Unassociated Document


    EXHIBIT
      10.17

    


    


    December
      30, 2004

    


    Mr.
      David
      Zeffren

    211
      S.
      Alta Vista Blvd.

    Los
      Angeles, CA 90036

    


    Dear
      David:

    


    We
      are
      pleased to offer you a full-time position with Arbios Systems, Inc. (“Arbios”)
      as Vice President of Operations, which is an exempt position. Specifics of
      our
      offer include:

     

    
      	
              1.

            	
              You
                will be compensated at an annualized rate of $120,000 paid twice
                monthly,
                before withholding of Federal and State income taxes, Social Security,
                and
                other customary deductions. 

            


    

     

    
      	
              2.

            	
              Your
                performance shall be reviewed annually against mutually agreed upon
                goals.
                At that time, appropriate upward compensation adjustments may be
                made in
                the form of increased salary. Your first review shall be in January
                2006
                with any compensation adjustments to be effective in February
                2006.

            


    

     

    
      	
              3.

            	
              All
                requests for time off (other than holidays observed by all of Arbios’s
                employees) should be approved in advance by Jacek Rozga, MD, PhD.
                You will
                report to Jacek Rozga, MD, PhD. and will perform such tasks as are
                usually
                and customarily performed by persons holding the title of Vice President
                of Operations.

            


    

     

    
      	
              4.

            	
              You
                will be entitled to two weeks vacation per year to be taken in accordance
                with Arbios Systems, Inc. corporate policy. You will also be entitled
                to
                the same paid holidays as are observed by all Arbios employees. In
                addition, you will be allowed paid time-off for religious holidays
                as
                specified in Appendix A (designated as “holy days”).  Additional
                religious holidays (designated as “regular” days) will be assessed as
                unpaid time-off. This calendar will be submitted before the end of
                each
                year or the upcoming year. Requests for additional time-off in excess
                of
                the time allotted for vacation leave will be assessed as an unpaid
                leave
                of absence.

            


    

     

    
      	
              5.

            	
              You
                will be entitled to participate in Arbios’s medical/dental insurance
                programs and will be entitled to such other employee benefits if
                Arbios
                decides to establish a medical/dental program in the future. You
                will be
                reimbursed for your reasonable business related expenses in accordance
                with the expense reimbursement policy in place from time to
                time.

            


    

     

    
      	
              6.

            	
              You
                will be employed on an “at will” basis. That is, the terms of your
                employment shall continue unless terminated by either you or us.
                Termination by us may be with or without cause, at any time. Further,
                this
                offer letter is not a contract of employment guaranteeing you the
                terms
                set forth in the letter for any specific period of time, or at
                all.

            


    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
              7.

            	
              All
                work that you perform for Arbios will be performed in our offices
                or as
                mutually agreed otherwise.

            


    

     

    
      	
              8.

            	
              Your
                employment is to be considered exclusive to Arbios. While you are
                employed
                by Arbios, you will not perform services for compensation for any
                third
                party.

            


    

     

    
      	
              9.

            	
              You
                must get a release from your current employer (or any still valid
                previous
                employers), from any existing non-compete agreements, if
                applicable.

            


    

     

    
      	
              10.

            	
              In
                consideration of your agreeing to this employment offer and as a
                condition
                of your reporting for work, we ask that you sign the attached Inventions
                Assignment and Confidentiality
                Agreement.

            


    

     

    
      	
              11.

            	
              This
                agreement is governed by California
                law.

            


    

     

    It
      the
      terms of this offer are acceptable to you, please indicate below by signing
      and
      returning one copy of this letter to me, together with one copy of the signed
      Inventions Assignment and Confidentiality Agreement as soon as possible before
      January 31, 2005. The remaining copies are for your records. 

     

    We
      are
      looking forward to having you join our team here at Arbios, and hope that you
      find your new employment with us challenging and rewarding.

     

    Sincerely,

    


    /s/
      Jacek
      Rozga, M.D., Ph.D. 
      
        

      

    

    Jacek
      Rozga, M.D., Ph.D.

    President

    


    ACCEPTED
      AND AGREED TO THIS

    3rd
      DAY OF
      JANUARY, 2005.

    


    By: 
      /s/
      David
      Zeffren 
      
        

      

    

    David
      Zeffren

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    Appendix
      A

    


    Jewish
      Holidays 2005

    


    Passover
      (1 holy day, 5 regular days)

    Friday,
      April 22

    Monday,
      April 25 (holy day)

    Tues-Fri,
      April 26-29

    


    Feast
      of
      Weeks (2 holy days) Mon-Tues, June 13-14

    


    Rosh
      Hashana (2 holy days) Tues-Wed, October 4-5

    


    Yom
      Kippur (1 holy day) Thursday, October 13

    


    Tabernacles
      (4 holy days, 3 regular days)

    Tues-Wed.
      October 18,19 

    October
      25-26 (holy days)

    October
      20,21, 24 (regular days)

    


    Total
      Holy Days 

    10
      holy
      days

    8
      regular
      days