We present a systematic density matrix theory of excitons interacting with charge transfer states in molecular systems subject to influence of a semiclassical bath. An excitonic dimer interacting non-linearly with an overdamped Brownian oscillator bath is studied, and the effect of eigenstate renormalization by interaction with the bath is shown to be essential in a correct description of the unusual temperature dependence of the absorption spectrum of the exciton-charge transfer state system. (c) 2006 Published by Elsevier B.V.