<SUBMISSION>
<ACCESSION-NUMBER>0000950134-04-001788
<TYPE>S-3/A
<PUBLIC-DOCUMENT-COUNT>6
<FILING-DATE>20040213
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>IMMERSION CORP
<CIK>0001058811
<ASSIGNED-SIC>3577
<IRS-NUMBER>943180138
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>S-3/A
<ACT>33
<FILE-NUMBER>333-108607
<FILM-NUMBER>04598825
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>801 FOX LANE
<CITY>SAN JOSE
<STATE>CA
<ZIP>95131
<PHONE>4084671900
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>801 FOX LANE
<CITY>SAN JOSE
<STATE>CA
<ZIP>95131
</MAIL-ADDRESS>
<FORMER-COMPANY>
<FORMER-CONFORMED-NAME>IMMERSION HUMAN INTERFACE CORP
<DATE-CHANGED>19980602
</FORMER-COMPANY>
</FILER>
<DOCUMENT>
<TYPE>S-3/A
<SEQUENCE>1
<FILENAME>f92905a1sv3za.htm
<DESCRIPTION>AMENDMENT TO FORM S-3
<TEXT>
<HTML>
<HEAD>
<TITLE>Immersion Corporation Amendment No. 1 To Form S-3</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="center"><FONT size="2"><B>As filed with the Securities and
Exchange Commission on February&nbsp;13, 2004</B>
</FONT>
<DIV align="left"><FONT size="1">

</FONT></DIV>


<DIV align="right"><FONT size="2">Registration No.&nbsp;333-108607
</FONT></DIV>

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<HR size="1" noshade color="#000000" style="margin-top: -10px">





<P align="center"><FONT size="4"><B>SECURITIES AND EXCHANGE COMMISSION
</B></FONT>


<DIV align="center"><FONT size="3"><B>Washington, DC 20549</B>
</FONT></DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="center"><FONT size="5"><B>Amendment No. 1<BR>
to<BR>
FORM S-3<BR>
</B></FONT>
<DIV align="left"><FONT size="1">

</FONT></DIV>


<P align="center"><FONT size="3">REGISTRATION STATEMENT<BR>
<B>Under<BR>
THE SECURITIES ACT OF 1933</B>
</FONT>


<P align="center"><FONT size="6"><B>IMMERSION CORPORATION
</B></FONT>


<DIV align="center"><FONT size="2">(Exact name of Registrant as specified in its charter)
</FONT></DIV>


<P align="center"><HR align="center" size="1" width="40%" noshade>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2"><B>Delaware</B></FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
<B>94-3180138</B></FONT></TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><FONT size="2">(State or other jurisdiction of<BR>
incorporation or organization)</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="center" valign="top"><FONT size="2">
(I.R.S. Employer<BR>
Identification No.)</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="center"><FONT size="2"><B>801 Fox Lane<BR>
San Jose, California 95131<BR>
(408)&nbsp;467-1900</B><BR>
(Address, including zip code, and telephone number, including area code, of Registrant&#146;s principal executive offices)
</FONT>


<P align="center"><HR align="center" size="1" width="40%" noshade>


<P align="center"><FONT size="2"><B>VICTOR A. VIEGAS<BR>
President, Chief Executive Officer<BR>
and Chief Financial Officer<BR>
IMMERSION CORPORATION<BR>
801 Fox Lane<BR>
San Jose, California 95131<BR>
(408)&nbsp;467-1900</B>
</FONT>


<P align="center"><HR align="center" size="1" width="40%" noshade>


<P align="center"><FONT size="2">(Name, address, including zip code, and telephone number, including area code, of agent for service)
</FONT>


<P align="center"><FONT size="2"><B><I>Copy to:</I></B>
</FONT>


<P align="center"><FONT size="2"><B>JAMES M. KOSHLAND, ESQ.</B><BR>
Gray Cary Ware &#038; Freidenrich LLP<BR>
2000 University Avenue<BR>
East Palo Alto, CA 94303-2248<BR>
(650)&nbsp;833-2000
</FONT>


<P align="center"><HR align="center" size="1" width="40%" noshade>


<P align="center"><FONT size="2"><B>Approximate date of commencement of proposed sale to the public:</B><BR>
As soon as practicable after the effective date of this registration statement.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: <FONT face="Wingdings">&#111;</FONT>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule&nbsp;415 under the Securities Act
of 1933, check the following box: <FONT face="Wingdings">&#120;</FONT>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is filed to a register additional securities for an offering
pursuant to Rule&nbsp;462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. <FONT face="Wingdings">&#111;</FONT>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this form is a post-effective amendment filed pursuant to Rule&nbsp;462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the
same offering. <FONT face="Wingdings">&#111;</FONT>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If delivery of the prospectus is expected to be made pursuant to Rule&nbsp;434,
check the following box. <FONT face="Wingdings">&#111;</FONT>
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="center"><HR align="center" size="1" width="40%" noshade>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The Registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section&nbsp;8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section&nbsp;8(a), may
determine.</B>
</FONT>

<P>
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<P align="center"><FONT size="2">&nbsp;</FONT>

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<TABLE width="100%" border="1" cellpadding="5">
<TR>
    <TD><FONT size="2" color="#FF0000">Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange commission. These securities
may not be sold nor may offers to buy be accepted prior to the time the
registration statement becomes effective. This prospectus shall not constitute
an offer to sell or the solicitation of an offer to buy
nor shall there be any sale of these securities in any State in which such
offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such State.</FONT></TD>
</TR>
</TABLE>


<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left"><FONT size="2">Subject to Completion, Dated
February&nbsp;13, 2004<BR>
</FONT>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<div align="left"><FONT size="2">PROSPECTUS
</FONT>
</div>

<P align="center"><FONT size="2"><B>6,542,552 Shares of Common Stock of</B>
</FONT>


<DIV align="center"><FONT size="3"><B>Immersion Corporation</B>
</FONT></DIV>


<DIV align="center"><FONT size="2"><B>(issuable upon conversion of preferred stock and debentures)</B>
</FONT></DIV>


<P align="center"><HR size="1" width="100%" noshade>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus relates to the public offering, which is not being
underwritten, of 6,542,552 shares of common stock of Immersion
Corporation. The shares of our common stock may be offered by the
selling stockholder named in this prospectus, upon conversion of issued
and issuable shares of Series&nbsp;A Redeemable Convertible Preferred Stock
and upon the conversion of issuable Senior Redeemable Convertible
Debentures. The shares of Preferred Stock are convertible into
approximately 2,686,897 shares of Immersion&#146;s Common Stock, and the
Debentures are convertible into approximately 3,855,655 shares of
Immersion&#146;s Common Stock. Additional shares of Immersion&#146;s Preferred
Stock and additional Debentures, which are convertible into Immersion&#146;s
Common Stock, may be issued in lieu of cash as dividends on the
Preferred Stock and interest on the Debentures, respectively. We will
not receive any proceeds from the sale of our Common Stock by the
selling stockholders. All expenses of registration incurred in
connection with this offering are being borne by us, but all selling
and other expenses incurred by the selling stockholder will be borne by
the selling stockholder. None of the shares offered pursuant to this
prospectus have been registered prior to the filing of the registration
statement of which this prospectus is a part.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock offered in this prospectus may be offered and
sold by the selling stockholder directly or through broker-dealers
acting solely as agents. The distribution of the Common Stock may be
effected in one or more of the following types of transactions:
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">transactions on any national securities
exchange or quotation service on which the common stock
may be listed or quoted at the time of the sale,
including the Nasdaq National Market;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">transactions in the over-the-counter
market; or</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">transactions otherwise than on such
exchanges or services or in the over-the-counter market.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These transactions may include block transactions or crosses.
Crosses are transactions in which the same broker acts as an agent on
both sides of the trade. These transactions may be made at market
prices and on terms prevailing at the time of sale, prices related to
such prevailing market prices or negotiated prices. Usual and
customary or specially negotiated brokerage fees or commissions may be
paid by the selling stockholder in connection with these sales.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Immersion Corporation&#146;s Common Stock is traded on the Nasdaq
National Market under the symbol &#147;IMMR&#148;. On February&nbsp;12, 2004, the
last reported sales price for the common stock was
$7.33 per share.
</FONT>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>INVESTING IN THE COMMON STOCK OFFERED IN THIS PROSPECTUS INVOLVES
A HIGH DEGREE OF RISK. SEE &#147;RISK FACTORS&#148; BEGINNING ON PAGE 4.</B>
</FONT>


<P align="center"><HR size="1" width="100%" noshade>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholder and any brokers executing selling orders
on behalf of the selling stockholder may be deemed to be &#147;underwriters&#148;
within the meaning of the Securities Act of 1933. Commissions received
by a broker executing selling orders may be deemed to be underwriting
commissions under the Securities Act.
</FONT>


<P align="center"><HR size="1" width="100%" noshade>


<P align="center"><FONT size="2">NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE<BR>
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR<BR>
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.<BR>
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
</FONT>

<P align="center"><FONT size="2">&nbsp;</FONT>

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<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">SUMMARY</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">RISK FACTORS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003"> USE OF PROCEEDS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004"> DIVIDEND POLICY</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005"> DESCRIPTION OF CAPITAL STOCK</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006"> SELLING STOCKHOLDER</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007"> PLAN OF DISTRIBUTION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">LEGAL MATTERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">EXPERTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">WHERE YOU CAN FIND MORE INFORMATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="f92905a1exv5w1.txt">EXHIBIT 5.1</A></TD></TR>
<TR><TD colspan="9"><A HREF="f92905a1exv10w4.txt">EXHIBIT 10.4</A></TD></TR>
<TR><TD colspan="9"><A HREF="f92905a1exv10w5.txt">EXHIBIT 10.5</A></TD></TR>
<TR><TD colspan="9"><A HREF="f92905a1exv10w7.txt">EXHIBIT 10.7</A></TD></TR>
<TR><TD colspan="9"><A HREF="f92905a1exv23w2.txt">EXHIBIT 23.2</A></TD></TR>
</TABLE>
</CENTER>
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<P align="center"><FONT size="2"><B>TABLE OF CONTENTS</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="92%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Page</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Disclosure Regarding Forward-Looking Statements</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">i</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Summary</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Risk Factors</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Use of Proceeds</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Dividend Policy</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">17</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Description of Capital Stock</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">18</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Selling Stockholder</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">20</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Plan of Distribution</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">21</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Legal Matters</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">22</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Experts</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">23</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Where You Can Find More Information</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="center"><HR size="1" width="100%" noshade>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
different information. If anyone provides you with different or inconsistent
information, you should not rely on it. The selling stockholder is not making
an offer to sell these securities in any jurisdiction where the offer or sale
is not permitted. You should assume that the information appearing in this
prospectus is accurate only as of the date on the front cover of this
prospectus. Our business, financial condition, results of operations and
prospects may have changed since that date.
</FONT>


<P align="center"><HR size="1" width="100%" noshade>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Immersion is a registered trademark of Immersion Corporation. This
prospectus contains product names, trade names and trademarks of Immersion and
other organizations.
</FONT>


<P align="center"><HR size="1" width="100%" noshade>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The terms &#147;Immersion,&#148; &#147;we,&#148; &#147;us,&#148; &#147;our,&#148; and the &#147;company,&#148; as used in
this prospectus, refer to Immersion Corporation and its consolidated
subsidiaries.
</FONT>

<!-- link1 "DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS" -->
<DIV align="left"><A NAME="000"></A></DIV>

<P align="center"><FONT size="2"><B>DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus includes forward-looking statements within the meaning of
Section&nbsp;27A of the Securities Act of 1933, as amended, and Section&nbsp;21E of the
Securities Exchange Act of 1934, as amended. The forward-looking statements
involve risks and uncertainties. Forward-looking statements are identified by
words such as &#147;anticipates&#148;, &#147;believes&#148;, &#147;expects&#148;, &#147;intends&#148;, &#147;may&#148;, &#147;will&#148;
and other similar expressions. However, these words are not the only way we
identify forward-looking statements. In addition, any statements, which refer
to expectations, projections or other characterizations of future events or
circumstances are forward-looking statements. Actual results could differ
materially from those projected in the forward-looking statements as a result
of a number of factors, including those listed under &#147;Risk Factors&#148; and
elsewhere in this prospectus and those described in our other reports filed
with the SEC. We caution you not to place undue reliance on these
forward-looking statements, which speak only as of the date of this report, and
we undertake no obligation to update these forward-looking statements after the
filing of this report. You are urged to review carefully and consider our
various disclosures in this report and in our other reports filed with the SEC
that attempt to advise you of the risks and factors that may affect our
business.
</FONT>

<P align="center"><FONT size="2">i</FONT>

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<DIV align="left"><A NAME="001"></A></DIV>

<P align="center"><FONT size="2"><B>SUMMARY</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>This summary highlights selected information contained elsewhere in this
prospectus. You should read the entire prospectus and the documents
incorporated by reference in this prospectus carefully before making an
investment decision.</I>
</FONT>


<P align="center"><FONT size="2"><B>Immersion Corporation</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We develop, manufacture, license and support a wide range of hardware and
software technologies that enable users to interact with a multitude of
computing and other devices using their sense of touch. We focus on four
application areas &#151; consumer, computing and entertainment, medical simulation,
industrial and automotive, and three-dimensional and professional. In high
volume market areas such as consumer computer peripherals and automotive
interfaces, we primarily license our touch-enabling technologies to third party
manufacturers. We have licensed our intellectual property to numerous
manufacturers of mice, joysticks, knobs, wheels and gamepads targeted at
consumers. For lower-volume markets like medical simulation systems and
three-dimensional and professional products, our primary strategy is to
manufacture and sell products through direct sales, distributors and value
added resellers. We sell medical simulation devices used to train and allow
health care providers to practice and enhance their skills in a variety of
procedures. These devices simulate such procedures as intravenous
catheterization, endovascular interventions, and laparoscopic and endoscopic
surgical procedures. We also sell three-dimensional and professional products.
Our three-dimensional products include the MicroScribe G2 desktop digitizer
product line and associated software and accessories, specialized whole-hand
sensing gloves, armatures and software, including the CyberGlove, CyberGrasp,
CyberForce, CyberTouch and VirtualHand software products that permit simulated
interaction with three-dimensional environments. In all market areas, we also
engage in development projects for government agencies and corporations from
time to time. The government contracts help fund advanced research and
development and corporate contracts are typically for product development.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our objective is to proliferate our TouchSense&#174; technologies across
markets, platforms and applications so that touch and feel become as common as
color, graphics and sound in modern user interfaces. Immersion and its
wholly-owned subsidiaries hold more than 185 issued patents and more than 200
pending patent applications worldwide covering various aspects of hardware and
software technologies.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We were incorporated in California in May 1993 and reincorporated in
Delaware in November 1999. Our principal executive offices are located at 801
Fox Lane, San Jose, California 95131, our telephone number is (408)&nbsp;467-1900
and our website is located at www.immersion.com. Information on our website is
not a part of this prospectus.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>
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<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">2</FONT>

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<P align="center"><FONT size="2"><B>The Offering</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="65%">
<TR valign="bottom">
    <TD width="56%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="39%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">Common stock offered by the selling<BR>
stockholder</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
<BR>6,542,552 shares, includes
2,686,897 shares issuable upon
conversion of the Preferred
Stock and dividends on the
Preferred Stock and 3,855,655
shares issuable upon conversion
of the Debentures and interest
on the Debentures.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>


<TR valign="bottom">
    <TD valign="top"><FONT size="2">Common stock to be outstanding after this
offering</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Up to 27,151,763 shares, which
includes 20,609,211 shares
outstanding as of November&nbsp;6,
2003.</FONT></TD>
</TR>


<TR><TD><FONT size="1">

</FONT></TD></TR>


<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Use of proceeds</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
We will not receive any of the
proceeds from the sale of shares
by the selling stockholder.</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Nasdaq National Market symbol</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
IMMR</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">Risk Factors</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
See &#147;Risk Factors&#148; beginning on
page 4 and other information in
this prospectus for a discussion
of factors you should consider
carefully before investing in
shares of our Common Stock.</FONT></TD>
</TR>
</TABLE>
</CENTER>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The number of shares that will be outstanding after the offering is
based on the number of shares outstanding as of November&nbsp;6, 2003 and
excludes shares of common stock reserved for issuance under our stock option
plans, employee stock purchase plan and outstanding warrants and upon
exercise of stock options and warrants assumed in connection with our
acquisitions of HT Medical Systems, Inc. and Virtual Technologies, Inc.
</FONT>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">3</FONT>

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<!-- link1 "RISK FACTORS" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="center"><FONT size="2"><B>RISK FACTORS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>An investment in the securities offered by this prospectus involves a high
degree of risk. You should carefully consider the following factors and other
information in this prospectus and in the documents incorporated by reference
in this prospectus before deciding to purchase shares of our common stock. If
any of these risks occur, our business could be harmed, the trading price of
our stock could decline and you may lose all or part of your investment.</I>
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left"><FONT size="2">WE HAD AN ACCUMULATED DEFICIT OF $89 MILLION AS OF SEPTEMBER 30, 2003, HAVE A
HISTORY OF LOSSES, WILL EXPERIENCE LOSSES IN THE FUTURE AND MAY NOT ACHIEVE OR
MAINTAIN PROFITABILITY.
</FONT>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since 1997, we have incurred losses in every fiscal quarter. We will need
to generate significant revenue to achieve and maintain profitability. We
anticipate that our expenses will increase in the foreseeable future as we:
</FONT>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">protect and enforce our intellectual property, including the costs of
our litigation against Sony Computer Entertainment;</FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">continue to develop our technologies;</FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">attempt to expand the market for touch-enabled products;</FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">increase our sales efforts; and</FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">pursue strategic relationships.</FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If our revenues grow more slowly than we anticipate or if our operating
expenses exceed our expectations, we may not achieve or maintain profitability.
</FONT>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">4</FONT>

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<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left"><FONT size="2">OUR CURRENT LITIGATION AGAINST SONY COMPUTER ENTERTAINMENT IS EXPENSIVE,
DISRUPTIVE AND TIME CONSUMING AND WILL CONTINUE TO BE, AND REGARDLESS OF
WHETHER WE ARE ULTIMATELY SUCCESSFUL, COULD ADVERSELY AFFECT OUR BUSINESS.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On February&nbsp;11, 2002, we filed a complaint against Microsoft Corporation,
Sony Computer Entertainment, Inc., and Sony Computer Entertainment of America,
Inc. in the U.S. District Court for the Northern District Court of California
alleging infringement of U.S. Patent Nos. 5,889,672 and 6,275,213. The case was
assigned to United States District Judge Claudia Wilken. On April&nbsp;4, 2002, Sony
Computer Entertainment and Microsoft answered the complaint by denying the
material allegations and alleging counterclaims seeking a judicial declaration
that the asserted patents were invalid, unenforceable, or not infringed. Under
the counterclaims, the defendants are also seeking damages for attorneys&#146; fees.
The process of discovery and exchanging information and documents on
infringement, invalidity, and damages, is ongoing. On October&nbsp;8, 2002, we filed
an amended complaint, withdrawing the claim under the &#145;672 patent and adding
claims under a new patent, U.S. Patent No.&nbsp;6,424,333.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On October&nbsp;10, 2002, the Court entered an Amended Case Management Order
that set, among other dates in the case, April&nbsp;25, 2003 for a hearing to
construe the claims of the asserted patents and April&nbsp;5, 2004 for the start of
trial. On October&nbsp;28, 2002, Sony Computer Entertainment and Microsoft answered
the amended complaint and alleged similar counterclaims for declaratory relief
that the asserted patents are invalid, unenforceable, or not infringed. On
March&nbsp;21, 2003, Sony Computer Entertainment filed a motion for summary judgment
of non-infringement. At Immersion&#146;s request, the Court ordered this motion
stricken, without prejudice to its being refiled at a later date after the
Court rules on claim construction. On April&nbsp;25, 2003, the Court held the
scheduled claim construction hearing. On July&nbsp;9, 2003, the Court issued an
Order Modifying Case Management Order that reset certain scheduled dates in the
case, including setting April&nbsp;12, 2004 as the start of trial. On October&nbsp;2,
2003, the Court issued its Claim Construction Order construing certain terms of
the patents asserted in the lawsuit.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On July&nbsp;28, 2003, we announced that we had settled our legal differences
with Microsoft and we and Microsoft have agreed to dismiss all claims and
counterclaims relating to this matter as well as assume financial
responsibility for our respective legal costs with respect to the lawsuit
between Immersion and Microsoft. We continue to pursue our claims of
infringement against Sony Computer Entertainment. In the event we settle our
lawsuit with Sony Computer Entertainment, we will be obligated to pay certain
sums to Microsoft. If Sony Computer Entertainment were successful in its
counterclaims and our patents were deemed invalid and unenforceable, the assets
relating to the patents that were deemed invalid would be impaired and we may
be required to pay Sony Computer Entertainment&#146;s attorneys fees.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to the inherent uncertainties of litigation, we cannot accurately
predict the ultimate outcome of the litigation. We anticipate that the
litigation will continue to be costly, and there can be no assurance that we
will be able to recover the costs we incur in connection with the litigation.
We expense litigation costs as incurred and only accrue for costs that have
been incurred but not paid to the vendor as of the financial statement date.
The litigation has diverted, and is likely to continue to divert, the efforts
and attention of some of our key management and personnel. As a result, until
such time as it is resolved, the litigation could adversely affect our
business. Further, any unfavorable outcome could adversely affect our business.
</FONT>
<P align="left"><FONT size="2">THE MARKET FOR TOUCH-ENABLING TECHNOLOGIES AND TOUCH-ENABLED PRODUCTS IS AT AN
EARLY STAGE AND IF MARKET DEMAND DOES NOT DEVELOP, WE MAY NOT ACHIEVE OR
SUSTAIN REVENUE GROWTH.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The market for our touch-enabling technologies, and our licensees&#146;
touch-enabled products is at an early stage. If we and our licensees are unable
to develop demand for touch-enabling technologies and touch-enabled products,
we may not achieve or sustain revenue growth. We cannot accurately predict the
growth of the markets for these technologies and products, the timing of
product introductions or the timing of commercial acceptance of these products.
We are currently working to increase the demand for these technologies and
products in the following five principal application areas:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">touch-enabled medical simulators that can be used for training and skills assessment for
procedures such as catheterization, bronchoscopy, colonoscopy, sigmoidoscopy and
laparoscopic procedures;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">touch-enabled peripherals for gaming on personal computers and dedicated gaming consoles;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">touch-enabled automotive interfaces;</FONT></TD>
</TR>
</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">5</FONT>
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<DIV align="left"><FONT size="1">

</FONT></DIV>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">touch-enabled, whole-hand sensing gloves, such as our CyberForce product;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">touch-enabled personal electronics, such as cell phones and PDAs.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Even if our touch-enabling technologies and our licensees&#146; touch-enabled
products are ultimately widely adopted, widespread adoption may take a long
time to occur. The timing and amount of royalties and product sales that we
receive will depend on whether the products marketed achieve widespread
adoption and, if so, how rapidly that adoption occurs. We expect that we will
need to pursue extensive and expensive marketing and sales efforts to educate
prospective licensees and end users about the uses and benefits of our
technologies and to persuade software developers to create software that
utilizes our technologies.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;OUR QUARTERLY REVENUES AND OPERATING RESULTS ARE VOLATILE, AND IF OUR
FUTURE RESULTS ARE BELOW THE EXPECTATIONS OF PUBLIC MARKET ANALYSTS OR
INVESTORS, THE PRICE OF OUR COMMON STOCK IS LIKELY TO DECLINE.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our revenues and operating results are likely to vary significantly from
quarter to quarter due to a number of factors, many of which are outside of our
control and any of which could cause the price of our common stock to decline.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These factors include:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">the establishment or loss of licensing relationships;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">the timing of payments under fixed and/or up-front license agreements;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">the timing of our expenses, including costs related to litigation,
acquisitions of technologies or businesses;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">the timing of introductions of new products and product enhancements
by us, our licensees or their competitors;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">our ability to develop and improve our technologies;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">our ability to attract, integrate and retain qualified personnel; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">seasonality in the demand for our licensees&#146; products.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accordingly, we believe that period-to-period comparisons of our operating
results should not be relied upon as an indicator of our future performance. In
addition, because a high percentage of our operating expenses are fixed, a
shortfall of revenues can cause significant variations in operating results
from period to period.
</FONT>
<P align="left"><FONT size="2">IF WE ARE UNABLE TO ENTER INTO NEW LICENSING ARRANGEMENTS WITH OUR EXISTING
LICENSEES AND WITH ADDITIONAL THIRD-PARTY MANUFACTURERS FOR OUR TOUCH-ENABLING
TECHNOLOGY, OUR ROYALTY REVENUE MAY NOT GROW.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our revenue growth is significantly dependent on our ability to enter into
new licensing arrangements. Our failure to enter into new licensing
arrangements will cause our operating results to suffer. We face numerous risks
in obtaining new licenses on terms consistent with our business objectives and
in maintaining, expanding and supporting our relationships with our current
licensees. These risks include:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">the lengthy and expensive process of building a relationship with potential licensees;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">the fact that we may compete with the internal design teams of existing and potential licensees;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">difficulties in persuading consumer product manufacturers to work with us, to rely on us for
critical technology and to disclose to us proprietary product development and other strategies;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">difficulties in persuading existing and potential licensees to bear the development costs
necessary to incorporate our technologies into their products; and</FONT></TD>
</TR>
</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">6</FONT>
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<DIV align="left"><FONT size="1">

</FONT></DIV>



<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">challenges in demonstrating the compelling value of our technologies in new applications like
cell phones and automobiles.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A substantial majority of our current royalty revenue has been derived
from the licensing of our portfolio of touch-enabling technologies for personal
computer gaming peripherals, such as joysticks and steering wheels. The market
for joysticks and steering wheels for use with personal computers is a
substantially smaller market than either the mouse market or the dedicated
gaming console market and is characterized by declining average selling prices.
If we are unable to gain market acceptance beyond the personal computer gaming
peripherals market, we may not achieve royalty revenue growth.
</FONT>
<P align="left"><FONT size="2">BECAUSE WE HAVE A FIXED PAYMENT LICENSE WITH MICROSOFT, OUR ROYALTY REVENUE
FROM LICENSING IN THE GAMING MARKET AND OTHER CONSUMER MARKETS MIGHT DECLINE IF
MICROSOFT INCREASES ITS VOLUME OF SALES OF TOUCH-ENABLED GAMING PRODUCTS AND
CONSUMER PRODUCTS AT THE EXPENSE OF OUR OTHER LICENSEES.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the terms of our present agreement with Microsoft, Microsoft
receives a royalty-free, perpetual, irrevocable license to Immersion&#146;s
worldwide portfolio of patents. This license permits Microsoft to make, use and
sell hardware, software and services, excluding specified products, covered by
Immersion&#146;s patents. Immersion also granted to Microsoft a limited right, under
Immersion&#146;s patents relating to touch technology, to sublicense specified
rights, excluding rights to excluded products and peripheral devices, to third
party customers of Microsoft&#146;s or Microsoft&#146;s subsidiaries&#146; operating systems
(other than Sony Corporation, Sony Computer Entertainment, Inc., Sony Computer
Entertainment of America, Inc., and their subsidiaries). In exchange, for the
grant of these rights and the rights included in a separate Sublicense
Agreement, Microsoft paid Immersion a one-time payment of $20.0&nbsp;million. We
will not receive any further revenues or royalties from Microsoft under our
current agreement with Microsoft. Microsoft has a significant share of the
market for touch-enabled gaming computer peripherals and is pursuing other
consumer markets such as cell phones and PDAs. Microsoft has significantly
greater financial, sales and marketing resources, as well as greater name
recognition and a larger customer base, than our other licensees. In the event
that Microsoft increases its share of these markets, our royalty revenue from
other licensees in these market segments might decline.
</FONT>
<P align="left"><FONT size="2">OUR RELATIONSHIP WITH MEDTRONIC, A LEADING MEDICAL DEVICE COMPANY, MAY
INTERFERE WITH OUR ABILITY TO ENTER INTO DEVELOPMENT AND LICENSING
RELATIONSHIPS WITH MEDTRONIC&#146;S COMPETITORS.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In February 2003, we entered into an agreement with Medtronic, a leading
medical device company, in which Medtronic was granted a right of first
negotiation. The right of first negotiation applies to any agreement, which we
refer to as a &#147;proposed agreement,&#148; under which we would grant a third party
rights to use specified Immersion intellectual property in specified fields of
use. Under the terms of the right of first negotiation, we must notify
Medtronic if we have received a written offer from a third party to enter into
a proposed agreement, or if we are seeking to find a third party to enter into
a proposed agreement. Medtronic has the exclusive right, for a period of forty
days, to negotiate with us regarding the material terms of the proposed
agreement. If during such forty-day period, Medtronic and Immersion fail to
reach agreement in principle upon the material terms of the proposed agreement,
then we will have twelve months after the expiration of such forty day period
to enter into an agreement with the applicable third party, provided that the
terms of such agreement are in the aggregate more favorable to Immersion than
the offer presented by Medtronic or the terms under which we initially sought
to find a third party to enter into the proposed agreement. The right of first
negotiation ceases to apply to any proposed agreement for which Medtronic and
Immersion reach agreement in principle upon the material terms during the
applicable forty-day period, but thereafter do not execute a definitive
agreement within 145&nbsp;days after the expiration of such forty-day period. In
addition, Medtronic&#146;s right of first negotiation terminates upon the second
anniversary of the completion of a development project to be undertaken by us
for Medtronic. Although the right of first negotiation has not impeded our
ability to interest other medical device companies in our technologies to date,
this right of first negotiation or our relationship with Medtronic may impede,
restrict or delay our ability to enter into development or license agreements
with large medical device companies that compete with Medtronic. Any
restriction in our ability to enter into development or license agreements with
other medical device companies would adversely affect our revenues.
</FONT>
<P align="left"><FONT size="2">MEDTRONIC ACCOUNTS FOR A LARGE PORTION OF OUR REVENUES AND A REDUCTION IN SALES
TO MEDTRONIC, A REDUCTION IN DEVELOPMENT WORK, OR A DECISION NOT TO RENEW
EXISTING LICENSES BY MEDTRONIC MAY REDUCE OUR TOTAL REVENUE.
</FONT>



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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the three months ended September&nbsp;30, 2003 and 2002 we derived 7% and
8%, respectively, of our net revenues from Medtronic. For the nine months ended
September&nbsp;30, 2003 and 2002, Medtronic accounted for 5% and 11% of our net
revenues. If our product sales to Medtronic decline, and/or Medtronic reduces
the development activities we perform then our total revenues may decline. In
addition, under our recent agreements with Medtronic, monies advanced by
Medtronic are subject to refund provisions under certain circumstances. These
circumstances have not arisen to date, but we cannot predict whether these
circumstances will arise in the future.
</FONT>
<P align="left"><FONT size="2">MADCATZ ACCOUNTS FOR A LARGE PORTION OF OUR ROYALTY REVENUE AND THE FAILURE OF
MADCATZ TO ACHIEVE SALES VOLUMES FOR ITS GAMING PRODUCTS THAT INCORPORATE OUR
TOUCH-ENABLING TECHNOLOGIES MAY REDUCE OUR ROYALTY REVENUE.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;MadCatz accounts for a large portion of our royalty revenue. For the
quarter ended September&nbsp;30, 2003 our royalty revenues from MadCatz increased as
compared to the same period during 2002. For the three months ended September
30, 2003 we derived 8% of our net revenues and 35% of our royalty and license
revenue from MadCatz, and for the three months ended September&nbsp;30, 2002, we
derived 6% of our net revenue and 28% of our royalty and license revenue from
MadCatz. For the nine months ended September&nbsp;30, 2003, we derived 9% of our
total revenues and 44% of our royalty and license revenue from MadCatz as
compared to the nine months ended September&nbsp;30, 2002, when MadCatz accounted
for 7% of our total revenues and 23% of our royalty and license revenue. We
expect that a significant portion of our total revenues will continue to be
derived from MadCatz. If MadCatz fails to achieve anticipated sales volumes for
its computer peripheral products that incorporate our technologies, our royalty
revenue would be reduced.
</FONT>
<P align="left"><FONT size="2">LOGITECH ACCOUNTS FOR A LARGE PORTION OF OUR ROYALTY REVENUE AND THE FAILURE OF
LOGITECH TO ACHIEVE SALES VOLUMES FOR ITS GAMING AND CURSOR CONTROL PERIPHERAL
PRODUCTS THAT INCORPORATE OUR TOUCH-ENABLING TECHNOLOGIES MAY REDUCE OUR
ROYALTY REVENUE.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Logitech has in the past and may in the future account for a large portion
of our royalty revenue. For the quarter ended September&nbsp;30, 2003 our revenues
from Logitech increased as compared to the same period during 2002. For the
three months ended September&nbsp;30, 2003 we derived 6% of our net revenues and 25%
of our royalty and license revenue from Logitech, and for the three months
ended September&nbsp;30, 2002, we derived 4% of our net revenue and 23% of our
royalty and license revenue from Logitech. For the nine months ended September
30, 2003, we derived 3% of our total revenues and 14% of our royalty and
license revenue from Logitech as compared to the nine months ended September
30, 2002, when Logitech accounted for 7% of our total revenues and 27% of our
royalty and license revenue. We expect that a significant portion of our total
revenues will continue to be derived from Logitech. If Logitech fails to
achieve anticipated sales volumes for its computer peripheral products that
incorporate our technologies, our royalty revenue would be reduced.
</FONT>
<P align="left"><FONT size="2">WE MAY ELECT TO RAISE ADDITIONAL CAPITAL IN THE FUTURE WHICH MAY RESULT IN
SUBSTANTIAL DILUTION TO OUR STOCKHOLDERS.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Should any unanticipated circumstances arise which significantly increase
our cash or capital requirements we may elect to raise additional capital to
have a supply of cash for such events or future periods. Our plans to raise
additional capital may include possible customer prepayments of certain royalty
obligations in exchange for a royalty discount and/or other negotiated
concessions, entering into new license agreements that require up-front license
payments, and through debt or equity financing. We have taken measures to
control our costs and will continue to monitor these efforts. We cannot be
certain that additional financing will be available to us on favorable terms
when required, or at all. Changes in equity markets over the past two years
have adversely affected the ability of companies to raise equity financing and
have adversely affected the markets for financing for companies with a history
of losses such as ours. Additional financing may require us to issue additional
shares of our common or preferred stock such that our existing stockholders may
experience substantial dilution.
</FONT>
<P align="left"><FONT size="2">WE MAY BE UNABLE TO INCREASE SALES OF OUR MEDICAL SIMULATION DEVICES IF, AS A
RESULT OF THE CURRENT ECONOMIC SLOWDOWN OR OTHER FACTORS, MEDICAL INSTITUTIONS
DO NOT BUDGET FOR SUCH DEVICES.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our medical simulation products, such as our AccuTouch&#174; Endoscopy
Simulator, the AccuTouch Endovascular Simulator and our Laparoscopic Surgical
Workstation&#153;, have only recently begun to be used by hospitals and medical
schools to train healthcare professionals. As a result, many of these medical
institutions do not budget for such simulation devices. To increase sales of
our simulation devices, we must, in addition to
</FONT>

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<P align="left"><FONT size="2">convincing medical institution
personnel of the utility of the devices, persuade them to include a significant
expenditure for the devices in their budgets. If these medical institutions are
unwilling to budget for simulation devices or reduce their budgets as a result
of the economic slowdown, cost-containment pressures or other factors, we may
not be able to increase sales of medical simulators at a satisfactory rate. As
a result of the terrorist attacks against the United States on September&nbsp;11,
2001 and the continuing threat of terrorist acts, hospitals may have assigned
priority in their capital expenditure budgets to equipment that will enable
them to respond more effectively to catastrophic emergencies, and federal,
state and local governments may have delayed certain funding for medical and
educational institutions, in which case purchases of medical simulators may
have been deferred. If we are unable to increase sales of our medical
simulation products, our results of operations and financial condition may be
adversely affected. We believe that medical device companies may also decrease
their expenditures in corporate research and development budgets and this may
adversely affect our contract and development revenue generated by the medical
segment.
</FONT>

<P align="left"><FONT size="2">WE DO NOT CONTROL OR INFLUENCE OUR LICENSEES&#146; MANUFACTURING, PROMOTION,
DISTRIBUTION OR PRICING OF THEIR PRODUCTS INCORPORATING OUR TOUCH-ENABLING
TECHNOLOGIES, UPON WHICH WE ARE DEPENDENT TO GENERATE ROYALTY REVENUE.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A key part of our business strategy is to license our intellectual
property to companies that manufacture and sell products incorporating our
touch-enabling technologies. Sales of those products generate royalty and
license revenue for us. For the quarters ended September&nbsp;30, 2003 and 2002, 22%
and 20% of our total revenues were royalty and license revenues. For the nine
months ended September&nbsp;30, 2003 and 2002, 21% and 25% of our total revenues
were royalty and license revenues. However, we do not control or influence the
manufacture, quality control, promotion, distribution or pricing of products
that are manufactured and sold by our licensees. In addition, we generally do
not have commitments from our licensees that they will continue to use our
technology in future products. As a result, products incorporating our
technologies may not be brought to market, meet quality control standards,
achieve commercial acceptance or generate meaningful royalty revenue for us.
For us to generate royalty revenue, licensees that pay us per-unit royalties
must manufacture and distribute products incorporating our touch-enabling
technologies in a timely fashion and generate consumer demand through marketing
and other promotional activities. Products incorporating our touch-enabling
technologies are generally difficult to design and manufacture which may cause
product introduction delays or quality control problems. If our licensees fail
to stimulate and capitalize upon market demand for products that generate
royalties for us, or if products are recalled because of quality control
problems, our revenues will not grow and could decline.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Peak demand for products that incorporate our technologies, especially in
the computer gaming peripherals market, typically occurs in the third and
fourth calendar quarters as a result of increased demand during the year-end
holiday season. If our licensees do not ship products incorporating our
touch-enabling technology in a timely fashion or fail to achieve strong sales
in the fourth quarter of the calendar year, we may not receive related royalty
and license revenue.
</FONT>
<P align="left"><FONT size="2">REDUCED SPENDING BY CORPORATE RESEARCH AND DEVELOPMENT DEPARTMENTS MAY
ADVERSELY AFFECT SALES OF OUR THREE-DIMENSIONAL AND PROFESSIONAL PRODUCTS.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that the current economic downturn has led to a reduction in
corporations&#146; budgets for research and development in several sectors,
including the automotive and aerospace sectors, which use our three-dimensional
and professional products. Sales of our three-dimensional and professional
products, including our CyberGlove line of whole-hand sensing gloves and our
MicroScribe G2 line of three-dimensional digitizers may be adversely affected
by these cuts in corporate research and development budgets.
</FONT>
<P align="left"><FONT size="2">WE HAVE LIMITED DISTRIBUTION CHANNELS AND RESOURCES TO MARKET AND SELL OUR
MEDICAL SIMULATION AND THREE-DIMENSIONAL SIMULATION PRODUCTS, AND IF WE ARE
UNSUCCESSFUL IN MARKETING AND SELLING THESE PRODUCTS WE MAY NOT ACHIEVE OR
SUSTAIN PRODUCT REVENUE GROWTH.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have limited resources for marketing and selling medical simulation or
three-dimensional simulation products either directly or through distributors.
To achieve our business objectives we must build a balanced mixture of sales
through a direct sales channel and through qualified distribution channels. The
success of our efforts to sell medical simulation and three-dimensional
simulation products will depend upon our ability to retain and develop a
qualified sales force and effective distributor channels. We may not be
successful in attracting and retaining the personnel necessary to sell and
market our simulation products. A number of our distributors represent
small-specialized companies that may not have sufficient capital or human
resources to support the complexities of
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<P align="left"><FONT size="2">selling and supporting simulation
products. There is no assurance that our direct selling efforts will be
effective, distributors will market our products successfully or, if our
relationships with distributors terminate, we will be able to establish
relationships with other distributors on satisfactory terms, if at all. Any
disruption in the distribution, sales or marketing network for our simulation
products could have a material adverse effect on our product revenues.
</FONT>
<P align="left"><FONT size="2">LITIGATION REGARDING INTELLECTUAL PROPERTY RIGHTS COULD BE EXPENSIVE,
DISRUPTIVE, AND TIME CONSUMING; COULD RESULT IN THE IMPAIRMENT OR LOSS OF
PORTIONS OF OUR INTELLECTUAL PROPERTY; AND COULD ADVERSELY AFFECT OUR BUSINESS.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intellectual property litigation, whether brought by us or by others
against us, could result in the expenditure of significant financial resources
and the diversion of management&#146;s time and efforts. From time to time, we
initiate claims against third parties that we believe infringe our intellectual
property rights. We intend to enforce our intellectual property rights
vigorously and may initiate litigation against parties that we believe are
infringing our intellectual property rights if we are unable to resolve matters
satisfactorily through negotiation. Litigation brought to protect and enforce
our intellectual property rights could be costly, time-consuming and
distracting to management and could result in the impairment or loss of
portions of our intellectual property. In addition, any litigation in which we
are accused of infringement may cause product shipment delays, require us to
develop non-infringing technology or require us to enter into royalty or
license agreements even before the issue of infringement has been decided on
the merits. If any litigation were not resolved in our favor, we could become
subject to substantial damage claims from third parties and indemnification
claims from our licensees. We and our licensees could be enjoined from the
continued use of the technology at issue without a royalty or license
agreement. Royalty or license agreements, if required, might not be available
on acceptable terms, or at all. If a third party claiming infringement against
us prevailed and we could not develop non-infringing technology or license the
infringed or similar technology on a timely and cost-effective basis, our
expenses would increase and our revenues could decrease.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We attempt to avoid infringing known proprietary rights of third parties.
However, third parties may hold, or may in the future be issued, patents that
could be infringed by our products or technologies. Any of these third parties
might make a claim of infringement against us with respect to the products that
we manufacture and the technologies that we license. From time to time, we have
received letters from companies, several of which have significantly greater
financial resources than we do, asserting that some of our technologies, or
those of our licensees, infringe their intellectual property rights. Certain of
our licensees have received similar letters from these or other companies. Such
letters may influence our licensees&#146; decisions whether to ship products
incorporating our technologies. Although none of these matters has resulted in
litigation to date, any of these notices, or additional notices that we could
receive in the future from these or other companies, could lead to litigation.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have acquired patents from third parties and also license some
technologies from third parties. We must rely upon the owners of the patents or
the technologies for information on the origin and ownership of the acquired or
licensed technologies. As a result, our exposure to infringement claims may
increase. We generally obtain representations as to the origin and ownership of
acquired or licensed technology and indemnification to cover any breach of
these representations. However, representations may not be accurate and
indemnification may not provide adequate compensation for breach of the
representations. Intellectual property claims against our licensees, or us
whether or not they have merit, could be time-consuming to defend, cause
product shipment delays, require us to pay damages, harm existing license
arrangements, or require us or our licensees to cease utilizing the technology
unless we can enter into royalty or licensing agreements. Royalty or licensing
agreements might not be available on terms acceptable to us or at all.
Furthermore, claims could also result in claims from our licensees under the
indemnification provisions of their agreements with us.
</FONT>
<P align="left"><FONT size="2">IF WE FAIL TO PROTECT AND ENFORCE OUR INTELLECTUAL PROPERTY RIGHTS, OUR ABILITY
TO LICENSE OUR TECHNOLOGIES AND TO GENERATE REVENUES WOULD BE IMPAIRED.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business depends on generating revenues by licensing our intellectual
property rights and by selling products that incorporate our technologies. If
we are not able to protect and enforce those rights, our ability to obtain
future licenses or maintain current licenses and royalty revenue could be
impaired. In addition, if a court were to limit the scope of, declare
unenforceable or invalidate any of our patents, current licensees may refuse to
make royalty payments or may themselves choose to challenge one or more of our
patents. Also it is possible that:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">our pending patent applications may not result in the issuance of patents;</FONT></TD>
</TR>
</TABLE>

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<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">our patents may not be broad enough to protect our proprietary rights; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">effective patent protection may not be available in every country in which our licensees do business.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also rely on licenses, confidentiality agreements and copyright,
trademark and trade secret laws to establish and protect our proprietary
rights. It is possible that:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">laws and contractual restrictions may not be sufficient to prevent
misappropriation of our technologies or deter others from developing
similar technologies; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">policing unauthorized use of our products and trademarks would be
difficult, expensive and time-consuming, particularly overseas.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">PRODUCT LIABILITY CLAIMS COULD BE TIME-CONSUMING AND COSTLY TO DEFEND, AND
COULD EXPOSE US TO LOSS.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Claims that our products or our licensees&#146; products have flaws or other
defects that lead to personal or other injury are common in the computer
peripherals industry and medical fields. If products that we or our licensees
sell cause personal injury, financial loss or other injury to our or our
licensees&#146; customers, the customers or our licensees may seek damages or other
recovery from us. Any claims against us would be time-consuming, expensive to
defend and distracting to management and could result in damages and injure our
reputation or the reputation of our licensees or their products. This damage
could limit the market for our and our licensees&#146; products and harm our results
of operations.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the past, manufacturers of peripheral products, such as computer mice
and certain gaming products such as joysticks, wheels or gamepads, have been
subject to claims alleging that use of their products has caused or contributed
to various types of repetitive stress injuries, including carpal tunnel
syndrome. We have not experienced any product liability claims to date.
Although our license agreements typically contain provisions designed to limit
our exposure to product liability claims, existing or future laws or
unfavorable judicial decisions could limit or invalidate the provisions.
</FONT>
<P align="left"><FONT size="2">THE HIGHER COST OF PRODUCTS INCORPORATING OUR TOUCH-ENABLING TECHNOLOGIES MAY
INHIBIT OR PREVENT THE WIDESPREAD ADOPTION AND SALE OF PRODUCTS INCORPORATING
OUR TECHNOLOGIES.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Personal computer gaming peripherals, computer mice and automotive
controls incorporating our touch-enabling technologies are more expensive than
similar competitive products that are not touch-enabled. Although major
manufacturers, such as Logitech, Microsoft, ALPS Electric Co., Ltd. and BMW,
have licensed our technology, the greater expense of products containing our
touch-enabling technologies as compared to non-touch-enabled products may be a
significant barrier to the widespread adoption and sale of touch-enabled
products.
</FONT>
<P align="left"><FONT size="2">COMPETITION BETWEEN OUR PRODUCTS AND OUR LICENSEES&#146; PRODUCTS MAY REDUCE OUR
REVENUE.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rapid technological change, short product life cycles, cyclical market
patterns, declining average selling prices and increasing foreign and domestic
competition characterize the markets in which we and our licensees&#146; compete. We
believe that competition in these markets will continue to be intense, and that
competitive pressures will drive the price of our products and our licensees&#146;
products downward. These price reductions, if not offset by increases in unit
sales or productivity, will cause our revenues to decline.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We face competition from unlicensed products as well. Our licensees or
other third parties may seek to develop products using our intellectual
property or alternative designs to our intellectual property, which they
believe do not require a license under our intellectual property. These potential
competitors may have significantly greater financial, technical and marketing
resources than we do, and the costs associated with asserting our intellectual
property rights against such products and such potential competitors could be
significant. Moreover, if such alternative designs were determined by a court
not to require a license under our intellectual property rights, competition
from such unlicensed products could limit or reduce our revenues.
</FONT>
<P align="left"><FONT size="2">IF WE ARE UNABLE TO CONTINUALLY IMPROVE, AND REDUCE THE COST OF OUR
TECHNOLOGIES, COMPANIES MAY NOT INCORPORATE OUR TECHNOLOGIES INTO THEIR
PRODUCTS, WHICH COULD IMPAIR OUR REVENUE GROWTH.
</FONT>
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<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our ability to achieve revenue growth depends on our
continuing ability to improve, and reduce the cost of, our technologies and to
introduce these technologies to the marketplace in a timely manner. If our
development efforts are not successful or are significantly delayed, companies
may not incorporate our technologies into their products and our revenue growth
may be impaired.
</FONT>
<P align="left"><FONT size="2">IF WE FAIL TO DEVELOP NEW OR ENHANCED TECHNOLOGIES FOR NEW APPLICATIONS AND
PLATFORMS, WE MAY NOT BE ABLE TO CREATE A MARKET FOR OUR TECHNOLOGIES OR OUR
TECHNOLOGIES MAY BECOME OBSOLETE AND OUR ABILITY TO GROW AND OUR RESULTS OF
OPERATIONS MIGHT BE HARMED.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our initiatives to develop new and enhanced technologies and to
commercialize these technologies for new applications and new platforms may not
be successful. Any new or enhanced technologies may not be favorably received
by consumers and could damage our reputation or our brand. Expanding our
technology could also require significant additional expenses and strain our
management, financial and operational resources. Moreover, technology products
generally have relatively short product life cycles and our current products
may become obsolete in the future. Our ability to generate revenues will be
harmed if:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">we fail to develop new technologies;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">our new technologies fail to gain market acceptance; or</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">our current products become obsolete.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">WE DEPEND ON A SINGLE SUPPLIER TO PRODUCE SOME OF OUR MEDICAL SIMULATORS AND
MAY LOSE CUSTOMERS IF THIS SUPPLIER DOES NOT MEET OUR REQUIREMENTS.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have one supplier for some of our custom medical simulators. Any
disruption in the manufacturing process from our sole supplier could adversely
affect our ability to deliver our products, ensure quality workmanship and
could result in a reduction of our product sales.
</FONT>
<P align="left"><FONT size="2">MEDICAL LICENSING AND CERTIFICATION AUTHORITIES MAY NOT ENDORSE OR REQUIRE USE
OF OUR TECHNOLOGIES FOR TRAINING PURPOSES, SIGNIFICANTLY SLOWING OR INHIBITING
THE MARKET PENETRATION OF OUR MEDICAL SIMULATION TECHNOLOGIES.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Several key medical certification bodies, including the American Board of
Internal Medicine, or ABIM, and the American College of Cardiology, or ACC,
have great influence in endorsing particular medical methodologies, including
medical training methodologies, for use by medical professionals. In the event
that the ABIM and the ACC, as well as other, similar bodies, do not endorse our
medical simulation training products as a training vehicle, market penetration
for our products could be significantly and adversely affected.
</FONT>
<P align="left"><FONT size="2">AUTOMOBILES INCORPORATING OUR TOUCH-ENABLING TECHNOLOGIES ARE SUBJECT TO
LENGTHY PRODUCT DEVELOPMENT PERIODS, MAKING IT DIFFICULT TO PREDICT WHEN AND
WHETHER WE WILL RECEIVE PER UNIT AUTOMOTIVE ROYALTIES.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The product development process for automobiles is very lengthy. We do not
earn per unit royalty revenue on our automotive technologies unless, and until,
automobiles featuring our technologies are shipped to customers, which may not
occur until several years after we enter into an agreement with an automobile
manufacturer. Throughout the product development process, we face the risk that
an automobile manufacturer or supplier may delay the incorporation of, or
choose not to incorporate, our technologies into its automobiles, making it
difficult for us to predict the per unit automotive royalties we may receive,
if any.
</FONT>
<P align="left"><FONT size="2">WE MIGHT BE UNABLE TO RETAIN OR RECRUIT NECESSARY PERSONNEL, WHICH COULD SLOW
THE DEVELOPMENT AND DEPLOYMENT OF OUR TECHNOLOGIES.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our ability to develop and deploy our technologies and to sustain our
revenue growth depends upon the continued service of our executive officers and
other key personnel and upon hiring additional key personnel. A number of
employees of our subsidiaries, including several members of these subsidiaries&#146;
senior management, have departed since the acquisitions of these subsidiaries
were completed. It may not be possible to retain enough key employees of our
subsidiaries to operate these businesses effectively.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">12</FONT>
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<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may hire additional sales, support, marketing and research and
development personnel. We may not be able to attract, assimilate or retain
additional highly qualified personnel in the future. Our executive officers and
key employees hold stock options with exercise prices considerably above the
current market price of our common stock. Each of these factors may impair our
ability to retain the services of our executive officers and key employees. Our
technologies are complex and we rely upon the continued service of our existing
engineering personnel to support licensees, enhance existing technology and
develop new technologies.
</FONT>
<P align="left"><FONT size="2">OUR MAJOR STOCKHOLDERS RETAIN SIGNIFICANT CONTROL OVER US, WHICH MAY LEAD TO
CONFLICTS WITH OTHER STOCKHOLDERS OVER CORPORATE GOVERNANCE MATTERS AND COULD
ALSO AFFECT THE VOLATILITY OF OUR STOCK PRICE.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have had in the past and may have in the future stockholders who retain
greater than a 20% of our outstanding stock. Acting together, these
stockholders would be able to exercise significant influence over matters that
our stockholders vote upon, including the election of directors and mergers or
other business combinations, which could have the effect of delaying or
preventing a third party from acquiring control over or merging with us.
Further, if any individuals in this group elect to sell a significant portion
or all of their holdings of our common stock, the trading price of our common
stock could experience volatility.
</FONT>
<P align="left"><FONT size="2">BECAUSE PERSONAL COMPUTER PERIPHERAL PRODUCTS THAT INCORPORATE OUR
TOUCH-ENABLING TECHNOLOGIES CURRENTLY MUST WORK WITH MICROSOFT&#146;S OPERATING
SYSTEM SOFTWARE, OUR COSTS COULD INCREASE AND OUR REVENUES COULD DECLINE IF
MICROSOFT MODIFIES ITS OPERATING SYSTEM SOFTWARE.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our hardware and software technology for personal computer peripheral
products that incorporate our touch-enabling technologies is currently
compatible with Microsoft&#146;s Windows 98, Windows 2000, Windows Me and Windows XP
operating systems software, including DirectX, Microsoft&#146;s entertainment
applications programming interface. If Microsoft modifies its operating system,
including DirectX, we may need to modify our technologies and this could cause
delays in the release of products by our licensees. If Microsoft modifies its
software products in ways that limit the use of our other licensees&#146; products,
our costs could be increased and our revenues could decline.
</FONT>
<P align="left"><FONT size="2">LEGISLATIVE ACTIONS, HIGHER INSURANCE COST AND POTENTIAL NEW ACCOUNTING
PRONOUNCEMENTS ARE LIKELY TO IMPACT OUR FUTURE FINANCIAL POSITION AND RESULTS
OF OPERATIONS.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;There have been regulatory changes, including the Sarbanes-Oxley Act of
2002, and there may potentially be new accounting pronouncements or additional
regulatory rulings which will have an impact on our future financial position
and results of operations. The Sarbanes-Oxley Act of 2002 and other legal
changes as well as proposed legislative initiatives following the Enron
bankruptcy are likely to increase general and administrative costs. In
addition, insurers are likely to increase premiums as a result of high claims
rates over the past year, which we expect will increase our premiums for our
various insurance policies. Further, proposed initiatives are expected to
result in changes in certain accounting rules, including legislative and other
proposals to account for employee stock options as a compensation expense.
These and other potential changes could materially increase the expenses we
report under generally accepted accounting principles, and adversely affect our
operating results.
</FONT>
<P align="left"><FONT size="2">IF OUR FACILITIES WERE TO EXPERIENCE CATASTROPHIC LOSS, OUR OPERATIONS WOULD BE
SERIOUSLY HARMED.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our facilities could be subject to a catastrophic loss such as fire,
flood, earthquake, power outage or terrorist activity. California has
experienced problems with its power supply in recent years. As a result, we
have experienced utility cost increases and may experience unexpected
interruptions in our power supply that could have a material adverse effect on
our sales, results of operations and financial condition. In addition, a
substantial portion of our research and development activities, manufacturing,
our corporate headquarters and other critical business operations are located
near major earthquake faults in San Jose, California, an area with a history of
seismic events. Any such loss at our facilities could disrupt our operations,
delay production, shipments and revenue and result in large expenses to repair
and replace the facility. While we believe that we maintain insurance
sufficient to cover most long-term potential losses at our facilities, our
existing insurance may not be adequate for all possible losses.
</FONT>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">13</FONT>
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</FONT></DIV>

<P align="left"><FONT size="2">WE HAVE EXPERIENCED SIGNIFICANT CHANGE IN OUR BUSINESS, AND OUR FAILURE TO
MANAGE THE COMPLEXITIES ASSOCIATED WITH THE CHANGING ECONOMIC ENVIRONMENT AND
TECHNOLOGY LANDSCAPE COULD HARM OUR BUSINESS.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any future periods of rapid change may place significant strains on our
managerial, financial, engineering and other resources. Further economic
weakness, in combination with our complex technologies, may demand an unusually
high level of managerial effectiveness in anticipating, planning, coordinating
and meeting our operational needs as well as the needs of our licensees.
</FONT>
<P align="left"><FONT size="2">WE MAY ENGAGE IN ACQUISITIONS THAT COULD DILUTE STOCKHOLDERS&#146; INTERESTS, DIVERT
MANAGEMENT ATTENTION OR CAUSE INTEGRATION PROBLEMS.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As part of our business strategy, we have in the past acquired, and may in
the future acquire, businesses or intellectual property that we feel could
complement our business, enhance our technical capabilities or increase our
intellectual property portfolio. If we consummate acquisitions through an
exchange of our securities, our stockholders could suffer significant dilution.
Acquisitions could also create risks for us, including:
</FONT>
<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">unanticipated costs associated with the acquisitions;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">use of substantial portions of our available cash to consummate the acquisitions;
</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>



<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">diversion of management&#146;s attention from other business concerns;</FONT></TD>
</TR>


<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">difficulties in assimilation of acquired personnel or operations; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">potential intellectual property infringement claims related to newly acquired product lines.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any acquisitions, even if successfully completed, might not generate
significant additional revenue or provide any benefit to our business.
</FONT>
<P align="left"><FONT size="2">WE COULD LOSE SOME OR ALL OF THE INVESTMENT THAT WE HAVE MADE IN AN EARLY STAGE
TECHNOLOGY COMPANY IF THAT COMPANY IS NOT SUCCESSFUL IN DEVELOPING ITS
TECHNOLOGIES OR UNABLE TO OBTAIN ADDITIONAL FINANCING IF AND WHEN NEEDED.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;From time to time we have made strategic investments in early stage
technology companies that are developing technologies that we believe could
complement or enhance our own technologies, if successful. We have made these
investments to provide funding for the development of these companies
technologies primarily because of the anticipated benefits to Immersion of the
availability of these technologies. The prospect of realizing a substantial
return on these investments was a secondary, though important, consideration.
We wrote down $1.2&nbsp;million of these investments in the third quarter of 2002,
and in the third quarter of 2001 we wrote down $4.3&nbsp;million of these
investments and approximately $239,000 of interest receivable from these
companies, and do not expect to realize any return on these amounts. The
remaining company in which we have invested may not succeed in developing its
technology, might be unsuccessful in marketing its technology or products based
on its technology or might fail for any number of other reasons, including an
inability to obtain additional capital if required to fund operations,
including the completion of the development of its technology. In the event
that this company in which we have invested fails or does not achieve a level
of success that permits us to realize the value of this investment, we could
experience a complete or partial loss on some or all of this investment. If we
experience additional losses and related write-downs on the carrying value of
our remaining investment, it would decrease our assets and increase our losses.
</FONT>
<P align="left"><FONT size="2">OUR CURRENT CLASS ACTION LAWSUIT COULD BE EXPENSIVE, DISRUPTIVE AND TIME
CONSUMING TO DEFEND AGAINST, AND IF WE ARE NOT SUCCESSFUL, COULD ADVERSELY
AFFECT OUR BUSINESS.
</FONT>
<P align="left"><FONT size="2"><I>In re Immersion Corporation</I>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are involved in legal proceedings relating to a class action lawsuit
filed on November&nbsp;9, 2001. In re Immersion Corporation Initial Public Offering
Securities Litigation, No.&nbsp;Civ. 01-9975 (S.D.N.Y.), related to In re Initial
Public Offering Securities Litigation, No.&nbsp;21 MC 92 (S.D.N.Y.). The named
defendants are the Company and three of its current or former officers or
directors (the &#147;Immersion Defendants&#148;), and certain underwriters of the
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">14</FONT>
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<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left"><FONT size="2">Company&#146;s November&nbsp;12, 1999 initial public offering (&#147;IPO&#148;). Subsequently,
two of the individual defendants stipulated to a dismissal without prejudice.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The operative amended complaint is brought on purported behalf of all
persons who purchased the common stock of the Company from the date of the IPO
through December&nbsp;6, 2000. It alleges liability under Sections&nbsp;11 and 15 of the
Securities Act of 1933 and Sections&nbsp;10(b) and 20(a) of the Securities Exchange
Act of 1934, on the grounds that the registration statement for the IPO did not
disclose that: (1)&nbsp;the underwriters agreed to allow certain customers to
purchase shares in the IPO in exchange for excess commissions to the paid to
the underwriters; and (2)&nbsp;the underwriters arranged for certain customers to
purchase additional shares in the aftermarket at predetermined prices. The
complaint also appears to allege that false or misleading analyst reports were
issued. The complaint does not claim any specific amount of damages.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Similar allegations were made in other lawsuits challenging over 300 other
initial public offerings and follow-on offerings conducted in 1999 and 2000.
The cases were consolidated for pretrial purposes. On February&nbsp;19, 2003, the
Court ruled on all defendants&#146; motions to dismiss. The motion was denied as to
claims under the Securities Act of 1933 in the case involving the Company, as
well as in all other cases (except for 10 cases). The motion was denied as to
the claim under Section&nbsp;10(b) as to the Company, on the basis that the
complaint alleged that the Company had made acquisition(s) following the IPO.
The motion was granted as to the claim under Section&nbsp;10(b), but denied as to
the claim under Section&nbsp;20(a), as to the remaining individual defendant.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have decided to accept a settlement proposal presented to all issuer
defendants. In this settlement, plaintiffs will dismiss and release all claims
against the Immersion Defendants, in exchange for a contingent payment by the
insurance companies collectively responsible for insuring the issuers in all of
the IPO cases, and for the assignment or surrender of certain claims we may
have against the underwriters. The Immersion Defendants will not be required to
make any cash payments in the settlement, unless the pro rata amount paid by
the insurers in the settlement exceeds the amount of the insurance coverage, a
circumstance which we believe is remote. The settlement will require approval
of the Court, which cannot be assured, after class members are given the
opportunity to object to the settlement or opt out of the settlement.
</FONT>
<P align="left"><FONT size="2">IF WE FAIL TO COMPLY WITH NASDAQ&#146;S MAINTENANCE CRITERIA FOR CONTINUED
LISTING ON THE NASDAQ NATIONAL MARKET, OUR COMMON STOCK COULD BE DELISTED.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To maintain the listing of our common stock on The Nasdaq National Market,
we are required to comply with one of two sets of maintenance criteria for
continued listing. Under the first set of criteria, among other things,
we must maintain stockholders&#146; equity of at least $10&nbsp;million, the market value
of our &#147;publicly held&#148; common stock (excluding shares held by our affiliates)
must be at least $5&nbsp;million, and the minimum bid price for our common stock must
be at least $1.00 per share. Under the second set of
criteria, among other things, the market value of our common stock must be at
least $50&nbsp;million or we must have both $50&nbsp;million in assets and $50&nbsp;million in
revenues, the market value of our &#147;publicly held&#148; shares must be at least $15
million, and the minimum bid price for our common stock must be at least $1.00
per share. As of September&nbsp;30, 2003, our most recent balance sheet date, we
had less than $10&nbsp;million in stockholders&#146; equity, and therefore would not have
been in compliance with the first set of listing criteria as of that date.
Although we were in compliance with the second set of criteria, should the
price of our common stock decline to the point where the aggregate value of our
outstanding common stock falls below $50&nbsp;million, the value of our &#147;publicly held&#148; shares falls below
$15&nbsp;million, or the bid price of our common stock falls below $1.00 per share,
our shares could be delisted from The Nasdaq National Market. If we are unable
to comply with the applicable criteria and our common stock is delisted from
The Nasdaq National Market, it would likely be more difficult to effect trades
and to determine the market price of our common stock. In addition, delisting
of our common stock could materially affect the market price and liquidity of
our common stock and our future ability to raise necessary capital.
</FONT>
<P align="left"><FONT size="2">OUR STOCK PRICE MAY FLUCTUATE REGARDLESS OF OUR PERFORMANCE.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The stock market has experienced extreme volatility that often has been
unrelated or disproportionate to the performance of particular companies. These
market fluctuations may cause our stock price to decline regardless of our
performance. The market price of our common stock has been, and in the future
could be, significantly affected by factors such as: actual or anticipated
fluctuations in operating results; announcements of technical innovations;
announcements regarding litigation in which we are involved; new products or
new contracts; sales or the perception in the market of possible sales of large
number of shares of Immersion common stock by insiders or
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">15</FONT>
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</FONT></DIV>

<P align="left"><FONT size="2">others; changes in securities analysts&#146; recommendations; changing
circumstances regarding competitors or their customers; governmental regulatory
action; developments with respect to patents or proprietary rights; inclusion
in or exclusion from various stock indices; and general market conditions. In
the past, following periods of volatility in the market price of a company&#146;s
securities, securities class action litigation has been initiated against that
company, such as the suit currently filed against us.
</FONT>
<P align="left"><FONT size="2">PROVISIONS IN OUR CHARTER DOCUMENTS AND DELAWARE LAW COULD PREVENT OR DELAY A
CHANGE IN CONTROL, WHICH COULD REDUCE THE MARKET PRICE OF OUR COMMON STOCK.
</FONT>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Provisions in our certificate of incorporation and bylaws may have the
effect of delaying or preventing a change of control or changes in our
management. In addition, certain provisions of Delaware law may discourage,
delay or prevent someone from acquiring or merging with us. These provisions
could limit the price that investors might be willing to pay in the future for
shares.
</FONT>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">16</FONT>
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<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<!-- link1 " USE OF PROCEEDS" -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="center"><FONT size="2"><B>USE OF PROCEEDS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will not receive any proceeds from the sale by the selling stockholder
of the common stock offered hereby. The selling stockholder will receive all
of the proceeds.
</FONT>

<!-- link1 " DIVIDEND POLICY" -->
<DIV align="left"><A NAME="004"></A></DIV>

<P align="center"><FONT size="2"><B>DIVIDEND POLICY</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have never paid cash dividends on our common stock. Except for the 7%
accrual of dividends on our Series&nbsp;A Redeemable Convertible Preferred Stock
which are payable semi-annually in, at our option cash or additional shares of
Series&nbsp;A Redeemable Convertible Preferred Stock, we currently intend to retain
earnings for use in our business and do not anticipate paying any cash dividend
on our common stock in the foreseeable future. Any future declaration and
payment of dividends on our common stock will be subject to the discretion of
our board of directors, will be subject to applicable law and will depend on
our results of operations, earnings, financial condition, contractual
limitations, cash requirements, future prospects and other factors deemed
relevant by our Board of Directors.
</FONT>

<P align="center"><FONT size="2">17</FONT>

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<!-- link1 " DESCRIPTION OF CAPITAL STOCK" -->
<DIV align="left"><A NAME="005"></A></DIV>

<P align="center"><FONT size="2"><B>DESCRIPTION OF CAPITAL STOCK</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our authorized capital stock consists of 100,000,000 shares of common
stock, $0.001 par value per share, and 5,000,000 shares of preferred stock,
$0.001 par value per share.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following is a summary of the material terms of our common stock and
preferred stock. Please see our certificate of incorporation for more detailed
information.
</FONT>


<P align="left"><FONT size="2"><B>Common Stock</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holders of our common stock are entitled to one vote for each share
held of record on all matters submitted to a vote of stockholders. Holders of a
majority of the shares of common stock entitled to vote in any election of
directors may elect all of the directors standing for election. Subject to
preferences applicable to the Series&nbsp;A Redeemable Convertible Preferred Stock
and any other outstanding preferred stock, holders of common stock are entitled
to receive ratably any dividends declared by the Board of Directors out of
funds legally available therefor. See &#147;Dividend Policy.&#148; In the event of a
liquidation, dissolution or winding up of Immersion, holders of common stock
are entitled to share ratably in the assets remaining after payment of
liabilities and the liquidation preferences of the Series&nbsp;A Redeemable
Convertible Preferred Stock and any other outstanding preferred stock. Holders
of our common stock have no preemptive, conversion or redemption rights.
</FONT>


<P align="left"><FONT size="2"><B>Preferred Stock</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Series&nbsp;A Redeemable Convertible Preferred Stock accrues dividends at a
rate of 7% per year which are payable semi-annually. At our option, we may pay
such dividends in cash or additional shares of Series&nbsp;A Redeemable Convertible
Preferred Stock. In the event of a liquidation, dissolution or winding up of
Immersion, the holder of Series&nbsp;A Redeemable Convertible Preferred Stock is
entitled to receive up to two and one-half times the original purchase price of
the Series&nbsp;A Redeemable Convertible Preferred Stock, except that the holder of
the Series&nbsp;A Redeemable Convertible Preferred Stock is entitled to three and
one-eighths times the original purchase price of the Series&nbsp;A Redeemable
Convertible Preferred Stock under specified circumstances. The Series&nbsp;A
Redeemable Convertible Preferred Stock is convertible at the holder&#146;s option at
any time based upon a 1:1 conversion ratio. In the event of the issuance of
any equity securities, equity linked securities or securities convertible into
equity securities of the Company, at a price less than the sum of the original
purchase price of the Series&nbsp;A Redeemable Convertible Preferred Stock plus any
accrued dividends that remain unpaid, we will pay the holder of the Series&nbsp;A
Redeemable Convertible Preferred Stock fifty percent of the original purchase
price plus any accrued but unpaid cash dividends for each outstanding share of
Series&nbsp;A Redeemable Convertible Preferred Stock. We may redeem the Series&nbsp;A
Redeemable Convertible Preferred Stock at any time our Common Stock has traded
at or above a value equal to two and one-half times the original purchase price
plus any accrued but unpaid dividends for a period of 30 successive trading
days, subject to certain exceptions, for a redemption price of 125% of the sum
of the original purchase price of the Series&nbsp;A Redeemable Convertible Preferred
Stock plus accrued but unpaid dividends. The holder of the Series&nbsp;A Redeemable
Convertible Preferred Stock may cause us to redeem the Series&nbsp;A Redeemable
Convertible Preferred Stock, at any time after three years from the original
purchase date, for cash equal to two times the original purchase price plus
accrued but unpaid dividends.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The holder of our Series&nbsp;A Redeemable Convertible Preferred Stock is
entitled to one vote for each share held of record on all matters submitted to
a vote of stockholders on an as converted basis. Following certain dilutive
issuances as described above which would result in a payment to the holder of
the Series&nbsp;A Redeemable Convertible Preferred Stock of an amount equal to fifty
percent of the original purchase price plus any accrued but unpaid cash
dividends for each outstanding share of Series&nbsp;A Redeemable Convertible
Preferred Stock, the voting power of each share of Series&nbsp;A Redeemable
Preferred Stock may be reduced as described in the certificate of designations.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to our Series&nbsp;A Redeemable Convertible Preferred Stock, up to
2,814,208 shares of our preferred stock remain undesignated and are authorized
for issuance. Our Board of Directors has the authority, without further action
by our stockholders, to issue preferred stock in one or more series. In
addition, the Board of Directors may fix the rights, preferences and privileges
of any preferred stock it determines to issue. Any or all of these rights may
be superior to the rights of the Common Stock with terms calculated to delay or
prevent a change in
</FONT>

<P align="center"><FONT size="2">18</FONT>

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<P align="left"><FONT size="2">control of Immersion or to make removal of management more difficult.
Additionally, the issuance of preferred stock may decrease the market price of
our Common Stock.
</FONT>


<P align="left"><FONT size="2"><B>Registration Rights</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under our agreements with Microsoft, we agreed to file, at our expense,
with the Commission a shelf registration statement on Form&nbsp;S-3 covering the
resale of shares of Immersion common stock issued to Microsoft upon conversion
of the Series&nbsp;A Redeemable Convertible Preferred Stock and the Common Stock
issuable upon the conversion of any debentures issued to Microsoft. There is a
monthly penalty (equal to $45,000) for the failure to file or update this
registration statement on Form&nbsp;S-3, failure to deliver our response letter to
the Commission within 15&nbsp;days of receipt, obtain the effectiveness of the
registration statement within 180&nbsp;days after filing, to fail to maintain the
effectiveness of the registration statement, or for the suspension of trading
under the registration statement on Form&nbsp;S-3 for more than 90&nbsp;days in any
six-month period. Other terms of our agreement with respect to the
registration of the shares are set forth under the caption &#147;Plan of
Distribution&#148; below.
</FONT>


<P align="left"><FONT size="2"><B>Antitakeover Provisions</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Delaware Law</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Immersion is subject to Section&nbsp;203 of the Delaware General Corporation
Law regulating corporate takeovers, which prohibits a Delaware corporation from
engaging in any business combination with an &#147;interested stockholder,&#148; unless:
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">prior to the date of the transaction, the Board of Directors of
the corporation approved either the business combination or the
transaction which resulted in the stockholder becoming an interested
stockholder;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">the interested stockholder owned at least 85% of the voting
stock of the corporation outstanding at the time the transaction
commenced, excluding for purposes of determining the number of shares
outstanding (a)&nbsp;shares owned by persons who are directors and also
officers, and (b)&nbsp;shares owned by employee stock plans in which
employee participants do not have the right to determine
confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer; or</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">on or subsequent to the date of the transaction, the business
combination is approved by the board and authorized at an annual or
special meeting of stockholders, and not by written consent, by the
affirmative vote of at least 66 2/3% of the outstanding voting stock
which is not owned by the interested stockholder.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except as otherwise specified in Section&nbsp;203, an &#147;interested stockholder&#148;
is defined to include (a)&nbsp;any person that is the owner of 15% or more of the
outstanding voting securities of the corporation, or is an affiliate or
associate of the corporation and was the owner of 15% or more of the
outstanding voting stock of the corporation at any time within three years
immediately prior to the date of determination and (b)&nbsp;the affiliates and
associates of any such person.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Certificate of Incorporation and Bylaw Provisions</I></B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Certificate of Incorporation provides that the Board of Directors will
be divided into three classes of directors serving staggered three-year terms.
Each class of directors need not be of equal number, with the size to be fixed
exclusively by the Board. As a result, only one of the three classes of the
Board will be elected each year. The directors are removable only for cause
upon the affirmative vote of the holders of at least a majority of the voting
power of all outstanding shares of voting stock, voting together as a single
class. The Board has the exclusive right to set the authorized number of
directors and to fill vacancies on the Board. Our Certificate of Incorporation
requires that any action required or permitted to be taken by stockholders of
Immersion must be effected at a duly called annual or special meeting of the
stockholders and may not be effected by a consent in writing. In addition,
special meetings of the stockholders of Immersion may be called only by the
Board or the holders of not less than
</FONT>

<P align="center"><FONT size="2">19</FONT>

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<P align="left"><FONT size="2">ten percent of the shares entitled to vote at such a meeting. Advance
notice is required for stockholder proposals or director nominations by
stockholders.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, pursuant to our Certificate of Incorporation, the Board has
authority to issue up to 5,000,000 shares of preferred stock and to fix the
rights, preferences, privileges and restrictions, including voting rights, of
these shares without any further vote or action by the stockholders. The
rights of the holders of the common stock will be subject to, and may be
adversely affected by, the rights of the holders of any preferred stock that
may be issued in the future. The issuance of preferred stock, while providing
desirable flexibility in connection with possible acquisitions and other
corporate purposes, could have the effect of making it more difficult for a
third party to acquire a majority of the outstanding voting stock of the
company, thereby delaying, deferring or preventing a change in control of the
company. Furthermore, such preferred stock may have other rights, including
economic rights, senior to the common stock, and as a result, the issuance of
such preferred stock could have a material adverse effect on the market price
of the common stock.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These provisions could discourage potential acquisition proposals and
could delay or prevent a change in control of the company. Such provisions
could diminish the opportunities for a stockholder to participate in tender
offers, including tender offers at a price above the then current market price
of the common stock. Such provisions also may inhibit fluctuations in the
market price of the common stock that could result from takeover attempts.
</FONT>


<P align="left"><FONT size="2"><B>Transfer Agent and Registrar</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The transfer agent and registrar for our common stock is Boston Equiserve.
</FONT>

<!-- link1 " SELLING STOCKHOLDER" -->
<DIV align="left"><A NAME="006"></A></DIV>

<P align="center"><FONT size="2"><B>SELLING STOCKHOLDER</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The shares of common stock offered hereby were issued by us in a private
placement in connection with a series of agreements with the selling
stockholder including licenses, issuance of equity and a settlement of ongoing
litigation between Immersion and the selling stockholder. The selling
stockholder may, from time to time, offer and sell pursuant to this prospectus
any or all of the common stock offered hereby.
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the number of shares owned by the selling
stockholder as of February&nbsp;13, 2004. No estimate can be given as to the amount
of shares that will be held by the selling stockholder after completion of this
offering because the selling stockholder may offer all, some or none of the
shares. The shares offered by this prospectus may be offered from time to time
by the selling stockholder named below.
</FONT>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="6%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="15"><FONT size="1"><B>Number of Shares of</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="15"><FONT size="1"><B>Common Stock</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="15"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Outstanding and</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Issuable Upon</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Selling</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Beneficially</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Conversion of</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Offered</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Owned After</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Stockholder</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Owned(1)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Debentures(2)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>Hereby(3)</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center" colspan="3"><FONT size="1"><B>the Offering(4)</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD colspan="3"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Microsoft Corporation</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">2,686,897</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">3,855,655</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">6,542,552</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Represents shares issuable upon conversion of the Series&nbsp;A Redeemable
Convertible Preferred Stock previously issued to the selling stockholder
plus three years of dividends that we may elect to pay in lieu of cash to
the selling stockholder in the form of additional shares of Series&nbsp;A
Redeemable Convertible Preferred Stock.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Represents shares issuable upon conversion of the maximum amount of
Debentures that may be issued to the selling stockholder plus three years
of interest payments that we may elect to pay in lieu of cash to the
selling stockholder in the form of additional Debentures convertible into
Common Stock.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">This registration statement shall also cover any additional shares of
Immersion Common Stock which become issuable in connection with the shares
registered for sale hereby by reason of any stock dividend, stock split,
recapitalization or other similar transaction effected without the receipt
of consideration which results in an increase in the number of outstanding
shares of Immersion Common Stock.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(4)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Assumes sale, transfer or other disposition of all Common Stock issuable
upon conversion of the Series&nbsp;A Redeemable Convertible Preferred Stock and
the Debentures.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">20</FONT>

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<!-- link1 " PLAN OF DISTRIBUTION" -->
<DIV align="left"><A NAME="007"></A></DIV>

<P align="center"><FONT size="2"><B>PLAN OF DISTRIBUTION</B>
</FONT>


<P align="left"><FONT size="2"><B>Selling Stockholder</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholder may transfer, pledge, donate or assign the Common
Stock to lenders or others and each of such persons and their transferees and
successors in interest will be deemed to be a &#147;selling stockholder&#148; for
purposes of this prospectus. The number of Common Stock beneficially owned by
a selling stockholder who transfers, pledges, donates or assigns Common Stock
will decrease as and when they take such actions. The plan of distribution for
Common Stock sold hereunder will otherwise remain unchanged, except that the
transferees, pledgees, donees or other successors will be a selling stockholder
hereunder.
</FONT>


<P align="left"><FONT size="2"><B>Method of Sale</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock may be sold pursuant to this prospectus by the selling
stockholder in any of the following ways:
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock may be sold through underwriters in one or more
underwritten offerings on a firm commitment or best efforts basis.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock may be sold through a broker or brokers. Transactions
through broker-dealers may include block trades in which brokers or dealers
will attempt to sell the Common Stock as agent but may position and resell the
block as principal to facilitate the transaction. The Common Stock may be sold
through dealers or agents or to dealers acting as market makers.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock may be sold on any exchange on which the securities are
listed.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock may be sold in private sales directly to purchasers.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A selling stockholder may enter into hedging transactions with
counterparties (including broker-dealers), and the counterparties may engage in
short sales of the Common Stock in the course of hedging the positions they
assume with such selling stockholder, including, without limitation, in
connection with distribution of the Common Stock by such counterparties. In
addition, the selling stockholder may sell short the Common Stock, and in such
instances, this prospectus may be delivered in connection with such short sales
and the Common Stock offered hereby may be used to cover such short sales. The
selling stockholder may also enter into option or other transactions with
counterparties that involve the delivery of the Common Stock to the
counterparties, who may then resell or otherwise transfer such Common Stock.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholder may also loan or pledge the Common Stock and the
borrower or pledgee may sell the Common Stock as loaned or upon a default may
sell or otherwise transfer the pledged Common Stock.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common Stock covered by this prospectus which qualify for sale pursuant to
Rule&nbsp;144 or Rule&nbsp;145 of the Common Stock Act may be sold under Rule&nbsp;144 or Rule
145 rather than pursuant to this prospectus.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholder reserves the right to accept and, together with
its agents from time to time to reject, in whole or in part, any proposed
purchase of Common Stock to be made directly or through agents.
</FONT>



<P align="center"><FONT size="2">21</FONT>



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<P align="left"><FONT size="2"><B>Timing and Price</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock may be sold from time to time by a selling stockholder.
There is no assurance that any selling stockholder will sell or dispose of
Common Stock.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Selling stockholders will be subject to applicable provisions of the
Securities Exchange Act of 1934 and the rules and regulations thereunder, which
provisions may limit the timing of purchases and sales of our securities by
them.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common Stock may be sold at a fixed price, which may be changed, or at
varying prices determined at the time of sale or at negotiated prices. Such
prices will be determined by the holders of such securities or by agreement
between such holders and purchasers or underwriters and/or dealers (who may
receive fees or commissions in connection therewith).
</FONT>


<P align="left"><FONT size="2"><B>Proceeds, Commissions and Expenses</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will not receive any of the proceeds from this offering.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholder will be responsible for payment of all
commissions, concessions and discounts of underwriters, dealers or agents, if
any.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will pay for all costs of the registration of the securities,
including, without limitation, SEC filing fees and expenses of compliance with
state securities or &#147;blue sky&#148; laws.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholder and any broker-dealers or agents that participate
with the selling stockholder in the distribution of the Common Stock may be
deemed to be &#147;underwriters&#148; within the meaning of the Securities Act, and any
commissions received by them and any profit on the resale of the Common Stock
may be deemed to be underwriting commissions or discounts under the Securities
Act.
</FONT>


<P align="left"><FONT size="2"><B>Registration</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We agreed with the selling stockholder to keep the registration statement
of which this prospectus constitutes a part effective until the earlier of:
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Such time as all of the shares have been sold by the selling
stockholder;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Such time as all of the shares have been otherwise transferred
to persons who may trade such shares without restriction under the
Securities Act; or</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">Such time as the selling stockholder may sell all of the shares
held by them without registration pursuant to Rule&nbsp;144 under the
Securities Act within a three-month period.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to de-register any of the shares not sold by the selling
stockholder at the end of such period. At such time, however, any unsold
shares may be freely tradable subject to compliance with Rule&nbsp;144 under the
Securities Act.
</FONT>

<!-- link1 "LEGAL MATTERS" -->
<DIV align="left"><A NAME="008"></A></DIV>

<P align="center"><FONT size="2"><B>LEGAL MATTERS</B>
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The validity of the shares of common stock offered hereby will be passed
upon for us by Gray Cary Ware &#038; Freidenrich LLP, East Palo Alto, California. As of
February&nbsp;13, 2004, attorneys of Gray Cary Ware &#038; Freidenrich LLP beneficially
own an aggregate of 2,000 shares of our common stock.
</FONT>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">22</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<!-- link1 "EXPERTS" -->
<DIV align="left"><A NAME="009"></A></DIV>

<P align="center"><FONT size="2"><B>EXPERTS</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The consolidated financial statements and the related consolidated
financial statement schedules incorporated in this prospectus by reference from
the Company&#146;s Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31, 2002
have been audited by Deloitte &#038; Touche LLP, independent auditors, as stated in
their report, which is incorporated herein by reference, and have been so
incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
</FONT>

<P align="center"><FONT size="2">23</FONT>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<!-- link1 "WHERE YOU CAN FIND MORE INFORMATION" -->
<DIV align="left"><A NAME="010"></A></DIV>

<P align="center"><FONT size="2"><B>WHERE YOU CAN FIND MORE INFORMATION</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We file reports, proxy statements and other information with the SEC. You
may read and copy all or any portion of any materials we file with the SEC at
the SEC&#146;s public reference room at Room&nbsp;1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the regional offices of the SEC.
You can request copies of these documents upon payment of a duplicating fee, by
writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference rooms. Our SEC filings
will also be available to you on the SEC&#146;s Web site at http://www.sec.gov. Our
SEC filings are also available at the offices of the Nasdaq National Market,
1730 K Street, N.W., Washington, D.C. 20006-1500.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Copies of our SEC filings and other information about us are also
available on our website at www.immersion.com. The information on our website
is neither incorporated into, nor a part of, this prospectus.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The information incorporated by reference is considered to be a part of
this prospectus, and information that we file later with the Commission will
automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made by us with the
Commission under Sections&nbsp;13(a), 13(c), 14 or 15(d) of the Exchange Act until
this offering is complete:
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">our Annual Report on Form&nbsp;10-K for the year ended December&nbsp;31, 2002;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">our Quarterly Report on Form&nbsp;10-Q for the quarter ended March&nbsp;31, 2003;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">our Quarterly Report on Form&nbsp;10-Q for the quarter ended June&nbsp;30, 2003;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>


<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">our Quarterly Report on
Form&nbsp;10-Q for the quarter ended September&nbsp;30, 2003;</FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>


<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">our definitive Proxy Statement on Schedule&nbsp;14A filed on April&nbsp;29, 2003;</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">our Current Report on Form&nbsp;8-K dated July&nbsp;29, 2003;</FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">our Current Report on
Form&nbsp;8-K dated October&nbsp;27, 2003;</FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>


<TR><TD><FONT size="1">

</FONT></TD></TR>

<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">our Current Report on
Form&nbsp;8-K dated February&nbsp;9, 2004; and</FONT></TD>
</TR>

<TR><TD><FONT size="1">

</FONT></TD></TR>



<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">&#149;</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">our Registration Statement on Form&nbsp;8-A12G, filed on November&nbsp;5,
1999, which contains a description of our common stock.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any statement contained in a document that is incorporated by reference
will be modified or superseded for all purposes to the extent that a statement
contained in this prospectus (or in any other document that is subsequently
filed with the Commission and incorporated by reference) modifies or is
contrary to that previous statement. Any statement so modified or superseded
will not be deemed a part of this prospectus except as so modified or
superseded.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address: Investor Relations, Immersion
Corporation, 801 Fox Lane, San Jose, California 95131 (408)&nbsp;467-1900.
</FONT>

<P align="center"><FONT size="2">24</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><FONT size="2"><B>PART II</B>
</FONT>


<P align="center"><FONT size="2"><B>INFORMATION NOT REQUIRED IN PROSPECTUS</B>
</FONT>


<P align="left"><FONT size="2"><B>ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the fees and expenses in connection with
the issuance and distribution of the securities being registered hereunder.
Except for the SEC registration fee, all amounts are estimates.
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%">
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">SEC registration fee</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">2,490</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Accounting fees and expenses</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">10,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Legal fees and expenses</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">17,510</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Printing and engraving expenses</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD align="right"><FONT size="2">20,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom" bgcolor="#eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Miscellaneous expenses</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">0</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="1" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">Total</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="right"><FONT size="2">$</FONT></TD>
    <TD><FONT size="2">50,000</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR>
    <TD><DIV style="margin-left:10px; text-indent:-10px"><FONT size="2">&nbsp;</FONT></DIV></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD><HR size="4" noshade></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P align="left"><FONT size="2"><B>ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;145 of the Delaware General Corporation Law (&#147;DGCL&#148;) permits
indemnification of officers, directors and other corporate agents under certain
circumstances and subject to certain limitations. The Registrant&#146;s Certificate
of Incorporation and Bylaws provided that the Registrant shall indemnify its
directors, officers, employees and agents to the full extent permitted by the
DGCL, including in circumstances in which indemnification is otherwise
discretionary under such law. In addition, with the approval of the Board of
Directors and the stockholders, the Registrant has entered into separate
indemnification agreements with its directors, officers and certain employees
which require the Registrant, among other things, to indemnify them against
certain liabilities which may arise by reason of their status or service (other
than liabilities arising from willful misconduct of a culpable nature) and to
obtain directors&#146; and officers&#146; insurance, if available on reasonable terms.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These indemnification provisions may be sufficiently broad to permit
indemnification of the Registrant&#146;s officers, directors and other corporate
agents for liabilities (including reimbursement of expenses incurred) arising
under the Securities Act of 1933.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Registrant&#146;s President, Chief Executive Officer and Chief Financial
Officer has been named a defendant in the securities class action lawsuit
described under the caption &#147;Risk Factors&#150;Our current class action lawsuit
could be expensive, disruptive and time consuming to defend against, and if we
are not successful, could adversely affect our business&#148; in Part I of the
registration statement. This officer is likely to assert claims for
indemnification in connection with that litigation. Other than the securities
class action lawsuit, there is no pending litigation or proceeding involving a
director, officer, employee or other agent of the Registrant in which
indemnification is being sought nor is the Registrant aware of any threatened
litigation that may result in a claim for indemnification by any director,
officer, employee or other agent of the Registrant.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Registrant has obtained liability insurance for the benefit of its
directors and officers.
</FONT>


<P align="left"><FONT size="2"><B>ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibits:
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="91%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Number</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Description</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">3.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Amended and Restated Bylaws(1)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">3.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Amended and Restated Certificate of Incorporation(2)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">3.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Certificate of Designation(3)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
7% Senior Redeemable Convertible Debenture(4)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Registration Rights Agreement dated July&nbsp;25, 2003(5)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Stockholder&#146;s Agreement dated July&nbsp;25, 2003(6)</FONT></TD>
</TR>
</TABLE>
</CENTER>
<P align="center"><FONT size="2">II-1</FONT>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="91%">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Number</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Description</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>


<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">

</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">5.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Opinion of Gray Cary Ware &#038; Freidenrich LLP</FONT></TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><FONT size="2">10.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Series&nbsp;A Redeemable Convertible Preferred Stock Purchase Agreement dated July&nbsp;25, 2003(7)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">10.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Senior Redeemable Convertible Debenture Purchase Agreement dated July&nbsp;25, 2003(8)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">10.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Settlement Agreement dated July&nbsp;25, 2003 by and between Microsoft Corporation and
Immersion<br>Corporation(9)*</FONT></TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><FONT size="2">10.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
License Agreement dated July&nbsp;25, 2003 by and between Microsoft Corporation and Immersion<br>
Corporation(9)</FONT></TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><FONT size="2">10.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Sublicense Agreement dated July&nbsp;25, 2003 by and between Microsoft Corporation and
Immersion<br>Corporation(9)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">

</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>


<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">

</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">10.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consulting Agreement dated July&nbsp;1, 2003 by and between Robert Van Naarden and Immersion
Corporation*</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">10.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Employment Agreement dated November&nbsp;13, 2003 by and between Tim
Tight and Immersion Corporation</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">

</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">23.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consent of Gray Cary Ware &#038; Freidenrich LLP (contained in Exhibit&nbsp;5.1)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">23.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consent of Deloitte &#038; Touche LLP, Independent Auditors</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Power of Attorney (contained in the signature page hereof)</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">

</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">*</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Previously filed.</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">

</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Incorporated by reference to Exhibit&nbsp;3.1 to the Company&#146;s Annual Report
on Form&nbsp;10-K filed March&nbsp;28, 2003.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Incorporated by reference to Exhibit&nbsp;3.4 to the Company&#146;s Quarterly
Report on Form&nbsp;10-Q on August&nbsp;14, 2000.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Incorporated by reference to Exhibit&nbsp;3.1 to the Company&#146;s Current Report
on Form&nbsp;8-K on July&nbsp;29, 2003.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(4)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Incorporated by reference to Exhibit&nbsp;4.1 to the Company&#146;s Current Report
on Form&nbsp;8-K on July&nbsp;29, 2003.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(5)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Incorporated by reference to Exhibit&nbsp;4.2 to the Company&#146;s Current Report
on Form&nbsp;8-K on July&nbsp;29, 2003.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(6)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Incorporated by reference to Exhibit&nbsp;4.3 to the Company&#146;s Current Report
on Form&nbsp;8-K on July&nbsp;29, 2003.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>




<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">

</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(7)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Incorporated by reference to Exhibit&nbsp;10.1 to the Company&#146;s Current Report
on Form&nbsp;8-K on July&nbsp;29, 2003.</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(8)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Incorporated by reference to Exhibit&nbsp;10.2 to the Company&#146;s Current Report
on Form&nbsp;8-K on July&nbsp;29, 2003.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(9)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">
This exhibit has been filed separately with the Commission pursuant to an
application for confidential treatment. The confidential portions of this
exhibit have been omitted and are marked by asterisks.</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">

</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>





</TABLE>

<P align="left"><FONT size="2"><B>ITEM 17. UNDERTAKINGS.</B>
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification by the Registrant for liabilities arising under
the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions referenced in Item&nbsp;15 of
this Registration Statement or otherwise, the Registrant has been advised that
in the opinion of the Commission such indemnification is against public policy
as expressed in the Securities Act, and is therefore unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer,
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered
hereunder, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby undertakes:
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(i)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="98%"><FONT size="2">To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">II-2</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>




<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="8%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(ii)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="88%"><FONT size="2">To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the &#147;Calculation of Registration
Fee&#148; table in the effective registration statement; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(iii)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement.</FONT></TD>
</TR>
</TABLE>

<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.</FONT></TD>
</TR>
</TABLE>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant&#146;s annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan&#146;s annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
</FONT>

<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby undertakes that:
</FONT>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">For purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule
430A and contained in the form of prospectus filed by the Registrant
pursuant to Rule&nbsp;424(b)(1) or (4)&nbsp;or 497(h) under the Securities Act
shall be deemed to be part of this Registration Statement as of the
time it was declared effective; and</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="93%"><FONT size="2">For the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at the time shall be deemed to be the initial bona fide
offering thereof.</FONT></TD>
</TR>
</TABLE>
<P align="center"><FONT size="2">II-3</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>




<P align="center"><FONT size="2"><B>SIGNATURES</B>
</FONT>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form&nbsp;S-3 and has duly caused this
Amendment No.&nbsp;1 to Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of San Jose, State of California on
February&nbsp;13, 2004.
</FONT>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD colspan="3" valign="top" align="left"><FONT size="2">IMMERSION CORPORATION</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
By:
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">/s/ Victor A. Viegas</FONT></TD>
</TR>
<TR>
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Victor A. Viegas</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">President, Chief Executive Officer and</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Chief Financial Officer</FONT></TD>
</TR>
</TABLE>
</CENTER>
<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="left"><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, this
Amendment No.&nbsp;1 to Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
</FONT>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="100%">
<TR valign="bottom">
    <TD width="28%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="49%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="17%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Name</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Title</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Date</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2"><BR>
/s/ Victor A. Viegas<BR>
</FONT>
<HR size="1" noshade><FONT size="2">
Victor A. Viegas</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
<BR>President, Chief Executive Officer, Chief<BR>
Financial Officer and Director (Principal<BR>
Executive Officer and Principal Financial and<BR>
Accounting Officer)
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>

<TD align="left" valign="top"><FONT size="2"><BR>February&nbsp;13, 2004</FONT></TD>
</TR>

<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">*<BR>
</FONT>
<HR size="1" noshade><FONT size="2">
Steven Blank</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">February&nbsp;13, 2004</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">*<BR>
</FONT>
<HR size="1" noshade><FONT size="2">
Jonathan Rubinstein</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">February&nbsp;13, 2004</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">*<BR>
</FONT>
<HR size="1" noshade><FONT size="2">
John Hodgman</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">February&nbsp;13, 2004</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">*<BR>
</FONT>
<HR size="1" noshade><FONT size="2">
Jack Saltich</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">February&nbsp;13, 2004</FONT></TD>
</TR>

<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">*<BR>
</FONT>
<HR size="1" noshade><FONT size="2">
Robert Van Naarden</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Director
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">February&nbsp;13, 2004</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">*By: /s/ Victor A. Viegas<BR>
</FONT>
<HR size="1" noshade><FONT size="2">
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Victor A. Viegas<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attorney-In-Fact</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
&nbsp;
</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">&nbsp;</FONT></TD>
</TR>

</TABLE>
</CENTER>


<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center"><FONT size="2">II-4</FONT>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<P align="center"><FONT size="2"><B>INDEX TO EXHIBITS</B>
</FONT>

<CENTER>
<TABLE cellspacing="0" border="0" cellpadding="0" width="85%">
<TR valign="bottom">
    <TD width="6%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="91%">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Exhibit</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><FONT size="1"><B>Number</B></FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><FONT size="1"><B>Description</B></FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="center"><HR size="1" noshade></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD nowrap align="center"><HR size="1" noshade></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">3.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Amended and Restated Bylaws(1)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">3.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Amended and Restated Certificate of Incorporation(2)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">3.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Certificate of Designation(3)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
7% Senior Redeemable Convertible Debenture(4)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Registration Rights Agreement dated July&nbsp;25, 2003(5)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">4.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Stockholder&#146;s Agreement dated July&nbsp;25, 2003(6)</FONT></TD>
</TR>


<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">

</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">5.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Opinion of Gray Cary Ware &#038; Freidenrich LLP</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">10.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Series&nbsp;A Redeemable Convertible Preferred Stock Purchase Agreement dated July&nbsp;25, 2003(7)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">10.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Senior Redeemable Convertible Debenture Purchase Agreement dated July&nbsp;25, 2003(8)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">10.3</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Settlement Agreement dated July&nbsp;25, 2003 by and between Microsoft Corporation and
Immersion Corporation(9)*</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">10.4</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
License Agreement dated July&nbsp;25, 2003 by and between Microsoft Corporation and Immersion
Corporation(9)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">10.5</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Sublicense Agreement dated July&nbsp;25, 2003 by and between Microsoft Corporation and
Immersion Corporation(9)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">

</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">

</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">10.6</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consulting Agreement dated July&nbsp;1, 2003 by and between Robert Van Naarden and Immersion
Corporation*</FONT></TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><FONT size="2">10.7</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">Employment Agreement
dated November&nbsp;13, 2003 by and between Tim Tight and Immersion
Corporation</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">

</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">23.1</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consent of Gray Cary Ware &#038; Freidenrich LLP (contained in Exhibit&nbsp;5.1)</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">23.2</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Consent of Deloitte &#038; Touche LLP, Independent Auditors</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><FONT size="2">24</FONT></TD>
    <TD><FONT size="2">&nbsp;</FONT></TD>
    <TD align="left" valign="top"><FONT size="2">
Power of Attorney (contained in the signature page hereof)</FONT></TD>
</TR>
</TABLE>
</CENTER>

<P>
<HR size="1" width="18%" align="left" noshade>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">

</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">*</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Previously filed.</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">

</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>

<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(1)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Incorporated by reference to Exhibit&nbsp;3.1 to the Company&#146;s Annual Report
on Form&nbsp;10-K filed March&nbsp;28, 2003.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(2)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Incorporated by reference to Exhibit&nbsp;3.4 to the Company&#146;s Quarterly
Report on Form&nbsp;10-Q on August&nbsp;14, 2000.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(3)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Incorporated by reference to Exhibit&nbsp;3.1 to the Company&#146;s Current Report
on Form&nbsp;8-K on July&nbsp;29, 2003.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(4)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Incorporated by reference to Exhibit&nbsp;4.1 to the Company&#146;s Current Report
on Form&nbsp;8-K on July&nbsp;29, 2003.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(5)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Incorporated by reference to Exhibit&nbsp;4.2 to the Company&#146;s Current Report
on Form&nbsp;8-K on July&nbsp;29, 2003.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(6)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Incorporated by reference to Exhibit&nbsp;4.3 to the Company&#146;s Current Report
on Form&nbsp;8-K on July&nbsp;29, 2003.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">

</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(7)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Incorporated by reference to Exhibit&nbsp;10.1 to the Company&#146;s Current Report
on Form&nbsp;8-K on July&nbsp;29, 2003.</FONT></TD>
</TR>
<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>


<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(8)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">Incorporated by reference to Exhibit&nbsp;10.2 to the Company&#146;s Current Report
on Form&nbsp;8-K on July&nbsp;29, 2003.</FONT></TD>
</TR>

<TR>
    <TD><FONT size="2">&nbsp;</FONT></TD>
</TR>


<TR valign="top">
    <TD width="1%" align="left" nowrap><FONT size="2">(9)</FONT></TD>
    <TD width="3%"><FONT size="2">&nbsp;</FONT></TD>
    <TD width="96%"><FONT size="2">This exhibit has been filed separately with the Commission pursuant to an
application for confidential treatment. The confidential portions of this
exhibit have been omitted and are marked by asterisks.</FONT></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="left"><FONT size="1">

</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
    <TD><FONT size="1">&nbsp;</FONT></TD>
</TR>
</TABLE>


<P align="center"><FONT size="2">&nbsp;</FONT>



</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>3
<FILENAME>f92905a1exv5w1.txt
<DESCRIPTION>EXHIBIT 5.1
<TEXT>
<PAGE>
                                                                     EXHIBIT 5.1



                                February 13, 2004



Immersion Corporation
801 Fox Lane
San Jose, California  95131

     RE: REGISTRATION STATEMENT ON FORM S-3

Ladies and Gentlemen:

     As counsel to Immersion Corporation, a Delaware corporation (the
"Company"), we are rendering this opinion in connection with the preparation and
filing of a registration statement on Form S-3 (the "Registration Statement")
relating to the registration under the Securities Act of 1933, as amended, of
6,542,552 shares of Common Stock, $0.001 par value (the "Common Stock"), of the
Company (the "Shares") which may be offered and sold by the selling stockholder
named therein.

     We have examined all instruments, documents and records which we deemed
relevant and necessary for the basis of our opinion hereinafter expressed. In
such examination, we have assumed the genuineness of all signatures and the
authenticity of all documents submitted to us as originals and the conformity to
the originals of all documents submitted to us as copies.

     Based on such examination, we are of the opinion that the Shares have been
duly authorized and, when issued, will be validly issued, fully paid and
nonassessable.

     We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters" in the Registration Statement and the Prospectus included therein, as
originally filed or as subsequently amended.

                                        Very truly yours,

                                        Gray Cary Ware & Freidenrich LLP

                                        /s/ Gray Cary Ware & Freidenrich LLP

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>4
<FILENAME>f92905a1exv10w4.txt
<DESCRIPTION>EXHIBIT 10.4
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.4


CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
EXHIBIT, WHICH PORTIONS HAVE BEEN OMITTED AND REPLACED WITH [****] AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                                LICENSE AGREEMENT
                                -----------------


This License Agreement (this "Agreement") is entered into and is effective on
this 25th day of July, 2003 (the "Effective Date") by and between MICROSOFT
CORPORATION, a Washington corporation with principal offices in Redmond,
Washington ("Microsoft") and IMMERSION CORPORATION, a Delaware corporation with
principal offices in San Jose, California ("Immersion"), each a "Party" and
collectively, the "Parties."

                                    RECITALS
                                    --------

Whereas, Immersion has the right to grant a license to Microsoft and its
Subsidiaries under certain patent rights more fully described below; and

Whereas, Microsoft desires to acquire a license under such patent rights, on the
terms and conditions set forth in this Agreement.

Now, Therefore, in consideration of the mutual promises and covenants contained
herein, the Parties agree as follows:

                                    AGREEMENT
                                    ---------

     1. DEFINITIONS.
        -----------

          (a)  "ADULT PRODUCT" means: [****]

          (b)  "CONDITIONAL PATENTS" means [****]

          (c)  "FOUNDRY PRODUCT" means a product which is designed by or for a
[****] and manufactured, reproduced, sold, leased, licensed or otherwise
transferred from [****] on essentially an [****]

          (d)  "LICENSED PATENTS" means all Patents under which Immersion or any
of its present or future Subsidiaries owns or has as of the Effective Date (or
as of the acquisition date in the case of future Subsidiaries), or thereafter
obtains, the ability or right to grant licenses, releases or freedom from suit,
with the exception of Conditional Patents.

          (e)  "LICENSED PRODUCT" means all hardware, software, and services,
excluding Adult Products, Medical Products, and Foundry Products.

          (f)  "MEDICAL PRODUCT" means any [****] or combination of [****] for
the [****] or the [****] of any [****] General purpose hardware or software
whose primary function is not the delivery of one of the foregoing is not a
Medical Product.

          (g)  [****] that is sold, licensed, sublicensed, or otherwise
distributed by [****]


                                       1
<PAGE>

                            PROVIDED UNDER RULE 408


          (h)  [****] means software, including firmware, that [****] Examples
include [****]

          (i)  "PATENT" means any patent, patent application, provisional
application, continuation, continuation-in-part, divisional, reissue, renewal,
reexamination, utility model, design patent, and foreign counterparts thereof.

          (j)  "PERIPHERAL DEVICE" means a hardware peripheral device which
communicates with but is [****] from a primary computer [****] or is [****] when
used in a [****] For example, [****] is a "Peripheral Device" as each of those
devices [****] Similarly, a [****] is also a "Peripheral Device," as each of
those [****] For purposes of this Agreement, the Parties expressly agree that:

               (i)  [****] shall not be deemed a "Peripheral Device" for
purposes of this definition and this Agreement, even if it includes or comprises
[****]

               (ii) a [****] other than a [****] for the foregoing which may be
[****] is not a "Peripheral Device," even if it includes or comprises [****];
and

               (iii) ___ any [****] other than [****] with and used in [****]
for the foregoing which may be [****] with any of the devices identified in (i)
or (ii) above is a Peripheral Device (for example, a [****] with a [****] is a
"Peripheral Device").

          (k)  "SUBSIDIARY" means a corporation, company or other entity: (i)
fifty percent (50%) or more of whose outstanding shares or securities
(representing the right to vote for the election of directors or other managing
authority) are, now or hereafter, owned or controlled, directly or indirectly,
by a Party hereto, but such corporation, company or other entity shall be deemed
to be a Subsidiary only so long as such ownership or control exists; or (ii)
which does not have outstanding shares or securities, as may be the case in a
partnership, joint venture or unincorporated association, but fifty percent
(50%) or more of whose ownership interest representing the right to make the
decisions for such corporation, company or other entity is, now or hereafter,
owned or controlled, directly or indirectly, by a Party hereto, but such
corporation, company or other entity shall be deemed to be a Subsidiary only so
long as such ownership or control exists.

          (l)  "TOUCH TECHNOLOGY" means technology related to calculating,
processing, amplifying, communicating, transmitting, controlling, applying,
producing, using, or enhancing touch sensations or information related to the
sense of touch (e.g., resistance, texture, force). Examples include force
feedback, vibration, and tactile response applications.

          (m)  All terms not defined herein shall have the meaning set forth in
the Settlement Agreement and Mutual Release executed by Microsoft and Immersion
simultaneously with the execution of this Agreement (the "Settlement").

     2.   License Rights.
          --------------

          (a)  LICENSE TO LICENSED PATENTS. Subject to the terms of this
Agreement, Immersion, on behalf of itself and its Subsidiaries, hereby grants to
Microsoft and its

                                       2
<PAGE>
                            PROVIDED UNDER RULE 408


Subsidiaries a worldwide, perpetual, paid-up, irrevocable, non-terminable,
royalty-free and non-exclusive license under the Licensed Patents to make, have
made, use, lease, distribute, have distributed, publish, have published, import,
offer for sale, provide as a service, sell, or otherwise dispose of Licensed
Products.

          (b)  SUBLICENSING RIGHTS. Immersion, on behalf of itself and its
Subsidiaries, hereby irrevocably and non-terminably grants to Microsoft and its
Subsidiaries the worldwide, royalty-free (subject to the terms of Section 2(e)),
paid-up right to sublicense the Licensed Patents (excluding Patents not directed
to Touch Technology) to third parties [****] any of their [****] and any other
[****] solely to the extent that such [****] designed specifically for [****] in
conjunction with the [****]. The right to sublicense shall exclude the following
fields of use:

               (i)  Medical Products, Adult Products or Foundry Products;

               (ii) hardware, (a) to the extent that such hardware does not
[****] (b) if such hardware can [****] to the extent that such hardware [****];

               (iii) software and services, to the extent that they do not
[****]; and

               (iv) [****].

     In the event that at [****] enters into an agreement with [****] as
permitted under this Section 2(b), such [****] shall not by virtue of such
[****] pursuant to any agreement entered into by [****]

          (c)  COMBINATIONS. Immersion, on behalf of itself and its
Subsidiaries, hereby covenants not to sue any third party, under any Licensed
Patent claim, for making, using, selling, importing, offering for sale,
providing as a service, leasing, distributing or otherwise disposing of a
Licensed Product created or distributed by or for Microsoft or a Microsoft
Subsidiary in combination with one or more other items licensed by, or sold or
manufactured by or for, such third party, but only to the extent that:

               (i)  the sale of the Licensed Product by Microsoft (or one of its
Subsidiaries) would, absent this Agreement, constitute direct or contributory
infringement of such Licensed Patent claim; and

               (ii) such Licensed Patent claim would not be directly or
contributorily infringed by such other item(s) separate and apart from the
combination with such Licensed Product. For the purposes of this Section, the
determination of infringement above shall assume the existence of any necessary
knowledge or intent required to constitute contributory infringement.

          (d)  PRODUCT/SERVICE RELATED MATERIALS. Immersion, on behalf of itself
and its Subsidiaries, hereby represents, warrants and covenants not to sue
Microsoft or any Microsoft Subsidiary for contributory infringement or induced
infringement of the Licensed Patents arising out of the publication or
distribution of product and/or service-related: (1) documentation for a
Microsoft or Microsoft Subsidiary Licensed Product (e.g., reference designs,
specifications, etc.), and (2) marketing, training and/or support relating to a
Microsoft or Microsoft Subsidiary

                                       3
<PAGE>
                            PROVIDED UNDER RULE 408


Licensed Product. The foregoing sentence shall not be construed to provide
customers of Microsoft or Microsoft Subsidiaries with any implied licenses or
sublicenses.

          (e)  CONDITIONAL PATENTS. Immersion on behalf of itself and its
Subsidiaries, agrees that [****]

          (f)  TRANSFER OF PATENTS. Immersion agrees that any transfer or
assignment of the Licensed Patents shall be subject to the licenses granted to
Microsoft and Microsoft's Subsidiaries under this Agreement. [****].

          (g)  OWNERSHIP. Except as expressly licensed to Microsoft in
this Agreement, Immersion retains all right, title and interest in and to the
Licensed Patents. Immersion reserves all rights not expressly granted in this
Agreement.

     3.   PAYMENT. Within five (5) days after the Effective Date, Microsoft
shall pay Immersion by cashier's check, wire transfer or other immediately
available funds, nineteen million nine hundred thousand dollars (USD
$19,900,000), in consideration of the rights and covenants set forth herein.

     4.   ADDITIONAL RIGHTS, OBLIGATIONS/RESTRICTIONS.
          -------------------------------------------

          (a)  NO OBLIGATIONS. Notwithstanding any other provision of this
Agreement, Microsoft will have no obligation to market, sell or otherwise
distribute Licensed Products.

          (b)  MEMBERSHIP IN MICROSOFT TOOL AND MIDDLEWARE PROGRAMS. Immersion
will have the right to apply for and participate in all publicly available
Microsoft tool and middleware programs in accordance with their standard terms,
conditions, and fees.

          (c)  NO RESTRICTIONS. Nothing in this Agreement will be construed as
restricting Microsoft's ability to acquire, license, develop, manufacture or
distribute for itself, or have others acquire, license, develop, manufacture or
distribute on its behalf, similar technology performing the same or similar
functions as the technology subject to the Licensed Patents, or to market and
distribute such similar technology in addition to, or in lieu of, the technology
subject to the Licensed Patents.

          (d)  MAINTENANCE OF PATENTS. In the event Immersion plans to forego
payment of any maintenance fees or not take any other steps required to maintain
Immersion's rights under any of the Licensed Patents, Immersion shall assign,
without additional compensation, all right, title, and interest in and to the
applicable Licensed Patents to Microsoft. If any of the Licensed Patents lapses
(other than by expiration), then Immersion will promptly use its best efforts to
revive the patent. It shall not be a breach of this Agreement, and the above
provisions of this Section 4(d) shall not apply, if a Licensed Patent lapses
because of an inadvertent failure to pay any maintenance fees or inadvertent
failure to take any other steps required to maintain Immersion's rights under
any of the Licensed Patents.

     5.   CONFIDENTIALITY. The terms and conditions, but not the existence, of
this Agreement shall be treated as confidential information by the Parties, and
neither Party shall disclose the terms or conditions of this Agreement to any
third party (other than its Subsidiaries

                                       4
<PAGE>
                            PROVIDED UNDER RULE 408


licensed pursuant to this Agreement) without the prior written permission of the
other Party. Each Party, however, shall have (a) the right to represent to third
parties that such Party is licensed for the products and patents as provided by
this Agreement, and (b) the right to make disclosures to the extent required by
an order of court, regulation of another governmental body, or otherwise by law
or by a stock exchange, provided that the Party shall promptly provide written
notice to the non-disclosing Party of the intended disclosure and of the court
order or regulation prior to such disclosure and that the Party shall take all
reasonable steps to minimize such disclosure by, for example, obtaining a
protective order and/or appropriate confidentiality provisions requiring that
such information to be disclosed be used only for the purpose for which such
law, order, regulation or requirement was issued. Additionally, each Party may
disclose the terms and conditions of this Agreement to the extent reasonably
necessary, under a suitable confidentiality agreement, to its accountants,
attorneys, financial advisors and in connection with due diligence activities
relating to the sale of the stock or a portion of the business of a Party or its
Subsidiaries.

     6.   WARRANTIES.

          (a)  IMMERSION. Immersion represents, warrants, and covenants that:

               (i)  it has the full power and has taken the necessary and
appropriate steps to enter into this Agreement and assume the obligations
hereunder;

               (ii) it has the right to license the Licensed Patents, and it has
the full power and has taken the necessary and appropriate steps to enter into
this Agreement and assume the obligations hereunder, and to grant the license
rights and covenants set forth herein;

               (iii) it has not previously and will not grant any rights in the
Licensed Patents to any third party that are inconsistent with the rights
granted to Microsoft herein;

               (iv) [****];

               (v)  [****] and have not [****];

               (vi) as of the Effective Date, there are no actual or threatened
lawsuits or claims relating to the Licensed Patents other than (i) the Lawsuit
(as defined in the Settlement), (ii) contract, business or licensing discussions
with existing or potential licensees and customers, and (iii) as set forth in
Schedule 3.12 to the Series A Redeemable Convertible Preferred Stock Purchase
Agreement executed by the Parties on even date herewith; and

               (vii) as of the Effective Date, Immersion believes, in good
faith, that the issued Licensed Patents owned by Immersion are valid and
enforceable.

          (b)  BY MICROSOFT. Microsoft represents, warrants, and covenants that
it has the full power and has taken the necessary and appropriate steps to enter
into this Agreement and assume the obligations hereunder.

          (c)  DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED IN SECTIONS 6(a) AND
6(b) ABOVE, THE PATENTS ARE PROVIDED "AS IS" AND WITHOUT

                                       5
<PAGE>
                            PROVIDED UNDER RULE 408


WARRANTY OF ANY KIND. EACH PARTY DISCLAIMS ALL IMPLIED WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT.

Nothing in this Agreement shall be construed (i) as a warranty or representation
by Immersion as to the validity or scope of any Licensed Patents; (ii) as a
warranty or representation that anything made, used, sold or otherwise disposed
of under any license or sublicense granted in or under this Agreement is or will
be free from infringement by patents, copyrights, trade secrets, trademarks, or
other rights of third parties; (iii) as granting by implication, estoppel or
otherwise any licenses or rights under patents or other intellectual property
rights of Immersion other than expressly granted herein; or (iv)(a) to require
Immersion to file any patent application, or (b) as a warranty that Immersion
will be successful in securing the grant of any patent or any reissue or
extensions thereof. Immersion does not assume any responsibility for the
manufacture of any product that is manufactured or sold by or for Microsoft or
Microsoft's Subsidiaries, or their sublicensees. All warranties in connection
with such products shall be made by the manufacturer or seller of such products.

     7.   TERM; TERMINATION.
          -----------------

          (a)  TERM. Unless terminated by Microsoft pursuant to Section 7(b),
the term of this Agreement shall be from the Effective Date until the expiration
of the last to expire of the Licensed Patents.

          (b)  TERMINATION. The parties expressly agree that this Agreement may
not be terminated by Immersion, even in the event of Microsoft's breach of this
Agreement. Notwithstanding the foregoing, Microsoft may terminate this Agreement
in its sole discretion and at any time upon thirty (30) days' written notice in
advance to Immersion. In the event Microsoft elects to terminate this Agreement,
(i) such termination shall not terminate or otherwise affect any sublicenses
granted by Microsoft under this Agreement prior to such termination, and (ii)
Sections 5, 6, 7(b), 8, and 9 shall survive. Termination of this Agreement by
Microsoft shall not in any way affect or relieve Microsoft's obligations to make
payment pursuant to Section 2(e).

     8.   LIMITATION OF LIABILITIES. NEITHER PARTY WILL BE LIABLE FOR ANY
INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES RELATING TO
THIS AGREEMENT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.

     9.   GENERAL.
          -------

          (a)  NOTICES. All notices and requests in connection with this
Agreement will be given in writing and will be deemed given as of the day they
are received either by messenger, delivery service, or in the mails of the
United States of America, postage prepaid, certified or registered, return
receipt requested, and addressed as follows:

<TABLE>
<S>                                            <C>
To: Microsoft                                  To: Immersion
Microsoft Corporation                          Immersion Corporation
Attention: Vice President,                     Vice President, Legal Affairs
Intellectual Property Attention:               801 Fox Lane
One Microsoft Way                              San Jose, California  95131
Redmond, Washington  98052-6399                Phone:  (408) 467-1900
Phone: (425) 882-8080                          Fax:  (408) 467-1901
Fax: (425) 936-7329
Copy to: Law & Corporate Affairs
Fax:  (425) 936-7409
</TABLE>

                                       6
<PAGE>
                            PROVIDED UNDER RULE 408


or to such other address as the Party to receive the notice or request so
designates by written notice to the other.

          (b)  INDEPENDENT CONTRACTORS. The Parties are independent contractors,
and nothing in this Agreement will be construed as creating an employer-employee
relationship, a partnership, or a joint venture between the Parties. Neither
Party will have the power to bind the other Party or incur obligations on the
other Party's behalf without the other Party's prior written consent.

          (c)  GOVERNING LAW. This Agreement shall be construed and controlled
by the laws of the State of Washington, and each Party consents to exclusive
jurisdiction and venue in the federal courts sitting in King County, Washington,
unless no federal subject matter jurisdiction exists, in which case each Party
consents to exclusive jurisdiction and venue in the Superior Court of King
County, Washington. Each Party waives all defenses of lack of personal
jurisdiction and forum non-conveniens. Process may be served on either Party in
the manner authorized by applicable law or court rule. In any action to enforce
any right or remedy under this Agreement or to interpret any provision of this
Agreement, the prevailing Party shall be entitled to recover its reasonable
attorneys' fees, costs and other expenses.

          (d)  ASSIGNMENT. This Agreement will be binding upon and inure
to the benefit of each Party's respective successors and lawful assigns.
Microsoft will have the right to assign this Agreement or any or all of its
rights under the Agreement, in whole or in part (in any case together with all
restrictive terms continuing with such assignment) to any purchaser of any
Microsoft business that uses the licenses granted herein, provided that (i) such
purchaser of a Microsoft business may use the assigned rights solely as
necessary to operate such purchased Microsoft business, (ii) the assignee's
license rights under Section 2(a) shall exclude the fields of use specified in
Sections 2(b)(ii) and (iii), and (iii) in any case Microsoft may not assign any
of its rights under this Agreement to [****]. This Agreement may be assigned by
Immersion to any acquiror of all or substantially all of the business or assets
of Immersion, or in connection with a merger. Microsoft and Immersion will each
have the right to merge or consolidate without the prior approval of the other
Party. Except as permitted above, assignment of this Agreement, whether by
contract, operation of law, or otherwise, will be void.

          (e) CONSTRUCTION. If for any reason a court of competent
jurisdiction finds any provision of this Agreement, or portion thereof, to be
unenforceable, that provision of the Agreement will be enforced to the maximum
extent permissible so as to effect the intention of the Parties, and the
remainder of this Agreement will continue in full force and effect. Failure by
either Party to enforce any provision of this Agreement will not be deemed a
waiver of future

                                       7
<PAGE>
                            PROVIDED UNDER RULE 408


enforcement of that or any other provision. This Agreement has been negotiated
by the Parties and their respective counsel and will be interpreted fairly in
accordance with its terms and without any strict construction in favor of or
against either Party.

          (f)  ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the Parties with respect to the subject matter hereof and
merges all prior and contemporaneous communications regarding the subject matter
hereof. This Agreement will not be modified except by a written agreement dated
subsequent to the Effective Date and signed on behalf of Immersion and Microsoft
by their respective duly authorized representatives. This Agreement may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original, and all of which taken together shall constitute one
and the Agreement. Delivery of an executed counterpart of this Agreement by
facsimile transmission shall be effective as delivery of an originally executed
counterpart of this Agreement.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                       8
<PAGE>
                   -------------------------------------------

                              SIGNATURE PAGE TO THE
                                LICENSE AGREEMENT

                   -------------------------------------------


IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the
Effective Date written above.

                                     IMMERSION CORPORATION


                                     By:
                                        ----------------------------------------
                                        VICTOR VIEGAS
                                        President, Chief Executive Officer and
                                        Chief Financial Officer


                                     MICROSOFT CORPORATION


                                     By:
                                        ----------------------------------------
                                        Name:
                                        Title:


                                     By:
                                        ----------------------------------------
                                        Name:
                                        Title:


                                     By:
                                        ----------------------------------------
                                        Name:
                                        Title:


                                     By:
                                        ----------------------------------------
                                        Name:
                                        Title:


                                       9

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>5
<FILENAME>f92905a1exv10w5.txt
<DESCRIPTION>EXHIBIT 10.5
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.5

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO CERTAIN PORTIONS OF THIS
EXHIBIT, WHICH PORTIONS HAVE BEEN OMITTED AND REPLACED WITH [****] AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                              SUBLICENSE AGREEMENT
                              --------------------

     This Sublicense Agreement ("Sublicense Agreement") is entered into and is
effective on this 25th day of July, 2003 (the "Effective Date") by and between
MICROSOFT CORPORATION, a Washington corporation with principal offices in
Redmond, Washington ("Microsoft") and IMMERSION CORPORATION, a Delaware
corporation with principal offices in San Jose, California ("Immersion"), each a
"Party" and collectively, the "Parties."

                                    RECITALS
                                    --------

     WHEREAS, Immersion has the right to grant a license to Microsoft and its
Subsidiaries to enable Microsoft and its Subsidiaries to grant the below
described sublicenses to third parties, under certain patent rights more fully
described below; and

     WHEREAS, Microsoft desires to acquire a sublicensing right under such
patent rights and Immersion desires to grant such a sublicensing right, all on
the terms and conditions set forth in this Agreement.

     NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the Parties agree as follows:


                                    AGREEMENT
                                    ---------

1.   Definitions.
     -----------

     a.   "ADULT PRODUCT" means: [****].

     b.   "CONDITIONAL PATENTS" means [****].

     c.   "FOUNDRY PRODUCT" means a product which is designed by or for a [****]
          without substantial [****] and manufactured, reproduced, sold, leased,
          licensed or otherwise transferred from the [****] on essentially an
          [****].

     d.   "GAME PLATFORM" means: (i) a [****] manufactured for the purpose of
          [****] for that platform; (ii) any [****] intended to be used with the
          [****] referenced in (i) above, so as to [****] (iii) [****]
          referenced in (i) above; (iv) [****] described in (iii) above; and (v)
          [****] are examples [****]

     e.   "GAME PLATFORM VENDOR" means an entity which distributes a Game
          Platform under its own name.

     f.   "LICENSED PATENTS" means all Patents under which Immersion or any of
          its present or future Subsidiaries owns or has as of the Effective
          Date (or as of the acquisition date in the case of future
          Subsidiaries), or thereafter obtains, the ability or right to grant
          licenses, releases or freedom from suit, with the exception of
          Conditional Patents.
<PAGE>
                             PROVIDED UNDER RULE 408


     g.   "MEDICAL PRODUCT" means any [****] product, [****] product, or
          combination of [****] that uses [****] for the [****] or the [****] of
          any [****] General purpose hardware or software whose primary function
          is not the delivery of one of the foregoing is not a Medical Product.

     h.   "PATENT" means any patent, patent application, ____ provisional
          application, ____ continuation, continuation-in-part, divisional,
          reissue, renewal, reexamination, utility model, design patent, and
          foreign counterparts thereof.

     i.   "ROYALTY-BEARING [****] PRODUCTS" means:

          (i)  [****] or [****] or a [****] and [****] or [****] distributed in
               connection with [****] or [****] except to the extent that such
               devices constitute Adult Products, Medical Products, or Foundry
               Products; and

          (ii) [****] distributed under a [****] or [****], except to the extent
               that such devices constitute Adult Products, Medical Products, or
               Foundry Products.

        A handheld device having a primary purpose of playing games shall be
        deemed to fall within the "Game Platform" definition and is not a
        Royalty-Bearing [****] Product.

     j.   [****]

     k.   [****] means the [****] for the [****] as such [****] pertains to
          [****]

     l.   "SUBLICENSEE" means any entity to which Microsoft may grant a
          sublicense in accordance with this Sublicense Agreement.

     m.   "SUBSIDIARY" means a corporation, company or other entity: (i) fifty
          percent (50%) or more of whose outstanding shares or securities
          (representing the right to vote for the election of directors or other
          managing authority) are, now or hereafter, owned or controlled,
          directly or indirectly, by a given entity, but such corporation,
          company or other entity shall be deemed to be a Subsidiary only so
          long as such ownership or control exists; or (ii) which does not have
          outstanding shares or securities, as may be the case in a partnership,
          joint venture or unincorporated association, but fifty percent (50%)
          or more of whose ownership interest representing the right to make the
          decisions for such corporation, company or other entity is, now or
          hereafter, owned or controlled, directly or indirectly, by a given
          entity, but such corporation, company or other entity shall be deemed
          to be a Subsidiary only so long as such ownership or control exists.

     n.   "TOUCH TECHNOLOGY" means technology related to calculating,
          processing, amplifying, communicating, transmitting, controlling,
          applying, producing, using, or enhancing touch sensations or
          information related to the sense of touch (e.g., resistance, texture,
          force). Examples include force feedback, vibration, and tactile
          response applications.

2.   SUBLICENSING RIGHTS AND PAYMENTS.
     --------------------------------

     a.   SUBLICENSE RIGHTS FOR GAME PLATFORM VENDORS.

          (i)  Grant of Rights. Immersion on behalf of itself and its
               Subsidiaries, hereby grants to Microsoft and its Subsidiaries the
               worldwide, irrevocable, non-terminable right, subject to and
               during the period set forth in Section 2(j),

                                       2
<PAGE>
                             PROVIDED UNDER RULE 408


               to sublicense Game Platform Vendors and their Subsidiaries under
               the Licensed Patents (excluding Patents not directed to Touch
               Technology) to:

               (1)  make, have made, use, lease, distribute, have distributed,
                    publish, have published, import, provide as a service, offer
                    to sell, sell or otherwise dispose of such Game Platform
                    Vendor's and its Subsidiaries' Game Platforms; and

               (2)  further sublicense third party software developers to use
                    such Game Platform Vendor's and its Subsidiaries' Game
                    Platform software development tools to develop games solely
                    for such Game Platforms.

          (ii) Delivery of Copy of Game Platform Sublicense. Microsoft's grant
               of such a sublicense to a Game Platform Vendor is referred to
               herein as a "Game Platform Sublicense." Except as set forth in
               the last sentence of Section 2(c), Microsoft shall provide
               Immersion with a copy of the fully executed Game Platform
               Sublicense within ten (10) days after the Game Platform
               Sublicense is executed by Microsoft and the applicable Game
               Platform Vendor.

     b.   COMPENSATION FOR GAME PLATFORM VENDORS [****] As Immersion's entire
          compensation with respect to each individual sublicense granted under
          Section 2(a) above to a particular Game Platform Vendor [****], (a)
          Microsoft shall pay Immersion [****] within ten (10) days of
          Microsoft's granting any such Game Platform Sublicense, and (b)
          thereafter Microsoft shall pay Immersion [****] of the cash amounts
          (if any, and including royalty payments and upfront, annual or other
          license fees) received by Microsoft from such Game Platform Vendor for
          the Game Platform Sublicense in excess of [****] ("Additional
          Sublicensing Revenue") within thirty (30) days of Microsoft's receipt
          of any such Additional Sublicensing Revenue.

     c.   COMPENSATION FOR [****] GAME PLATFORM SUBLICENSE. In the event
          Microsoft grants [****] a Game Platform Sublicense on the terms set
          forth in Section 2(a) above, the following terms shall apply in place
          of the terms of Section 2(b). Within ten (10) days after Microsoft
          grants [****] the Game Platform Sublicense, Microsoft shall pay
          Immersion:

          (i)  [****] if the Game Platform Sublicense is entered into prior to
               the date that is thirty (30) days prior to the then most recently
               [****] in the [****];

          (ii) [****] if the Game Platform Sublicense is entered into within the
               thirty (30) day period immediately prior to the then most
               recently [****] in the [****];

          (iii) [****] if the Game Platform Sublicense is entered into during
               the time period the [****] of the [****] is underway, but prior
               to the delivery of [****] for the [****] to be [****] to
               Immersion (if any) in the [****]; or

          (iv) the greater of [****] or the amount that is [****] of any [****]
               that has been [****] in the [****] if the Game Platform
               Sublicense is entered into after the delivery of the [****]
               referenced in (3) above. Microsoft shall be


                                       3
<PAGE>
                             PROVIDED UNDER RULE 408


               entitled to deduct [****] of the [****] received by Microsoft
               [****] for the Game Platform Sublicense from the amounts payable
               under this clause (4); provided that the amount payable by
               Microsoft under this clause (4) will in no event be less than
               [****].

          In any of the cases described under clauses (1) - (4) above, the
          Parties shall each be entitled to [****] of the cash amounts (if any,
          and including royalty payments and upfront, annual or other license
          fees) received by Microsoft [****] for the Game Platform Sublicense in
          excess of the applicable amount specified in such clauses (1) - (4)
          (after implementation of the calculation specified in clause (4)). Any
          license grant [****] under the Game Platform Sublicense shall not
          become effective until [****] renders all compensation required under
          the Game Platform Sublicense to be paid [****] as of the effective
          date of such Game Platform Sublicense. At the time of making payment
          to Immersion for [****] Game Platform Sublicense, Microsoft shall also
          provide Immersion with a fully executed copy of the [****] Game
          Platform Sublicense.

     d.   MICROSOFT'S RIGHT TO SUBLICENSE [****] FOR ADDITIONAL [****].
          Immersion on behalf of itself and its Subsidiaries, hereby grants to
          Microsoft and its Subsidiaries the worldwide, irrevocable,
          non-terminable right, subject to and during the period set forth in
          Section 2(j), to sublicense [****] under the Licensed Patents
          (excluding Patents not directed to Touch Technology) to make, have
          made, use, offer to sell and sell or otherwise distribute
          Royalty-Bearing [****] Products, subject to the royalty obligations
          set forth in Exhibit A. In the event Microsoft and [****] execute an
          agreement for such a sublicense, Immersion shall pay Microsoft [****]
          within ten (10) days after the execution thereof. Within ten (10) days
          after execution of any sublicense under this Section 2(d), Microsoft
          shall provide a fully executed copy thereof to Immersion.

     e.   PAYMENTS TO MICROSOFT IN THE EVENT IMMERSION [****] PRIOR TO MICROSOFT
          GRANTING [****] A GAME PLATFORM SUBLICENSE. In the event Immersion
          elects in its discretion to [****] prior to Microsoft's granting
          [****] the Game Platform Sublicense (and regardless of whether such
          [****] occurs during or after the twenty-four (24) month period
          following the Effective Date), then Immersion shall pay Microsoft an
          amount determined as follows:

          (i)  If Immersion [****] for an amount of [****] up to and including
               [****], then Immersion shall pay Microsoft the sum of [****].

          (ii) If Immersion [****] for an amount in excess of [****] up to and
               including [****], then Immersion shall pay Microsoft the sum of
               [****] plus an additional amount equal to 25% of the amount of
               the settlement in excess of [****] up to and including [****].

          (iii) If Immersion [****] for an amount in excess of [****], then
               Immersion shall pay Microsoft the sum specified in the preceding
               clause (3) plus an additional amount equal to [****] of the
               amount of the settlement in excess of [****].

                                       4
<PAGE>
                             PROVIDED UNDER RULE 408


          The [****] amounts specified in clauses (i) - (iii) above shall
          include all amounts, including all royalty payments and upfront,
          annual or other license fees (regardless of when received), received
          by Immersion on account of any license, [****], or similar
          consideration granted by Immersion to [****] in respect of the
          Licensed Patents, including for fields of use outside of the area of
          Game Platforms, and(a) in connection with the [****], including any
          agreement, license, sublicense, option, investment, or other
          transaction associated with [****], and (b) with respect to any other
          agreement, license, sublicense, option, investment, or other
          transaction entered into during the time period that is the lesser of
          (1) the period set forth in Section 2(j), or (2) eighteen (18) months
          after [****]. Any amounts due under this Section 2(e) shall be paid to
          Microsoft within ten (10) days of Immersion's [****]. Immersion
          further agrees to promptly provide Microsoft with sufficient
          documentation of [****] to enable Microsoft to determine and confirm
          the payment owed to Microsoft in the event of such a [****].

     f.   [****]. Within five (5) days after Microsoft grants [****] a Game
          Platform Sublicense and pays Immersion the amount due under Section
          2(c), Immersion, for no additional consideration or payment whatsoever
          (whether from Microsoft or [****]) will: (i) [****]; and (ii) [****]
          licensees, distributors, and customers, direct and indirect, from any
          [****] or could have [****]. The Immersion obligations set forth in
          the foregoing sentence shall be contingent on [****] (for no
          additional consideration or payment whatsoever from Immersion) [****]
          or that could have been [****] or based on or [****].

     g.   SUBLICENSING REVENUE FROM [****] JOINT VENTURE. If, during the period
          set forth in Section 2(j), Immersion grants a third party the right to
          grant licenses for the equivalent of Royalty-Bearing [****] Products
          to [****], Microsoft shall be entitled to receive [****] of all
          amounts received on account of the grant of such rights, including all
          royalty payments and upfront, annual or other license fees (regardless
          of when received). All such amounts shall be paid to Microsoft no than
          thirty (30) days after receipt by Immersion. In the event that [****],
          the aforementioned percentage shall be increased to [****].

     h.   CONDITIONAL PATENTS. Immersion on behalf of itself and its
          Subsidiaries, agrees that [****].

     i.   OWNERSHIP. Except as expressly licensed to Microsoft in this
          Sublicense Agreement, Immersion retains all right, title and interest
          in and to the Licensed Patents. Immersion reserves all rights not
          expressly granted in this Sublicense Agreement.

     j.   LIMITATION. Microsoft's right to grant sublicenses to [****] or other
          third parties pursuant to this Section 2 shall only be effective
          during the twenty-four (24) month period following the Effective Date;
          provided, however, that any such sublicense granted by Microsoft
          pursuant to this Section 2 during such twenty-four (24) month period
          shall be effective for the life of the Licensed Patents or for such
          lesser duration as Microsoft and the applicable sublicensee may agree,
          in their sole discretion.

                                       5
<PAGE>
                             PROVIDED UNDER RULE 408


3.   PAYMENT. Within five (5) days after the Effective Date, Microsoft shall pay
     Immersion by cashier's check, wire transfer or other immediately available
     funds, one hundred thousand dollars (USD $100,000), in consideration of the
     rights and covenants set forth herein. The payment referenced in this
     Section 3 is in addition to any payments that Microsoft may be obligated to
     make to Immersion under Sections 2(b), 2(c) or 2(h) of this Sublicense
     Agreement.

4.   CONFIDENTIALITY. The terms, conditions, and existence of this Sublicense
     Agreement shall be treated as confidential information by the Parties, and
     neither Party shall disclose the existence, terms or conditions of this
     Sublicense Agreement to any third party (other than, in the case of
     Microsoft, to [****] and to any other Game Platform Vendor entering into a
     Game Platform Sublicense) without the prior written permission of the other
     Party. Each Party, however, shall have the right to make disclosures to the
     extent required by an order of court, regulation of another governmental
     body, or otherwise by law or by a stock exchange, provided that the Party
     shall promptly provide written notice to the non-disclosing Party of the
     intended disclosure and of the court order or regulation prior to such
     disclosure and that the Party shall take all reasonable steps to minimize
     such disclosure by, for example, obtaining a protective order and/or
     appropriate confidentiality provisions requiring that such information to
     be disclosed be used only for the purpose for which such law, order,
     regulation or requirement was issued. Additionally, (i) each Party may
     disclose the terms and conditions of this Sublicense Agreement to the
     extent reasonably necessary, under a suitable confidentiality agreement, to
     its accountants, attorneys, financial advisors and in connection with due
     diligence activities relating to the sale of the stock or a portion of the
     business of a Party or its Subsidiaries, and (ii) Immersion shall be
     permitted to disclose to [****] and any other Game Platform Vendor entering
     into a Game Platform Sublicense the permitted scope of Microsoft's
     sublicense rights under this Sublicense Agreement, provided that Immersion
     gives Microsoft notice of such proposed disclosure and Microsoft does not
     respond within thirty (30) days after such notice.

5.   Warranties.
     -----------

     a.   IMMERSION. Immersion represents, warrants, and covenants that:

          (i)  it has the full power and has taken the necessary and appropriate
               steps to enter into this Sublicense Agreement and assume the
               obligations hereunder;

          (ii) it has the right to license the Licensed Patents, and it has the
               full power and has taken the necessary and appropriate steps to
               enter into this Sublicense Agreement and assume the obligations
               hereunder, and to grant the license rights and covenants set
               forth herein;

          (iii) it has not previously and will not grant any rights in the
               Licensed Patents to any third party that are inconsistent with
               the rights granted to Microsoft herein;

          (iv) it has not previously and will not grant during the period set
               forth in Section 2(j) to any third party the right to grant
               [****] the sublicense rights granted in Sections 2(a) herein;

                                       6
<PAGE>
                             PROVIDED UNDER RULE 408


          (v)  it has not assigned or otherwise transferred or subrogated any
               interest in any of its [****] that are the [****] the [****],
               and, except in connection with an assignment by Immersion
               permitted by Section 8(d), will not assign or otherwise transfer
               or subrogate any interest [****] in any of its [****] that are
               the [****] the [****];

          (vi) [****];

          (vii) as of the Effective Date, [****] owned by Immersion [****] and
               have not [****];

          (viii)as of the Effective Date, there are no actual or threatened
               lawsuits or claims relating to the Licensed Patents other than
               the action in the United States District Court for the Northern
               District of California entitled Immersion Corporation v. Sony
               Computer Entertainment of America, Inc., Sony Computer
               Entertainment Inc., and Microsoft Corporation, Northern District
               of California Case No. C02-00710 CW (WDB), contract, business or
               licensing discussions with existing or potential licensees and
               customers, and as set forth in Schedule 3.12 to the Series A
               Redeemable Convertible Preferred Stock Purchase Agreement
               executed by the Parties on even date herewith; and

          (ix) as of the Effective Date, Immersion believes, in good faith, that
               the issued Licensed Patents owned by Immersion are valid and
               enforceable.

b.   BY MICROSOFT. Microsoft represents, warrants, and covenants that it has the
     full power and has taken the necessary and appropriate steps to enter into
     this Sublicense Agreement and assume the obligations hereunder.

c.   DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED IN SECTIONS 5(a) AND 5(b) ABOVE,
     THE PATENTS ARE PROVIDED "AS IS" AND WITHOUT WARRANTY OF ANY KIND. EACH
     PARTY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
     PARTICULAR PURPOSE, OR NON-INFRINGEMENT.

     Nothing in this Sublicense Agreement shall be construed (i) as a warranty
     or representation by Immersion as to the validity or scope of any Licensed
     Patents; (ii) as a warranty or representation that anything made, used,
     sold or otherwise disposed of under any license or sublicense granted in or
     under this Sublicense Agreement is or will be free from infringement by
     patents, copyrights, trade secrets, trademarks, or other rights of third
     parties; (iii) as granting by implication, estoppel or otherwise any
     licenses or rights under patents or other intellectual property rights of
     Immersion other than expressly granted herein; or (iv)(a) to require
     Immersion to file any patent application, (b) as a warranty that Immersion
     will be successful in securing the grant of any patent or any reissue or
     extensions thereof, or (c) to require Immersion to pay any maintenance fees
     or take any other steps to maintain Immersion's patent rights. Immersion
     does not assume any responsibility for the manufacture of any product that
     is manufactured or sold by or for Microsoft or Microsoft's Subsidiaries, or
     their sublicensees. All warranties

                                       7
<PAGE>
                             PROVIDED UNDER RULE 408


     in connection with such products shall be made by the manufacturer or
     seller of such products.

6.   TERM; TERMINATION.
     -----------------

     a.   TERM. Unless terminated by Microsoft pursuant to Section 6(b), the
          term of this Sublicense Agreement shall be from the Effective Date
          until the expiration of the last to expire of the Licensed Patents.

     b.   TERMINATION. The parties expressly agree that this Sublicense
          Agreement may not be terminated by Immersion, even in the event of
          Microsoft's breach of this Sublicense Agreement. Notwithstanding the
          foregoing, Microsoft may terminate this Sublicense Agreement in its
          sole discretion and at any time upon thirty (30) days' written notice
          in advance to Immersion. In the event Microsoft elects to terminate
          this Sublicense Agreement, (i) such termination shall not terminate or
          otherwise affect any sublicenses granted by Microsoft under this
          Sublicense Agreement prior to such termination, and (ii) Sections 4,
          5, 6(b), 7, 8, and 9 shall survive. Termination of this Sublicense
          Agreement by Microsoft shall not in any way affect or relieve either
          of the Parties of the payment obligations set forth in Sections 2(b),
          2(c), 2(d) and 2(h) of this Sublicense Agreement.

     7.   LIMITATION OF LIABILITIES.
          -------------------------

NEITHER PARTY WILL BE LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL,
PUNITIVE OR SPECIAL DAMAGES RELATING TO THIS SUBLICENSE AGREEMENT, EVEN IF SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

                                       8
<PAGE>
                             PROVIDED UNDER RULE 408


8.   General.
     -------

     a.   NOTICES. All notices and requests in connection with this Sublicense
          Agreement will be given in writing and will be deemed given as of the
          day they are received either by messenger, delivery service, or in the
          mails of the United States of America, postage prepaid, certified or
          registered, return receipt requested, and addressed as follows:

<TABLE>
<S>                                                   <C>
     TO: MICROSOFT                                    TO: IMMERSION
     Microsoft Corporation                            Immersion Corporation
     Attention: Vice President, Intellectual          Attention: Vice President,
     Property                                         Legal Affairs
     One Microsoft Way                                801 Fox Lane
     Redmond, Washington 98052-6399                   San Jose, California 95131
     Phone: (425) 882-8080                            Phone: (408) 467-1900
     Fax: (425) 936-7329                              Fax: (408) 467-1901
     Copy to: Vice President, Litigation
     Fax:  (425) 936-7409
</TABLE>

          or to such other address as the Party to receive the notice or request
          so designates by written notice to the other.

     b.   INDEPENDENT CONTRACTORS. The Parties are independent contractors, and
          nothing in this Sublicense Agreement will be construed as creating an
          employer-employee relationship, a partnership, or a joint venture
          between the Parties. Neither Party will have the power to bind the
          other Party or incur obligations on the other Party's behalf without
          the other Party's prior written consent.

     c.   DISPUTE RESOLUTION. This Sublicense Agreement shall be construed and
          controlled by the laws of the State of Washington, and each Party
          consents to exclusive jurisdiction and venue in the federal courts
          sitting in King County, Washington, unless no federal subject matter
          jurisdiction exists, in which case each Party consents to exclusive
          jurisdiction and venue in the Superior Court of King County,
          Washington. Each Party waives all defenses of lack of personal
          jurisdiction and forum non-conveniens. Process may be served on either
          Party in the manner authorized by applicable law or court rule. In any
          action to enforce any right or remedy under this Sublicense Agreement
          or to interpret any provision of this Sublicense Agreement, the
          prevailing Party shall be entitled to recover its reasonable
          attorneys' fees, costs and other expenses.

     d.   ASSIGNMENT. This Sublicense Agreement will be binding upon and inure
          to the benefit of each Party's respective successors and lawful
          assigns. Microsoft will have the right to assign this Sublicense
          Agreement or any or all of its rights under this Sublicense Agreement,
          in whole or in part (in any case together with all restrictive terms
          continuing with such assignment) to any purchaser of any Microsoft
          business that grants the sublicenses authorized herein; provided, that
          Microsoft may not make any such assignment to [****]. This Sublicense
          Agreement may be assigned by Immersion to any acquiror of all or
          substantially all of the business or assets of Immersion, or in
          connection with a merger.
                                       9
<PAGE>
                             PROVIDED UNDER RULE 408


          Microsoft and Immersion will each have the right to merge or
          consolidate without the prior approval of the other Party. Except as
          permitted above, assignment of this Sublicense Agreement, whether by
          contract, operation of law, or otherwise, will be void.

     e.   CONSTRUCTION. If for any reason a court of competent jurisdiction
          finds any provision of this Sublicense Agreement, or portion thereof,
          to be unenforceable, that provision of the Sublicense Agreement will
          be enforced to the maximum extent permissible so as to effect the
          intention of the Parties, and the remainder of this Sublicense
          Agreement will continue in full force and effect. Failure by either
          Party to enforce any provision of this Sublicense Agreement will not
          be deemed a waiver of future enforcement of that or any other
          provision. This Sublicense Agreement has been negotiated by the
          Parties and their respective counsel and will be interpreted fairly in
          accordance with its terms and without any strict construction in favor
          of or against either Party.

     f.   ENTIRE AGREEMENT. This Sublicense Agreement constitutes the entire
          agreement between the Parties with respect to the subject matter
          hereof and merges all prior and contemporaneous communications
          regarding the subject matter hereof. This Sublicense Agreement will
          not be modified except by a written agreement dated subsequent to the
          Effective Date and signed on behalf of Immersion and Microsoft by
          their respective duly authorized representatives. This Sublicense
          Agreement may be executed in any number of counterparts, each of which
          when so executed shall be deemed to be an original, and all of which
          taken together shall constitute one and the Sublicense Agreement.
          Delivery of an executed counterpart of this Sublicense Agreement by
          facsimile transmission shall be effective as delivery of an originally
          executed counterpart of this Sublicense Agreement.

                  [Remainder of page intentionally left blank]


                                       10
<PAGE>
                   -------------------------------------------

                              SIGNATURE PAGE TO THE
                        GAME CONSOLE SUBLICENSE AGREEMENT

                   -------------------------------------------


        IN WITNESS WHEREOF, the Parties have entered into this Sublicense
Agreement as of the Effective Date written above.


                                 IMMERSION CORPORATION


                                 By:
                                    --------------------------------------
                                    VICTOR VIEGAS
                                    President, Chief Executive Officer and
                                    Chief Financial Officer


                                    MICROSOFT CORPORATION


                                    By:
                                       --------------------------------------
                                       Name:
                                       Title:


                                    By:
                                       --------------------------------------
                                       Name:
                                       Title:


                                    By:
                                       --------------------------------------
                                       Name:
                                       Title:


                                    By:
                                       --------------------------------------
                                       Name:
                                       Title:




<PAGE>

                                    EXHIBIT A

                  ROYALTIES FOR ROYALTY-BEARING [****] PRODUCTS

1.   In the event Microsoft grants [****] the additional license rights
     referenced in Section 2(d), Microsoft shall arrange for [****] to pay
     royalties directly to Immersion as described below.

     a.   The royalty applicable to each unit of a given type of Royalty-Bearing
          [****] Product that is licensed, sold, or otherwise distributed or
          disposed of by any entity licensed under the sublicense granted
          pursuant to Section 2(d) of the Sublicense Agreement (a "UNIT") shall
          be the greater of:

          (i)  [****] per Unit; or

          (ii) [****] of the wholesale cost of production of such Unit.

     b.   Alternatively, at [****] option, in the event that Immersion has
          entered into an agreement with a party other than [****] (excluding
          (i) the License Agreement entered into by Microsoft and Immersion
          simultaneously with the execution of this Agreement, (ii) any other
          agreement with a third party in connection with the [****]; and (iii)
          any agreement under which Immersion receives a license or [****] from
          such third party) (a "THIRD PARTY AGREEMENT") in which Immersion
          grants such third party rights under the Licensed Patents of
          equivalent scope to the rights sublicensed to [****] under Section
          2(d), if, taken as a whole, the terms of such Third Party Agreement
          are more favorable than the terms of the agreement entered into by
          [****] and Microsoft pursuant to Section 2(d) ("SECTION 2(d)
          AGREEMENT"), [****] may elect that all material terms of such Third
          Party Agreement shall apply to [****] in place of the Section 2(d)
          Agreement. In the event of such an election by [****] and Microsoft
          shall terminate the Section 2(d) Agreement, and Immersion and [****]
          will enter into an agreement containing all such material terms of
          such Third Party Agreement.

2.   Except as otherwise agreed by [****] and Immersion, royalties payable for
     Units shall be paid within 30 days after the end of the calendar quarter in
     which [****] receives revenue for such Unit and to a bank account
     designated by Immersion.

3.   [****] bundled with [****] shall not bear a separate royalty; the only
     royalty payable shall be on the underlying [****] with which such [****]
     intended to be used.




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>6
<FILENAME>f92905a1exv10w7.txt
<DESCRIPTION>EXHIBIT 10.7
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.7

November 13, 2003

Tim Tight
590 Menlo Oaks Drive
Menlo Park, CA  94025

RE: Employment with Immersion Corporation

Dear Tim:

      Immersion Corporation (the "Company" or "Immersion") is pleased to present
this offer for the position of Vice President and General Manager, Industrial
Business Group, on the terms set forth in this agreement, effective upon your
acceptance by execution of a counterpart copy of this letter where indicated
below.

      Reporting Duties and Responsibilities. In this position, you will report
to the CEO and will be responsible for developing the markets, customers and
alliances needed to build a large and profitable revenue stream in our
Industrial Business Group. This segment will include our Automotive, 3D and
Industrial businesses. You may also be tasked with other responsibilities as
identified by the CEO.

      Salary and Benefits. Your initial base salary will be $180,000 annually,
payable in accordance with the Company's customary payroll practice, which is
bi-weekly. This offer is for a full time, salaried, exempt position, located at
the San Jose offices of the Company, except as travel to other locations that
may be necessary to fulfill your responsibilities. Your performance will be
reviewed in January 2004 during our company's focal review process, and annually
thereafter, that will be based on an achievement of a number of revenue and
profit margin targets. You will be eligible to participate in our variable
compensation program. The details of your 2004 variable compensation are
detailed in the attached Addendum A. You will also receive the Company's
standard employee benefits package. A copy of our current benefits package is
enclosed but may be subject to change at any time.

      Stock Options. Effective upon board approval, the Company will grant you
an option to purchase 300,000 shares of the Company's Common Stock pursuant to
the Company's stock option plan and standard stock option agreement. All options
will have an exercise price that will be equal to the fair market value of the
Company's Common Stock at the date of grant. The options will become exercisable
over a four-year exercise schedule with 25% of the shares vesting at the end of
your first twelve months of service, and with an additional 2.083% vesting per
month thereafter, at the close of each month during which you remain employed
with the Company.

      Confidential Information. As an employee of the Company, you will have
access to certain Company confidential information and you may during the course
of your employment, develop certain information or inventions that will be the
property of the Company. To protect the interest of the Company, you will need
to sign the Company's standard "Employee Inventions and Confidentiality
Agreement" as a condition of your employment. A copy of the agreement is
attached for your review. We wish to impress upon you that we do not wish you to
bring with you any confidential or proprietary material of any former employer
or to violate any other obligation to your former employers.

      At-Will Employment. While we look forward to a long and rewarding
relationship, should you decide to accept our offer, you will be an at-will
employee of the Company, which means the employment relationship can be
terminated by either of us
<PAGE>
for any reason at any time. Any statements or representations to the contrary
(and indeed, any statements contradicting any provision in this letter) should
be regarded by you as ineffective. The provisions of this offer letter may only
be modified by a document signed by you and the CEO of the company. Further,
your participation in any stock option or benefit program is not to be regarded
as assuring you of continuing employment for any particular period of time.

      Benefits Upon Resignation or Termination Due to Death or Permanent
Disability. In the event of your voluntary resignation from employment with the
Company, or in the event that your employment terminates as a result of death or
Permanent Disability, you shall be entitled to no compensation or benefits from
the Company other than those earned through the date of your termination or in
the case of any Options, vested through the date of your termination. In the
event of your voluntary resignation from employment, you agree to provide the
Company with 20-business days notice, in writing. The Company may accept all or
part of your notice and agrees to provide you with pay in lieu of notice as
appropriate.

For purposes of this letter, "Permanent Disability" means that you (i) have been
incapacitated by bodily injury or disease so as to be prevented thereby from
engaging in the performance of your duties following reasonable accommodation on
behalf of the Company; (ii) such total incapacity shall have continued for a
period of sixty (60) days; and (iii) such incapacity will, in the opinion of a
qualified physician, be permanent and continuous during the remainder of your
life.

      Benefits Upon Other Termination: You agree that the Company may terminate
your employment at any time, with or without cause. In the event of the
termination of your employment by the Company for the reasons set forth below,
you shall be entitled to the following:

      Termination for Cause: If the Company terminates your employment for
Cause, as defined below, you shall be entitled to no compensation or benefits
from the Company other than those earned, or in the case of any Options, vested
through the date of you termination. For purposes of this letter agreement, a
termination "for Cause" occurs if the Company for any of the following reasons
terminates your employment: theft, dishonesty, or falsification of any
employment or Company records; your conviction of a felony or of any criminal
act which impairs your ability to perform your duties with the Company; your
consistent poor performance, as determined by the CEO in his sole discretion;
your improper use or disclosure of the Company's confidential or proprietary
information; any intentional act by you that has a material detrimental effect
on the Company's reputation or business; or any material breach of the terms of
this letter agreement by you, which breach, if curable, is not cured within
thirty (30) days following written notice of such breach from the Company.

      Termination Without Cause: The termination of your employment by the
Company at any time for any reason other than (i) for Cause, or (ii) for your
death or Permanent Disability, shall constitute a "Termination Without Cause."
In the event of a Termination Without Cause, you shall be entitled to the
following separation benefits provided that you execute a general release of all
known and unknown claims against the Company in a form acceptable to the
Company:

      continued payment of your salary at your final Base Salary rate, less
applicable withholding, for six (6) months following your termination;

      as of your termination of employment, you will be entitled to elect to
purchase group health insurance coverage in accordance with federal law (COBRA).
If you timely elect COBRA coverage, the Company shall pay the premiums for your
COBRA coverage for a six (6) month period. Thereafter, you may elect to purchase
COBRA coverage at your own expense.
<PAGE>
      Authorization to Work. The Immigration Reform and Control Act of 1986
requires you, within three business days of hire, to present documentation
demonstrating that you have authorization to work in the United States.
Acceptable documentation is shown on the enclosed form titled Employment
Eligibility Verification (Form I-9). Please bring this form to work along with
the appropriate documentation to the new employee orientation on your first day
of employment. If you have questions about this requirement, which applies to
U.S. citizens and non-U.S. citizens alike, please contact our Human Resources
department.

      Arbitration Provision. In the event of any dispute or claim relating to or
arising out of this letter agreement, the employment relationship, or the
termination of that relationship for any reason (including, but not limited to,
any claims of breach of contract, wrongful termination, fraud, retaliation,
discrimination or harassment), the parties agree that all such disputes shall be
fully, finally and exclusively resolved by binding arbitration conducted by the
American Arbitration Association in Santa Clara County, California. The parties
hereby waive their respective rights to have any such disputes or claims tried
to a judge or jury. Provided, however, that this arbitration provision shall not
apply to any claims for injunctive relief by you or the Company and shall not
apply to any disputes or claims relating to or arising out of the misuse or
misappropriation of trade secrets or proprietary information.

      Term of Offer. This offer will remain open until close of business on
Friday, November 14, 2003. If you decide to accept our offer, and we hope that
you will, please sign the enclosed copy of this letter in the space indicated
and return it to me. This letter agreement and the Inventions and
Confidentiality Agreement and Stock Option Agreement referred to above
constitute the entire agreement between you and the Company regarding the terms
and conditions of your employment, and they supersede all prior negotiations,
representations or agreements between you and the Company. California law will
govern this letter agreement.

      Start Date. This offer is made with the understanding that you will start
employment with Immersion on or about November 17, 2003. For purposes of this
Agreement, the term "start date" shall mean the day on which you commence
employment with the Company.

      Tim, we are excited and pleased to have you join the Immersion team in
this exciting role and we look forward to a mutually beneficial working
relationship.

Sincerely,


/s/ Victor Viegas                      /s/ Rose Ramos
---------------------------            ---------------------------
Victor Viegas                          Rose Ramos
President and CEO                      Human Resources


Agreed and Accepted By:


/s/ Tim Tight                                  11/14/03
---------------------------            ---------------------------
Tim Tight                              Date
<PAGE>
                                   Addendum A

This Addendum A to the Employment with Immersion Corporation offer letter
identifies your 2004 variable compensation program details. Please see the
Immersion FY2004 Commission Plan for a more complete description of the
Immersion plan including objectives, eligibility, administration, plan design
and example calculations.

QUARTERLY QUOTA ACHIEVED

<70%              QPF = 0
70% to < 90%      QPF = 50%
90% and above     QPF = 100%

YTD REVENUE

$0 to $9M         Commission rate = 1.0%
>$9M              Commission rate = 2.0%

Commission paid for the quarter is the QPF multiplied by the YTD revenue
commission rate times the quarterly revenue of your Business Group.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>7
<FILENAME>f92905a1exv23w2.txt
<DESCRIPTION>EXHIBIT 23.2
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT


We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-108607 of Immersion Corporation on Form S-3 of
our report dated March 26, 2003 appearing in the Annual Report on Form 10-K of
Immersion Corporation for the year ended December 31, 2002, and to the reference
to us under the heading "Experts" in the Prospectus, which is part of this
registration statement.

/s/ DELOITTE & TOUCHE LLP
--------------------------

San Jose, California
February 10, 2004



</TEXT>
</DOCUMENT>
</SUBMISSION>
