**Exhibit10.25**

** **

**[ExecutionCopy]**

 

**PATENT AND TRADEMARK SECURITYAGREEMENT**

 

THISPATENT AND TRADEMARK SECURITY AGREEMENT (this “Agreement”), dated as of March31, 2006, is made between AKSYS, LTD., a Delaware corporation (“Debtor”), andDURUS LIFE SCIENCES MASTER FUND LTD., a Cayman Islands Exempted Company (the “SecuredParty”).

 

Debtorand Secured Party hereby agree as follows:

 

# **Section 1.  **Definitions;Interpretation.

#  

## (a)           Terms Defined in Security Agreement. All capitalized terms used in thisAgreement and not otherwise defined herein shall have the meanings assigned tothem in the Security Agreement.

##  

## (b)           Certain Defined Terms. As used in this Agreement, thefollowing terms shall have the following meanings:

##  

“Collateral”has the meaning set forth in Section 2.

 

“PTO”means the United States Patent and Trademark Office.

 

“SecurityAgreement” means the Security Agreement dated as of March 31, 2006 between Debtorand Secured Party, as amended, amended and restated, modified, renewed orextended from time to time.

 

## (c)           Terms Defined in UCC. Where applicable and except asotherwise defined herein, terms used in this Agreement shall have the meaningsassigned to them in the UCC.

##  

## (d)           Interpretation. The rules of interpretation applicable to theSecurity Agreement shall also be applicable to this Agreement and areincorporated herein by this reference.

##  

# **Section 2.  **SecurityInterest.

#  

## (a)           Grant of Security Interest. As security for the payment andperformance of the Obligations, Debtor hereby grants to Secured Party asecurity interest in all of Debtor’s right, title and interest in, to and underthe following property, in each case whether now or hereafter existing orarising or in which Debtor now has or hereafter owns, acquires or develops aninterest and wherever located (collectively, the “Collateral”):

##  

### (i)            all patents and patent applications, domestic orforeign, all licenses relating to any of the foregoing and all income androyalties with respect to any licenses (including such patents and patentapplications as described in Schedule A), all rights to sue for

 

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### past, present or future infringement thereof, all rightsarising therefrom and pertaining thereto and all reissues, divisions,continuations, renewals, extensions and continuations-in-part thereof;

###  

### (ii)           all state (including common law), federal and foreigntrademarks, service marks and trade names, and applications for registration ofsuch trademarks, service marks and trade names, all licenses relating to any ofthe foregoing and all income and royalties with respect to any licenses(including such marks, names and applications as described in Schedule B),whether registered or unregistered and wherever registered, all rights to suefor past, present or future infringement or unconsented use thereof, all rightsarising therefrom and pertaining thereto and all reissues, extensions andrenewals thereof;

###  

### (iii)          the entire goodwill of or associated with thebusinesses now or hereafter conducted by Debtor connected with and symbolizedby any of the aforementioned properties and assets;

###  

### (iv)          all commercial tort claims associated with or arisingout of any of the aforementioned properties and assets;

###  

### (v)           all accounts, all intangible intellectual or other similarproperty and other general intangibles associated with or arising out of any ofthe aforementioned properties and assets and not otherwise described above,including all license payments and payments under insurance (whether or notSecured Party is the loss payee thereof) or any indemnity, warranty or guarantypayable by reason of loss or damage to or otherwise with respect to theforegoing Collateral; and

###  

### (vi)          all products, proceeds and supporting obligations ofor with respect to any and all of the foregoing Collateral.

###  

## (b)           Continuing Security Interest. Debtor agrees that this Agreementshall create a continuing security interest in the Collateral which shallremain in effect until terminated in accordance with Section 12.

##  

# **Section 3.  **Supplementto Security Agreement. This Agreementhas been granted in conjunction with the security interests granted to SecuredParty under the Security Agreement. The rights and remedies of Secured Party withrespect to the security interests granted herein are without prejudice to, andare in addition to those set forth in the Security Agreement, all terms andprovisions of which are incorporated herein by reference.

#  

# **Section 4.  **Representationsand Warranties. Debtor represents and warrants to Secured Party that:

#  

## (a)           Patents. A true and correct list of all of the existingCollateral consisting of U.S. patents and patent applications and/orregistrations owned by Debtor, in whole or in part, is set forth in ScheduleA.

##  

## (b)           Trademarks. A true and correct list of all of the existingCollateral consisting of U.S. trademarks, trademark registrations and/orapplications owned by Debtor, in whole or in part, is set forth in ScheduleB.

 

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# **Section 5.  **FurtherActs. On a continuing basis, Debtor shall make, execute, acknowledge anddeliver, and file and record in the proper filing and recording places, allsuch instruments and documents, and take all such action as may be necessary oradvisable or may be reasonably requested by Secured Party to carry out theintent and purposes of this Agreement, or for assuring, confirming orprotecting the grant or perfection of the security interest granted orpurported to be granted hereby, to ensure Debtor’s compliance with this Agreementor to enable Secured Party to exercise and enforce its rights and remedieshereunder with respect to the Collateral, including any documents for filingwith the PTO and/or any applicable state office. Secured Party may record thisAgreement, an abstract thereof, or any other document describing Secured Party’sinterest in the Collateral with the PTO, at the expense of Debtor.

#  

# **Section 6.  **Authorizationto Supplement. If Debtor shall obtain rights as owner to any new, or applyfor registration of, any U.S. trademarks or service marks, or any U.S. patents,the provisions of this Agreement shall automatically apply thereto. Debtorshall give prompt notice in writing to Secured Party with respect to theforegoing. Without limiting Debtor’s obligations under this Section 6, Debtorauthorizes Secured Party to modify this Agreement by amending Schedules Aor B to include any such new patent or trademark and service mark registrationor such application. Notwithstanding the foregoing, no failure to so modifythis Agreement or amend Schedules A or B shall in any wayaffect, invalidate or detract from Secured Party’s continuing security interestin all Collateral, whether or not listed on Schedule A or B.

#  

# **Section 7.  **BindingEffect. This Agreement shall be binding upon, inure to the benefit of andbe enforceable by Debtor, Secured Party and their respective successors andassigns. Debtor may not assign, transfer, hypothecate or otherwise convey itsrights, benefits, obligations or duties hereunder except as specificallypermitted by the Security Agreement.

#  

# **Section 8.  **Notices.All notices and other communicationsrequired or permitted hereunder shall be in writing and shall be deemedeffectively given: (i) upon personal delivery to the party to be notified;(ii) when sent by confirmed telex or facsimile if sent during normalbusiness hours of the recipient, if not, then on the next business day;(iii) five (5) days after having been sent by registered or certifiedmail, return receipt requested, postage prepaid; or (iv) two (2) daysafter deposit with a nationally recognized overnight courier, specifying nextday delivery, with written verification of receipt. All communications shall besent to the parties hereto at their respective addresses or facsimilenumbers set forth in the below their names on the signature pages hereof, or as notified by such party from time totime at least ten (10) days prior to the effectiveness of such notice.

#  

# **Section 9.  **GoverningLaw. This Agreement shall be construed in accordance with and governed bythe internal laws of the State of New York (as permitted by Section 5-1401of the New York General Obligations Law (or any similar successor provision))without giving effect to any choice of law rule that would cause the applicationof the laws of any jurisdiction other than the internal laws of the State ofNew York to the rights and duties of the parties, except as required bymandatory provisions of law and to the extent the validity or perfection of thesecurity interests hereunder, or the remedies hereunder, in respect of anyCollateral are governed by the law of a jurisdiction other than New York.

 

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# **Section 10.  **Amendment;Conflict. No amendment to this Agreement, or any waiver of any provisionhereof, shall be effective unless it is in writing and signed by Secured Partyand (in the case of any amendment) the Debtor. To the extent that any provisionof this Agreement conflicts with any provision of the Security Agreement, theprovision giving Secured Partygreater rights or remedies shall govern, it being understood that the purposeof this Agreement is to add to, and not detract from, the rights granted to Secured Party under the SecurityAgreement.

#  

# **Section 11.  **Counterparts.This Agreement may be executed in any number of counterparts and by differentparties hereto in separate counterparts, each of which when so executed shallbe deemed to be an original and all of which taken together shall constitutebut one and the same agreement.

#  

# **Section 12.  **Termination.Upon payment and performance in full of all Obligations (other than inchoateindemnity obligations and any other obligations which by their terms are tosurvive the termination of the Loan Documents), the security interests createdby this Agreement shall terminate and Secured Party shall promptly execute anddeliver to Debtor such documents and instruments reasonably requested by Debtoras shall be necessary to evidence termination of all such security interestsgiven by Debtor to Secured Party hereunder, including cancellation of thisAgreement by written notice from Secured Party to the PTO.

#  

[Signature PagesFollowing]

 

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INWITNESS WHEREOF, the parties hereto have duly executed this Agreement, as ofthe date first above written.

 
|     | Debtor                    |
|----------|---------------------------|
|     |                      |
|     | AKSYS, LTD.               |
|     |                      |
|     |                      |
|     | By:                       | /s/ Laurence P.  Birch |   |
|     |                      | Title: CEO |
|     |                      |   |
|     |                      |   |
|     | Address:                  |
|     |                      |
|     | Two Marriott  Drive       |
|     | Lincolnshire, IL  60069   |
|     | Attn.:                    |   |   |
|     | Fax:  847-229-2080        |
|     |                      |
| * * | *With a  copy to*:        |
| * * | * *                  |
| * * | Keith S. Crow  P.C.       |
| * * | Kirkland &  Ellis LLP |
| * * | 200 East  Randolph Drive  |
| * * | Chicago,  Illinois 60601  |
| * * | Fax:  312-861-2200        |
|          |                           |  |  |  |  |  |

 

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|   |   | Secured Party                                  |
|--------|--------|------------------------------------------------|
|   |   | ** **                                     |
|   |   | DURUS LIFE  SCIENCES MASTER FUND  LTD.         |
|   |   |                                           |
|   |   | By                                             | /s/ Leslie Lake |   |
|   |   |                                           | Name: Leslie  Lake |
|   |   |                                           | Title: Director |
|   |   |                                           |
|   |   | Address:                                       |
|   |   |                                           |
|   |   | Durus Life Sciences Master Fund Ltd.           |
|   |   | c/o International Fund Services (Ireland) Ltd. |
|   |   | 3rd Floor, Bishops Square                      |
|   |   | Redmonds Hill                                  |
|   |   | Dublin 2, Ireland                              |
|   |   | Attention: Susan Byrne                         |
|   |   | Fax: (011)  35-31-707-5013                     |
|   |   |                                           |
|   |   | *With a  copy to:*                        |
|   |   | Gavin Grover,  Esq.                            |
|   |   | Morrison &  Foerster LLP                   |
|   |   | 425 Market  Street                             |
|   |   | San Francisco, California 94105           |
|   |   | Fax: 415-269-7522                         |
|   |   |                                           |
|   |   | *And with a copy to:*                          |
|   |   | * *                                       |
|   |   | Paul N. Roth,Esq.                              |
|   |   | Schulte, Roth &  Zabel                     |
|   |   | 919 Third Avenue                               |
|   |   | New York, New York  10022                      |
|   |   | Fax: 212-593-5955                              |

 

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SCHEDULE Ato the Patent and Trademark Security Agreement

 

Issued U.S. Patents of Debtor

 
| **Patent No.** | ** ** | **Issue Date** | ** ** | **Registered Owner** | ** ** | **Title**                                                                                   |
|----------------|------------|----------------|------------|----------------------|------------|---------------------------------------------------------------------------------------------|
| ** **     | ** ** | ** **     | ** ** | ** **           | ** ** | ** **                                                                                  |
| 5,591,344      |       | 1/7/1997       |       | Aksys, Ltd.          |       | Hot  Water Disinfection of Dialysis Machines, Including the Extracorporeal Circuit  thereof |
|           |       |           |       |                 |       |                                                                                        |
| 5,630,935      |       | 5/20/1997      |       | Aksys, Ltd.          |       | Pressure Relief Valve with  Sample Removal Port                                             |
|           |       |           |       |                 |       |                                                                                        |
| 5,645,734      |       | 7/8/1997       |       | Aksys, Ltd.          |       | Dialysate Separation  Method                                                                |
|           |       |           |       |                 |       |                                                                                        |
| 5,651,893      |       | 7/29/1997      |       | Aksys, Ltd.          |       | Disinfection of Dialysis  Machine                                                           |
|           |       |           |       |                 |       |                                                                                        |
| 5,658,456      |       | 8/19/1997      |       | Aksys, Ltd.          |       | Batch Dialysate Chemical  Vessel with Machine-Readable Indicator                            |
|           |       |           |       |                 |       |                                                                                        |
| 5,670,050      |       | 9/23/1997      |       | Aksys, Ltd.          |       | Method for Detection of  Leakage of Blood                                                   |
|           |       |           |       |                 |       |                                                                                        |
| 5,674,390      |       | 10/7/1997      |       | Aksys, Ltd.          |       | Dialysis Machine with  Leakage Detection                                                    |
|           |       |           |       |                 |       |                                                                                        |
| 5,674,397      |       | 10/7/1997      |       | Aksys, Ltd.          |       | Debubblers                                                                                  |
|           |       |           |       |                 |       |                                                                                        |
| 5,674,404      |       | 10/7/1997      |       | Aksys, Ltd.          |       | Filter Integrity Test  Method for Dialysis Machines                                         |
|           |       |           |       |                 |       |                                                                                        |
| 5,690,821      |       | 11/25/1997     |       | Aksys, Ltd.          |       | Apparatus for Supplying a  Batch of Chemicals to a Dialysate Tank                           |
|           |       |           |       |                 |       |                                                                                        |
| 5,690,831      |       | 11/25/1997     |       | Aksys, Ltd.          |       | Method of Rinsing Back  Blood to Hemodialysis Patient                                       |
|           |       |           |       |                 |       |                                                                                        |
| 5,702,606      |       | 12/30/1997     |       | Aksys, Ltd.          |       | Method of Priming Dialyzer                                                                  |
|           |       |           |       |                 |       |                                                                                        |
| 5,705,066      |       | 1/6/1998       |       | Aksys, Ltd.          |       | Apparatus for Opening a  Vessel                                                             |
|           |       |           |       |                 |       |                                                                                        |
| 5,707,086      |       | 1/13/1998      |       | Aksys, Ltd.          |       | Tubing Connector and Parts  for Receiving the Connector                                     |
|           |       |           |       |                 |       |                                                                                        |
| 5,714,060      |       | 2/3/1998       |       | Aksys, Ltd.          |       | Disinfection of Arterial  and Venous Line Connectors of Hemodialysis Machine                |

 

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| **Patent No.** | ** ** | **Issue Date** | ** ** | **Registered Owner** | ** ** | **Title**                                                                                                     |
|----------------|------------|----------------|------------|----------------------|------------|---------------------------------------------------------------------------------------------------------------|
| ** **     | ** ** | ** **     | ** ** | ** **           | ** ** | ** **                                                                                                    |
| 5,716,531      |       | 2/10/1998      |       | Aksys, Ltd.          |       | Method for Determining  Sodium Clearance of Dialyzer                                                          |
|           |       |           |       |                 |       |                                                                                                          |
| 5,725,776      |       | 3/10/1998      |       | Aksys, Ltd.          |       | Methods for  Ultrafiltration Control In Hemodialysis                                                          |
|           |       |           |       |                 |       |                                                                                                          |
| 5,762,782      |       | 6/9/1998       |       | Aksys, Ltd.          |       | Water Treatment for  Dialysate Preparation                                                                    |
|           |       |           |       |                 |       |                                                                                                          |
| 5,783,072      |       | 7/21/1998      |       | Aksys, Ltd.          |       | Lightweight Noncompliant  Dialysate Solution Tank for Batch Dialysate Preparation Systems                     |
|           |       |           |       |                 |       |                                                                                                          |
| 5,788,099      |       | 8/4/1998       |       | Aksys, Ltd.          |       | Vessel for Containing  Batch Quantities of Dialysate or Other Physiologic Solution Chemicals                  |
|           |       |           |       |                 |       |                                                                                                          |
| 5,788,851      |       | 8/4/1998       |       | Aksys, Ltd.          |       | User Interface and Method  for Control of Medical Instruments, such as Dialysis Machines                      |
|           |       |           |       |                 |       |                                                                                                          |
| 5,858,239      |       | 1/12/1999      |       | Aksys, Ltd.          |       | Methods and Apparatus for  Adjustment of Blood Drip Chamber of Dialysis Machines Using Touchscreen  Interface |
|           |       |           |       |                 |       |                                                                                                          |
| 5,863,421      |       | 1/26/1999      |       | Aksys, Ltd.          |       | Hemodialysis Machine with  Automatic Priming by Induced Pressure Pulses                                       |
| 5,932,103      |       | 8/3/1999       |       | Aksys, Ltd.          |       | withdrawal of Priming  Fluid From Extracorporeal Circuit of Hemodialysis Machines or the Like                 |
|           |       |           |       |                 |       |                                                                                                          |
| 5,932,110      |       | 8/3/1999       |       | Aksys, Ltd.          |       | Dialysate Conductivity  Adjustment in a Batch Dialysate Preparation System                                    |
| 6,044,691      |       | 4/4/2000       |       | Aksys, Ltd.          |       | Blood Tubing Set Integrity  Tests for Extracorporeal Circuits                                                 |
|           |       |           |       |                 |       |                                                                                                          |
| 6,132,616      |       | 10/17/200      |       | Aksys, Ltd.          |       | Method for Flushing and  Filling of an Extracorporeal Blood Circulating System of a Dialysis Machine          |
|           |       |           |       |                 |       |                                                                                                          |
| 6,136,201      |       | 10/24/2000     |       | Aksys, Ltd.          |       | Method of Preparation of  Batch of Physiologic Solution                                                       |
|           |       |           |       |                 |       |                                                                                                          |
| 6,146,523      |       | 11/14/2000     |       | Aksys, Ltd.          |       | User Interface and Method  for Control of Medical Instruments, such as Dialysis                               |

 

A-2

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| **Patent No.** | ** ** | **Issue Date** | ** ** | **Registered Owner** | ** ** | **Title**                                                                                      |
|----------------|------------|----------------|------------|----------------------|------------|------------------------------------------------------------------------------------------------|
| ** **     | ** ** | ** **     | ** ** | ** **           | ** ** | ** **                                                                                     |
| ** **     | ** ** | ** **     | ** ** | ** **           | ** ** | Machines                                                                                       |
| ** **     | ** ** | ** **     | ** ** | ** **           | ** ** | ** **                                                                                     |
| 6,153,102      |       | 11/28/2000     |       | Aksys, Ltd.          |       | Disinfection of Dead-Ended  Lines in Medical Instruments                                       |
|           |       |           |       |                 |       |                                                                                           |
| 6,280,634      |       | 8/28/2001      |       | Aksys, Ltd.          |       | Method of Determining  System Volume of a Dialysis Machine                                     |
|           |       |           |       |                 |       |                                                                                           |
| 6,355,161      |       | 3/12/2002      |       | Aksys, Ltd.          |       | Bottles for Dialysis  Machines and Method for Automatically Identifying Such Bottles           |
|           |       |           |       |                 |       |                                                                                           |
| 6,691,047      |       | 2/10/2004      |       | Aksys, Ltd.          |       | Calibration of Pumps, Such  as Blood Pumps of Dialysis Machine                                 |
|           |       |           |       |                 |       |                                                                                           |
| 6,868,309      |       | 3/15/2005      |       | Aksys, Ltd.          |       | Dialysis Machine with  Symmetric Multi-Processing (SMP) Control System and Method of Operation |
|           |       |           |       |                 |       |                                                                                           |
| D383,842       |       | 9/16/1997      |       | Aksys, Ltd.          |       | Dialysis Machine                                                                               |
|           |       |           |       |                 |       |                                                                                           |
| D395,085       |       | 6/9/1998       |       | Aksys, Ltd.          |       | Dialysis Machine                                                                               |
|           |       |           |       |                 |       |                                                                                           |
| D395,517       |       | 6/23/1998      |       | Aksys, Ltd.          |       | Chemical Vessel                                                                                |
|           |       |           |       |                 |       |                                                                                           |
| D403,079       |       | 12/22/1998     |       | Aksys, Ltd.          |       | Chemical Vessel                                                                                |
|           |       |           |       |                 |       |                                                                                           |
| D435,646       |       | 12/26/2000     |       | Aksys, Ltd.          |       | Bottle for Dialysis  Machine                                                                   |
|           |       |           |       |                 |       |                                                                                           |
| D435,647       |       | 12/26/2000     |       | Aksys, Ltd.          |       | Bottle for Dialysis  Machine                                                                   |
|           |       |           |       |                 |       |                                                                                           |
| D435,648       |       | 12/26/2000     |       | Aksys, Ltd.          |       | Bottle for Dialysis  Machine                                                                   |
|           |       |           |       |                 |       |                                                                                           |
| D435,649       |       | 12/26/2000     |       | Aksys, Ltd.          |       | Bottle for Dialysis  Machine                                                                   |

 

A-3

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Pending U.S. Patent Applications of Debtor

 
| **Application  No.** | ** ** | **Publication  Date** | ** ** | **Registered Owner** | ** ** | **Title**                                      |
|----------------------|------------|-----------------------|------------|----------------------|------------|------------------------------------------------|
| ** **           | ** ** | ** **            | ** ** | ** **           | ** ** | ** **                                     |
| 10/921,677           |       | 2/23/2006             |       | Aksys, Ltd.          |       | Citrate-Based  Dialysate Chemical Formulations |

 

A-4

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SCHEDULE Bto the Patent and Trademark Security Agreement

 

U.S. Registered Trademarks of Debtor

 
| **Registration No.** | ** ** | **Registration Date** | ** ** | **Registered Owner** | ** ** | **Mark**   |
|----------------------|------------|-----------------------|------------|----------------------|------------|------------|
| ** **           | ** ** | ** **            | ** ** | ** **           | ** ** | ** ** |
| 2,407,373            |       | 11/21/2000            |       | Aksys, Ltd.          |       | AKSYS      |
|                 |       |                  |       |                 |       |       |
| 2,472,036            |       | 7/24/2001             |       | Aksys, Ltd.          |       | PHD        |
|                 |       |                  |       |                 |       |       |
| 2,500,717            |       | 10/23/2004            |       | Aksys, Ltd.          |       | AKSYS      |
| 2,659,850            |       | 12/10/2002            |       | Aksys, Ltd.          |       | AKSYS      |

 

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Pending U.S. Trademark Applications of Debtor

 
| **Serial No.** | ** ** | **Filed Date** | ** ** | **Applicant** | ** ** | **Mark**                  |
|----------------|------------|----------------|------------|---------------|------------|---------------------------|
| ** **     | ** ** | ** **     | ** ** | ** **    | ** ** | ** **                |
| 78/584,229     |       | 3/10/2005      |       | Aksys, Ltd.   |       | HOME FEELS  BETTER.       |
|           |       |           |       |          |       |                      |
| 78/586,437     |       | 3/14/2005      |       | Aksys, Ltd.   |       | HOME FEELS  BETTER. AKSYS |

 

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