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                                                                    Exhibit 10.5

                                WARRANT AGREEMENT

                                     Between

                                   AKSYS, LTD.

                                       And

                   CONTINENTAL STOCK TRANSFER & TRUST COMPANY

                            Dated as of June 23, 2006

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     This Agreement, dated as of June 23, 2006, is between Aksys, Ltd., a
Delaware corporation (the "Company"), and Continental Stock Transfer & Trust
Company, as warrant agent (the "Warrant Agent").

                                    RECITALS

     WHEREAS, the Company has entered into a Securities Purchase Agreement (the
"Purchase Agreement") dated as of March 31, 2006 by and between the Company and
Durus Life Sciences Master Fund Ltd. (the "Investor");

     WHEREAS, pursuant to the Purchase Agreement, the Company has agreed to sell
to the Investor, and the Investor has agreed to acquire from the Company, (i)
five thousand (5,000) shares of the Company's Series B Convertible Preferred
Stock (the "Preferred Shares"), each of which Preferred Share is convertible
into shares of the Company's common stock, par value $0.01 per share (the
"Common Stock"), pursuant to the terms of the Certificate of Designation (such
shares of Common Stock into which the Preferred Shares may be converted
hereinafter referred to as the "Conversion Shares") and (ii) warrants (the
"Warrants") to purchase at an initial exercise price of $1.10 per share five
million (5,000,000) shares of Common Stock (the "Warrant Shares");

     WHEREAS, pursuant to the Purchase Agreement, the Company has agreed to sell
to the Investor or other persons or entities designated by the Investor (such
other persons or entities designated by the Investor herein are collectively
referred to with the Investor as the "Investors"), and the Investors have the
option to purchase, in one or more installments, for an aggregate purchase price
of up to $15,000,000, additional preferred shares and warrants containing
substantially the same terms and conditions as the Preferred Shares and the
Warrants except that the expiration date of such later issued warrants shall be
five years from their original date of issue (any such later acquired preferred
shares and warrants are herein collectively referred to with the initially
issued Preferred Shares and Warrants as the "Preferred Shares" and the
"Warrants", respectively, and the initially issued Warrants under the Purchase
Agreement are sometimes referred to herein as the "Initial Warrants");

     WHEREAS, the Company wishes to retain the Warrant Agent to act on behalf of
the Company, and the Warrant Agent is willing so to act, in connection with the
issuance, transfer, exchange and replacement of the certificates evidencing the
Warrants to be issued under this Agreement (the "Warrant Certificates") and the
exercise of the Warrants;

     WHEREAS, the Company and the Warrant Agent wish to enter into this
Agreement to set forth the terms and conditions of the Warrants and the rights
of the holders thereof ("Warrantholders") and to set forth the respective rights
and obligations of the Company and the Warrant Agent; and

     WHEREAS, each Warrantholder is an intended beneficiary of this Agreement
with respect to the rights of Warrantholders herein.

     NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth and for the purpose of defining the terms and provisions of the
Warrants and the

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Warrant Certificates and the respective rights and obligations thereunder of the
Company, the Warrantholders and the Warrant Agent, the parties hereto agree as
follows:

     SECTION 1. APPOINTMENT OF WARRANT AGENT

     The Company appoints the Warrant Agent to act as agent for the Company in
accordance with the instructions in this Agreement and the Warrant Agent accepts
such appointment.

     SECTION 2. DATE, DENOMINATION AND EXECUTION OF WARRANT CERTIFICATES

     The Warrant Certificates (and the Form of Election to Purchase and the Form
of Assignment to be printed on the reverse thereof) shall be in registered form
only and shall be substantially in the form attached hereto as Exhibit A (the
provisions of which are hereby incorporated herein), and may have such letters,
numbers or other marks of identification or designation and such legends,
summaries or endorsements printed, lithographed or engraved thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any law, or with any rule
or regulation made pursuant thereto, or with any rule or regulation of any stock
exchange or automated quotation system on which the Common Stock (or other
securities issuable upon exercise of the Warrants) or the Warrants may be
listed, or to conform to usage. Each Warrant Certificate for the Initial
Warrants shall entitle the registered holder thereof, subject to the provisions
of this Agreement and of the Warrant Certificate, to purchase, on or before the
close of business on June 23, 2011 (the "Expiration Date"), and each Warrant
Certificate for any later issued series of Warrants shall entitle the registered
holder thereof, subject to the provisions of this Agreement and the Warrant
Certificate, to purchase, on or before the date that is the first business day
falling five years after the initial date of issuance of such later issued
Warrants (and such date shall be the "Expiration Date" for such later issued
series of Warrants), one fully paid and non-assessable share of Common Stock for
each Warrant evidenced by such Warrant Certificate for $1.10 (the "Exercise
Price), in each case subject to the adjustments provided in Section 6 hereof.
Each Warrant Certificate issued to the Investors as described in the recitals,
above, shall be dated the date of issuance thereof; and each other Warrant
Certificate shall be dated the date on which the Warrant Agent receives valid
issuance instructions from the Company or a transferring holder of a Warrant
Certificate or, if such instructions specify another date, such other date.

     For purposes of this Agreement, the term "close of business" on any given
date shall mean 5:00 p.m., New York Time, on such date; provided, however, that
if such date is not a business day, it shall mean 5:00 p.m., New York Time, on
the next succeeding business day. For purposes of this Agreement, the term
"business day" shall mean any day other than a Saturday, Sunday, or a day on
which the New York Stock Exchange (or banking institutions in the state in which
the Warrant Agent maintains the principal office in which it conducts business
related to the Warrants) are authorized or obligated by law to be closed.

     Each Warrant Certificate shall be executed on behalf of the Company by its
Chief Executive Officer or Chief Financial Officer, either manually or by
facsimile signature printed thereon, and have affixed thereto the Company's seal
or a facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by

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facsimile signature. Each Warrant Certificate shall be manually or by facsimile
signature printed thereon countersigned by the Warrant Agent and shall not be
valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any Warrant Certificate shall cease to be such
officer of the Company before countersignature by the Warrant Agent and issue
and delivery thereof by the Company, such Warrant Certificate, nevertheless, may
be countersigned by the Warrant Agent, issued and delivered with the same force
and effect as though the person who signed such Warrant Certificate had not
ceased to be such officer of the Company.

     Except as otherwise permitted by this Agreement, each Warrant (including
each Warrant issued upon the transfer of any Warrant) shall be stamped or
otherwise imprinted with a legend in substantially the following form:

          "THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS
     WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
     AMENDED, OR APPLICABLE SECURITIES LAWS. THIS WARRANT AND SUCH SECURITIES
     MAY NOT BE OFFERED FOR SALE, SOLD, OR TRANSFERRED EXCEPT PURSUANT TO AN
     EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
     ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT
     TO AN APPLICABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
     REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, AND IN
     ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS."

     SECTION 3. SUBSEQUENT ISSUE OF WARRANT CERTIFICATES

     Subsequent to their original issuance, no Warrant Certificates shall be
reissued except (i) Warrant Certificates issued upon transfer thereof in
accordance with Section 4 hereof, (ii) Warrant Certificates issued upon any
combination, split-up or exchange of Warrant Certificates pursuant to Section 4
hereof, (iii) Warrant Certificates issued in replacement of mutilated,
destroyed, lost or stolen Warrant Certificates pursuant to Section 5 hereof,
(iv) Warrant Certificates issued upon the partial exercise of Warrant
Certificates pursuant to Section 7 hereof, and (v) Warrant Certificates issued
to reflect any adjustment or change in the Exercise Price or the number or kind
of shares or securities purchasable thereunder pursuant to Section 22 hereof.
The Warrant Agent is hereby irrevocably authorized to countersign and deliver,
in accordance with the provisions of Sections 4, 5, 7 and 22, the new Warrant
Certificates required for purposes thereof, and the Company, whenever required
by the Warrant Agent, will supply the Warrant Agent with Warrant Certificates
duly executed on behalf of the Company for such purposes.

     SECTION 4. TRANSFERS AND EXCHANGES OF WARRANT CERTIFICATES; COMPLIANCE WITH
                THE SECURITIES ACT

               The Warrant Agent will keep or cause to be kept at its stock
transfer office in New York, New York ("Stock Transfer Office") books for
registration of ownership and transfer

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of the Warrant Certificates issued hereunder. Such registers shall show the
names and addresses of the respective holders of the Warrant Certificates and
the number of Warrants evidenced by each such Warrant Certificate.

     The Warrant Agent shall, from time to time, promptly register the transfer
of any outstanding Warrants in whole or in part in the books to be maintained by
the Warrant Agent for that purpose, upon surrender of the Warrant Certificate
evidencing such Warrants, with the Form of Assignment duly filled in and
executed with such signature guaranteed by a financial institution that is a
member of a Securities Transfer Association approved medallion program, such as
STAMP, SEMP or MSP and such supporting documentation as the Warrant Agent or the
Company may reasonably require, to the Warrant Agent at its Stock Transfer
Office at any time on or before the Expiration Date, and upon payment to the
Warrant Agent for the account of the Company of an amount equal to any
applicable transfer tax. Payment of the amount of such tax may be made in cash,
or by certified or official bank check, payable in lawful money of the United
States of America to the order of the Company.

     Upon receipt of a Warrant Certificate, with the Form of Assignment duly
filled in and executed, accompanied by payment of an amount equal to any
applicable transfer tax, the Warrant Agent shall promptly cancel the surrendered
Warrant Certificate and countersign and deliver to the transferee a new Warrant
Certificate for the number of full Warrants transferred to such transferee;
provided, however, that in case the registered holder of any Warrant Certificate
shall elect to transfer fewer than all of the Warrants evidenced by such Warrant
Certificate, the Warrant Agent in addition shall promptly countersign and
deliver to such registered holder a new Warrant Certificate or Certificates for
the number of full Warrants not so transferred.

     Any Warrant Certificate or Certificates may be exchanged at the option of
the holder thereof for another Warrant Certificate or Certificates of different
denominations, of like tenor and representing in the aggregate the same kind and
number of Warrants, upon surrender of such Warrant Certificate or Certificates,
with the Form of Assignment duly filled in and executed, to the Warrant Agent,
at any time or from time to time after the close of business on the date hereof
and prior to the close of business on the applicable Expiration Date. The
Warrant Agent shall promptly cancel the surrendered Warrant Certificate and
deliver the new Warrant Certificate pursuant to the provisions of this Section.

     Upon transfer of any Warrant, such Warrant shall be transferred free of any
restrictive legend and registered in such name and in such denominations as
specified by the transferor in question provided:

     (i) The Warrant Agent receives written notice from Company counsel that a
registration statement covering re-sales of the Warrants has been declared
effective by the Securities and Exchange Commission under the Securities Act of
1933, as amended (the "Securities Act"), and written confirmation from the
transferor in question that the resale of such Warrant was made pursuant to such
effective registration statement; or

     (ii) The Warrant Agent receives written notice from Company counsel that
the re-sale of such Warrants may be effected under Rule 144 of the Securities
Act or otherwise pursuant to an exemption from registration under the Securities
Act.

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     Unless and until the Warrant Agent receives written notice from the Company
that a registration statement covering resales of the Warrants has been declared
effective by the Securities and Exchange Commission under the Securities Act,
the Warrant Agent shall promptly notify the Chief Financial Officer of the
Company in writing of any request that the Warrant Agent receives pertaining to
the proposed transfer of any Warrant.

     SECTION 5. MUTILATED, DESTROYED, LOST OR STOLEN WARRANT CERTIFICATES

     Upon receipt by the Company and the Warrant Agent (i) of evidence
reasonably satisfactory to them of the ownership of and the loss, theft,
destruction or mutilation of any Warrant Certificate, and (ii) in the case of
loss, theft or destruction, of indemnity or security reasonably satisfactory to
them, and reimbursement to them of all reasonable expenses incidental thereto,
and, (iii) in the case of mutilation, upon surrender and cancellation of the
Warrant Certificate, then: the Warrant Agent shall countersign and deliver a new
Warrant Certificate of like tenor for the same number of Warrants.

     SECTION 6. ADJUSTMENTS AND LIMITATION OF NUMBER AND KIND OF SHARES
                PURCHASABLE AND EXERCISE PRICE

     The number and kind of securities or other property purchasable upon
exercise of a Warrant shall be subject to adjustment from time to time upon the
occurrence, after the date hereof, of any of the following events:

A. COMMON STOCK DIVIDENDS AND DISTRIBUTIONS, SUBDIVISIONS, COMBINATIONS AND
RECLASSIFICATIONS. In the event that the Company shall (i) pay a dividend or
make a distribution on its outstanding shares of Common Stock using shares of
Common Stock, (ii) subdivide its outstanding shares of Common Stock into a
larger number of shares of Common Stock, (iii) combine its outstanding shares of
Common Stock into a smaller number of shares of Common Stock or (iv) increase or
decrease the number of shares of Common Stock outstanding by reclassification of
its Common Stock, then the Exercise Price in effect immediately prior to such
dividend, distribution, subdivision, combination or reclassification shall be
adjusted to equal the product obtained by multiplying the Exercise Price by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately prior to such dividend, distribution, subdivision,
combination or reclassification and the denominator of which is the number of
shares of Common Stock outstanding after giving effect to such dividend,
distribution, subdivision, combination or reclassification. Likewise, the number
of shares of Common Stock issuable upon exercise of each Warrant immediately
prior to such Exercise Price adjustment shall be adjusted, effective
simultaneously with the Exercise Price adjustment, to equal the product obtained
by multiplying such number of shares of Common Stock by a fraction, the
numerator of which is the Exercise Price per share immediately prior to such
Exercise Price adjustment and the denominator of which is the Exercise Price per
share in effect upon such Exercise Price adjustment, which adjusted number of
shares of Common Stock shall be the number of shares of Common Stock issuable
upon exercise of the Warrant until further adjusted as provided herein. An
adjustment made pursuant to this Section 6A shall become effective immediately
after the dividend or distribution date retroactive to the record date in the

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case of a dividend or distribution of shares of Common Stock, and shall become
effective immediately after the effective date in the case of a subdivision,
combination or reclassification.

B. DIVIDENDS AND OTHER DISTRIBUTIONS. In the event that the Company shall pay on
its outstanding shares of Common Stock (i) any dividend or other distribution
(including any dividend or distribution made in connection with a consolidation
or merger in which the Company is the continuing corporation) of cash, evidences
of its indebtedness, shares of its capital stock or any other properties or
securities or (ii) any options, warrants or other rights to subscribe for or
purchase any of the foregoing (other than, in the case of clause (i) and (ii)
above, (x) any dividend or distribution described in Section 6A, and (y) any
rights, options, warrants or securities described in Section 6C or Section 6D),
then the number of shares of Common Stock issuable upon the exercise of each
Warrant immediately prior to the record date for any such dividend or
distribution shall be increased to a number determined by multiplying the number
of shares of Common Stock issuable upon the exercise of such Warrant immediately
prior to such record date by a fraction, the numerator of which shall be the
Market Price (as defined below) per share of Common Stock on such record date,
and the denominator of which shall be such Market Price per share of Common
Stock on such record date less the sum of (x) the amount of cash, if any,
dividended or distributed per share of Common Stock and (y) the then fair value
(as reasonably determined in good faith by the Company's Board of Directors,
whose determination shall be evidenced by a board resolution filed with the
Warrant Agent, a copy of which will be sent to Warrantholders upon request) per
share of Common Stock of the dividend or distribution consisting of evidences of
indebtedness, shares of stock, securities, other property, warrants, options or
subscription or purchase rights. In the case of any such dividend or
distribution, subject to Section 6H, the Exercise Price shall be adjusted to a
number determined by dividing the Exercise Price immediately prior to the record
date for such dividend or distribution by the fraction set forth in the
preceding sentence. As used herein, "Market Price" shall be the arithmetic mean
of the last reported sale prices of the Common Stock for the ten (10)
consecutive trading days ending on the date for which the Market Price is being
calculated, such sale prices as reported by the primary exchange on which the
Common Stock is traded, if the Common Stock is traded on a national securities
exchange, or by Nasdaq, if the Common Stock is traded on a Nasdaq automated
quotation system, or, if not listed on Nasdaq or traded on any such exchange,
the average of the bid and asked price per share on Nasdaq or, if such
quotations are not available, the fair market value per share of the Common
Stock as reasonably determined in good faith by the Board of Directors of the
Company. Such adjustments shall be made, and shall only become effective,
whenever any dividend or distribution is made. Notwithstanding the foregoing,
the Company shall not be required to make an adjustment pursuant to this Section
6B, if at the time of any such dividend or distribution, the Company makes the
same distribution to Warrantholders as it makes to holders of Common Stock pro
rata based on the number of shares of Common Stock for which a Warrantholder's
Warrants are exercisable (whether or not currently exercisable). No adjustment
shall be made pursuant to this Section 6B which shall have the effect of
decreasing the number of shares of Common Stock issuable upon exercise of a
Warrant or increasing the Exercise Price thereof.

C. ISSUANCE OF COMMON STOCK OR RIGHTS OR OPTIONS. In the event that the Company
shall issue shares of Common Stock, or rights, options or warrants to acquire
shares of Common Stock, or securities convertible or exchangeable into shares of
Common Stock, for consideration per share of Common Stock that is less than the
Market Price per share of Common Stock as of

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the issuance date of such shares, or entitling the holders of such rights,
options, warrants or convertible or exchangeable securities to subscribe for or
purchase shares of Common Stock at a price that is less than the Market Price
per share of Common Stock as of the issuance date of such rights, options,
warrants or convertible or exchangeable securities, the number of shares of
Common Stock issuable upon the exercise of each Warrant immediately after such
issuance date shall be adjusted by multiplying the number of shares of Common
Stock issuable upon exercise of such Warrant immediately prior to such issuance
date by a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding immediately preceding the issuance of such shares,
rights, options, warrants or convertible or exchangeable securities plus the
number of additional shares of Common Stock to be issued in such transaction or
which may be issued upon exercise of such rights, options or warrants or
conversion of such convertible or exchangeable securities, and the denominator
of which shall be the number of shares of Common Stock outstanding immediately
preceding the date for the issuance of such shares or rights, options, warrants
or convertible or exchangeable securities plus the total number of shares of
Common Stock which the aggregate consideration expected to be received by the
Company upon the issuance of such shares of Common Stock and the exercise,
conversion or exchange of such rights, options, warrants or convertible or
exchangeable securities (as reasonably determined in good faith by the Company's
Board of Directors, whose determination shall be evidenced by a board resolution
filed with the Warrant Agent, a copy of which will be sent to Warrantholders
upon request) would purchase at the Market Price per share of Common Stock as of
the date of such issuance. Subject to Section 6H, in the event of any such
adjustment, the Exercise Price of each Warrant shall be adjusted to a number
determined by dividing the Exercise Price immediately prior to such date of
issuance by the fraction set forth in the foregoing sentence. No adjustment to
the number of Warrant Shares issuable upon the exercise of a Warrant or to the
Exercise Price shall be made as a result of (i) the issuance of any Warrants (or
the later exercise thereof) in accordance with the terms of the Purchase
Agreement as the same may be amended from time to time, (ii) the exercise,
conversion or exchange of any right, option, warrant or convertible or
exchangeable security, in accordance with its terms at the time of the issuance
of such right, option, warrant or convertible or exchangeable security, whether
or not the issuance thereof previously resulted in an adjustment to the number
of Warrant Shares issuable upon the exercise of the Warrants or to the Exercise
Price pursuant to this Section 6C, (iii) the issuance of any Preferred Shares
(or the later conversion thereof) in accordance with the terms of the Purchase
Agreement as the same may be amended from time to time, or (iv) the issuance,
award, exercise, conversion or exchange of shares of Common Stock or options to
acquire shares of Common Stock under any employee or director benefit plan of
the Company approved by the Company's Board of Directors if such issuance,
award, exercise, conversion or exchange is made to, by, or for the benefit of
officers, directors, employees or consultants of the Company in accordance with
such employee or director benefit plan. Such adjustment shall be made, and shall
only become effective, whenever such shares or such rights, options, warrants or
convertible or exchangeable securities are issued. No adjustment shall be made
pursuant to this Section 6C which shall have the effect of decreasing the number
of shares of Common Stock issuable upon exercise of each Warrant or increasing
the Exercise Price.

D. FUNDAMENTAL TRANSACTIONS; LIQUIDATION.

     (a) Except as provided in Section 6D(b), in the event of a Fundamental
Transaction (as defined in the next sentence), each Warrantholder shall have the
right to receive upon

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exercise of the Warrants the kind and amount of shares of capital stock or other
securities or property which such Warrantholder would have been entitled to
receive upon completion of or as a result of such Fundamental Transaction had
such Warrant been exercised immediately prior to such event or prior to the
relevant record date for any such entitlement (regardless of whether the
Warrants are then exercisable). "Fundamental Transaction" shall mean any
transaction or series of related transactions by which the Company consolidates
with or merges with or into another corporation or entity or sells, assigns,
transfers, leases, conveys or otherwise disposes of all or substantially all of
its properties and assets to any other person or entity or group of affiliated
persons or entities or is a party to a merger or binding share exchange which
reclassifies or changes its outstanding Common Stock. Unless Section 6D(b) is
applicable to a Fundamental Transaction, the Company shall provide that the
surviving or acquiring person, corporation or entity (the "Successor Company")
in such Fundamental Transaction will enter into an agreement (a "Supplemental
Warrant Agreement") with the Warrant Agent confirming the Warrantholders' rights
pursuant to this Section 6D(a) and providing for adjustments, which shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Section 6. Any such Supplemental Warrant Agreement shall further provide that
such Successor Company will succeed to and be substituted for every right and
obligation of the Company in respect of this Agreement and the Warrants. The
provisions of this Section 6D(a) shall similarly apply to successive Fundamental
Transactions involving any Successor Company.

     (b) In the event of (i) a Fundamental Transaction with another person,
corporation or entity (other than a subsidiary of the Company) where
consideration to the holders of Common Stock in exchange for their shares is
payable solely in cash or (ii) the dissolution, liquidation or winding-up of the
Company, the Warrantholders of the Warrants shall be entitled to receive, upon
surrender of their Warrant Certificates, such cash distributions on an equal
basis with the holders of Common Stock or other securities issuable upon
exercise of the Warrants, as if the Warrants had been exercised immediately
prior to such event, less the Exercise Price. In the event of any Fundamental
Transaction described in this Section 6D(b), the Successor Company and, in the
event of any dissolution, liquidation or winding-up of the Company, the Company,
shall deposit promptly with the Warrant Agent the funds, if any, necessary to
pay the Warrantholders of the Warrants the amounts to which they are entitled as
described above. After such funds and the surrendered Warrant Certificates are
received, the Warrant Agent shall make payment to the Warrantholders by
delivering a check in such amount as is appropriate (or, in the case of
consideration other than cash, such other consideration as is appropriate) to
such party as it may be directed in writing by the Warrantholders surrendering
such Warrant Certificates.

E. OTHER EVENTS. If any event occurs as to which the foregoing provisions of
this Section 6 are not strictly applicable or, if strictly applicable, would
not, in the good faith judgment of the Company's Board of Directors, fairly and
adequately protect the purchase rights of the Warrants in accordance with the
essential intent and principles of such provisions, then the Board of Directors
shall make such adjustments in the application of such provisions, in accordance
with such essential intent and principles, as shall be reasonably necessary, in
the good faith opinion of the Board of Directors, to protect such purchase
rights as aforesaid, but in no event shall any such adjustment have the effect
of increasing the Exercise Price or decreasing the number of shares of Common
Stock issuable upon exercise of the Warrants.

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F. SUPERSEDING ADJUSTMENT. Upon the expiration of any rights, options, warrants
or conversion or exchange privileges which resulted in adjustments pursuant to
this Section 6, if any thereof shall not have been exercised, the number of
Warrant Shares issuable upon the exercise of each Warrant shall be readjusted
pursuant to the applicable section of Section 6 as if (i) the only shares of
Common Stock issuable upon exercise of such rights, options, warrants,
conversion or exchange privileges were the shares of Common Stock, if any,
actually issued upon the exercise of such rights, options, warrants or
conversion or exchange privileges and (ii) shares of Common Stock actually
issued, if any, were issuable for the consideration actually received by the
Company upon such exercise plus the aggregate consideration, if any, actually
received by the Company for the issuance, sale or grant of all such rights,
options, warrants or conversion or exchange privileges whether or not exercised
and the Exercise Price shall be readjusted inversely; provided, however, that no
such readjustment (except by reason of an intervening adjustment under Section
6A) shall have the effect of decreasing the number of Warrant Shares issuable
upon the exercise of each Warrant, or increasing the Exercise Price, by an
amount in excess of the amount of the adjustment initially made in respect of
the issuance, sale or grant of such rights, options, warrants or conversion or
exchange privileges.

G. MINIMUM ADJUSTMENT. The adjustments required by the preceding sections of
this Section 6 shall be made whenever and as often as any specified event
requiring an adjustment shall occur, except that no adjustment of the Exercise
Price or the number of shares of Common Stock issuable upon exercise of the
Warrants that would otherwise be required shall be made unless and until such
adjustment either by itself or with other adjustments not previously made
increases or decreases by at least 1% of the Exercise Price or the number of
shares of Common Stock issuable upon exercise of the Warrants immediately prior
to the making of such adjustment. Any adjustment representing a change of less
than such minimum amount shall be carried forward and made as soon as such
adjustment, together with other adjustments required by this Section 6 and not
previously made, would result in a minimum adjustment. For the purpose of any
adjustment, any specified event shall be deemed to have occurred at the close of
business on the date of its occurrence. In computing adjustments under this
Section 6, fractional interests in Common Stock shall be taken into account to
the nearest one-hundredth of a share.

H. NOTICE OF ADJUSTMENT. Whenever the Exercise Price or the number of shares of
Common Stock and other property, if any, issuable upon exercise of the Warrants
is adjusted, as herein provided, the Company shall deliver to the Warrant Agent
a certificate of a firm of independent accountants selected by the Board of
Directors (who may be the regular accountants employed by the Company) setting
forth, in reasonable detail, the event requiring the adjustment and the method
by which such adjustment was calculated (including a description of the basis on
which (i) the Board of Directors determined the then fair value of any evidences
of indebtedness, other securities or property or warrants, options or other
subscription or purchase rights and (ii) the Market Price of the Common Stock
was determined, if either of such determinations were required), and specifying
the Exercise Price and the number of shares of Common Stock issuable upon
exercise of the Warrants after giving effect to such adjustment. The Company
shall promptly cause the Warrant Agent, at the Company's expense, to mail a copy
of such certificate to each Warrantholder in accordance with Section 23. The
Warrant Agent shall be entitled to rely on such certificate and shall be under
no duty or responsibility with respect to any such certificate, except to
exhibit the same from time to time, to any Warrantholder desiring an inspection
thereof during reasonable business hours. The Warrant Agent shall not at any
time be

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under any duty or responsibility to any Warrantholder to determine whether any
facts exist which may require any adjustment of the Exercise Price or the number
of shares of Common Stock or other stock or property issuable on exercise of the
Warrants, or with respect to the nature or extent of any such adjustment when
made, or with respect to the method employed in making such adjustment or the
validity or value of any shares of Common Stock, evidences of indebtedness,
warrants, options, or other securities or property.

I. ADJUSTMENT TO WARRANT CERTIFICATE. The form of Warrant Certificate need not
be changed because of any adjustment made pursuant to this Section 6, and
Warrant Certificates issued after such adjustment may state the same Exercise
Price and the same number of shares of Common Stock issuable upon exercise of
the Warrants as are stated in the Warrant Certificates initially issued pursuant
to this Agreement. The Company, however, may at any time in its sole discretion
make any change in the form of Warrant Certificate that it may deem appropriate
to give effect to such adjustments and that does not affect the substance of the
Warrant Certificate, and any Warrant Certificate thereafter issued or
countersigned, whether in exchange or substitution for an outstanding Warrant
Certificate or otherwise, may be in the form as so changed.

J. LIMITATION ON NUMBER OF WARRANT SHARES. The Company shall not be obligated to
issue any shares of Common Stock upon the exercise of any Warrants after the
aggregate number of shares of Common Stock previously issued by the Company upon
(i) the exercise of Warrants and (ii) the conversion of Preferred Shares issued
by the Company and purchased by holders of Warrants has exceeded the Nasdaq
Conversion Limitation (as defined below), except that such limitation shall not
apply from and after such time as the Company obtains Shareholder Approval (as
defined below) for issuances of Warrant Shares upon the exercise of Warrants in
excess of such amount. In the event the Company receives on the same date a
notice requesting the exercise of Warrants from more than one holder of Warrants
and the Company can exercise some, but not all, of the Warrants presented for
exercise, the Company shall exercise from each holder electing to exercise
Warrants at such time a pro rata amount of such holder's Warrants submitted for
exercise based on the number Warrants submitted for exercise on such date by
such holder relative to the number of all Warrants submitted for exercise on
such date. The Nasdaq Conversion Limitation shall mean 6,425,476 shares of
Common Stock or such other amount as Nasdaq shall determine is the applicable
limitation under Marketplace Rule 4350(i)(1)(D). Shareholder Approval shall mean
the approval of the Company's stockholders as may be required by the applicable
rules and regulations of Nasdaq, including Marketplace Rule 4350(i)(1)(D).

     SECTION 7. EXERCISE OF WARRANTS

The registered holder of any Warrant Certificate may exercise the Warrants
evidenced thereby, in whole or in part from time to time at or prior to the
close of business on the Expiration Date, subject to the provisions of Section
9, at which time the Warrant Certificates shall be and become wholly void and of
no value. Warrants may be exercised by their holders as follows:

A. Exercise of Warrants shall be accomplished upon surrender of the Warrant
Certificate evidencing such Warrants, with the Form of Election to Purchase on
the reverse side thereof duly filled in and executed, to the Warrant Agent at
its Stock Transfer Office, together with payment

                                       10

<Page>

to the Company of the Exercise Price (as of the date of such surrender) of the
Warrants then being exercised and an amount equal to any applicable transfer tax
and, if requested by the Company, any other taxes or governmental charges which
the Company may be required by law to collect in respect of such exercise.
Payment of the Exercise Price and other amounts may be made by wire transfer of
same day funds to an account in a bank designated by the Company for such
purpose, or by certified or bank cashier's check, payable in lawful money of the
United States of America to the order of the Company, or by any combination of
such methods. No adjustment shall be made for any cash dividends, whether paid
or declared, on any securities issuable upon exercise of a Warrant. At the
request of the Company or otherwise in accordance with the instructions of the
Company, the Warrant Agent shall remit any funds held by it as a result of the
exercise of the Warrants to the Company.

B. Upon receipt of a Warrant Certificate, with the Form of Election to Purchase
duly filled in and executed, accompanied by payment of the Exercise Price of the
Warrants being exercised (and an amount equal to any applicable transfer tax
and, if requested by the Company, any other taxes or governmental charges which
the Company may be required by law to collect in respect of such exercise), the
Warrant Agent shall promptly request from the Company's transfer agent with
respect to the securities to be issued and shall promptly, and in any event
within five (5) business days thereof, deliver to or upon the order of the
registered holder of such Warrant Certificate, in such name or names as such
registered holder may designate, a certificate or certificates for the number of
full shares of the securities to be purchased, together with cash made available
by the Company pursuant to Section 8 hereof in respect of any fraction of a
share of such securities otherwise issuable upon such exercise. If the Warrant
is then exercisable to purchase property other than securities, the Warrant
Agent shall take appropriate steps to cause such property to be delivered as
soon as practicable to or upon the order of the registered holder of such
Warrant Certificate. In addition, if it is required by law and upon instruction
by the Company, the Warrant Agent will deliver to each Warrantholder a
prospectus which complies with the provisions of Section 10 of the Securities
Act of 1933, as amended, and the Company agrees to supply the Warrant Agent with
a sufficient number of prospectuses to effectuate that purpose.

C. In case the registered holder of any Warrant Certificate shall exercise fewer
than all of the Warrants evidenced by such Warrant Certificate, the Warrant
Agent shall promptly countersign and deliver to the registered holder of such
Warrant Certificate, or to his duly authorized assigns, a new Warrant
Certificate or Certificates evidencing the number of Warrants that were not so
exercised.

D. Each person in whose name any certificate for securities is issued upon the
exercise of Warrants shall for all purposes be deemed to have become the holder
of record of the securities represented thereby as of, and such certificate
shall be dated, the date upon which the Warrant Certificate was duly surrendered
in proper form and payment of the Exercise Price (and of any applicable taxes or
other governmental charges) was made; provided, however, that if the date of
such surrender and payment is a date on which the stock transfer books of the
Company are closed, such person or entity shall be deemed to have become the
record holder of such shares as of, and the certificate for such shares shall be
dated, the next succeeding business day on which the stock transfer books of the
Company are open (whether before, on or after the Expiration Date) and the
Warrant Agent shall be under no duty to deliver the certificate for such shares
until

                                       11

<Page>

such date. The Company covenants and agrees that it shall not cause its stock
transfer books to be closed for a period of more than twenty (20) consecutive
business days except upon consolidation, merger, sale of all or substantially
all of its assets, dissolution or liquidation or as otherwise required by law.

     SECTION 8. FRACTIONAL INTERESTS

     The Company shall not be required to issue any Warrant Certificate
evidencing a fraction of a Warrant or to issue fractions of shares of securities
on the exercise of the Warrants. If any fraction (calculated to the nearest
one-hundredth) of a Warrant or a share of securities would, except for the
provisions of this Section, be issuable on the exercise of any Warrant, the
Company shall, at its option, either purchase such fraction for an amount in
cash equal to the current value of such fraction computed on the basis of the
Market Price, except that for all purposes of this Section 8, the time periods
set forth in the definition thereof shall be the trading day immediately
preceding the day upon which such Warrant Certificate was surrendered for
exercise in accordance with Section 7 hereof or issue the required, fractional
Warrant or share. By accepting a Warrant Certificate, the holder thereof
expressly waives any right to receive a Warrant Certificate evidencing any
fraction of a Warrant or to receive any fractional share of securities upon
exercise of a Warrant, except as expressly provided in this Section 8.

     SECTION 9. RESERVATION AND LISTING OF EQUITY SECURITIES

     The Company covenants that it will at all times reserve and keep available,
free from any pre-emptive rights, out of its authorized and unissued equity
securities, solely for the purpose of issuance upon exercise of the Warrants,
120% of such number of shares of equity securities of the Company, including the
Common Stock, as shall then be issuable upon the exercise of all outstanding
Warrants ("Equity Securities"). The Company covenants that all Equity Securities
which shall be so issuable shall, upon such issue, be duly authorized, validly
issued, fully paid and non-assessable.

     The Company covenants and agrees that from and after the date hereof: (a)
it will use its best efforts to prepare and file with the Securities and
Exchange Commission a registration statement and the prospectuses used in
connection therewith as may be necessary to keep such registration statement
effective with respect to the resale of the Warrants and Equity Securities and
the issuance of the Equity Securities to be delivered upon the exercise of the
Warrants and, to the extent required under applicable law, to keep such
registration statement current from the date of issuance thereof through the
final Expiration Date or until such earlier time as no Warrants remain
outstanding; (b) as expeditiously as possible, it will register or qualify the
Equity Securities to be delivered upon exercise of the Warrants under the
securities or Blue Sky laws of each jurisdiction in which such registration or
qualification is necessary and use its best efforts to maintain all such
registrations or qualifications in effect from the date of issuance thereof
through the final Expiration Date or until such earlier time as no Warrants
remain outstanding; provided, that in no event shall the Company be obligated to
qualify to do business in any jurisdiction where it is not now so qualified or
to take any action which would subject it to general service of process in any
jurisdiction where it is not now so subject; (c) it will pay all expenses
incurred by the Company in complying with this Section 9, including, without

                                       12

<Page>

limitation, (i) all registration and filing fees, (ii) all printing expenses,
(iii) all fees and disbursements of counsel for the Company and independent
public accountants, (iv) all NASD and Blue Sky fees and expenses (including fees
and expenses of counsel in connection with any Blue Sky surveys), and (v) the
entire expense of any special audits incident to or required by any such
registration; and (d) it will use its best efforts to list for quotation on the
Nasdaq Capital Market, or such other over-the-counter quotation system on which
the Common Stock may at any time be listed, or on any national securities
exchange on which the Common Stock may at any time be listed, the Equity
Securities, and will maintain such listing so long as any other shares of Equity
Securities are so listed; and the Company shall use its best efforts to so list
on the Nasdaq Capital Market, or such other over-the-counter quotation system,
or each national securities exchange, and shall maintain such listing of, any
other shares of capital stock of the Company issuable upon the exercise of the
Warrants if and so long as any shares of capital stock of the same class are
traded on the Nasdaq Capital Market or such over-the-counter quotation system or
listed on such national securities exchange, and any such quotation or listing
will be at the Company's expense; provided, however, that in no event shall such
Equity Securities be issued, and the Company is authorized to refuse to honor
the exercise of any Warrant, if such exercise would result, in the opinion of
the Company's Board of Directors, upon advice of counsel, in the violation of
any law; provided, however, that the foregoing proviso shall not affect or in
any way limit the obligations of the Company pursuant to clauses (a) and (b) of
this paragraph.

     SECTION 10. REDUCTION OF EXERCISE PRICE BELOW PAR VALUE

     The Company shall not take any action that would cause an adjustment
pursuant to Section 6 hereof to reduce the Exercise Price required to purchase
one share of capital stock below the then par value (if any) of a share of such
capital stock, unless and until the Company shall have taken any corporate
action which, in the opinion of its counsel, is necessary in order that the
Company may validly and legally issue fully paid and non-assessable shares of
such capital stock.

     SECTION 11. PAYMENT OF CERTAIN TAXES

     The Company covenants and agrees that it will pay when due and payable any
and all federal and state documentary stamp and other original issue taxes which
may be payable in respect of the original issuance of the Warrant Certificates,
or any shares of Common Stock or other securities upon the exercise of Warrants.
The Company shall not, however, be required (i) to pay any tax which may be
payable in respect of the transfer and delivery of Warrant Certificates or the
issuance or delivery of certificates for Common Stock or other securities in a
name other than that of the registered holder of the Warrant Certificate
surrendered for purchase or (ii) to issue or deliver any certificate for shares
of Common Stock or other securities upon the exercise of any Warrant Certificate
until any such tax shall have been paid, all such taxes being payable by the
holder of such Warrant Certificate at the time of surrender.

                                       13

<Page>

     SECTION 12. NOTICE OF CERTAIN CORPORATE ACTION

     In case the Company after the date hereof shall propose (i) to take a
record of the holders of any class of securities for the purpose of determining
the holders thereof that are entitled to receive any dividend or other
distribution, rights to subscribe for or to purchase any shares of any class of
its capital stock or any other securities or property, any evidences of its
indebtedness or assets, or any other rights, warrants or options, (ii) to issue
any shares of its capital stock or rights, options or warrants entitling to
subscribe for shares of such capital stock or securities convertible or
exchangeable or exercisable for shares of such capital stock (other than any
such issuances under any employee or director benefit plan of the Company
approved by the Company's Board of Directors), (iii) to effect any capital
reclassification or reorganization, or any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the Company is
required, or any sale, lease, transfer or other disposition of all or
substantially all of its property and assets, or the liquidation, voluntary or
involuntary dissolution or winding-up of the Company, or (iv) the commencement
by any "person" or "group" (within the meaning of Section 13(d) and Section
14(d) of the Securities Exchange Act of 1934 (the "Exchange Act")) of a bona
fide tender offer or exchange offer in accordance with the rules and regulations
of the Exchange Act to purchase shares of Common Stock of the Company, then, in
each such case, the Company shall file with the Warrant Agent, and the Company,
or the Warrant Agent on its behalf and at the Company's request, shall provide
to all registered holders of the Warrant Certificates notice of such proposed
action or event, which notice shall specify the date on which the books of the
Company shall close or a record be taken for such dividend, distribution or
offer of rights or options, or the date on which such issuance,
reclassification, reorganization, consolidation, merger, sale, lease, transfer,
other disposition, liquidation, voluntary or involuntary dissolution, winding-up
or tender offer shall take place, commence, or be completed, as the case may be,
and which shall also specify any record date for determination of holders of
Common Stock entitled to vote thereon or participate therein, and as of which
the holders of record of the Company's Common Stock (or other securities) shall
be entitled to exchange their shares of such Common Stock (or other securities)
for the securities or other property deliverable upon such reorganization,
reclassification, recapitalization, consolidation, merger, sale, lease,
transfer, other disposition, dissolution, liquidation, winding-up, tender offer
or other event, and shall set forth such facts with respect thereto as shall be
reasonably necessary to indicate any adjustments in the Exercise Price and the
number or kind of shares or other securities, cash or property purchasable upon
exercise of Warrants which will be required as a result of such action, if
applicable. Such notice shall be filed and provided in the case of any action
covered by clause (i) above, at least ten (10) days prior to the record date for
determining holders of the Common Stock for purposes of such action or, if a
record is not to be taken, the date as of which the holders of shares of Common
Stock of record are to be entitled to such offering; and, in the case of any
action covered by clauses (ii) through (iv) above, at least twenty (20) days
prior to the earlier of the date on which such issuance, reclassification,
reorganization, consolidation, merger, sale, lease, transfer, other disposition,
liquidation, voluntary or involuntary dissolution or winding-up, exchange or
tender offer is expected to become effective or be completed and the date on
which it is expected that holders of shares of Common Stock of record shall be
entitled to exchange their shares for securities or other property deliverable
upon such reclassification, reorganization, consolidation, merger, sale,
transfer, other disposition, liquidation, voluntary or involuntary dissolution
or winding-up, exchange or tender offer. Notwithstanding the foregoing, the
Company's obligation to provide notice under this Section 12

                                       14

<Page>

is subject and subordinate to the Company's legal obligations regarding the
handling and dissemination of material non-public information under the
Securities Act, the rules and regulations of the quotation system or securities
exchange on which the Common Stock may at any time be listed and other
applicable law.

     Failure to give any notice or any defect therein shall not affect the
legality or validity of any transaction listed in this Section 12.

     SECTION 13. DISPOSITION OF PROCEEDS ON EXERCISE OF WARRANT CERTIFICATES,
                 ETC.

     The Warrant Agent shall account promptly to the Company with respect to
Warrants exercised and concurrently pay to the Company all moneys received by
the Warrant Agent for the purchase of securities or other property through the
exercise of such Warrants.

     The Warrant Agent shall keep copies of this Agreement available for
inspection by Warrantholders during normal business hours at its Stock Transfer
Office. Copies of this Agreement may be obtained upon written request addressed
to the Warrant Agent at its Stock Transfer Office.

     SECTION 14. WARRANTHOLDER NOT DEEMED A STOCKHOLDER

     No Warrantholder, as such, shall be entitled to vote, receive dividends or
be deemed the holder of Common Stock or any other securities of the Company
which may at any time be issuable on the exercise of the Warrants represented
thereby for any purpose whatsoever, nor shall anything contained herein or in
any Warrant Certificate be construed to confer upon any Warrantholder, as such,
any of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of stock, reclassification of stock, change
of par value or change of stock to no par value, consolidation, merger,
conveyance or otherwise), or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 12 hereof), or to receive
dividends or subscription rights, or otherwise, until such Warrant Certificate
shall have been exercised in accordance with the provisions hereof and the
receipt by the Warrant Agent of the Exercise Price and any other amounts payable
upon such exercise.

     SECTION 15. RIGHTS OF ACTION

     All rights of action in respect to this Agreement are vested in the
respective registered holders of the Warrant Certificates; and any registered
holder of any Warrant Certificate, without the consent of the Warrant Agent or
of any other holder of a Warrant Certificate, may, on its own behalf for its own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company suitable to enforce, or otherwise in respect of, its right
to exercise the Warrants evidenced by such Warrant Certificate, for the purchase
of shares of the Common Stock in the manner provided in the Warrant Certificate
and in this Agreement.

                                       15

<Page>

     SECTION 16. AGREEMENT OF HOLDERS OF WARRANT CERTIFICATES

     Every holder of a Warrant Certificate by accepting the same consents and
agrees with the Company, the Warrant Agent and with every other holder of a
Warrant Certificate that:

A. The Warrant Certificates are transferable on the registry books of the
Warrant Agent only upon the terms and conditions set forth in this Agreement;
and

B. The Company and the Warrant Agent may deem and treat the person in whose name
the Warrant Certificate is registered as the absolute and lawful owner of the
Warrant (notwithstanding any notation of ownership or other writing thereon made
by anyone other than the Company or the Warrant Agent) for all purposes
whatsoever and neither the Company nor the Warrant Agent shall be affected by
any notice to the contrary.

     SECTION 17. CANCELLATION OF WARRANT CERTIFICATES

     In the event that the Company shall purchase or otherwise acquire any
Warrant Certificate or Certificates after the issuance thereof, such Warrant
Certificate or Certificates shall thereupon be delivered to the Warrant Agent
and be canceled by it and retired. The Warrant Agent shall also cancel any
Warrant Certificate delivered to it for exercise, in whole or in part, or
delivered to it for transfer, split-up, combination or exchange. Warrant
Certificates so canceled shall be delivered by the Warrant Agent to the Company
from time to time, or disposed of in accordance with the instructions of the
Company.

     SECTION 18. CONCERNING THE WARRANT AGENT

     The Company agrees to pay to the Warrant Agent from time to time, on demand
of the Warrant Agent, reasonable compensation for all services rendered by it
hereunder and also its reasonable expenses, including counsel fees, and other
disbursements incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder. The Company also agrees to
indemnify the Warrant Agent for, and to hold it harmless against, any loss,
liability or expense, incurred without gross negligence, bad faith or willful
misconduct on the part of the Warrant Agent, arising out of or in connection
with the acceptance and administration of this Agreement.

     SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT

     Any corporation into which the Warrant Agent may be merged or with which it
may be consolidated, or any corporation resulting from any merger or
consolidation to which the Warrant Agent shall be a party, or any corporation
succeeding to the corporate trust business of the Warrant Agent, shall be the
successor to the Warrant Agent hereunder without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided that
such corporation would be eligible for appointment as a successor warrant agent
under the provisions of Section 21 hereof. In case at the time such successor to
the Warrant Agent shall succeed to the agency created by this Agreement, any of
the Warrant Certificates shall have been countersigned but not delivered, any
such successor to the Warrant Agent may adopt the

                                       16

<Page>

countersignature of the original Warrant Agent and deliver such Warrant
Certificates so countersigned; and in case at that time any of the Warrant
Certificates shall not have been countersigned, any successor to the Warrant
Agent may countersign such Warrant Certificates either in the name of the
predecessor Warrant Agent or in the name of the successor Warrant Agent; and in
all such cases such Warrant Certificates shall have the full force provided in
the Warrant Certificates and in this Agreement.

     In case at any time the name of the Warrant Agent shall be changed and at
such time any of the Warrant Certificates shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignature under its prior name
and deliver Warrant Certificates so countersigned; and in case at that time any
of the Warrant Certificates shall not have been countersigned, the Warrant Agent
may countersign such Warrant Certificates either in its prior name or in its
changed name; and in all such cases such Warrant Certificates shall have the
full force provided in the Warrant Certificates and in this Agreement.

     SECTION 20. DUTIES OF WARRANT AGENT

     The Warrant Agent undertakes the duties and obligations imposed by this
Agreement upon the following terms and conditions, by all of which the Company
and the holders of Warrant Certificates, by their acceptance thereof, shall be
bound:

A. The Warrant Agent may consult with counsel satisfactory to it (who may be
counsel for the Company or the Warrant Agent's in-house counsel), and the
opinion of such counsel shall be full and complete authorization and protection
to the Warrant Agent as to any action taken, suffered or omitted by it in good
faith and in accordance with such opinion; provided, however, that the Warrant
Agent shall have exercised reasonable care in the selection of such counsel.
Fees and expenses of such counsel, to the extent reasonable, shall be paid by
the Company.

B. Whenever in the performance of its duties under this Agreement, the Warrant
Agent shall deem it necessary or desirable that any fact or matter be proved or
established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and established
by a certificate signed by the Chief Executive Officer or the Chief Financial
Officer of the Company and delivered to the Warrant Agent; and such certificate
shall be full authorization to the Warrant Agent for any action taken or
suffered in good faith by it under the provisions of this Agreement in reliance
upon such certificate.

C. The Warrant Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.

D. The Warrant Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Warrant
Certificates (except its countersignature on the Warrant Certificates and such
statements or recitals as describe the Warrant Agent or action taken or to be
taken by it or its obligations hereunder) or be required to verify the same, but
all such statements and recitals are and shall be deemed to have been made by
the Company only.

E. The Warrant Agent shall not be under any responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the due
execution and delivery hereof by

                                       17

<Page>

the Warrant Agent) or in respect of the validity or execution of any Warrant
Certificate (except its countersignature thereof); nor shall it be responsible
for any breach by the Company of any covenant or condition contained in this
Agreement or in any Warrant Certificate; nor shall it be responsible for the
making of any change in the number of shares of Common Stock for which a Warrant
is exercisable required under the provisions of Section 6 or responsible for the
manner, method or amount of any such change or the ascertaining of the existence
of facts that would require any such adjustment or change (except with respect
to the exercise of Warrant Certificates after actual notice of any adjustment of
the Exercise Price); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock to be issued pursuant to this Agreement or any Warrant
Certificate or as to whether any shares of Common Stock will, when issued, be
validly issued, fully paid and non-assessable.

F. The Warrant Agent shall be under no obligation to institute any action, suit
or legal proceeding or take any other action likely to involve expense unless
the Company or one or more registered holders of Warrant Certificates shall
furnish the Warrant Agent with reasonable security and indemnity for any costs
and expenses which may be incurred. All rights of action under this Agreement or
under any of the Warrants may be enforced by the Warrant Agent without the
possession of any of the Warrants or the production thereof at any trial or
other proceeding relative thereto, and any such action, suit or proceeding
instituted by the Warrant Agent shall be brought in its name as Warrant Agent,
and any recovery of judgment shall be for the ratable benefit of the registered
holders of the Warrant Certificates, as their respective rights or interests may
appear.

G. The Warrant Agent and any stockholder, director, officer or employee of the
Warrant Agent may buy, sell or deal in any of the Warrants or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to or otherwise act as
fully and freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.

H. The Warrant Agent is hereby authorized and directed to accept instructions
with respect to the performance of its duties hereunder from the Chief Executive
Officer or the Chief Financial Officer of the Company, and to apply to such
officers for advice or instructions in connection with the Warrant Agent's
duties, and it shall not be liable for any action taken or suffered or omitted
by it in good faith in accordance with instructions of any such officer.

I. The Warrant Agent will not be responsible for any failure of the Company to
comply with any of the covenants contained in this Agreement or in the Warrant
Certificates to be complied with by the Company.

J. The Warrant Agent may execute and exercise any of the rights or powers hereby
vested in it or perform any duty hereunder either itself or by or through its
attorneys, agents or employees and the Warrant Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys,
agents or employees or for any loss to the Company resulting from such neglect
or misconduct; provided, however, that reasonable care shall have

                                       18

<Page>

been exercised in the selection and continued employment of such attorneys,
agents and employees.

K. The Warrant Agent will not incur any liability or responsibility to the
Company or to any holder of any Warrant Certificate for any action taken, or any
failure to take action, in reliance on any notice, resolution, waiver, consent,
order, certificates or other paper, document or instrument reasonably believed
by the Warrant Agent to be genuine and to have been signed, sent or presented by
the proper party or parties.

L. The Warrant Agent will act hereunder solely as agent of the Company in a
ministerial capacity, and its duties will be determined solely by the provisions
hereof. The Warrant Agent will not be liable for anything which it may do or
refrain from doing in connection with this Agreement except for its own gross
negligence, bad faith or willful misconduct.

     SECTION 21. CHANGE OF WARRANT AGENT

     The Warrant Agent may resign and be discharged from all further duties and
liabilities under this Agreement (except liabilities arising as a result of the
Warrant Agent's own negligence, bad faith or willful misconduct) upon thirty
(30) days prior notice in writing mailed, by registered or certified mail, to
the Company. The Company may remove the Warrant Agent or any successor warrant
agent upon thirty (30) days prior notice in writing, mailed to the Warrant Agent
or successor warrant agent, as the case may be, by registered or certified mail.
If the Warrant Agent shall resign or be removed or shall otherwise become
incapable of acting, the Company shall appoint a successor to the Warrant Agent
and shall, within fifteen (15) days following such appointment, give notice
thereof in writing to each registered holder of the Warrant Certificates. If the
Company shall fail to make such appointment within a period of fifteen (15) days
after giving notice of such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Warrant Agent,
then the holder of any Warrant Certificate may apply to any court of competent
jurisdiction for the appointment of a new Warrant Agent. Any new Warrant Agent,
whether appointed by the Company or by such a court, shall be a bank or trust
company having capital and surplus of not less than $10,000,000 or a stock
transfer company that is a registered transfer agent under the Exchange Act.
After appointment and execution of a copy of this Agreement in effect at that
time, the successor Warrant Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named as Warrant Agent
without further act or deed; but the former Warrant Agent shall deliver and
transfer to the successor Warrant Agent, within a reasonable time, any property
at the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Failure to give any notice
provided for in this Section, however, or any defect therein shall not affect
the legality or validity of the resignation or removal of the Warrant Agent or
the appointment of the successor warrant agent, as the case may be.

     SECTION 22. ISSUANCE OF NEW WARRANT CERTIFICATES

     Notwithstanding any of the provisions of this Agreement or the several
Warrant Certificates to the contrary, the Company may, at its option, issue new
Warrant Certificates in such form as may be approved by its Board of Directors
to reflect any adjustment or change in

                                       19

<Page>

the Exercise Price or the number or kind of shares purchasable under the several
Warrant Certificates made in accordance with the provisions of this Agreement.

     SECTION 23. NOTICES

     Notice or demand pursuant to this Agreement to be given or made on the
Company by the Warrant Agent or by the registered holder of any Warrant
Certificate shall be sufficiently given or made (A) upon delivery if sent by
personal delivery or courier, (B) when sent, if sent by confirmed facsimile
during normal business hours of the recipient, if not, then on the next business
day, or (C) by first-class certified or registered mail, postage prepaid, return
receipt requested, in each case addressed (until another address is filed in
writing by the Company with the Warrant Agent) as follows: Aksys, Ltd., Two
Marriott Drive, Lincolnshire, Illinois 60069, Attention: Chief Financial Office,
Tel: 847-229-2020, Fax: 847-229-2080.

     Subject to the provisions of Section 21, any notice pursuant to this
Agreement to be given or made by the Company or by the holder of any Warrant
Certificate to or on the Warrant Agent shall be sufficiently given or made (A)
upon delivery if sent by personal delivery or courier, (B) when sent, if sent by
confirmed facsimile during normal business hours of the recipient, if not, then
on the next business day, or (C) by first-class certified or registered mail,
postage prepaid, return receipt requested, in each case addressed (until another
address is filed in writing by the Warrant Agent with the Company) as follows:
Continental Stock Transfer, 17 Battery Place, New York, New York 10004.

     Any notice or demand authorized to be given or made to the registered
holder of any Warrant Certificate under this Agreement shall be sufficiently
given or made (A) upon delivery if sent by personal delivery or courier, (B)
when sent, if sent by confirmed facsimile during normal business hours of the
recipient, if not, then on the next business day, or (C)by first-class certified
or registered mail, postage prepaid, return receipt requested, in each case
addressed to the last address of such holder as it shall appear on the registers
maintained by the Warrant Agent (until another address is filed in writing by
such holder with the Warrant Agent).

     SECTION 24. MODIFICATION OF AGREEMENT

     The Company and the Warrant Agent, without the consent of any Warrant
holder, may supplement this Agreement in order to make any changes in this
Agreement which the Warrant Agent has been advised by counsel (i) are required
to cure any ambiguity or to correct any defective or inconsistent provision or
clerical omission or mistake or manifest error contained herein, (ii) add to the
covenants and agreements of the Company or the Warrant Agent in the Warrants
such further covenants and agreements thereafter to be observed or (iii) result
in the surrender of any right or power reserved to or conferred upon the Company
or the Warrant Agent in the Warrants, but which changes or corrections do not or
will not adversely affect, alter or change the rights, privileges or immunities
of the registered holders of Warrants. In addition, this Agreement may be
modified, supplemented or altered with the consent in writing of the holders of
Warrants representing not less than 50% of the Warrants then outstanding, except
that no change in the number or nature of the securities purchasable upon the
exercise of any Warrant, or increase in the applicable Exercise Price therefor,
or acceleration of the Expiration Date shall be made without the consent in
writing of the registered holder of each Warrant. For

                                       20

<Page>

the purposes of any amendment, modification or waiver hereunder, Warrants held
by the Company shall be disregarded.

     Any modification or amendment made in accordance with this Agreement will
be conclusive and binding on all present and future holders of Warrant
Certificates whether or not they have consented to such modification or
amendment or waiver and whether or not notation of such modification or
amendment is made upon such Warrant Certificates. Any instrument given by or on
behalf of any holder of a Warrant Certificate in connection with any consent to
any modification or amendment made in accordance with this Agreement will be
conclusive and binding on all subsequent holders of such Warrant Certificate.

     As of the date hereof, this Agreement contains the entire and only
agreement, understanding, representation, condition, warranty or covenant
between the parties hereto with respect to the matters herein, supersedes any
and all other agreements between the parties hereto relating to such matters,
and may be modified or amended only by a written agreement signed by both
parties hereto pursuant to the authority granted by the first sentence of this
Section.

     SECTION 25. SUCCESSORS

     All the covenants and provisions of this Agreement by or for the benefit of
the Company or the Warrant Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.

     SECTION 26. GOVERNING LAW

     This Agreement and each Warrant Certificate issued hereunder shall be
governed by and construed in accordance with the laws of the State of New York,
without reference to principles of conflict of laws.

     SECTION 27. TERMINATION

     This Agreement shall terminate as of the close of business on the final
Expiration Date, or such earlier date upon which all Warrants shall have been
exercised or redeemed, except that the Warrant Agent shall account to the
Company as to all Warrants outstanding and all cash held by it as of the close
of business on the final Expiration Date.

     SECTION 28. NO IMPAIRMENT

     The Company will not, by amendment of its governing documents or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms of this Agreement and
the Warrants, but will at all times in good faith assist in the carrying out of
all such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Warrantholders against
impairment. The Company will take such further action as may be necessary or
appropriate to effectuate the purposes and intent of this Agreement and the
Warrants including execution and delivery of such further documents and,
instruments and agreements as may be required to carry out the purposes and
intention of this Agreement and the Warrants. In furtherance and not in
limitation of the foregoing, the

                                       21

<Page>

Company (i) will not increase the par value of any Warrant Shares above the
amount payable therefore on such exercise, (ii) will take all such action as may
be reasonably necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares on the exercise of the
Warrants, (iii) will not close its shareholder books or records in any manner
which interferes with the timely exercise of the Warrants and (iv) will, to the
extent that the Warrantholder is not able to exercise any Warrants for the full
number of shares subject to such Warrants for any reason, then the Company shall
take such further action as may be necessary to facilitate such exercise, and
failing the ability of the Warrantholder to exercise in full, the Company shall
take such further action as may be necessary to give the Warrantholder the
economic benefit of the Warrants including payment to the Warrantholder of the
value of the Warrants upon the expiration of the Warrant or at the time of any
merger, acquisition or other Fundamental Transaction in an amount equal to the
value of the Common Stock that the Warrantholder would have received upon such
exercise of the Warrants in full less the applicable Exercise Price.

     SECTION 29. BENEFITS OF THIS AGREEMENT

     Nothing in this Agreement or in the Warrant Certificates shall be construed
to give to any person or entity other than the Company, the Warrant Agent, the
registered holders of the Warrant Certificates and their respective successors
and assigns hereunder, any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Warrant Agent, the registered holders of the Warrant Certificate
and their respective successors and assigns hereunder.

     SECTION 30. DESCRIPTIVE HEADINGS

     The descriptive headings of the several sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof

                                       22

<Page>

     SECTION 31. COUNTERPARTS

     This Agreement may be executed in any number of counterparts, each of which
shall be an original, but such counterparts shall together constitute one and
the same instrument.

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

                                        AKSYS, LTD.

                                        By: /s/ Larry Birch
                                            ------------------------------------
                                        Name: L. Birch
                                        Title: CF0

                                        CONTINENTAL STOCK TRANSFER & TRUST
                                        COMPANY

                                        By: /s/ Felix Orihuela
                                            ------------------------------------
                                        Name: Felix Orihuela
                                        Title: Vice President

                                       23

<Page>

                                    EXHIBIT A

THIS WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS WARRANT HAVE
    NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
  SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
 DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
          TO THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.

VOID AFTER 5:00 P.M. NEW YORK TIME ON __________, 20__

                        WARRANTS TO PURCHASE COMMON STOCK

W___ ____                                                     _________ Warrants

AKSYS, LTD.

                             CUSIP [INSERT NUMBER]

     THIS CERTIFIES THAT FOR VALUE RECEIVED ____________________ or its
registered assigns, is the registered holder of the number of Warrants
("Warrants") set forth above. Each Warrant initially entitles the registered
holder thereof to purchase from Aksys, Ltd., a corporation incorporated under
the laws of the State of Delaware (the "Company"), subject to the terms and
conditions set forth hereinafter and in the Warrant Agreement (as hereinafter
defined), one fully paid and non-assessable share of Common Stock, $0.001 par
value, of the Company ("Common Stock") upon presentation and surrender of this
Warrant Certificate with the Subscription Form on the reverse hereof duly
executed, at any time prior to 5:00 p.m., New York Time, on ________, 20__, at
the stock transfer office of _________________________, Warrant Agent of the
Company (the "Warrant Agent"), or of its successor warrant agent or, if there be
no successor warrant agent, at the corporate offices of the Company, and upon
payment of the Exercise Price (as defined in the Warrant Agreement) paid either
in cash, or by certified or official bank check, payable in lawful money of the
United States of America to the order of the Company. Each Warrant initially
entitles the holder to purchase one share of Common Stock for $1.10. In the
event of certain contingencies provided for in the Warrant Agreement, the
Exercise Price or the number and kind of securities or other property for which
the Warrants are exercisable are subject to adjustment or modification.

     This Warrant Certificate is subject to all of the terms, provisions and
conditions of the Warrant Agreement, dated as of ____________, 2006 ("Warrant
Agreement"), between the Company and the Warrant Agent, to all of which terms,
provisions and conditions the registered holder of this Warrant Certificate
consents by acceptance hereof. The Warrant Agreement is incorporated herein by
reference and made a part hereof and reference is made to the Warrant Agreement
for a full description of the rights, limitations of rights, obligations, duties
and

                                       1

<Page>

immunities of the Warrant Agent, the Company and the holders of the Warrant
Certificates. Copies of the Warrant Agreement are available for inspection at
the stock transfer office of the Warrant Agent or may be obtained upon written
request addressed to the Company at Two Marriott Drive, Lincolnshire, IL 60069,
Attention: President and Chief Executive Officer.

     The Company shall not be required upon the exercise of the Warrants
evidenced by this Warrant Certificate to issue fractions of Warrants, Common
Stock or other securities, but shall make adjustment therefor in cash on the
basis of the current market value of any fractional interest as provided in the
Warrant Agreement.

     The Company has agreed in the Warrant Agreement that, among other things:
it will use its best efforts to prepare and file with the Securities and
Exchange Commission a registration statement and the prospectuses used in
connection therewith as may be necessary to keep such registration statement
effective with respect to the resale of the Warrants and Equity Securities and
the issuance of the Equity Securities to be delivered upon the exercise of the
Warrants and, to the extent required under applicable law, to keep such
registration statement current from the date of issuance thereof through the
final Expiration Date (as defined in the Warrant Agreement) or until such
earlier time as no Warrants remain outstanding; and (b) as expeditiously as
possible, it will register or qualify the Equity Securities to be delivered upon
exercise of the Warrants under the securities or Blue Sky laws of each
jurisdiction in which such registration or qualification is necessary and use
its best efforts to maintain all such registrations or qualifications in effect
from the date of issuance thereof through the final Expiration Date or until
such earlier time as no Warrants remain outstanding; provided, that in no event
shall the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action which would subject it to
general service of process in any jurisdiction where it is not now so subject.
However, the Company will not be required to honor the exercise of Warrants if,
in the opinion of the Board of Directors upon advice of counsel, the sale of
securities upon such exercise would be unlawful; provided, further, that the
foregoing provisos shall not affect or in any way limit the obligations of the
Company pursuant to clauses (a) and (b) of this paragraph.

     This Warrant Certificate, with or without other Certificates, upon
surrender to the Warrant Agent, any successor warrant agent or, in the absence
of any successor warrant agent, at the corporate offices of the Company, may be
exchanged for another Warrant Certificate or Certificates evidencing in the
aggregate the same number of Warrants as the Warrant Certificate or Certificates
so surrendered. If the Warrants evidenced by this Warrant Certificate shall be
exercised in part, the holder hereof shall be entitled to receive upon surrender
hereof another Warrant Certificate or Certificates evidencing the number of
Warrants not so exercised.

     No holder of this Warrant Certificate, as such, shall be entitled to vote,
receive dividends or be deemed the holder of Common Stock or any other
securities of the Company which may at any time be issuable on the exercise
hereof for any purpose whatsoever, nor shall anything contained in the Warrant
Agreement or herein be construed to confer upon the holder of this Warrant
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof or give or withhold consent to any corporate
action (whether upon any recapitalization, issuance of stock, reclassification
of stock, change of par value or change of stock to no par

                                       2

<Page>

value, consolidation, merger, conveyance or otherwise) or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Warrant Agreement) or to receive dividends or subscription rights or otherwise
until the Warrants evidenced by this Warrant Certificate shall have been
exercised and the receipt by the Warrant Agent of the Exercise Price.

     The Company shall not be required to issue or deliver any certificate for
shares of Common Stock or other securities upon the exercise of Warrants
evidenced by this Warrant Certificate until any tax which may be payable in
respect thereof by the holder of this Warrant Certificate pursuant to the
Warrant Agreement shall have been paid, such tax being payable by the holder of
this Warrant Certificate at the time of surrender.

     This Warrant Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Warrant Agent.

     This Warrant Certificate shall be governed by and construed in accordance
with the laws of the State of New York.

     IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed, manually or by facsimile signatures of the proper officers of the
Company and a facsimile of its corporate seal to be imprinted hereon.

Dated:  __________ __________, 2006.

                                       AKSYS, LTD.

                                       By:
                                           -------------------------------------
                                           President and Chief Executive Officer

                                       Attest:
                                               ---------------------------------
                                                       Secretary

Countersigned

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

____________, as Warrant Agent

By:
    --------------------------------
    Authorized Officer

                                       3

<Page>

                    [FORM OF REVERSE OF WARRANT CERTIFICATE]

                                SUBSCRIPTION FORM

                     To Be Executed by the Registered Holder
                          in Order to Exercise Warrants

         The undersigned Registered Holder hereby irrevocably elects to
exercise _____________ of the Warrants represented by this Warrant Certificate,
and to purchase the securities issuable upon the exercise of such Warrants, and
 requests that certificates for such securities shall be issued in the name of:

            PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

                                   _________

                                   _________

                                   _________

                                   _________

                    [please print or type name and address]

     and be delivered to

                                   _________

                                   _________

                                   _________

                                   _________

                     [please print or type name and address]

     and if such number of Warrants shall not be all the Warrants evidenced by
this Warrant Certificate, that a new Warrant Certificate for the balance of such
Warrants be registered in the name of, and delivered to, the Registered Holder
at the address stated below.

                                       1

<Page>

     If applicable, the undersigned represents that the exercise of the Warrants
evidenced hereby was solicited by a member of the National Association of
Securities Dealers, Inc. If not solicited by an NASD member, please leave blank
or write "unsolicited" in the space below.

                                        ________________________________________
                                                  (Name of NASD Member)

                                        Dated: ________________

                                        ________________________________________

                                        ________________________________________

                                        ________________________________________

                                                         Address

                                        ________________________________________

                                        Taxpayer Identification Number

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

                                                  Signature Guaranteed

     THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO
THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST
BE GUARANTEED BY A MEMBER OF THE MEDALLION STAMP PROGRAM.

                                       2

<Page>

                                   ASSIGNMENT

                     To Be Executed by the Registered Holder
                           in Order to Assign Warrants

FOR VALUE RECEIVED,____________________ hereby sells, assigns and transfers unto

            PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER

                                   _________

                                   _________

                                   _________

                                   _________

                     [please print or type name and address]

     _____________ of the Warrants represented by this Warrant Certificate, and
hereby irrevocably constitutes and appoints _____________ Attorney to transfer
this Warrant Certificate on the books of the Company, with full power of
substitution in the premises.

                                        Dated: ___________________

                                        ________________________________________

                                               Signature Guaranteed

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

     THE SIGNATURE TO THE ASSIGNMENT OR THE SUBSCRIPTION FORM MUST CORRESPOND TO
THE NAME AS WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY
PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST
BE GUARANTEED BY A MEMBER OF THE MEDALLION STAMP PROGRAM.

                                       3<Page>

                                                                    Exhibit 10.6

                                RELEASE AGREEMENT

     This Release Agreement (this "Agreement") is entered into as of June 23,
2006, by and among AKSYS, LTD., a Delaware corporation (the "Company"), DURUS
LIFE SCIENCES MASTER FUND LTD., a Cayman Islands company ("Durus"), ARTAL LONG
BIOTECH PORTFOLIO LLC, a Delaware limited liability company ("Artal") and
certain members of the Company's Board of Directors as set forth on the
signature page hereof (each, a "Director" and, collectively, the "Directors").
Durus and Artal are collectively referred to herein as the "Investors," and each
is individually referred to herein as an "Investor."

     WHEREAS, the Company and Durus have entered into a Securities Purchase
Agreement by and among the Company and Durus, dated as of March 31, 2006 (the
"Purchase Agreement"), pursuant to which, among other things, the Company has
agreed, upon the terms and subject to the conditions set forth in the Purchase
Agreement, to issue and sell to Durus at the "Initial Closing," as defined in
the Purchase Agreement, (i) 5,000 shares of the Company's Series B Convertible
Preferred Stock, and (ii) warrants to purchase 5,000,000 shares of Common Stock
of the Company at an initial exercise price of $1.10 per share;

     WHEREAS, contemporaneously with the execution and delivery of the Purchase
Agreement, (i) Durus made a bridge loan to the Company in an aggregate principal
amount of $5,000,000, pursuant to which the Company issued a note to Durus (the
"Bridge Loan"), (ii) the Company and Computershare Trust Company, Inc., as
successor Rights Agent under the Company's Rights Agreement, dated as of October
28, 1996, as amended (the "Rights Agreement"), executed and delivered an
amendment to the Rights Agreement in the form attached as Exhibit G to the
Purchase Agreement, and (iii) the Company and the Investors executed and
delivered an Amendment to the Settlement Agreement (as defined below)
substantially in the form attached as Exhibit H to the Purchase Agreement (the
"Settlement Agreement Amendment");

     WHEREAS, contemporaneously with the Initial Closing, (i) Durus and the
Company will execute and deliver a loan agreement, substantially in the form
attached as Exhibit D to the Purchase Agreement (the "Loan Agreement"), pursuant
to which the Company will issue certain notes to Durus, (ii) the Investors and
the Company will execute and deliver an investor rights agreement, substantially
in the form attached as Exhibit E to the Purchase Agreement (the "Investor
Rights Agreement" and, together with the Purchase Agreement, the Bridge Loan,
the Settlement Agreement Amendment, the Loan Agreement and the other agreements
and documents entered into among the Company, Durus and/or Artal in connection
with the transactions contemplated in such agreements, the "Financing
Documents"), and (iii) certain of the Directors are resigning from their
positions as members of the Board of Directors of the Company and members of
certain committees thereof;

     WHEREAS, the Company and the Investors have previously entered into certain
agreements with respect to the Investors' acquisition, ownership, trading and
disposition of shares of Common Stock of the Company and certain other matters,
including (i) a Settlement Agreement and Mutual Release dated as of February 23,
2004 (the "Settlement Agreement") by and among the Company, the Investors, Durus
Capital Management, LLC ("Durus LLC"), Durus

<Page>

Capital Management (N.A.), LLC ("Durus NA") and Scott Sacane ("Sacane" and,
together with Durus LLC and Durus NA, the "Sacane Parties"), (ii) a First
Amendment to Rights Agreement by and between the Company and EquiServe Trust
Company, N.A., as successor Rights Agent, dated as of February 23, 2004 (the
"First Rights Agreement Amendment"), (iii) the Registration Rights Agreement by
and among the Company and the Investors dated as of February 23, 2004 (the
"Registration Rights Agreement"), (iv) the Note Purchase Agreement by and among
the Company and the Investors dated as of February 23, 2004 (the "Note Purchase
Agreement"), pursuant to which the Company issued to the Investors unsecured
subordinated promissory notes (the "Notes" and, together with the Settlement
Agreement, the Rights Agreement, the First Rights Agreement Amendment, the
Registration Rights Agreement and the Note Purchase Agreement, the "Prior
Agreements");

     WHEREAS, in connection with the execution and delivery of the Financing
Documents, it is the desire and intent of the Investors to fully and completely
waive, release and relinquish certain claims and rights that they may have
against the Company as set forth below, and it is the desire and intent of the
Company to fully and completely waive, release and relinquish certain claims and
rights that it may have against the Investors as set forth below; and

     WHEREAS, it is the intent of each of the Directors to fully and completely
waive, release and relinquish certain claims and rights that such Director may
have against the Investors as set forth below.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

1.   RELEASE OF THE COMPANY.

     As of the date hereof, each Investor for (i) itself and its affiliates
(other than the Company to the extent the Company might otherwise be deemed to
be an affiliate of such Investor) and subsidiaries, predecessor and successor
corporations or entities, (ii) any and all of their respective past, present and
future officers, directors, employees, agents, representatives and attorneys,
and (iii) any and all other persons, firms, corporations and entities that could
or might act on its behalf, does hereby fully, finally and forever release,
remise, discharge and acquit the Company, its affiliates and subsidiaries,
predecessor and successor corporations or entities, any and all of their
respective past, present and future managers, partners, officers, directors
(including the Directors), employees, agents, representatives and attorneys,
permitted assigns and transferees, and any and all other persons, firms,
corporations and entities that could or might act on its behalf (collectively,
the "Company Released Parties"), from and against any and all claims, actions,
causes of action, debts, damages, demands, offsets, payments, costs, attorneys'
fees, obligations of every kind and nature, rights, liabilities, charges,
expenses, contracts, promises and agreements (collectively, "Claims") arising
out of conduct to date, whether direct or indirect, regardless of the legal
theory upon which they are based, whether known or unknown, now existing or
arising at any time in the future, and whether liquidated or unliquidated,
including, but not limited to, (i) all Claims arising out of conduct to date
relating to or arising from the acquisition, ownership, trading or disposition
of shares of the Company's Common Stock, (ii) all Claims arising out of conduct
to date relating to breach of good faith or fair dealing or breach of

                                       2

<Page>

the duty of care or any other similar fiduciary duty, and (iii) all Claims
arising out of conduct to date relating to or arising under any agreement,
contract or other arrangement, whether verbal or written, entered into prior to
the Initial Closing, including the Prior Agreements. Notwithstanding the
foregoing, it is further expressly agreed that the terms of this Section 1 shall
not (i) release or otherwise discharge the obligations of the Company Released
Parties under or pursuant to the Financing Documents, (ii) apply to any Claims
such Investor (or any of its affiliates or other parties on whose behalf such
Investor is releasing Claims) may have against the Sacane Parties or (iii) apply
to any Claims such Investor (or any of its affiliates or other parties on whose
behalf such Investor is releasing Claims) may have relating to (A) any breach by
a Company Released Party of his or her duty of loyalty to the Company or its
stockholders, (B) any acts or omissions by a Company Released Party which
involve intentional misconduct or a knowing violation of law by him or her or
(C) any transaction from which an improper personal benefit was derived by a
Company Released Party.

2.   RELEASE OF THE INVESTORS.

     As of the date hereof, (1) each Director and (1) the Company for (i) itself
and its affiliates (other than the Investors to the extent the Investors might
otherwise be deemed to be affiliates of the Company) and subsidiaries,
predecessor and successor corporations or entities, (ii) any and all of their
respective past, present and future officers, directors, employees, agents,
equityholders, representatives, attorneys and joint venturers, and (iii) any and
all other persons, firms, corporations and entities that could or might act on
its behalf, does hereby fully, finally and forever release, remise, discharge
and acquit each of the Investors, their affiliates and subsidiaries, predecessor
and successor corporations or entities, any and all of their respective past,
present and future managers, investors, members, partners, officers, directors,
employees, agents, representatives and attorneys, permitted assigns and
transferees, and any and all other persons, firms, corporations and entities
that could or might act on its behalf, including, without limitation, Durus Life
Sciences Fund, LLC and Durus Life Sciences International Fund Ltd.
(collectively, the "Investor Released Parties"), from and against any and all
Claims arising out of conduct to date, whether direct or indirect, regardless of
the legal theory upon which they are based, whether known or unknown, now
existing or arising at any time in the future, and whether liquidated or
unliquidated, including, but not limited to (i) all Claims arising out of
conduct to date relating to or arising from the acquisition, ownership, trading
or disposition of shares of the Company's Common Stock, (ii) all Claims arising
out of conduct to date relating to breach of good faith or fair dealing or
breach of the duty of care or any other fiduciary duty, and (iii) all Claims
arising out of conduct to date relating to or arising under any agreement,
contract or other arrangement, whether verbal or written, entered into prior to
the Initial Closing, including the Prior Agreements. Notwithstanding the
foregoing, it is further expressly agreed that the terms of this Section 2 shall
not (i) release or otherwise discharge the obligations of the Investor Released
Parties under or pursuant to the Financing Documents, (ii) apply to any Claims
that the Company (or any of its affiliates or other parties on whose behalf the
Company is releasing Claims) or any Director may have may have against the
Sacane Parties, or (iii) apply to any Claims the Company (or any of its
affiliates or other parties on whose behalf the Company is releasing Claims) or
any Director may have relating to (A) a breach of any duty of loyalty that the
Investor Released Parties may have to the Company or its stockholders, (B) any
acts or omissions of the Investor Released Parties which involve intentional
misconduct or a knowing violation of law or (C) any

                                       3

<Page>

transaction from which an Investor Released Party derived an improper personal
benefit in breach of a duty to the Company or its stockholders.

3.   FURTHER ASSURANCES.

     (A) Subject to obligations under Applicable Law (as defined in Section 3(c)
below), each party hereto agrees that neither such party nor, as applicable, (i)
any of such party's affiliates and subsidiaries, predecessor and successor
corporations or entities, (ii) any of such party's past, present and future
officers, directors, employees, agents, representatives and attorneys, or (iii)
any other private person or private entity, including any individual, limited
liability company, partnership, joint venture, corporation, trust,
unincorporated organization but excluding any Governmental Body (as defined
below) (each, a "Private Person"), that such party controls or that could or
might act on its behalf, will assist, directly or indirectly, any other Private
Person in investigating, preparing or asserting any private action, suit,
litigation, arbitration, proceeding, contest, hearing, inquiry, inquest, audit
or examination (collectively, "Private Proceedings") against any person, party
or entity released hereunder arising out of conduct to date or any transaction
contemplated by this Agreement; provided, that nothing contained in this Section
3 shall preclude any such Private Person from producing documents or other
information or providing truthful testimony in response to a subpoena, court
order, regulatory request or other legal process believed in good faith to be
valid.

     (B) Each party hereto agrees not to pursue any claim, right or defense
against any other party hereto under this Agreement that is inconsistent with
the obligations of such party under this Agreement. Each party hereto agrees
that it will not make any representation or argument or take any position
inconsistent with the agreements made by it in this Agreement, in any Private
Proceeding, including in any negotiation with any Private Person threatening to
make any claims or commence any Private Proceeding, and no party hereto shall
initiate or encourage in any way any such Private Proceeding.

     (C) "Applicable Law" as used herein means all controlling applicable
federal, state and local statutes, regulations, ordinances and administrative
rules and orders (that have the effect of law) as well as all applicable final,
non-appealable judicial opinions.

     (D) "Governmental Body" as used herein means any governmental authority,
agency or entity of any kind whatsoever, including without limitation any
quasi-governmental agency, self-regulatory organization, arbitrator or arbitral
panel.

4.   SUFFICIENCY OF CONSIDERATION.

     Each Investor, the Company and each Director acknowledges and agrees that
sufficient consideration has passed among them by virtue of this Agreement to
render this Agreement, including the releases herein, valid and enforceable.

5.   AMENDMENTS; WAIVERS.

                                       4

<Page>

     This Agreement may not be modified, amended, or terminated except by an
instrument in writing, signed by each of the parties; provided, further, that no
such modification, amendment or termination shall adversely affect the rights of
any beneficiary of this release without that beneficiary's written consent. No
failure to exercise and no delay in exercising any right, remedy, or power under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, or power under this Agreement preclude
any other or further exercise thereof, or the exercise of any other right,
remedy, or power provided herein or by law or in equity.

6.   ENTIRE AGREEMENT.

     This Agreement and the Transaction Documents (as defined in the Purchase
Agreement) constitute the complete, final and exclusive embodiment of the entire
agreement among the parties hereto with regard to the subject matter hereof and
thereof. This Agreement is entered into without reliance on any promise or
representation, written or oral, other than those expressly contained or
referenced herein.

7.   HEIRS, SUCCESSORS AND ASSIGNS.

     This Agreement shall bind the heirs, personal representatives, successors,
assigns, executors and administrators of each party hereto, and inure to the
benefit of each such party, its heirs, personal representatives, successors,
assigns, executors and administrators.

8.   MISCELLANEOUS.

     (A) The execution of this Agreement shall neither constitute nor be
construed as an admission of any liability.

     (B) This Agreement shall be governed by and construed in accordance with
the law of the State of Delaware, without giving effect to the conflicts or
choice of law provisions thereof.

     (C) If any provision of this Agreement is determined to be invalid, void or
unenforceable, in whole or in part, this determination will not affect any other
provision of this Agreement, and the provision in question shall be modified so
as to be rendered valid and enforceable and to give the applicable parties
hereto the intended benefits of the provision.

     (E) The parties hereto acknowledge and agree that the provisions of this
Agreement are intended to be for the benefit of, and may be enforced by, each of
the parties and the third parties who are intended beneficiaries of the release
of claims against them contained in Sections 1 and 2 hereof.

     (F) This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original and all of which, when taken together,
will be deemed to constitute one and the same document.

                                       5

<Page>

     IN WITNESS WHEREOF, the Investors, the Company and the Directors have
caused their respective signature page to this Release Agreement to be duly
executed as of the date first written above.

                                        AKSYS, LTD.

                                        By: /s/
                                            ------------------------------------
                                            Name:
                                            Title:

                                        DURUS LIFE SCIENCES MASTER FUND LTD.

                                        By: /s/
                                            ------------------------------------
                                            Name:
                                            Title:

                                        ARTAL LONG BIOTECH PORTFOLIO LLC

                                        By: Artal Alternative Treasury
                                            Management
                                        Its: Managing Member

                                        By: /s/
                                            ------------------------------------
                                            Name:
                                            Title:

                                       6

<Page>

                                        /s/
                                        ----------------------------------------
                                        Lawrence D. Damron

                                        /s/
                                        ----------------------------------------
                                        Alan R. Meyer

                                        /s/
                                        ----------------------------------------
                                        Bernard R. Tresnowski

                                        /s/
                                        ----------------------------------------
                                        Brian J.G. Pereira

                                        /s/
                                        ----------------------------------------
                                        Richard B. Egen

                  [Signature Page to Release Agreement, cont.]

                                       7

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