Document:

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                                                                   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

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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.

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         (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

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           (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.]

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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.]

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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).

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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.]

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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

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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.

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         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

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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.

                                     Page 1
<PAGE>

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.]

                                     Page 2
<PAGE>

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.

                                     Page 3
<PAGE>

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

                                     Page 4
<PAGE>

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.

                                     Page 5
<PAGE>

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.]

                                     Page 6
<PAGE>

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.]

                                     Page 7
<PAGE>

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

                                     Page 8
<PAGE>

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.

                                     Page 9
<PAGE>

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

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