**Exhibit 10.26**

** **

**[Execution Copy]**

 

**GUARANTY**

 

THIS GUARANTY (“Guaranty”), dated as of March 31, 2006,is made by each Guarantor named in the signature pages hereof (“Guarantor”), infavor of in favor of DURUS LIFE SCIENCES MASTER FUND LTD., a Cayman Islands ExemptedCompany (“Lender”).

 

Aksys, Ltd., a Delaware corporation (“Company”), andLender are parties to a Bridge Loan Agreement dated as of the date hereof (asamended, amended and restated, modified, renewed or extended from time to time,the “Loan Agreement”) pursuant to which Lender has or will extend certaincredit to Company and Company has or will execute and deliver the Note describedtherein. Guarantor has agreed to guarantee the indebtedness and otherobligations of Company to Lender under or in connection with the Loan Agreement,the Notes and the other Loan Documents (as defined in the Loan Agreement and asamended, amended and restated, modified, renewed or extended from time to time)as set forth herein. Guarantor will derive substantial direct and indirectbenefits from the extension of credit to Company (which benefits are herebyacknowledged by Guarantor). All capitalized terms used in this Guaranty and nototherwise defined herein shall have the meanings assigned to them in the LoanAgreement.

 

Accordingly, to induce Lender to extend credit toCompany, and in consideration thereof, Guarantor hereby agrees as follows:

 

# 1.             *Guaranty*. Guarantor hereby unconditionally and irrevocablyguarantees to Lender the full and prompt payment when due (whether at statedmaturity, declaration, acceleration, demand or otherwise) and performance of theindebtedness, liabilities and other obligations of Company to Lender, under orin connection with the Loan Agreement, the Note and the other Loan Documents orany other documents or instruments executed or delivered in connectiontherewith, including interest that accrues after the commencement by or againstCompany or Guarantor of any Insolvency Proceeding. The terms “indebtedness,” “liabilities”and “obligations” are used herein in their most comprehensive sense and includeany and all advances, debts, obligations and liabilities, now existing orhereafter arising, regardless of by what instrument, agreement, contract orentry in Lender’s accounts they may be evidenced, or whether evidenced by anyinstrument, agreement, contract or entry in Lender’s accounts, whethervoluntary or involuntary and whether due or not due, absolute or contingent,liquidated or unliquidated, determined or undetermined, and whether recoveryupon such indebtedness, liabilities and obligations may be or hereafter becomeunenforceable under the Bankruptcy Code or other applicable law. The foregoingindebtedness, liabilities and other obligations of Company, and all otherindebtedness, liabilities and obligations to be paid or performed by Guarantorin connection with this Guaranty (including any and all amounts due underSection 12 hereof), shall hereinafter be collectively referred to as the “GuaranteedObligations.”

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# 2.             *Liability of Guarantor.*The liability of Guarantor underthis Guaranty shall be irrevocable, absolute, independent and unconditional,and shall not be affected by any circumstance which might constitute adischarge of a surety or guarantor other than the indefeasible payment andperformance in full of all Guaranteed Obligations. In furtherance of theforegoing and without limiting the generality thereof, Guarantor agrees asfollows:

 

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# (i) Guarantor’s liability hereunder shall be theimmediate, direct, and primary obligation of Guarantor and shall not becontingent upon Lender’s exercise or enforcement of any remedy it may haveagainst Company or any other Person, or against any collateral for anyGuaranteed Obligations; (ii) this Guaranty is a guaranty of payment whendue and not of collectibility; (iii) Lender may enforce this Guaranty uponthe occurrence of an Event of Default notwithstanding any dispute between Lenderand Company with respect to the existence of such default; (iv) Guarantor’spayment of a portion, but not all, of the Guaranteed Obligations shall in noway limit, affect, modify or abridge Guarantor’s liability for any portion ofthe Guaranteed Obligations remaining unsatisfied; and (v) Guarantor’s liabilitywith respect to the Guaranteed Obligations shall remain in full force andeffect without regard to, and shall not be impaired or affected by, nor shallGuarantor be exonerated or discharged by, (A) any Insolvency Proceedingwith respect to Company, Guarantor, any other guarantor or any other Person; (B) anylimitation, discharge, or cessation of the liability of Company, any otherguarantor or any other Person for any Guaranteed Obligations due to anystatute, regulation or rule of law, or any invalidity or unenforceability inwhole or in part of any of the Guaranteed Obligations; (C) any merger,acquisition, consolidation or change in structure of Company, Guarantor or anyother guarantor or Person, or any sale, lease, transfer or other disposition ofany or all of the assets or shares of Company, Guarantor, any other guarantoror other Person; (D) any assignment or other transfer, in whole or inpart, of Lender’s interests in and rights under this Guaranty, including Lender’sright to receive payment of the Guaranteed Obligations, or any assignment orother transfer, in whole or in part, of Lender’s interests in and to any collateralsecuring any Guaranteed Obligations; (E) any claim, defense, counterclaimor setoff, other than that of prior performance, that Company, Guarantor, anyother guarantor or other Person may have or assert, including any defense ofincapacity or lack of corporate or other authority to execute or deliver any LoanDocument or this Guaranty or any other document related to the GuaranteedObligations; (F) Lender’s amendment, modification, renewal, extension,cancellation or surrender of any Loan Document, any Guaranteed Obligations, anycollateral securing any Guaranteed Obligations, or Lender’s exchange, release,or waiver of any such collateral; (G) Lender’s exercise or nonexercise ofany power, right or remedy with respect to any of the collateral securing anyGuaranteed Obligations, including Lender’s compromise, release, settlement orwaiver with or of Company, any other guarantor or any other Person; (H) anydirection of application of payment to Company, Guarantor, any other guarantoror other Person; (I) Lender’s vote, claim, distribution, election,acceptance, action or inaction in any Insolvency Proceeding related to the GuaranteedObligations; (J) any impairment or invalidity of any of the collateral securingany Guaranteed Obligations or any failure to perfect any of Lender’s Liensthereon or therein; and (K) any other guaranty of all or any part of theGuaranteed Obligations.

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# 3.             *Consents.*Guarantor hereby consents and agrees that, withoutnotice to or further assent from Guarantor: (i) the time, manner, place or terms of any payment under any Loan Documentmay be extended or changed, including by an increase or decrease in the principalamount or in the interest rate on any Guaranteed Obligation or any fee or otheramount payable under such Loan Document, by a modification or renewal of any LoanDocument or otherwise; (ii) the time for Company’s (or any other Person’s)performance of or compliance with any term, covenant or agreement on its partto be performed or observed under any Loan Document may be extended, or suchperformance or compliance waived, or failure in or departure from suchperformance or compliance consented to, all in such manner and upon such termsas Lender may deem proper; (iii) Lender may discharge or release, in wholeor in part any other guarantor or

 

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# any other Person liable for the payment and performance ofall or any part of the Guaranteed Obligations, and may permit or consent to anysuch action or any result of such action, and Lender shall not be liable toGuarantor for any failure to collect or enforce payment of the GuaranteedObligations; (iv) Lender may take and hold security of any kind, at anytime, as collateral for the Guaranteed Obligations, and may, from time to time,in whole or in part, exchange, sell, surrender, release, subordinate, modify,waive, rescind, compromise or extend such security and may permit or consent toany such action or the result of any such action, and may apply such securityand direct the order or manner of sale thereof; (v) Lender may request andaccept other guaranties of the Guaranteed Obligations and may, from time totime, in whole or in part, surrender, release, subordinate, modify, waive,rescind, compromise or extend any such guaranty and may permit or consent toany such action or the result of any such action; and (vi) Lender mayexercise, or waive or otherwise refrain from exercising, any other right, remedy,power or privilege granted by any Loan Document, or otherwise available to Lender,with respect to the Guaranteed Obligations and any collateral therefor, even ifthe exercise of such right, remedy, power or privilege affects or eliminatesany right of subrogation or any other right of Guarantor against Company; allas Lender may deem advisable, and all without impairing, abridging, releasingor affecting this Guaranty.

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# 4.             *Waivers.*(a) Guarantor waives and agrees not toassert:  (i) any right to require Lenderto proceed against Company, any other guarantor or any other Person, to proceedagainst or exhaust any collateral or other security held for the GuaranteedObligations (except to the extent required by applicable law), to give noticeof or institute any public or private sale, foreclosure, or other dispositionof any collateral or security for the Guaranteed Obligations, including,without limitation, to comply with applicable provisions of the New YorkUniform Commercial Code (“UCC”) or any equivalent provision of any otherapplicable law in connection with the sale, foreclosure, or other dispositionof any collateral or to pursue any other right, remedy, power or privilege of Lenderwhatsoever; (ii) the defense of the statute of limitations in any actionhereunder or for the collection or performance of the Guaranteed Obligations;(iii) any defense arising by reason of any lack of corporate or otherauthority or any other defense of Company, Guarantor or any other Person;(iv) any defense based upon Lender’s errors or omissions in theadministration of the Guaranteed Obligations; (v) any rights to set-offsand counterclaims; (vi) any defense based upon an election of remedies(including, if available, an election to proceed by nonjudicial foreclosure)which destroys or impairs the subrogation rights of Guarantor or the right ofGuarantor to proceed against Company or any other obligor of the GuaranteedObligations for reimbursement, and (vii) without limiting the generalityof the foregoing, to the fullest extent permitted by law, any other defenses orbenefits that may be derived from or afforded by applicable law limiting theliability of or exonerating guarantors or sureties, or which may conflict withthe terms of this Guaranty. (b) Guarantor waivesany and all notice of the acceptance of this Guaranty, and any and all noticeof the creation, renewal, modification, extension or accrual of the GuaranteedObligations, or the reliance by Lender upon this Guaranty, or the exercise ofany right, power or privilege hereunder. The Guaranteed Obligations shallconclusively be deemed to have been created, contracted, incurred and permittedto exist in reliance upon this Guaranty. Guarantor waives promptness,diligence, presentment, protest, demand for payment, notice of default,dishonor or nonpayment and all other notices to or upon Company, Guarantor orany other Person with respect to the Guaranteed Obligations. (c) The obligations of Guarantor hereunder areindependent of and separate from the obligations of Company and any other guarantorand upon the occurrence and during the

 

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# continuance of any default, a separate action or actions maybe brought against Guarantor, whether or not Company or any such other guarantoris joined therein or a separate action or actions are brought against Companyor any such other guarantor. (d) Guarantorshall not have any right to require Lender to obtain or disclose anyinformation with respect to (i) the financial condition or character ofCompany or Guarantor or the ability of Company or Guarantor to pay and performthe Guaranteed Obligations; (ii) the Guaranteed Obligations;(iii) any collateral or other security for any or all of the GuaranteedObligations; (iv) the existence or nonexistence of any other guarantees ofall or any part of the Guaranteed Obligations; (v) any action or inactionon the part of Lender or any other Person; or (vi) any other matter, factor occurrence whatsoever.

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# 5.             *Subrogation.*Until the Guaranteed Obligations shall be satisfied infull, Guarantor shall not have, and shall not directly or indirectly exercise,(i) any rights that it may acquire by way of subrogation under thisGuaranty, by any payment hereunder or otherwise, (ii) any rights of contribution,indemnification, reimbursement or similar suretyship claims arising out of thisGuaranty, or (iii) any other right which it might otherwise have oracquire (in any way whatsoever) which could entitle it at any time to share orparticipate in any right, remedy or security of Lender as against Company orother guarantors, whether in connection with this Guaranty, any other LoanDocuments or otherwise. If any amount shall be paid to Guarantor on account ofthe foregoing rights at any time when any Guaranteed Obligations areoutstanding or any Commitment remains in effect, such amount shall be held intrust for the benefit of Lender and shall forthwith be paid to Lender to becredited and applied to the Guaranteed Obligations.

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# 6.             *Continuing Guaranty; Reinstatement.*Guarantor agrees that this Guarantyis a continuing guaranty relating to any Guaranteed Obligations, includingGuaranteed Obligations which may exist continuously or which may arise fromtime to time under successive transactions, and Guarantor expresslyacknowledges that this Guaranty shall remain in full force and effectnotwithstanding that there may be periods in which no Obligations exist. ThisGuaranty shall continue to be effective or shall be reinstated and revived, asthe case may be, if, for any reason, any payment of the Guaranteed Obligationsby or on behalf of Company or Guarantor (or receipt of any proceeds of collateral)shall be rescinded or must otherwise be restored by Lender, whether as a resultof any Insolvency Proceeding or otherwise. To the extent any payment isrescinded or restored, the Guaranteed Obligations shall be revived in fullforce and effect without reduction or discharge for such payment.

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# 7.             *Payments.* Guarantor hereby agrees, in furtherance of theforegoing provisions of this Guaranty and not in limitation of any other rightwhich Lender or any other Person may have against Guarantor by virtue hereof,upon the failure of Company to pay any of the Guaranteed Obligations due to Lenderwhen and as the same shall become due, whether at stated maturity, by requiredprepayment, declaration, acceleration, demand or otherwise (including amountsthat would become due but for the operation of the automatic stay under §362(a)of the Bankruptcy Code), Guarantor shall forthwith pay, or cause to be paid, incash, to Lender an amount equal to the amount of the Guaranteed Obligationsthen due as aforesaid (including interest which, but for the filing of apetition in any Insolvency Proceeding with respect to Company, would haveaccrued on such Guaranteed Obligations, whether or not a claim is allowedagainst Company for such interest in any such Insolvency Proceeding). Allpayments made by Guarantor hereunder

 

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# shall be applied in accordance with the Loan Agreement. Guarantorshall make each payment hereunder, without deduction (whether for taxes orotherwise), set-off or counterclaim, on the day when due in same day orimmediately available funds, and in U.S. dollars.

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# 8.             *Representations.*Guarantor represents and warrants toLender that:

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(a)           Guarantoris duly organized, validly existing and in good standing under the laws of thejurisdictions in which it is formed and has the requisite power and authorityto own its properties and to carry on its businesses as now being conducted. Guarantoris duly qualified as a foreign entity to do business and is in good standing inevery jurisdiction in which the ownership of property or the nature of itsbusinesses conducted by it makes such qualification necessary and where thefailure to qualify would reasonably be expected to have a Material AdverseEffect.

 

(b)           Guarantor hasthe requisite power and authority to enter into and perform its obligationsunder this Guaranty and the other Loan Documents to which it is a party. Theexecution and delivery of this Guaranty and the other Loan Documents to whichit is a party by Guarantor and the consummation by Guarantor of thetransactions contemplated hereby and thereby have been duly authorized by allnecessary action of Guarantor. This Guaranty and the other Loan Documents towhich it is a party have been (or when delivered, will have been) duly executedand delivered by Guarantor and constitute (or when so delivered, willconstitute) the legal, valid and binding obligations of Guarantor, enforceableagainst Guarantor in accordance with their respective terms, except as suchenforceability may be limited by general principles of equity or applicablebankruptcy, insolvency, reorganization, moratorium, liquidation or similar lawsrelating to, or affecting generally, the enforcement of applicable creditors’rights and remedies and except as rights to indemnification and to contributionmay be limited by federal or state securities law.

 

(c)           The execution,delivery and performance of this Guaranty and the other Loan Documents to whichGuarantor is a party, and the consummation by Guarantor of the transactionscontemplated hereby and thereby will not (i) result in a violation of itsarticles or certificate of incorporation or bylaws, or other applicableorganizational documents, or (ii) conflict with, result in a breach of, orconstitute a default (or an event which with notice or lapse of time or bothwould become a default) under, or give rise to any rights of termination,amendment, acceleration or cancellation of, any agreement, indenture orinstrument to which Guarantor is a party or by which any of its property orassets is bound or affected, (iii) result in a violation of any law, rule,regulation, order, judgment or decree applicable to Guarantor or by which anyof its property or assets is bound or affected, or (iv) except ascontemplated by the Transaction Documents, result in, or require, the creation,or imposition of any Lien upon or with respect to any of the properties orassets of Guarantor.

 

(d)           Guarantoris not required to obtain any consent, approval, license, exemption, authorizationor order of, or make any filing or registration with, any court, governmentalagency or authority or any regulatory or self-regulatory agency or any otherperson in connection with the execution, delivery or performance of itsobligations under or contemplated by this Guaranty or the other Loan Documentsto which it is a party, except for any filings necessary to perfect any Lienson any Collateral provided by Guarantor.

 

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# 9.             *Covenants.*So long as this Guaranty shall be in effect, Guarantor:

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(a)           willfurnish to Lender from time to time such information respecting Guarantor’sfinancial condition as Lender may from time to time reasonably request and willexecute, acknowledge, deliver, file, notarize and register at its own expenseall such further agreements, instruments, certificates, documents andassurances and perform such acts as Lender shall deem necessary or appropriateto effectuate the purposes of this Guaranty and shall reasonably request.

 

(b)           willobserve, perform and comply with all covenants applicable to Guarantor setforth in Article V of the Loan Agreement, which by their terms Company isrequired to cause Guarantor to observe, perform and comply with, as if suchcovenants were set forth in full herein.

 

# 10.           *Notices.*All notices and othercommunications required or permitted hereunder shall be in writing and shall bedeemed effectively given: (i) upon personal delivery to the party to benotified; (ii) when sent by confirmed telex or facsimile if sent duringnormal business hours of the recipient, if not, then on the next business day;(iii) five (5) days after having been sent by registered or certifiedmail, return receipt requested, postage prepaid; or (iv) two (2) daysafter deposit with a nationally recognized overnight courier, specifying nextday delivery, with written verification of receipt. All communications shall besent to the parties hereto (i) if to Lender, at its address or facsimilenumber set forth in the Loan Agreement, and (ii) if to Guarantor, at itsaddress or facsimile number set forth below its name on the signature pages hereof;or,in each case, as notified by such party from time to time at least ten (10)days prior to the effectiveness of such notice.

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# 11.           *No Waiver.*No failure on the part of Lender to exercise, and nodelay in exercising, any right, remedy, power or privilege hereunder shalloperate as a waiver thereof, nor shall any single or partial exercise of anysuch right, remedy, power or privilege preclude any other or further exercisethereof or the exercise of any other right, remedy, power or privilege. Therights and remedies under this Guaranty are cumulative and not exclusive of anyrights, remedies, powers and privileges that may otherwise be available to Lender.

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# 12.           *Costs and Expenses.*Guarantor agrees to pay on demandall reasonable costs and expenses of Lender and reasonable fees anddisbursements of counsel in connection with the enforcement, or preservation ofany rights under, this Guaranty.

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# 13.           *Binding Effect.*This Guaranty shall be binding uponGuarantor and its successors and assigns, and inure to the benefit of and beenforceable by Lender and its successors and assigns; provided that Guarantorshall not have the right to assign, transfer, hypothecate or otherwise conveyits rights, benefits, obligations or duties hereunder without the prior writtenconsent of Lender. Any such purported assignment, transfer, hypothecation orother conveyance by Guarantor without the prior express written consent of Lendershall be void. Guarantor acknowledges and agrees that in connection with anassignment of, or grant of a participation in, the Guaranteed Obligations, Lendermay assign, or grant participations in, all or a portion of its rights andobligations hereunder. Upon any assignment of Lender’s rights hereunder, suchassignee or assignees shall have, to the extent of such assignment, all rightsof Lender hereunder.

 

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# Guarantor agrees that, upon any such assignment, suchassignee may enforce directly, without joinder of Lender, the rights of Lenderset forth in this Guaranty. Any such assignee shall be entitled to enforce Lender’srights and remedies under this Guaranty to the same extent as if it were anoriginal secured party named herein.

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# 14.           *Entire Agreement; Amendment*. There are no conditions to thefull effectiveness of this Guaranty. This Guaranty and the other Loan Documentscontain the entire agreement of the parties with respect to the subject matterhereof and supersede any prior agreements, commitments, drafts, communication,discussions and understandings, oral or written, with respect thereto. Noamendment to this Guaranty, or any waiver of any provision hereof, shall beeffective unless it is in writing and signed by Lender and (in the case of anyamendment) Guarantor. Any such amendment, waiver or consent shall be effectiveonly in the specific instance and for the specific purpose for which given.

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# 15.           *Knowing and Explicit Waivers*. Guarantor acknowledges that it haseither obtained the advice of legal counsel or has had the opportunity toobtain such advice in connection with the terms and provisions of this Guaranty.Guarantor acknowledges and agrees that each of the waivers and consents setforth herein, including, without limitation, those contained in Sections 2through 4, are made with full knowledge of their significance and consequences.Additionally, Guarantor acknowledges and agrees that by executing thisGuaranty, it is waiving certain rights, benefits, protections and defenses towhich it may otherwise be entitled under applicable law. Guarantor furtheracknowledges and agrees that Lender is relying on such waivers in creating the GuaranteedObligations, and that such waivers are a material part of the considerationwhich Lender is receiving for creating the Guaranteed Obligations.

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# 16.           *Severability.*If any provision of this Guaranty shall be prohibitedby or invalid under any applicable law or regulation in any jurisdiction, itshall, as to such jurisdiction, be deemed modified to conform to the minimumrequirements of such law or regulation, or, if for any reason it is not deemedso modified, it shall be ineffective and invalid only to the extent of suchprohibition or invalidity without affecting the remaining provisions of thisGuaranty, or the validity or effectiveness of such provision in any otherjurisdiction.

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# 17.           *Governing Law; Submission to Jurisdiction; JuryTrial Waiver*.

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(a)           ThisGuaranty shall be construed in accordance with and governed by the internallaws of the State of New York (as permitted by Section 5-1401 of the NewYork General Obligations Law (or any similar successor provision)) withoutgiving effect to any choice of law rule that would cause the application of thelaws of any jurisdiction other than the internal laws of the State of New Yorkto the rights and duties of the parties.

 

(b)           GUARANTORHEREBY KNOWINGLY, VOLUNTARILY, ANDINTENTIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATIONARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTY AND THE OTHER LOANDOCUMENTS TO WHICH IT IS A PARTY, THIS WAIVER BEING A MATERIAL INDUCEMENT FOR LENDERTO ACCEPT THIS GUARANTY AND ENTER INTO THE OTHER LOAN DOCUMENTS.

 

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(c)           Forpurposes of any suit, action or other legal proceeding relating to this Guarantyor the other Loan Documents to which it is a party or the enforcement of anyprovision of this Guaranty or such Loan Documents, Guarantor hereby expresslyand irrevocably submits and consents to the exclusive jurisdiction of thecourts of the State of New York sitting in the borough of Manhattan and theUnited States District Court for the Southern District of New York for thepurposes of any such suit, action or legal proceeding, including to enforce anysettlement, order or award; and agrees that such state and federal courts shallbe deemed to be a convenient forum; and waives and agrees not to assert (by wayof motion, as a defense or otherwise), in any such legal proceeding commencedin such court any claim that Guarantor is not subject personally to thejurisdiction of such court, that such legal proceeding has been brought in aninconvenient forum, that the venue of such proceeding is improper or that the Guarantyor such Loan Documents or the subject matter thereof may not be enforced in orby such court.

 

(d)           Guarantoragrees to the entry of an order to enforce any resolution, settlement, order oraward made pursuant to this Section by the courts of the State of New Yorksitting in the borough of Manhattan or the United States District Court for theSouthern District of New York and in connection therewith hereby waives, andagrees not to assert by way of motion, as a defense, or otherwise, any claimthat such resolution, settlement, order or award is inconsistent with orviolative of the laws or public policy of the laws of the State of New York orany other jurisdiction.

 

# 18.           *Future Guarantors*. At such time following the datehereof as any Subsidiary of Company (an “Acceding Subsidiary”) is required toaccede hereto pursuant to the terms of Section 5.02(m) of the LoanAgreement, such Acceding Subsidiary shall execute and deliver to Lender anaccession agreement substantially in the form of Annex 1 (the “AccessionAgreement’), signifying its agreement to be bound by the provisions of thisGuaranty as a Guarantor to the same extent as if such Acceding Subsidiary hadoriginally executed this Guaranty as of the date hereof.

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# 19.           *Multiple Guarantors; Joint and Several Liability*. When this Guaranty is executed bymore than one Guarantor, the word “Guarantor” shall mean all and any one ormore of them, and the obligations of all Persons signing this Guaranty shall bejoint and several.

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# 20.           *Counterparts.*This Guaranty may be executed in any number ofcounterparts and by different parties hereto in separate counterparts, each ofwhich when so executed shall be deemed to be an original and all of which takentogether shall constitute but one and the same agreement.

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# 21.           *Termination*. This Guaranty shall terminate upon payment andperformance in full of all Guaranteed Obligations (other than inchoateindemnity obligations and any other obligations which by their terms are tosurvive the termination of the Loan Documents).

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[Signature PagesFollowing]

 

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IN WITNESS WHEREOF, Guarantor has duly executed thisGuaranty, as of the date first above written.

 

**GUARANTORS**

** **
| ** ** | **GRANTOR:**                     |
|------------|----------------------------------|
| ** ** | ** **                       |
| ** ** | **AKSYS INTERNATIONAL, INC.**    |
| ** ** | ** **                       |
| ** ** | ** **                       |
| ** ** | **By**                           | **/s/ Laurence P. Birch** | ** ** |
| ** ** | ** **                       | **Name: Laurence P. Birch** |
| ** ** | ** **                       | **Title: CEO** |
| ** ** | ** **                       |
| ** ** | **Address:**                     |
| ** ** | ** **                       |
| ** ** | **Two Marriot Drive**       |
| ** ** | **Lincolnshire, IL 60069**  |
| ** ** | **Attn:**                        | ** ** | ** ** |
| ** ** | **Fax: 847-229-2080**            |
|            |                                  |  |  |  |

 

 
| ** ** | ***With a copy  to***:        |
|------------|-------------------------------|
| ** ** | *** ***                  |
| ** ** | **Keith  S. Crow P.C.**       |
| ** ** | **Kirkland  & Ellis LLP** |
| ** ** | **200  East Randolph Drive**  |
| ** ** | **Chicago,  Illinois 60601**  |
| ** ** | **Fax:  312-861-2200**        |

 

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Annex 1

to the Guaranty

 

**FORM OFACCESSION AGREEMENT**

 
| To:    |   |   |   |
|--------|--------|--------|--------|
|   |   |   |   |
| Re:    |   |   |   |

 

 

Ladies and Gentlemen:

 

This Accession Agreementis made and delivered pursuant to Section 18 of that certain Guaranty dated asof                 ,2006 (as amended, amended and restated, modified, renewed or extended from timeto time, the “Guaranty”), made by each Guarantor named in the signature pagesthereof (each a “Guarantor”), in favor of DURUS LIFE SCIENCES MASTER FUND LTD.,a Cayman Islands Exempted Company (“Lender”). All capitalized terms used inthis Accession Agreement and not otherwise defined herein shall have themeanings assigned to them in either the Guaranty or the Loan Agreement.

 

Aksys, Ltd., a Delawarecorporation (“Company”) is party to that certain Loan Agreement dated as of                 ,2006 (as amended, amended and restated, modified, renewed or extended from timeto time, the “Loan Agreement”) by and between Company and Lender.

 

The undersigned,                                                         *[insert name of acceding Guarantor]*, a                                           *[corporation, partnership, limited liabilitycompany, etc.]*, is a Subsidiary of Company and hereby acknowledgesfor the benefit of Lender that it shall be a “Guarantor” for all purposes ofthe Guaranty effective from the date hereof. The undersigned confirms that therepresentations and warranties set forth in Section 8 of the Guaranty aretrue and correct as to the undersigned as of the date hereof.

 

Without limiting theforegoing, the undersigned hereby agrees to perform all of the obligations of aGuarantor under, and to be bound in all respects by the terms of, the Guaranty,including Section 9, to the same extent and with the same force and effectas if the undersigned were an original signatory thereto.

 

This Accession Agreementshall constitute a Loan Document under the Loan Agreement.

 

This Accession Agreementshall be construed in accordance with and governed by the internal laws of theState of New York (as permitted by Section 5-1401 of the New York GeneralObligations Law (or any similar successor provision)) without giving effect toany choice of law rule that would cause the application of the laws of anyjurisdiction other than the internal laws of the State of New York to therights and duties of the parties.

 

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IN WITNESS WHEREOF, theundersigned has duly executed this Accession Agreement, as of                               ,200     .

 

 
|   | [GUARANTOR]           |   |
|--------|-----------------------|--------|
|   |                  |
|   | By                    |   |   |
|   | Title                 |   |   |
|   |                  |
|   | Address for  Notices: |   |
|   | c/o                   |   |   |
|   |                  |   |
|   |                  |   |
|   | Attn.:                |   |   |
|   | Fax No.:              |   |   |
|        |                       |        |  |  |  |  |  |

 

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