Document:

EXHIBIT 10.8

                             CEDARS-SINAI LETTERHEAD

June 21, 2004

Arbios Systems, Inc.
c/o 110 North George Burns Road, Suite 4018
Los Angeles, CA 90048
Attention:  Jacek Rozga, M.D., Ph.D.
            President and Chief Scientific Officer

      Re:   Contract - Arbios Technologies, Inc. (Employee Loan-Out Agreement)
            (Third Amendment)
            ------------------------------------------------------------------

Dear Dr. Rozga:

      1. Section 1.1 of the Agreement, is hereby amended in its entirety to read
in full as follows:

            1.1 Term. The term of this Agreement ("Term") shall commence on the
            date set forth above ("Commencement Date"), and shall continue
            through June 30, 2005, unless sooner terminated as provided herein.

      2. Exhibit "B" to the Agreement is hereby deleted in its entirety, and
replaced with the Exhibit "B" attached herewith.

      3. All other provision of the Agreement shall remain in full force and
effect.

<PAGE>

Arbios Systems, Inc.
June 21, 2004
Page 2

      If this Third Amendment is acceptable to you, please return a signed copy
of it to Cedars-Sinai Medical Center, Legal Affairs Department, 8701 West Third
Street, Suite 290, Los Angeles, California 90048, Attention: Paralegal Analyst,
at your earliest convenience.

                                   Sincerely yours,

                                   CEDARS-SINAI MEDICAL CENTER,
                                   a California nonprofit public
                                   benefit corporation

                                   By:/s/ Shlomo Melmed, M.D.
                                      -----------------------
                                      Shlomo Melmed, M.D.
                                      Senior Vice President
                                      for Academic Affairs

                                   By:/s/ Richard S. Katzman
                                      -----------------------
                                      Richard S. Katzman
                                      Vice President for
                                      Academic Affairs

ACKNOWLEDGED AND AGREED TO
EFFECTIVE THIS 30 DAY OF JUNE, 2004

ARBIOS SYSTEMS, INC.,
a Delaware corporation

By: /s/ Jacek Rozga, M.D., Ph.D.
    ----------------------------
    Jacek Rozga, M.D., Ph.D.
    President & Chief Scientific Officer

<PAGE>

                                   EXHIBIT "B"

                       TIME PERIOD AND WORK HOURS SCHEDULE
                       -----------------------------------

Arbios Systems, Inc.
Employee Loan-Out Agreement
Time Period Number Five

FY 2005: July 1, 2004 to June 30, 2005

<TABLE>
<CAPTION>

            NAME                    COMPANY             $ EQUIVALENT            MEDICAL CENTER         $ EQUIVALENT
-----------------------------    -------------       ------------------       ------------------    ------------------
<S>                                   <C>                    <C>                      <C>                 <C>

Jacek Rozga                           100%                   $161,360                  0%                     $-

Linda Proctor                         100%                    $56,779                  0%                     $-

Andrey Trofimenko                      80%                    $32,702                 20%                 $8,176

Eugene Vishnevsky                     100%                    $32,048                  0%                     $-
</TABLE>EXECUTION VERSION

                            ASSET PURCHASE AGREEMENT

      This Asset Purchase Agreement (the "Agreement") among Circe Biomedical,
Inc., a Delaware corporation (the "Seller"), Arbios Technologies, Inc., a
Delaware corporation (the "Buyer") and Arbios Systems, Inc., a Nevada
corporation (the "Parent"), is entered into as of April 7, 2004 (the "Effective
Date"). The Seller, the Buyer and the Parent together may be referred to herein
as the "Parties" and each of them may be referred to herein as a "Party."

                                    RECITALS

      WHEREAS, the Seller wishes to sell certain of its assets described herein
to Buyer and Buyer wishes to purchase such assets from the Seller;

      NOW THEREFORE, in consideration of the foregoing and of the following
covenants, the sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:

1.    Sale of Assets

      1.1. Purchase and Sale of Assets. The Seller hereby agrees to sell,
      transfer and deliver to Buyer at Closing (as defined below), and the Buyer
      agrees to purchase and pay for, all of Seller's right, title and interest,
      subject to the Third Party Rights (as defined below), in and to the (a)
      Investigational New Drug Application number 5654 for HepatAssist; (b)
      Investigational New Drug Application number 6215 for PancreAssist; (c)
      orphan drug and fast track designations relating to the HepatAssist
      program; (d) the patents, patent applications and inventions described by
      the unfiled potential patent claims listed on Schedule 1.1(a) hereto (the
      "Patents Rights"); (e) all rights, claims, credits, judgments, choses in
      action, rights of set-off or rights for past, present or future
      infringement against third parties relating to the Patents Rights; (f) the
      agreements listed on Schedule 1.1(b) hereto (the "Assumed Contracts"); (g)
      Seller's standard operating procedures generic to cell system technology
      other than those relating to block co-polymer technology (the "SOPs"); (h)
      the prototype devices and representative custom or modified equipment
      listed in Schedule 1.1(c) hereto; and (i) all records, data, results,
      patient files, historical samples, and clinical trial protocols relating
      to the foregoing, including without limitation those items listed in
      Schedule 1.1(d).

      All of the foregoing are referred to herein as the "Acquired Assets."

      1.2. Consideration. The Buyer shall pay the Seller a total of $450,000 for
      the Acquired Assets. The foregoing purchase price shall be paid as
      follows: The Buyer (a) shall pay to the Seller on the Effective Date by
      wire transfer of immediately available funds in accordance with the wire
      instructions set forth in Schedule 1.2 hereto (the "Wire Instructions")
      the sum of Fifty Thousand Dollars ($50,000) (the "Up-Front Cash Purchase
      Price"); (b) shall pay to the Seller on the Closing Date (as defined
      below) the sum of One Hundred Fifty Thousand Dollars ($150,000) (the

                                       1
<PAGE>

      "Closing Cash Purchase Price") and shall assume on and after the Closing
      Date the Assumed Liabilities (as defined below); and (c) on the Deferred
      Payment Date, shall pay to the Seller the sum of Two Hundred Fifty
      Thousand Dollars ($250,000) (the "Deferred Cash Purchase Price" and, once
      paid, together with the Closing Cash Purchase Price and the Up-Front Cash
      Purchase Price, the "Purchase Price"). The "Deferred Payment Date" is the
      earlier to occur of (i) the date on which the Parent and any Controlled
      Subsidiary have consummated one or more debt or equity financings in which
      the gross proceeds received by such entities since the date of this
      Agreement in the aggregate equal or exceed Four Million Dollars
      ($4,000,000), or (ii) the second anniversary of the Effective Date. For
      purposes of the preceding sentence, a "Controlled Subsidiary" shall mean
      any entity of which the Parent directly or indirectly owns more than 50%
      of the voting securities. Some or all of the Purchase Price may, at the
      Seller's direction, be paid by the Buyer directly to the Stockholders (as
      defined below) as the Seller may designate in writing prior to the payment
      date. The Up-Front Cash Purchase Price shall be non-refundable, even if
      the Closing (as defined below) does not occur for any reason.

      1.3. Assumption of Liabilities. On and after the Closing, the Buyer shall
      assume and discharge when due all of the following liabilities:

            (a) All liabilities and obligations arising on or after the Closing
            Date under the Assumed Contracts; and

            (b) All liabilities and obligations arising on or after the Closing
            Date relating to the Acquired Assets, including without limitation
            all liabilities and obligations for the operation, prosecution,
            maintenance, upkeep, renewal, retention, shipment, transfer,
            delivery, storage or disposal of the Acquired Assets.
            Notwithstanding anything herein to the contrary, the decision
            whether to maintain the Acquired Assets after the Closing Date will
            be in the sole discretion of the Buyer, and nothing herein shall
            require the Seller to use, maintain or defend any of the Acquired
            Assets.

      All of the foregoing are referred to as the "Assumed Liabilities." Other
      than the Assumed Liabilities, the Buyer will not assume or have any
      responsibility with respect to any other obligation or liability of the
      Seller, including any liability arising from the acquisition by the Seller
      of the Acquired Assets or the Seller's operations before or after the
      Closing.

      1.4. Closing. On the Effective Date, the Seller shall provide to the Buyer
      copies of the Seller's SOPs, clinical data and other documentation
      relating to the Acquired Assets as set forth on Exhibit 1.4 (the
      "Diligence Material") to permit the Buyer to conduct its due diligence
      review with respect thereto. The closing (the "Closing") shall occur at a
      place mutually acceptable to the Buyer and the Seller on April 19, 2004,
      or such other date that is mutually acceptable to the Seller and the Buyer
      (the "Closing Date"). Notwithstanding the prior sentence, in the event
      that the Seller fails to provide any material portion of the Diligence
      Material to the Buyer on the Effective Date, the Closing Date shall be
      extended by the number of days that elapse between the Effective Date and
      the date on which the Seller provides such material to the Buyer.

                                       2
<PAGE>

      1.5. Seller's Deliveries at Closing. On the Closing Date the Seller shall
      execute and deliver or cause to be executed and delivered to the Buyer (a)
      the Bill of Sale in the form set forth in Exhibit 1.5(a) hereto, (b) an
      Assignment and Assumption Agreement in the form set forth in Exhibit
      1.5(b) hereto, and (c) an Assignment of Patents in the form set forth in
      Exhibit 1.5(c) hereto, and such other instruments of conveyance and
      assignment as the parties and their respective counsel shall deem
      reasonably necessary to vest in Buyer the right, title and interest in and
      to the Acquired Assets set forth herein. In addition to the foregoing
      conveyance documents, the Seller has previously delivered to the Buyer on
      the Effective Date the ICN Amendment (as defined in Section 3.1.4). (The
      Bill of Sale, the Assignment and Assumption Agreement, the Assignment of
      Patents, and the ICN Amendment as executed and delivered by the Seller are
      herein collectively referred to as the "Seller Transaction Documents.")
      All tangible assets included in the Acquired Assets shall be delivered by
      Seller, and title and risk of loss shall pass, to Buyer on the Closing
      Date where such assets are then located. The Seller will identify to the
      Buyer any location at which tangible Acquired Assets are located on the
      Closing Date and the Seller shall provide Buyer with reasonable assistance
      in arranging for the shipment of tangible Acquired Assets to one or more
      locations specified by the Buyer.

      1.6. Buyer's Deliveries at Closing. On the Closing Date, (a) the Buyer
      shall pay to the Seller the Closing Cash Purchase Price by wire transfer
      of immediately available funds in accordance with the Wire Instructions or
      such other, later Wire Instructions of which the Seller may notify the
      Buyer as provided for herein and (b) the Buyer shall execute and deliver
      or cause to be executed and delivered to the Seller (i) the Bill of Sale
      in the form set forth in Exhibit 1.5(a) hereto, (ii) an Assignment and
      Assumption Agreement in the form set forth in Exhibit 1.5(b), and (iii) an
      Assignment of Patents in the form set forth in Exhibit 1.5(c) hereto (The
      Bill of Sale, the Assignment of Patents and the Assignment and Assumption
      Agreement as executed and delivered by the Buyer are herein collectively
      referred to as the "Buyer Transaction Documents.")

      1.7. Obligations on the Deferred Payment Date. On the Deferred Payment
      Date, the Buyer shall pay the Deferred Cash Purchase Price by wire
      transfer of immediately available funds in accordance with the Wire
      Instructions or such other, later wire instructions of which Seller may
      notify Buyer as provided for herein. The obligation of the Buyer to pay
      the Deferred Cash Purchase Price shall survive until such obligations are
      satisfied.

2.    Representations and Warranties.

      2.1. Representation and Warranties of the Seller. The Seller hereby
      represents and warrants to the Buyer as follows:

            2.1.1. Organization and Authorization. (i) The Seller is duly
            organized, validly existing and in good standing under the laws of
            its jurisdiction of organization, with all requisite corporate power
            and authority to enter into this Agreement and the transaction
            contemplated hereby, (ii) the execution, delivery and performance of
            this Agreement and each of the Seller Transaction Documents has been
            authorized by all necessary corporate action of the Seller, and
            (iii) this Agreement and each of the Seller Transaction Documents is
            a valid, binding obligation of the Seller, enforceable in accordance
            with its terms except as may be limited by applicable federal or
            state bankruptcy, insolvency, reorganization, moratorium or other
            laws affecting creditors' rights generally.

                                       3
<PAGE>

            2.1.2. Ownership of Assets. The Seller owns the Acquired Assets,
            free and clear of any and all mortgages, liens, pledges and security
            interests, subject to the rights of third parties specified in
            Schedule 2.1.2 hereto (the "Third Party Rights"). All security
            interests in the Acquired Assets shall, as of the Closing Date, have
            been released and discharged.

            2.1.3. Brokers and Finders. The Seller has not, on its own behalf or
            on behalf of the Buyer, employed any broker or finder or incurred
            any liability for brokerage fees, commissions or finder's fees in
            connection with the transactions contemplated by this Agreement.

            2.1.4. Noncontravention. Neither the execution and delivery of this
            Agreement and the Seller Transaction Documents, nor the consummation
            of the transactions contemplated hereby, will (i) violate any
            constitution, statute, regulation, rule to which Seller is subject
            or, to the knowledge of the Seller, any injunction, judgment, order,
            decree, ruling, charge or other restriction of any government,
            governmental agency, or court to which Seller is subject, or any
            provision of the Seller's certificate of incorporation or By-laws,
            or (ii) conflict with, result in a breach of, constitute a default
            under, result in the acceleration of, create in any party the right
            to accelerate, terminate, modify, or cancel, or require any notice
            under any agreement, contract, lease, license, instrument, or other
            arrangement to which Seller is a party or by which it is bound or to
            which any of the Acquired Assets is subject (or result in the
            imposition of any security interest upon any of the Acquired
            Assets), in each case except as set forth in Schedule 2.1.4 hereto.

            2.1.5. Legal Compliance. The Seller has complied in all material
            respects with all laws (including rules, regulations and codes) and,
            to the Seller's knowledge, with all plans, injunctions, judgments,
            orders, decrees, rulings and charges thereunder in each case
            applicable to the Acquired Assets or to the Seller's business to the
            extent involving the Acquired Assets, and, except as set forth on
            Schedule 2.1.5 hereto, to the Seller's knowledge, no action, suit,
            proceeding, hearing, investigation, charge, complaint, claim, demand
            or notice has been threatened, filed or commenced against the Seller
            relating to or involving the Acquired Assets.

            2.1.6. ICN Amendment. The ICN Amendment, as of the date thereof, is
            a valid and binding agreement, enforceable against the Seller and,
            to the Seller's knowledge, all other parties thereto in accordance
            with its terms and subject to the conditions thereof (assuming the
            truth and accuracy of all representations and warranties made
            therein other than those made by the Seller). Other than as set
            forth in the ICN Amendment and this Agreement, the Buyer shall not
            acquire from the Seller any obligations or liabilities to ICN
            Pharmaceuticals, Inc., the Seller, or any of the Stockholders (as
            defined below) regarding any agreement, instrument or transaction
            entered into by such parties, including without limitation the
            Assignment Agreement, dated as of November 15, 2002, that certain
            Merger Agreement, dated March 11, 2002, the Stock Purchase
            Agreement, dated November 15, 2002, or the Release Agreement, dated
            November 15, 2002.

                                       4
<PAGE>

            2.1.7. No Litigation. Except as set forth on Schedule 2.1.7, to the
            Seller's knowledge, no action or proceeding before a court or any
            other governmental agency or body is pending or threatened that
            could be reasonably likely to materially and adversely affect the
            Acquired Assets or the use of the Acquired Assets in a manner
            consistent with the Seller's use thereof prior to the Closing.

            2.1.8. Patent Assets. The Seller has not received any written or
            oral notice or claim of infringement with respect to any of the
            Patent Assets and, to the Seller's knowledge, the Patent Assets do
            not infringe on the patent rights of a third party.

      2.2. Representations and Warranties of Buyer. The Buyer hereby represents
      and warrants to the Seller as follows:

            2.2.1. Organization and Authorization. (i) The Buyer is duly
            organized, validly existing and in good standing under the laws of
            its jurisdiction of organization, with all requisite corporate power
            and authority to enter into this Agreement and the transaction
            contemplated hereby; (ii) the execution, delivery and performance of
            this Agreement and each of the Buyer Transaction Documents has been
            authorized by all necessary corporate action of Buyer; and (iii)
            this Agreement and each of the Buyer Transaction Documents is a
            valid, binding obligation of Buyer, enforceable in accordance with
            its terms except as may be limited by applicable federal or state
            bankruptcy, insolvency, reorganization, moratorium or other laws
            affecting creditors' rights generally.

            2.2.2. Brokers and Finders. The Buyer has not, on its own behalf or
            on behalf of the Seller, employed any broker or finder or incurred
            any liability for brokerage fees, commissions or finder's fees in
            connection with the transactions contemplated by this Agreement.

            2.2.3. Noncontravention. Neither the execution and delivery of this
            Agreement and the Buyer Transaction Documents, nor the consummation
            of the transactions contemplated hereby, will (i) violate any
            constitution, statute, regulation, rule to which Buyer is subject
            or, to the knowledge of the Buyer, any injunction, judgment, order,
            decree, ruling, charge or other restriction of any government,
            governmental agency, or court to which Buyer is subject, or any
            provision of the Buyer's certificate of incorporation or By-laws, or
            (ii) conflict with, result in a breach of, constitute a default
            under, result in the acceleration of, create in any party the right
            to accelerate, terminate, modify, or cancel, or require any notice
            under any agreement, contract, lease, license, instrument, or other
            arrangement to which Buyer is a party or by which it is bound or to
            which any of the Acquired Assets is subject (or result in the
            imposition of any security interest upon any of the Acquired
            Assets).

                                       5
<PAGE>

            2.2.4. Legal Compliance. The Buyer has complied in all material
            respects with all laws (including rules, regulations and codes) and,
            to the Buyer's knowledge, with all injunctions, judgments, orders,
            decrees and rulings thereunder in each case applicable to the
            Acquired Assets or to the Buyer's business to the extent involving
            the Acquired Assets, and, to the Buyer's knowledge no action, suit,
            proceeding, hearing, investigation, charge, complaint, claim, demand
            or notice has been threatened, filed or commenced against the Buyer
            relating to or involving the Acquired Assets, and Buyer is not aware
            of any factual basis for any assertion against it of any action,
            suit, proceeding, hearing, investigation, charge, complaint, claim,
            demand or notice relating to or involving the Acquired Assets.

      2.3.  Representations and Warranties of Parent.

            2.3.1. Organization and Authorization. (i) The Parent is duly
            organized, validly existing and in good standing under the laws of
            its jurisdiction of organization, with all requisite corporate power
            and authority to enter into this Agreement and the transaction
            contemplated hereby; (ii) the execution, delivery and performance of
            this Agreement has been authorized by all necessary corporate action
            of he Parent; and (iii) this Agreement is a valid, binding
            obligation of the Parent, enforceable in accordance with its terms
            except as may be limited by applicable federal or state bankruptcy,
            insolvency, reorganization, moratorium or other laws affecting
            creditors' rights generally.

            2.3.2. Noncontravention. Neither the execution and delivery of this
            Agreement, nor the consummation of the transactions contemplated
            hereby, will (i) violate any constitution, statute, regulation, rule
            to which the Parent is subject or, to the knowledge of the Parent,
            any injunction, judgment, order, decree, ruling, charge or other
            restriction of any government, governmental agency, or court to
            which Buyer is subject, or any provision of the Parent's certificate
            of incorporation or By-laws, or (ii) conflict with, result in a
            breach of, constitute a default under, result in the acceleration
            of, create in any party the right to accelerate, terminate, modify,
            or cancel, or require any notice under any agreement, contract,
            lease, license, instrument, or other arrangement to which the Parent
            is a party or by which it is bound or to which any of the Acquired
            Assets is subject (or result in the imposition of any security
            interest upon any of the Acquired Assets).

      2.4. Disclaimer. Except as expressly set forth in Section 2.1, the Patent
      Assets are being sold "as is and where is" and the Seller makes no, and
      hereby disclaims any, representation or warranty to the Buyer with respect
      to the Patent Assets or the transactions contemplated hereby, including
      without limitation any warranty of merchantability, current status,
      fitness for a particular purpose or non-infringement.

                                       6
<PAGE>

3.    Conditions to Closing

      3.1. Seller's Closing Condition. The Seller's obligation to consummate the
      transactions contemplated hereby is subject to the satisfaction of the
      following conditions as of the Closing Date:

            3.1.1. No Litigation. No action or proceeding before a court or any
            other governmental agency or body shall have been instituted or
            threatened to stay, restrain or prohibit the consummation of the
            transactions contemplated hereby or to impose any remedy, condition
            or restriction unacceptable to the Seller in its sole discretion.

            3.1.2. Representations and Warranties; Performance of Obligations.
            All representations and warranties of the Buyer contained in this
            Agreement shall be true and correct in all material respects as of
            the Closing with the same force and effect as though made at and as
            of the Closing and all of the terms, covenants and conditions of
            this Agreement to be complied with, performed and satisfied by the
            Buyer at or before the Closing shall have been complied with,
            performed and satisfied in all material respects.

            3.1.3. Proceedings Satisfactory. All actions, proceedings,
            instruments and documents required to carry out this Agreement or
            incidental hereto shall be reasonably satisfactory to the Seller and
            its counsel.

            3.1.4. ICN Assignment Agreement. Amendment No. 1 (in the form set
            forth in Exhibit 3.1.4 to that certain "Assignment Agreement"
            entered into as of November 15, 2002 among ICN Pharmaceuticals,
            Inc., the Seller, the persons who have executed counterpart
            signature pages thereof (individually and collectively, the
            "Stockholders") and Robert W. Crane and John Gannon, each solely in
            his capacity as representative of the Stockholders, shall have been
            executed and delivered by all parties thereto. (The executed
            Amendment No. 1 to the Assignment Agreement is herein referred to as
            the "ICN Amendment.")

      3.2. Buyer's Conditions Precedent. The Buyer's obligations hereunder are
      conditioned upon the following:

            3.2.1. No Litigation. No action or proceeding before a court or any
            other governmental agency or body shall have been instituted or
            threatened to stay, restrain or prohibit the consummation of the
            transactions contemplated hereby or to impose any remedy, condition
            or restriction unacceptable to the Buyer in its sole discretion.

            3.2.2. Representations and Warranties; Performance of Obligations.
            All representations and warranties of the Seller contained in this
            Agreement shall be true and correct in all material respects as of
            the Closing Date with the same force and effect as though made at
            and as of the Closing Date and all of the terms, covenants and
            conditions of this Agreement to be complied with, performed and
            satisfied by the Seller at or before the Closing Date shall have
            been complied with, performed and satisfied in all material
            respects.

                                       7
<PAGE>

            3.2.3. Proceedings Satisfactory. All actions, proceedings,
            instruments and documents required to carry out this Agreement or
            incidental hereto shall be reasonably satisfactory to the Buyer and
            its counsel.

            3.2.4. Due Diligence. The Buyer shall be reasonably satisfied with
            its due diligence review of the SOPs, clinical data and other
            documentation relating to the Acquired Assets as provided by the
            Seller on the Effective Date; provided, however, that if the Buyer
            fails to notify the Seller prior to April 18, 2004 that the Buyer is
            not satisfied with such due diligence review, this condition shall
            be deemed to be satisfied.

            3.2.5. ICN Amendment. The Buyer shall have been provided a copy of
            the executed ICN Amendment on or prior to the Effective Date.

4.    Confidentiality.

      4.1. Each party may disclose or may have disclosed (the "Disclosing
      Party") to another party (the "Receiving Party") certain information that
      the Disclosing Party considers to be confidential and/or proprietary,
      including, but not limited to, personally identifiable information and
      data entered, technical processes and formulas, product designs, customer
      lists, product and business plans, revenues, projections, marketing and
      other data, the terms and provisions of this Agreement, sales, cost,
      accounting and other technical, business and financial information, as
      well as information that the Disclosing Party marks as confidential
      (collectively, "Confidential Information"). Notwithstanding the foregoing,
      Confidential Information does not include information (i) already known by
      the Receiving Party without an obligation of confidentiality, (ii)
      publicly known or which becomes publicly known through no omission or
      unauthorized act of the Receiving Party, (iii) rightfully received from a
      third party without any obligation of confidentiality, or (iv)
      independently developed by the Receiving Party without use of the
      Disclosing Party's Confidential Information.

      4.2. The Receiving Party shall make use of the Confidential Information
      only for the purposes of this Agreement and shall protect the Disclosing
      Party's Confidential Information by using the same degree of care, but not
      less than a reasonable degree of care, to prevent the unauthorized access,
      use, dissemination, or publication of the Confidential Information as the
      Receiving Party uses to protect its own Confidential Information of a like
      nature. The Receiving Party shall disclose Confidential Information only
      (i) to those of its employees, contractors, representatives and
      consultants with a need to know such Confidential Information who have
      first agreed with the Receiving Party, either as a condition of employment
      or engagement, or in order to obtain the Confidential Information, to be
      bound by terms and conditions substantially similar to those contained in
      this Section 4, (ii) as required by court order, law or regulation or as
      requested by any regulatory agency or governmental body having
      jurisdiction over the Receiving Party, provided that prior to such
      disclosure the Receiving Party shall provide prompt written notice to the
      Disclosing Party sufficient to permit the Disclosing Party the opportunity
      to oppose the disclosure and the Receiving Party shall take all reasonable
      steps available to maintain the Confidential Information in confidence, or
      (iii) to make appropriate disclosure regarding the tax treatment and tax
      structure of the transactions contemplated hereby.

                                       8
<PAGE>

      4.3. All Confidential Information shall remain the property of the
      Disclosing Party, and such Confidential Information and all copies thereof
      (if any), shall be promptly returned to the Disclosing Party upon request
      or upon termination of this Agreement or, at the Disclosing Party's sole
      option, destroyed, in which case the Disclosing Party shall be notified
      promptly in writing when its Confidential Information has been destroyed.
      The furnishing of any Confidential Information between the parties shall
      not constitute the granting of any right or license to use such
      Confidential Information.

      4.4. The obligations of the parties set forth in this Section 4 shall
      remain in effect for three years after the date of this Agreement.

      4.5. Notwithstanding any other provision in this Section 4 to the
      contrary, the Buyer shall be permitted after the Closing to use and
      disclose any Confidential Information received from the Seller and
      included in the Acquired Assets to the extent the Buyer in its sole
      discretion determines that it is necessary or appropriate to use or
      disclose that Confidential Information in order to carry out any of the
      Buyer's commercial activities through the use of any of the Acquired
      Assets. Each Party agrees that, subject to the other Party's compliance
      with the terms of this Section 4, such Party shall not commence any action
      against the other Party alleging misappropriation or illegal use of any
      trade secrets, know-how or proprietary information of such Party based on
      any activities of the other Party that occurred either (i) prior to the
      Effective Date or (ii) between the Effective Date and the Closing Date.
      The immediately preceding sentence of this Section 4.5 is intended to be a
      complete release by each Party of the other Party of any claims relating
      to any misappropriation or illegal use of any trade secrets, know-how or
      proprietary information, whether such claims were known or unknown by the
      releasing Party as of the Effective Date.

5. Failure to Pay the Deferred Cash Purchase Price. If the Buyer fails to pay to
the Seller the Deferred Cash Purchase Price on or prior to the second
anniversary of the Closing Date, then in addition to any other remedies
available to the Seller at law or in equity, the Seller shall have the right to
require the Buyer to reconvey the Acquired Assets to the Seller without the
refund or return by the Seller of any portion of the Deferred Cash Purchase
Price. Upon exercise of the foregoing right by the Seller, the Buyer shall
execute and deliver to the Seller such instruments of conveyance and assignment
and other documents, and shall take all other actions, as the Seller and its
counsel may deem reasonably necessary to vest in Seller the right, title and
interest in and to the Acquired Assets. The Buyer and the Seller agree that the
Seller would be damaged irreparably in the event that the provisions of this
Section 5 are not performed by the Buyer in accordance with its specific terms.
Accordingly, the Buyer and the Seller agree that, without posting bond or other
undertaking, the Seller will be entitled to an injunction or injunctions to
prevent breaches or violations of the provisions of this Section 5 and to
enforce specifically the terms of this Section 5 in any action instituted in any
court of the United States or any state hereof having jurisdiction over the
Parties and the matter in addition to any other remedy which it may be entitled,
at law or in equity. The Buyer further agrees that, in the event of any action
for specific performance in respect of such breach or violation, it will not
assert the defense that a remedy at law would be adequate.

                                       9
<PAGE>

6. Notices. Any notice or communication required or permitted to be delivered to
any party under this Agreement shall be in writing and shall be deemed properly
delivered, given and received when delivered (by hand, by registered mail, by
courier or express delivery service or by fax) to the address or fax number set
forth beneath the name of such party below (or to such other address or fax
number as such party shall have specified in a written notice given to the other
parties hereto):

         If to the Seller:    Circe Biomedical, Inc.
                              c/o Elizabeth Chen
                              73 Valleyfield Street
                              Lexington, MA 02421
                              Attn: Elizabeth Chen

         With a copy to:      Ropes & Gray LLP
                              One International Place
                              Boston, MA 02110-2624
                              Attn: Hemmie Chang
                              Fax: (617) 951-7050

         If to Parent to:     Arbios Systems, Inc.
                              110 North George Burns Road, Suite D-4018
                              Los Angeles, CA 90048
                              Attn: Jacek Rozga, MD, Phd
                              Fax: (310) 423-7434

         With a copy to:      Troy & Gould
                              1801 Century Park East, 16th Floor
                              Los Angeles, CA 90067
                              Attn: Istvan Benko
                              Fax: (310) 201-4746

         If to Buyer to:      Arbios Technologies, Inc.
                              110 North George Burns Road, Suite D-4018
                              Los Angeles, CA 90048
                              Attn: Jacek Rozga, MD, Phd
                              Fax: (310) 423-7434

         With a copy to:      Troy & Gould
                              1801 Century Park East, 16th Floor
                              Los Angeles, CA 90067
                              Attn: Istvan Benko
                              Fax: (310) 201-4746

                                       10
<PAGE>

7. Access, Information, Documents, Consultation. From the Closing Date through
the date that the Buyer has paid in full the Deferred Cash Purchase Price, upon
reasonable advance notice, during normal business hours and in a manner so as
not to interfere with the business operations of the Parent and its Controlled
Subsidiaries, the Parent shall make available, and shall cause its Controlled
Subsidiaries to make available, to the Seller and its designees, at the offices
of the Parent, all financial books, accounts, records, agreements and other
documents of the Parent and its Controlled Subsidiaries which the Seller or such
designees may reasonably request and shall permit the Seller and its designees
to discuss the business, operations, assets, properties and financial condition
of the Parent and its Controlled Subsidiaries with any officer or independent
auditor of the Parent of its Controlled Subsidiaries, in each case only to the
extent reasonably necessary to permit the Seller and its designees to ascertain
whether Buyer has complied with its obligation to pay the Deferred Cash Purchase
Price. Notwithstanding anything to the contrary in this Section 7, the Parent
and its Controlled Subsidiaries shall not be obligated to provide material,
non-public information to the Seller or its designees unless, at such time, the
Seller and its designees agree not to execute trades in the public securities of
the Parent until such time as the Seller and its designees determine, in their
sole discretion, that such information in no longer material and/or non-public.

8. Termination Survival of Representations, Warranties and Covenants; Etc. This
Agreement shall terminate automatically if the Closing does not occur on or
before April 19, 2004 or such later Closing Date as the Buyer and the Seller may
mutually agree to. No termination of this Agreement shall relieve any Party from
liability for any breach of this Agreement committed prior to termination. All
representations and warranties contained in this Agreement shall survive for a
period of twelve (12) months following the date of the Closing. In no event
shall the liability of the Seller for breaches of representations, warranties
and covenants hereunder exceed an aggregate amount equal to 50% of the Purchase
Price actually received by the Seller (or the Stockholders at the Seller's
direction). Any claim for any breach or violation of any representation,
warranty or covenant herein or otherwise relating hereto (other than any claim
under Section 4 or any claim regarding the payment of the Deferred Cash Purchase
Price) must be made, if at all, on or prior to the date which is twelve (12)
months after the Closing Date or it shall be thereafter barred.

9. Miscellaneous.

      9.1. Governing Law; Jurisdiction. This Agreement was executed in, and the
      transactions contemplated by and the provisions of this Agreement shall be
      governed by and construed in accordance with the laws of The Commonwealth
      of Massachusetts without giving effect to the conflict of laws provisions
      thereof; and both parties consent to the jurisdiction of the state and
      federal courts sitting in Massachusetts.

      9.2. Exclusivity. During the period from the Effective Date through the
      tenth business day following the Effective Date, the Seller will not seek
      or negotiate with any potential buyer of the Acquired Assets other than
      the Buyer.

      9.3. Expenses. Each party to this Agreement shall be responsible for its
      own expenses incurred in connection with this Agreement and the
      transactions contemplated hereby and Buyer shall be responsible for (a)
      all filing and recordation fees relating to the transfer of the Acquired
      Assets hereunder; and (b) all fees, costs and expenses relating to the
      shipment, transfer or delivery of all tangible assets included in the
      Acquired Assets from their respective locations on the Closing Date to
      such location or locations as Buyer may determine.

                                       11
<PAGE>

      9.4. Entire Agreement; Third Party Beneficiaries; Assignment; Etc. This
      Agreement, including all exhibits and schedules attached hereto,
      constitutes and contains the entire agreement of the parties and
      supersedes any and all prior negotiations, correspondence, understandings
      and agreements between the parties respecting the subject matter hereof.
      This Agreement is not intended to confer upon any person other than the
      Parties to this Agreement any rights or remedies, provided, however, that
      the Stockholders are intended third party beneficiaries of the penultimate
      sentence of Section 1.2 and are entitled to enforce the provisions thereof
      against the Buyer. Neither the Parent nor the Buyer may assign its rights
      or obligations under this Agreement without the prior written consent of
      the Seller (not to be unreasonably withheld) and the Seller may not assign
      its rights or obligations under this Agreement without the prior consent
      of the Buyer (not to be unreasonably withheld); provided, however, that
      the Seller may assign, distribute or otherwise transfer its rights
      relating to the Deferred Cash Purchase Price without the consent of the
      Buyer; and provided, further that any person or entity that acquires the
      Buyer or all or substantially all of the Acquired Assets after the Closing
      Date must agree in writing to assume the obligation to pay the Deferred
      Cash Purchase Price and to be bound by the provisions of Section 5 as if
      such person or entity were substituted for the Buyer therein (but no such
      assignment and assumption shall relieve the Buyer of such obligation
      without the Seller's written consent). In addition, the Buyer shall be
      permitted to assign and transfer the Acquired Assets to the Parent or to a
      wholly-owned subsidiary of the Buyer, provided, however, that such
      assignee shall agree with the Seller, in writing, to assume the
      obligations of the Buyer hereunder on a joint and several basis and the
      Buyer shall not thereby be relieved of its obligations hereunder.

      9.5. No Liability of Officers and Directors. The parties hereto
      acknowledge that the individuals executing this Agreement on behalf of the
      Seller, the Buyer and the Parent do so on behalf of such entities and not
      in their individual capacities. As such no officer, director, employee or
      agent of the Seller, the Buyer or the Parent shall have any liability
      hereunder.

      9.6. Counterparts. This Agreement may be executed in two or more
      counterparts and shall be effective when each party has executed at least
      one of the counterparts even though all parties have not executed the same
      counterpart.

      9.7. Guaranty. The Parent hereby agrees to unconditionally guarantee the
      obligations and liabilities of the Buyer under this Agreement. The Parent
      hereby acknowledges and agrees that (a) the Buyer and the Seller may amend
      or modify this Agreement without the requirement of providing notice of
      such amendment or modification to the Parent or of obtaining the Parent's
      consent thereto and (b) the Seller shall be entitled to interact and deal
      with the Buyer on all matters relating to this Agreement (and any
      modifications and amendments hereto) without regard to the guaranty made
      by the Parent hereunder, and that in each such case, the obligations and
      liabilities of the Parent under this guaranty shall not be released or
      otherwise affected or impaired as a result thereof.

         [the remainder of this page has been intentionally left blank]

                                       12
<PAGE>

IN WITNESS  WHEREOF,  this Agreement has been executed under seal as of the date
first written above.

SELLER:  CIRCE BIOMEDICAL, INC.

                  By:_/s/ Elizabeth Chen_____________________________
                     Name: Elizabeth Chen
                     Title: President and Chief Executive Officer

BUYER:   ARBIOS SYSTEMS, INC.

                  By:_/s/ Jacek Rozga________________________________
                     Name:  Jacek Rozga
                     Title:  President

PARENT:  ARBIOS TECHNOLOGIES, INC.

                  By:__/s/ Jacek Rozga_______________________________
                     Name:  Jacek Rozga
                     Title:  President

                    [Asset Purchase Agreement Signature Page]

                                       13
<PAGE>

EXHIBITS AND SCHEDULES TO ASSET PURCHASE AGREEMENT

The following is a list of the exhibits and  schedules  that are attached to the
Asset  Purchase  Agreement,  which  will  be  furnished  supplementally  to  the
Commission upon request.

Exhibit 1.4 - Diligence Material

Exhibit 1.5 (a) - Bill of Sale

Exhibit 1.5 (b) - Assignment and Assumption Agreement

Exhibit 1.5 (c) - Assignment of Patents

Exhibit 3.1.4 - ICN Assignment Agreement

Schedule 1.1 (a) - Patents, Patent Applications and Inventions Described in
Unfiled Potential Patent Claims

Schedule 1.1 (b) - Assumed Contract

Schedule 1.1 (c) - Certain Devices and Equipment

Schedule 1.1 (d) - Certain Records, Data, etc.

Schedule 1.2 - Wire Instructions

Schedule 2.1.2 - Third Party Rights

Schedule 2.1.4 - Non-Contravention

Schedule 2.1.5 - Legal Compliance

Schedule 2.1.7 - Certain Actions and Proceedings

                                       14

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