AMENDED AND RESTATED
                             SECURED PROMISSORY NOTE


    $3,200,000                                               March 13, 2003
                                                        Minneapolis, Minnesota

         For good and valuable consideration, the receipt of which is hereby
acknowledged, the undersigned, EP MEDSYSTEMS, INC., a New Jersey corporation
("EP MedSystems" or the "Company"), agrees to pay to the order of MEDTRONIC
INTERNATIONAL LIMITED, a Delaware corporation, as successor-in-interest to
Medtronic Asset Management, Inc. ("Medtronic"), or its registered assign
("Holder"), at 7000 Central Avenue, N.E., Minneapolis, Minnesota 55432, or such
other address provided to EP MedSystems by written notice from Holder, the
principal sum of Three Million Two Hundred Thousand Dollars ($3,200,000), or
such lesser sum as is actually outstanding from time to time, plus interest from
and after the date hereof on the unpaid principal balance outstanding from time
to time at a rate, determined as of the date hereof and adjusted monthly
thereafter, equal to three percentage points in excess of the prime rate in
effect on the particular date of determination, as quoted by Wells Fargo Bank
Minnesota, N.A., Minneapolis, Minnesota (calculated on the basis of the actual
number of days elapsed and a 360-day year), upon the terms and conditions
specified below, plus accrued but unpaid interest from November 15, 2000 through
and including the date hereof, as determined under that certain Secured
Promissory Note of EP Medsystems in favor of Medtronic, dated November 15, 2000,
in the original principal amount of $3,200,000.

         This Note is issued in connection with that certain Note Purchase
Agreement, dated November 15, 2000, as amended by that certain First Amendment
to Note Purchase Agreement of even date herewith, between Medtronic and EP
MedSystems, as the same may be amended from time to time ("Note Purchase
Agreement"). This Note is issued in substitution for and replacement of, but not
in payment of, the Original Note. Payment of this Note is secured by a pledge of
300,000 shares of stock of Transneuronix owned David A. Jenkins ("Jenkins")
pursuant to a Stock Pledge Agreement among Medtronic, EP MedSystems and Jenkins,
dated as of November 15, 2000, and by the assignment of certain payments the
Company may be entitled to receive pursuant to that certain Stock Purchase
Agreement by and between the Company and Boston Scientific Corporation, a
Delaware corporation ("Boston Scientific"), dated as of September 5, 2002
("Boston Scientific Agreement").

1. Payment. Pursuant to the Boston Scientific Agreement, the Company may be
entitled to receive payments from Boston Scientific from time to time. As set
forth in the Note Purchase Agreement, and in any event within 5 days of receipt
of any payments from Boston Scientific pursuant to the Boston Scientific
Agreement, EP MedSystems shall forward such payment to Medtronic or the Holder,
endorsed as necessary, for application to the obligations under this Note;
provided however, that EP MedSystems shall only be required to forward such
payments to Medtronic or the Holder in an amount not to exceed $1,000,000 in the
aggregate. Payments under this Note shall be applied first to accrued but unpaid
costs (as described in Section 4 hereof), then to interest and then to
principal.

         If not paid earlier, the then outstanding principal of this Note and
all accrued and unpaid interest thereon shall be repaid in full on April 1,
2004.
<PAGE>

2. Prepayment. EP MedSystems may at any time, at its option upon at least five
business days' written notice to the Holder, prepay this Note in whole or in
part without premium. In the event EP MedSystems shall give notice of any such
prepayment, such notice shall specify the principal amount to be prepaid and the
date of the proposed prepayment, and thereupon such principal amount, together
with accrued and unpaid interest thereon to the prepayment date, shall become
due and payable on the prepayment date.

3. Events of Default. The entire principal amount outstanding, together with
accrued interest shall, at the option of Medtronic or Holder, become immediately
due and payable upon the occurrence of the following events, whether such
occurrence shall be voluntary or involuntary or be effected by operation of law
or otherwise (an "Event of Default"):

(a) if any principal of or interest on this Note is not paid when due, and such
nonpayment continues for 10 days; or

(b) if EP MedSystems materially breaches any provision of the Note Purchase
Agreement, and such default continues for a period of 30 days after notice
thereof by Medtronic to EP MedSystems; or

(c) if EP MedSystems or Jenkins materially breaches any provision of the Stock
Pledge Agreement referred to above, and such default continues for a period of
30 days after notice thereof by Medtronic to EP MedSystems and Jenkins; or

(d) if EP MedSystems materially breaches any provision of the agreements and
instruments entered into with any institutional lender from which the Company
may obtain financing from time to time, or receives such notice of any such
breach from any such lender, and either (i) such default continues for a period
of 30 days after notice thereof by such lender to EP MedSystems or (ii) such
lender accelerates all or any portion of EP MedSystems' indebtedness to such
lender or forecloses or takes similar action with respect to any collateral
securing any such indebtedness; or

(e) if (i) any creditor of EP MedSystems commences any foreclosure, levy,
attachment, or other action or proceeding to enforce or collect a judgment owed
by EP MedSystems; or (ii) EP MedSystems makes an assignment for the benefit of
creditors, or any order, judgment, or decree is entered adjudicating EP
MedSystems bankrupt or insolvent; or (iii) EP MedSystems petitions or applies to
any tribunal for the appointment of a trustee, receiver, or liquidator of EP
MedSystems, or commences any proceedings relating to EP MedSystems under any
bankruptcy, reorganization, insolvency, dissolution, or liquidation law of any
jurisdiction, whether now or hereafter in effect; or (iv) an order, judgment, or
decree is entered appointing any such trustee, receiver, or liquidator, or
approving the petition in any such proceedings, and such order, judgment, or
decree remains unstayed and in effect for more than 30 days; or (v) any order,
judgment, or decree is entered in any proceedings against EP MedSystems
decreeing the dissolution of EP MedSystems and such order, judgment, or decree
remains unstayed and in effect for more than 30 days; provided that, upon the
occurrence of any Event of Default in this paragraph 3(e), all amounts owing to
Medtronic or Holder shall immediately and automatically become due and payable
with no further action required by Medtronic or Holder.
<PAGE>

EP MedSystems shall immediately notify Medtronic or Holder of the occurrence of
any Event of Default. Upon the occurrence of an Event of Default, Medtronic or
the Holder may, at its option, exercise any remedy available to it by agreement
or under law, including exercising its rights as a secured creditor under the
Uniform Commercial Code.

4. Costs of Collection. Upon default under any provision of this Note, EP
MedSystems shall pay the costs, including reasonable attorneys' fees, of
Medtronic or Holder of this Note in the pursuit of Medtronic's or Holder's
remedies hereunder.

5. Waiver of Notices. EP MedSystems hereby waives presentment, demand for
payment, notice of dishonor, and all other notices or demands in connection with
the delivery, acceptance, performance, default or endorsement of this Note. No
delay or failure on the part o Medtronic or Holder, or their respective agents
or representatives, to collect this Note or to exercise any power or right in
connection with its collection should operate as a waiver thereof, and such
rights and powers shall be deemed continuous.

6. Amendment. No amendment, modification or waiver of any provision of this Note
shall he effective unless the same shall be in writing and signed by Medtronic
or Holder.

7. Governing Law. This Note shall be governed by, and interpreted and construed
in accordance with, the laws of the State of Minnesota, without reference to the
choice of law principles thereof.

         ACCORDINGLY, EP MedSystems has caused this Promissory Note to be signed
by its authorized officer as of the date stated above.


                               EP MEDSYSTEMS, INC.


                               By: _/s/ Reinhardt Schmidt________
                                   Reinhard Schmidt
                                   Its: President and Chief Executive
                                        Officer

<PAGE>


Attachment:


                   FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT


         THIS FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT is made as of the 13th
day of March, 2003, by and between EP MEDSYSTEMS, INC., a New Jersey corporation
(the "Company"), and MEDTRONIC INTERNATIONAL LIMITED, a Delaware corporation, as
successor-in-interest to Medtronic Asset Management, Inc. ("Medtronic").

RECITALS:

         A. Medtronic and the Company are parties to that certain Note Purchase
Agreement, dated as of November 15, 2000 (the "Note Purchase Agreement").

         B. Pursuant to the Note Purchase Agreement, Medtronic has loaned to the
Company the original principal amount of Three Million Two Hundred Thousand
Dollars ($3,200,000).

         C. Through and including the date hereof, accrued interest is due and
payable with respect to the original principal amount loaned by Medtronic.

         D. The Company has requested that Medtronic extend the maturity date of
the Note and make certain other amendments to the Note Purchase Agreement and
the Note, and Medtronic is willing to extend the maturity of the Note and to
make certain other amendments on the terms and conditions as provided herein.

AGREEMENTS:

         IN CONSIDERATION of the premises and mutual covenants herein, the
parties agree as follows:

1. Definitions. Capitalized terms not otherwise defined in this First Amendment
have the same meanings as set forth in the Note Purchase Agreement.

2. Amendments to Note Purchase Agreement. The Note Purchase Agreement shall be
amended as follows:

(a) Amendment of Section 1.1. Section 1.1 of the Note Purchase Agreement is
hereby amended by deleting the definition of "Note" and replacing it with the
following:

                   ""Note" means the Amended and Restated Secured Promissory
                   Note of the Company, dated as of March 12, 2003 payable to
                   Medtronic, in the original principal amount of $3,200,000, in
                   the form attached as Exhibit A hereto, as the same may be
                   amended, modified, supplemented, restated or replaced from
                   time to time."

(b) Further Amendment of Section 1.1. Section 1.1 of the Note Purchase Agreement
is further hereby amended by adding the following:
<PAGE>

                   ""Applicable Milestones" means the Milestones described in
                   clauses (ii), (iii) and (iv) of Exhibit A to the Boston
                   Scientific Agreement, as such milestones may be modified in
                   accordance with Section 5.5 hereof."

                   ""Boston Scientific" means Boston Scientific Corporation,
                   a Delaware corporation."

                   ""Boston Scientific Agreement" means that certain Stock
                   Purchase Agreement, dated as of September 5, 2002, by and
                   between the Company and Boston Scientific."

                   ""Boston Scientific Payments" shall mean all payments made to
                   or for the benefit of the Company pursuant to the Boston
                   Scientific Agreement, not to exceed an aggregate of
                   $1,000,000."

                   ""Common Stock Purchase Agreement" means that certain Common
                   Stock and Warrant Purchase Agreement by and between the
                   Company and various purchasers, dated as of January 31,
                   2003."

                   ""EGS Entities" means EGS Private Healthcare Partnership,
                   L.P., and EGS Private Healthcare Counterpart, L.P."

                   ""EGS Loans" shall mean the loans from the EGS Entities
                   described in the Common Stock Purchase Agreement."

(c) Amendment of Section 2.1. The fourth and fifth sentences of Section 2.1 of
the Note Purchase Agreement are hereby amended in its entirety to read as
follows:

                   "2.1 Loan. The Note shall bear interest on the unpaid
                   principal balance of the Loan outstanding from time to time,
                   until the Note is fully paid, at an annual rate equal to
                   three percentage points in excess of the prime commercial
                   lending rate quoted by Wells Fargo Bank Minnesota, N.A., in
                   effect from time to time. The Loan shall be secured by a
                   pledge of 300,000 shares of stock of Transneuronix pursuant
                   to the Pledge Agreement and by the assignment of the Boston
                   Scientific Payments as set forth in Section 2.3 below."

(d) Addition of Section 2.3. The Note Purchase Agreement is hereby amended by
the addition of the following Section 2.3:

                   "2.3 Assignment of Payments. To secure the payment in full of
                   the Note and the performance of the Company's obligations
                   under the Note and this Agreement, the Company hereby grants
                   to Medtronic a first priority security interest in the Boston
                   Scientific Payments; provided however, that upon Medtronic's
                   receipt of $1,000,000 in the aggregate of such Boston
                   Scientific Payments, Medtronic shall promptly release such
                   security interest.

                           "(a) Upon its receipt of any Boston Scientific
                   Payments, the Company shall (a) immediately notify Medtronic
                   of its receipt of such payment, (b) hold such payment in
                   trust and safekeeping for Medtronic, and (c) within five (5)
                   days of its receipt of such payment deliver to Medtronic the
                   amount of such payment received. Amounts received by
                   Medtronic pursuant to this Section 2.3 shall be applied to
                   amounts payable pursuant to the Note, in accordance with the
                   terms of the Note.
<PAGE>

                           "(b) Upon the occurrence of an Event of Default, as
                   such term is defined in the Note, Medtronic shall have all
                   rights of a secured creditor under the Uniform Commercial
                   Code with respect to the Boston Scientific Payments.
                   Medtronic may at any time file a financing statement or make
                   any other notice it deems necessary to protect or perfect its
                   security interest in the Boston Scientific Payments."

(e) Addition of Section 5.5. The Note Purchase Agreement is hereby amended by
the addition of the following Section 5.5:

                   "5.5 Compliance with Boston Scientific Agreement. The Company
                   shall use its commercially reasonable efforts to achieve each
                   of the Applicable Milestones. If the Company receives any
                   notice of termination pursuant to Section 8.3(ii) of the
                   Boston Scientific Agreement from Boston Scientific, or if the
                   Company terminates the Boston Scientific Agreement, which, in
                   each case, occurs prior to the time an amount equal to the
                   full amount of the Boston Scientific Payments is received by
                   Medtronic, the Company shall promptly give written notice
                   thereof to Medtronic specifying such failure or termination
                   and such failure or termination shall be a default under this
                   Agreement. The Company shall not materially amend the Boston
                   Scientific Agreement or materially revise the Applicable
                   Milestones under such agreement without the prior written
                   consent of Medtronic, which consent shall not be unreasonably
                   delayed or withheld."

(f) No Other Modification. Except as expressly amended by the terms of this
Section 2, all other terms of the Note Purchase Agreement shall remain unchanged
and in full force and effect.

3. Amendment to Note. That certain Promissory Note, dated November 15, 2000, of
the Company in favor of Medtronic in the original principal amount of $3,200,000
is hereby amended and restated as set forth in Exhibit A hereto. Except as
expressly amended hereby, all other terms of the Note shall remain unchanged and
in full force and effect.

4. Representations and Warranties. To induce Medtronic to enter into this
Amendment, the Company represents and warrants to Medtronic as follows:

(a) The execution, delivery and performance by the Company of this Amendment and
any other documents required to be executed and/or delivered by the Company by
the terms of this Amendment have been duly authorized by all necessary corporate
action, do not require any approval or consent of, or any registration,
qualification or filing with, any government agency or authority or any approval
or consent of any other person, do not and will not conflict with, result in any
violation of or constitute any default under, any provision of the Company's
Articles of Incorporation or Bylaws, any agreement binding on or applicable to
the Company or any of its property, or any law or governmental regulation or
court decree or order, binding upon or applicable to the Company or of any of
its property and will not result in the creation or imposition of any security
interest or other lien or encumbrance in or on any of its property pursuant to
the provisions of any agreement applicable to the Company or any of its
property, other than the liens created by this Amendment.
<PAGE>

(b) Subject to the information provided on Schedule A hereto, the
representations and warranties contained in the Note Purchase Agreement are true
and correct as of the date hereof as though made on the date hereof, except to
the extent that such representations and warranties relate solely to an earlier
date.

(c) There does not exist any default or Event of Default under the Note Purchase
Agreement, the Note, the Stock Pledge Agreement or the Boston Scientific
Agreement.

(d) The Company has provided to Medtronic true, correct and complete copies of
the Boston Scientific Agreement and that certain License, Supply and Joint
Venture Agreement by and between the Company and Boston Scientific.

(e) Without limiting the representations and warranties contained in this
Section 4, no information provided to Medtronic by the Company relating to or
arising out of the Boston Scientific Agreement contains any untrue statement of
a material fact or omits to state a material fact necessary to make such
information not misleading.

(f) Subject to the terms of the Boston Scientific Agreement, the Company
possesses the right to receive the Boston Scientific Payments free and clear of
all liens and encumbrances.

(g) The EGS Loans have been converted into shares of common stock and warrants
issued by the Company, the liens held by the EGS Entities have been released,
and any financing statements perfecting such liens have been terminated.

5. No Other Modification. Except as expressly amended by the terms of this First
Amendment, all other terms of the Note Purchase Agreement shall remain unchanged
and in full force and effect.

6. Release. The Company hereby releases, acquits, and forever discharges
Medtronic and each and every past and present subsidiary, affiliate,
stockholder, officer, director, agent, servant, employee, representative, and
attorney of Medtronic from any and all claims, causes of action, suits, debts,
liens, obligations, liabilities, demands, losses, costs and expenses (including
attorneys' fees) of any kind, character, or nature whatsoever, known or unknown,
fixed or contingent, which any of them may have or claim to have now or which
may hereafter arise out of or be connected with any act of commission or
omission of Medtronic existing or occurring prior to the date of this First
Amendment or any instrument executed prior to the date of this First Amendment
with respect to the indebtedness evidenced by the Note or with respect to any
other document executed in connection with the Note Purchase Agreement (the
"Loan Documents"). The provisions of this Section 6 shall survive payment of the
Note and any other obligations of the Company under the Loan Documents and shall
be binding upon the Company and shall inure to the benefit of Medtronic and its
successors and assigns.
<PAGE>

7. Estoppel. The Company represents and warrants that there are no known claims,
causes of action, suits, debts, liens, obligations, liabilities, demands,
losses, costs and expenses (including attorneys' fees) of any kind, character or
nature whatsoever, fixed or contingent, which it may have or claim to have
against Medtronic, which might arise out of or be connected with any act of
commission or omission of Medtronic existing or occurring on or prior to the
date of this First Amendment with respect to the indebtedness evidenced by the
Note or with respect to any other Loan Document.

8. No Waiver. This First Amendment is not intended to operate as, and shall not
be construed as, a waiver of any Event of Default whether known to Medtronic or
unknown, as to which all rights and remedies of Medtronic shall remain reserved.

9. Payment of Expenses. The Company agrees to reimburse Medtronic upon demand
for all out-of-pocket expenses, including attorneys' fees and expenses, incurred
by Medtronic in connection with the drafting, negotiation and execution of this
First Amendment, and all other documents executed in connection herewith;
provided, however, that the Company shall not be obligated to reimburse such
fees and expenses to the extent that they, in the aggregate exceed $3,000.

10. Binding Nature of Loan Documents. The Company acknowledges and agrees that
the terms, conditions and provisions of the Note Purchase Agreement and of each
document executed and delivered in connection therewith are fully binding and
enforceable agreements, and are not subject to any defense, counterclaim, set
off or other claim of any kind or nature. The Company hereby reaffirms and
restates its duties, obligations and liability under the Note Purchase
Agreement, the Note and each other document executed by it in connection with
the Note Purchase Agreement.

11. References. From and after the date of this First Amendment, each reference
in the Note Purchase Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Note Purchase Agreement, and
each reference to the "Note Purchase Agreement", "thereunder", "thereof",
"therein" or words of like import referring to the Note Purchase Agreement in
any other document by the Company in connection with the Note Purchase Agreement
shall mean and be a reference to the Note Purchase Agreement as amended hereby.
From and after the date of this First Amendment, each reference to the "Note" or
words of like import referring to the Note in the Note Purchase Agreement or in
any other document by the Company in connection with the Note Purchase Agreement
shall mean and be a reference to the Note as amended hereby.

12. Counterparts. This First Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument. Any executed counterpart of this First
Amendment delivered by facsimile or other electronic transmission to a party
hereto shall constitute an original counterpart of this First Amendment.



<PAGE>



         THE PARTIES HAVE EXECUTED this First Amendment to Note Purchase
Agreement in the manner appropriate to each as of the date and year first above
written.

                           EP MEDSYSTEMS, INC.


                           By:        /s/ Reinhard Schmidt
                                  -------------------------------------------
                                    Name:    Reinhard Schmidt
                                    Title:   President and Chief Executive
                                                 Officer


                           MEDTRONIC INTERNATIONAL LIMITED


                           By:
                                   -------------------------------------------
                                   Name:
                                        --------------------------------------
                                   Title:
                                         -------------------------------------




<PAGE>


                                                             Schedule A

         The following is provided, as of March 12, 2003, as exceptions to the
representations and warranties incorporated by reference into the First
Amendment to Note Purchase Agreement from the Note Purchase Agreement, dated
November 15, 2003, between the Company and Medtronic, dated as of March 12, 2003
(the "Agreement").

         Any terms defined in the Agreement shall have the same meaning when
used in these Schedules as when used in the Agreement, unless the context
otherwise requires.




<PAGE>




   Outstanding Subscriptions, Warrants, Options or Other Rights or Commitments


     (i) On November 21, 2002, the Company received two $375,000  mortgage loans
on the Company's  West Berlin,  N.J.  corporate  office  building (the "Mortgage
Loans").  The Mortgage Loans mature on January 15, 2006 (the  "Maturity  Date"),
bear interest at a rate of 8.0 % per annum,  and principal and interest  thereon
are initially and through December 31, 2003 convertible, at the lender's option,
into Common Stock at a conversion  price equal to $2.14,  an amount in excess of
the  market  price of the Common  Stock on the date of the  funding of the loan.
Beginning  January 1, 2004  through  December  31,  2004,  principal  and unpaid
interest are convertible into Common Stock at $2.50 per share. Beginning January
1, 2005 through the Maturity Date, principal and unpaid interest are convertible
into Common Stock of Company at $3.00 per share.

     (ii)  Subject  to the  terms of the  Boston  Scientific  Agreement,  Boston
Scientific  is  required  to  purchase  up to $2.5  million of the shares of the
Company's common stock, based on the achievement of certain Milestones described
in that agreement and at a purchase price  calculated  based on the market price
of the Company's  common stock.  To date,  the Company has achieved the first of
those four milestones,  and BSC purchased, in February,  2003, 311,915 shares of
the Company's common stock at $1.603 per share.


<PAGE>




      Developments or Changes that may Result in a Material Adverse Effect


         On January 9, 2003, the Company was advised by NASDAQ that it was not
in compliance with the $10 million stockholders' equity standard for continued
listing set forth in Marketplace Rule 4450(a)(3). Compliance with this new
standard was required as of November 2002. The Company will request a hearing
before a NASDAQ Listing Qualifications Panel to review the Staff Determination.
If the Company is unsuccessful in its appeal, it intends to apply for listing on
the NASDAQ SmallCap Market. However, there can be no assurance that the Company
will meet the listing standard requirements of the NASDAQ SmallCap Market.



 Indebtedness, Obligations or Liabilities Not Reflected in the Financial
 Statements


         The Financial Statements covering the period from December 31, 2001
through September 30, 2002 do not reflect obligations under contracts or
commitments for which expenses have not yet been incurred, entered into or
arisen in the ordinary course of business and, consistent with generally
accepted accounting principles and with past practices, that individually or in
the aggregate do not have a Material Adverse Effect.



         Proceedings to Revoke or Suspend the Listing of Common Stock on
                           The NASDAQ National Market


         On January 9, 2003, the Company was advised by NASDAQ that it was not
in compliance with the $10 million stockholders' equity standard for continued
listing set forth in Marketplace Rule 4450(a)(3). Compliance with this new
standard was required as of November 2002. On February 20, 2003, the Company
appeared at a hearing before a NASDAQ Listing Qualifications Panel to appeal the
NASDAQ Staff Determination. If the Company is unsuccessful in its appeal, it
intends to apply for listing on the NASDAQ SmallCap Market. However, there can
be no assurance that the Company will meet the listing standard requirements of
the NASDAQ SmallCap Market.




<PAGE>



            Mortgages, Liens, Loans, Claims, Charges and Encumbrances


         In connection with the Mortgage Loans referred to above, the Company
granted a first priority security interest in the building owned by the Company
and located at 575 Route 73 North - Building D, West Berlin, New Jersey 08091.


                           Related Party Transactions


         Abhijeet Lele is a member of the Board of Directors of the Company and
is a Managing Member of the General Partner of each of the EGS Entities that
provided the EGS Loans.






<PAGE>



                            ACKNOWLEDGMENT BY PLEDGOR

         The undersigned acknowledges the foregoing and agrees that the
foregoing does not affect his obligations under that certain Pledge Agreement
dated November 15, 2000 of the undersigned in favor of Medtronic, and that such
Pledge Agreement continues in full force and effect and secures the Company's
obligations under the Note Purchase Agreement and the Note as amended hereby and
any extensions, renewals, amendments, restatements or supplements thereof.

                                               -------------------------------
                                                     David A. Jenkins