Document:

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                                                                   EXHIBIT 10.28

                           LOAN AND SECURITY AGREEMENT

      This LOAN AND SECURITY AGREEMENT (this "Agreement") dated as of April 30,
2004, between SILICON VALLEY BANK, a California chartered bank, with its
principal place of business at 3003 Tasman Drive, Santa Clara, California 95054
and with a loan production office located at 230 W. Monroe, Suite 720, Chicago,
Illinois 60606 ("Bank") and STEREOTAXIS, INC., a Delaware corporation
("Borrower"), provides the terms on which Bank shall lend to Borrower and
Borrower shall repay Bank. The parties agree as follows:

1     ACCOUNTING AND OTHER TERMS

      Accounting terms not defined in this Agreement shall be construed
following GAAP. Calculations and determinations must be made following GAAP. The
term "financial statements" includes the notes and schedules. The terms
"including" and "includes" always mean "including (or includes) without
limitation," in this or any Loan Document. Capitalized terms in this Agreement
shall have the meanings set forth in Section 13.

2     LOAN AND TERMS OF PAYMENT

      2.1 PROMISE TO PAY. Borrower hereby unconditionally promises to pay Bank
the unpaid principal amount of all Credit Extensions and interest on the unpaid
principal amount of the Credit Extensions as and when due in accordance with
this Agreement.

            2.1.1 REVOLVING ADVANCES.

            (a) Availability. Bank shall make Advances not exceeding (i) the
lesser of (A) the Revolving Line or (B) the Borrowing Base minus (ii) the amount
of all outstanding Letters of Credit (including drawn but unreimbursed Letters
of Credit), minus (iii) the FX Reserve, and minus (iv) the aggregate outstanding
Advances hereunder (including any Cash Management Services). Amounts borrowed
under this Section may be repaid and reborrowed during the term of this
Agreement.

            (b) Borrowing Procedure. To obtain an Advance, Borrower must notify
Bank by facsimile or telephone by 3:00 p.m. Eastern time on the Business Day the
Advance is to be made. If such notification is by telephone, Borrower must
promptly confirm the notification by delivering to Bank a completed
Payment/Advance Form in the form attached as Exhibit B. Bank shall credit
Advances to Borrower's deposit account. Bank may make Advances under this
Agreement based on instructions from a Responsible Officer or his or her
designee or without instructions if the Advances are necessary to meet
Obligations which have become due. Bank may rely on any telephone notice given
by a person whom Bank believes is a Responsible Officer or designee. Borrower
shall indemnify Bank for any loss Bank suffers due to such reliance.

            (c) Interest Rate. The principal amounts outstanding under the
Revolving Line shall accrue interest at a floating per annum rate equal to the
aggregate of the Prime Rate, and one and one-quarter of one percent (1.25%).

            (d) Termination; Repayment. The Revolving Line terminates on the
Revolving Maturity Date, when the principal amount of all Advances and the
unpaid interest thereon, shall be immediately due and payable.

            (e) Revolving Loan and Security Agreement. The Revolving Loan and
Security Agreement dated March 19, 2002 is hereby terminated.

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            2.1.2 LETTERS OF CREDIT SUBLIMIT.

            (a) Bank shall issue or have issued Letters of Credit for Borrower's
account not exceeding (i) the lesser of the Revolving Line or the Borrowing Base
minus (ii) the outstanding principal balance of any Advances (including any Cash
Management Services), minus (iii) the amount of all Letters of Credit (including
drawn but unreimbursed Letters of Credit), plus an amount equal to any Letter of
Credit Reserves. The face amount of outstanding Letters of Credit (including
drawn but unreimbursed Letters of Credit and any Letter of Credit Reserve) may
not exceed Three Million Five Hundred Thousand Dollars ($3,500,000.00). Each
Letter of Credit shall have an expiry date no later than 180 days after the
Revolving Maturity Date provided Borrower's Letter of Credit reimbursement
obligation shall be secured by cash on terms acceptable to Bank on and after (i)
the Maturity Date of the Revolving Line if the Maturity Date of the Revolving
Line is not extended by Bank, or (ii) the occurrence of an Event of Default
hereunder. All Letters of Credit shall be, in form and substance, acceptable to
Bank in its sole discretion and shall be subject to the terms and conditions of
Bank's form of standard Application and Letter of Credit Agreement. Borrower
agrees to execute any further documentation in connection with the Letters of
Credit as Bank may reasonably request.

            (b) The obligation of Borrower to immediately reimburse Bank for
drawings made under Letters of Credit shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement and such Letters of Credit, under all circumstances whatsoever.
Borrower shall indemnify, defend, protect, and hold Bank harmless from any loss,
cost, expense or liability, including, without limitation, reasonable attorneys'
fees, arising out of or in connection with any Letters of Credit.

            (c) Borrower may request that Bank issue a Letter of Credit payable
in a currency other than United States Dollars. If a demand for payment is made
under any such Letter of Credit, Bank shall treat such demand as an Advance to
Borrower of the equivalent of the amount thereof (plus cable charges) in United
States currency at the then prevailing rate of exchange in San Francisco,
California, for sales of that other currency for cable transfer to the country
of which it is the currency.

            (d) Upon the issuance of any letter of credit payable in a currency
other than United States Dollars, Bank shall create a reserve (the "Letter of
Credit Reserve") under the Revolving Line for letters of credit against
fluctuations in currency exchange rates, in an amount equal to ten percent (10%)
of the face amount of such letter of credit. The amount of such reserve may be
amended by Bank from time to time to account for fluctuations in the exchange
rate. The availability of funds under the Revolving Line shall be reduced by the
amount of such reserve for so long as such letter of credit remains outstanding.

            2.1.3 FOREIGN EXCHANGE SUBLIMIT. If there is availability under the
Revolving Line and the Borrowing Base, then Borrower may enter in foreign
exchange forward contracts with the Bank under which Borrower commits to
purchase from or sell to Bank a set amount of foreign currency more than one
business day after the contract date (the "FX Forward Contract"). Bank shall
subtract 10% of each outstanding FX Forward Contract from the foreign exchange
sublimit, which sublimit is a maximum of Three Million Five Hundred Thousand
Dollars ($3,500,000.00) (the "FX Reserve"). The total FX Forward Contracts at
any one time may not exceed 10 times the amount of the FX Reserve. Bank may
terminate the FX Forward Contracts if an Event of Default occurs.

            2.1.4 CASH MANAGEMENT SERVICES SUBLIMIT. Borrower may use up to
Three Million Five Hundred Thousand Dollars ($3,500,000.00) for the Bank's Cash
Management Services, which may include merchant services, direct deposit of
payroll, business credit card, and check cashing services identified in the
various

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cash management services agreements related to such Cash Management Services
(the "Cash Management Services"). Such aggregate amounts utilized under the Cash
Management Services Sublimit shall at all times reduce the amount otherwise
available for Credit Extensions under the Revolving Line. Any amounts Bank pays
on behalf of Borrower or any amounts that are not paid by Borrower for any Cash
Management Services will be treated as Advances under the Revolving Line and
will accrue interest at the interest rate applicable to Advances.

            2.1.5 EQUIPMENT ADVANCES.

            (a) Availability. Through June 30, 2004 (the "Equipment Availability
End Date"), Bank shall make advances ("Equipment Advance" and, collectively,
"Equipment Advances") not exceeding the Equipment Line. The Equipment Advances
may only be used to finance Eligible Equipment purchased (i) on and after March
31, 2003 through September 30, 2003, and (ii) on and after October 1, 2003 and
through December 31, 2004. No Equipment Advances may exceed 100% of the
equipment invoice (with the exception of Eligible Equipment purchased between
March 31, 2003 and September 30, 2003, for which Equipment Advances shall be
equal to 100% of the aggregate net book value of such Eligible Equipment)
excluding taxes, shipping, warranty charges, freight discounts and installation
expense relating to such Equipment, unless such costs constitute Other
Equipment. Borrower shall provide Bank with equipment invoices (aggregate book
value for Eligible Equipment purchased between March 31, 2003 and September 30,
2003) totaling the aggregate Equipment Advances made hereunder, on or before
December 31, 2004. In the event that the total outstanding Equipment Advances as
of December 31, 2004, is less than the aggregate invoices (aggregate book value
for Eligible Equipment purchased between March 31, 2003 and September 30, 2003)
for Eligible Equipment for the periods referenced above (the "Equipment Value"),
the Bank may, at its sole and absolute discretion, demand, and Borrower shall
immediately pay Bank, the difference between the outstanding Equipment Advances
and the Equipment Value. The Borrower may only request a total of two (2)
Equipment Advances under the Equipment Line. After repayment, Equipment Advances
may not be reborrowed.

            (b) Interest. Interest accrues from the date of each Equipment
Advance fixed at the per annum rate of seven percent (7.0%) and is payable
monthly.

            (c) Repayment. Each Equipment Advance is payable in (a) thirty-six
(36) consecutive equal monthly installments of principal, plus, (b) monthly
payments of accrued interest, beginning on the first calendar day of each month
following the Funding Date with respect to such Equipment Advance, and
continuing thereafter on the first calendar day of each successive calendar
month (each a "Payment Date"). All unpaid principal and interest is due and
payable in full on the last Payment Date with respect to such Equipment Advance.
Payments received after 12:00 noon Eastern time are considered received at the
opening of business on the next Business Day.

            (d) To obtain an Equipment Advance, Borrower must notify Bank (the
notice is irrevocable) by facsimile no later than 3:00 p.m. Eastern time one (1)
Business Day before the day on which the Equipment Advance is to be made. The
notice in the form of Exhibit B (Payment/Advance Form) must be signed by a
Responsible Officer or designee and include a copy of the invoice for the
Equipment being financed.

            2.1.6 UNDISBURSED CREDIT EXTENSIONS. The Bank's obligation to lend
the undisbursed portion of the Obligations shall terminate if, in Bank's sole
discretion, there has been a Material Adverse Change, or there has been any
material adverse deviation by Borrower from the most recent business plan of
Borrower presented to and accepted by Bank prior to the execution of this
Agreement.

      2.2 OVERADVANCES. If Borrower's Obligations under Section 2.1.1, 2.1.2,
2.1.3., and 2.1.4 exceed the lesser of either (i) the Revolving Line or (ii) the
Borrowing Base, Borrower must immediately pay in cash to Bank the excess.

      2.3 DEFAULT RATE; PAYMENTS.

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            (a) Default Rate. After an Event of Default, Obligations shall bear
interest at five percent (5.0%) above the rate effective immediately before the
Event of Default. The applicable interest rate hereunder shall increase or
decrease when the Prime Rate changes. Interest is computed on the basis of a 360
day year for the actual number of days elapsed.

            (b) Payments. Interest is payable on the first calendar day of each
month. Payments received after 12:00 noon Eastern time are considered received
at the opening of business on the next Business Day. When a payment is due on a
day that is not a Business Day, the payment is due the next Business Day and
additional fees or interest, as applicable, shall continue to accrue.

            (c) Debit of Accounts. Bank may debit any of Borrower's deposit
accounts including Account Number __________ for principal and interest payments
or any amounts Borrower owes Bank. Bank shall promptly notify Borrower when it
debits Borrower's accounts. These debits shall not constitute a set-off.

      2.4 FEES. Borrower shall pay to Bank:

            (a) Revolving Line Commitment Fee. (i) A fully earned,
non-refundable commitment fee of Forty Thousand Dollars ($40,000.00) due on the
Closing Date, and (ii) a fully earned, non-refundable commitment fee of Twenty
Thousand Dollars ($20,000.00) due on the Closing Date and payable on the first
(1st) anniversary of the Closing Date.

            (b) Equipment Line Commitment Fee. A fully earned non-refundable
commitment fee of Ten Thousand Dollars ($10,000.00); and

            (c) Equipment Line Prepayment Fee. In the event that any portion of
the Equipment Line is repaid in connection with the proceeds of a debt
refinancing by another lender, prior to the scheduled payments of principal and
interest hereunder, the Borrower shall immediately pay a Prepayment Fee, as
defined herein, if and when applicable;

            (d) Premium Event Fee. As defined herein, if and when applicable;
and

            (e) Bank Expenses. All Bank Expenses (including reasonable
attorneys' fees and expenses) incurred through and after the Closing Date, when
due.

      2.5 ADDITIONAL COSTS. If any new law or regulation increases Bank's costs
or reduces its income for any loan, Borrower shall pay the increase in cost or
reduction in income or additional expense; provided, however, that Borrower
shall not be liable for any amount attributable to any period before 180 days
prior to the date Bank notifies Borrower of such increased costs. Bank agrees
that it shall allocate any increased costs among its customers similarly
affected in good faith and in a manner consistent with Bank's customary
practice.

3     CONDITIONS OF LOANS

      3.1 CONDITIONS PRECEDENT TO INITIAL CREDIT EXTENSION. The Bank's
obligation to make the initial Credit Extension is subject to the condition
precedent that Bank shall have received, in form and substance satisfactory to
Bank, the following:

            (a) this Agreement;

            (b) a certificate of the Secretary of Borrower with respect to
articles, bylaws, incumbency and resolutions authorizing the execution and
delivery of this Agreement;

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            (c) Negative Pledge Agreement covering Intellectual Property;

            (d) Perfection Certificate(s) by Borrower;

            (e) landlord's waiver;

            (f) a legal opinion of Borrower's counsel, in form and substance
acceptable to Bank;

            (g) financing statements (Forms UCC-1);

            (h) Account Control Agreement/ Investment Account Control Agreement

            (i) insurance certificate;

            (j) payment of the fees and Bank Expenses then due specified in
Section 2.4 hereof;

            (k) Certificate of Foreign Qualification (if applicable);

            (l) Certificate of Good Standing/Legal Existence; and

            (m) such other documents, and completion of such other matters, as
Bank may reasonably deem necessary or appropriate.

      3.2 CONDITIONS PRECEDENT TO ALL CREDIT EXTENSIONS. Bank's obligations to
make each Credit Extension, including the initial Credit Extension, is subject
to the following:

            (a) timely receipt of any Payment/Advance Form; and

            (b) the representations and warranties in Section 5 shall be
materially true on the date of the Payment/Advance Form and on the effective
date of each Credit Extension and no Event of Default shall have occurred and be
continuing, or result from the Credit Extension. Each Credit Extension is
Borrower's representation and warranty on that date that the representations and
warranties in Section 5 remain true.

4     CREATION OF SECURITY INTEREST

      4.1 GRANT OF SECURITY INTEREST. Borrower hereby grants Bank, to secure the
payment and performance in full of all of the Obligations and the performance of
each of Borrower's duties under the Loan Documents, a continuing security
interest in, and pledges and assigns to the Bank, the Collateral, wherever
located, whether now owned or hereafter acquired or arising, and all proceeds
and products thereof. Borrower warrants and represents that the security
interest granted herein shall be a first priority security interest in the
Collateral. Bank may place a "hold" on any deposit account pledged as
Collateral.

      Except as noted on the Perfection Certificate, Borrower is not a party to,
nor is bound by, any material license or other agreement with respect to which
the Borrower is the licensee that prohibits or otherwise restricts Borrower from
granting a security interest in Borrower's interest in such license or agreement
or any other property. Without prior consent from Bank, Borrower shall not enter
into, or become bound by, any such license or agreement which is reasonably
likely to have a material impact on Borrower's business or financial condition.
Borrower shall take such steps as Bank requests to obtain the consent of, or
waiver by, any person whose consent or waiver is necessary for all such licenses
or contract rights to be deemed "Collateral" and for Bank to have a security
interest in

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it that might otherwise be restricted or prohibited by law or by the terms of
any such license or agreement, whether now existing or entered into in the
future.

      If the Agreement is terminated, Bank's lien and security interest in the
Collateral shall continue until Borrower fully satisfies its Obligations. If
Borrower shall at any time, acquire a commercial tort claim, Borrower shall
promptly notify Bank in a writing signed by Borrower of the brief details
thereof and grant to Bank in such writing a security interest therein and in the
proceeds thereof, all upon the terms of this Agreement, with such writing to be
in form and substance satisfactory to Bank.

      4.2 AUTHORIZATION TO FILE FINANCING STATEMENTS. Borrower hereby authorizes
Bank to file financing statements, without notice to Borrower, with all
appropriate jurisdictions in order to perfect or protect Bank's interest or
rights hereunder, including a notice that any disposition of the Collateral, by
either the Borrower or any other Person, shall be deemed to violate the rights
of the Bank under the Code.

5     REPRESENTATIONS AND WARRANTIES

      Borrower represents and warrants as follows:

      5.1 DUE ORGANIZATION AND AUTHORIZATION. Borrower and each Subsidiary is
duly existing and in good standing in its state of formation and qualified and
licensed to do business in, and in good standing in, any state in which the
conduct of its business or its ownership of property requires that it be
qualified except where the failure to do so could not reasonably be expected to
cause a Material Adverse Change. In connection with this Agreement, the Borrower
delivered to the Bank a certificate signed by the Borrower and entitled
"Perfection Certificate". The Borrower represents and warrants to the Bank that:
(a) the Borrower's exact legal name is that indicated on the Perfection
Certificate and on the signature page hereof; and (b) the Borrower is an
organization of the type, and is organized in the jurisdiction, set forth in the
Perfection Certificate; and (c) the Perfection Certificate accurately sets forth
the Borrower's organizational identification number or accurately states that
the Borrower has none; and (d) the Perfection Certificate accurately sets forth
the Borrower's place of business, or, if more than one, its chief executive
office as well as the Borrower's mailing address if different, and (e) all other
information set forth on the Perfection Certificate pertaining to the Borrower
is accurate and complete. If the Borrower does not now have an organizational
identification number, but later obtains one, Borrower shall forthwith notify
the Bank of such organizational identification number.

      The execution, delivery and performance of the Loan Documents have been
duly authorized, and do not conflict with Borrower's organizational documents,
nor constitute an event of default under any material agreement by which
Borrower is bound. Borrower is not in default under any agreement to which or by
which it is bound in which the default could reasonably be expected to cause a
Material Adverse Change.

      5.2 COLLATERAL. Borrower has good title to the Collateral, free of Liens
except Permitted Liens. Borrower has no deposit account, other than the deposit
accounts with Bank and deposit accounts described in the Perfection Certificate
delivered to the Bank in connection herewith. The Accounts are bona fide,
existing obligations, and the service or property has been performed or
delivered to the account debtor or its agent for immediate shipment to and
unconditional acceptance by the account debtor. The Collateral is not in the
possession of any third party bailee (such as a warehouse). Except as hereafter
disclosed to the Bank in writing by Borrower, none of the components of the
Collateral shall be maintained at locations other than as provided in the
Perfection Certificate. In the event that Borrower, after the date hereof,
intends to store or otherwise deliver any portion of the Collateral to a bailee,
then Borrower will first receive the written consent of Bank (which consent
shall not be unreasonably withheld) and such bailee must acknowledge in writing
that the bailee is holding such Collateral for the benefit of Bank. Borrower has
no knowledge of any actual or imminent Insolvency Proceeding of any account
debtor whose accounts are an Eligible Account in any Borrowing Base Certificate.
All Inventory is in all material respects of good and marketable quality, free
from material defects. To Borrower's knowledge, Borrower is the sole

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owner of the Intellectual Property, except for non-exclusive licenses granted to
its customers in the ordinary course of business. To Borrower's knowledge, each
Patent is valid and enforceable and no part of the Intellectual Property has
been judged invalid or unenforceable, in whole or in part, and no claim has been
made that any part of the Intellectual Property violates the rights of any third
party except to the extent such claim could not reasonably be expected to cause
a Material Adverse Change.

      5.3 LITIGATION. Except as shown in the Perfection Certificate, there are
no actions or proceedings pending or, to the knowledge of Borrower's Responsible
Officers or legal counsel, threatened by or against Borrower or any Subsidiary
in which an adverse decision could reasonably be expected to cause a Material
Adverse Change.

      5.4 NO MATERIAL DEVIATION IN FINANCIAL STATEMENTS. All consolidated
financial statements for Borrower and any Subsidiary delivered to Bank fairly
present in all material respects Borrower's consolidated financial condition and
Borrower's consolidated results of operations. There has not been any material
deterioration in Borrower's consolidated financial condition since the date of
the most recent financial statements submitted to Bank.

      5.5 SOLVENCY. The fair salable value of Borrower's assets (including
goodwill minus disposition costs) exceeds the fair value of its liabilities; the
Borrower is not left with unreasonably small capital after the transactions in
this Agreement; and Borrower is able to pay its debts (including trade debts) as
they mature.

      5.6 REGULATORY COMPLIANCE. Borrower is not an "investment company" or a
company "controlled" by an "investment company" under the Investment Company
Act. Borrower is not engaged as one of its important activities in extending
credit for margin stock (under Regulations T and U of the Federal Reserve Board
of Governors). Borrower has complied in all material respects with the Federal
Fair Labor Standards Act. Borrower has not violated any laws, ordinances or
rules, the violation of which could reasonably be expected to cause a Material
Adverse Change. None of Borrower's or any Subsidiary's properties or assets has
been used by Borrower or any Subsidiary or, to the best of Borrower's knowledge,
by previous Persons, in disposing, producing, storing, treating, or transporting
any hazardous substance other than legally. Borrower and each Subsidiary has
timely filed all required tax returns and paid, or made adequate provision to
pay, all material taxes, except those being contested in good faith with
adequate reserves under GAAP. Borrower and each Subsidiary has obtained all
consents, approvals and authorizations of, made all declarations or filings
with, and given all notices to, all government authorities that are necessary to
continue its business as currently conducted except where the failure to make
such declarations, notices or filings would not reasonably be expected to cause
a Material Adverse Change.

      5.7 SUBSIDIARIES. Borrower does not own any stock, partnership interest or
other equity securities except for Permitted Investments.

      5.8 FULL DISCLOSURE. No written representation, warranty or other
statement of Borrower in any certificate or written statement given to Bank
taken together with all such written certificates and written statements given
to Bank contains any untrue statement of a material fact or omits to state a
material fact necessary to make the statements contained in the certificates or
statements not misleading (it being recognized by Bank that the projections and
forecasts provided by Borrower in good faith and based upon reasonable
assumptions are not viewed as facts and that actual results during the period or
periods covered by such projections and forecasts may differ from the projected
or forecasted results).

6     AFFIRMATIVE COVENANTS

      Borrower shall do all of the following:

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      6.1 GOVERNMENT COMPLIANCE. Borrower shall maintain its and all
Subsidiaries' legal existence and good standing in its jurisdiction of formation
and maintain qualification in each jurisdiction in which the failure to so
qualify would reasonably be expected to have a material adverse effect on
Borrower's business or operations. Borrower shall comply, and have each
Subsidiary comply, with all laws, ordinances and regulations to which it is
subject, noncompliance with which could have a material adverse effect on
Borrower's business or operations or would reasonably be expected to cause a
Material Adverse Change.

      6.2 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES.

            (a) Borrower shall deliver to Bank: (i) as soon as available, but no
later than thirty (30) days after the last day of each month, a company prepared
consolidated balance sheet and income statement covering Borrower's consolidated
operations during the period certified by a Responsible Officer and in a form
acceptable to Bank; (ii) as soon as available, but no later than one hundred
twenty (120) days after the last day of Borrower's fiscal year, audited
consolidated financial statements prepared under GAAP, consistently applied,
together with an unqualified opinion on the financial statements from an
independent certified public accounting firm reasonably acceptable to Bank;
(iii) in the event that the Borrower's stock becomes publicly held, within five
(5) days of filing, copies of all statements, reports and notices made available
to Borrower's security holders or to any holders of Subordinated Debt and all
reports on Form 10-K, 10-Q and 8-K filed with the Securities and Exchange
Commission; (iv) a prompt report of any legal actions pending or threatened
against Borrower or any Subsidiary that could result in damages or costs to
Borrower or any Subsidiary of One Hundred Thousand Dollars ($100,000.00) or
more; (v) as soon as available, but no later than thirty (30) days after the
last day of each month , an inventory report, and (vi) other financial
information reasonably requested by Bank.

            (b) Within thirty (30) days after the last day of each month,
Borrower shall deliver to Bank a Borrowing Base Certificate signed by a
Responsible Officer in the form of Exhibit C, with aged listings of accounts
receivable(by invoice date).

            (c) Borrower shall also deliver to Bank with the monthly and annual
financial statements a Compliance Certificate signed by a Responsible Officer in
the form of Exhibit D.

            (d) Allow Bank to audit Borrower's Collateral at Borrower's expense.
Such audits shall be conducted no more often than once every twelve (12) months
unless an Event of Default has occurred and is continuing.

      6.3 INVENTORY; RETURNS. Borrower shall keep all Inventory in good and
marketable condition, free from material defects. Returns and allowances between
Borrower and its account debtors shall follow Borrower's customary practices as
they exist at the Closing Date. Borrower must promptly notify Bank of all
returns, recoveries, disputes and claims that involve more than Fifty Thousand
Dollars ($50,000.00), for each such return, recovery, dispute or claim.

      6.4 TAXES. Borrower shall make, and cause each Subsidiary to make, timely
payment of all material federal, state, and local taxes or assessments (other
than taxes and assessments which Borrower is contesting in good faith, with
adequate reserves maintained in accordance with GAAP) and will deliver to Bank,
on demand, appropriate certificates attesting to such payments.

      6.5 INSURANCE. Borrower shall keep its business and the Collateral insured
for risks and in amounts, and as Bank may reasonably request. Insurance policies
shall be in a form, with companies, and in amounts that are satisfactory to
Bank. All property policies shall have a lender's loss payable endorsement
showing Bank as an additional loss payee and all liability policies shall show
the Bank as an additional insured and all policies shall provide that the
insurer must give Bank at least twenty (20) days notice before canceling its
policy. At Bank's request, Borrower shall deliver certified copies of policies
and evidence of all premium payments. Proceeds payable

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under any policy shall, at Bank's option, be payable to Bank on account of the
Obligations. Notwithstanding the foregoing, so long as no Event of Default has
occurred and is continuing, Borrower shall have the option of applying the
proceeds of any casualty policy up to $25,000.00, in the aggregate, toward the
replacement or repair of destroyed or damaged property; provided that (i) any
such replaced or repaired property (a) shall be of equal or like value as the
replaced or repaired Collateral and (b) shall be deemed Collateral in which Bank
has been granted a first priority security interest and (ii) after the
occurrence and during the continuation of an Event of Default all proceeds
payable under such casualty policy shall, at the option of the Bank, be payable
to Bank on account of the Obligations. If Borrower fails to obtain insurance as
required under Section 6.5 or to pay any amount or furnish any required proof of
payment to third persons and the Bank, Bank may make all or part of such payment
or obtain such insurance policies required in Section 6.5, and take any action
under the policies Bank deems prudent.

      6.6 ACCOUNTS.

            (a) In order to permit the Bank to monitor the Borrower's financial
performance and condition, Borrower, and all Borrower's Subsidiaries, shall
maintain Borrower's, and such Subsidiaries, primary depository, operating, and
securities accounts with Bank and a majority of the Borrower's and such
Subsidiaries cash or securities in excess of that amount used for Borrower's or
such Subsidiaries operations shall be maintained or administered through the
Bank.

            (b) Borrower shall identify to Bank, in writing, any bank or
securities account opened by Borrower with any institution other than Bank. In
addition, for each such account that the Borrower or Guarantor at any time opens
or maintains, Borrower shall, at the Bank's request and option, pursuant to an
agreement in form and substance acceptable to the Bank, cause the depository
bank or securities intermediary to agree that such account is the collateral of
the Bank pursuant to the terms hereunder. The provisions of the previous
sentence shall not apply to deposit accounts exclusively used for payroll,
payroll taxes and other employee wage and benefit payments to or for the benefit
of the Borrower's employees.

      6.7 FINANCIAL COVENANTS.

      Borrower shall maintain at all times, to be tested as of the last day of
each month, unless otherwise noted:

            (A) ADJUSTED QUICK RATIO. A ratio of Quick Assets to Current
            Liabilities minus Deferred Revenue of at least 1.5 to 1.0.

            (B) REVENUE TRACKING. Prior to the occurrence of the Initial Public
            Offering, beginning June 30, 2004, Borrower shall maintain quarterly
            revenues within thirty (30.0%) of the operating budget approved by
            the Board of Directors of the Borrower, and accepted by the Bank,
            tested as of the last day of each quarter for the preceding six (6)
            month period.

            (C) TANGIBLE NET WORTH. After the occurrence of the Initial Public
            Offering, Borrower shall maintain, as of the last day of each
            calendar month, a minimum Tangible Net Worth of at least Fifty
            Million Dollars ($50,000,000.00).

      6.8 FURTHER ASSURANCES. Borrower shall execute any further instruments and
take further action as Bank reasonably requests to perfect or continue Bank's
security interest in the Collateral or to effect the purposes of this Agreement.

7     NEGATIVE COVENANTS

                                      -9-
<PAGE>
      Borrower shall not do any of the following without the Bank's prior
written consent which shall not be unreasonably withheld.

      7.1 DISPOSITIONS. Convey, sell, lease, transfer or otherwise dispose of
(collectively a "Transfer"), or permit any of its Subsidiaries to Transfer, all
or any part of its business or property, except for Transfers (i) of Inventory
in the ordinary course of business; (ii) of non-exclusive licenses and similar
arrangements for the use of the property of Borrower or its Subsidiaries in the
ordinary course of business; or (iii) of worn-out or obsolete Equipment.

      7.2 CHANGES IN BUSINESS, OWNERSHIP, MANAGEMENT OR BUSINESS LOCATIONS.
Engage in or permit any of its Subsidiaries to engage in any business other than
the businesses currently engaged in by Borrower or reasonably related thereto,
or have a material change in its ownership (other than by the sale of Borrower's
equity securities in a public offering or to venture capital investors so long
as Borrower identifies to Bank the venture capital investors prior to the
closing of the investment), or management. Borrower shall not, without at least
thirty (30) days prior written notice to Bank: (i) relocate its chief executive
office, or add any new offices or business locations, including warehouses
(unless such new offices or business locations contain less than Five Thousand
Dollars ($5,000.00) in Borrower's assets or property), or (ii) change its
jurisdiction of organization, or (iii) change its organizational structure or
type, or (iv) change its legal name, or (v) change any organizational number (if
any) assigned by its jurisdiction of organization.

      7.3 MERGERS OR ACQUISITIONS. Merge or consolidate, or permit any of its
Subsidiaries to merge or consolidate, with any other Person, or acquire, or
permit any of its Subsidiaries to acquire, all or substantially all of the
capital stock or property of another Person. A Subsidiary may merge or
consolidate into another Subsidiary or into Borrower.

      7.4 INDEBTEDNESS. Create, incur, assume, or be liable for any
Indebtedness, or permit any Subsidiary to do so, other than Permitted
Indebtedness.

      7.5 ENCUMBRANCE. Create, incur, or allow any Lien on any of its property,
or assign or convey any right to receive income, including the sale of any
Accounts, or permit any of its Subsidiaries to do so, except for Permitted
Liens, or permit any Collateral not to be subject to the first priority security
interest granted herein. The Collateral may also be subject to Permitted Liens.

      7.6 DISTRIBUTIONS; INVESTMENTS. (i) Directly or indirectly acquire or own
any Person, or make any Investment in any Person, other than Permitted
Investments, or permit any of its Subsidiaries to do so; or (ii) pay any
dividends or make any distribution or payment or redeem, retire or purchase any
capital stock.

      7.7 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into or
permit to exist any material transaction with any Affiliate of Borrower, except
for transactions that are in the ordinary course of Borrower's business, upon
fair and reasonable terms that are no less favorable to Borrower than would be
obtained in an arm's length transaction with a non-affiliated Person.

      7.8 SUBORDINATED DEBT. Make or permit any payment on any Subordinated
Debt, except under the terms of the Subordinated Debt, or amend any provision in
any document relating to the Subordinated Debt, without Bank's prior written
consent.

      7.9 COMPLIANCE. Become an "investment company" or a company controlled by
an "investment company", under the Investment Company Act of 1940 or undertake
as one of its important activities extending credit to purchase or carry margin
stock, or use the proceeds of any Credit Extension for that purpose; fail to
meet the minimum funding requirements of ERISA, permit a Reportable Event or
Prohibited Transaction, as defined in ERISA, to occur; fail to comply with the
Federal Fair Labor Standards Act or violate any other law or regulation, if

                                      -10-
<PAGE>
the violation could reasonably be expected to have a material adverse effect on
Borrower's business or operations or would reasonably be expected to cause a
Material Adverse Change, or permit any of its Subsidiaries to do so.

8     EVENTS OF DEFAULT

      Any one of the following is an Event of Default:

      8.1 PAYMENT DEFAULT. Borrower fails to pay any of the Obligations within
three (3) days after their due date. During such three (3) day period the
failure to cure the default shall not constitute an Event of Default (but no
Credit Extension shall be made during such period);

      8.2 COVENANT DEFAULT. Borrower fails or neglects to perform any obligation
in Section 6 or violates any covenant in Section 7 or fails or neglects to
perform, keep, or observe any other material term, provision, condition,
covenant or agreement contained in this Agreement, any Loan Documents, or in any
present or future agreement between Borrower and Bank and as to any default
under such other material term, provision, condition, covenant or agreement that
can be cured, has failed to cure the default within ten (10) days after the
occurrence thereof; provided, however, that if the default cannot by its nature
be cured within the ten (10) day period or cannot after diligent attempts by
Borrower be cured within such ten (10) day period, and such default is likely to
be cured within a reasonable time, then Borrower shall have an additional period
(which shall not in any case exceed thirty (30) days) to attempt to cure such
default, and within such reasonable time period the failure to cure the default
shall not be deemed an Event of Default (but no Credit Extensions shall be made
during such cure period). Grace periods provided under this section shall not
apply, among other things, to financial covenants or any other covenants that
are required to be satisfied, completed or tested by a date certain.

      8.3 MATERIAL ADVERSE CHANGE. A Material Adverse Change occurs;

      8.4 ATTACHMENT. (i) Any material portion of Borrower's assets is attached,
seized, levied on, or comes into possession of a trustee or receiver and the
attachment, seizure or levy is not removed in ten (10) days; (ii) the service of
process upon the Borrower seeking to attach, by trustee or similar process, any
funds of the Borrower on deposit with the Bank, or any entity under control of
Bank (including a subsidiary); (iii) Borrower is enjoined, restrained, or
prevented by court order from conducting a material part of its business; (iv) a
judgment or other claim becomes a Lien on a material portion of Borrower's
assets; or (v) a notice of lien, levy, or assessment is filed against any of
Borrower's assets by any government agency and not paid within ten (10) days
after Borrower receives notice. These are not Events of Default if stayed or if
a bond is posted pending contest by Borrower (but no Credit Extensions shall be
made during the cure period);

      8.5 INSOLVENCY. (i) Borrower becomes insolvent; (ii) Borrower begins an
Insolvency Proceeding; or (iii) an Insolvency Proceeding is begun against
Borrower and not dismissed or stayed within thirty (30) days (but no Credit
Extensions shall be made before any Insolvency Proceeding is dismissed);

      8.6 OTHER AGREEMENTS. If there is a default in any agreement to which
Borrower is a party with a third party or parties resulting in a right by such
third party or parties, whether or not exercised, to accelerate the maturity of
any Indebtedness in an amount in excess of Two Hundred Thousand Dollars
($200,000) or that could result in a Material Adverse Change;

      8.7 JUDGMENTS. If a judgment or judgments for the payment of money in an
amount, individually or in the aggregate, of at least Two Hundred Thousand
Dollars ($200,000) shall be rendered against Borrower and shall remain
unsatisfied and unstayed for a period of twenty (20) days (provided that no
Credit Extensions will be made prior to the satisfaction or stay of such
judgment);

                                      -11-
<PAGE>
      8.8 MISREPRESENTATIONS. If Borrower or any Person acting for Borrower
makes any material misrepresentation or material misstatement now or later in
any warranty or representation in this Agreement or in any writing delivered to
Bank or to induce Bank to enter this Agreement or any Loan Document.

      8.9 GUARANTY. (i) Any guaranty of any Obligations terminates or ceases for
any reason to be in full force; or (ii) any Guarantor does not perform any
obligation under any guaranty of the Obligations; or (iii) any material
misrepresentation or material misstatement exists now or later in any warranty
or representation in any guaranty of the Obligations or in any certificate
delivered to Bank in connection with the guaranty; or (iv) any circumstance
described in Section 7, or Sections 8.4, 8.5 or 8.7 occurs to any Guarantor, or
(v) the liquidation, winding up, termination of existence, or insolvency of any
Guarantor.

      8.10 EXISTING LOANS. An Event of Default under either of the Existing
Loans shall be an Event of Default hereunder, and an Event of Default hereunder
shall be an Event of Default under the Existing Loans. The Borrower hereby
acknowledges, confirms and agrees that at any time in which any obligations are
outstanding under the Existing Loans it shall comply with the financial
covenants appearing in Section 6.7 of this Agreement, as may be amended from
time to time, notwithstanding any repayment of the Revolving Line or Equipment
Line hereunder.

9     BANK'S RIGHTS AND REMEDIES

      9.1 RIGHTS AND REMEDIES. When an Event of Default occurs and continues
Bank may, without notice or demand, do any or all of the following:

            (a) Declare all Obligations immediately due and payable (but if an
Event of Default described in Section 8.5 occurs all Obligations are immediately
due and payable without any action by Bank);

            (b) Stop advancing money or extending credit for Borrower's benefit
under this Agreement or under any other agreement between Borrower and Bank;

            (c) Settle or adjust disputes and claims directly with account
debtors for amounts, on terms and in any order that Bank considers advisable and
notify any Person owing Borrower money of Bank's security interest in such funds
and verify the amount of such account. Borrower shall collect all payments in
trust for Bank and, if requested by Bank, immediately deliver the payments to
Bank in the form received from the account debtor, with proper endorsements for
deposit;

            (d) Make any payments and do any acts it considers necessary or
reasonable to protect its security interest in the Collateral. Borrower shall
assemble the Collateral if Bank requests and make it available as Bank
designates. Bank may enter premises where the Collateral is located, take and
maintain possession of any part of the Collateral, and pay, purchase, contest,
or compromise any Lien which appears to be prior or superior to its security
interest and pay all expenses incurred. Borrower grants Bank a license to enter
and occupy any of its premises, without charge, to exercise any of Bank's rights
or remedies;

            (e) Apply to the Obligations any (i) balances and deposits of
Borrower it holds, or (ii) any amount held by Bank owing to or for the credit or
the account of Borrower;

            (f) Ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sale, and sell the Collateral. Bank is hereby granted a
non-exclusive, royalty-free license or other right to use, without charge,
Borrower's labels, patents, copyrights, mask works, rights of use of any name,
trade secrets, trade names, trademarks, service marks, and advertising matter,
or any similar property as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in
connection with Bank's exercise of its rights under this Section, Borrower's
rights under all licenses and all franchise agreements inure to Bank's benefit;
and

                                      -12-
<PAGE>
            (g) Place a "hold" on any account maintained with Bank and/or
deliver a notice of exclusive control, any entitlement order, or other
directions or instructions pursuant to any control agreement or similar
agreements providing control of any Collateral.

            (h) Dispose of the Collateral according to the Code.

      9.2 POWER OF ATTORNEY. Borrower hereby irrevocably appoints Bank as its
lawful attorney-in-fact, to be effective upon the occurrence and during the
continuance of an Event of Default, to: (i) endorse Borrower's name on any
checks or other forms of payment or security; (ii) sign Borrower's name on any
invoice or bill of lading for any Account or drafts against account debtors;
(iii) settle and adjust disputes and claims about the Accounts directly with
account debtors, for amounts and on terms Bank determines reasonable; (iv) make,
settle, and adjust all claims under Borrower's insurance policies; and (v)
transfer the Collateral into the name of Bank or a third party as the Code
permits. Borrower hereby appoints Bank as its lawful attorney-in-fact to sign
Borrower's name on any documents necessary to perfect or continue the perfection
of any security interest regardless of whether an Event of Default has occurred
until all Obligations have been satisfied in full and Bank is under no further
obligation to make Credit Extensions hereunder. Bank's foregoing appointment as
Borrower's attorney in fact, and all of Bank's rights and powers, coupled with
an interest, are irrevocable until all Obligations have been fully repaid and
performed and Bank's obligation to provide Credit Extensions terminates.

      9.3 ACCOUNTS NOTIFICATION/COLLECTION. In the event that an Event of
Default occurs and is continuing, Bank may notify any Person owing Borrower
money of Bank's security interest in the funds and verify and/or collect the
amount of the Account. After the occurrence of an Event of Default, any amounts
received by Borrower shall be held in trust by Borrower for Bank, and, if
requested by Bank, Borrower shall immediately deliver such receipts to Bank in
the form received from the account debtor, with proper endorsements for deposit.

      9.4 BANK EXPENSES. Any amounts paid by Bank as provided herein are Bank
Expenses and are immediately due and payable, and shall bear interest at the
then applicable rate and be secured by the Collateral. No payments by Bank shall
be deemed an agreement to make similar payments in the future or Bank's waiver
of any Event of Default.

      9.5 BANK'S LIABILITY FOR COLLATERAL. So long as the Bank complies with
reasonable banking practices regarding the safekeeping of collateral, the Bank
shall not be liable or responsible for: (a) the safekeeping of the Collateral;
(b) any loss or damage to the Collateral; (c) any diminution in the value of the
Collateral; or (d) any act or default of any carrier, warehouseman, bailee, or
other Person. Borrower bears all risk of loss, damage or destruction of the
Collateral.

      9.6 REMEDIES CUMULATIVE. Bank's rights and remedies under this Agreement,
the Loan Documents, and all other agreements are cumulative. Bank has all rights
and remedies provided under the Code, by law, or in equity. Bank's exercise of
one right or remedy is not an election, and Bank's waiver of any Event of
Default is not a continuing waiver. Bank's delay is not a waiver, election, or
acquiescence. No waiver hereunder shall be effective unless signed by Bank and
then is only effective for the specific instance and purpose for which it was
given.

      9.7 DEMAND WAIVER. Borrower waives demand, notice of default or dishonor,
notice of payment and nonpayment, notice of any default, nonpayment at maturity,
release, compromise, settlement, extension, or renewal of accounts, documents,
instruments, chattel paper, and guarantees held by Bank on which Borrower is
liable.

10    NOTICES

      All notices or demands by any party to this Agreement or any other related
agreement must be in writing and be personally delivered or sent by an overnight
delivery service, by certified mail, postage prepaid, return

                                      -13-
<PAGE>
receipt requested, or by telefacsimile at the addresses listed below. Either
Bank or Borrower may change its notice address by giving the other party written
notice.

      If to Borrower:   Stereotaxis, Inc
                        4041 Forest Park Avenue
                        St. Louis, Missouri 63108
                        Attn:  Mr. Timothy Mortenson
                        Fax:  (314) 615-6922

      If to Bank:       Silicon Valley Bank
                        230 W. Monroe, Suite 720
                        Chicago, Illinois 60606
                        Attn: Mr. Robert Blee
                        Fax: (312) 704-1530

      with a copy to:   Riemer & Braunstein LLP
                        Three Center Plaza
                        Boston, Massachusetts 02108
                        Attn:  David A. Ephraim, Esquire
                        Fax:  (617) 880-3456

11    CHOICE OF LAW, VENUE AND JURY TRIAL WAIVER

      Illinois law governs the Loan Documents without regard to principles of
conflicts of law. Borrower and Bank each submit to the exclusive jurisdiction of
the State and Federal courts in Cook County, Illinois. NOTWITHSTANDING THE
FOREGOING, THE BANK SHALL HAVE THE RIGHT TO BRING ANY ACTION OR PROCEEDING
AGAINST THE BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION
WHICH THE BANK DEEMS NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE
COLLATERAL OR TO OTHERWISE ENFORCE THE BANK'S RIGHTS AGAINST THE BORROWER OR ITS
PROPERTY.

BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY
CONTEMPLATED TRANSACTION, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER
CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS
AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS COUNSEL.

12    GENERAL PROVISIONS

      12.1 SUCCESSORS AND ASSIGNS. This Agreement binds and is for the benefit
of the successors and permitted assigns of each party. Borrower may not assign
this Agreement or any rights or Obligations under it without Bank's prior
written consent which may be granted or withheld in Bank's discretion. Bank has
the right, without the consent of or notice to Borrower, to sell, transfer,
negotiate, or grant participation in all or any part of, or any interest in,
Bank's obligations, rights and benefits under this Agreement, the Loan Documents
or any related agreement.

      12.2 INDEMNIFICATION. Borrower hereby indemnifies, defends and holds the
Bank and its officers, employees and agents harmless against: (a) all
obligations, demands, claims, and liabilities asserted by any other party in
connection with the transactions contemplated by the Loan Documents; and (b) all
losses or Bank Expenses

                                      -14-
<PAGE>
incurred, or paid by Bank from, following, or consequential to transactions
between Bank and Borrower (including reasonable attorneys' fees and expenses),
except for losses caused by Bank's gross negligence or willful misconduct.

      12.3 RIGHT OF SET-OFF. Borrower and any guarantor hereby grant to Bank, a
lien, security interest and right of setoff as security for all Obligations to
Bank, whether now existing or hereafter arising upon and against all deposits,
credits, collateral and property, now or hereafter in the possession, custody,
safekeeping or control of Bank or any entity under the control of the Bank
(including a Bank subsidiary) or in transit to any of them. At any time after
the occurrence and during the continuance of an Event of Default, without demand
or notice, Bank may set off the same or any part thereof and apply the same to
any liability or obligation of Borrower and any guarantor even though unmatured
and regardless of the adequacy of any other collateral securing the Obligations.
ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES WITH
RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE OBLIGATIONS, PRIOR TO
EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER
PROPERTY OF THE BORROWER OR ANY GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND
IRREVOCABLY WAIVED.

      12.4 TIME OF ESSENCE. Time is of the essence for the performance of all
Obligations in this Agreement.

      12.5 SEVERABILITY OF PROVISION. Each provision of this Agreement is
severable from every other provision in determining the enforceability of any
provision.

      12.6 AMENDMENTS IN WRITING; INTEGRATION. All amendments to this Agreement
must be in writing signed by both Bank and Borrower. This Agreement and the Loan
Documents represent the entire agreement about this subject matter, and
supersede prior negotiations or agreements. All prior agreements,
understandings, representations, warranties, and negotiations between the
parties about the subject matter of this Agreement and the Loan Documents merge
into this Agreement and the Loan Documents.

      12.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, are an original, and all taken together, constitute
one Agreement.

      12.8 SURVIVAL. All covenants, representations and warranties made in this
Agreement continue in full force while any Obligations remain outstanding. The
obligation of Borrower in Section 12.2 to indemnify Bank shall survive until the
statute of limitations with respect to such claim or cause of action shall have
run.

      12.9 CONFIDENTIALITY. In handling any confidential information, Bank shall
exercise the same degree of care that it exercises for its own proprietary
information, but disclosure of information may be made: (i) to Bank's
subsidiaries or affiliates in connection with their business with Borrower; (ii)
to prospective transferees or purchasers of any interest in the Credit
Extensions (provided, however, Bank shall use commercially reasonable efforts in
obtaining such prospective transferee's or purchaser's agreement to the terms of
this provision); (iii) as required by law, regulation, subpoena, or other order,
(iv) as required in connection with Bank's examination or audit; and (v) as Bank
considers appropriate in exercising remedies under this Agreement. Confidential
information does not include information that either: (a) is in the public
domain or in Bank's possession when disclosed to Bank, or becomes part of the
public domain after disclosure to Bank; or (b) is disclosed to Bank by a third
party, if Bank does not know that the third party is prohibited from disclosing
the information.

13    DEFINITIONS

      13.1 DEFINITIONS. In this Agreement:

                                      -15-
<PAGE>
      "ACCOUNTS" are all existing and later arising accounts, contract rights,
and other obligations owed Borrower in connection with its sale or lease of
goods (including licensing software and other technology) or provision of
services, all credit insurance, guaranties, other security and all merchandise
returned or reclaimed by Borrower and Borrower's Books relating to any of the
foregoing, as such definition may be amended from time to time according to the
Code.

      "ADVANCE" or "ADVANCES" is a loan advance (or advances) under the
Revolving Line.

      "AFFILIATE" is a Person that owns or controls directly or indirectly the
Person, any Person that controls or is controlled by or is under common control
with the Person, and each of that Person's senior executive officers, directors,
partners and, for any Person that is a limited liability company, that Person's
managers and members.

      "BANK EXPENSES" are all audit fees and expenses and reasonable costs or
expenses (including reasonable attorneys' fees and expenses) for preparing,
negotiating, administering, defending and enforcing the Loan Documents
(including appeals or Insolvency Proceedings).

      "BORROWER'S BOOKS" are all Borrower's books and records including ledgers,
records regarding Borrower's assets or liabilities, the Collateral, business
operations or financial condition and all computer programs or discs or any
equipment containing the information.

      "BORROWING BASE" is (i) eighty percent (80.0%) of Eligible Accounts plus
(ii) the lesser of forty percent (40.0%) of the value of Borrower's Eligible
Inventory (valued at the lower of cost or wholesale fair market value) or Four
Million Five Hundred Thousand Dollars ($4,500,000.00) as determined by Bank from
Borrower's most recent Borrowing Base Certificate; provided, however, that Bank
may lower the percentage of the Borrowing Base after performing an audit of
Borrower's Collateral.

      "BUSINESS DAY" is any day that is not a Saturday, Sunday or a day on which
the Bank is closed.

      "CASH MANAGEMENT SERVICES" are defined in Section 2.1.4.

      "CLOSING DATE" is the date of this Agreement.

      "CODE" is the Uniform Commercial Code as adopted in Illinois, as amended
and as may be amended and in effect from time to time.

      "COLLATERAL" is any and all properties, rights and assets of the Borrower
granted by the Borrower to Bank or arising under the Code, now, or in the
future, in which the Borrower obtains an interest, or the power to transfer
rights, including, without limitation, the property described on EXHIBIT A.

      "CONTINGENT OBLIGATION" is, for any Person, any direct or indirect
liability, contingent or not, of that Person for (i) any indebtedness, lease,
dividend, letter of credit or other obligation of another such as an obligation
directly or indirectly guaranteed, endorsed, co-made, discounted or sold with
recourse by that Person, or for which that Person is directly or indirectly
liable; (ii) any obligations for undrawn letters of credit for the account of
that Person; and (iii) all obligations from any interest rate, currency or
commodity swap agreement, interest rate cap or collar agreement, or other
agreement or arrangement designated to protect a Person against fluctuation in
interest rates, currency exchange rates or commodity prices; but "Contingent
Obligation" does not include endorsements in the ordinary course of business.
The amount of a Contingent Obligation is the stated or determined amount of the
primary obligation for which the Contingent Obligation is made or, if not
determinable, the maximum reasonably anticipated liability for it determined by
the Person in good faith; but the amount may not exceed the maximum of the
obligations under the guarantee or other support arrangement.

                                      -16-
<PAGE>
      "CREDIT EXTENSION" is each Advance, Equipment Advance, Letter of Credit,
F/X Forward Contract, or any other extension of credit by Bank for Borrower's
benefit.

      "CURRENT LIABILITIES" are the aggregate amount of Borrower's Total
Liabilities which mature within one (1) year, which shall include, without
limitation, all short term and long term obligations and liabilities of Borrower
to Bank.

      "DEFERRED REVENUE" is all amounts received in advance of performance under
contracts and not yet recognized as revenue.

      "ELIGIBLE ACCOUNTS" are billed Accounts in the ordinary course of
Borrower's business that meet all Borrower's representations and warranties in
Section 5.2; but Bank may change eligibility standards by giving Borrower
notice. Unless Bank agrees otherwise in writing, Eligible Accounts shall not
include:

            (a) Accounts that the account debtor has not paid within one hundred
            twenty (120) days of invoice date;

            (b) Accounts for an account debtor, fifty percent (50%) or more of
            whose Accounts have not been paid within one hundred twenty (120)
            days of invoice date;

            (c) Credit balances over ninety (90) days from invoice date;

            (d) Accounts for an individual account debtor, whose total
            obligations to Borrower exceed Eight Hundred Thousand Dollars
            ($800,000.00) shall be excluded (but only with respect to that
            portion of the total obligations which exceed that amount, unless
            Bank approves in writing);

            (e) Accounts for which the account debtor does not have its
            principal place of business in the United States, unless those
            Accounts are: (i) billed and collected in the United States, (ii)
            invoiced by Medlink, Inc; (iii) covered by credit insurance
            satisfactory to the Bank, less any deductible; or (iv) supported by
            letter(s) of credit acceptable to Bank;

            (f) Accounts for which the account debtor is a federal, state or
            local government entity or any department, agency, or
            instrumentality thereof;

            (g) Accounts for which Borrower owes the account debtor, but only up
            to the amount owed (sometimes called "contra" accounts, accounts
            payable, customer deposits or credit accounts);

            (h) Accounts for demonstration or promotional equipment, or in which
            goods are consigned, sales guaranteed, sale or return, sale on
            approval, bill and hold, or other terms if account debtor's payment
            may be conditional;

            (i) Accounts for which the account debtor is Borrower's Affiliate,
            officer, employee, or agent;

            (j) Accounts in which the account debtor disputes liability or makes
            any claim and Bank believes there may be a basis for dispute (but
            only up to the disputed or claimed amount), or if the account debtor
            is subject to an Insolvency Proceeding, or becomes insolvent, or
            goes out of business;

                                      -17-
<PAGE>
            (k) Accounts for which Bank reasonably determines collection to be
            doubtful after inquiry and consultation with Borrower.

      "ELIGIBLE EQUIPMENT" is (a) general purpose computer equipment, office
equipment, test and laboratory equipment, furnishings, subject to the
limitations set forth herein, (b) two (2)demonstration machines located at
University of Iowa and University of Oklahoma, costing approximately One Million
Three Hundred Twenty Thousand Dollars ($1,320,000.00), (c) five (5)offsite test
machines, costing approximately One Hundred Thousand Dollars ($100,000.00) each,
and (d) Other Equipment that complies with all of Borrower's representations and
warranties to Bank and which is acceptable to Bank in all respects.

      "ELIGIBLE INVENTORY" is Borrower's Inventory, including raw materials,
located at its principal place of business (or any location permitted under
Section 7.2) that complies with representations and warranties in Section 5.2,
but does not include used, returned, obsolete, consigned, demonstrative
inventory, supplies, packing or shipping materials, or inventory pending
approval by the Food and Drug Administration, but may include work in progress.

      "EQUIPMENT" is all present and future machinery, equipment, tenant
improvements, furniture, fixtures, vehicles, tools, parts and attachments in
which Borrower has any interest.

      "EQUIPMENT ADVANCE" is defined in Section 2.1.5.

      "EQUIPMENT LINE" is an Equipment Advance or Equipment Advances of up to
Two Million Dollars ($2,000,000.00).

      "ERISA" is the Employment Retirement Income Security Act of 1974, and its
regulations.

      "EXISTING LOANS" means, collectively the First Equipment Loan Agreement
and the Second Equipment Loan Agreement.

      "FIRST EQUIPMENT LOAN AGREEMENT" is that certain Loan and Security
Agreement by and between the Borrower and the Bank dated January 31, 2002.

      "FUNDING DATE" is any date on which an Equipment Advance is made to or on
account of Borrower.

      "FX FORWARD CONTRACT" is defined in Section 2.1.3.

      "FX RESERVE" is defined in Section 2.1.3.

      "GAAP" is generally accepted accounting principles.

      "GUARANTOR" is any present or future guarantor of the Obligations.

      "INDEBTEDNESS" is (a) indebtedness for borrowed money or the deferred
price of property or services, such as reimbursement and other obligations for
surety bonds and letters of credit, (b) obligations evidenced by notes, bonds,
debentures or similar instruments, (c) capital lease obligations and (d)
Contingent Obligations.

      "INITIAL PUBLIC OFFERING" is Borrower's initial underwritten public
offering and sale of its securities, pursuant to an effective registration
statement under the Securities Act of 1933, as amended.

                                      -18-
<PAGE>
      "INSOLVENCY PROCEEDING" is any proceeding by or against any Person under
the United States Bankruptcy Code, or any other bankruptcy or insolvency law,
including assignments for the benefit of creditors, compositions, extensions
generally with its creditors, or proceedings seeking reorganization,
arrangement, or other relief.

      "INTELLECTUAL PROPERTY" is any copyright rights, copyright applications,
copyright registrations and like protections in each work of authorship and
derivative work, whether published or unpublished, now owned or later acquired;
any patents, trademarks, service marks and applications therefor; any trade
secret rights, including any rights to unpatented inventions, now owned or
hereafter acquired.

      "INVENTORY" is present and future inventory in which Borrower has any
interest, including merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products intended for sale or
lease or to be furnished under a contract of service, of every kind and
description now or later owned by or in the custody or possession, actual or
constructive, of Borrower, including inventory temporarily out of its custody or
possession or in transit and including returns on any accounts or other proceeds
(including insurance proceeds) from the sale or disposition of any of the
foregoing and any documents of title.

      "INVESTMENT" is any beneficial ownership of (including stock, partnership
interest or other securities) any Person, or any loan, advance or capital
contribution to any Person.

      "LETTER OF CREDIT" means a letter of credit or similar undertaking issued
by Bank pursuant to Section 2.1.2.

      "LETTER OF CREDIT RESERVE" has the meaning set forth in Section 2.1.2.

      "LIEN" is a mortgage, lien, deed of trust, charge, pledge, security
interest or other encumbrance.

      "LOAN AMOUNT" in respect of each Equipment Advance is the original
principal amount of such Equipment Advance.

      "LOAN DOCUMENTS" are, collectively, this Agreement, any note, or notes or
guaranties executed by Borrower or Guarantor, and any other present or future
agreement between Borrower and/or for the benefit of Bank in connection with
this Agreement, all as amended, extended or restated.

      "MATERIAL ADVERSE CHANGE" is: (i) A material impairment in the perfection
or priority of Bank's security interest in the Collateral or in the value of
such Collateral; (ii) a material adverse change in the business, operations, or
condition (financial or otherwise) of the Borrower; or (iii) a material
impairment of the prospect of repayment of any portion of the Obligations;or
(iv) Bank determines, based upon information available to it and in its
reasonable judgment, that there is a substantial likelihood that Borrower shall
fail to comply with one or more of the financial covenants in Section 6 during
the next succeeding financial reporting period.

      "OBLIGATIONS" are debts, principal, interest, Bank Expenses and other
amounts Borrower owes Bank now or later under this Agreement, the First
Equipment Loan Agreement, and the Second Equipment Loan Agreement, including
letters of credit, cash management services, and foreign exchange contracts, if
any, and including interest accruing after Insolvency Proceedings begin and
debts, liabilities, or obligations of Borrower assigned to Bank.

      "OTHER EQUIPMENT" is leasehold improvements, intangible property such as
computer software and software licenses, and soft costs approved by the Bank,
including sales tax, freight and installation expenses. Unless otherwise agreed
to by Bank, not more than thirty (30.0%) of the proceeds of the Equipment Line
shall be used to finance Other Equipment.

      "PAYMENT DATE" is defined in Section 2.1.5(c).

                                      -19-
<PAGE>
      "PERMITTED INDEBTEDNESS" is:

            (a) Borrower's indebtedness to Bank under this Agreement or the Loan
            Documents;

            (b) Indebtedness existing on the Closing Date and shown on the
            Perfection Certificate;

            (c) Subordinated Debt;

            (d) Indebtedness to trade creditors incurred in the ordinary course
            of business; and

            (e) Indebtedness secured by Permitted Liens; and

            (f) Extensions, refinancings, modifications, amendments and
            restatements of any items of Permitted Indebtedness (a) through (e)
            above, provided that the principal amount thereof is not increased
            or the terms thereof are not modified to impose more burdensome
            terms upon Borrower or its Subsidiary, as the case may be.

      "PERMITTED INVESTMENTS" are:

            (a) Investments shown on the Perfection Certificate and existing on
            the Closing Date; and

            (b) (i) marketable direct obligations issued or unconditionally
            guaranteed by the United States or its agency or any state maturing
            within 1 year from its acquisition, (ii) commercial paper maturing
            no more than 1 year after its creation and having the highest rating
            from either Standard & Poor's Corporation or Moody's Investors
            Service, Inc., (iii) Bank's certificates of deposit issued maturing
            no more than 1 year after issue, (iv) any other investments
            administered through the Bank.

      "PERMITTED LIENS" are:

            (a) Liens existing on the Closing Date and shown on the Perfection
            Certificate or arising under this Agreement or other Loan Documents;

            (b) Liens for taxes, fees, assessments or other government charges
            or levies, either not delinquent or being contested in good faith
            and for which Borrower maintains adequate reserves on its Books, if
            they have no priority over any of Bank's security interests;

            (c) Purchase money Liens (i) on Equipment acquired or held by
            Borrower incurred for financing the acquisition of the Equipment, or
            (ii) existing on equipment when acquired, if the Lien is confined to
            the property and improvements and the proceeds of the equipment;

            (d) Leases or subleases and non-exclusive licenses or sublicenses
            granted in the ordinary course of Borrower's business, if the
            leases, subleases, licenses and sublicenses permit granting Bank a
            security interest; and

            (e) Liens incurred in the extension, renewal or refinancing of the
            indebtedness secured by Liens described in (a) through (d), but any
            extension, renewal or replacement Lien must be limited to the
            property encumbered by the existing Lien and the principal amount of
            the indebtedness may not increase.

                                      -20-
<PAGE>
      "PERSON" is any individual, sole proprietorship, partnership, limited
liability company, joint venture, company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, firm, joint
stock company, estate, entity or government agency.

      "PREMIUM EVENT" is the occurrence of: (i) the Initial Public Offering,
or (ii) the consummation of the sale of substantially all assets of the
Borrower.

      "PREMIUM EVENT FEE" is a fully earned, non-refundable fee of
Twenty-Thousand Dollars ($20,000.00), due on the date of the Premium Event.

      "PREPAYMENT FEE" shall be an amount equal to :

            (a) for a prepayment made between the Closing Date and April 29,
            2005, two percent (2.0%) of the principal amount repaid; or

            (b) for a prepayment made at any time after April 29, 2005 and prior
            to the scheduled payments of principal and interest hereunder, one
            percent (1.0%) of the principal amount repaid.

      "PRIME RATE" is the greater of: (i) Bank's most recently announced "prime
rate," even if it is not Bank's lowest rate, and (ii) four percent (4.0%).

      "QUICK ASSETS" is, on any date, the Borrower's consolidated, unrestricted
cash, cash equivalents, net billed accounts receivable and investments with
maturities of fewer than 12 months determined according to GAAP.

      "RESPONSIBLE OFFICER" is each of the Chief Executive Officer, President,
Chief Financial Officer and Controller of Borrower.

      "REVOLVING LINE" is an Advance or Advances of up to Eight Million Dollars
($8,000,000.00).

      "REVOLVING MATURITY DATE" is April 29, 2006.

      "SECOND EQUIPMENT LOAN AGREEMENT" is that certain Loan and Security
Agreement by and between the Borrower and the Bank dated September 30, 2002.

      "SUBORDINATED DEBT" is debt incurred by Borrower subordinated to
Borrower's debt to Bank (pursuant to a subordination agreement entered into
between the Bank, the Borrower and the subordinated creditor), on terms
acceptable to Bank.

       "SUBSIDIARY" is any Person, corporation, partnership, limited liability
company, joint venture, or any other business entity of which more than 50% of
the voting stock or other equity interests is owned or controlled, directly or
indirectly, by the Person or one or more Affiliates of the Person.

      "TANGIBLE NET WORTH" is, on any date, the consolidated total assets of
Borrower and its Subsidiaries minus (i) any amounts attributable to (a)
goodwill, (b) intangible items including unamortized debt discount and expense,
patents, trade and service marks and names, copyrights and research and
development expenses except prepaid expenses, and (c) reserves not already
deducted from assets, minus (ii) Total Liabilities, plus (iii) Subordinated
Debt.

                                      -21-
<PAGE>
      "TOTAL LIABILITIES" is on any day, obligations that should, under GAAP, be
classified as liabilities on Borrower's consolidated balance sheet, including
all Indebtedness, and current portion of Subordinated Debt permitted by Bank to
be paid by Borrower, but excluding all other Subordinated Debt.

                           [Signature Page to Follow]

                                      -22-
<PAGE>
      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument under the laws of the State of Illinois as of
the date first above written.

BORROWER:

STEREOTAXIS, INC.

By /s/ T.J. MORTENSON
  -----------------------------------------
Name: T.J. Mortenson
     --------------------------------------
Title: V.P. CFO
      -------------------------------------

BANK:

SILICON VALLEY BANK

By /s/ DEREK STEWARD
  -----------------------------------------
Name: Derek Steward
     --------------------------------------
Title: Senior Credit Officer
      -------------------------------------

                                      -23-
<PAGE>
                                    EXHIBIT A

      The Collateral consists of all right, title and interest of Borrower in
and to the following:

      All goods, equipment, inventory, contract rights or rights to payment of
money, license agreements, franchise agreements, general intangibles (including
payment intangibles), accounts (including health-care receivables), documents,
instruments (including any promissory notes), chattel paper (whether tangible or
electronic), cash, deposit accounts, fixtures, letters of credit rights (whether
or not the letter of credit is evidenced by a writing), commercial tort claims
(specifically identified below), securities, and all other investment property
supporting obligations, and financial assets, whether now owned or hereafter
acquired, wherever located; and

      All Borrower's Books relating to the foregoing and any and all claims,
rights and interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and improvements to and replacements,
products, proceeds and insurance proceeds of any or all of the foregoing.

      The following commercial tort claims:

          NONE
      -----------------------------------------------------

      -----------------------------------------------------

      -----------------------------------------------------

      The Collateral does not include:

      Any copyright rights, copyright applications, copyright registrations and
like protections in each work of authorship and derivative work thereof, whether
published or unpublished, now owned or later acquired; any patents, trademarks,
service marks and applications therefor; any trade secret rights, including any
rights to unpatented inventions, now owned or hereafter acquired.
Notwithstanding the foregoing, the Collateral shall include all accounts,
license and royalty fees and other revenues, proceeds, or income arising out of
or relating to any of the foregoing intellectual property. To the extent a court
of competent jurisdiction holds that a security interest in any Intellectual
Property is necessary to have a security interest in any accounts, license and
royalty fees and other revenues, proceeds, or income arising out of or relating
to any of the foregoing Intellectual Property, then the Collateral shall,
effective as of the Closing Date, include the Intellectual Property, to the
extent necessary to permit perfection of the Bank's security interest in such
accounts, license and royalty fees and other revenues, proceeds, or income
arising out of or relating to any of the Intellectual Property.

                                      -24-
<PAGE>
                                    EXHIBIT B

                        LOAN PAYMENT/ADVANCE REQUEST FORM
                DEADLINE FOR SAME DAY PROCESSING IS 3:00 E.S.T.

Fax To:  (617) 969-5965                               Date:_____________________

LOAN PAYMENT:

                                Stereotaxis, Inc.
From Account #__________________________  To Account #__________________________
                  (Deposit Account #)                      (Loan Account #)

Principal $_________________________  and/or Interest $_________________________

All Borrower's representation and warranties in the Loan and Security Agreement
are true, correct and complete in all material respects on the date of the
telephone transfer request for an advance, but those representations and
warranties expressly referring to another date shall be true, correct and
complete in all material respects as of such date:

AUTHORIZED SIGNATURE: __________________________  Phone Number: ________________

LOAN ADVANCE:

Complete Outgoing Wire Request section below if all or a portion of the funds
from this loan advance are for an outgoing wire.

From Account #__________________________  To Account #__________________________
                   (Loan Account #)                       (Deposit Account #)

Amount of Advance $___________________________

All Borrower's representation and warranties in the Loan and Security Agreement
are true, correct and complete in all material respects on the date of the
telephone transfer request for an advance, but those representations and
warranties expressly referring to another date shall be true, correct and
complete in all material respects as of such date:

AUTHORIZED SIGNATURE: __________________________  Phone Number: ________________

OUTGOING WIRE REQUEST

COMPLETE ONLY IF ALL OR A PORTION OF FUNDS FROM THE LOAN ADVANCE ABOVE ARE TO BE
WIRED. Deadline for same day processing is 3:00 pm, E.S.T.

Beneficiary Name: ______________________  Amount of Wire: $_____________________

Beneficiary Bank: ______________________  Account Number: ______________________

City and State: ________________________

Beneficiary Bank Transit (ABA) #: __ __ __ __ __ __ __ __
Beneficiary Bank Code (Swift, Sort, Chip, etc.): _______________________

                                          (FOR INTERNATIONAL WIRE ONLY)

Intermediary Bank: _____________________  Transit (ABA) #: _____________________

For Further Credit to: _________________________________________________________

Special Instruction: ___________________________________________________________

By signing below, I (we) acknowledge and agree that my (our) funds transfer
request shall be processed in accordance with and subject to the terms and
conditions set forth in the agreements(s) covering funds transfer service(s),
which agreements(s) were previously received and executed by me (us).

Authorized Signature: ________________________

Print Name/Title: ____________________________

Telephone # __________________________________

            2nd Signature (If Required): _______________________________________

            Print Name/Title: _________________________________________

            Telephone # _______________________________________________

                                      -25-
<PAGE>
                                    EXHIBIT C

                           BORROWING BASE CERTIFICATE

--------------------------------------------------------------------------------
Borrower:   Stereotaxis, Inc.
Lender:           Silicon Valley Bank
Commitment Amount:      $8,000,000.00
--------------------------------------------------------------------------------

<TABLE>
<S>                                                           <C>
ACCOUNTS RECEIVABLE
1.    Accounts Receivable Book Value as of ___________________  $_______________
2.    Additions (please explain on reverse)                     $_______________
3.    TOTAL ACCOUNTS RECEIVABLE                                 $_______________
ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication)
4.    Amounts over 120 days due                                 $_______________
5.    Balance of 50% over 120 day accounts                      $_______________
6.    Credit balances over 90 days                              $_______________
7.    Concentration Limits (in excess of $800,000.00 for
      individual account debtors)                               $_______________
8.    Foreign Accounts                                          $_______________
9.    Governmental Accounts                                     $_______________
10.   Contra Accounts                                           $_______________
11.   Promotion or Demo Accounts                                $_______________
12.   Intercompany/Employee Accounts                            $_______________
13.   Other (please explain on reverse)                         $_______________
14.   TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS                      $_______________
15.   Eligible Accounts (#3 minus #14)                          $_______________
16.   LOAN VALUE OF ACCOUNTS (80% of #15)                       $_______________
INVENTORY
17.   Inventory Value as of _______________                     $_______________
18.   LOAN VALUE OF INVENTORY (lesser of 40% of #17 or
      $4,500,000.00)                                            $_______________
BALANCES
19.   Maximum Loan Amount                                       $_______________
20.   Total Funds Available (Lesser of #19 or (#16 plus #18))   $_______________
21.   Present balance owing on Line of Credit                   $_______________
22.   Outstanding under Sublimits (L/C, FX Contract, Cash
      Mgt.)                                                     $_______________
23.   RESERVE POSITION (#20 minus #21 and #22)                  $_______________
</TABLE>

The undersigned represents and warrants that this is true, complete and correct,
and that the information in this Borrowing Base Certificate complies with the
representations and warranties in the Loan and Security Agreement between the
undersigned and Silicon Valley Bank.

                                                       BANK USE ONLY

                                               Received by:_________________
                                                           AUTHORIZED SIGNER

                                               Date:________________________
COMMENTS:
By: ___________________________                Verified:____________________
        Authorized Signer                                  AUTHORIZED SIGNER
                                               Date:________________________

                                               Compliance Status:   Yes   No

                                      -26-
<PAGE>
                                    EXHIBIT D

                             COMPLIANCE CERTIFICATE

TO:   SILICON VALLEY BANK
FROM: STEREOTAXIS, INC.

      The undersigned authorized officer of Stereotaxis, Inc., ("Responsible
Officer") certifies that under the terms and conditions of the Loan and Security
Agreement between Borrower and Bank (the "Agreement"), (i) Borrower is in
complete compliance for the period ending _______________ with all required
covenants except as noted below and (ii) all representations and warranties in
the Agreement are true and correct in all material respects on this date.
Attached are the required documents supporting the certification. The
Responsible Officer certifies that these are prepared in accordance with
Generally Accepted Accounting Principles (GAAP) consistently applied from one
period to the next except as explained in an accompanying letter or footnotes.
The Responsible Officer acknowledges that no borrowings may be requested at any
time or date of determination that Borrower is not in compliance with any of the
terms of the Agreement, and that compliance is determined not just at the date
this certificate is delivered.

      PLEASE INDICATE COMPLIANCE STATUS BY CIRCLING YES/NO UNDER "COMPLIES"
COLUMN.

<TABLE>
<CAPTION>
      REPORTING COVENANT                                REQUIRED                                 COMPLIES
      ------------------                                --------                                 --------
<S>                                                     <C>                                      <C>
      Monthly financial statements with CC              Monthly within 30 days                   Yes   No
      Annual (CPA Audited) with CC                      FYE within 120 days                      Yes   No
      Inventory Report                                  Monthly within 30 days                   Yes   No
      BBC A/R Agings                                    Monthly within 30 days                   Yes   No
      Audit                                             Annually                                 Yes   No
</TABLE>

<TABLE>
<CAPTION>
      FINANCIAL COVENANT                                REQUIRED                ACTUAL           COMPLIES
      ------------------                                --------                ------           --------
<S>                                                     <C>                     <C>              <C>
      Maintain on a Monthly Basis:
      Minimum Adjusted Quick Ratio                      1.5:1.0                 _____:1.0        Yes   No
      Tangible Net Worth                                $50,000,000.00          $________        Yes   No
                                                        (after IPO)

      Maintain on a Quarterly Basis
      Revenue Tracking                                  $________*              $________        Yes   No
                                                        (prior to IPO)
</TABLE>

      *As set forth in Section 6.7(b) of the Agreement.

COMMENTS REGARDING EXCEPTIONS:  See Attached.           BANK USE ONLY

Sincerely,                                      Received by:_________________
_____________________________                               AUTHORIZED SIGNER
Signature
_____________________________                   Date:________________________
Title
_____________________________                   Verified:____________________
Date                                                        AUTHORIZED SIGNER
                                                Date:________________________

                                                Compliance Status:   Yes   No

                                      -27-<PAGE>
                                                                   EXHIBIT 10.32

MAY 2004

JAPANESE MARKET DEVELOPMENT LETTER AGREEMENT

Stereotaxis, Inc. ("Stereotaxis") -- on the one side -- and Siemens
Aktiengesellschaft, Medical Solutions ("Siemens") and Siemens Asahi Medical
Technologies Ltd. ("SAM") -- on the other side -- set forth in this letter
agreement (this "Agreement") the general terms of their collaboration in respect
of development of the Japanese market for NIOBE Systems, whether integrated with
Siemens imaging systems or those of third parties, as follows:

1. OVERVIEW

The objective of the collaboration of Stereotaxis and Siemens in respect of the
Japanese market is to facilitate penetration of the Japanese interventional
cardiology and electrophysiology cath lab markets with NIOBE Systems and the
utilization of these systems by Japanese customers. Siemens, through its
subsidiary SAM, will take primary responsibility for and coordinate the
regulatory process to achieve approval by the Ministry of Health, Labour and
Welfare of Japan ("MHLW") under the Pharmaceutical Affairs Law to obtain
regulatory clearance ("Shonin") for commercial use of the NIOBE System in Japan
in a manner that permits the Shonin to be transferred to Stereotaxis at
Stereotaxis election, in the manner set out below. Siemens will also, at
Stereotaxis' request, support the regulatory process to achieve Shonin
regulatory clearance in respect of disposable products for use with the NIOBE
System in a manner that permits the Shonin to be transferred to Stereotaxis on
its written request, in the manner set out below. In order to facilitate these
objectives, except as noted in paragraph 3(c) of this Agreement, Stereotaxis
agrees to appoint SAM as its sole distributor in Japan on the terms and
conditions set forth herein. Stereotaxis and SAM agree that the pricing defined
in sections 5 and 8 below of this Agreement applies to the current generation of
the Niobe system only.

2. REGULATORY PROCESS

Siemens will be ready to submit its sponsorship of the regulatory protocol for
Shonin regulatory clearance on or before the date which is 30 days following the
time Siemens

                                       1
<PAGE>

has received all of the information necessary for submission of the protocol,
which sponsorship shall include the NIOBE System and its accessories (described
below under "Accessories for Japanese Market"). SAM will also, at Stereotaxis'
request, support the regulatory process to achieve Shonin regulatory clearance
in respect of disposable products for use with the NIOBE System. In all cases,
regulatory clearance shall be sought in a manner that permits transfer of the
Shonin (or where feasible, transfer of the application for the Shonin) to
Stereotaxis at Stereotaxis' election and at Stereotaxis' expense. Stereotaxis
may make such election by written notice to Siemens in respect of any
Stereotaxis product at any time.

3. DISTRIBUTION

         (a) Subject to Paragraphs 3(b) and (c) below, SAM is appointed sole
distributor for NIOBE System and related accessories (but not disposable
instruments) in Japan and will use all reasonable commercial efforts to maximize
the placements of such products in Japan. This Agreement shall not entitle
Siemens or SAM to any distribution rights in respect of any disposable
instruments used with the NIOBE System. It is the intention of the parties that
the term of this distribution arrangement will be five years, commencing January
1, 2004 and ending December 31, 2008, unless this Agreement is not renewed or is
otherwise terminated in accordance with the terms herein. However, during such
five-year period, the parties will confer at least annually to mutually agree
upon commercially reasonable distribution goals in Japan for the next year and
to quarterly review performance against goals for the calendar year, provided
that the parties agree that the initial distribution goals (including the
promotional site placements described in Section 8) will be as set forth on
SCHEDULE A. Where goals were achieved for the prior year and the parties reach
such mutual agreement as to goals for the next year, SAM's appointment as sole
distributor of the NIOBE System and related accessories in Japan will be renewed
for the next year. [***] Within 12 months prior to December 31, 2008, the
parties will confer and negotiate in good faith whether to further extend the
appointment of SAM as distributor of the NIOBE Systems and accessories in Japan.
[***]

                                       2
<PAGE>

[***]

         (b) In the event that the appointment of SAM as distributor for the
NIOBE System and accessories in Japan is not renewed in the manner set out above
during the [***] and where SAM has complied with its obligations as distributor
and has achieved the distribution goals agreed upon as provided in the previous
paragraph, Stereotaxis will pay to Siemens an amount comprising the reasonable
costs actually incurred by SAM for regulatory and other NIOBE distribution
start-up costs in Japan, [***]. The determination of such regulatory and
distribution start-up costs shall be determined on a reasonable and customary
basis as agreed between the parties. Siemens shall provide an annual accounting
for such actual costs incurred, subject to the approval of Stereotaxis.

         (c) Japanese distribution and service of the NIOBE System and
accessories will encompass placements that are integrated with the ARTIS dF
FLUOROSCOPY System and with third party imaging systems. Stereotaxis can provide
marketing and promotional support for NIOBE System and accessories that are
integrated with third-party imaging systems, including related activities such
as sales force training and presentations to customers. In the case of such
placements, SAM shall act as the import and distribution agent (subject to the
limitations on transfer pricing set forth below), and SAM shall be responsible
for the installation and service of such NIOBE Systems, provided that SAM may
subcontract such installation and service obligations to one or more parties
acceptable to Stereotaxis and to the third party imaging company. SAM agrees use
its best efforts to carry out its distribution, installation and service
obligations under this Agreement on a timely basis in connection with such sales
and marketing activities between Stereotaxis and such third party imaging
companies.

         (d) Stereotaxis will provide a level of training to SAM's Japanese
sales force in respect of NIOBE Systems and accessories as would be commercially
reasonable for equivalent U.S. sales force training. Stereotaxis shall provide
two days of training per

[*** 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.]

                                       3
<PAGE>

year to the Japanese sales force in Japan. Each party will be responsible for
the travel and expenses of their respective representatives to attend such
two-day training. Stereotaxis will forward a training schedule to SAM after the
two training days are determined. Siemens will pay for any additional training
requests at a [***] per Stereotaxis representative per day, plus the reasonable
travel and expenses of such Stereotaxis representatives. Additional training
days will include training of new sales representatives during the same
agreement year and training for any software upgrades provided at no charge. For
each new software release purchased at an agreed upon incremental cost,
Stereotaxis will provide one day of training by a Stereotaxis representative at
Stereotaxis' cost, at a time and location to be mutually determined by the
parties.

         (e) Further details of the distributor relationship between Stereotaxis
and SAM will be set forth in a Distributorship Agreement to be separately
concluded not later than 60 days after the date of this Agreement, provided that
the terms of the Distribution Agreement shall be consistent with, and shall not
conflict with, this Agreement.

         (f) [***]

         (g) [***]

         (h) The inclusion of any additional applications contemplated by
subparagraphs (f) and (g) shall be subject to a mutually agreed upon increase of
NIOBE System distribution goals specific to the clinical application for a
specified period of time. Stereotaxis may integrate either application with
third party imaging systems other than the ARTIS dF FLUOROSCOPY System. If the
parties do not agree to move forward with respect to the neurological or the
interventional radiology applications described in

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

                                       4
<PAGE>

subparagraphs (f) and (g), then Stereotaxis shall have the right to pursue
either or both of those applications with one or more third parties.

         (i) SAM will provide all necessary translations of documents into
Japanese relating to the matters set forth herein and will also be responsible
for importation and customs processes for products landed in Japan at SAM's cost
and expense (with reasonable cooperation from Stereotaxis).

4. COSTS OF REGULATORY CLEARANCE

[***] SAM and Stereotaxis will contribute [***] of the reasonable costs of
obtaining regulatory clearance for the NIOBE System and accessories (except in
respect of clinical trials, for which costs will be split [***] between SAM,
Stereotaxis and Stereotaxis' appointed Japanese distributor for disposables).
Stereotaxis or its disposables partner will pay for all incremental costs
associated with disposable devices clearance.

5. TRANSFER PRICE

The transfer price of NIOBE Systems and accessories to SAM for distribution in
Japan [***]. The pricing for a third party hereunder will be determined and
denominated in U.S. Dollars and does not include any services such as shipping,
insurance, room preparation or installation.

6. ACCESSORIES FOR JAPANESE MARKET

NIOBE accessories covered by the distribution alliance will comprise the
Navigant Advanced Workstation, the CardioDrive catheter advancer hardware (but
not including the Stereotaxis CardioDrive disposable device), discrete
navigation software products and such other accessories as are reasonably
nominated by Stereotaxis from

[*** Indicates portions of this exhibit that have been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.]
                                       5
<PAGE>

time to time that are designed for use with the NIOBE system. "Accessories"
shall not include disposable interventional devices such as catheters,
guidewires and stent delivery devices.

7. JAPANESE SERVICE, WARRANTY AND RECURRING COSTS/LICENSE FEES

         (a) Service and Warranty. Stereotaxis will subcontract to SAM the
warranty and all service for the NIOBE Systems and accessories placed in Japan
and all obligations and benefits related thereto, including for NIOBE System
placements that are integrated with third party imaging systems. SAM shall
perform its service and warranty obligations on commercially reasonable terms
and conditions, including as to price, and such terms, conditions, pricing and
performance levels shall be the same for NIOBE placements integrated with the
Siemens' imaging systems as for those placements integrated with third party
imaging systems. Stereotaxis will provide spare parts as reasonably required to
SAM for the Japanese market at commercially reasonable transfer prices (refer to
Schedule C, spare parts Stereotaxis will provide a level of training to SAM's
Japanese service and field support representatives in respect of NIOBE Systems
and accessories as would be commercially reasonable for equivalent U.S. service
and field support representatives training. If training is required in Japan,
each party will be responsible for the travel and expenses of their respective
representatives to attend such training. [***]

         (b) [***] Recurring Costs/License Fees. There shall be a license fee
for the Navigant(TM) software of [***]. Navigant(TM) is tailored toward either
electrophysiology or interventional cardiology applications. If both
applications are chosen the license fee for Navigant(TM) will be [***]. Software
license fees are a condition of the sale of the Navigant software and will
continue after the termination or expiration of this Agreement. [***].

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

                                       6

<PAGE>

         (c) Stereotaxis may from time to time develop additional software
options which will be available for sale to SAM or if SAM declines, for sale to
customers directly. Each of these software options may have annual license fees
which will be the responsibility of SAM from the date the option is sold. These
annual license fees will also continue after the termination or expiration of
this Agreement.

8. JAPANESE PROMOTIONS

       (a) SAM and Stereotaxis will mutually agree upon [***] promotional sites
[***]. SAM will cooperate to facilitate timely installation of these systems in
[***]. [***] sites are targeted to be installed in [***] in order to qualify as
research institutions for their respective applications. [***].

       (b) [***].

       (c) Stereotaxis and SAM to cooperate so as to jointly exhibit at trade
shows set forth in SCHEDULE B in 2004 and 2005. [***].

9. MISCELLANEOUS

       (a) Notwithstanding any other provision of this Agreement, this Agreement
may be terminated (i) by the Parties at any time and for any reason upon the
Parties' mutual written agreement, or (ii) by either Party for a material breach
by the other Party if such breach continues unremedied for a period of thirty
(30) days after receipt by the breaching Party of notice of the breach from the
non-breaching Party.

       (b) This Agreement shall be construed and enforced in accordance with the
laws of the State of New York, USA.

       (c) All disputes arising out of this Agreement shall be finally resolved
by arbitration conducted in the English language in accordance with the
commercial

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

                                       7
<PAGE>

arbitration rules of the American Arbitration Association ("AAA"), in New York,
New York, USA. Within thirty (30) days after a request or demand for arbitration
is filed with the AAA, each Party shall appoint one (1) arbitrator. The two
arbitrators so appointed shall jointly appoint a third arbitrator within fifteen
(15) days. If a Party fails to appoint an arbitrator, the AAA shall appoint an
arbitrator for such Party. The AAA shall be the administrator of the arbitration
proceedings. The award entered by the arbitrator(s) shall be final and binding
on all parties to arbitration. Each party shall bear its respective arbitration
expenses and shall each pay fifty percent (50%) of the arbitrator's charges and
expenses.

AGREED TO THIS 18 DAY OF MAY, 2004 BY:

STEREOTAXIS, INC:

BY /s/ BEVIL HOGG
  --------------------------
NAME: BEVIL HOGG
     -----------------------
TITLE: CEO
      ----------------------

SIEMENS AKTIENGESELLSCHAFT, MEDICAL SOLUTIONS

BY /s/ ILLEGIBLE                /s/ R. THOMAS
  --------------------------    ---------------------------
NAME: ILLEGIBLE                 R. THOMAS
     -----------------------    ---------------------------
TITLE: PRESIDENT AX             CFO AX
      ----------------------    ---------------------------

SIEMENS ASAHI MEDICAL TECHNOLOGIES LTD.

BY /s/ W. BEITZ                 /s/ E.  WENNINGER
  --------------------------    ---------------------------
NAME: WOLFGANG BEITZ            E. WENNINGER
     -----------------------    ---------------------------
TITLE: VICE-PRESIDENT           DIRECTOR
      ----------------------    ---------------------------

                                       8

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