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Exhibit 10.38    
    

[IMMUNICON
LOGO] 

April 15,
2003 

Mr. Edward
L. Erickson

Greenlands Farm

6887 Tohickon Hill Road

Pipersville, PA 18947-1415 

Dear
Ed: 

        This
letter agreement will serve as an amendment and modification of the terms and conditions of your employment, including your employment letter of March 15, 1999, by Immunicon
Corporation ("Immunicon"), and is effective March 20, 2003. 

        1.     In
consideration of your agreement to continue to be employed as Chairman of the Board of Directors, President and Chief Executive Officer of Immunicon, the Board of
Directors of Immunicon wishes to provide you with salary continuation and certain other benefits, as set forth herein, in the event of a Change of Control of Immunicon (as defined herein), or in the
event you terminate your employment with Immunicon for Good Reason (as defined herein), or other circumstance whereby your employment is terminated by Immunicon for reasons other than cause (as
defined herein). For the purpose of this letter agreement, a "Change of Control" shall mean: (a) the acquisition, directly or indirectly, other than from Immunicon, by any person, entity or
"group" (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), excluding, for this purpose, Immunicon, its subsidiaries,
and any employee benefit plan of Immunicon or its subsidiaries which acquires beneficial ownership of voting securities of Immunicon) (a "Third Party") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the combined voting power of Immunicon's then outstanding voting securities entitled to vote generally in the
election of directors; or (b) individuals who, as of March 19, 2003, constitute the Board of Directors of Immunicon (the "Incumbent Directors") cease for any reason to constitute at
least a majority of the Board; provided, that any person becoming a director subsequent to such date whose election, or nomination for election by Immunicon's shareholders, was approved by a vote of
at least a majority of the Incumbent Directors who are directors at the time of such vote shall be, for purposes of this letter agreement, an Incumbent Director; or (c) consummation of
(i) a reorganization, merger or consolidation of Immunicon, or (ii) a liquidation or dissolution of Immunicon or the sale of all or substantially all of the assets of Immunicon (whether
such assets are held directly or indirectly) to a Third Party; except that any event or transaction which would be a "Change of Control" under (a) or (c)(i) of this definition shall not
be a "Change of Control" if persons who were the shareholders of Immunicon immediately prior to such event or transaction (other than the acquiror in the case of a reorganization, merger or
consolidation), immediately thereafter, beneficially own more than 50% of the combined voting power of Immunicon's or the reorganized, merged or consolidated company's then outstanding voting
securities entitled to vote generally in the election of directors. For purposes of this letter agreement you shall be entitled to terminate your employment for "Good Reason" if: (i) Immunicon
or any acquiror or successor assigns to you any duties inconsistent in any material respect with your current position as Chief Executive Officer (including status, offices, titles and reporting
requirements), authority, duties or responsibilities or takes any other action which results in a material diminution in such position as Chief Executive Officer, authority, duties or
responsibilities; or (ii) Immunicon or any acquiror or successor requires you to be based at any office or location other than the current office or location with Immunicon or a location within
a 35 mile radius of such office or location; provided that within fifteen (15) days after the occurrence of any of the events listed in clauses (i) or (ii), you deliver written notice to
Immunicon of your intention to terminate for Good Reason specifying in reasonable detail the facts and circumstances claimed to give rise to your right to terminate your employment for Good Reason and
Immunicon shall not have cured such facts and circumstances within thirty (30) days after delivery of 

 

such
notice by you to Immunicon (unless Immunicon shall have waived its right to cure by written notice to you). For purposes of this letter agreement, any good faith determination of "Good Reason" in
connection with a Change in Control made by you shall be conclusive. For purposes of this letter agreement, termination of your employment for cause is a termination of your employment by Immunicon,
or any successor thereto or acquiror thereof, as determined in good faith by the Board of Directors, which is due to willful malfeasance or gross negligence in the carrying out of your duties and
responsibilities in the position of Chairman of the Board of Directors, President and Chief Executive Officer of Immunicon, breach of your fiduciary duty to Immunicon, or conviction of a felony
involving a recognized act of moral turpitude under applicable law or a securities or corporate governance law violation. 

        2.     Notwithstanding
the terms and conditions of any stock option agreement or other agreement between you and Immunicon, all restrictions on sale or transfer by you of shares
of Immunicon stock will be removed (except those conditions imposed by law or regulation, such as the Securities Act of 1933, as amended, and the Exchange Act), and all unvested stock options granted
to you under any stock option agreement or otherwise will immediately vest, upon the effective date of a Change of Control of Immunicon, the date of termination of your employment for Good Reason or
the date of notice of termination of your employment by Immunicon for reasons other than termination of your employment for cause, disability or death. 

        3.     Should
you decide to sell any shares of Immunicon stock which are vested as provided in paragraph 2 above, you will notify the Immunicon Board of Directors of such
decision in writing and Immunicon will have the option to purchase such shares from you at the prevailing market price. If the Immunicon common stock is then listed for trading on a national
securities exchange or quoted on an interdealer quotation system, such market price shall be the average of the closing price of the Immunicon common stock on such exchange or system for the five
trading days immediately preceding the date the Board exercises its option, and, otherwise, shall be the market price as established by the Immunicon Board of Directors, within forty-eight
(48) hours after receipt by the Immunicon Board of Directors of such written notice of your intention to sell the shares. In the event the provisions of paragraph 2 above do not apply,
including without limitation in the event you terminate your employment voluntarily, any vested shares or options will be treated in accordance with the applicable stock or option agreement governing
their issuance and any unvested shares or options will be forfeited in the event your employment ceases prior to any vesting date. 

        4.     It
is understood and agreed that an employment-at-will relationship continues to exist between you and Immunicon, and that both you and Immunicon
have the right to terminate the employment relationship at any time for any reason. However, should you be terminated by Immunicon or any acquiror of or successor to Immunicon as a result of a Change
of Control or for reasons other than termination of your employment for cause, or, if you terminate your employment with Immunicon for Good Reason, in addition to the applicability of the foregoing
provisions of this letter agreement you will receive a severance package consisting of a payment equal to twelve (12) months of your base salary at the time of your termination, from the date
notice of termination is given, and such benefits as may be continued for the twelve (12) month period from such termination under the benefit plans of Immunicon or a successor to Immunicon
existing and applicable to you at the time of your termination. Payments not in connection with a Change in Control shall be made in twelve (12) monthly installments; payment in connection with
a Change in Control shall be made in a lump sum. Notwithstanding the foregoing, in the event that during such twelve (12) month period you are employed, or are engaged in the capacity of an
independent contractor or agent, by an entity that reasonably may be considered a competitor of Immunicon, or you otherwise materially breach your non-competition,
non-solicitation or confidentiality obligations to the Company, as determined in good faith by the Immunicon Board of Directors, such benefits will immediately cease as of the date of such 

2

 

employment
or engagement and you shall be required to reimburse Immunicon for the applicable portion of your salary severance payment. 

        5.     Anything
in this letter agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by Immunicon to or for your
benefit (whether paid or payable or distributed or distributable pursuant to the terms of this letter agreement) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then you shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount equal to the Excise Tax imposed upon the
Payment. 

        Subject
to the provisions of the next paragraph, all determinations required to be made under this paragraph 5, including whether a Gross-Up Payment is required and
the amount of such Gross-Up Payment, shall be made by an independent accounting firm selected by the Audit Committee of the Board of Directors which may, if in compliance with applicable
law, be the then-current independent auditor of Immunicon (the "Accounting Firm") which shall provide detailed supporting calculations both to Immunicon and you within 15 business days
after the date of termination or such earlier time as is requested by Immunicon. The Gross-Up Payment, if any, shall be paid to you within five days of the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is payable by you, it shall furnish you with an opinion that you have substantial authority not to report any Excise Tax on your
federal income tax return. Any determination by the Accounting Firm shall be binding upon Immunicon and you. As a result of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is possible that a Gross-Up Payment which will not have been made by Immunicon should have been made
("Underpayment"), consistent with the calculations required to be made hereunder. In the event that Immunicon exhausts
its remedies pursuant to the next paragraph and you thereafter are required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by Immunicon to or for your benefit. 

        You
shall notify Immunicon in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by Immunicon of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than ten business days after you know of such claim and shall apprise Immunicon of the nature of such claim and the date on which such
claim is requested to be paid. You shall not pay such claim prior to the expiration of the thirty-day period following the date on which you give such notice to Immunicon (or such shorter
period ending on the date that any payment of taxes with respect to such claim is due). If Immunicon notifies you in writing prior to the expiration of such period that it desires to contest such
claim, you shall: (i) give Immunicon any information reasonably requested by Immunicon relating to such claim; (ii) take such action in connection with contesting such claim as Immunicon
shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by Immunicon;
(iii) cooperate with Immunicon in good faith in order effectively to contest such claim; and (iv) permit Immunicon to participate in any proceedings relating to such claim; provided,
however, that Immunicon shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold you
harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs
and expenses. Without limitation on the foregoing provisions of this paragraph 5, Immunicon shall control all proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct you to pay the
tax claimed 

3

 

and
sue for a refund or contest the claim in any permissible manner, and you agree to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction
and in one or more appellate courts, as Immunicon shall determine; provided, however, that if Immunicon directs you to pay such claim and sue for a refund, Immunicon shall advance a portion of such
payment equal to the Gross-Up Payment to you, on an interest-free basis, and shall indemnify and hold you harmless, on an after-tax basis, from any Excise Tax on
the Payment or income tax, including interest or penalties with respect thereto; and further provided that any extension of the statute of limitations relating to payment of taxes for your taxable
year with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Immunicon shall not exercise the foregoing right if such loan would violate applicable
securities laws. Furthermore, Immunicon's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and you shall be entitled to
settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority. 

        If,
after the receipt by you of an amount advanced by Immunicon pursuant to the preceding paragraph, you become entitled to receive any refund with respect to such claim, you shall
(subject to Immunicon's complying with the requirements of the preceding paragraph) promptly pay to Immunicon the amount of such refund (together with any interest paid or credited thereon after taxes
applicable thereto). If,
after the receipt by you of an amount advanced by Immunicon pursuant to the preceding paragraph, a determination is made that you shall not be entitled to any refund with respect to such claim and
Immunicon does not notify you in writing of its intent to contest such denial of refund prior to the expiration of thirty days after such determination, then such advance shall be forgiven and shall
not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 

        6.     Nothing
in this letter agreement shall prevent or limit your continuing or future participation in any benefit, bonus, incentive or other plans, programs, policies or
practices provided by Immunicon or its subsidiaries and for which you may qualify, nor shall anything herein limit or otherwise affect such rights as you may have under any stock option or other
agreements with Immunicon or any of its subsidiaries. 

        7.     The
terms and conditions set forth in this letter agreement shall supercede, amend and take precedence over the terms and conditions set forth in the employment offer
letter to you dated March 15, 1999, as well as the terms and conditions of any Employee Non-Disclosure Agreement, Non-Compete Agreement and any other agreement
previously entered into by you and Immunicon, to the extent any of the terms and conditions of such offer letter and such other agreements may be inconsistent or in conflict with the terms and
conditions set forth herein. 

        If
you are in agreement with the terms and conditions of this letter agreement, please so indicate by signing and dating this letter agreement as provided below. 

	Sincerely,	 	 
	IMMUNICON CORPORATION	 	 
	

By	
 	

/s/  ZOLA P. HOROVITZ      
	
 	

 
	Zola P. Horovitz, Ph.D.
 Director, Chairman of the Compensation Committee	 	 

	Agreed and Accepted:	 	 
	

/s/  EDWARD L. ERICKSON      
 Edward L. Erickson	
 	

 
	

Date of Signature:	
 	

5/20/03	
 	

 

4

[IMMUNICON
LOGO] 

April 15,
2003 

Mr. Edward
L. Erickson

Greenlands Farm

6887 Tohickon Hill Road

Pipersville, PA 18947-1415 

Dear
Ed: 

        This
letter confirms our recent discussions with respect to the recently-executed severance agreement (the "Agreement") between Immunicon Corporation (the "Company") and you. 

        As
you know, the Agreement calls for certain benefits and cash payments in the event of your separation from the service of the Company in connection with a "change in control" of the
Company (as defined in the Agreement) or if you terminate your employment for "good reason" (as defined in the Agreement). The Agreement also calls for the Company to pay certain taxes otherwise
payable by you with respect to benefits and cash compensation made available to you in connection with a termination event under the Agreement. This "gross up" commitment is intended to make you whole
for taxes imposed on "golden parachute" payments under Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the "Code"). 

        As
we have also discussed, however, the Company's payment of your taxes may become expensive to the Company because such payment itself generates additional "gross up" obligations. As a
result, we are writing to memorialize our understanding that it is the parties' intention to take steps that will avoid applicability of the "golden parachute" taxes in the first instance. To that
end, the Company is offering assurance that securing shareholder approval of the payments (using process discussed in §280G(b)(5)(II) of the Code) will be given every reasonable
effort by the Company and that the Company understands that both parties will make all reasonable efforts to avoid applicability of such taxes, in the event of a contemplated transaction. 

        Accordingly,
this letter reflects the understandings and intentions of the parties that the parties will make mutual efforts to attempt to avoid such additional costs to the Company if
it is reasonably possible to do so. 

        Thank
you for your consideration and best wishes for your continued success. 

	 	 	Sincerely yours,
	

 	
 	

IMMUNICON CORPORATION
	

 	
 	

By:	
 	

/s/  ZOLA P. HOROVITZ      

	 	 	Zola P. Horovitz, Ph.D.
 Director, Chairman of the Compensation Committee
	

Agreed and acknowledged:	
 	

 	
 	

 
	

/s/  EDWARD L. ERICKSON      
 Edward L. Erickson        5/20/03	
 	

 	
 	

 

ATTACHMENT
A 

[IMMUNICON
LOGO] 

March 15,
1999 

Edward
L. Erickson

Greenlands Farm

6887 Tohickon Hill Road

Pipersville, PA 18947-1415 

Dear
Ed: 

        We
are pleased to confirm the details of our offer to you for the position of (executive) Chairman of the Board and Chief Executive Officer at Immunicon Corporation. In this position you
will be accountable to the Board of Directors and the shareholders of the corporation for building value and managing day-to-day operations. 

        It
has been agreed that this offer is contingent upon, and your acceptance and start date will be contemporaneous with, the first closing of the first tranche of a convertible preferred
equity offering being led by MDS Capital Corporation of Canada. The offer is also subject to ratification by the full Board and, once effective, supercedes your consulting agreement dated
April 30, 1998. 

        You
will receive the following compensation package: 

	1.
	Annual
salary of $200,000 to be paid biweekly (i.e., once every two weeks).

	2.
	An
annual cash bonus will not be paid until such time as you and the Board agree that the Company is at a stage of development such that a cash bonus plan is appropriate and fiscally
prudent. However, the Board will review your equity ownership on an annual basis and may grant additional stock options, restricted stock or similar forms of equity compensation based on performance.

	3.
	Stock
option for 1,600,000 shares of Immunicon Corporation common stock at an exercise price of $0.07 per share vesting over five years with a one-year "cliff" provision. Furthermore,
existing stock options that have been granted to you will continue to vest at the previously established rate, but you will no longer be eligible for future annual stock option grants that are made to
non-executive directors.

	4.
	Review
of your compensation on an annual basis by the Compensation Committee of the Board. 

        Upon
full-time employment, you will also be elgible for the Company's standard benefits package as follows: 

	•
	Health
Insurance (Choice of Blue Cross/Blue Shield or Keystone HMO)

	•
	Dental
Insurance (Guardian)

	•
	Short-term
disability coverage

	•
	A
$50,000 life insurance policy

	•
	Eight
holidays and two personal days each year

	•
	Vacation
equal to 20 days per calendar year (prorated during the year)

	•
	Long-term
disability policy available through the Company

	•
	401-K
Savings Plan with company match available after one year of employment

	•
	Any
other benefits for which you qualify that are available now or in the future to employees or executive officers of the Company 

        Please
confirm by signing below and returning an original signature copy of this letter that you are in agreement with the offer herein. 

        Immunicon
maintains an employment-at-will relationship with all employees, which means that both you and the Company have the right to end this employment relationship at any time for
any reason. However, should you be terminated by the Board for reasons other than for cause, you will receive a severance package consisting of six months of base salary and such benefits as may be
continued under the benefit plans in extant at the time of your termination. Additionally, any equity participation not fully vested at the time of your termination will be subject to one year's worth
of accelerated vesting. 

        As
a condition of employment, you will be asked to sign our standard Employee Non-Disclosure Agreement and Non-Compete Agreement that serves to assign rights and protect the Company with
respect to its intellectual property. 

        We
look forward to working with you and other members of management and the Board to build value and make Immunicon a highly successful medical products company. 

Sincerely,

	/s/  ZOLA P. HOROVITZ    

Zola P. Horovitz, Ph.D.

Chairman of the Compensation Committee	 	/s/  PAUL A. LIBERTI    

Paul A. Liberti, Ph.D.

President
	

Agreed and accepted:	
 	

 
	

/s/  EDWARD L. ERICKSON      
 Edward L. Erickson, this    day
of                    , 1999	
 	

 

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Exhibit 10.38QuickLinks
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Exhibit 10.39    
    

[IMMUNICON
LOGO] 

April 15,
2003 

Mr. James
G. Murphy

Senior Vice President of Finance and Administration

25 McIntosh Road

Sewell, NJ 08080 

Dear
Jim: 

        This
letter agreement will serve as an amendment and modification of the terms and conditions of your employment, including your employment letter of October 20, 1999, by
Immunicon Corporation ("Immunicon"), and is effective March 20, 2003. 

        1.     In
consideration of your agreement to continue to be employed as Senior Vice President of Finance and Administration and Chief Financial Officer, of Immunicon, the Board
of Directors of Immunicon wishes to provide you with salary continuation and certain other benefits, as set forth herein, in the event of a Change of Control of Immunicon (as defined herein), or in
the event you terminate your employment with Immunicon for Good Reason (as defined herein), or other circumstance whereby your employment is terminated by Immunicon for reasons other than cause (as
defined herein). For the purpose of this letter agreement, a "Change of Control" shall mean: (a) the acquisition, directly or indirectly, other than from Immunicon, by any person, entity or
"group" (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), excluding, for this purpose, Immunicon, its subsidiaries,
and any employee benefit plan of Immunicon or its subsidiaries which acquires beneficial ownership of voting securities of Immunicon) (a "Third Party") of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the combined voting power of Immunicon's then outstanding voting securities entitled to vote generally in the
election of directors; or (b) individuals who, as of March 19, 2003, constitute the Board of Directors of Immunicon (the "Incumbent Directors") cease for any reason to constitute at
least a majority of the Board; provided, that any person becoming a director subsequent to such date whose election, or nomination for election by Immunicon's shareholders, was approved by a vote of
at least a majority of the Incumbent Directors who are directors at the time of such vote shall be, for purposes of this letter agreement, an Incumbent Director; or (c) consummation of
(i) a reorganization, merger or consolidation of Immunicon, or (ii) a liquidation or dissolution of Immunicon or the sale of all or substantially all of the assets of Immunicon (whether
such assets are held directly or indirectly) to a Third Party; except that any event or transaction which would be a "Change of Control" under (a) or (c)(i) of this definition shall not
be a "Change of Control" if persons who were the shareholders of Immunicon immediately prior to such event or transaction (other than the acquiror in the case of a reorganization, merger or
consolidation), immediately thereafter, beneficially own more than 50% of the combined voting power of Immunicon's or the reorganized, merged or consolidated company's then outstanding voting
securities entitled to vote generally in the election of directors. For purposes of this letter agreement you shall be entitled to terminate your employment for "Good Reason" if: (i) Immunicon
or any acquiror or successor assigns to you any duties inconsistent in any material respect with your current position as Senior Vice President of Finance and Administration and Chief Financial
Officer (including status, offices, titles and reporting requirements), authority, duties or responsibilities or takes any other action which results in a material diminution in such position as
Senior Vice President of Finance and Administration and Chief Financial Officer, authority, duties or responsibilities; or (ii) Immunicon or any acquiror or successor requires you to be based
at any office or location other than the current office or location with Immunicon or a location within a 35 mile radius of such office or location; provided that within fifteen (15) days after
the occurrence of any of the events listed in clauses (i) or (ii), you deliver written notice to Immunicon of your intention to terminate for Good Reason specifying in reasonable detail the
facts and circumstances claimed to give rise to your right to terminate your employment for 

 

Good
Reason and Immunicon shall not have cured such facts and circumstances within thirty (30) days after delivery of such notice by you to Immunicon (unless Immunicon shall have waived its
right to cure by written notice to you). For purposes of this letter agreement, any good faith determination of "Good Reason" in connection with a Change in Control made by you shall be conclusive.
For purposes of this letter agreement, termination of your employment for cause is a termination of your employment by Immunicon, or any successor thereto or acquiror thereof, as determined in good
faith by the Board of Directors, which is due to willful malfeasance or gross negligence in the carrying out of your duties and responsibilities in the position of Senior Vice President of Finance and
Administration and Chief Financial Officer of Immunicon, breach of your fiduciary duty to Immunicon, or conviction of a felony involving a recognized act of moral turpitude under applicable law or a
securities or corporate governance law violation. 

        2.     Notwithstanding
the terms and conditions of any stock option agreement or other agreement between you and Immunicon, all restrictions on sale or transfer by you of shares
of Immunicon stock will be removed (except those conditions imposed by law or regulation, such as the Securities Act of 1933, as amended, and the Exchange Act), and all unvested stock options granted
to you under any stock option agreement or otherwise will immediately vest, upon the effective date of a Change of Control of Immunicon, the date of termination of your employment for Good Reason or
the date of notice of termination of your employment by Immunicon for reasons other than termination of your employment for cause, disability or death. 

        3.     Should
you decide to sell any shares of Immunicon stock which are vested as provided in paragraph 2 above, you will notify the Immunicon Board of Directors of such
decision in writing and Immunicon will have the option to purchase such shares from you at the prevailing market price. If the Immunicon common stock is then listed for trading on a national
securities exchange or quoted on an interdealer quotation system, such market price shall be the average of the closing price of the Immunicon common stock on such exchange or system for the five
trading days immediately preceding the date the Board exercises its option, and, otherwise, shall be the market price as established by the Immunicon Board of Directors, within forty-eight
(48) hours after receipt by the Immunicon Board of Directors of such written notice of your intention to sell the shares. In the event the provisions of paragraph 2 above do not apply,
including without limitation in the event you terminate your employment voluntarily, any vested shares or options will be treated in accordance with the applicable stock or option agreement governing
their issuance and any unvested shares or options will be forfeited in the event your employment ceases prior to any vesting date. 

        4.     It
is understood and agreed that an employment-at-will relationship continues to exist between you and Immunicon, and that both you and Immunicon
have the right to terminate the employment relationship at any time for any reason. However, should you be terminated by Immunicon or any acquiror of or successor to Immunicon as a result of a Change
of Control or for reasons other than termination of your employment for cause, or, if you terminate your employment with Immunicon for Good Reason, in addition to the applicability of the foregoing
provisions of this letter agreement you will receive a severance package consisting of a payment equal to twelve (12) months of your base salary at the time of your termination, from the date
notice of termination is given, and such benefits as may be continued for the twelve (12) month period from such termination under the benefit plans of Immunicon or a successor to Immunicon
existing and applicable to you at the time of your termination. Payments not in connection with a Change in Control shall be made in twelve (12) monthly installments; payment in connection with
a Change in Control shall be made in a lump sum. Notwithstanding the foregoing, in the event that during such twelve (12) month period you are employed, or are engaged in the capacity of an
independent contractor or agent, by an entity that reasonably may be considered a competitor of Immunicon, or you otherwise materially breach your non-competition,
non-solicitation or confidentiality obligations to the Company, as determined in good faith by the Immunicon Board of Directors, such benefits will immediately cease as of the date of such 

2

 

employment
or engagement and you shall be required to reimburse Immunicon for the applicable portion of your salary severance payment. 

        5.     Anything
in this letter agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by Immunicon to or for your
benefit (whether paid or payable or distributed or distributable pursuant to the terms of this letter agreement) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then you shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount equal to the Excise Tax imposed upon the
Payment. 

        Subject
to the provisions of the next paragraph, all determinations required to be made under this paragraph 5, including whether a Gross-Up Payment is required and
the amount of such Gross-up Payment, shall be made by an independent accounting firm selected by the Audit Committee of the Board of Directors which may, if in compliance with applicable
law, be the then-current independent auditor of Immunicon (the "Accounting Firm") which shall provide detailed supporting calculations both to Immunicon and you within 15 business days
after the date of termination or such earlier time as is requested by Immunicon. The Gross-Up Payment, if any, shall be paid to you within five days of the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is payable by you, it shall furnish you with an opinion that you have substantial authority not to report any Excise Tax on your
federal income tax return. Any determination by the Accounting Firm shall be binding upon Immunicon and you. As a result of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is possible that a Gross-Up Payment which will not have been made by Immunicon should have been made
("Underpayment"), consistent with the calculations required to be made hereunder. In the event that Immunicon exhausts
its remedies pursuant to the next paragraph and you thereafter are required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be promptly paid by Immunicon to or for your benefit. 

        You
shall notify Immunicon in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by Immunicon of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than ten business days after you know of such claim and shall apprise Immunicon of the nature of such claim and the date on which such
claim is requested to be paid. You shall not pay such claim prior to the expiration of the thirty-day period following the date on which you give such notice to Immunicon (or such shorter
period ending on the date that any payment of taxes with respect to such claim is due). If Immunicon notifies you in writing prior to the expiration of such period that it desires to contest such
claim, you shall: (i) give Immunicon any information reasonably requested by Immunicon relating to such claim; (ii) take such action in connection with contesting such claim as Immunicon
shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by Immunicon;
(iii) cooperate with Immunicon in good faith in order effectively to contest such claim; and (iv) permit Immunicon to participate in any proceedings relating to such claim; provided,
however, that Immunicon shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold you
harmless, on an after-tax basis, for any Excise Tax or income tax, including interest and penalties with respect thereto, imposed as a result of such representation and payment of costs
and expenses. Without limitation on the foregoing provisions of this paragraph 5, Immunicon shall control all proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct you to pay the
tax claimed 

3

 

and
sue for a refund or contest the claim in any permissible manner, and you agree to prosecute such contest to a determination before any administrative tribunal, in a court of initial jurisdiction
and in one or more appellate courts, as Immunicon shall determine; provided, however, that if Immunicon directs you to pay such claim and sue for a refund, Immunicon shall advance a portion of such
payment equal to the Gross-Up Payment to you, on an interest-free basis, and shall indemnify and hold you harmless, on an after-tax basis, from any Excise Tax on
the Payment or income tax, including interest or penalties with respect thereto; and further provided that any extension of the statute of limitations relating to payment of taxes for your taxable
year with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Immunicon shall not exercise the foregoing right if such loan would violate applicable
securities laws. Furthermore, Immunicon's control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and you shall be entitled to
settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority 

        If,
after the receipt by you of an amount advanced by Immunicon pursuant to the preceding paragraph, you become entitled to receive any refund with respect to such claim, you shall
(subject to Immunicon's complying with the requirements of the preceding paragraph) promptly pay to Immunicon the amount of such refund (together with any interest paid or credited thereon after taxes
applicable thereto). If,
after the receipt by you of an amount advanced by Immunicon pursuant to the preceding paragraph, a determination is made that you shall not be entitled to any refund with respect to such claim and
Immunicon does not notify you in wirting of its intent to contest such denial of refund prior to the expiration of thirty days after such determination, then such advance shall be forgiven and shall
not be required to be repaid and the amount of such advance shall offset, to the extent thereof, the amount of Gross-Up Payment required to be paid. 

        6.     Nothing
in this letter agreement shall prevent or limit your continuing or future participation in any benefit, bonus, incentive or other plans, programs, policies or
practices provided by Immunicon or its subsidiaries and for which you may qualify, nor shall anything herein limit or otherwise affect such rights as you may have under any stock option or other
agreements with Immunicon or any of its subsidiaries. 

        7.     The
terms and conditions set forth in this letter agreement shall supercede, amend and take precedence over the terms and conditions set forth in the employment offer
letter to you dated October 20, 1999, as well as the terms and conditions of any Employee Non-Disclosure Agreement, Non-Compete Agreement and any other agreement
previously entered into by you and Immunicon, to the extent any of the terms and conditions of such offer letter and such other agreements may be inconsistent or in conflict with the terms and
conditions set forth herein. 

        If
you are in agreement with the terms and conditions of this letter agreement, please so indicate by signing and dating this letter agreement as provided below. 

	Sincerely,	 	 
	IMMUNICON CORPORATION	 	 
	

By	
 	

/s/  ZOLA P. HOROVITZ      
	
 	

 
	Zola P. Horovitz, Ph.D.
 Director, Chairman of Compensation Committee	 	 

	Agreed and Accepted:	 	 
	

/s/  JAMES G. MURPHY      
 James G. Murphy	
 	

 
	

Date of Signature:	
 	

May 20, 2003	
 	

 

4

[IMMUNICON
LOGO] 

April 15,
2003 

Mr. James
G. Murphy

Senior Vice President of Finance and Administration

25 McIntosh Road

Sewell, NJ 08080 

Dear
Jim: 

        This
letter confirms our recent discussions with respect to the recently-executed severance agreement (the "Agreement") between Immunicon Corporation (the "Company") and you. 

        As
you know, the Agreement calls for certain benefits and cash payments in the event of your separation from the service of the Company in connection with a "change in control" of the
Company (as defined in the Agreement) or if you terminate your employment for "good reason" (as defined in the Agreement). The Agreement also calls for the Company to pay certain taxes otherwise
payable by you with respect to benefits and cash compensation made available to you in connection with a termination event under the Agreement. This "gross up" commitment is intended to make you whole
for taxes imposed on "golden parachute" payments under Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the "Code"). 

        As
we have also discussed, however, the Company's payment of your taxes may become expensive to the Company because such payment itself generates additional "gross up" obligations. As a
result, we are writing to memorialize our understanding that it is the parties' intention to take steps that will avoid applicability of the "golden parachute" taxes in the first instance. To that
end, the Company is offering assurance that securing shareholder approval of the payments (using process discussed in §280G(b)(5)(II) of the Code) will be given every reasonable
effort by the Company and that the Company understands that both parties will make all reasonable efforts to avoid applicability of such taxes, in the event of a contemplated transaction. 

        Accordingly,
this letter reflects the understandings and intentions of the parties that the parties will make mutual efforts to attempt to avoid such additional costs to the Company if
it is reasonably possible to do so. 

        Thank
you for your consideration and best wishes for your continued success. 

	 	 	Sincerely yours,
	

 	
 	

IMMUNICON CORPORATION
	

 	
 	

By:	
 	

/s/  ZOLA P. HOROVITZ      
 Zola P. Horovitz, Ph.D.
 Director,
 Chairman of Compensation Committee
	

Agreed and Acknowledged:	
 	

 	
 	

 
	

/s/  JAMES G. MURPHY      
	
 	

 	
 	

 

[IMMUNICON
LOGO] 

October 20,
1999 

Mr. James
G. Murphy

25 McIntosh Road

Sewell, NJ 08080 

Dear
Jim: 

        I
am pleased to confirm the details of our offer to you for the position of Vice President, Finance and Administration and Chief Financial Officer (CFO), at Immunicon Corporation
reporting to me. Your responsibilities will be to provide leadership in all aspects of finance and administration, including, but not limited to, accounting and financial reporting, management
control, financing, corporate legal matters, MIS and other administrative duties normally falling under the CFO. Additionally, I look forward to your contributions in areas of corporate strategy,
business development and licensing and overall corporate governance. 

        It
has been agreed that your start date will be November 1, 1999, and we will give you reasonable flexibility to close current professional commitments. 

        The
following compensation package has been approved by the Board: 

	1.
	Annual
salary of $155,000 to be paid biweekly.

	2.
	Review
of your compensation on an annual basis by the Compensation Committee of the Board.

	3.
	Subject
to your performance, the Company's performance and financial resources, you will be eligible to receive an annual cash bonus, once instituted.

	4.
	Stock
option for 670,000 shares of Immunicon Corporation common stock at an exercise price per share of $0.07 and vesting over five (5) years.

	5.
	Additional
stock options to be granted by the Compensation Committee of the Board based on performance and achieved, if agreed upon, objectives.

	6.
	Should
you be terminated (for other than cause), you will receive 20 weeks of severance allowance to be paid out with the Company's payroll schedule. 

        Upon
employment, you will also be elgible for the Company's standard benefits package as follows: 

	•
	Health
Insurance (Choice of Blue Cross/Blue Shield or Keystone HMO)

	•
	Dental
Insurance (Guardian)

	•
	Short-term
disability coverage

	•
	A
$50,000 life insurance policy

	•
	Eight
holidays

	•
	Vacation
days (22) per calendar year (prorated during the year)

	•
	Long-term
disability policy available through the Company

	•
	401-K
Savings Plan with company match available after six months of employment 

        Please
confirm by signing below and returning an original signature copy of this letter that you are in agreement with the offer herein. 

        Immunicon
maintains an employment-at-will relationship with all employees, which means that both you and the Company have the right to end this employment relationship at any time for
any reason. As a condition of employment, you will be asked to sign our standard Employee Non- 

Disclosure
Agreement and Non-Compete Agreement which serves to assign rights and protect the Company with respect to its intellectual property. 

        We
look forward to your joining Immunicon on a full-time basis. I am confident that you will make a major contribution to the strategic development of the Company in the coming years. 

	 	 	Sincerely,
	

 	
 	

/s/  EDWARD L. ERICKSON    

Edward L. Erickson

Chairman & CEO
	

Agreed and accepted:	
 	

 
	

/s/  JAMES G. MURPHY      
 James G. Murphy	
 	

 

QuickLinks

Exhibit 10.39

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