licensed to Purchaser on a non
exclusive, non-transferable basis (for the license fees described in the
Quotation) not sold. This software is the confidential information of Seller and
Purchaser will not copy or modify this software, reverse engineer, decompile or
disassemble or use this software except in conjunction with the Niobe Magnetic
Navigation System at the installation site. Notwithstanding anything else
contained in this Agreement there is no warranty or condition of
non-infringement, quiet enjoyment or possession or title regarding such
software. Purchaser acknowledges that the software is of such complexity that it
may have inherent or latent defects and agrees that its sole remedy for any
defects during the warranty period is that Seller will correct documented
software errors. There are no licenses or rights in respect of software upgrades
or future software products implied or provided for by this Agreement

14.3     Purchaser agrees that it will not use the Products in a manner that
infringes any of Seller's patents.

15.      ENGINEERING CHANGES


<PAGE>

Seller makes no representation that engineering changes that may be announced in
the future will be suitable for use on, or in connection with, the Products.

16.      ASSIGNMENT

Neither party may assign any right or obligations under this Agreement without
the written consent of the other and any attempt to do so will be void, except
that Seller may assign this Agreement without consent to any subsidiary or
affiliated company or an acquirer of all or a substantial portion of the assets
of Seller. This Agreement will inure to and be binding upon the parties and
their respective successors, permitted assigns and legal representatives.

17.      DAMAGES, COSTS AND FEES

In the event that any dispute or difference is brought arising from or relating
to this Agreement or the breach, termination or validity thereof, the prevailing
party will NOT be entitled to recover from the other party any punitive damages.
The prevailing party will be entitled to recover from the other party all
reasonable attorneys fees incurred, together with other such expenses, costs and
disbursements as may be allowed by law.

18.      MODIFICATION

This Agreement may not be changed, modified or amended except in writing signed
by duly authorized representatives of the parties.

19.      GOVERNING LAW

This Agreement will be governed by the laws of the State of Delaware.

20.      INTEGRATION

These terms and conditions, including any attachments or other documents
incorporated by reference herein, constitute the entire agreement and the
complete and exclusive statement of agreement with respect to the subject matter
hereof, and supercedes any and all prior agreements, understandings and
communications between the parties with respect to the Products.

21.      SEVERABILITY; HEADINGS

No provision of this Agreement that may be deemed unenforceable will in any way
invalidate any other portion or provision of this Agreement. Section headings
are for convenience only and will have no substantive effect.

22.      WAIVER

No failure and no delay in exercising, on the part of any party, any right under
this Agreement will operate as a waiver thereof, nor will any single or partial
exercise of any right preclude the further exercise of any other right.

23.      NOTICES

Any notice or other communication under this Agreement will be deemed properly
given if given in writing and delivered in person or mailed, properly addressed
and stamped with the required postage, to the intended recipient at its address
specified on the face hereof. Either party may from time to time change such
address by giving the other party notice of such change in accordance with this
section.

24.      RIGHTS CUMULATIVE

The rights and remedies afforded to Seller under this Agreement are in addition
to, and do not in any way limit, any other rights or remedies afforded to Seller
by any other agreement, by law or otherwise.

25.      END USER CERTIFICATION

Purchaser represents, warrants and covenants that it is acquiring the Products
for its own end use and not for reselling, leasing or transferring to a third
party (except for lease back financing)

26.      TRANSFER OF PRODUCTS

Purchaser grants Seller a right of first refusal on substantially equivalent
terms with respect to any proposed sale of any Products to any third part


<PAGE>

                                                                   EXHIBIT 10.31

                       RETIREMENT AND CONSULTING AGREEMENT

                  THIS Retirement and Consulting Agreement ("Agreement") is made
and entered into by and between Nicola Young (hereinafter "Young" or "you" or
"your"), and Stereotaxis, Inc. ("Stereotaxis"," "Company" or "we" or "us"). For
and in consideration of the following promises, the parties agree to the
following:

                  WHEREAS, for medical reasons and following a leave of absence
YOUNG has submitted her resignation from STEREOTAXIS effective December 1, 2003
("Effective Date") and STEREOTAXIS has with regret accepted such resignation.

                  WHEREAS, the parties acknowledge that Young has made
substantial contributions to the success of Stereotaxis that the parties desire
that YOUNG will continue to contribute financial advisory and transaction
management services to STEREOTAXIS going forward at least until July 31, 2004 or
such later date as is mutually agreed ("Finish Date") on the terms set forth in
this Retirement and Consulting Agreement.

                  NOW THEREFORE, for and in consideration of the mutual
covenants and undertakings hereinafter set forth, and for other good and
valuable consideration, which each party hereby acknowledges, it is agreed as
follows:

1.       Young will provide Stereotaxis
 with ongoing financial advisory and
         transaction management services ("Consulting Services") during
         reasonable working hours and including advising as to and conducting
         work regarding:

         a.       Negotiation, documentation and due diligence relating to
                  strategic alliances and business combinations;

         b.       Budgeting;

         c.       Financial modeling and forecasting;

         d.       Due diligence relating to financing activities including an
                  initial public offering ("IPO") of the common stock of the
                  Company and including making presentations to underwriters and
                  others in this regard;

         e.       The drafting relating to an IPO;

         f.       Preparation of audiovisual and verbal presentations for an IPO
                  "roadshow"; and

         g.       Investor relations;

         and such other services as are mutually agreed. In this regard the
         parties agree to minimize Young's air travel subject to providing
         reasonably appropriate services to the Company.

2.       Young and Stereotaxis may agree upon a later Finish Date, including
         agreeing on month to month extensions, on the same terms as set forth
         in this agreement.

3.       Compensation For Consulting Services. Compensation to Young from
         Stereotaxis for the Consulting Services will comprise the cash, stock
         and other elements set forth in the Appendix hereto.

4.       Standard Release of Claims. Young agrees to execute upon request by
         Stereotaxis and effective as at December 1, 2003 the Company's standard
         form release of claims applicable in context of a senior executive's
         resignation provided that such release is on reasonable commercial
         terms.




<PAGE>

5.       Choice of Law. This Agreement shall be construed and governed by the
         laws of the State of Missouri.

6.       Modification, Entire Agreement, Severability. The parties acknowledge
         that this Agreement and the Standard Release of Claims constitutes the
         entire agreement between them superseding all prior written and oral
         agreements regarding your separation, and there are no other
         understandings or agreements, written or oral, among them on the
         subject of your separation. The parties hereto agree that this
         Agreement may not be modified, altered, or changed except by a written
         agreement signed by the parties hereto. If any provision of this
         Agreement is held to be invalid, the remaining provisions shall remain
         in full force and effect.

7.       Confidential Information. Young agrees to abide by the confidentiality
         agreement set forth in your employment agreement signed on January 15,
         2001. Young agrees to adhere to this commitment now and in the future.


                  IN WITNESS WHEREOF, the undersigned parties have executed this
Agreement, effective as of the Effective Date.

                                    /s/ Nicola Young
                                    ---------------------------------------
                                    Nicola Young


                                    STEREOTAXIS, INC.


                                    By:/s/ John Aplin
                                       ------------------------------------
                                       John Aplin, Director







                                       2

<PAGE>

                                    APPENDIX
                      COMPENSATION FOR CONSULTING SERVICES

         Payments and Benefits. In return for the Consulting Services,
         Stereotaxis will provide to Young the payments and benefits described
         below.

         (A)      Cash Payments; Loan Repayment. Young will be paid the sum of
                  $18,200 per month in semi-monthly increments commencing
                  December 1, 2003. After January 1, 2004, Stereotaxis may
                  accelerate that monthly payment. Young agrees to repay the
                  outstanding principal and interest of the Promissory Note
                  dated November 20, 2001 made by Young in favor of the Company
                  by exchanging a number of shares of the Company's common stock
                  owned by Young on a date (the "Exchange Date") which is the
                  earlier of (i) the date of the pricing of an initial public
                  offering of the Company's common stock pursuant to a
                  registration statement filed the Company on Form S-1 with the
                  SEC (with settlement and exchange of the shares in such case
                  to occur one day following such closing) or (ii) August 31,
                  2004 or, if later, the Finish Date. The number of shares that
                  will be exchanged will be equal to (a) the outstanding
                  principal and interest on the Promissory Note as of the
                  Exchange Date, divided by (b) the per share value of the
                  common stock, which per share value shall be equal to (x) in
                  the event of an initial public offering, the per share
                  offering price to the public (before underwriting discounts
                  and commissions) or (y) otherwise, the then current value per
                  common share as determined by the Compensation Committee of
                  the Company. Young agrees that interest will continue to
                  accrue in respect of the promissory note until the Exchange
                  Date. The number and value of the shares shall take into
                  account any stock splits that may be effected in connection
                  with the initial public offering.

         (B)      Early Exercise Shares; Stock Options.

                           (i) Early Exercise Shares. The parties acknowledge
                  that a certain number of the 400,000 shares of the Company's
                  Common Stock you purchased pursuant to that certain Early
                  Exercise Agreement dated as of November 20, 2001 will be
                  subject to the Purchase Option (as defined in the Early
                  Exercise Agreement) as of December 1, 2003. Stereotaxis agrees
                  that it will exercise its Purchase Option for 50,000 of such
                  shares at $0.30 per share for an aggregate consideration of
                  $15,000. The parties agree that the Company shall continue to
                  hold the shares which it currently holds and which are not so
                  repurchased by the Company in escrow to facilitate the share
                  exchange described in Section (A) of this Appendix.
                  Immediately following the determination of the number of
                  shares to be exchanged, the Company shall, upon receipt of a
                  stock power from you, issue a certificate to you and deliver
                  it at your direction for the balance of such shares.

                           (ii) Stock Options. As to the remaining incentive
                  stock options granted to you under the Stock Option Agreement
                  dated February 19, 2002 (25,000 shares) and the Stock Option
                  Agreement dated May 28, 2003 (150,000 shares), we understand
                  that you do not currently intend to exercise any options
                  vested under such agreements within 90 days of the Effective
                  Date. Accordingly, we will amend those Stock Option Agreements
                  to provide that they will continue to vest on their current
                  schedule through the Finish Date, which will cause such
                  options to be treated as non-qualified options. In the case of
                  the Stock Option Agreement dated February 19, 2002, this may
                  require the Company to amend its 1994 Stock Option Plan, and
                  the Company shall take all reasonable steps to accomplish such
                  amendment unless there are formidable impediments to achieving
                  such amendment.



                                       3

<PAGE>

         (C)      Performance Bonus. You will receive a performance bonus for
                  fiscal year 2003 in the amount of Forty-five thousand dollars
                  ($45,000.00). Such bonus will be paid by Stereotaxis at the
                  same time otherwise paid to eligible employees during calendar
                  2004.

         (D)      Indemnification. Stereotaxis will indemnify you and your
                  estate against any claims made against you in your capacity as
                  an officer of Stereotaxis for actions arising out of or in the
                  course of your employment while an officer of Stereotaxis and
                  for such actions arising out of or in the course of your
                  consulting services to the Company described above.

         (E)      Health Insurance Continuation. Stereotaxis shall continue your
                  current healthcare coverage under the Company's healthcare
                  policy for the same period set forth in paragraph 1(A) above,
                  the consulting period, or, if not available, then we will pay
                  your COBRA payments for said period, after which time such
                  benefits will cease unless you choose to continue healthcare
                  benefits pursuant to COBRA.

         (F)      Vacation Pay. On or by November 30, 2003 or the next following
                  payroll period, Stereotaxis will pay you all accrued, but
                  unused vacation compensation.

         (G)      Moving Expenses. Stereotaxis will reimburse you for your
                  reasonable moving expenses to Arizona from St. Louis provided
                  that such reimbursement will not exceed the amount of Ten
                  thousand dollars ($10,000).

         (H)      Vested Rights. The parties agree that this Agreement shall not
                  adversely affect, alter, or extinguish any vested rights you
                  may have with respect to any pension or 401k plan to which you
                  are or may be entitled by virtue of your employment with
                  Stereotaxis, and nothing in this Agreement will prohibit you
                  from enforcing your rights to any such pension or 401k plan.



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