Exhibit 10.5

Restated At-Will Employment Agreement

It is understood and agreed that the continued employment by Stereotaxis, Inc.,
a Delaware corporation (the “Company” or “Stereotaxis”), of the employee named
below (“Employee”) shall be subject to the terms and conditions of this At-Will
Employment Agreement (“Agreement’). As of the date hereof, this Agreement shall
supersede and replace that certain prior At-Will Employment Agreement between
the Company and Employee dated June 23, 1997 (“Prior Agreement”); provided,
however, that the terms and conditions of this Agreement shall be no less
favorable to Employee than under the Prior Agreement.

The parties acknowledge and agree that this Agreement is intended to constitute
a restatement of the Prior Agreement, including all amendments thereto
previously approved by the Company’s Board of Directors and/or duly authorized
Compensation Committee, including certain amendments approved by resolution that
had been previously disclosed but not formalized by written amendment to the
Prior Agreement.

1. POSITION. Employee shall serve as the Company’s President, Chief Executive
Officer and as a member of the Company’s Board of Directors. Employee shall
carry out such duties normally and customarily associated with a President and
Chief Executive Officer, and as are otherwise assigned to him by the Company’s
Board of Directors. Employee shall report to the Company’s Board of Directors.
Employee’s employment with the Company shall continue as of the effective date
of under this Agreement.

2. BASE SALARY. Employee shall be paid a beginning base salary equivalent to
Three Hundred Sixty-Five Thousand Dollars ($365,000) per year in semi-monthly
installments which shall be subject to applicable withholdings and deductions.

3. SIGNING BONUS. [Intentionally omitted as no longer applicable.]

4. INCENTIVE BONUS. At the end of each year of employment, Employee will be
eligible for a cash incentive bonus of up to 25% of Employee’s 12-month base
salary. Payment of such incentive bonus will be determined by Stereotaxis’ Board
of Directors (or duly authorized Compensation Committee of the Board) based upon
the Company’s achievement of goals and objectives for the year, and shall be
shall be made as soon as practicable thereafter, but in no event later than the
fifteenth (15th) day of the third (3rd) month following the year.

5. SEVERANCE BENEFITS.

5.1 For purposes of this letter agreement, “Cause” shall mean gross misconduct
or gross negligence such as gross breach of fiduciary duty, dishonest, theft or
commission of a crime involving moral turpitude.

5.2 If Employee’s employment is terminated by Stereotaxis without Cause,
Employee will be paid a salary continuance equal to Employee’s base salary for
the lesser of (i) the period from the date of Employee’s termination of
employment until Employee commences employment with a

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new employer or (ii) twenty-four (24) months. In addition, the number of stock
options, stock appreciation rights or other equity awards subject to vesting
that would have vested over the 12-month period following such termination shall
be automatically vested as of the date of such termination. Upon an acquisition
or merger of the Company where the Company is not the surviving entity and a
change of control occurs, 50% of Employee’s unvested options will automatically
vest. Additionally, if Employee’s employment is terminated following an
acquisition or merger of the Company where the Company is not the surviving
entity and a change of a control occurs, and if Employee is not offered a
comparable position in the surviving entity, Employee will be paid salary
continuance equal to his base salary for twenty-four (24) months and 100% of
Employee’s unvested options will vest at the end of the salary continuance
period.

6. CERTAIN MATTERS RELATING TO EQUITY COMPENSATION

6.1 Sale of Common Stock.

6.1.1 Pursuant to the Prior Agreement, the Company sold, and Employee purchased,
Six Hundred Thousand (600,000) shares (the “Initial Shares”) of the Company’s
common stock, par value $0.001 per share (“Common Stock”), at a price of $0.07
per share (such price and number of shares prior to giving effect to the
Company’s 1-for3.6 reverse stock split in July 2004), following the execution
and delivery of the Prior Agreement.

6.1.2 Pursuant to the Prior Agreement, the Company granted Employee an option to
purchase, and Employee exercised such option and purchased, an additional Two
Hundred Thirty Thousand (230,000) shares (the “Additional Shares”, the Initial
Shares and Additional Shares together, the “Shares”) of Common Stock at $0.15
per share (such price and number of shares prior to giving effect to the
Company’s 1-for3.6 reverse stock split in July 2004), the then fair market value
price per share as determined by the Company’s Board of Directors in connection
with the achievement of certain goals as described in the Prior Agreement,
including the closing of the Company’s Series C Preferred Stock financing in
1998.

6.1.3 The Initial Shares and the Additional Shares were all subject to various
repurchase rights (“Repurchase Rights”) as detailed in the Prior Agreement. The
parties acknowledge and agree that the Repurchase Rights for all of the Initial
Shares and the Additional Shares have lapsed in accordance with their terms
under the Prior Agreement.

6.2 Transferability of the Shares. Transfer or sale of the Shares is subject to
restrictions on transfer imposed by any applicable state and federal securities
laws. Any transferee shall hold such Shares subject to all provisions hereof and
shall acknowledge the same by signing a copy of this Agreement.

6.3 Representations. Employee has reviewed with his own tax advisers the
federal, state, local and foreign tax consequences of this investment and the
transaction contemplated by this Agreement. Employee is relying solely on such
advisors and not on any statements or representations of the Company or any of
its agents (including with respect to any 83(b) election(s) that may have been
made in connection with the original purchase of the Shares). Employee
understands that he and not the Company shall be responsible for his own tax
liability that may arise as a result of this investment or the transactions
contemplated by this Agreement.

 

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6.4 Options and Other Equity Awards. The Company acknowledges that Employee has
previously been granted certain equity awards (including options to purchase
shares of Common Stock and grants of restricted stock), pursuant to the terms
set forth more particularly in the Company’s various equity incentive plans in
effect from time to time during the term of the Prior Agreement, and ratifies
and confirms such awards. Future equity awards (including, without limitation,
stock options or shares of restricted stock) may be granted conditioned on and
subject to the approval of the Board of Directors, or any duly authorized
committee thereof.

7. COMPANY BENEFITS. While employed by the Company, Employee shall be entitled
to receive the benefit of employment made available by the Company from time to
time for which he is eligible. Employee will be entitled to medical insurance
for himself, his spouse and minor children and four weeks paid vacation per
year. Employee additionally will be provided office space and secretarial
services for the normal conduct of the Company’s business.

8. ATTENTION TO DUTIES; CONFLICT OF INTEREST.

8.1 While employed by the Company, Employee shall devote Employee’s full
business time, energy and abilities exclusively to the business and interests of
Stereotaxis, and shall perform all duties and services in a faithful and
diligent manner and to the best of Employee’s abilities. Employee shall not,
without the Company’s prior written consent, render to others, services of any
kind for compensation, or engage in any other business activity that would
materially interfere with the performance of Employee’s duties under this
Agreement. Employee will not serve on any other board, be employed by another
company or perform any consulting services without the express approval of the
Company’s Board of Directors.

8.2 Employee represents that Employee has no other outstanding commitments
inconsistent with any of the terms of this Agreement or the services to be
rendered to Stereotaxis. While employed by the Company, Employee shall not
invest in any company or business which competes in any manner with the Company,
except those companies whose securities are publicly traded, listed on national
securities exchange, foreign stock exchange, pink sheets or small cap.
Securities exchanges.

8.3 Without limiting the effectiveness of such provisions prior to the date
hereof, the Company acknowledges that certain references permitting Employee to
serve on the boards of directors of other companies during the term of the Prior
Agreement have been deleted as no longer applicable because Employee no longer
serves on such boards.

9 . CONFIDENTIALITY AND NONCOMPETE AGREEMENT. Employee agrees to be bound by the
terms of the Confidentiality and Noncompete Agreement which are attached as
Exhibit A and incorporated by this reference (“Proprietary and Noncompete
Agreement”).

10. AT-WILL EMPLOYER. The Company is an “at-will” employer. This means that the
Company may terminate Employee’s employment at any time, with or without cause
and without notice, and that Employee may terminate Employee’s employment at any
time, with or without cause and without notice. Stereotaxis makes no promise
that Employee’s employment will continue for a set period of time, nor is there
any promise that it will be terminated only under particular circumstances. No
raise or bonus, if any, shall alter Employee’s status as an “at-will” Employee
or create any implied contract of employment. Discussion of possible or
potential benefits in future

 

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years is not an express or implied promise of continued employment. No manager,
supervisor or officer of Stereotaxis has the authority to change Employee’s
status as an “at-will” Employee. The “at-will” nature of the employment
relationship with Employee can only be altered by a written resolution signed by
all the directors of Stereotaxis. No position within Stereotaxis is considered
permanent.

11. BINDING ARBITRATION.

11.1 Any dispute, claim or controversy relating to discrimination of any nature,
including, without limitation, age, sex, race, religion or national origin
between employee and the Company (“Discrimination Claims”) shall be settled
exclusively by arbitration pursuant to the provisions of this Section 10.

11.2 Employee and Stereotaxis each waive their federal and state constitutional
rights to have Discrimination Claims determined by a jury. Instead of a jury
trial, an arbitrator shall be chosen by Stereotaxis and Employee. Arbitration is
preferred because, among other reasons, it is quicker, less expensive and less
formal than litigation in court.

11.3 The arbitrator shall not have the authority to alter, amend, modify, add to
or eliminate any condition or provision of this Agreement, including, but not
limited to, the “at-will” nature of the employment relationship. The arbitration
shall be held in St. Louis County, Missouri and shall be conducted in accordance
with the rules of the Center for Dispute Resolution. The award of the arbitrator
shall be final and binding on the parties. Judgment upon the arbitrator’s award
may be entered in any court, state or federal, having jurisdiction over the
parties. If a written request for arbitration is not made within six months of
the date of the alleged wrong or violation, all remedies regarding such alleged
wrong or violation shall be waived.

11.4 Should any court determine that any provision(s) of this Agreement to
arbitrate is void or invalid, the parties specifically intend every other
provision of this Agreement to arbitrate to remain enforceable and intact. The
parties explicitly and definitely prefer arbitration to recourse to the courts,
for the reasons described above, and have prescribed arbitration as their sole
and exclusive method of dispute resolution.

12. NO INCONSISTENT OBLIGATIONS. Employee represents that Employee is not aware
of any obligations, legal or otherwise, inconsistent with the terms of this
Agreement or Employee’s undertakings under this Agreement.

13. MISCELLANEOUS.

13.1 No promises or changes in Employee’s status as an employee of the Company
or any of the terms and conditions of this Agreement can be made unless they are
duly authorized by the Company’s Board of Directors (including any duly
authorized committee thereof), with Employee abstaining from the vote. The
Company acknowledges, ratifies and confirms that all previous amendments to the
Prior Agreement, as reflected herein, were valid and binding at the time
authorized and continue to be valid and binding set forth in this Agreement.
This Agreement and the terms and conditions described in it cannot be changed
orally or by any conduct of either Employee or Stereotaxis or any course of
dealings between Employee, or another person and Stereotaxis.

 

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13.2 Unless otherwise agreed upon in writing by the parties, Employee, after
termination of any employment, shall not seek nor accept employment with the
Company in the future and the Company is entitled to reject without cause any
application for employment with the Company made by Employee, and not hire
Employee. Employee agrees that Employee shall have no cause of action against
the Company arising out of any such rejection.

13.3 This Agreement and performance under it, and any suits or special
proceedings brought under it, shall be construed in accordance with the laws of
the United States of America and the State of Missouri and any arbitration,
mediation or other proceeding arising hereunder shall be filed and adjudicated
in St. Louis County, Missouri.

13.4 If any term or condition, or any part of a term or condition, of this
Agreement shall prove to be invalid, void or illegal, it shall in no way affect,
impair or invalidate any of the other terms or conditions of this Agreement,
which shall remain in full force and effect.

13.5 The failure of either party to enforce any provision of this Agreement
shall not be construed as a waiver of or any acquiescence in or to such
provision.

13.6 The parties to this Agreement represent and acknowledge that in executing
this Agreement they do not rely and have not relied upon any representation or
statement made by the other party or the other party’s agents, attorneys or
representatives regarding the subject matter, basis, or effect of this Agreement
or otherwise, other than those specifically stated in this written Agreement.
This Agreement shall be interpreted in accordance with the plain meaning of its
terms and not strictly for or against any party. This Agreement shall be
construed as if each party was its author and each party hereby adopts the
language of this Agreement as if it were his, her or its own. The captions to
this Agreement and its sections, subsections, tables and exhibits are inserted
only for convenience and shall not be construed as part of this Agreement or as
a limitation on or broadening of the scope of this Agreement or any section,
subsection, table or exhibit.

Employee and Stereotaxis have executed this Agreement and agree to enter into
and be bound by the provisions hereof as of February 22, 2006.

THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES.

 

STEREOTAXIS, INC. By:  

/s/ Fred A. Middleton

  Fred A. Middleton  

Chairman of the Board

on behalf of the Board of Directors

EMPLOYEE Sign:  

/s/ Bevil J. Hogg

  Bevil J. Hogg

 

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