<SUBMISSION>
<ACCESSION-NUMBER>0000891618-04-000796
<TYPE>S-3/A
<PUBLIC-DOCUMENT-COUNT>9
<FILING-DATE>20040325
<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>04688281
</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>f92905a2sv3za.htm
<DESCRIPTION>AMENDMENT NO. 2 TO FORM S-3
<TEXT>
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<DIV style="font-family: 'Times New Roman',Times,serif">


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

</FONT>
<DIV align="center" style="font-size: 10pt"><B>As filed with the
Securities and Exchange Commission on March&nbsp;24, 2004</B></DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>


<DIV align="right" style="font-size: 10pt">Registration No.&nbsp;333-108607</DIV>



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<P align="center" style="font-size: 14pt"><B>SECURITIES AND EXCHANGE COMMISSION</B>

<DIV align="center" style="font-size: 12pt"><B>Washington, DC 20549</B>
</DIV>

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

</FONT>
<DIV align="center" style="font-size: 10pt"><B>Amendment No.&nbsp;2
</B></DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="center" style="font-size: 10pt"><B>to</B>
<DIV align="center" style="font-size: 18pt"><B>FORM S-3</B></DIV>


<P align="center" style="font-size: 10pt">REGISTRATION STATEMENT<BR>
<B>Under<BR>
THE SECURITIES ACT OF 1933</B>


<P align="center" style="font-size: 24pt"><B>IMMERSION CORPORATION</B>

<DIV align="center" style="font-size: 10pt">(Exact name of Registrant as specified in its charter)</DIV>


<DIV align="center" style="font-size: 10pt"><HR size="1" noshade width="35%" align="center"></DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
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<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
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<TR valign="bottom">
    <TD align="center" valign="top"><B>Delaware</B><BR>
(State or other jurisdiction of<BR>
incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>94-3180138</B><BR>
(I.R.S. Employer<BR>
Identification No.)</TD>
</TR>

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</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><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)


<DIV align="center" style="font-size: 10pt"><HR size="1" noshade width="35%" align="center"></DIV>



<P align="center" style="font-size: 10pt"><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>



<P align="center" style="font-size: 10pt"><HR size="1" noshade width="35%" align="center">


<DIV align="center" style="font-size: 10pt">(Name, address, including zip code, and telephone number, including area code, of agent for service)</DIV>



<P align="center" style="font-size: 10pt"><B><I>Copy to:</I></B>



<P align="center" style="font-size: 10pt"><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


<DIV align="center" style="font-size: 10pt"><HR size="1" noshade width="35%" align="center"></DIV>




<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="center" style="font-size: 10pt"><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.



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

</FONT></DIV>
<P align="left" style="font-size: 10pt">&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>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt">&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">&#111;</FONT>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this Form is filed to a register additional securities for an offering
pursuant to Rule 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>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If this form is a post-effective amendment filed pursuant to Rule 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>


<P align="left" style="font-size: 10pt">&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>


<P align="center" style="font-size: 10pt"><HR size="1" noshade width="35%" align="center">



<P align="left" style="font-size: 10pt">&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 </B><B>Section 8(a)</B><B> 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;</B><B>8(a)</B><B>, may
determine.</B>


<P>
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<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">








<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.

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

</FONT>
<DIV align="left" style="font-size: 10pt">Subject to Completion, Dated March&nbsp;24, 2004
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt"><B>PROSPECTUS</B>
<P align="center" style="font-size: 10pt"><B>6,542,552 Shares of Common Stock of<BR>
Immersion Corporation<BR>
(issuable upon conversion of preferred stock and debentures)</B>



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

</FONT></DIV>
<P align="left" style="font-size: 10pt">&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 stockholder. 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.
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt">&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:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>transactions in the over-the-counter
market; or</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="9%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>transactions otherwise than on such
exchanges or services or in the over-the-counter market.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&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.

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

</FONT>
<DIV align="left" style="font-size: 10pt">&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 March&nbsp;23, 2004, the last
reported sales price for the common stock was $7.68 per share.</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt">&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>


<P align="left" style="font-size: 10pt">&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.


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt">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.




<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
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</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>TABLE OF CONTENTS</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<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 style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Page</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#101">Disclosure Regarding Forward-Looking Statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">i</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#102">Summary</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">i</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#103">Risk Factors</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#104">Use of Proceeds</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#105">Dividend Policy</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#106">Description of Capital Stock</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#107">Selling Stockholder</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#108">Plan of Distribution</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">21</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#109">Legal Matters</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#110">Experts</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px"><A href="#111">Where You Can Find More Information</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">24</TD>
    <TD>&nbsp;</TD>
</TR>

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<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="f92905a2exv5w1.txt">EXHIBIT 5.1</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="f92905a2exv10w4.txt">EXHIBIT 10.4</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="f92905a2exv10w5.txt">EXHIBIT 10.5</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="f92905a2exv10w8.txt">EXHIBIT 10.8</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="f92905a2exv10w9.txt">EXHIBIT 10.9</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="f92905a2exv10w10.txt">EXHIBIT 10.10</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="f92905a2exv10w11.txt">EXHIBIT 10.11</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="f92905a2exv23w2.txt">EXHIBIT 23.2</A></FONT></TD></TR>
</TABLE>
</DIV>


<DIV align="left">
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</DIV>

<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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.

<DIV align="left">
<A name="101"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS</B>



<P align="left" style="font-size: 10pt">&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.



<P align="center" style="font-size: 10pt">i
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="102"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>SUMMARY</B>



<P align="left" style="font-size: 10pt">&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>


<P align="center" style="font-size: 10pt"><B>Immersion Corporation</B>


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

</FONT>
<DIV align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are a leading provider of haptic technology that brings the sense of
feel or touch to a wide variety of markets. We develop, manufacture, license
and support a wide range of hardware and software technologies that let users
interact with digital devices using their sense of touch. We focus on four
application areas &#150; consumer, computing and entertainment; industrial and
automotive; three-dimensional and professional products; and medical
simulation. We manage these application areas under two operating and
reportable segments: 1) Immersion Computing, Entertainment and Industrial, and
2) Immersion Medical.
 </DIV>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In markets where our touch technology is a small piece of a larger system
(such as cellular phones, consumer gaming peripherals and automotive
interfaces), we license our technologies to third party manufacturers who
integrate our technology into their products and resell it under their own
brand names. In other markets, where our touch technology is a complete system
(like medical simulation systems and three-dimensional and professional
products), we manufacture and sell products under our own Immersion brand name,
through direct sales, distributors and value added resellers. In all market
areas, we also engage in development projects for third parties and government
agencies from time to time.


<P align="left" style="font-size: 10pt">&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 210 issued patents and more than 240 pending
patent applications worldwide, covering various aspects of hardware and
software technologies.
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We were incorporated in California in May&nbsp;1993 and reincorporated in
Delaware in November&nbsp;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.


<P align="center" style="font-size: 10pt"><B>Recent Developments</B>


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

</FONT>
<DIV align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On January&nbsp;16, 2004, Sony Computer Entertainment, Inc. and Sony Computer
Entertainment of America, Inc. (collectively, &#147;Sony Computer Entertainment&#148;)
filed motions for summary judgment on grounds of invalidity of our claims and
requested that it be dismissed as a party to our lawsuit against it. We also
filed a motion for summary judgment seeking dismissal to Sony Computer
Entertainment&#146;s defenses that our asserted patents are unenforceable. On
February&nbsp;27, 2004, the court held a hearing on these motions. On March&nbsp;2,
2004, the court issued a written ruling on the summary judgment motions. The
court denied Sony Computer Entertainment&#146;s motion for summary judgment of
invalidity. The court granted all but one of our motions and dismissed several
of Sony Computer Entertainment&#146;s defenses.</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>


<P align="center" style="font-size: 10pt">1
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>The Offering</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Common stock offered by the selling
stockholder
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">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.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD><FONT size="1">

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

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Common stock to be outstanding after this
offering
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Up to 27,442,203 shares, which
includes 20,899,651 shares
outstanding as of March&nbsp;10,
2004.</TD>
</TR>
<TR valign="bottom">
<TD><FONT size="1">

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


<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Use of proceeds
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">We will not receive any of the
proceeds from the sale of shares
by the selling stockholder.</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Nasdaq National Market symbol
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">IMMR</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Risk Factors
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">See &#147;Risk Factors&#148; beginning on
page 3 and other information in
this prospectus for a discussion
of factors you should consider
carefully before investing in
shares of our Common Stock.</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


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

</FONT>
<DIV align="left" style="font-size: 10pt">&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 March&nbsp;10, 2004 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.</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt">2
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="103"></A>
</DIV>

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

</FONT>
<DIV align="center" style="font-size: 10pt"><B>RISK FACTORS</B>
</DIV>


<P align="left" style="font-size: 10pt">&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>


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">WE HAD AN ACCUMULATED DEFICIT OF $93 MILLION AS OF DECEMBER 31, 2003, HAVE A
HISTORY OF LOSSES, WILL EXPERIENCE LOSSES IN THE FUTURE AND MAY NOT ACHIEVE OR
MAINTAIN PROFITABILITY.


<P align="left" style="font-size: 10pt">&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:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>protect and enforce our intellectual property, including the costs of
our litigation against Sony Computer Entertainment;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>continue to develop our technologies;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>attempt to expand the market for touch-enabled products;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>increase our sales efforts; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>pursue strategic relationships.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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. On January&nbsp;16, 2004, Sony Computer
Entertainment moved for summary judgment on the grounds that all asserted

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

</FONT></DIV>
<P align="center" style="font-size: 10pt">3
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left"><FONT size="1">

</FONT>
<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">claims are invalid. Immersion has opposed these motions. On February&nbsp;27,
2004, the Court held a hearing on these motions. On March&nbsp;2, 2004, the Court
issued a written ruling on the summary judgment motions. The Court denied
Sony&#146;s motion for summary judgment of invalidity. The Court granted all but
one of Immersion&#146;s motions and dismissed several Sony defenses. On March
23, 2004 the court rescheduled the trial from April 12, 2004 to April 19, 2004.
</DIV>

<P align="left" style="font-size: 10pt">&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 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. The case is
scheduled to go to trial in April&nbsp;2004.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These factors include:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the establishment or loss of licensing relationships;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the timing of payments under fixed and/or up-front license agreements;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the timing of our expenses, including costs related to litigation,
acquisitions of technologies or businesses;</TD>
</TR>

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

</FONT></DIV>
<P align="center" style="font-size: 10pt">4
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>


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

</FONT>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the timing of introductions of new products and product enhancements
by us, our licensees or their competitors;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to develop and improve our technologies;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to attract, integrate and retain qualified personnel; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>seasonality in the demand for our licensees&#146; products.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&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:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the lengthy and expensive process of building a relationship with potential licensees;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the fact that we may compete with the internal design teams of existing and potential licensees;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>
if we are not successful in the litigation with Sony, not only might we have a difficult time
signing up new gaming licensees, we also risk losing our existing licensees as well;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>difficulties in convincing car companies to sign a license agreement with us when they will
need to purchase components from one of their vendors who may or may not yet be able to meet
the car companies&#146; stringent quality and parts availability standards;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>difficulties in persuading existing and potential licensees to bear the development costs
necessary to incorporate our technologies into their products; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>challenges in demonstrating the compelling value of our technologies in new applications like
cell phones and automobiles.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A 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 declining and
is a substantially smaller market than either 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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">THE TERMS IN OUR AGREEMENTS MAY BE CONSTRUED BY OUR LICENSEES IN A MANNER THAT
IS INCONSISTENT WITH THE RIGHTS THAT WE HAVE GRANTED TO OTHER LICENSEES, OR IN
A MANNER THAT MAY REQUIRE US TO INCUR SUBSTANTIAL COSTS TO RESOLVE CONFLICTS
OVER LICENSE TERMS.
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt">5
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




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

</FONT>
<DIV align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have entered into, and will continue to enter into, agreements pursuant
to which our licensees are granted rights under our technology and intellectual
property. These rights may be granted in certain fields of use, or with
respect to certain market sectors or product categories, and may include
exclusive rights or sublicensing rights. The license terms and restrictions in
our agreements, including but not limited to field of use definitions, market
sector and product category definitions, and sublicensing and exclusivity
terms, shall collectively be referred to as &#147;License Provisions.&#148;
</DIV>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to the continuing evolution of market sectors, product categories and
licensee business models, and to the compromises inherent in the drafting and
negotiation of License Provisions, our licensees may, at some time during the
term of their agreements with us, interpret License Provisions in their
agreements in a way that is different to our interpretation of such License
Provisions, or in a way that is in conflict with the rights that we have
granted to other licensees. Such interpretations by our licensees may lead to
(a)&nbsp;claims that we have granted rights to one licensee which are inconsistent
with the rights that we have granted to another licensee, and/or (b)&nbsp;claims by
one licensee against another licensee that may result in our incurring
indemnification or other obligations or liabilities.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, after entering into an agreement it is possible that markets
and/or products, or legal and/or regulatory environments, will evolve in a
manner that was not foreseen or was not foreseeable at the time the agreement
was entered into. As a consequence, in the agreement we may have granted
rights that will preclude or restrict our exploitation of potentially lucrative
new opportunities that arise after the execution of the agreement.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">AUTOMOTIVE ROYALTIES COULD BE REDUCED IF BMW WERE TO ABANDON ITS IDRIVE SYSTEM.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our largest royalty stream from the auto industry is from BMW for its
iDrive controller. Press reviews of this system have been largely negative and
critical of the system&#146;s complexity. While this negative press is not our
fault, it may mean limited sales of BMW&#146;s cars, and could ultimately lead to
their abandoning the system, which could reduce or eliminate the related
royalties.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In February&nbsp;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
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<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.
</DIV>

<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For the years ended December&nbsp;31, 2003, 2002 and 2001 we derived 18%, 10%
and 9%, respectively, of our total revenue from Medtronic. If our royalty and
license revenue or product sales to Medtronic decline, and/or Medtronic reduces
the development activities we perform, then our total revenue 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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">MAD CATZ ACCOUNTS FOR A SIGNIFICANT PORTION OF OUR REVENUE AND THE FAILURE OF
MAD CATZ TO ACHIEVE SALES VOLUMES FOR ITS GAMING PRODUCTS THAT INCORPORATE OUR
TOUCH-ENABLING TECHNOLOGIES MAY REDUCE OUR TOTAL REVENUE.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mad Catz accounts for a significant portion of our total revenue. For the
year ended December&nbsp;31, 2003 our revenue from Mad Catz increased as compared to
2002. For the years ended December&nbsp;31, 2003, 2002 and 2001 we derived 7%, 6%
and 2%, respectively of our total revenue from Mad Catz. We expect that a
significant portion of our total revenue will continue to be derived from Mad
Catz. If Mad Catz fails to achieve anticipated sales volumes for its computer
peripheral products that incorporate our technologies, our total revenue may
decline.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">LOGITECH ACCOUNTS FOR A SIGNIFICANT PORTION OF OUR REVENUE AND THE FAILURE OF
LOGITECH TO ACHIEVE SALES VOLUMES FOR ITS GAMING PERIPHERAL PRODUCTS THAT
INCORPORATE OUR TOUCH-ENABLING TECHNOLOGIES MAY REDUCE OUR TOTAL REVENUE.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Logitech has in the past and may in the future account for a significant
portion of our revenue. For the year ended December&nbsp;31, 2003 our revenue from
Logitech declined from 2002. For the years ended December&nbsp;31, 2003, 2002 and
2001 we derived from Logitech 5%, 8% and 14%, respectively of our total
revenue. We expect that a significant portion of our total revenue 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 total revenue may decline.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">WE MAY ELECT TO OR NEED TO RAISE ADDITIONAL CAPITAL IN THE FUTURE, WHICH MAY
RESULT IN SUBSTANTIAL DILUTION TO OUR STOCKHOLDERS.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Should any unanticipated circumstances arise which significantly increase
our cash or capital requirements we may elect to or need to raise additional
capital in order to ensure a sufficient supply of cash for such events or
future periods. Our plans to raise additional capital may include possible
customer prepayments of certain royalty
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<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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 three 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.
</DIV>

<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our medical simulation products, such as our AccuTouch 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 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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&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 years ended December&nbsp;31, 2003, 2002 and 2001,
30%, 26% and 28% 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.


<P align="left" style="font-size: 10pt">&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.

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</FONT></DIV>
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<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">REDUCED SPENDING BY CORPORATE RESEARCH AND DEVELOPMENT DEPARTMENTS MAY
ADVERSELY AFFECT SALES OF OUR THREE-DIMENSIONAL AND PROFESSIONAL PRODUCTS.
</DIV>

<P align="left" style="font-size: 10pt">&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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&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 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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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.

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

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<DIV align="left" style="font-size: 10pt">&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.
 </DIV>

<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">IF WE FAIL TO PROTECT AND ENFORCE OUR INTELLECTUAL PROPERTY RIGHTS, OUR ABILITY
TO LICENSE OUR TECHNOLOGIES AND TO GENERATE REVENUES WOULD BE IMPAIRED.


<P align="left" style="font-size: 10pt">&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:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our pending patent applications may not result in the issuance of patents;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our patents may not be broad enough to protect our proprietary rights; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>effective patent protection may not be available in every country in which our licensees do business.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&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:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>laws and contractual restrictions may not be sufficient to prevent
misappropriation of our technologies or deter others from developing
similar technologies; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>policing unauthorized use of our products and trademarks would be
difficult, expensive and time-consuming, particularly overseas.</TD>
</TR>

</TABLE>


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">PRODUCT LIABILITY CLAIMS COULD BE TIME-CONSUMING AND COSTLY TO DEFEND, AND
COULD EXPOSE US TO LOSS.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the past, manufacturers of peripheral products including 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.
<DIV align="left"><FONT size="1">

</FONT></DIV>

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<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">THE HIGHER COST OF PRODUCTS INCORPORATING OUR TOUCH-ENABLING TECHNOLOGIES MAY
INHIBIT OR PREVENT THE WIDESPREAD ADOPTION AND SALE OF PRODUCTS INCORPORATING
OUR TECHNOLOGIES.
</DIV>

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Personal computer gaming peripherals and automotive and industrial
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., Samsung
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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">COMPETITION BETWEEN OUR PRODUCTS AND OUR LICENSEES&#146; PRODUCTS MAY REDUCE OUR
REVENUE.


<P align="left" style="font-size: 10pt">&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 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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">COMPETITION FROM NEW COMPETITORS IN THE MEDICAL MARKET MAY REDUCE OUR REVENUE.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the medical simulation market develops as we anticipate, we will
probably have a greater number of competitors and may have competition in
product lines where we have previously enjoyed sole supplier status. Increased
competition may result in the reduction of our market share and/or cause us to
reduce our selling prices which may result in a decline in our revenue.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&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:
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</DIV>

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

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we fail to develop new technologies;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the technologies we develop infringe on existing non-Immersion patents;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our new technologies fail to gain market acceptance; or</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our current products become obsolete.</TD>
</TR>

</TABLE>


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&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. Additionally, the single
supplier could increase prices and thereby erode our margins before we are able
to find an alternative source.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The product development process for automobiles is very lengthy, sometimes
longer than four years. 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. After the
product launches, our royalties still depend on market acceptance of the
vehicle, which is likely to be determined by many factors beyond our control.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">WE MIGHT BE UNABLE TO RETAIN OR RECRUIT NECESSARY PERSONNEL, WHICH COULD SLOW
THE DEVELOPMENT AND DEPLOYMENT OF OUR TECHNOLOGIES.


<P align="left" style="font-size: 10pt">&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 management and other
key personnel, many of whom would be difficult to replace. Management and
other key employees may voluntarily terminate their employment with us at any
time upon short notice. The loss of management or key personnel could delay
product development cycles or otherwise harm our business.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We believe that our future success will also depend largely on our ability
to attract, integrate and retain sales, support, marketing and research and
development personnel. Competition for such personnel is intense, and we may
not be successful in attracting, integrating and retaining such personnel.
Given the protracted nature of if, how and when we collect royalties on new
design contracts, it may be difficult to craft compensation plans that will
attract and retain the level of salesmanship needed to secure these contracts.
Some of 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
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</FONT>
<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.
</DIV>

<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have, and had in the past, and may have in the future, stockholders who
retain greater than 10%, or in some cases greater than 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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&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 increase and our revenues could decline.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">LEGISLATIVE ACTIONS, HIGHER INSURANCE COST AND POTENTIAL NEW ACCOUNTING
PRONOUNCEMENTS ARE LIKELY TO IMPACT OUR FUTURE FINANCIAL POSITION AND RESULTS
OF OPERATIONS.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">IF OUR FACILITIES WERE TO EXPERIENCE CATASTROPHIC LOSS, OUR OPERATIONS WOULD BE
SERIOUSLY HARMED.


<P align="left" style="font-size: 10pt">&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.

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

</FONT></DIV>
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<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.
</DIV>

<P align="left" style="font-size: 10pt">&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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">WE MAY ENGAGE IN ACQUISITIONS THAT COULD DILUTE STOCKHOLDERS&#146; INTERESTS, DIVERT
MANAGEMENT ATTENTION OR CAUSE INTEGRATION PROBLEMS.


<P align="left" style="font-size: 10pt">&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 cash
and/or an exchange of our securities, our stockholders could suffer significant
dilution. Acquisitions could also create risks for us, including:


<P>
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<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>unanticipated costs associated with the acquisitions;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>use of substantial portions of our available cash to consummate the acquisitions;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>diversion of management&#146;s attention from other business concerns;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>difficulties in assimilation of acquired personnel or operations; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>potential intellectual property infringement claims related to newly acquired product lines.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any acquisitions, even if successfully completed, might not generate
significant additional revenue or provide any benefit to our business.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt"><I>In re Immersion Corporation</I>



<P align="left" style="font-size: 10pt">&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
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.


<P align="left" style="font-size: 10pt">&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 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 be 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.


<P align="left" style="font-size: 10pt">&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,
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<P align="center" style="font-size: 10pt">14
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<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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 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.
</DIV>

<P align="left" style="font-size: 10pt">&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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&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&nbsp;million, and the minimum bid
price for our common stock must be at least $1.00 per share. As of December&nbsp;31,
2003, our most recent balance sheet date, we had a deficit 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
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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">OUR STOCK PRICE MAY FLUCTUATE REGARDLESS OF OUR PERFORMANCE.


<P align="left" style="font-size: 10pt">&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 others including
Microsoft; 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.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.


<P align="left" style="font-size: 10pt">&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,
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</FONT></DIV>

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<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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.
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left">
<A name="104"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>USE OF PROCEEDS</B>



<P align="left" style="font-size: 10pt">&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.

<DIV align="left">
<A name="105"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>DIVIDEND POLICY</B>



<P align="left" style="font-size: 10pt">&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.


<P align="center" style="font-size: 10pt">16
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<P align="center" style="font-size: 10pt"><B>DESCRIPTION OF CAPITAL STOCK</B>



<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt"><B>Common Stock</B>



<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt"><B>Preferred Stock</B>


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

</FONT>
<DIV align="left" style="font-size: 10pt">&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. On March&nbsp;12, 2004, we satisfied the
closing price and trading day requirements and therefore we have the ability to
redeem the Series&nbsp;A Redeemable Convertible Preferred Stock. 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.
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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


<P align="center" style="font-size: 10pt">17
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">these rights may be superior to the rights of the Common Stock with terms
calculated to delay or prevent a change in 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.


<P align="left" style="font-size: 10pt"><B>Registration Rights</B>


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

</FONT>
<DIV align="left" style="font-size: 10pt">&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 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 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 S-3 for more than 90&nbsp;days in any
six-month period. As we did not obtain the effectiveness of the registration
statement by March&nbsp;6, 2004, we have not satisfied our obligation to do so
within 180&nbsp;days after filing.

On March 18, 2004, Microsoft waived its right to receive penalties for this
failure to timely register it's shares, as well as its right to receive dividends
 that would otherwise accrue after the registration statement becomes effective.
In exchange, we agreed that Microsoft shall have the right to convert its shares of Series
A Redeemable Convertible Preferred Stock into Common Stock in advance of any decision by us
to redeem such shares of Series A Redeemable Convertible Preferred Stock.  We also agreed to
continue to work diligently towards obtaining the effectiveness of
 the registration statement.

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

</FONT></DIV>

<P align="left" style="font-size: 10pt"><B>Antitakeover Provisions</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Delaware Law</I></B>


<P align="left" style="font-size: 10pt">&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:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Certificate of Incorporation and Bylaw Provisions</I></B>


<P align="left" style="font-size: 10pt">&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


<P align="center" style="font-size: 10pt">18
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">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 ten percent of the shares entitled to vote at such a meeting.
Advance notice is required for stockholder proposals or director nominations by
stockholders.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt"><B>Transfer Agent and Registrar</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The transfer agent and registrar for our common stock is Boston Equiserve.

<DIV align="left">
<A name="107"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>SELLING STOCKHOLDER</B>



<P align="left" style="font-size: 10pt">&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.

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

</FONT>
<DIV align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the number of shares owned by the selling
stockholder as of March&nbsp;24, 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.
 </DIV><DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<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 style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15"><B>Number of Shares of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="15"><B>Common Stock</B><HR size="1" noshade></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Outstanding and</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Issuable Upon</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Selling</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Beneficially</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Conversion of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Offered</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Owned After</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Stockholder</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Owned(1)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Debentures(2)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Hereby(3)</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>the Offering(4)</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Microsoft Corporation
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2,686,897</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">3,855,655</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">6,542,552</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>




<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="right">(1)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">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.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(2)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">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.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">19
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">






<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="right">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>

<DIV align="left">
<A name="108"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>PLAN OF DISTRIBUTION</B>



<P align="left" style="font-size: 10pt"><B>Selling Stockholder</B>



<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt"><B>Method of Sale</B>



<P align="left" style="font-size: 10pt">&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:


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock may be sold on any exchange on which the securities are
listed.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Common Stock may be sold in private sales directly to purchasers.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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.


<P align="center" style="font-size: 10pt">20
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>Timing and Price</B>



<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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).


<P align="left" style="font-size: 10pt"><B>Proceeds, Commissions and Expenses</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will not receive any of the proceeds from this offering.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt"><B>Registration</B>



<P align="left" style="font-size: 10pt">&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:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Such time as all of the shares have been sold by the selling
stockholder;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&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.

<DIV align="left">
<A name="109"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>LEGAL MATTERS</B>


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

</FONT>
<DIV align="left" style="font-size: 10pt">&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, Palo Alto, California. As of
March&nbsp;23, 2004, attorneys of Gray Cary Ware &#038; Freidenrich LLP beneficially own
an aggregate of 2,000 shares of our common stock.
 </DIV>
 <DIV align="left"><FONT size="1">

</FONT></DIV>
<P align="center" style="font-size: 10pt">21
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="110"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>EXPERTS</B>


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

</FONT>
<DIV align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
consolidated financial statements and the related consolidated
financial statement schedule as of December&nbsp;31, 2003 and 2002,
and for each of the three years in the period ended December&nbsp;31,
2003, which expresses an unqualified opinion and includes an
explanatory paragraph regarding the adoption of Statement of
Financial Accounting Standards No.&nbsp;142, &#147;Goodwill and Other
Intangibles&#148; in 2002, incorporated in this prospectus by
reference from the Company&#146;s Current Report on Form 8-K have
been audited by Deloitte &amp; 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.
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>

<P align="center" style="font-size: 10pt">22
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="111"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>WHERE YOU CAN FIND MORE INFORMATION</B>



<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Annual Report on Form 10-K for the year ended December&nbsp;31, 2002;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Quarterly Report on Form 10-Q for the quarter ended March&nbsp;31, 2003;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Quarterly Report on Form 10-Q for the quarter ended June&nbsp;30, 2003;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our definitive Proxy Statement on Schedule&nbsp;14A filed on April&nbsp;29, 2003;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Current Report on Form 8-K dated July&nbsp;29, 2003;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Current Report on Form 8-K dated October&nbsp;27, 2003;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD><FONT size="1">

</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>

</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Current Report on Form 8-K dated February&nbsp;9, 2004;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Current Report on Form 8-K dated March&nbsp;1, 2004;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Current Report on Form 8-K dated March&nbsp;24, 2004; and</TD>
</TR>
<TR valign="bottom">
<TD><FONT size="1">

</FONT></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>

</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">&#149;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Registration Statement on Form 8-A12G, filed on November&nbsp;5,
1999, which contains a description of our common stock.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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.


<P align="center" style="font-size: 10pt">23
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><B>PART II<BR>
INFORMATION NOT REQUIRED IN PROSPECTUS</B>



<P align="left" style="font-size: 10pt"><B>ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.</B>



<P align="left" style="font-size: 10pt">&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.

<DIV>
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="80%">
<!-- Begin Table Head -->
<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>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD colspan="5"><FONT size="1">

</FONT></TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">SEC registration fee</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">2,490</TD>
    <TD>&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Accounting fees and expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Legal fees and expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">27,510</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Printing and engraving expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="1" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #eeeeee">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Miscellaneous expenses</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-10px">Total</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="right">$</TD>
    <TD align="right">70,000</TD>
    <TD>&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD><DIV style="margin-left:10px; text-indent:-10px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right"><HR size="4" noshade>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>


<!-- End Table Body -->
</TABLE>
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>



<P align="left" style="font-size: 10pt"><B>ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.</B>



<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&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&nbsp;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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Registrant has obtained liability insurance for the benefit of its
directors and officers.


<P align="left" style="font-size: 10pt"><B>ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Exhibits:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Number</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Description</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Bylaws(1)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Certificate of Incorporation(2)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certificate of Designation(3)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">7% Senior Redeemable Convertible Debenture(4)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Registration Rights Agreement dated July&nbsp;25, 2003(5)</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt">II-1
</DIV>

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


<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Number</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Description</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stockholder&#146;s Agreement dated July&nbsp;25, 2003(6)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Gray Cary Ware &#038; Freidenrich LLP</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Series&nbsp;A Redeemable Convertible Preferred Stock Purchase Agreement dated July&nbsp;25, 2003(7)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Redeemable Convertible Debenture Purchase Agreement dated July&nbsp;25, 2003(8)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Settlement Agreement dated July&nbsp;25, 2003 by and between Microsoft Corporation and
Immersion Corporation(9)*</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">License Agreement dated July&nbsp;25, 2003 by and between Microsoft Corporation and Immersion
Corporation(9)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Sublicense Agreement dated July&nbsp;25, 2003 by and between Microsoft Corporation and
Immersion Corporation(9)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consulting Agreement dated July&nbsp;1, 2003 by and between Robert Van Naarden and Immersion
Corporation*</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement dated November&nbsp;13, 2003 by and between Tim Tight and Immersion
Corporation*</TD>
</TR>


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

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

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement dated February&nbsp;24, 2004 by and between Richard Vogel and Immersion
Corporation</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.9
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">First Amendment to Lease between WW&#038;LJ Gateways, Ltd. and Immersion Corporation dated
March&nbsp;17, 2004</TD>
</TR>


<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Letter Agreement dated March 18,
2004 by and between Microsoft Corporation and Immersion Corporation</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.11
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">New Form of Indemnity Agreement</TD>
</TR>

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

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

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Gray Cary Ware &#038; Freidenrich LLP (contained in Exhibit&nbsp;5.1)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Deloitte &#038; Touche LLP, Independent Auditors</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">24
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney (contained in the signature page hereof)</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>




<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="right">*</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Previously filed</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(1)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;3.1 to the Company&#146;s Annual Report
on Form 10-K filed March&nbsp;28, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(2)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;3.4 to the Company&#146;s Quarterly
Report on Form 10-Q on August&nbsp;14, 2000.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(3)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;3.1 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(4)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;4.1 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(5)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;4.2 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(6)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;4.3 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

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

<TR><TD>&nbsp;</TD></TR>

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

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(9)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">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.</TD>
</TR>

</TABLE>



<P align="left" style="font-size: 10pt"><B>ITEM 17. UNDERTAKINGS.</B>



<P align="left" style="font-size: 10pt">&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.


<P align="center" style="font-size: 10pt">II-2
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby undertakes:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">(i)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">(ii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">(iii)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&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.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned registrant hereby undertakes that:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="right">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

</TABLE>

<P align="center" style="font-size: 10pt">II-3
</DIV>

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

<DIV style="font-family: 'Times New Roman',Times,serif">


<P><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>

<DIV align="left">
<A name="112"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>SIGNATURES</B>


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

</FONT>
<DIV align="left" style="font-size: 10pt">&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 S-3 and has duly caused this Amendment No.&nbsp;2 to
be signed on its behalf by the undersigned, thereunto duly authorized in the
City of San Jose, State of California on March&nbsp;24, 2004.
 </DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="43%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left">IMMERSION CORPORATION</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Victor A. Viegas</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><HR size="1" noshade>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Victor A. Viegas</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President, Chief Executive Officer and Chief</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Financial Officer</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


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

</FONT>
<DIV align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, this Amendment
No.&nbsp;2 has been signed by the following persons in the capacities and on the
dates indicated:
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="35%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR valign="bottom">
<TD><FONT size="1">

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

<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Name</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Title</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Date</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Victor A. Viegas
<HR size="1" noshade width="100%" align="left">
Victor A. Viegas
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President, Chief Executive
Officer, Chief Financial
Officer and Director
(Principal Executive Officer
and Principal Financial and
Accounting Officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;24, 2004</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">*<BR>
<HR size="1" noshade width="100%" align="left">
Steven Blank
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;24, 2004</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">*<BR>
<HR size="1" noshade width="100%" align="left">
Jonathan Rubinstein
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;24, 2004</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">*<BR>
<HR size="1" noshade width="100%" align="left">
John Hodgman
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;24, 2004</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">*<BR>
<HR size="1" noshade width="100%" align="left">
Jack Saltich
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;24, 2004</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">*<BR>
<HR size="1" noshade width="100%" align="left">
Robert Van Naarden
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">March&nbsp;24, 2004</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="100%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By:/s/ Victor A. Viegas</DIV></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><HR size="1" noshade width="15%" align="left"></DIV></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Victor A. Viegas</DIV></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attorney-In-Fact</DIV></TD>
</TR>
<!-- End Table Body -->
</TABLE>
<DIV align="left"><FONT size="1">

</FONT></DIV></DIV>



<P align="center" style="font-size: 10pt">II-4
</DIV>

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


<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left">
<A name="113"></A>
</DIV>

<P align="center" style="font-size: 10pt"><B>INDEX TO EXHIBITS</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="8%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="90%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Exhibit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>&nbsp;</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Number</B><HR size="1" noshade></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Description</B><HR size="1" noshade></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Bylaws(1)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Amended and Restated Certificate of Incorporation(2)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Certificate of Designation(3)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">7% Senior Redeemable Convertible Debenture(4)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Registration Rights Agreement dated July&nbsp;25, 2003(5)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stockholder&#146;s Agreement dated July&nbsp;25, 2003(6)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">5.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Gray Cary Ware &#038; Freidenrich LLP</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Series&nbsp;A Redeemable Convertible Preferred Stock Purchase Agreement dated July&nbsp;25, 2003(7)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Redeemable Convertible Debenture Purchase Agreement dated July&nbsp;25, 2003(8)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Settlement Agreement dated July&nbsp;25, 2003 by and between Microsoft Corporation and
Immersion Corporation(9)*</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.4
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">License Agreement dated July&nbsp;25, 2003 by and between Microsoft Corporation and Immersion
Corporation(9)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Sublicense Agreement dated July&nbsp;25, 2003 by and between Microsoft Corporation and
Immersion Corporation(9)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.6
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consulting Agreement dated July&nbsp;1, 2003 by and between Robert Van Naarden and Immersion
Corporation*</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.7
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement dated November&nbsp;13, 2003 by and between Tim Tight and Immersion
Corporation*</TD>
</TR>


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

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

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.8
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Employment Agreement dated February&nbsp;24, 2004 by and between Richard Vogel and Immersion
Corporation</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.9
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">First Amendment to Lease between WW&#038;LJ Gateways, Ltd. and Immersion Corporation dated
March&nbsp;17, 2004</TD>
</TR>


<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<TR valign="bottom">
<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.10
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Letter Agreement dated March 18,
2004 by and between Microsoft Corporation and Immersion Corporation</TD>
</TR>
<TR valign="bottom">
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">10.11
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">New Form of Indemnity Agreement</TD>
</TR>
<TR valign="bottom">
<TD><FONT size="1">

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

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Gray Cary Ware &#038; Freidenrich LLP (contained in Exhibit&nbsp;5.1)</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Deloitte &#038; Touche LLP, Independent Auditors</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">24
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Power of Attorney (contained in the signature page hereof)</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>




<P>
<HR size="1" width="18%" align="left" noshade>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
 <TR valign="top">
    <TD width="1%" nowrap align="right">*</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Previously filed</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>
<TR valign="top">
    <TD width="1%" nowrap align="right">(1)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;3.1 to the Company&#146;s Annual Report
on Form 10-K filed March&nbsp;28, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(2)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;3.4 to the Company&#146;s Quarterly
Report on Form 10-Q on August&nbsp;14, 2000.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(3)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;3.1 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(4)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;4.1 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(5)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;4.2 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(6)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Incorporated by reference to Exhibit&nbsp;4.3 to the Company&#146;s Current Report
on Form 8-K on July&nbsp;29, 2003.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

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

<TR><TD>&nbsp;</TD></TR>

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

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="right">(9)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">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.</TD>
</TR>

</TABLE>




<P align="center" style="font-size: 10pt">&nbsp;
</DIV>


</BODY>
</HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>3
<FILENAME>f92905a2exv5w1.txt
<DESCRIPTION>EXHIBIT 5.1
<TEXT>
<PAGE>


                                                                     EXHIBIT 5.1
                                 March 23, 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>f92905a2exv10w4.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: [****] content, access to
which may be lawfully provided solely to users who certify that they are at
least 18 years of age; and (ii) media (e.g. videos, CDs and DVDs) containing the
content described in (i), but only to the extent that the rights to create the
content and/or media described in (i) and (ii) above have been licensed prior to
the Effective Date under the Licensed Patents to another party on an exclusive
basis.

                  (b)      "CONDITIONAL PATENTS" means Patents for which the
grant of licenses, releases, or freedom from suit to Microsoft or Microsoft
Subsidiaries results in an obligation to pay, or the payment of, additional
royalties by Immersion or its Subsidiaries to third parties (except for payments
among Immersion and its Subsidiaries, and payments made to third parties for
inventions made by said third parties while employed by or under an obligation
to assign inventions to Immersion or any of its Subsidiaries).

                  (c)      "FOUNDRY PRODUCT" means a product which is designed
by or for a third party without substantial input from Microsoft, and
manufactured, reproduced, sold, leased, licensed or otherwise transferred from
Microsoft to that third party (or to customers of, or as directed by, that third
party) on essentially an exclusive basis.

                  (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.

                                       1

<PAGE>

                             PROVIDED UNDER RULE 408

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

                  (f)      "MEDICAL PRODUCT" means any hardware product,
software product, or combination of hardware and software that uses Touch
Technology for the medical treatment of patients, the training of medical
personnel for medical procedures, or the simulation of any medical procedure.
General purpose hardware or software whose primary function is not the delivery
of one of the foregoing is not a Medical Product.

                  (g)      "MICROSOFT AND MICROSOFT SUBSIDIARY OPERATING SYSTEM"
means an Operating System that is sold, licensed, sublicensed, or otherwise
distributed by Microsoft or Microsoft's Subsidiaries to third parties.

                  (h)      "OPERATING SYSTEM" 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 physically separate from a primary
computer (such primary computer being, for example, a personal computer or a
game console), or is physically separate from the primary computing processor
when used in a device other than a primary computer (such primary computing
processor being, for example, a processor contained in a smart refrigerator).
For example, a standalone gamepad, touchpad, joystick, wheel, or haptic control
knob that communicates (by wired or wireless means) with a personal computer is
a "Peripheral Device" as each of those devices is physically separated from the
"primary computer" with which it communicates. Similarly, a joystick built into
a control panel on an aircraft carrier or a touchpad built into the door of a
refrigerator is also a "Peripheral Device," as each of those user input controls
is separate from the primary computer or primary computing processor with which
such user input control communicates. For purposes of this Agreement, the
Parties expressly agree that:

                           (i)      an arcade-style gaming device shall not be
deemed a "Peripheral Device" for purposes of this definition and this Agreement,
even if it includes or comprises a touch sensation mechanism, for example, a
vibrating seat, vibro-gamepad, touchpad, slider, touchscreen, joystick, wheel,
or haptic control knob;

                           (ii)     a [****] other than a portable keyboard not
distributed in connection with the device with which it interacts), laptop
computer, Tablet PC or Smart Display device (including any associated styluses
or pens, solely when bundled with and used in conjunction with such Tablet PC or
Smart Display device or replacement components for the foregoing which may be
sold separately), or "Game Boy" -type handheld gaming device) is not a
"Peripheral Device," even if it includes or comprises a vibrating seat,
vibro-gamepad, touchpad, slider, touchscreen, joystick, wheel, or haptic control
knob; and

                                       2

<PAGE>

                             PROVIDED UNDER RULE 408

                           (iii)    any physically separate hardware device
(other than styluses, pens, or similar-type devices bundled with and used in
conjunction with Tablet PCs or Smart Display-type devices, or replacement
components for the foregoing which may be sold separately) which communicates
with any of the devices identified in (i) or (ii) above is a Peripheral Device
(for example, a gamepad that communicates (by wired or wireless means) with a
laptop 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 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 (excluding Sony
Corporation, Sony Computer Entertainment, Inc., Sony Computer Entertainment of
America, Inc., any of their Subsidiaries or successors (collectively, "Excluded
Sublicensees"), and any other entity solely to the extent that such other entity
provides services to or makes products designed specifically for use in
conjunction with the products of the Excluded Sublicensees). The right to
sublicense shall exclude the following fields of use:

                                       3

<PAGE>

                             PROVIDED UNDER RULE 408

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

                           (ii)     hardware, (a) to the extent that such
hardware does not use and is not controlled by a Microsoft or Microsoft
Subsidiary Operating System, or, (b) if such hardware can use or be controlled
by multiple Operating Systems (including a Microsoft or Microsoft Subsidiary
Operating System), to the extent that such hardware uses and is controlled by an
Operating System other than a Microsoft or Microsoft Subsidiary Operating
System;

                           (iii)    software and services, to the extent that
they do not use or run on a Microsoft or Microsoft Subsidiary Operating System;
and

                           (iv)     Peripheral Devices.

         In the event that at any given date Microsoft enters into an agreement
with a third party which grants such third party a sublicense under the Licensed
Patents, as permitted under this Section 2(b), such third party shall not by
virtue of such sublicense from Microsoft be excused from such third party's
obligations to pay Immersion pursuant to any agreement entered into by Immersion
and such third party prior to such date.

                  (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 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 upon written request, it will grant to
Microsoft and Microsoft Subsidiaries to the broadest extent and under the most
favorable terms and conditions (including the most favorable

                                       4

<PAGE>

                             PROVIDED UNDER RULE 408

royalty terms) which Immersion then has the ability or right to do, a license,
release and covenant with respect to any Conditional Patents under the terms,
conditions, licenses and covenants granted herein. Such license, release and
covenant shall be granted under a separate agreement upon payment to Immersion
of the additional royalty or other consideration which Immersion or any of its
Subsidiaries is obligated to pay to a third party because of the grant of such
license, release or covenant thereunder. In the event that Immersion's
obligation to pay a particular licensor is based on a percentage of Immersion's
sublicensing revenues from such Conditional Patents, Microsoft and Immersion
agree to negotiate a reasonable payment based on the fair market value of the
sublicense of such Conditional Patents. If Immersion sublicenses such
Conditional Patents to other parties, the fair market value shall be no more
than the best terms that Immersion grants or has granted to other sub-licensees
for the same or similar sublicense.

                  (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. In the
event that Immersion assigns rights to an invention that is documented and ready
for patenting but for which an application has not yet been filed, in any way
for the purpose of avoiding the resulting patent application being captured as a
"Licensed Patent" under this Agreement (for example, to a licensing entity such
as Refac or ThinkFire), Immersion agrees that such transfer shall be subject to
this Agreement and that any resulting Patent(s) on the transferred invention
shall be included as Licensed Patent(s). The foregoing shall not apply to (1)
bona fide transactions that do not include as a purpose of such transactions an
intent to avoid capturing any invention as a "Licensed Patent" under this
Agreement an invention that is documented and ready for patenting but for which
an application has not yet been filed; and (2) the following types of
transactions:

                           (i)      A development agreement where the total
compensation rendered to Immersion is less than [****] Immersion's costs of
performing such development;

                           (ii)     A development or asset sale agreement where
the sole compensation rendered to Immersion is [****]

                           (iii)    A development or asset sale agreement where
the sole compensation rendered to Immersion [****]

                           (iv)     Any standard development agreement or
agreement for sale of technology to an entity that intends to use the developed
or transferred technology in the entity's products.

         Microsoft shall use good faith efforts to respond to any requests by
Immersion to determine if a given agreement falls within the terms of (i)
through (iv) above.

                  (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

                                       5

<PAGE>

                             PROVIDED UNDER RULE 408

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 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

<PAGE>

                             PROVIDED UNDER RULE 408

         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)      as of the Effective Date, the issued
Licensed Patents owned by Immersion are subsisting and have not lapsed or
otherwise become abandoned;

                           (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 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

                                       7

<PAGE>

                             PROVIDED UNDER RULE 408

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:

     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: Law & Corporate Affairs
     Fax: (425) 936-7409

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

                                       8




<PAGE>

                             PROVIDED UNDER RULE 408

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 Sony Corporation, Sony Computer
Entertainment, Inc., Sony Computer Entertainment of America, Inc., Nintendo,
Inc., or any of their Subsidiaries or successors. 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 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

                                       9

<PAGE>

                             PROVIDED UNDER RULE 408

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]

                                       10

<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:

                                       11

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>5
<FILENAME>f92905a2exv10w5.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: (i) [****] content, access to which may
                  be lawfully provided solely to users who certify that they are
                  at least 18 years of age; and (ii) media (e.g. videos, CDs and
                  DVDs) containing the content described in (i), but only to the
                  extent that the rights to create the content and/or media
                  described in (i) and (ii) above have been licensed by
                  Immersion prior to the Effective Date under the Licensed
                  Patents to another party on an exclusive basis.

         b.       "CONDITIONAL PATENTS" means Patents for which the grant of
                  licenses, releases, or freedom from suit to Microsoft or
                  Microsoft Subsidiaries for sublicensing or passing through to
                  a Sublicensee, on the terms and conditions set forth herein,
                  results in an obligation to pay, or the payment of, additional
                  royalties by Immersion or its Subsidiaries to third parties
                  (except for payments among Immersion and its Subsidiaries, and
                  payments made to third parties for inventions made by said
                  third parties while employed by or under an obligation to
                  assign inventions to Immersion or any of its Subsidiaries).

         c.       "FOUNDRY PRODUCT" means a product which is designed by or for
                  a third party without substantial input from the Sublicensee,
                  and manufactured, reproduced, sold, leased, licensed or
                  otherwise transferred from the Sublicensee to that third

                                             1

<PAGE>

                             PROVIDED UNDER RULE 408

                  party (or to customers of, or as directed by, that third
                  party) on essentially an exclusive basis

         d.       "GAME PLATFORM" means: (i) a proprietary consumer computing
                  platform manufactured for the purpose of running game software
                  licensed and written for that platform; (ii) any peripheral
                  device (such as a game pad, joystick or wheel) intended to be
                  used with the computing platform referenced in (i) above, so
                  as to receive input from or transmit output to the user; (iii)
                  game software licensed and written for the computing platform
                  referenced in (i) above; (iv) software development tools used
                  to produce the game software described in (iii) above; and (v)
                  network services to support online gaming activity, including,
                  for example, player match making, data warehousing and voice
                  and chat communications. Sony's PlayStation and Nintendo's
                  GameCube and GameBoy platforms are examples of a Game
                  Platform.

         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.

         g.       "MEDICAL PRODUCT" means any hardware product, software
                  product, or combination of hardware and software that uses
                  Touch Technology for the medical treatment of patients, the
                  training of medical personnel for medical procedures, or the
                  simulation of any medical procedure. 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 SONY PRODUCTS" means:

                  (i)      handheld mobile entertainment or productivity devices
                           (e.g. a downloadable media player device or a PDA),
                           and portable keyboards, styluses or pens (and
                           replacement components) distributed in connection
                           with such handheld mobile entertainment or
                           productivity devices, except to the extent that such
                           devices constitute Adult Products, Medical Products,
                           or Foundry Products; and

                  (ii)     handheld mobile communications devices (e.g., a cell
                           phone) distributed under a Sony or Sony Subsidiary
                           brand, 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 Sony Product.

                                       2

<PAGE>

                             PROVIDED UNDER RULE 408

         j.       "SONY" means Sony Corporation, Sony Computer Entertainment,
                  Inc., Sony Computer Entertainment of America, Inc., and any
                  and all of their Subsidiaries.

         k.       "SONY LAWSUIT" means 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), as such action pertains to Sony.

         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), 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.

                                       3

<PAGE>

                             PROVIDED UNDER RULE 408

                  (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 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

                                       4

<PAGE>

                             PROVIDED UNDER RULE 408

                  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 Sony 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 [****].

                  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

                                       5

<PAGE>

                             PROVIDED UNDER RULE 408

                  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 SONY/ERICSSON 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 Sony Products to Sony - Ericsson Mobile
                  Communications, 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 Sony acquires
                  majority ownership of Sony - Ericsson Mobile Communications,
                  the aforementioned percentage shall be increased to [****].

         h.       CONDITIONAL PATENTS. Immersion on behalf of itself and its
                  Subsidiaries, agrees that upon written request, it will grant
                  to Microsoft and Microsoft Subsidiaries to the broadest extent
                  and under the most favorable terms and conditions (including
                  the most favorable royalty terms) which Immersion then has the
                  ability or right to do, a license, release and covenant with
                  respect to any Conditional Patents under the terms,
                  conditions, licenses and covenants granted herein, (i.e. of
                  such scope as to permit the sublicense of such Conditional
                  Patents on the terms set forth herein). Such license, release
                  and covenant shall be granted under a separate agreement upon
                  payment to Immersion of the additional royalty or other
                  consideration which Immersion or any of its Subsidiaries is
                  obligated to pay to a third party because of the grant of such
                  license, release or covenant thereunder. In the event that
                  Immersion's obligation to pay a particular licensor is based
                  on a percentage of Immersion's sublicensing revenues from such
                  Conditional Patents, Microsoft and Immersion agree to
                  negotiate a reasonable payment based on the fair market value
                  of the sublicense of such Conditional Patents. If Immersion
                  sublicenses such Conditional Patents to other parties, the
                  fair market value shall be no more than the best terms that
                  Immersion grants or has granted to other sub-licensees for the
                  same or similar sublicense.

         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.

                                       6

<PAGE>

                             PROVIDED UNDER RULE 408

         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.

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;

                                       7

<PAGE>

                             PROVIDED UNDER RULE 408

                  (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;

                  (v)      it has not assigned or otherwise transferred or
                           subrogated any interest in any of its claims that are
                           the subject of the Sony Lawsuit, and, except in
                           connection with an assignment by Immersion permitted
                           by Section 8(d), will not assign or otherwise
                           transfer or subrogate any interest (other than in the
                           proceeds) in any of its claims that are the subject
                           of the Sony Lawsuit;

                  (vi)     [****];

                  (vii)    as of the Effective Date, the issued Licensed Patents
                           owned by Immersion are subsisting and have not lapsed
                           or otherwise become abandoned;

                  (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

                                       8

<PAGE>

                             PROVIDED UNDER RULE 408

                  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 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.

                                       9

<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:

         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

                  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 Sony
                  Corporation, Sony Computer Entertainment, Inc., Sony Computer
                  Entertainment of America, Inc., Nintendo, Inc., or any of
                  their Subsidiaries or successors. This Sublicense

                                       10

<PAGE>

                             PROVIDED UNDER RULE 408

                  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 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]

                                       11

<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>

                CONFIDENTIAL TREATMENT REQUESTED - EDITED COPY

                                    EXHIBIT A

                   ROYALTIES FOR ROYALTY-BEARING SONY 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 Sony 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.       Portable keyboards, styluses or pens bundled with handheld mobile
         entertainment or productivity devices shall not bear a separate
         royalty; the only royalty payable shall be on the underlying handheld
         mobile entertainment or productivity devices with which such portable
         keyboards, styluses or pens are intended to be used.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>6
<FILENAME>f92905a2exv10w8.txt
<DESCRIPTION>EXHIBIT 10.8
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.8

                              EMPLOYMENT AGREEMENT

This Employment Agreement ("Agreement") is made this 24th day of February 2004
by and between Immersion Medical ("Employer"), a Gaithersburg, MD company with
offices at 55 West Watkins Mill Road, Gaithersburg, MD 20878, and Richard Vogel,
("Employee").

WHEREAS Employer is engaged in the business of medical simulation and
visualization; and,

WHEREAS Employer and Employee mutually desire the employment of Employee;
therefore,

The Parties agree as follows:

ARTICLE I - SCOPE

     A. Employee will serve employer as "Senior Vice President-General Manager,
     Immersion Medical". Employee accepts and agrees to such employment and to
     perform all of the duties that may be required by the express and implicit
     terms of this Agreement, to the reasonable satisfaction of Employer.
     Employee will also perform such other and unrelated service and Employer
     may assign duties as to Employee from time to time.

     B. Employee agrees to perform faithfully, industriously, and to the best of
     Employee's ability, experience, and talents to further the growth and
     development of Immersion Medical. Such duties shall be provided at
     Gaithersburg, MD and at such other places(s) as the needs, business or
     opportunities of the Employer may require from time to time.

     C. Employee will have an adequate working knowledge of the services and
     products offered by Immersion Medical.

ARTICLE II - TERM

     This Agreement shall be effective for a minimum period of six (6) months,
     beginning on March 1, 2004, unless and until terminated by one or both
     parties in accordance with ARTICLE X herein.

ARTICLE III - COMPENSATION

     Financial compensation will be provided via A. Base Salary and Incentive B.
     Benefits C. Stock Options D. Relocation E. Termination for Cause F.
     Termination Without Cause



<PAGE>



     A. BASE SALARY AND INCENTIVE
     Your initial base salary will be $200,000 annually, payable in accordance
     with the Company's customary payroll practice. In addition to your base
     salary, the company agrees to compensate you up to an additional 50% of
     your base salary, contingent upon successfully achieving mutually agreeable
     objectives during 2004.


     B. BENEFITS
     As of the date-of-hire, Employee will be eligible for all employee benefits
     offered to full-time employees. Employee will also accrue vacation at a
     rate of 4 weeks per year.

     C. STOCK OPTIONS
     Effective upon board approval, the Company will grant you an option to
     purchase 200,000 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. All Options, to
     the extent unexercised and exercisable by the Employee on the date on which
     the Employee's employment is terminated without Cause, may be exercised by
     Employee within six (6) months after the Employee's employment is
     terminated but in any event no later than the option expiration date as set
     forth in the Company's Plan.


     D. RELOCATION
     In addition to the above-mentioned salary and benefits, Immersion Medical
     agrees to subsidize your relocation to Maryland in the amount of up to
     $50,000 (subject to appropriate state and federal taxes). A copy of the
     Relocation Policy will be forwarded to you for your review and signature.
     Funds will be released upon Immersion obtaining a signed copy of the
     Relocation Policy and as approved expenses are incurred.

     E. 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. 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 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.

     F. TERMINATION WITHOUT CAUSE
     The termination of Employee's employment by the Company within the
     twenty-four (24) month period beginning on your start date for any reason
     other than

<PAGE>

     (i) for Cause, or (ii) for Employee's death or permanent disability shall
     constitute a "Termination Without Cause." In the event of a Termination
     Without Cause, Employee shall be entitled to the following separation
     benefits provided that Employee executes a general release of all known and
     unknown claims against the Company in a form acceptable to the Company:

     1.   Continued payment of Employee's salary at his final Base Salary rate,
          less applicable withholding, for six (6) months following his
          termination; As of Employee's termination of employment, he will be
          entitled to elect to purchase group health insurance coverage in
          accordance with federal law (COBRA). If Employee timely elects COBRA
          coverage, the Company shall pay the premiums for Employee's COBRA
          coverage for the following six (6) month period. Thereafter, Employee
          may elect to continue COBRA coverage at his own expense.

ARTICLE IV - PERFORMANCE APPRAISALS

     Employee performance appraisals will be given after the first six (6)
     months of employment and every January thereafter. January performance
     appraisals may be accompanied by a salary review beginning January, 2005.

ARTICLE V - REIMBURSEMENT FOR EXPENSES

     Immersion Medical will reimburse expenses incurred by Employee in
     fulfilling responsibilities to Immersion Medical in full, so long as the
     company's CEO deems expenses reasonable and necessary.

     1.   Receipt must accompany request for reimbursement.

     2.   The CEO must approve all expenditures entailed for work pursuant to
          this agreement before reimbursement will be made.

ARTICLE VI - INTELLECTUAL PROPERTY

     All writings, without limitation, including software program codes, graphic
     designs, technical data, and documentation related thereto, produced by the
     Employee in the course of work for Employer, shall be considered works made
     for hire and the property of Employer. Employee hereby assigns and
     transfers to Employer the ownership of copyright on any and all such works,
     whether published or unpublished.

     Employee agrees to immediately disclose to Immersion Medical and to assign
     to Immersion Medical all computer software and displays and inventions; (1)
     made or (2) first reduced to practice during the course of the Employee's
     employment at Immersion Medical, and to grant the right to Immersion
     Medical (entirely at its own expense) any and all patents for those
     inventions, displays and software in any and all countries.

     In order to perfect Immersion Medical's right, title and interest in and to
     said


<PAGE>

     inventions, displays, software, and patents, and to convey to Immersion
     Medical rights under the International Conventions for the Protection of
     Industrial Property and the Patent Cooperation Treaty, Employee will,
     without further compensation:

          1.   Execute and deliver all papers and instruments, and
          2.   Perform such further acts, including giving testimony or
               furnishing evidence in the prosecution or defense of appeals,
               interferences, suits and controversies relating to any aforesaid
               invention as may be deemed necessary by Immersion Medical.


ARTICLE VII -  LIMITATION OF CONTRACTUAL AUTHORITY

     A. Employee shall enter no contractual agreement representing Immersion
     Medical without the specific prior approval of the CEO. The CEO must
     approve production Proposals and/or quotes before being presented to the
     Client.

     B. Employee shall not have the right to obligate any funds without the
     prior consent of Employer. If such powers of contractual commitment shall
     be bestowed upon Employee, the limitations of said responsibility shall be
     clearly stated in Employer policy statement or incorporated herein as an
     attachment.

ARTICLE VIII - CONFIDENTIALITY

     Employee agrees not at any time or in any manner, either directly or
     indirectly, to divulge, disclose, or communicate in any manner, any
     Immersion Medical proprietary and/or confidential information to any third
     party without the prior written consent of the Employer. Employee will
     protect the information and treat it as strictly confidential. Information
     included in this provision includes but is not limited to:
          A.   Technical Information
          B.   Development time-line information for products or projects under
               development
          C.   Pricing information
          B.   Bidding information
          C.   Subcontractor/vendor information
          D.   Company financial data

ARTICLE IX - NON-COMPETE

     Employee agrees NOT TO COMPETE with Immersion Medical during the period of
     this Agreement and for a period of 12 months upon termination of this
     Agreement, independent of the reason for termination.

     The term NOT COMPETE as used in this Agreement shall mean that Employee
     shall not directly or indirectly, or in any capacity, on his own behalf or
     on behalf of any other organization work for, with, or on behalf of, or be
     employed by any organization that produces similar products and services as
     Immersion Medical. Employee will not undertake or assist in the:
          1.   Solicitation of any customer, account, or actively pursued lead
               of Immersion Medical.
          2.   Solicitation for the employment of current or former employees of
               Immersion Medical without the written consent of the management
               of Immersion Medical.
<PAGE>

          3.   Interfere with the relationships between Immersion Medical and
               its vendors, clients, employees or partners.
          4.   Damage to the reputation and good name of Immersion Medical.

     Employee agrees that any breach of this Agreement by the Employee would
     cause irreparable harm to Immersion Medical for which Immersion Medical
     would have no adequate remedy at law and that, in such event, Immersion
     Medical shall have the right to an injunction, specific performance or
     other equitable relief in addition to any remedies available at law.

ARTICLE X - TERMINATION

     This Agreement may be terminated upon:

          A.   Breach of Agreement by either Employee or Employer.

               Or

          B.   Two weeks (10 business days) notice by either party.

     In the event of termination, Employer shall be liable to pay Employee
     consideration due and owing up to the date of termination.

     Upon termination of this Agreement for any reason, Employee shall return to
     Employer all copies of any company data, records, or materials, and
     Employer's confidential and proprietary materials provided to Employee by
     Employer. Employee shall also submit to Employer all copies of work in
     progress, or portions thereof, under the direction of Employer by this
     Agreement.

ARTICLE XI - MODIFICATIONS

     No modification of this Agreement shall be binding upon the parties hereto,
     unless such is in writing and duly signed by the respective parties hereto.

ARTICLE XII - GOVERNING LAW

     This Agreement shall be governed by the law of the State of Maryland. Any
     disputes arising under this Agreement solely between Employer and Employee
     shall be governed by the law of the State of Maryland. However, if the
     issue in dispute is not covered by Maryland law, or if there is a conflict
     between Maryland law and the Federal law, e.g., decision of Federal courts,
     regulations and statutes, the Maryland court shall apply the Federal law.
     Any litigation under this Agreement, if commenced by the Employee, shall be
     brought in a court of competent jurisdiction in the State of Maryland.


<PAGE>

ARTICLE XIII - PROCUREMENT INTEGRITY CERTIFICATION

     Employee certified that he has reviewed the Procurement Integrity
     provisions of the OFPP Act as amended (41 U.S.C. 423), and is familiar
     with, and will comply with, the requirements and prohibitions it imposes on
     employees, contractors, and procurement officials. Employee has no
     knowledge of any offer of employment or future business, money, or other
     thing of value made to any procurement official of any federal agency with
     whom this Agreement is likely to require contact.

     Further, Employee has not obtained or solicited from any agency official
     any proprietary or sensitive, source selection information regarding any
     procurement which will also be the subject of this Agreement. Employee will
     immediately report in writing to the President, any information about
     potential violations of the Act.


ARTICLE XIV - BYRD AMENDMENT CERTIFICATIONS DISCLOSURE

     Employee is familiar with the prohibition on the use of appropriated funds
     to influence an officer or employee of any Government agency, member of
     Congress, or an officer or employee of Congress in connection with any
     Federal grant, the making of any Federal loan, the entering of any Federal
     contract, grant, loan, or cooperative agreement. Employee agrees to comply
     with any certification or disclosure requirement required on any covered
     Federal action on which Employee participates.

ARTICLE XV - ENTIRE AGREEMENT

     This instrument and attachments contain the entire agreement and
     understanding of the parties hereto. It may not be changed orally, but only
     by agreement in writing, signed by the party against whom enforcement of
     any waiver, change, modification, extension, or discharge is sought. There
     is no other contemporaneous understanding or agreement, oral or written,
     between the parties on said subject matter.

ARTICLE XVI - START DATE

     It would be my understanding that you would start employment with Immersion
     on or about March 1, 2004. For purposes of this letter, the term "start
     date" shall mean the day on which you commence employment with the Company.




<PAGE>

ARTICLE XVII - EXECUTION OF AGREEMENT

     IN WITNESS WHEREOF, the parties hereto have caused these articles to be
executed.

IMMERSION MEDICAL                   EMPLOYEE

BY:                                 BY:
   ---------------------------          ---------------------------------
TITLE:                              SOCIAL SECURITY #
      ------------------------                       --------------------
DATE:                               ADDRESS:
     ---------------------                  -----------------------------

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

                                 DATE:
                                       --------------------
<PAGE>


                                  ATTACHMENT 1

INDIVIDUAL CERTIFICATE OF PROCUREMENT INTEGRITY

          I hereby certify that I am familiar with and will comply with the
          requirements of subsection 27(a) of the Procurement Integrity section
          of the Office of Federal Procurement Policy Act Amendments of 1988 (41
          U.S.C. 423) as implemented in the Federal Acquisition Regulations (FAR
          3.104).

          I understand that during the conduct of any Federal agency procurement
          of property or services in which the Employer competed, neither the
          Employer nor any officer, employee, representative, agent or
          consultant may knowingly:

               (1) make, directly or indirectly, any offer or promise of future
               employment or business opportunity to, or engage, directly or
               indirectly, in any discussion of future employment or business
               opportunity with, any procurement official of such agency; or

               (2) offer, give, or promise to offer or give, directly or
               indirectly, any money, gratuity, or other thing of value to any
               procurement official of such agency; or

               (3) solicit or obtain, directly or indirectly, from any officer
               or employee of such agency, prior to the award of a contract any
               proprietary or source selection information regarding such
               procurement.

          On any Federal procurement on which I participate personally and
          substantially, I will immediately report to the President any
          violation or possible violation of such Procurement Integrity
          provision occurring on that procurement.


          -------------------------------
          SIGNATURE

          -------------------------------
          Typed or Printed Name

          -------------------------------
          Date

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.9
<SEQUENCE>7
<FILENAME>f92905a2exv10w9.txt
<DESCRIPTION>EXHIBIT 10.9
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.9

                            FIRST AMENDMENT TO LEASE


I.   PARTIES AND DATE.

     This First Amendment to Lease (the "Amendment") dated March 17, 2004, is by
and between WW&LJ GATEWAYS, LTD., a California limited partnership ("Landlord")
and IMMERSION CORPORATION, a Delaware corporation ("Tenant").

II.  RECITALS.

     On January 11, 2000, Landlord and Tenant entered into a lease ("Lease") for
space in a building located at 801 Fox Lane, San Jose, California ("Premises").

     Landlord and Tenant each desire to modify the Lease to extend the Lease
Term, to adjust the Basic Rent, and to make such other modifications as are set
forth in "III. MODIFICATIONS" next below.

III. MODIFICATIONS.

     A. Basic Lease Provisions. The Basic Lease Provisions are hereby amended as
follows:

          1.   Item 5 is hereby deleted in its entirety and substituted therefor
          shall be the following:

               "5. Lease Term: The Term of this Lease shall expire at midnight
               on June 30, 2010"

          2.   Item 6 is hereby amended by adding the following:

               "Commencing March 1, 2004, the Basic Rent shall be Forty Seven
               Thousand Six Hundred Sixty-Eight Dollars ($47,668.00) per month,
               based on $1.00 per rentable square foot.

               Commencing June 19, 2005, the Basic Rent shall be Thirty Five
               Thousand Seven Hundred Fifty-One Dollars ($35,751.00) per month,
               based on $.75 per rentable square foot.

               Commencing July 1, 2006, the Basic Rent shall be Thirty Six
               Thousand Seven Hundred Four Dollars ($36,704.00) per month, based
               on $.77 per rentable square foot.

               Commencing July 1,2007, the Basic Rent shall be Thirty Eight
               Thousand One Hundred Thirty-Four Dollars ($38,134.00) per month,
               based on $.80 per rentable square foot.

               Commencing July 1, 2008, the Basic Rent shall be Thirty Nine
               Thousand Eighty-Eight Dollars ($39,088.00) per month, based on
               $.82 per rentable square foot.

               Commencing July 1, 2009, the Basic Rent shall be Forty Thousand
               Forty-One Dollars ($40,041.00) per month, based on $.84 per
               rentable square foot."


     B. Acceptance of Premises. Tenant acknowledges that the lease of the
Premises pursuant to this Amendment shall be on an "as-is" basis without further
obligation on Landlord's part as to improvements whatsoever.


<PAGE>

IV.  GENERAL.

     A. Effect of Amendments. The Lease shall remain in full force and effect
except to the extent that it is modified by this Amendment.

     B. Entire Agreement. This Amendment embodies the entire understanding
between Landlord and Tenant with respect to the modifications set forth in "III.
MODIFICATIONS" above and can be changed only by a writing signed by Landlord and
Tenant.

     C. Counterparts. If this Amendment is executed in counterparts, each is
hereby declared to be an original; all, however, shall constitute but one and
the same amendment. In any action or proceeding, any photographic, photostatic,
or other copy of this Amendment may be introduced into evidence without
foundation.

     D. Defined Terms. All words commencing with initial capital letters in this
Amendment and defined in the Lease shall have the same meaning in this Amendment
as in the Lease, unless they are otherwise defined in this Amendment.

     E. Corporate and Partnership Authority. If Tenant is a corporation or
partnership, or is comprised of either or both of them, each individual
executing this Amendment for the corporation or partnership represents that he
or she is duly authorized to execute and deliver this Amendment on behalf of the
corporation or partnership and that this Amendment is binding upon the
corporation or partnership in accordance with its terms.

     F. Expenses and Legal Fees. The provisions of the Lease respecting payment
of expenses and legal fees set forth in Section 14.6 shall also apply to this
Amendment.


V.   EXECUTION.

     Landlord and Tenant executed this Amendment on the date as set forth in "I.
PARTIES AND DATE." above.


<TABLE>
<CAPTION>
LANDLORD:                                   TENANT:
<S>                                         <C>
WW&LJ GATEWAYS, LTD.,                       IMMERSION CORPORATION,
a California limited partnership            a Delaware corporation

By:     THE IRVINE COMPANY,
        as attorney-in-fact for
        WW&LJ Gateways, Ltd.
        And not on its own behalf



By: /s/ Donald S. McNutt                    By: /s/ Victor Viegas
    ------------------------------------        --------------------------------
    Donald S. McNutt, Senior VicE           Name: Victor Viegas
    President Leasing, Office Properties    Title: President, CEO and CFO



By: /s/ Michael T. Bennett
    ------------------------------------
    Michael T. Bennett
    Vice President, Operations
</TABLE>





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.10
<SEQUENCE>8
<FILENAME>f92905a2exv10w10.txt
<DESCRIPTION>EXHIBIT 10.10
<TEXT>
<PAGE>

                                                                   EXHIBIT 10.10

                                 March 18, 2004

Ken Lustig
Senior Director
Corporate Development and Strategy
Microsoft Corporation
One Microsoft Way
Redmond, WA 98052-6399

         Re: Redemption and Waiver of Payments

Dear Ken:

Immersion and Microsoft entered into a Series A Preferred Stock Purchase
Agreement dated as of July 25, 2003 (the "Purchase Agreement"), pursuant to
which Microsoft purchased 2,185,792 shares of the Company's Series A Redeemable
Convertible Preferred Stock (the "Series A Preferred Stock"). The parties also
entered into a Registration Rights Agreement dated as of July 25, 2003 (the
"Registration Rights Agreement"). Under the Registration Rights Agreement,
Immersion agreed to file a registration statement to register those shares of
Immersion common stock to be issued upon conversion of the Series A Preferred
Stock (the "Registration Statement"). Pursuant to Article 7(a) of Immersion's
Certificate of Designation of the Series A Preferred Stock (the "Certificate of
Designation"), Immersion has the option to redeem all of the shares of the
Series A Preferred Stock under certain circumstances.

Microsoft hereby agrees that it irrevocably waives its rights to (a) dividends
that would otherwise accrue after the Registration Statement becomes effective
and be payable to Microsoft pursuant to Section 2 of the Certificate of
Designation, and (b) any amounts that may be payable by Immersion under Section
3(l)(iii) of the Registration Rights Agreement, in connection with the
requirement that Immersion obtain the effectiveness of the Registration
Statement within one hundred eighty (180) days of its filing with the Securities
and Exchange Commission.

<PAGE>

Immersion hereby agrees (c) that between the date on which Microsoft receives a
Redemption Notice and the applicable Redemption Date (as defined in Section 7(c)
of the Certificate of Designation), Microsoft shall have the right to convert
its shares of the Series A Preferred Stock into shares of Immersion Common
Stock, as set forth in Section 5 of the Certificate of Designation, (d) that,
solely with respect to Microsoft, the number of shares to be surrendered to
Immersion pursuant to the second sentence of Section 7(d) of the Certificate of
Designation shall be the number of shares of Series A Preferred Stock that
Microsoft has not converted into shares of Immersion Common Stock as of the
applicable Redemption Date, and (e) to continue to work diligently and in good
faith to obtain the effectiveness of the Registration Statement.

If Microsoft agrees to the foregoing, please have this letter agreement executed
below by an authorized Microsoft representative, and fax or send a pdf copy of
the executed document to the attention of Patrick Reutens at Immersion. His fax
number is 408.350.8761, and his email address is preutens@immersion.com. Upon
execution by Microsoft, this letter agreement shall be effective as of the date
first set forth above.

Very truly yours,

IMMERSION CORPORATION

/s/ Victor Viegas
----------------------------
Victor Viegas
President, CEO and CFO

AGREED AND ACCEPTED

MICROSOFT CORPORATION

BY: /s/ John A. Seethoff
------------------------

PRINT NAME: John A. Seethoff

TITLE: Assistant Secretary

DATE: ______________________

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.11
<SEQUENCE>9
<FILENAME>f92905a2exv10w11.txt
<DESCRIPTION>EXHIBIT 10.11
<TEXT>
<PAGE>
                                                                   EXHIBIT 10.11

                               INDEMNITY AGREEMENT


     This Indemnity Agreement, dated as of ___________________, is made by and
between Immersion Corporation, a Delaware corporation (the "Company"), and
____________________ (the "Indemnitee").

                                   RECITALS

     A. The Company is aware that competent and experienced persons are
increasingly reluctant to serve as directors, officers or agents of corporations
unless they are protected by comprehensive liability insurance or
indemnification, due to increased exposure to litigation costs and risks
resulting from their service to such corporations, and due to the fact that the
exposure frequently bears no reasonable relationship to the compensation of such
directors, officers and other agents.

     B. The statutes and judicial decisions regarding the duties of directors
and officers are often difficult to apply, ambiguous, or conflicting, and
therefore fail to provide such directors, officers and agents with adequate,
reliable knowledge of legal risks to which they are exposed or information
regarding the proper course of action to take.

     C. Plaintiffs often seek damages in such large amounts and the costs of
litigation may be so enormous (whether or not the case is meritorious), that the
defense and/or settlement of such litigation is often beyond the personal
resources of directors, officers and other agents.

     D. The Company believes that it is unfair for its directors, officers and
agents and the directors, officers and agents of its subsidiaries to assume the
risk of huge judgments and other expenses which may occur in cases in which the
director, officer or agent received no personal profit and in cases where the
director, officer or agent was not culpable.

     E. The Company recognizes that the issues in controversy in litigation
against a director, officer or agent of a corporation such as the Company or its
subsidiaries are often related to the knowledge, motives and intent of such
director, officer or agent, that he is usually the only witness with knowledge
of the essential facts and exculpating circumstances regarding such matters, and
that the long period of time which usually elapses before the trial or other
disposition of such litigation often extends beyond the time that the director,
officer or agent can reasonably recall such matters; and may extend beyond the
normal time for retirement for such director, officer or agent with the result
that he, after retirement or in the event of his death, his spouse, heirs,
executors or administrators, may be faced with limited ability and undue
hardship in maintaining an adequate defense, which may discourage such a
director, officer or agent from serving in that position.

     F. Based upon their experience as business managers, the Board of Directors
of the Company (the "Board") has concluded that, to retain and attract talented
and experienced individuals to serve as directors, officers and agents of the
Company and its subsidiaries and to encourage such individuals to take the
business risks necessary for the success of the Company and its subsidiaries, it
is necessary for the Company to contractually indemnify its directors, officers
and agents and the directors, officers and agents of its subsidiaries, and to
assume for

                                       1
<PAGE>

itself maximum liability for expenses and damages in connection with claims
against such directors, officers and agents in connection with their service to
the Company and its subsidiaries, and has further concluded that the failure to
provide such contractual indemnification could result in great harm to the
Company and its subsidiaries and the Company's stockholders.

     G. Section 145 of the General Corporation Law of Delaware, under which the
Company is organized ("Section 145"), empowers the Company to indemnify its
directors, officers, employees and agents by agreement and to indemnify persons
who serve, at the request of the Company, as the directors, officers, employees
or agents of other corporations or enterprises, and expressly provides that the
indemnification provided by Section 145 is not exclusive.

     H. The Company desires and has requested the Indemnitee to serve or
continue to serve as a director, officer or agent of the Company and/or one or
more subsidiaries of the Company free from undue concern for claims for damages
arising out of or related to such services to the Company and/or one or more
subsidiaries of the Company.

     I. Indemnitee is willing to serve, or to continue to serve, the Company
and/or one or more subsidiaries of the Company, provided that he is furnished
the indemnity provided for herein.

                                   AGREEMENT

     NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:

     1. Definitions.

          (a) Agent. For the purposes of this Agreement, "agent" of the Company
means any person who is or was a director, officer, employee or other agent of
the Company or a subsidiary of the Company; or is or was serving at the request
of, for the convenience of, or to represent the interests of the Company or a
subsidiary of the Company as a director, officer, employee or agent of another
foreign or domestic corporation, partnership, joint venture, trust or other
enterprise; or was a director, officer, employee or agent of a foreign or
domestic corporation which was a predecessor corporation of the Company or a
subsidiary of the Company, or was a director, officer, employee or agent of
another enterprise at the request of, for the convenience of, or to represent
the interests of such predecessor corporation.

          (b) Expenses. For purposes of this Agreement, "expenses" include all
out of pocket expenses or costs of any type or nature whatsoever (including,
without limitation, all attorneys' fees and related disbursements), actually and
reasonably incurred by the Indemnitee in connection with either the
investigation, defense or appeal of a proceeding or establishing or enforcing a
right to indemnification under this Agreement or Section 145 or otherwise;
provided, however, that "expenses" shall not include any judgments, fines, ERISA
excise taxes or penalties, or amounts paid in settlement of a proceeding.

                                       2
<PAGE>

          (c) Proceeding. For the purposes of this Agreement, "proceeding" means
any threatened, pending, or completed action, suit or other proceeding, whether
civil, criminal, administrative, or investigative.

          (d) Subsidiary. For purposes of this Agreement, "subsidiary" means any
corporation of which more than 50% of the outstanding voting securities is owned
directly or indirectly by the Company, by the Company and one or more other
subsidiaries, or by one or more other subsidiaries.

     2. Agreement to Serve. The Indemnitee agrees to serve and/or continue to
serve as agent of the Company, at its will (or under separate agreement, if such
agreement exists), in the capacity Indemnitee currently serves as an agent of
the Company, so long as he is duly appointed or elected and qualified in
accordance with the applicable provisions of the Bylaws of the Company or any
subsidiary of the Company or until such time as he tenders his resignation in
writing; provided, however, that nothing contained in this Agreement is intended
to create any right to continued employment by Indemnitee.

     3. Liability Insurance.

          (a) Maintenance of D&O Insurance. The Company hereby covenants and
agrees that, so long as the Indemnitee shall continue to serve as an agent of
the Company and thereafter so long as the Indemnitee shall be subject to any
possible proceeding by reason of the fact that the Indemnitee was an agent of
the Company, the Company, subject to Section 3(c), shall promptly obtain and
maintain in full force and effect directors' and officers' liability insurance
("D&O Insurance") in reasonable amounts from established and reputable insurers.

          (b) Rights and Benefits. In all policies of D&O Insurance, the
Indemnitee shall be named as an insured in such a manner as to provide the
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company's directors, if the Indemnitee is a director; or of the
Company's officers, if the Indemnitee is not a director of the Company but is an
officer; or of the Company's key employees, if the Indemnitee is not a director
or officer but is a key employee.

          (c) Limitation on Required Maintenance of D&O Insurance.
Notwithstanding the foregoing, the Company shall have no obligation to obtain or
maintain D&O Insurance if the Company determines in good faith that such
insurance is not reasonably available, the premium costs for such insurance are
disproportionate to the amount of coverage provided, the coverage provided by
such insurance is limited by exclusions so as to provide an insufficient
benefit, or the Indemnitee is covered by similar insurance maintained by a
subsidiary of the Company.

     4. Mandatory Indemnification. Subject to Section 9 below, the Company shall
indemnify the Indemnitee as follows:

          (a) Successful Defense. To the extent the Indemnitee has been
successful on the merits or otherwise in defense of any proceeding (including,
without limitation, an action by or in the right of the Company) to which the
Indemnitee was a party by reason of the fact that he is or was an Agent of the
Company at any time, against all expenses of any type whatsoever

                                       3
<PAGE>

actually and reasonably incurred by him in connection with the investigation,
defense or appeal of such proceeding.

          (b) Third Party Actions. If the Indemnitee is a person who was or is a
party or is threatened to be made a party to any proceeding (other than an
action by or in the right of the Company) by reason of the fact that he is or
was an agent of the Company, or by reason of anything done or not done by him in
any such capacity, the Company shall indemnify the Indemnitee against any and
all expenses and liabilities of any type whatsoever (including, but not limited
to, judgments, fines, ERISA excise taxes and penalties, and amounts paid in
settlement) imposed by a court or governmental entity or otherwise actually and
reasonably incurred by him in connection with the investigation, defense,
settlement or appeal of such proceeding, provided the Indemnitee acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company and its stockholders, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful.

          (c) Derivative Actions. If the Indemnitee is a person who was or is a
party or is threatened to be made a party to any proceeding by or in the right
of the Company by reason of the fact that he is or was an agent of the Company,
or by reason of anything done or not done by him in any such capacity, the
Company shall indemnify the Indemnitee against all expenses actually and
reasonably incurred by him in connection with the investigation, defense,
settlement, or appeal of such proceeding, provided the Indemnitee acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company and its stockholders; except that no indemnification
under this subsection 4(c) shall be made in respect to any claim, issue or
matter as to which such person shall have been finally adjudged to be liable to
the Company by a court of competent jurisdiction unless and only to the extent
that the court in which such proceeding was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such amounts which the court shall deem proper.

          (d) Actions where Indemnitee is Deceased. If the Indemnitee is a
person who was or is a party or is threatened to be made a party to any
proceeding by reason of the fact that he is or was an agent of the Company, or
by reason of anything done or not done by him in any such capacity, and if prior
to, during the pendency of after completion of such proceeding Indemnitee
becomes deceased, the Company shall indemnify the Indemnitee's heirs, executors
and administrators against any and all expenses and liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes
and penalties, and amounts paid in settlement) actually and reasonably incurred
to the extent Indemnitee would have been entitled to indemnification pursuant to
Sections 4(a), 4(b), or 4(c) above were Indemnitee still alive.

          (e) Notwithstanding the foregoing, the Company shall not be obligated
to indemnify the Indemnitee for expenses or liabilities of any type whatsoever
(including, but not limited to, judgments, fines, ERISA excise taxes and
penalties, and amounts paid in settlement) for which payment is actually made to
Indemnitee under a valid and collectible insurance policy of D&O Insurance, or
under another valid and enforceable indemnity clause, by-law or agreement.


                                       4
<PAGE>

     5. Partial Indemnification. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for some or a
portion of any expenses or liabilities of any type whatsoever (including, but
not limited to, judgments, fines, ERISA excise taxes and penalties, and amounts
paid in settlement) incurred by him in the investigation, defense, settlement or
appeal of a proceeding, but not entitled, however, to indemnification for all of
the total amount hereof, the Company shall nevertheless indemnify the Indemnitee
for such total amount except as to the portion hereof to which the Indemnitee is
not entitled.

     6. Mandatory Advancement of Expenses. Subject to Section 8(a) below, the
Company shall advance all expenses incurred by the Indemnitee in connection with
the investigation, defense, settlement or appeal of any proceeding to which the
Indemnitee is a party or is threatened to be made a party by reason of the fact
that the Indemnitee is or was an agent of the Company. Indemnitee hereby
undertakes to repay such amounts advanced only if, and to the extent that, it
shall be determined ultimately that the Indemnitee is not entitled to be
indemnified by the Company as authorized hereby. The advances to be made
hereunder shall be paid by the Company to the Indemnitee within twenty (20) days
following delivery of a written request therefor by the Indemnitee to the
Company.

     7. Notice and Other Indemnification Procedures.

          (a) Promptly after receipt by the Indemnitee of notice of the
commencement of or the threat of commencement of any proceeding, the Indemnitee
shall, if the Indemnitee believes that indemnification with respect thereto may
be sought from the Company under this Agreement, notify the Company of the
commencement or threat of commencement thereof.

          (b) If, at the time of the receipt of a notice of the
commencement of a proceeding pursuant to Section 7(a) hereof, the Company has
D&O Insurance in effect, the Company shall give prompt notice of the
commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.

          (c) In the event the Company shall be obligated to pay the expenses of
any proceeding against the Indemnitee, the Company, except as otherwise provided
below, shall be entitled to assume the defense of such proceeding, with counsel
approved by the Indemnitee, upon the delivery to the Indemnitee of written
notice of its election so to do. After delivery of such notice, approval of such
counsel by the Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to the Indemnitee under this Agreement for any fees
of counsel subsequently incurred by the Indemnitee with respect to the same
proceeding, except as otherwise provided below. The Company shall not settle any
proceeding in any manner which would impose any penalty or limitation on the
Indemnitee without the Indemnitee's written consent. The Indemnitee shall have
the right to employ his counsel in any proceeding but the fees and expenses of
the counsel incurred after notice from the Company of its assumption of the
defense of the proceeding shall be at the Indemnitee's expense, unless (i) the
employment of counsel by the Indemnitee has been authorized by the Company, (ii)
the Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and the


                                       5
<PAGE>

Indemnitee in the conduct of the defense of a proceeding, or (iii) the Company
shall not, in fact, have employed counsel to assume the defense of such
proceeding, in each of which cases the fees and expenses of Indemnitee's
counsel, including any fees and expenses incurred in connection with an
investigation to determine whether a conflict of interest exists, shall be at
the expense of the Company. The Company shall not be entitled to assume the
defense of any proceeding brought by or on behalf of the Company or as to which
the Indemnitee has reasonably made the conclusion, based on written advice of
counsel, that there may be a conflict of interest between the Company and the
Indemnitee.

     8. Exceptions. Any other provision herein to the contrary notwithstanding,
the Company shall not be obligated pursuant to the terms of this Agreement:

          (a) Claims Initiated by Indemnitee. To indemnify or advance expenses
to the Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by the Indemnitee and not by way of defense, unless (i) such
indemnification is expressly required to be made by law, (ii) the proceeding was
authorized by the Board, (iii) such indemnification is provided by the Company,
in its sole discretion, pursuant to the powers vested in the Company under the
General Corporation Law of Delaware or (iv) the proceeding is brought to
establish or enforce a right to indemnification under this Agreement or any
other statute or law or otherwise as required under Section 145.

          (b) Lack of Good Faith. To indemnify the Indemnitee for any expenses
incurred by the Indemnitee with respect to any proceeding instituted by the
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous; or

          (c) Unauthorized Settlements. To indemnify the Indemnitee under this
Agreement for any amounts paid in settlement of a proceeding unless the Company
consents to such settlement, which consent shall not be unreasonably withheld or
delayed.

     9. Non-exclusivity. The provisions for indemnification and advancement of
expenses set forth in this Agreement shall not be deemed exclusive of any other
rights which the Indemnitee may have under any provision of law, the Company's
Certificate of Incorporation or Bylaws, the vote of the Company's stockholders
or disinterested directors, other agreements, or otherwise, both as to action in
his official capacity and to action in another capacity while occupying his
position as an agent of the Company, and the Indemnitee's rights hereunder shall
continue after the Indemnitee has ceased acting as an agent of the Company and
shall inure to the benefit of the heirs, executors and administrators of the
Indemnitee.

     10. Enforcement. Any right to indemnification or advances granted by this
Agreement to Indemnitee shall be enforceable by or on behalf of Indemnitee in
any court of competent jurisdiction if (i) the claim for indemnification or
advances is denied, in whole or in part by the Company, or (ii) no disposition
of such claim is made within ninety (90) days of request therefor by the
Company. Indemnitee, in such enforcement action, if successful in whole or in
part, shall be entitled to be paid also the expense of prosecuting his claim. It
shall be a defense to any action for which a claim for indemnification is made
under this Agreement (other


                                       6
<PAGE>

than an action brought to enforce a claim for expenses pursuant to Section 6
hereof, provided that the required undertaking has been tendered to the Company)
that Indemnitee is not entitled to indemnification because of the limitations
set forth in Sections 4 and 8 hereof. Neither the failure of the Company
(including its Board of Directors or its stockholders) to have made a
determination prior to the commencement of such enforcement action that
indemnification of Indemnitee is proper in the circumstances, nor an actual
determination by the Company (including its Board of Directors or its
stockholders) that such indemnification is improper, shall be a defense to the
action or create a presumption that Indemnitee is not entitled to
indemnification under this Agreement or otherwise.

     11. Subrogation. In the event the Company is obligated to make a payment
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of recovery under any valid and collectible
insurance policy of D&O Insurance or another indemnity agreement covering the
Indemnitee, who shall execute all documents required and shall do all acts that
may be necessary to secure such rights and to enable the Company effectively to
bring suit to enforce such rights.

     12. Survival of Rights.


          (a) All agreements and obligations of the Company contained herein
shall continue during the period Indemnitee is an agent of the Company and shall
continue thereafter so long as Indemnitee shall be subject to any possible claim
or threatened, pending or completed action, suit or proceeding, whether civil,
criminal, arbitrational, administrative or investigative, by reason of the fact
that Indemnitee was serving in the capacity referred to herein.

          (b) The Company shall require any successor to the Company (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company, expressly to assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform if no such succession had taken
place.

     13. Interpretation of Agreement. It is understood that the parties hereto
intend this Agreement to be interpreted and enforced so as to provide
indemnification to the Indemnitee to the fullest extent permitted by law
including those circumstances in which indemnification would otherwise be
discretionary.

     14. Severability. If any provision or provisions of this Agreement shall be
held to be invalid, illegal or unenforceable for any reason whatsoever, (i) the
validity, legality and enforceability of the remaining provisions of the
Agreement (including without limitation, all portions of any paragraphs of this
Agreement containing any such provision held to be invalid, illegal or
unenforceable, that are not themselves invalid, illegal or unenforceable) shall
not in any way be affected or impaired thereby, and (ii) to the fullest extent
possible, the provisions of this Agreement (including, without limitation, all
portions of any paragraph of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that are not themselves invalid,
illegal or unenforceable) shall be construed so as to give effect to the intent
manifested by the provision held invalid, illegal or unenforceable and to give
effect to Section 13 hereof.

                                       7

<PAGE>

     15. Savings Clause. If this Agreement or any portion of it is invalidated
on any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee as to expenses, judgments, fines, penalties or
ERISA excise taxes with respect to any proceeding to the full extent permitted
by any applicable portion of this Agreement that shall not have been invalidated
or by any other applicable law.

     16. Modification and Waiver. No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provisions hereof (whether or
not similar) nor shall such waiver constitute a continuing waiver.

     17. Notice. All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee or (ii) if mailed by
certified or registered mail with postage prepaid, on the third business day
after the mailing date. Addresses for notice to either party are as shown on the
signature page of this Agreement, or as subsequently modified by written notice.

     18. Governing Law. This Agreement shall be governed exclusively by and
construed according to the laws of the State of Delaware as applied to contracts
between Delaware residents entered into and to be performed entirely within
Delaware.

     19. Consent to Jurisdiction. The Company and the Indemnitee each hereby
consent to the jurisdiction of the courts of the State of Delaware with respect
to any action or proceeding which arises out of or relates to this Agreement.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                       8
<PAGE>
     The parties hereto have entered into this Indemnity Agreement effective as
of the date first above written.


                                      THE COMPANY:

                                      IMMERSION CORPORATION


                                      ------------------------------------------
                                      By: Victor Viegas

                                      Its: President and Chief Executive Officer

                                      Address: 801 Fox Lane
                                               San Jose, CA 95131



                                      INDEMNITEE:



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

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

                                      Address:
                                               ---------------------------

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






</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>10
<FILENAME>f92905a2exv23w2.txt
<DESCRIPTION>EXHIBIT 23.2
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.2

INDEPENDENT AUDITORS' CONSENT


We consent to the incorporation by reference in this Amendment No. 2 to
Registration Statement No. 333-108607 of Immersion Corporation on Form S-3 of
our report dated March 23, 2004 appearing in the Current Report on Form 8-K of
Immersion Corporation dated March 24, 2004 on the consolidated financial
statements and related financial statement schedule as of December 31, 2003 and
2002, and for each of the three years in the period ended December 31, 2003,
which expresses an unqualified opinion and includes an explanatory paragraph
regarding the adoption of Statement of Financial Accounting Standards No. 142,
"Goodwill and Other Intangibles" in 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
March 23, 2004



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