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                                                                   Exhibit 10.3

                                                                 EXECUTION COPY

               AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT

         This AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this
"AGREEMENT"), dated as of January 22, 2003, is by and between AKSYS, LTD. (the
"COMPANY") and KINGSBRIDGE CAPITAL LIMITED (the "INVESTOR").

         WHEREAS, the Company and the Investor have entered into that certain
Amended and Restated Common Stock Purchase Agreement, dated as of the date
hereof (the "PURCHASE AGREEMENT"), pursuant to which the Company may issue, from
time to time, to the Investor up to $15 million worth (as determined in
accordance with the Purchase Agreement) of Common Stock;

         WHEREAS, on October 15, 2002 the Company issued to the Investor a
warrant, exercisable from time to time within five (5) years following the
six-month anniversary of the date of issuance (the "WARRANT") for the purchase
of an aggregate of up to 200,000 shares of Common Stock at a price specified in
such Warrant;

         WHEREAS, pursuant to the terms of, and in partial consideration for,
the Investor's agreement to enter into the Purchase Agreement, the Company has
agreed to provide the Investor with certain registration rights with respect to
the Registrable Securities (as defined in the Purchase Agreement) as set forth
herein;

         WHEREAS, the parties hereto entered into a Registration Rights
Agreement, dated as of October 15, 2002 (the "ORIGINAL REGISTRATION RIGHTS
AGREEMENT"), and desire to amend and restate the Original Registration Rights
Agreement in its entirety hereby;

         NOW, THEREFORE, in consideration of the premises, the representations,
warranties, covenants and agreements contained herein, in the Warrant, and in
the Purchase Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, intending to be legally
bound hereby, the parties hereto agree to amend and restate the Original
Registration Rights Agreement in its entirety as follows (capitalized terms used
herein and not defined herein shall have the respective meanings ascribed to
them in the Purchase Agreement):

                                    ARTICLE I
                               REGISTRATION RIGHTS

Section 1.1. REGISTRATION STATEMENT.

                  (a) FILING OF THE REGISTRATION STATEMENT. Upon the terms and
subject to the conditions set forth in this Agreement, the Company shall file
with the Commission within ten (10) Trading Days following the Closing Date a
registration statement on Form S-3 under the Securities Act or such other form
as deemed appropriate by counsel to the Company for the registration for the
resale by the Investor of the Registrable Securities (the "REGISTRATION
STATEMENT").

                  (b) EFFECTIVENESS OF THE REGISTRATION STATEMENT. The Company
shall use commercially reasonable efforts (i) to have the Registration Statement
declared effective by the Commission as soon as reasonably practicable, but in
any event no later than forty-five (45) calendar days, or ninety (90) calendar
days in the event that the Commission reviews the Registration Statement,
following the Closing Date and (ii) to ensure that the Registration Statement
remains in effect throughout the term of this Agreement as set forth in Section
4.2, subject to the terms and conditions of this Agreement.

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                  (c) REGULATORY DISAPPROVAL. Notwithstanding the provisions of
Sections 1.1 (b), the date by which a Registration Statement is required to
become effective shall be extended without default or liquidated damages
hereunder or under the Purchase Agreement in the event that the Company's
failure to obtain the effectiveness of the Registration Statement on a timely
basis results solely from the Commission's disapproval of the structure of the
transactions contemplated by the Purchase Agreement. In such event, the parties
agree to cooperate with one another in good faith to arrive at a resolution
acceptable to the Commission; PROVIDED, HOWEVER, that nothing contained in this
subsection 1.1(c) shall relieve the Company from its obligation to effect and
maintain the registration of the Warrant Shares on a timely basis.

                  (d) FAILURE TO MAINTAIN EFFECTIVENESS OF REGISTRATION
STATEMENT. In the event the Company fails to maintain the effectiveness of the
Registration Statement (or the Prospectus) throughout the period set forth in
Section 4.2, other than temporary suspensions as set forth in Section 1.1(e) or
2.1(h), and the Investor holds any Registrable Securities at any time during the
period of such ineffectiveness (an "INEFFECTIVE PERIOD"), the Company shall pay
to the Investor in immediately available funds into an account designated by the
Investor an amount equal to the product of (x) the total number of Registrable
Securities issued to the Investor under the Purchase Agreement and owned by the
Investor at any time during such Ineffective Period and (y) the result, if
greater than zero, obtained by subtracting the VWAP on the Trading Day
immediately following the last day of such Ineffective Period from the VWAP on
the Trading Day immediately preceding the day on which any such Ineffective
Period began; PROVIDED, HOWEVER, that the foregoing payments shall not apply in
respect of Registrable Securities that are otherwise freely tradable by the
Investor.

                  (e) DEFERRAL OR SUSPENSION DURING A BLACKOUT PERIOD.
Notwithstanding the provisions of Section 1.1 (d), if in the good faith judgment
of the Company, following consultation with legal counsel, it would be
detrimental to the Company or its stockholders for the Registration Statement to
be filed or for resales of Registrable Securities to be made pursuant to the
Registration Statement due to (i) the existence of a material development or
potential material development involving the Company that the Company would be
obligated to disclose in the Registration Statement, which disclosure would be
premature or otherwise inadvisable at such time or would have a Material Adverse
Effect on the Company or its stockholders, or (ii) a filing of a
Company-initiated registration of any class of its equity securities, which, in
the good faith judgment of the Company, would adversely effect or require
premature disclosure of the filing of such Company-initiated registration
(notice thereof, a "BLACKOUT NOTICE"), the Company shall have the right to (A)
immediately defer such filing for a period of not more than sixty (60) days
beyond the date by which such Registration Statement was otherwise required
hereunder to be filed or (B) suspend use of such Registration Statement for a
period of not more than thirty (30) days (any such deferral or suspension
period, a "BLACKOUT PERIOD"). The Investor acknowledges that it would be
seriously detrimental to the Company and its stockholders for such Registration
Statement to be filed (or remain in effect) during a Blackout Period and
therefore essential to defer such filing (or suspend the use thereof) during
such Blackout Period and agrees to cease any disposition of the Registrable
Securities during such Blackout Period. The Company may not utilize any of its
rights under this Section 1.1(e) to defer the filing of a Registration Statement
(or suspend its effectiveness) more than twice in any twelve (12) month period.
In the event that, within sixty (60) calendar days following any Settlement
Date, the Company gives a Blackout Notice to the Investor of a Blackout Period
and the VWAP on the Trading Day immediately preceding such Blackout Period ("OLD
VWAP") is greater than the VWAP on the first Trading Day following such Blackout
Period that the Investor may sell its Registrable Securities pursuant to an
effective Registration Statement ("NEW VWAP"), then the Company shall either:
(X) issue to the Investor the number of additional shares of Common Stock
("BLACKOUT SHARES") equal to one hundred twenty percent (120%) of the difference
between (1) the product of the number of Registrable Securities purchased by the
Investor during the

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preceding sixty (60) calendar days under the Purchase Agreement and actually
held by Investor immediately prior to the Blackout Period multiplied by the Old
VWAP, divided by the New VWAP, and (2) the number of Registrable Securities
purchased by the Investor under the Purchase Agreement during the preceding
sixty (60) calendar days and actually held by Investor immediately prior to the
Blackout Period or (Y) pay to the Investor an amount equal to the product of (1)
the number of Registrable Securities purchased by the Investor under the
Purchase Agreement during the preceding sixty (60) calendar days and actually
held by Investor immediately prior to the Blackout Period and (2) the result
obtained by subtracting the New VWAP from the Old VWAP.

                  (f) LIQUIDATED DAMAGES. The Company and the Investor hereto
acknowledge and agree that the amounts payable under subsection 1(d) and 1.1(e)
and the Blackout Shares deliverable under subsection 1(e) above shall constitute
liquidated damages and not penalties. The parties further acknowledge that (i)
the amount of loss or damages likely to be incurred by the Investor is incapable
or is difficult to precisely estimate, (ii) the amounts specified in such
subsections bear a reasonable proportion and are not plainly or grossly
disproportionate to the probable loss likely to be incurred in connection with
any failure by the Company to obtain or maintain the effectiveness of the
Registration Statement, (iii) one of the reasons for the Company and the
Investor reaching an agreement as to such amounts was the uncertainty and cost
of litigation regarding the question of actual damages, and (iv) the Company and
the Investor are sophisticated business parties and have been represented by
sophisticated and able legal and financial counsel and negotiated this Agreement
at arm's length.

                  (g) ADDITIONAL REGISTRATION STATEMENTS. In the event and to
the extent that the Registration Statement fails to register a sufficient amount
of Common Stock necessary for the Company to issue and sell to the Investor and
the Investor to purchase from the Company all of the Registrable Securities to
be issued, sold and purchased under the Purchase Agreement and the Warrant, the
Company shall prepare and file with the Commission an additional registration
statement or statements in order to effectuate the purpose of this Agreement,
the Purchase Agreement, and the Warrant.

                                   ARTICLE II
                             REGISTRATION PROCEDURES

Section 2.1. FILINGS; INFORMATION. The Company shall effect the registration
with respect to the sale of the Registrable Securities by the Investor in
accordance with the intended methods of disposition thereof. Without limiting
the foregoing, the Company in each such case will do the following as
expeditiously as possible, but in no event later than the deadline, if any,
prescribed therefor in this Agreement:

                  (a) Subject to Section 1.1 (e), the Company shall (i) prepare
and file with the Commission the Registration Statement; (ii) use commercially
reasonable efforts to cause such filed Registration Statement to become and to
remain effective (pursuant to Rule 415 under the Securities Act or otherwise);
(iii) prepare and file with the Commission such amendments and supplements to
the Registration Statement and the Prospectus used in connection therewith as
may be necessary to keep such Registration Statement effective for the time
period prescribed by Section 4.2 and in order to effectuate the purpose of this
Agreement, the Purchase Agreement, and the Warrant; and (iv) comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during such period in
accordance with the intended methods of disposition by the Investor set forth in
such Registration Statement; PROVIDED, HOWEVER, that the Investor shall be
responsible for the delivery of the Prospectus to the Persons to whom the
Investor sells the Shares and the Warrant Shares.

                  (b) If so requested by a managing underwriter or underwriters,
if any, or the holders of a majority of the Registrable Securities being sold in
connection with the filing of a Registration

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Statement under the Securities Act for the offering on a continuous or delayed
basis in the future of all of the Registrable Securities (a "SHELF
REGISTRATION"), the Company shall (i) promptly incorporate in a prospectus
supplement or post-effective amendment such information as the managing
underwriters, if any, and such holders agree should be included therein, and
(ii) make all required filings of such prospectus supplement or post-effective
amendment as soon as practicable after the Company has received notification of
the matters to be incorporated in such prospectus supplement or post-effective
amendment; PROVIDED, HOWEVER, that the Company shall not be required to take any
action pursuant to this Section 2.1(b)(ii) that would, in the opinion of counsel
for the Company, violate applicable law.

                  (c) In connection with the filing of a Shelf Registration, the
Company shall enter into such reasonable agreements and take all such other
reasonable actions in connection therewith (including those reasonably requested
by the managing underwriters, if any, or the holders of a majority of the
Registrable Securities being sold) in order to expedite or facilitate the
disposition of such Registrable Securities, and in such connection, whether or
not an underwriting agreement is entered into and whether or not the
registration is an underwritten registration, the Company shall (i) make such
representations and warranties to the holders of such Registrable Securities and
the underwriters, if any, with respect to the business of the Company (including
with respect to businesses or assets acquired or to be acquired by the Company),
and the Registration Statement, Prospectus and documents, if any, incorporated
or deemed to be incorporated by reference therein, in each case, in form,
substance and scope as are customarily made by issuers to underwriters in
underwritten offerings, and confirm such representations and warranties if and
when requested; (ii) if an underwriting agreement is entered into, it shall
contain indemnification provision and procedures no less favorable to the
selling holders of such Registrable Securities and the underwriters, if any,
than those set forth herein (or such other provisions and procedures acceptable
to the holders of a majority of Registrable Securities covered by such
Registration Statement and the managing underwriters, if any); and (iii) deliver
such documents and certificates as may be reasonably requested by the holders of
a majority of the Registrable Securities being sold, their counsel and the
managing underwriters, if any, to evidence the continued validity of their
representations and warranties made pursuant to clause (i) above and to evidence
compliance with any customary conditions contained in the underwriting agreement
or other agreement entered into by the Company.

                  (d) If the Investor determines to engage an underwriter in
connection with the offering of any Registrable Securities, the Investor will
enter into and perform its obligations under an underwriting agreement, in usual
and customary form, including, without limitation, customary indemnification and
contribution obligation, with the managing underwriter of such offering, and
will take such other actions as are reasonably required in order to expedite or
facilitate the disposition of the Registrable Securities, unless the Investor
has notified the Company in writing of its election to exclude all of its
Registrable Securities from such Registration Statement; PROVIDED, HOWEVER, that
the Investor shall consult with the Company prior to any such underwritten
offering and defer such offering for a reasonable period upon the commercially
reasonable request of the Company.

                  (e) The Investor may not participate in any underwriting
distribution hereunder unless it (i) agrees to sell its Registrable Securities
on the basis provided in any underwriting agreements, (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting agreements, and (iii) agrees to pay all underwriting discounts and
commissions and other fees and expenses of investment bankers and any manager or
managers of such underwriting, and legal expenses of the underwriter, applicable
with respect to its Registrable Securities.

                  (f) Three (3) Trading Days prior to filing the Registration
Statement or Prospectus, or any amendment or supplement thereto (excluding
amendments deemed to result from the filing of documents incorporated by
reference therein), the Company shall deliver to the Investor and to counsel
representing the Investor, in accordance with the notice provisions of Section
4.8, copies of the

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Registration Statement, Prospectus and/or any amendments or supplements thereto
as proposed to be filed, together with exhibits thereto, which documents will be
subject to review by the Investor and such counsel, and thereafter deliver to
the Investor and such counsel, in accordance with the notice provisions of
Section 4.8, such number of copies of the Registration Statement, each amendment
and supplement thereto (in each case including all exhibits thereto), the
Prospectus (including each preliminary prospectus) and such other documents or
information as the Investor or counsel may reasonably request in order to
facilitate the disposition of the Registrable Securities.

                  (g) The Company shall deliver, in accordance with the notice
provisions of Section 4.8, to each seller of Registrable Securities covered by
the Registration Statement such number of conformed copies of the Registration
Statement and of each amendment and supplement thereto (in each case including
all exhibits and documents incorporated by reference), such number of copies of
the Prospectus (including each preliminary prospectus and any summary
prospectus) and any other prospectus filed under Rule 424 promulgated under the
Securities Act relating to such seller's Registrable Securities, and such other
documents, as such seller may reasonably request to facilitate the disposition
of its Registrable Securities.

                  (h) After the filing of the Registration Statement, the
Company shall promptly notify the Investor of any stop order issued or
threatened by the Commission in connection therewith and take all commercially
reasonable actions required to prevent the entry of such stop order or to remove
it if entered.

                  (i) The Company shall use commercially reasonable efforts to
(i) register or qualify the Registrable Securities under such other securities
or blue sky laws of each jurisdiction in the United States as the Investor may
reasonably (in light of its intended plan of distribution) request, and (ii)
cause the Registrable Securities to be registered with or approved by such other
governmental agencies or authorities in the United States as may be necessary by
virtue of the business and operations of the Company and do any and all other
acts and things that may be reasonably necessary or advisable to enable the
Investor to consummate the disposition of the Registrable Securities; PROVIDED,
HOWEVER, that the Company will not be required to qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this paragraph (g), subject itself to taxation in any such jurisdiction,
consent or subject itself to general service of process in any such
jurisdiction, change any existing business practices, benefit plans or
outstanding securities or amend or otherwise modify the Charter or Bylaws.

                  (j) The Company shall enter into customary agreements and take
such other actions as are reasonably required in order to expedite the
disposition of such Registrable Securities (whereupon the Investor may, at its
option, require that any or all of the representations, warranties and covenants
of the Company also be made to and for the benefit of the Investor).

                  (k) The Company shall make available to the Investor (and will
deliver to Investor's counsel),(A) subject to restrictions imposed by the United
States federal government or any agency or instrumentality thereof, copies of
all public correspondence between the Commission and the Company concerning the
Registration Statement and will also make available for inspection by the
Investor and any attorney, accountant or other professional retained by the
Investor (collectively, the "INSPECTORS"),(B) upon reasonable advance notice
during normal business hours all financial and other records, pertinent
corporate documents and properties of the Company (collectively, the "RECORDS")
as shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers and employees to supply all
information reasonably requested by any Inspectors in connection with the
Registration Statement. Records that the Company determines, in good faith, to
be confidential and that it notifies the Inspectors are confidential shall not
be disclosed by the Inspectors unless the disclosure or release of such Records
is requested or required pursuant to oral questions, interrogatories, requests
for information or documents or a subpoena or other order from a court of
competent jurisdiction or other

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process; PROVIDED, HOWEVER, that prior to any disclosure or release pursuant to
the immediately preceding clause, the Inspectors shall provide the Company with
prompt notice of any such request or requirement so that the Company may seek an
appropriate protective order or waive such Inspectors' obligation not to
disclose such Records; and, PROVIDED, FURTHER, that if failing the entry of a
protective order or the waiver by the Company permitting the disclosure or
release of such Records, the Inspectors, upon advice of counsel, are compelled
to disclose such Records, the Inspectors may disclose that portion of the
Records that counsel has advised the Inspectors that the Inspectors are
compelled to disclose; PROVIDED, HOWEVER, that upon any such required
disclosure, such Inspector shall use his or her best efforts to obtain
reasonable assurances that confidential treatment will be afforded such
information. The Investor agrees that information obtained by it solely as a
result of such inspections (not including any information obtained from a third
party who, insofar as is known to the Investor after reasonable inquiry, is not
prohibited from providing such information by a contractual, legal or fiduciary
obligation to the Company) shall be deemed confidential and shall not be used
for any purposes other than as indicated above or by it as the basis for any
market transactions in the securities of the Company or its affiliates unless
and until such information is made generally available to the public. The
Investor further agrees that it will, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of the Records deemed confidential.

                  (l) To the extent required by law or reasonably necessary to
effect a sale of Registrable Securities in accordance with prevailing business
practices at the time of any sale of Registrable Securities pursuant to a
Registration Statement, the Company shall deliver to the Investor a signed
counterpart, addressed to the Investor, of (1) an opinion or opinions of counsel
to the Company, and (2) a comfort letter or comfort letters from the Company's
independent public accountants, each in customary form and covering such matters
of the type customarily covered by opinions or comfort letters, as the case may
be, as the Investor therefor reasonably requests.

                  (m) The Company shall otherwise comply with all applicable
rules and regulations of the Commission, including, without limitation,
compliance with applicable reporting requirements under the Exchange Act.

                  (n) The Company shall appoint a transfer agent and registrar
for all of the Registrable Securities covered by such Registration Statement not
later than the effective date of such Registration Statement.

                  (o) The Company may require the Investor to promptly furnish
in writing to the Company such information as may be required in connection with
such registration including, without limitation, all such information as may be
requested by the Commission or the NASD or any state securities commission and
all such information regarding the Investor, the Registrable Securities held by
the Investor and the intended method of disposition of the Registrable
Securities. The Investor agrees to provide such information requested in
connection with such registration within five (5) Business days after receiving
such written request and the Company shall not be responsible for any delays in
obtaining or maintaining the effectiveness of the Registration Statement caused
by the Investor's failure to timely provide such information.

                  (p) The Investor will cooperate with the Company, as
reasonably requested by the Company, in connection with the preparation and
filing of any Registration Statement hereunder, unless the Investor has notified
the Company in writing of such Investor's irrevocable election to exclude all of
the Investor's Registrable Securities from such Registration Statement.

                  (q) Upon receipt of a Blackout Notice from the Company, the
Investor will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement covering such Registrable Securities
until (i) the Company advises the Investor that the Blackout Period

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has terminated and (ii) the Investor receives copies of a supplemented or
amended prospectus, if necessary. If so directed by the Company, the Investor
will deliver to the Company (at the expense of the Company) or destroy (and
deliver to the Company a certificate of destruction) all copies in the
Investor's possession (other than a limited number of file copies) of the
prospectus covering such Registrable Securities that is current at the time of
receipt of such notice.

Section 2.2. REGISTRATION EXPENSES. The Company shall pay all registration
expenses incurred in connection with the Registration Statement (the
"REGISTRATION EXPENSES"), including, without limitation: (i) all registration,
filing, securities exchange listing and fees required by the National
Association of Securities Dealers, (ii) all registration, filing, qualification
and other fees and expenses of compliance with securities or blue sky laws
(including reasonable fees and disbursements of counsel in connection with blue
sky qualifications of the Registrable Securities), (iii) all word processing,
duplicating, printing, messenger and delivery expenses, (iv) the Company's
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), (v) the fees
and expenses incurred by the Company in connection with the listing of the
Registrable Securities, (vi) reasonable fees and disbursements of counsel for
the Company and customary fees and expenses for independent certified public
accountants retained by the Company (including the expenses of any special
audits or comfort letters or costs associated with the delivery by independent
certified public accountants of such special audit(s) or comfort letter(s)
requested pursuant to Section 2.1(k) hereof), (vii) the fees and expenses of any
special experts retained by the Company in connection with such registration and
amendments and supplements to the Registration Statement and Prospectus, (viii)
fees and disbursements of underwriters customarily paid by issuers or sellers of
securities, if any but excluding in all cases underwriting fees, discounts,
transfer taxes or commissions, if any, attributable to the sale of Registrable
Securities, which shall be payable by each holder of Registrable Securities PRO
RATA on the basis of the number of Registrable Securities of each such holder
that are included in a registration under this Agreement.

                                   ARTICLE III
                                 INDEMNIFICATION

Section 3.1. INDEMNIFICATION. The Company agrees to indemnify and hold harmless
the Investor, and each Person or entity, if any, who controls the Investor
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act (collectively, the "CONTROLLING PERSONS"), from and against any
loss, claim, damage, liability, costs and expenses (including, without
limitation, reasonable and accurate attorneys' fees and reasonable disbursements
and costs and expenses of investigating and defending any such claim)
(collectively, "DAMAGES"), joint or several, and any action or proceeding in
respect thereof to which any Controlling Person, may become subject under the
Securities Act or otherwise, as incurred, insofar as such Damages (or actions or
proceedings in respect thereof) arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
Registration Statement, or in any preliminary prospectus, final prospectus,
summary prospectus, amendment or supplement relating to the Registrable
Securities or arises out of, or are based upon, any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein under the circumstances not misleading, and shall
reimburse such Controlling Person, for any reasonable and documented legal and
other expenses reasonably incurred by such Controlling Person, as incurred, in
investigating or defending or preparing to defend against any such Damages or
actions or proceedings; PROVIDED, HOWEVER, that the Company shall not be liable
to the extent that any such Damages arise out of the Investor's (or any other
Indemnified Person's) failure to send or give a copy of the final prospectus or
supplement (as then amended or supplemented) to the persons asserting an untrue
statement or alleged untrue statement or omission or alleged omission at or
prior to the written confirmation of the sale of Registrable Securities to such
person if such statement or omission was corrected in such final prospectus or
supplement; PROVIDED, FURTHER, that the Company shall not be liable

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to the extent that any such Damages arise out of or are based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
such Registration Statement, or any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Investor or any other person who participates as an underwriter in the
offering or sale of such securities.

In connection with any Registration Statement with respect to which the Investor
is participating, such Investor will indemnify and hold harmless, to the same
extent and in the same manner set forth in the preceding paragraph, the Company,
each of directors, each its officers who signs the Registration Statement, each
Person, if any, who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (each a "COMPANY INDEMNIFIED
PERSON") against any Damages to which any Company Indemnified Person may become
subject under the Securities Act, the Exchange Act or otherwise, insofar as the
such Damages arises out of or is based upon (a) any untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement, or
in any preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement relating to the Registrable Securities or arises out of, or are
based upon, any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein under
the circumstances not misleading to the extent that such violation occurs in
reliance upon and in conformity with written information furnished to the
Company by the Investor or on behalf of the Investor expressly for use in
connection with such Registration Statement or (b) any failure by the Investor
to comply with prospectus delivery requirements of the Securities Act, the
Exchange Act or any other law or legal requirement applicable to sales under the
Registration Statement.

Section 3.2. CONDUCT OF INDEMNIFICATION PROCEEDINGS. All claims for
indemnification under Section 3.1 shall be asserted and resolved in accordance
with the provisions of Section 10.02 and 10.03 of the Purchase Agreement.

Section 3.3. ADDITIONAL INDEMNIFICATION. Indemnification similar to that
specified in the preceding paragraphs of this Article 3 (with appropriate
modifications) shall be given by the Company with respect to any required
registration or other qualification of securities under any federal or state law
or regulation of any governmental authority other than the Securities Act. The
provisions of this Article III shall be in addition to any other rights to
indemnification, contribution or other remedies which an Indemnified Party may
have pursuant to law, equity, contract or otherwise.

To the extent that any indemnification provided for herein is prohibited or
limited by law, the indemnifying party will make the maximum contribution with
respect to any amounts for which it would otherwise be liable under this Article
III to the fullest extent permitted by law. However, (a) no contribution will be
make under circumstances where maker of such contribution would not have been
required to indemnify the indemnified party under the fault standards set forth
in this Article III, (b) or seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any Person who is not
guilty of such fraudulent misrepresentation, and (c) contribution (together with
any indemnification obligations under this Agreement) by any seller of
Registrable Securities will be limited in amount of proceeds received by such
seller from the sale of such Registrable Securities.

                                   ARTICLE IV
                                  MISCELLANEOUS

Section 4.1. NO OUTSTANDING REGISTRATION RIGHTS. Except as set forth on Schedule
4.1, the Company represents and warrants to the Investor that, except as set
forth in the Commission

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Documents, there is not in effect on the date hereof any agreement by the
Company pursuant to which any holders of securities of the Company have a right
to cause the Company to register or qualify such securities under the Securities
Act or any securities or blue sky laws of any jurisdiction.

Section 4.2. TERM. The registration rights provided to the holders of
Registrable Securities hereunder shall terminate at the earlier of (i) such time
that is two years following the termination of the Purchase Agreement or (ii)
such time as all Registrable Securities have been issued and have ceased to be
Registrable Securities. Notwithstanding the foregoing, paragraphs (c) and (d) of
Section 1.1, Article III, Section 4.8, and Section 4.9 shall survive the
termination of this Agreement.

Section 4.3. RULE 144. The Company will, at its expense, promptly take such
action as holders of Registrable Securities may reasonably request to enable
such holders of Registrable Securities to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act ("RULE 144"), as such Rule may
be amended from time to time, or (b) any similar rule or regulation hereafter
adopted by the Commission. If at any time the Company is not required to file
such reports, it will, at its expense, forthwith upon the written request of any
holder of Registrable Securities, make available adequate current public
information with respect to the Company within the meaning of paragraph (c)(2)
of Rule 144 or such other information as necessary to permit sales pursuant to
Rule 144. Upon the request of the Investor, which request shall not be made more
than once per calendar quarter the Company will deliver to the Investor a
written statement, signed by the Company's principal financial officer, as to
whether it has complied with such requirements.

Section 4.4. CERTIFICATE. The Company will, at its expense, forthwith upon the
request of any holder of Registrable Securities, which request shall not be made
more than once per calendar quarter deliver to such holder a certificate, signed
by the Company's principal financial officer, stating (a) the Company's name,
address and telephone number (including area code), (b) the Company's Internal
Revenue Service identification number, (c) the Company's Commission file number,
(d) the number of shares of each class of Stock outstanding as shown by the most
recent report or statement published by the Company, and (e) whether the Company
has filed the reports required to be filed under the Exchange Act for a period
of at least ninety (90) days prior to the date of such certificate and in
addition has filed the most recent annual report required to be filed
thereunder.

Section 4.5. AMENDMENT AND MODIFICATION. Any provision of this Agreement may be
waived, provided that such waiver is set forth in a writing executed by both
parties to this Agreement. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of the holders of a majority
of the then outstanding Registrable Securities. Notwithstanding the foregoing,
the waiver of any provision hereof with respect to a matter that relates
exclusively to the rights of holders of Registrable Securities whose securities
are being sold pursuant to a Registration Statement and does not directly or
indirectly affect the rights of other holders of Registrable Securities may be
given by holders of at least a majority of the Registrable Securities being sold
by such holders; provided that the provisions of this sentence may not be
amended, modified or supplemented except in accordance with the provisions of
the immediately preceding sentence. No course of dealing between or among any
Person having any interest in this Agreement will be deemed effective to modify,
amend or discharge any part of this Agreement or any rights or obligations of
any person under or by reason of this Agreement.

Section 4.6. SUCCESSORS AND ASSIGNS; ENTIRE AGREEMENT. This Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. The Investor may
assign its rights under this Agreement to any

                                       9
<Page>

subsequent holder of the Registrable Securities (unless sold pursuant to an
effective registration statement or in accordance with Rule 144 under the
Securities Act), provided that the Company shall have the right to require any
holder of Registrable Securities to execute a counterpart of this Agreement as a
condition to such holder's claim to any rights hereunder. This Agreement,
together with the Purchase Agreement and the Warrant(s) sets forth the entire
agreement and understanding between the parties as to the subject matter hereof
and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them.

Section 4.7. SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that such severability shall be ineffective if
it materially changes the economic benefit of this Agreement to any party
hereto.

Section 4.8. NOTICES. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be given in
accordance with Section 10.04 of the Purchase Agreement.

Section 4.9. GOVERNING LAW. This Agreement shall be construed under the laws of
the State of New York.

Section 4.10. HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement, nor shall they
affect their meaning, construction or effect.

Section 4.11. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original instrument and all
of which together shall constitute one and the same instrument.

Section 4.12. FURTHER ASSURANCES. Each party shall cooperate and take such
action as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.

Section 4.13. ABSENCE OF PRESUMPTION. This Agreement shall be construed without
regard to any presumption or rule requiring construction or interpretation
against the party drafting or causing any instrument to be drafted.

                                       10
<Page>

         IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be executed by the undersigned, thereunto duly authorized,
as of the date first set forth above.

                      AKSYS, LTD.

                      By: /s/ Lawrence D. Damron
                          -------------------------
                          Name:  Lawrence D. Damron
                          Title:  Chief Financial Officer

                      KINGSBRIDGE CAPITAL LIMITED

                      By: /s/ Valentine O'Donoghue
                          -------------------------
                          Valentine O'Donoghue
                          Director<Page>

                                                                    Exhibit 10.4

                      CODEVELOPMENT AND LICENSING AGREEMENT

       THIS CODEVELOPMENT AND LICENSING AGREEMENT (referred to hereinafter as
this "Agreement") is entered into this 21st day of June, 1999 by and between:

              TEIJIN LIMITED (a corporation duly organized under
              the laws of Japan and having its registered office
              and principal place of business at 6-7,
              Minami-honmachi 1-chome, Chuo-ku, Osaka 541, Japan)
              and its successors, subsidiaries, and assigns
              (hereinafter referred to as "Teijin")

                                       and

              AKSYS, LTD. (a corporation duly organized under the
              laws of the State of Delaware, USA, and having its
              principal place of business at 2 Marriott Drive,
              Lincolnshire, Illinois 60069, USA) and its
              successors, subsidiaries, and assigns (hereinafter
              referred to as "Aksys")

                                    RECITALS

       WHEREAS, Teijin provides medical devices and equipment, drugs, and
related services in Japan which are used for the treatment at home of patients
requiring oxygen and also provides other therapies and has developed a unique
and substantial capability to support the treatment of seriously ill patients at
home;

       WHEREAS, Teijin desires to utilize and expand the aforesaid capability by
introducing products for the treatment at home (and possibly in other
non-traditional locations) of patients requiring hemodialysis;

       WHEREAS, Aksys is developing an automated hemodialysis system which is
uniquely suited to supporting patients at home (and possibly in other
non-traditional locations) and will soon complete the initial version of such
system; and

       WHEREAS, Teijin and Aksys intend to collaborate, and have already begun
to collaborate, in developing a substantially improved version of the aforesaid
system which is to be manufactured and marketed both in the United States (by
Aksys beginning in 2001) and in Japan (by Teijin beginning in 2002);

       NOW THEREFORE, in consideration of the mutual covenants and premises
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, accepted and agreed to, Teijin and
Aksys, intending to be legally bound, hereby agree as follows.

                                      - 1 -
<Page>

                             ARTICLE 1: DEFINITIONS

       For purposes of this Agreement, the following terms (when used herein
with initial capital letters) shall have the respective meanings specified or
referred to in this Article 1:

1.1.   MHW: The term "MHW" shall mean the Japanese Ministry of Health and
Welfare and other agencies through which submissions are made to the Japanese
Ministry of Health and Welfare including, for example and without limitation,
the Tokyo Metropolitan Government (i.e. TOCHO) and the Japan Association for the
Advancement of Medical Equipment (i.e. IRYO KIKI CENTER).

1.2.   IMPORT APPROVAL: The term "Import Approval" (i.e. YUNYU SHONIN) shall
mean the approval granted by the MHW to import a drug or medical device for sale
in Japan.

1.3.   MANUFACTURING APPROVAL: The term "Manufacturing Approval" (i.e. SEIZO
SHONIN) shall mean the approval granted by the MHW to manufacture a drug or
medical device for sale in Japan.

1.4.   APPROVAL: The term "Approval" (i.e. SHONIN) shall refer to either
Manufacturing Approval, Import Approval, or both, as defined herein.

1.5.   AKSYS APPROVAL DATE: The term "Aksys Approval Date" shall mean the date
on which the MHW first grants an Approval to Aksys for any of the Products.

1.6.   SYSTEM: The term "System" shall mean Aksys' PHD(TM) Personal Hemodialysis
System, including any and all versions thereof and improvements and
modifications thereto which are existing during the Term of this Agreement and
prior to the Aksys Approval Date.

1.7.   VERSION C: The term "Version C" shall mean that version of the System
which shall be jointly developed by Aksys and Teijin in accordance with Article
3 hereof.

1.8.   PRODUCTS: The term "Products" shall mean all permanent, disposable,
consumable and other items which comprise or are used in conjunction with the
System.

1.9.   TECHNOLOGY: The term "Technology" shall mean inventions, works of
authorship and other intellectual property, whether or not patentable,
copyrightable or subject to other forms of protection, and wherever developed,
protected or maintained, which are existing during the Term of this Agreement
and prior to the Aksys Approval Date and which are related and necessary to the
design, development, manufacture, use, promotion, marketing, distribution,
lease, rent, offer for sale, or sale of the Products. The term "Technology"
shall not include any trade name, trade dress, trademark, service mark or
similar symbols identifying a party or any intellectual property concerning
semiconductor materials, semiconductor manufacturing processes, methods or
techniques except as specifically identified in this or another agreement in
writing by the parties.

                                      - 2 -
<Page>

1.10.  AKSYS TECHNOLOGY: The term "Aksys Technology" shall mean and include
Technology which: (i) is owned or controlled by Aksys or (ii) can be sublicensed
by Aksys to Teijin without additional cost to Aksys.

1.11.  TEIJIN TECHNOLOGY: The term "Teijin Technology" shall mean and include
Technology which: (i) is owned or controlled by Teijin or (ii) can be
sublicensed by Teijin to Aksys without additional cost to Teijin.

1.12.  REIMBURSEMENT: The term "Reimbursement" shall mean any and all payment(s)
which health care providers and/or patients are entitled to receive under
Japan's medical insurance system with respect to any medical procedure which is
performed using the Products and/or with respect to the sale or use of the
Products PER SE.

1.13.  FIRST COMMERCIAL SALE: The term "First Commercial Sale" shall mean the
first time that a health care provider or patient in Japan agrees to purchase,
lease, rent or otherwise acquire a Product and then uses such Product in the
performance of a hemodialysis procedure for which the health care provider or
patient is entitled to receive any Reimbursement, or is otherwise compensated
for having performed or undergone such procedure.

1.14.  GROSS REVENUE: The term "Gross Revenue" shall mean all revenue of any
kind which accrues or is owed to Teijin during the Term of this Agreement and is
derived from or in any way related to the sale or use of the Products. Gross
Revenue shall not include any Japanese consumption tax (i.e. SHOHIZEI) collected
by Teijin.

1.15.  NET REVENUE: The term "Net Revenue" shall mean Gross Revenue minus any
portion of such Gross Revenue which: (i) will not be received by Teijin due to
discounts granted by Teijin to any unrelated customers or (ii) has been refunded
by Teijin to unrelated customers who have returned Products.

1.16.  TERRITORY: The term "Territory" shall mean Japan.

1.17.  FDA: The term "FDA" shall mean the Food and Drug Administration of the US
Department of Health and Human Services.

1.18.  EFFECTIVE DATE: The term "Effective Date" shall mean the date of the last
signature hereto, as entered on the first page of this Agreement.

1.19.  AKSYS LAUNCH DATE: The term "Aksys Launch Date" shall mean the date on
which any Product for which the MHW has granted an Approval to Aksys is first
purchased, leased, rented, or

                                      - 3 -
<Page>

otherwise obtained by a healthcare provider or patient in the Territory.

1.20.  ROYALTY DATE: The term "Royalty Date" shall mean the date on which the
cumulative amount of Teijin's Net Revenue has reached the amount of Twenty-four
Billion Japanese Yen (Y 24,000,000,000).

                          ARTICLE 2: TERM; TERMINATION

2.1.   TERM: This Agreement shall be effective from the Effective Date until
terminated in accordance with this Article 2 (the "Term" of this Agreement).

2.2    TERMINATION BY EITHER PARTY: After the tenth (10th) anniversary of the
First Commercial Sale, either party may terminate this Agreement, effective upon
receipt by the other party of written notice thereof.

2.3.   TERMINATION PURSUANT TO BREACH: In the event that either party, at any
time during the Term of this Agreement, commits a material breach of any
provision hereof, and fails to rectify such material breach within sixty (60)
days following receipt from the other party of written notice that such a
material breach has been committed, then such other party may terminate this
Agreement forthwith by giving written notice to the breaching party. Such
termination shall not prejudice any cause of action or claim of such other
party.

2.4.   TERMINATION EFFECT: Articles 1, 8, 10, 11, 12, and 13 hereof shall
survive termination of this Agreement. Upon termination of this Agreement, the
parties shall discuss in good faith and seek to determine the terms and
conditions (if any) under which either party may use the Technology owned by the
other party.

                      ARTICLE 3: CODEVELOPMENT OF VERSION C

3.1.   BACKGROUND: Aksys has been developing the System and will soon complete
the initial version of the System ("Version A"). Using Version A Aksys intends
to conduct clinical trials, obtain 510 (k) clearance, and begin to market the
System in the United States and Europe. However Aksys and Teijin both recognize
that Version A will be rather costly to manufacture and maintain and, therefore,
that it could be difficult for either party to establish a profitable business
using Version A.

3.2.   OBJECTIVES: The activities undertaken by the parties pursuant to this
Article 3 are intended to develop a new, commercially viable, version of the
System (i.e. "Version C"). Compared to Version A, Version C will be less costly
to manufacture and maintain, and it will incorporate such additional
improvements as may be determined and agreed to by the parties. It is intended
that Version C will replace Version A in the US and Europe beginning in 2001
and, furthermore, that Teijin will begin to manufacture and market Version C in
Japan beginning in 2002. In order to

                                      - 4 -
<Page>

obtain the necessary Approval(s) for Version C by that time, Teijin intends to
conduct clinical trials in Japan beginning in the middle of 2000 and, therefore,
it is intended that samples of Version C which are sufficient for the
performance of such clinical trials be available by mid-2000. Prior to
conducting such clinical trials, Teijin will require samples of Version C for
pre-clinical testing and, therefore, it is intended that at least three samples
of Version C which are sufficient for the performance of such pre-clinical
testing be available by the second calendar quarter of 2000.

3.3    CO-DEVELOPMENT PROGRAM: Version C shall be developed in accordance with
the objectives set forth in Article 3.2 hereof and in accordance with a program
plan to be jointly determined and agreed to by the parties. The program plan
shall include the milestones set forth on Exhibit A attached hereto, and each
such milestone shall be deemed to have been achieved when both parties have
acknowledged such achievement in writing. The parties shall jointly determine
and agree to each party's duties under the program plan. Each party shall
exercise its reasonable efforts to perform its duties under the program plan,
until the co-development program has been completed in accordance with Article
3.4 hereof.

3.4.   COMPLETION OF THE CO-DEVELOPMENT PROGRAM: Unless otherwise agreed by the
parties in writing, the co-development program for Version C shall continue
until the final milestone set forth on Exhibit A attached hereto (i.e. "Approval
for Shipment") has been achieved.

3.5.   RIGHT TO ATTEND BOARD MEETINGS: Until the co-development program for
Version C has been completed in accordance with Article 3.4 hereof, an
individual named by Teijin shall have the right (but not the obligation) to
attend those portions of the regular meetings of the Aksys Board of Directors
which are related to the discussion and review of Aksys' product development
activities.

                         ARTICLE 4: DEVELOPMENT EXPENSES

4.1.   AKSYS DEVELOPMENT EXPENSES FUNDED BY TEIJIN: Upon receipt from Teijin of
the payment specified in Article 7.1 hereof, Aksys shall establish a budget in
the amount of Seven Million US Dollars ($7,000,000). Near the end of June, 1999
and near the end of each calendar quarter thereafter, until Aksys has spent all
of the aforesaid budget, Aksys shall provide Teijin with reports showing Aksys'
actual spending to date against this budget, and the amount of this budget which
remains unspent. Until such time as the co-development program for Version C has
been completed in accordance with Article 3.4 hereof, the actual expenditures
presented in such reports shall include only expenditures which are related and
necessary to the performance of Aksys' duties under Article 3.3 hereof, and
shall not include expenditures solely related to the development of Version A.
After the co-development program for Version C has been completed in accordance
with Article 3.4 hereof, the actual expenditures presented in such reports may
include items which are necessary and related to development of the System, but
which are not specifically related to Version C. Aksys shall exercise reasonable
efforts to ensure that its spending is sufficient for the timely completion of
its duties under Article 3.3 hereof and, also, to ensure that Teijin understands
how and why such funds are being spent. Aksys shall comply with Teijin's
reasonable requests for additional

                                      - 5 -
<Page>

explanation, information, and supporting data.

                                      - 6 -
<Page>

4.2.   OTHER DEVELOPMENT EXPENSES: Except as provided in Article 4.1 hereof,
neither party shall be obligated to reimburse any costs or expenses which the
other party incurs in connection with the performance of its duties under
Article 3 hereof. Each party shall be solely responsible for: (i) all salary,
benefits, and other compensation paid to its own employees and contractors,
(ii) all transportation, lodging, meals, and other expenses incurred by its own
employees and contractors, (iii) all costs and expenses which it incurs to
establish, maintain, equip, and operate its own facilities, and (iv) all other
costs and expenses which it incurs to support development activities which take
place in its own facilities.

4.3.   REGULATORY EXPENSES. Article 4.2. notwithstanding, each party shall be
solely responsible for all costs and expenses related to obtaining any
regulatory approvals which are required prior to beginning its own manufacturing
and marketing activities, including without limitation the cost of any samples
required to perform preclinical or clinical testing for purposes of obtaining
such approval. Should one party request assistance from the other party in
obtaining regulatory approvals, then the party requesting such assistance shall
reimburse the other party for all costs and expenses reasonably incurred to
provide such assistance.

4.4.   MANUFACTURING AND MARKETING EXPENSES: Article 4.2. notwithstanding, each
party shall be solely responsible for all costs and expenses related to its own
manufacturing and marketing activities. Should one party request assistance from
the other party in establishing its own manufacturing and marketing
capabilities, then the party requesting such assistance shall reimburse the
other party for all costs and expenses reasonably incurred to provide such
assistance.

                       ARTICLE 5: RIGHTS IN THE TERRITORY

5.1.   TEIJIN'S RIGHT: During the Term of this Agreement, Teijin shall have the
exclusive right to develop, make, use, promote, market, distribute, lease, rent,
offer for sale, and sell the Products in the Territory; provided however that,
unless otherwise agreed by the parties in writing: (i) Aksys shall have the
option to develop, make, use, promote, market, distribute, lease, rent, offer
for sale, and sell the Products in the Territory, in accordance with Article 5.2
hereof; (ii) Teijin shall not develop, make, use, promote, market, distribute,
lease, rent, offer for sale, or sell the Products outside the Territory; and
(iii) Teijin shall not enable or assist any third-party to develop, make, use,
promote, market, distribute, lease, rent, offer for sale, or sell the Products,
except as provided in Articles 5.3 and 5.4 hereof.

5.2.   AKSYS' OPTION IN THE TERRITORY: During the Term of this Agreement, Aksys
shall have the option to develop, make, use, promote, market, distribute, lease,
rent, offer for sale, and sell the Products in the Territory; provided however
that, unless otherwise agreed by the parties in writing: (i) Aksys shall not
enable or assist any third-party to develop, make, use, promote, market,
distribute, lease, rent, offer for sale, or sell the Products in the Territory,
except as provided in Articles 5.3 and 5.4 hereof; (ii) Aksys shall not submit
an application to the MHW for an Approval for any of the Products until after
the earlier of the second (2nd) anniversary of the First Commercial Sale or

                                      - 7 -
<Page>

December 31, 2005; (iii) at least ninety (90) days prior to submitting its first
application to the MHW for Approval of any of the Products, Aksys shall give
written notice thereof to Teijin; (iv) following the receipt by Teijin of such
notice, the parties shall discuss and amicably seek to address any regulatory,
reimbursement, commercial, or other issues which could arise if and when the MHW
grants such an Approval to Aksys; and (v) notwithstanding the nature or outcome
of the aforesaid discussions, upon being granted an Approval for any of the
Products, Aksys shall have the right to develop, make, use, promote, market,
distribute, lease, rent, offer for sale, and sell the Products in the Territory.

5.3.   CONTRACT MANUFACTURERS: This Agreement shall not prevent either party
from entering into agreements with contract manufacturers or other third-parties
in the Territory under which such third- parties will develop and/or make the
Products in the Territory; provided however, that neither party shall enter into
any such agreement without the prior written consent of the other party, which
consent shall not be unreasonably withheld.

5.4.   WHOLESALERS AND DISTRIBUTORS: This Agreement shall not prevent either
party from promoting, marketing, distributing, leasing, renting, offering for
sale, or selling the Products in the Territory through wholesalers and
distributors (i.e. DAIRITEN); provided however that: (i) neither party shall
enable or assist any third-party to obtain an Approval for any of the Products
and (ii) Teijin shall exercise its reasonable efforts to ensure that any
third-party which obtains the Products from Teijin shall not sell or otherwise
transfer the Products outside the Territory, to any party other than Aksys.

                     ARTICLE 6: RIGHTS OUTSIDE THE TERRITORY

       During the Term of this Agreement, Aksys shall have the exclusive right
to develop, make, use, promote, market, distribute, lease, rent, offer for sale,
and sell the Products outside the Territory. This Agreement shall not prevent
Aksys from entering into agreements of any kind with any third-parties outside
the Territory; provided however that Aksys shall exercise its reasonable efforts
to ensure that no third-party outside the Territory which obtains the Products
from Aksys shall sell or otherwise transfer the Products into the Territory, to
any party other than Aksys or Teijin.

                               ARTICLE 7: PAYMENTS

7.1.   RESEARCH AND DEVELOPMENT FUNDS: On the Effective Date of this Agreement,
Teijin will pay to Aksys the amount of Seven Million US Dollars (US$7,000,000)
as a non-refundable advance against expenditures to be made by Aksys in
accordance with Article 4.1 hereof.

7.2.   LICENSING FEE: On the Effective Date of this Agreement, in addition to
the payment made in accordance with Article 7.1 hereof, Teijin will pay to Aksys
the amount of Seven Million US Dollars (US$7,000,000) as a licensing fee.

                                      - 8 -
<Page>

7.3.   ROYALTIES PAID TO AKSYS: After the Royalty Date, Teijin will pay
royalties to Aksys as follows:

       (i)    Teijin will pay to Aksys as royalties ten percent (10%) of the Net
              Revenue which Teijin earns after the Royalty Date and before the
              Aksys Launch Date.

       (ii)   Teijin will pay to Aksys as royalties five percent (5%) of the Net
              Revenue which Teijin earns after the Royalty Date and after the
              Aksys Launch Date.

       (iii)  Teijin will pay such royalties to Aksys within sixty (60) days
              following the end of each calendar quarter in which Net Revenue is
              earned.

       (iv)   Unless otherwise agreed by the parties in writing, all royalties
              will be paid to Aksys in US Dollars at the rate of exchange
              prevailing at the time such payment is made.

7.4.   POSSIBLE REDUCTION OF ROYALTY RATES: The royalty rates set forth in
Article 7.3 hereof may be reduced by mutual written consent of the parties.

7.5.   JAPANESE TAXES:

       (i)    ON SIGNATURE PAYMENTS: Notwithstanding Article 4.1 or any other
              provision of this Agreement, the payments made by Teijin in
              accordance with Articles 7.1 and 7.2 hereof, shall be
              non-refundable and payable without any set off or any deduction
              for Japanese taxes or withholding and to the extent any deductions
              or withholdings are required with respect to such payments, Teijin
              shall be solely responsible for any such payment, so that Aksys
              receives what it would have received absent any such deduction or
              withholding.

       (ii)   ON ROYALTY PAYMENTS: Should any withholding tax be levied by the
              fiscal authorities of Japan on royalty payments to be made by
              Teijin to Aksys under Article 7.3 hereof, then after having paid
              such withholding tax to the fiscal authorities of Japan, Teijin
              shall be entitled to deduct such withholding tax from payments to
              be made to Aksys hereunder. In such case, Teijin shall procure
              proper tax receipts and shall forward such tax receipts to Aksys
              in order to enable Aksys to obtain withholding tax credit. Should
              a tax exemption for withholding tax purposes be available under
              the laws of Japan or under any international tax treaty or similar
              agreement, then Teijin shall use commercially reasonable efforts
              to enable Aksys to obtain such exemption.

                                     - 9 -
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                         ARTICLE 8: RIGHTS TO TECHNOLOGY

8.1.   TECHNOLOGY DEVELOPED BY TEIJIN: All Technology made in the performance of
any development solely by Teijin personnel shall be the sole and exclusive
property of Teijin and Teijin shall retain any and all rights to file any
applications for intellectual property rights thereon. Any and all such
technology shall be included in the definition of the term "Teijin Technology."
For the Term of this Agreement, Teijin hereby grants to Aksys a non-transferable
sole license, without the right to sublicense, to utilize Teijin Technology to
develop, make, have made, use, promote, market, distribute, lease, rent, offer
for sale and sell the Products worldwide.

8.2.   TECHNOLOGY DEVELOPED BY AKSYS: All Technology made in the performance of
any development solely by Aksys personnel shall be the sole and exclusive
property of Aksys and Aksys shall retain any and all rights to file any
applications for intellectual property rights thereon. Any and all such
technology shall be included in the definition of the term "Aksys Technology."
For the Term of this Agreement, Aksys hereby grants to Teijin a non-transferable
sole license, without the right to sublicense, to utilize Aksys Technology to
develop, make, have made, use, promote, market, distribute, lease, rent, offer
for sale and sell the Products in the Territory.

8.3.   TECHNOLOGY DEVELOPED JOINTLY BY TEIJIN AND AKSYS: All Technology made in
the performance of any development jointly by Teijin and Aksys personnel shall
be the property jointly of Teijin and Aksys ("Jointly Owned Technology"). In the
case of any Jointly Owned Technology, the parties shall mutually determine:
(i) whether an application or applications for intellectual property rights
should be filed, (ii) which party which will prepare, file, and prosecute such
application(s) (the "Filing Party"), and (iii) the country or countries in which
such application(s) shall be filed. Regardless of which party is the Filing
Party, all costs and expenses related to obtaining and defending intellectual
property rights for Jointly Owned Technology shall be borne equally by the
parties.

8.4.   ABANDONMENT OF JOINTLY OWNED TECHNOLOGY: Notwithstanding Article 8.3.
hereof, if either party declines to obtain, maintain, or defend any particular
intellectual property right for any Jointly Owned Technology or fails to pay its
share of the cost of obtaining, defending, or maintaining such intellectual
property right, then the party wishing to obtain and defend such intellectual
property right may do so independently, at its sole expense, and the other party
shall forthwith relinquish its right, title, and interest in such intellectual
property right.

                 ARTICLE 9: RIGHTS TO OBTAIN AND USE INFORMATION

9.1.   IN GENERAL: Prior to the Aksys Approval Date during the Term of this
Agreement, each party shall provide the other party with such documents,
information, and data related and necessary to the design, development,
manufacture, use, promotion, marketing, distribution, lease, rent, offer for
sale, or sale of the Products, as may be reasonably requested by the other
party, including without limitation as provided in this Article 9.

                                     - 10 -
<Page>

9.2.   US REGULATORY DOCUMENTS, INFORMATION, AND DATA: Prior to the Aksys
Approval Date during the Term of this Agreement, and within thirty (30) days
following its submission to or receipt from the FDA of any document pertaining
to the Products, Aksys shall deliver a copy of each such document to Teijin.
Aksys shall comply with Teijin's reasonable requests to review information and
data supporting such documents, whether or not such information or data has been
submitted to the FDA.

9.3.   RESULTS OF US CLINICAL TRIALS: Prior to the Aksys Approval Date, during
the Term of this Agreement, Aksys will inform Teijin prior to beginning any
clinical trial which involves the use of the Products and provide Teijin with a
copy of the protocol to be used for each such trial. The results of such trials,
including information regarding adverse reactions or other problems which may
arise or be identified during the trial, will be reported to Teijin on a timely
basis. Aksys will comply with Teijin's reasonable requests for additional
information concerning such trials.

9.4.   JAPANESE REGULATORY DOCUMENTS, INFORMATION, AND DATA: Prior to the Aksys
Approval Date during the Term of this Agreement, and within thirty (30) days
following its submission to or receipt from the MHW of any document pertaining
to the Products, Teijin shall deliver a copy of each such document to Aksys.
Teijin shall comply with Aksys' reasonable requests to review information and
data supporting such documents, whether or not such information or data has been
submitted to the MHW.

9.5.   RESULTS OF JAPAN CLINICAL TRIALS: Prior to the Aksys Approval Date,
during the Term of this Agreement, Teijin will inform Aksys prior to beginning
any clinical trial which involves the use of the Products and provide Aksys with
a copy of the protocol to be used for each such trial. The results of such
trials, including information regarding adverse reactions or other problems
which may arise or be identified during the trial, will be reported to Aksys on
a timely basis. Teijin will comply with Aksys' reasonable requests for
additional information concerning such trials.

9.6.   USE OF DOCUMENTS, INFORMATION, AND DATA: Either party shall have the
right to refer to and use documents, information, and data received under this
Article 9 in the performance of its duties under Article 3 hereof and in
developing its applications for Approval; provided however that Aksys shall not
have the right to submit to the MHW any clinical or other experimental data
which Teijin has previously submitted to the MHW, unless such data were: (i)
developed by Aksys or (ii) obtained by Aksys from a third-party without breach
of this Agreement. Aksys shall in any case have the right to refer to and use
all documents, information, and data received under this Article 9 in developing
its submissions to the FDA and other regulatory agencies outside Japan.

9.7.   COST OF DOCUMENTS, INFORMATION, AND DATA: Article 4 hereof
notwithstanding, neither party shall be entitled to compensation from the other
party for documents, information, or data provided in accordance with this
Article 9.

                                     - 11 -
<Page>

9.8.   LANGUAGE: All documents, information, and data provided by either party
in accordance with this Article 9 shall be provided in the language (e.g.
Japanese or English) in which such items were originally created, and neither
party shall be obligated to translate any item into another language.

                           ARTICLE 10: CONFIDENTIALITY

10.1.  CONFIDENTIAL INFORMATION: Aksys and Teijin acknowledge that, in the
course of performing their respective obligations under this Agreement, each
will receive information which is confidential and proprietary to the disclosing
party and which the disclosing party wishes to protect from public disclosure.
The term "Confidential Information" shall mean any information and data relating
to Technology or which shall be disclosed between the parties and marked
"Confidential" relating to their respective businesses, customers, products,
development results, marketing plans, financial status, intellectual property
rights, the terms of this Agreement, and technical information. In addition any
and all of the information, data and samples which Teijin or Aksys acquires
pursuant to Articles 3 and 9 hereof shall be considered Confidential
Information.

10.2.  RESTRICTIONS: Confidential Information shall remain the sole and
exclusive property of the disclosing party. The party receiving Confidential
Information shall use it only for the purpose of performing its obligations
under this Agreement, including its responsibilities under Article 3 and as
provided in Article 9 hereof, and shall not disclose or provide access to the
Confidential Information to any third party without the prior written consent of
the disclosing party except as required by applicable law. Each party shall
exercise the same degree of care to safeguard the confidentiality of the other
party's Confidential Information as it would exercise in protecting the
confidentiality of similar property of its own, and shall use its diligent
efforts to prevent inadvertent or unauthorized disclosure of all Confidential
Information. The foregoing shall not apply to information which a party can
show:

(i)    was already in the possession of such party prior to disclosure;

(ii)   has become publicly available without breach of this Agreement by such
       party;

(iii)  has been rightfully received by such party from a third party not under
       an obligation of confidence to the other party with respect thereto;

(iv)   was released for disclosure by the other party with its written consent;
       or,

(v)    was disclosed to the public pursuant to the requirement of a governmental
       agency or operation of law, provided that such party is obligated to use
       its best efforts to prevent or limit disclosure under such circumstances.

                                     - 12 -
<Page>

10.3.  INJUNCTIVE RELIEF: The parties understand and agree that the disclosing
party will suffer immediate, irreparable harm in the event the receiving party
fails to comply with any of its obligations under this Article 10, that monetary
damages will be inadequate to compensate the disclosing party for such breach,
and that the disclosing party shall have the right to enforce this Article 10 by
injunctive or other equitable remedies. In the event that one party brings legal
action pursuant to this Article 10 and successfully obtains injunctive relief,
then the other party shall pay the attorneys' fees and other reasonable costs of
the party bringing such action. (The provisions of this Article 10.3 shall not
be limited in any way by the provisions of Articles 12 or 13.2 hereof.)

            ARTICLE 11: INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS

11.1.  REPRESENTATIONS AND WARRANTIES: Neither Teijin nor Aksys is currently
aware of any third-party's intellectual property that would be infringed,
misappropriated, or otherwise violated by Version C as currently envisaged.

11.2   INDEMNIFICATION: Aksys hereby agrees to protect, defend, hold harmless
and indemnify Teijin from and against any and all claims, damages, liabilities,
losses and expenses arising out of any alleged or actual infringement of the
intellectual property of any third-party by Products sold by Aksys outside the
Territory. Teijin hereby agrees to protect, defend, hold harmless and indemnify
Aksys from and against any and all claims, damages, liabilities, losses and
expenses arising out of any alleged or actual infringement of the intellectual
property of any third-party by Products sold by Teijin in the Territory.

11.3.  INDEMNITY RESTRICTION: Notwithstanding Article 11.2 hereof, the
indemnifying party shall have no obligations for any claim under this Article 11
unless: (i) the indemnified party notifies the indemnifying party of such claim
as soon as practicable, but in no event less than fifteen (15) days after the
indemnified party receives notice thereof, (ii) the indemnified party tenders
control of the defense of such claim to the indemnifying party, and (iii) the
indemnified party provides the indemnifying party with all reasonable
cooperation in such defense of such claim. Furthermore, the indemnifying party
shall have no obligation for any claim under this Agreement if the Indemnified
Party makes any admission, settlement or other communication regarding such
claim without the prior written consent of the Indemnifying Party, which consent
shall not be unreasonably withheld. The indemnified party shall have the right
(but not the obligation) to participate in such defense or settlement, in which
event each party shall pay its respective attorneys' fees.

                       ARTICLE 12: LIMITATION OF LIABILITY

12.1.  DISCLAIMER OF WARRANTY: EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
THE PARTIES MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER
EXPRESS OR IMPLIED, INCLUDING ANY

                                     - 13 -
<Page>

EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. THE PARTIES EXPRESSLY DISCLAIM ANY REPRESENTATION, WARRANTY, COVENANT
OR CONDITION REGARDING THE COMPLETION OR FAILURE TO COMPLETE VERSION C.

12.2   INDEMNIFICATION BY AKSYS: Aksys shall indemnify and hold harmless Teijin,
its officers, agents, employees, and affiliates from any loss, claim, action,
damage, expense, or liability (including defense costs and attorneys' fees)
arising out of or related to: (i) any injury to Aksys' employees or agents while
at Teijin's facilities, (ii) the handling, use or sale by Aksys of any product
(including but not limited to any of the Products) which Aksys has purchased or
otherwise obtained from Teijin and (iii) the use in commerce of any product
(including but not limited to any of the Products) which Aksys has purchased or
otherwise obtained from Teijin.

12.3   INDEMNIFICATION BY TEIJIN: Teijin shall indemnify and hold harmless
Aksys, its officers, agents, employees, and affiliates from any loss, claim,
action, damage, expense, or liability (including defense costs and attorneys'
fees) arising out of or related to: (i) any injury to Teijin employees or agents
while at Aksys facilities, (ii) the handling, use or sale by Teijin of any
product (including but not limited to any of the Products) which Teijin has
purchased or otherwise obtained from Aksys and (iii) the use in commerce of any
product (including but not limited to any of the Products) which Teijin has
purchased or otherwise obtained from Aksys.

12.4.  EXCLUSION OF CONSEQUENTIAL DAMAGES: In no event shall either party be
liable or responsible to the other party for the loss of any actual or
anticipated profits, loss of time, inconvenience, commercial loss, or any other
damages arising from or related to either party's performance or failure to
perform under this Agreement.

                            ARTICLE 13: MISCELLANEOUS

13.1.  GOVERNING LAW: This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Illinois, USA.

13.2.  ARBITRATION: The parties shall initially endeavor to resolve any disputes
by good-faith negotiations. If they are unable to resolve any differences
relating to or arising from this Agreement or alleged breach of this Agreement,
the matter(s) shall be submitted to arbitration in accordance with the
International Rules of the American Arbitration Association ("A.A.A.") then in
force. The number of arbitrators shall be three (3), with one (1) to be
appointed by each party and the third to be designated by the two
party-appointed arbitrators. Each party shall be responsible for their own costs
and expenses, including attorneys' fees, the fees for each party-appointed
arbitrator, disbursements, and filing fees. The place of arbitration shall be
Chicago, Illinois, USA. The decision of the arbitrators shall be final and
binding and the award may be entered in any court of competent jurisdiction.

                                     - 14 -
<Page>

13.3.  COUNTERPARTS: For convenience of the parties, this Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
for all purposes, and all of which taken together shall constitute but one and
the same instrument.

13.4.  NOTICES: All notices, requests, demands, consents, waivers, approvals,
and other communications hereunder shall be in writing and shall be deemed to
have been duly given: (i) if delivered personally with receipt acknowledged,
(ii) if transmitted by telex, telefax, telegraph, or other like method (with
receipt acknowledged), or (iii) if mailed, postage prepaid, by certified mail,
return receipt requested, addressed as follows:

       IF TO TEIJIN:  Teijin Limited
                      Home Health Care Division
                      Tokyo Sakurada Bldg.
                      1-1-3, Nishi-Shimbashi
                      Minato-ku, Tokyo 105, Japan
                      Attn: General Manager, Planning Department
                      Telefax: 81-3-3506-4060

       IF TO AKSYS:   Aksys Limited
                      Two Marriott Drive
                      Lincolnshire, Illinois  60069, USA
                      Attn: Chief Executive Officer
                      Telefax: 1-847-229-2080

                      with a copy (which shall not constitute notice) to:

                      Aksys Japan, KK
                      2-28-1 Nihonbashi-Hamacho
                      Chuo-ku, Tokyo 103, Japan
                      Attn: President
                      Telefax: 81-3-3662-5040

or such other address as either party may designate for itself by written notice
given to the other party from time to time in the manner hereinabove provided.
Except as otherwise expressly provided herein, all communications hereunder
shall be deemed to be given, received, and dated on the date when delivered
personally, on the date of receipt of telex or telefax, or on the date of
delivery or refusal (if refused) of certified or registered mail.

13.5.  SEVERABILITY: In the event that any one or more of the provisions of this
Agreement is held invalid or unenforceable, such unenforceability shall not
affect any other provision, but this Agreement shall then be construed as if
such unenforceable provision or provisions had never been contained herein.

                                     - 15 -
<Page>

13.6.  HEADINGS: Headings and titles used herein are for convenience of
reference only and shall not control the construction or interpretation of any
provision hereof.

13.7.  INTEGRATION: This Agreement embodies the entire understanding and
agreement of the parties hereto with respect to the subject matter contained
herein, and supersedes all prior oral or written understandings and agreements
relating thereto except as expressly otherwise provided, and may not be altered,
modified, or waived in whole or in part, except in writing, signed by duly
authorized representatives of the parties.

13.8.  FORBEARANCE: The failure of either party to insist upon the performance
of any of the terms, covenants, conditions, or provisions of this Agreement
shall not be considered a waiver or relinquishment of continued compliance
therewith; nor shall a waiver by either party of any breach of any term,
covenant, condition, agreement, or provision constitute a waiver of any
subsequent breach of that term, covenant, condition, agreement or provision.

13.9.  ASSIGNMENT: The rights granted to and the obligations imposed upon the
parties under this Agreement shall not be assignable, or otherwise delegable,
transferable, or subject to encumbrance in any manner or degree to or in favor
of any person for any purpose by any act of either party or by operation of law
or otherwise, without the prior written consent of the other party, and any
attempt to assign, delegate, transfer, or encumber such rights or duties, in the
absence of the other party's prior written consent, shall be void and of no
force and effect; provided however that this Agreement may be assigned to any
third-party which has acquired all or substantially all of the business or
assets of either party to this Agreement. Notwithstanding the foregoing, this
Agreement shall be binding on any successors of the parties.

13.10. RELATIONSHIP: This Agreement supersedes and replaces the Joint
Development Agreement dated January 8, 1998 by and between Teijin and Aksys. The
parties acknowledge that this Agreement constitutes a fair and equitable basis
for their relationship. However in the event that during the term of this
Agreement the general situation and/or data upon which this Agreement is based
are substantially changed so that either party suffers severe and unforeseeable
hardship which it could not reasonably be expected to bear, the parties will
consult in good faith to find a solution acceptable to both parties. The parties
shall be independent contractors, and nothing herein shall be deemed to make
them partners, co-venturers or principal and agent.

13.11. AUDIT PROVISIONS: Aksys shall comply with Teijin's reasonable requests to
inspect Aksys' accounting records in order to determine Aksys' compliance with
Article 4.1 hereof. Teijin shall comply with Aksys' reasonable requests to
inspect Teijin's accounting records in order to determine Teijin's compliance
with Article 7 hereof. Either party may use a Certified Public Accountant or
other qualified third-party to perform on its behalf the inspections allowed
under this Article 13.11.

13.12. PUBLIC RELEASE: Except as required by law, neither party shall issue a
press release or make

                                     - 16 -
<Page>

any other public statement or disclosure regarding this Agreement, without the
prior written consent of the other party.

13.13. GOOD FAITH DISCUSSIONS: Aksys shall hold good-faith discussions with
Teijin before concluding any agreement with a third-party which would foreclose
to Teijin the possibility of marketing the Products in the Republic of China,
Korea, Taiwan, Singapore, Malaysia, Thailand, or Indonesia.

       IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the day and year first above written.

TEIJIN LIMITED                               AKSYS, LTD.

BY:      /s/ Toshimitsu Ishikawa             BY:      /s/ Lawrence H.N. Kinet
       -------------------------                    -------------------------
       Toshimitsu Ishikawa                          Lawrence H. N. Kinet
       Managing Director                            President
       General Manager                               and Chief Executive Officer
       Medical and Pharmaceutical Group

       Hereunto Duly Authorized                     Hereunto Duly Authorized

DATE:  June 21, 1999                         DATE:  June 16, 1999

                                     - 17 -

<Page>

                                    EXHIBIT A
                              KEY MILESTONES IN THE
                      CO-DEVELOPMENT PROGRAM FOR VERSION C

<Table>
<Caption>

                          DEVELOPMENT MILESTONE                                  TARGET DATE*
-------------------------------------------------------------------------       ---------------
<S>    <C>                                                                      <C>

1.   AFTF  ("Approval for Technical Feasibility"):  The parties agree            1999, May 1
     on a set of general requirements and specifications for Version C
     the technical feasibility of which shall be systematically explored.

2.   AFD   ("Approval for Development"):  The parties agree on a set             1999, July 30
     of requirements and specifications which are technically feasible
     and approve the program whereby Version C shall be developed.

3.   AFM  ("Approval for Manufacturing"):  The parties agree on the              2000, June 30
     final specifications for Version C as it will actually be manufactured.

4.   AFS ("Approval for Shipment"): The parties agree that Version C             2000, September 30
     can be reliably manufactured and is, pending the receipt of necessary
     regulatory approvals, suitable for actual clinical and commercial use.

--------
*   The dates specified above represent the consensus of the parties, as of the
    Effective Date of this Agreement, regarding when each milestone was or
    probably will be achieved.

</table>

                                     - 18 -

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