**Exhibit 10.27**

 

**AMENDMENT TO**

**SETTLEMENT AGREEMENT AND MUTUAL RELEASE**

 

This Amendment to Settlement Agreement andMutual Release (this “Amendment”) is entered into as of March 31, 2006 byand among **AKSYS, LTD.**, a Delaware corporation(the “Company”), **DURUS LIFE SCIENCES MASTERFUND LTD.**, a Cayman Islands company (“Durus”), and **ARTAL LONG BIOTECH PORTFOLIO LLC**, a Delaware limitedliability company (“Artal”). Durus and Artal are collectively referredto herein as the “Investors,” and each is individually referred toherein as an “Investor.”

 

A.            The Company, Durus,Durus Capital Management, LLC, Durus Capital Management (N.A.), LLC, Artal andScott Sacane are parties to that certain Settlement Agreement and MutualRelease, dated as of February 23, 2004 (the “Settlement Agreement”).

 

B.            Under the terms of theSettlement Agreement, the parties agreed to certain matters related to, amongother things, the acquisition, ownership, trading or disposition of shares of theCompany’s common stock by the Investors.

 

C.            In connection with theexecution and delivery of the Securities Purchase Agreement, dated as of March 31,2006, by and between the Company and Durus (the “Purchase Agreement”)and the execution and delivery of the Transaction Documents (as defined in thePurchase Agreement), the Company and the Investors have agreed to amend theSettlement Agreement as provided herein as to themselves only in accordancewith Section 17(b) of the Settlement Agreement.

 

D.            Capitalized terms usedbut not defined herein shall have the meanings ascribed to such terms in theSettlement Agreement.

 

NOW,THEREFORE, in consideration of the premises and the mutualcovenants contained herein and other good and valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, the Company and theInvestors hereby agree as follows:

 

**1.****             Amendmentto Settlement Agreement.**Effective immediately upon execution of thisAmendment, as between the Company, on the one hand, and each of the Investorsand their respective Affiliates and Associates, on the other hand, thefollowing sections of the Settlement Agreement are hereby terminated and deemedto be deleted in their entirety and are and shall be of no further force andeffect: Sections 3, 5, 6, 7, 11(c), 11(d), 12, 13 and 27(a).

 

**2.****             Terminationof Irrevocable Proxy.**The Company hereby consents to the termination of theirrevocable proxies provided by the Investors to any and all Voting Designeespursuant to Section 16 of the Settlement Agreement, including Georgeson ShareholderCommunications, Inc., and the Company hereby authorizes the Investors toprovide written notice to such Voting Designees of the Company’s consent tosuch termination.

 

**3.****             FullForce and Effect.**Except as expressly modified by this Amendment, allterms, conditions and provisions of the Settlement Agreement shall remain infull force and 

 

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effect. In the event of anyinconsistency or conflict between the Settlement Agreement and this Amendment,the terms, conditions and provisions of this Amendment shall govern andcontrol.

 

**4.**             Counterparts.This Amendment may be executed in two or morecounterparts, each of which shall be deemed an original, but all of whichtogether shall constitute one and the same instrument. A facsimile, telecopy orother reproduction of this Amendment may be executed by any party hereto anddelivered by such party by facsimile or other electronic transmission, and suchexecution and delivery shall be considered valid, binding and effective for allpurposes.

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**5.****            ****Further Assurance.**Theparties hereto further agree to do and perform, or cause to be done andperformed, all such further acts and things, and shall execute and deliver allsuch other agreements, certificates, instruments and documents as any otherparty hereto may reasonably request in order to effect the foregoing.

 

**6.****            ****Entire Agreement****.**The SettlementAgreement, the Purchase Agreement, the Mutual Release, the amendment to theRights Agreement (referenced in Section 2.8.2 of the Purchase Agreement) andthis Amendment constitute the entire agreement among the parties with respectto the subject matter hereof and supersedes all prior or contemporaneousrepresentations, discussions, proposals, negotiations, conditions andagreements, whether oral or written, and all communications between the partiesrelating to the subject matter of the Settlement Agreement, the Investor RightsAgreement and this Amendment, including any limitations on the Investors’ andtheir respective Affiliates’ and Associates’ right to vote or take any otheraction with respect to the shares of capital stock of the Company held by them.

 

**6.****            ****Governing Law.**This Amendmentshall be governed by and construed in accordance with the law of the State ofDelaware, without giving effect to the conflicts or choice of law provisionsthereof.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, theInvestors and the Company have executed this Amendment to Settlement Agreementas of the date first above written.

 

 
|   | **AKSYS, LTD.**                           |
|--------|-------------------------------------------|
|   |                                      |
|   |                                      |
|   | By:                                       | /s/ Laurence P. Birch |   |
|   |                                      | Name: Laurence P.  Birch |
|   |                                      | Title: CEO |
|   |                                      |
|   |                                      |
|   | **DURUS LIFE SCIENCES MASTER FUND  LTD.** |
|   |                                      |
|   |                                      |
|   | By:                                       | /s/ Leslie Lake |   |
|   |                                      | Name: Leslie Lake |
|   |                                      | Title: Director |
|   |                                      |
|   |                                      |
|   | **ARTAL LONG BIOTECH PORTFOLIO LLC**      |
|   |                                      |
|   | By:                                       | Artal Alternative Treasury Management |
|   | Its:                                      | Managing Member |
|   |                                      |
|   |                                      |
|   | By:                                       | /s/ Christian Tedeschi |   |
|   |                                      | Name: Christian  Tedeschi |
|   |                                      | Title: Managing Director |

 

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