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                                                                   Exhibit 10.3

                                                                 EXECUTION COPY

               AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT


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

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

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

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

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

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

                                    ARTICLE I
                               REGISTRATION RIGHTS

Section 1.1. REGISTRATION STATEMENT.

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

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


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


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

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

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

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


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


                                   ARTICLE II
                             REGISTRATION PROCEDURES

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

                                   ARTICLE III
                                 INDEMNIFICATION

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

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

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

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

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

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


                                   ARTICLE IV
                                  MISCELLANEOUS

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

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

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

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

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

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

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

                                       9
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subsequent holder of the Registrable Securities (unless sold pursuant to an
effective registration statement or in accordance with Rule 144 under the
Securities Act), provided that the Company shall have the right to require any
holder of Registrable Securities to execute a counterpart of this Agreement as a
condition to such holder's claim to any rights hereunder. This Agreement,
together with the Purchase Agreement and the Warrant(s) sets forth the entire
agreement and understanding between the parties as to the subject matter hereof
and merges and supersedes all prior discussions, agreements and understandings
of any and every nature among them.

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

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

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

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

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

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

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


                                       10
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         IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be executed by the undersigned, thereunto duly authorized,
as of the date first set forth above.



                      AKSYS, LTD.


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



                      KINGSBRIDGE CAPITAL LIMITED


                      By: /s/ Valentine O'Donoghue
                          -------------------------
                          Valentine O'Donoghue
                          Director