<PAGE>

                                                                    EXHIBIT 10.1

SERIES A REDEEMABLE
CONVERTIBLE PREFERRED STOCK
PURCHASE AGREEMENT

BY AND BETWEEN:

IMMERSION CORPORATION

AND

MICROSOFT CORPORATION

DATED AS OF JULY 25, 2003

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                                TABLE OF CONTENTS

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                                                                                                              PAGE NO.
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1.    AUTHORIZATION AND SALE OF SHARES......................................................................      1
      1.1      Authorization................................................................................      1
      1.2      Sale of Shares...............................................................................      1
      1.3      Use of Proceeds..............................................................................      1

2.    THE CLOSING...........................................................................................      1

3.    REPRESENTATIONS OF THE COMPANY........................................................................      2

      3.1      Organization and Standing....................................................................      2
      3.2      Subsidiaries.................................................................................      2
      3.3      Capitalization...............................................................................      3
      3.4      Issuance of Shares...........................................................................      3
      3.5      Authority for Agreement; No Violation........................................................      4
      3.6      Governmental Consents........................................................................      4
      3.7      Litigation; Proceedings......................................................................      4
      3.8      Brokers or Finders...........................................................................      4
      3.9      Nasdaq National Market.......................................................................      5
      3.10     Taxes........................................................................................      5
      3.11     Property and Assets..........................................................................      5
      3.12     Intellectual Property........................................................................      5
      3.13     Material Agreements..........................................................................      6
      3.14     Compliance...................................................................................      6
      3.15     Sarbanes-Oxley Compliance....................................................................      6
      3.16     Disclosures..................................................................................      7
      3.17     Financial Statements.........................................................................      7
      3.18     SEC Documents................................................................................      7
      3.19     No Manipulation of Stock.....................................................................      8
      3.20     Related Party Transactions...................................................................      8
      3.21     Employees....................................................................................      8
      3.22     Investment Company...........................................................................      8
      3.23     Insurance....................................................................................      8
      3.24     Environmental Matters........................................................................      8
      3.25     Accuracy of Information Furnished............................................................      9
      3.26     No Material Adverse Effect...................................................................      9
      3.27     Absence of Certain Developments..............................................................      9
      3.28     Contributions................................................................................      9

4.    REPRESENTATIONS OF THE PURCHASER......................................................................     10

      4.1      Investment...................................................................................     10
      4.2      Authority....................................................................................     10
      4.3      Experience...................................................................................     10
      4.4      Accredited Investor..........................................................................     10
      4.5      Brokers......................................................................................     10
      4.6      Restricted Securities........................................................................     10

5.    CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER........................................................     10

      5.1      Accuracy of Representations and Warranties...................................................     10
      5.2      Performance..................................................................................     11
      5.3      Approvals....................................................................................     11
      5.4      Registration Rights Agreement................................................................     11
      5.5      Stockholders' Agreement......................................................................     11
      5.6      Debenture Agreement..........................................................................     11
</TABLE>

Immersion Corporation
Series A Preferred Stock Purchase Agreement

                                       i
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<TABLE>
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      5.7      Settlement...................................................................................     11
      5.8      License Agreement............................................................................     11
      5.9      Game Console Agreement.......................................................................     11
      5.10     Certificates and Documents...................................................................     11
      5.11     Compliance Certificate.......................................................................     12
      5.12     Opinion of Counsel...........................................................................     12
      5.13     Adoption and Filing of Certificate of Incorporation..........................................     12
      5.14     No Material Adverse Effect...................................................................     12
      5.15     No Constraints...............................................................................     12
      5.16     Other Matters................................................................................     12

6.    CONDITIONS TO THE OBLIGATIONS OF THE COMPANY..........................................................     12

      6.1      Accuracy of Representations and Warranties...................................................     12
      6.2      Purchase Consideration.......................................................................     13
      6.3      Ancillary Agreements.........................................................................     13

7.    COVENANTS OF THE COMPANY..............................................................................     13

      7.1      Reduction of Lawsuit Claims..................................................................     13
      7.2      Listing and Maintenance Requirements Compliance..............................................     13
      7.3      Hedging Activities...........................................................................     13

8.    SUCCESSORS AND ASSIGNS................................................................................     13

9.    CONFIDENTIALITY.......................................................................................     13

10.    SURVIVAL OF REPRESENTATIONS AND WARRANTIES...........................................................     14

11.    NOTICES..............................................................................................     14

12.    EXPENSES.............................................................................................     15

13.    BROKERS..............................................................................................     15

14.    ENTIRE AGREEMENT.....................................................................................     15

15.    AMENDMENTS AND WAIVERS...............................................................................     16

16.    COUNTERPARTS; SIGNATURES.............................................................................     16

17.    HEADINGS.............................................................................................     16

18.    SEVERABILITY.........................................................................................     16

19.    GOVERNING LAW........................................................................................     16

20.    CUSTODIANS...........................................................................................     17
</TABLE>

Immersion Corporation
Series A Preferred Stock Purchase Agreement

                                       ii
<PAGE>

                   SERIES A PREFERRED STOCK PURCHASE AGREEMENT

         This SERIES A REDEEMABLE CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
(this "AGREEMENT") dated as July 25, 2003 (the "EFFECTIVE DATE") is entered into
by and between Immersion Corporation, a Delaware corporation having its
corporate headquarters at 801 Fox Lane, San Jose, California 95131 (the
"COMPANY") and Microsoft Corporation, a Washington corporation having its
corporate headquarters at One Microsoft Way, Redmond, Washington 98052-6399 (the
"PURCHASER"). Capitalized terms have the meanings ascribed to such terms in
Appendix A.

         In consideration of the premises and mutual covenants contained herein
and for other good and valuable consideration, the sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:

         1.       AUTHORIZATION AND SALE OF SHARES.

                  1.1      Authorization. The Company has duly authorized the
sale and issuance of up to 2,185,792 shares (the "SHARES") of its Series A
Redeemable Convertible Preferred Stock, $0.001 par value per share (the "SERIES
A PREFERRED STOCK") and the issuance of shares of common stock, $0.001 par value
per share (the "COMMON STOCK"), to be issued upon conversion of the Shares (the
"SERIES A CONVERSION SHARES"), each having the rights, restrictions, privileges
and preferences set forth in the Company's Certificate of Designation of the
Powers, Preferences, and Rights of Series A Redeemable Convertible Preferred
Stock in the form attached hereto as Exhibit A (the "CERTIFICATE OF
DESIGNATION").

                  1.2      Sale of Shares. Subject to the terms and conditions
of this Agreement, at the Closing (as defined in Section 2), the Company will
(i) sell and issue to the Purchaser, and the Purchaser will purchase from the
Company, the number of shares of Series A Preferred Stock determined by dividing
six million dollars ($6,000,000) (the "PURCHASE PRICE") by the Per Share Price.
The Per Share Price shall be $2.745.

                  1.3      Use of Proceeds. The Company will use the proceeds
from the sale of the Shares for general working capital purposes.

         2.       THE CLOSING. The closing (the "CLOSING") of the sale and
purchase of the Shares under this Agreement shall take place at the offices of
Preston Gates & Ellis LLP, 925 Fourth Avenue, Suite 2900, Seattle, Washington at
2:00 p.m. on July 25, 2003, or at such other time, date and place as are
mutually agreeable to the Company and the Purchaser. At the Closing, the Company
will deliver to the Purchaser a certificate for the Shares being purchased by
such Purchaser, registered in the name of the Purchaser, against payment to the
Company of the Purchase Price therefor, by wire transfer, certified or cashier's
check, or other method acceptable to the Company. If at the Closing any of the
conditions specified in Section 5 hereof shall not have been fulfilled, the
Purchaser shall, at its election, be relieved of all of its obligations under
this Agreement without thereby waiving any other rights it may have by reason

<PAGE>

of such failure or such non-fulfillment. The date of the Closing is hereinafter
referred to as the "CLOSING DATE."

         3.       REPRESENTATIONS OF THE COMPANY. Except as otherwise described
in the Filed SEC Documents (as defined in Section 3.18 below) (including the
documents incorporated by reference therein) and the Company's press releases
since March 31, 2003 that are available on the Company's web site located at
http://www.immersion.com, in each case on the date hereof, the Company hereby
represents and warrants to, and covenants with, the Purchaser as follows:

                  3.1      Organization and Standing. The Company and each of
its Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and has all
corporate power and authority to conduct its business as presently conducted and
as proposed to be conducted by it. The Company has all corporate power and
authority to enter into and perform this Agreement, the Registration Rights
Agreement between the Company and the Purchaser (the "REGISTRATION RIGHTS
AGREEMENT"), the Stockholders' Agreement between the Company and the Purchaser
(the "STOCKHOLDERS' AGREEMENT"), and the Senior Redeemable Convertible Debenture
Purchase Agreement (the "DEBENTURE AGREEMENT" and, together with the
Registration Rights Agreement and the Stockholders' Agreement, collectively
referred to as the "ANCILLARY AGREEMENTS") and to carry out the transactions
contemplated by this Agreement. Each of the Company and the Subsidiaries (as
defined in Section 3.2 below) is duly qualified to conduct business as a foreign
corporation and is in good standing in every other jurisdiction, if any, in
which the failure to so qualify would have a Material Adverse Effect. Complete
and correct copies of the Company's certificate of incorporation and bylaws and
the certificate of incorporation and bylaws of its Subsidiaries, as in effect on
the date hereof, have been filed by the Company with the Securities and Exchange
Commission (the "COMMISSION") or otherwise made available (including via EDGAR)
to the Purchaser. As used herein, "MATERIAL ADVERSE EFFECT" means any change,
effect, event, occurrence, development or developments which, individually or in
the aggregate, (i) has had or would reasonably be expected to have a material
adverse effect on the business, assets, liabilities (contingent or other),
affairs, operations or financial condition of the Company or any of its
Subsidiaries, or (ii) would reasonably be expected to prevent or materially
impede, interfere, hinder or delay the performance by the Company of its
obligations hereunder.

                  3.2      Subsidiaries. Schedule 3.2 lists the Company's
subsidiaries (the "SUBSIDIARIES") and the jurisdictions in which each is
incorporated. Except as set forth in Schedule 3.2, all of the issued and
outstanding shares of capital stock of, or other equity interests in, each of
the Subsidiaries have been validly issued and are fully paid and nonassessable
and are owned by the Company free and clear of all pledges, liens, charges,
encumbrances or security interests of any kind ("LIENS"), and free of any
restriction on the right to vote, sell or otherwise dispose of such capital
stock or other equity interests. Except for the capital stock of, or voting
securities or equity interests in, its Subsidiaries, for short-term investments,
or as set forth in Schedule 3.2, the Company does not own any shares of stock or
any other equity or long-term debt securities of any corporation or have any
equity interest in any firm, partnership, limited liability company, joint
venture, association or other entity.

Immersion Corporation
Series A Preferred Stock Purchase Agreement

                                       2
<PAGE>

                  3.3      Capitalization.

                           (i)      The authorized capital stock of the Company
(immediately prior to the Closing) consists of 105,000,000 shares of stock
consisting 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.

                           (ii)     As of July 24, 2003, 20,197,984 shares of
Common Stock and no shares of Preferred Stock were outstanding. The Company has
not issued any capital stock since July 24, 2003 other than pursuant to employee
benefit plans disclosed in the Filed SEC Documents.

                           (iii)    Immediately after the Closing, there will
be: 2,185,792 shares of Series A Preferred Stock duly authorized, validly issued
and outstanding and such shares shall be fully-paid and nonassessable.
Immediately after the Closing, there will be a sufficient number of shares of
Common Stock reserved, and duly authorized, for issuance upon exercise of the
Series A Preferred Stock.

                           (iv)     Except as may be provided in this Agreement,
the Ancillary Agreements or as set forth in Schedule 3.3: (a) no subscription,
warrant, option, convertible security or other right (contingent or otherwise)
to purchase or acquire any shares of capital stock of the Company is authorized
or outstanding; (b) there is no commitment of the Company to issue any
subscription, warrant, option, convertible security or other such right or to
issue or distribute to holders of any shares of its capital stock any evidences
of indebtedness or assets of the Company; and (c) other than as set forth in the
Certificate of Designation, the Company has no obligation (contingent or
otherwise) to repurchase, redeem or otherwise acquire any shares of its capital
stock or any interest therein or to pay any dividend or make any other
distribution in respect thereof. The outstanding shares of capital stock of the
Company have been duly and validly issued and are fully paid and nonassessable,
have been issued in compliance with all federal and state securities laws, and
were not issued in violation of any preemptive rights or similar rights to
subscribe for or purchase securities. There are no voting agreements or other
similar agreements with respect to the Common Stock to which the Company is a
party.

                           (v)      Except as provided in this Agreement or the
Ancillary Agreements, no person or entity is entitled to: (a) any preemptive or
similar right with respect to the issuance of any capital stock of the Company;
(b) any rights with respect to the registration of any capital stock of the
Company under the Securities Act of 1933, as amended (the "SECURITIES ACT"); or
(c) any first offer rights, first refusal rights or, pursuant to an agreement to
which the Company is a party or, to the best of the Company's knowledge,
pursuant to an agreement to which any of the Company's stockholders is a party,
other similar rights to subscribe for or purchase any capital stock of the
Company or any right to restrict the transfer of such securities.

                  3.4      Issuance of Shares. The issuance, sale and delivery
of the Shares in accordance with this Agreement, and the issuance and delivery
of the shares of Common Stock issuable upon conversion of the Shares, have been,
or will be on or prior to the Closing, duly

Immersion Corporation
Series A Preferred Stock Purchase Agreement

                                       3
<PAGE>

authorized and, as the case may be, reserved for issuance by all necessary
corporate action on the part of the Company, its officers, directors and
stockholders, and the Shares when so issued sold and delivered against payment
therefor in accordance with the provisions of this Agreement, and the shares of
Common Stock issuable upon conversion of the Shares when issued upon such
conversion, will be duly authorized and validly issued, fully paid and
non-assessable, free and clear of any liens, encumbrances or security interests.

                  3.5      Authority for Agreement; No Violation. The execution,
delivery and performance by the Company of this Agreement and the consummation
by the Company of the transactions contemplated hereby have been duly authorized
by all necessary corporate action on the part of the Company, its officers,
directors and stockholders. This Agreement and each of the Ancillary Agreements
have been duly executed and delivered by the Company and constitute valid and
binding obligations of the Company enforceable in accordance with their
respective terms. The execution of and performance of the transactions
contemplated by this Agreement and the Ancillary Agreements and compliance with
their provisions by the Company will not violate any provision of law and will
not conflict with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under, its Certificate of Designation or
Bylaws (each as amended to date and presently in effect), or any material bond,
indenture, note or other evidence of indebtedness, any material lease, agreement
or other instrument to which the Company is a party or by which it or any of its
Subsidiaries is a party or by which their respective properties are bound, or
any decree, judgment, order, statute, rule or regulation applicable to the
Company or its Subsidiaries.

                  3.6      Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any governmental authority is required on the part of the Company
in connection with the execution and delivery of this Agreement, the offer,
issue, sale and delivery of the Shares, and the issue and delivery of the Series
A Conversion Shares or the other transactions to be consummated at the Closing,
as the case may be, as contemplated by this Agreement.

                  3.7      Litigation; Proceedings. Except as set forth in
Schedule 3.7, as of the date hereof, there is no action, suit, claim, proceeding
or investigation pending against or affecting the Company at law or in equity,
or by any arbitrator, or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, or, to the Company's knowledge there is no action, suit, claim,
proceeding or investigation threatened against or affecting the Company at law
or in equity, or by any arbitrator, or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, and the Company is not subject to any order, writ,
injunction or decree entered into any lawsuit or proceeding.

                  3.8      Brokers or Finders. The Company has not dealt with
any broker or finder in connection with the transactions contemplated by this
Agreement or the Ancillary Agreements, and the Company has not incurred, and
shall not incur, directly or indirectly, any liability for any brokerage or
finders' fees or agents commissions or any similar charges in connection with
this Agreement or any transaction contemplated hereby.

Immersion Corporation
Series A Preferred Stock Purchase Agreement

                                       4

<PAGE>

                  3.9      Nasdaq National Market. The Common Stock is
registered pursuant to Section 12(g) of the Exchange Act and is listed on the
Nasdaq National Market System ("NASDAQ"). The Company has taken no action
designed to delist, or which, to the Company's knowledge, is likely to have the
effect of, terminating the registration of the Common Stock under the Exchange
Act or delisting the Common Stock from Nasdaq. The Company shall comply with all
requirements of the National Association of Securities Dealers, Inc. with
respect to the issuance of the Series A Preferred Stock and the listing of the
Common Stock on Nasdaq.

                  3.10     Taxes. The Company and its Subsidiaries have filed or
obtained presently effective extensions with respect to all federal, state,
county, local and foreign tax returns that are required to be filed by it, such
returns are true and correct and all taxes shown thereon to be due have been
timely paid with exceptions not material to the Company. Federal income tax
returns of the Company have not been audited by the Internal Revenue Service,
and no controversy with respect to taxes of any type is pending or, to the
knowledge of the Company, threatened. The Company is taxed as a C corporation as
defined in Section 1361(a)(2) of the Internal Revenue Code of 1986, as amended
(the "CODE"). The provision for taxes of the Company as shown in the Financial
Statements is adequate for taxes due or accrued as of the date thereof. The
Company has not made any other elections pursuant to the Code (other than
elections that relate solely to methods of accounting, depreciation or
amortization) that would have a Material Adverse Effect on the Company. The
Company has never had any tax deficiency proposed or assessed against it and has
not executed any waiver of any statute of limitations on the assessment or
collection of any tax or governmental charge. Except as set forth on Schedule
3.10, none of the Company's federal income tax returns and none of its state
income or franchise tax or sales or use tax returns have ever been audited by
governmental authorities. Except as set forth on Schedule 3.10, since the date
of the Financial Statements, the Company has not incurred any taxes, assessments
or governmental charges other than in the ordinary course of business and the
Company has made adequate provisions on its books of account for all taxes,
assessments and governmental charges with respect to its business, properties
and operations for such period. The Company has withheld or collected from each
payment made to each of its employees, the amount of all taxes (including, but
not limited to, federal income taxes, Federal Insurance Contribution Act taxes
and Federal Unemployment Tax Act taxes) required to be withheld or collected
therefrom, and has paid the same to the proper tax receiving officers or
authorized depositories.

                  3.11     Property and Assets. The Company has good and
marketable title in fee simple to all of the real property that it owns and good
and marketable title to all of its personal property and assets, and none of
such properties or assets is subject to any mortgage, pledge, lien, security
interest, lease, charge, encumbrance or defect. Any real or personal property
held under lease by the Company or its Subsidiaries is held by them under valid,
existing and enforceable leases.

                  3.12     Intellectual Property. Set forth on Schedule 3.12 is
a true and complete list of all issued patents and registered trademarks
presently owned or held by the Company. Except as set forth on Schedule 3.12, to
the Company's knowledge, the Company and each of its Subsidiaries has, or has
rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, licenses and know-how
(including trade secrets or other unpatented and/or unpatentable proprietary or
confidential information, systems

Immersion Corporation
Series A Preferred Stock Purchase Agreement

                                       5

<PAGE>

or procedures) (collectively, the "INTELLECTUAL PROPERTY RIGHTS") that are
necessary for use in connection with its business as presently conducted or
proposed to be conducted as described in the SEC Documents. Except as disclosed
on Schedule 3.12, to the Company's knowledge, there is no existing infringement
or misappropriation by another person or entity of any of the Intellectual
Property Rights that are necessary for use in connection with the Company's
business as presently conducted. Except as set forth on Schedule 3.12, neither
the Company nor its Subsidiaries are infringing or misappropriating any
Intellectual Property Rights (other than unpublished patent applications) of any
other person or entity, nor, to the Company's knowledge, are the Company or its
Subsidiaries infringing the rights of any other person or entity granted under
any unpublished patent application. Except as set forth on Schedule 3.12, there
are no claims of infringement of any Intellectual Property Rights made or
threatened by a third party against or involving the Company.

                  3.13     Material Agreements. Except as filed with or listed
in the exhibit index to the Filed SEC Documents or as otherwise made available
to the Purchaser, neither Company nor any of its Subsidiaries is a party to any
material contract, as such contracts are defined in Item 601(b)(10) of
Regulation S-K under the Securities Act (each such contract, a "COMPANY
CONTRACT"). To the Company's knowledge, each Company Contract is valid, binding
and in full force and effect and is enforceable by the Company or any of its
Subsidiaries in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization or other laws affecting creditors' rights generally
and by general equitable principles. As of the date hereof, no party to any such
Company Contract has notified the Company or any of its Subsidiaries that it
intends to terminate such Company Contract. The Company or its Subsidiaries, as
the case may be, has performed in all respects all obligations required to be
performed by it to date under the Company Contracts and is not (with or without
the lapse of time or the giving of notice, or both) in breach or default in any
respect thereunder and, to the knowledge of Company, no other party to any of
the Company Contracts, as of the date hereof, is (with or without the lapse of
time or the giving of notice, or both) in breach or default in any respect
thereunder, except to the extent that such breach or default would not have a
Material Adverse Effect.

                  3.14     Compliance. The Company has, in all material
respects, complied with all laws, regulations and orders applicable to its
present and proposed business and has all material permits and licenses required
thereby. There is no term or provision of any material mortgage, indenture,
contract, agreement or instrument to which the Company is a party or by which it
is bound, or of any provision of any state or federal judgment, decree, order,
statute, rule or regulation applicable to or binding upon the Company, that
materially adversely affects or, to the best of the Company's knowledge so far
as the Company may now foresee, in the future is reasonably likely to materially
adversely affect, the business, prospects, condition, affairs or operations of
the Company or any of its properties or assets. To the Company's knowledge, no
employee of the Company is in violation of any contract or covenant (either with
the Company or with another entity) relating to employment, patent, other
proprietary information disclosure, non-competition, or non-solicitation.

                  3.15     Sarbanes-Oxley Compliance. The Company is currently
and at all times prior to the date hereof has been in compliance in all material
respects with the Sarbanes-Oxley Act of 2002 and any and all rules or
regulations promulgated thereunder.

Immersion Corporation
Series A Preferred Stock Purchase Agreement

                                       6
<PAGE>

                  3.16     Disclosures. Neither this Agreement nor any exhibit
hereto, nor any report, certificate or instrument furnished to the Purchaser in
connection with the transactions contemplated by this Agreement, when read
together, contains or will contain any material misstatement of fact or omits or
will omit to state a material fact necessary to make the statements contained
herein or therein not misleading. The Company knows of no information or fact
that has or would have a material adverse effect on the business, prospects or
condition (financial or otherwise) of the Company that has not been disclosed to
the Purchaser in writing.

                  3.17     Financial Statements. The Company has made available
(including via EDGAR) to the Purchaser its audited consolidated statements of
income, stockholders' equity and cash flows for the fiscal year ended December
31, 2002, its audited consolidated balance sheet as of December 31, 2002, its
unaudited consolidated statements of income, stockholders' equity and cash flows
for the period from January 1, 2003 through March 31, 2003 and its unaudited
consolidated balance sheet as of March 31, 2003. All such financial statements
are hereinafter referred to collectively as the "FINANCIAL STATEMENTS." The
Financial Statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved,
and fairly present the financial position of the Company and its Subsidiaries
and the results of their respective operations as of the date and for the
periods indicated thereon, except that the unaudited financial statements may
not be in accordance with generally accepted accounting principles because of
the absence of footnotes normally contained therein and are subject to normal
year-end audit adjustments which, individually, and in the aggregate, will not
be material. The Company and its Subsidiaries have implemented and maintain a
system of internal accounting controls meeting the requirements of applicable
law, including without limitation the requirements of Section 13(b)(2) of the
Exchange Act. Since March 31, 2003, there has been no Material Adverse Effect.

                  3.18     SEC Documents. The Company has made available
(including via EDGAR) to the Purchaser, a true and complete copy of the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2002, the Company's Quarterly Report on Form 10-Q for the three months ended
March 31, 2003, the Company's Definitive Proxy Statement for the Annual Meeting
held on June 3, 2003 and the Company's Current Reports on Form 8-K filed after
December 31, 2002 and before the date hereof (all such materials being called,
collectively, the "FILED SEC DOCUMENTS"). The Company will, promptly upon the
filing thereof, also make available to each Purchaser all statements, reports
(including, without limitation, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K) and definitive proxy statements filed by the Company with
the SEC during the period commencing on the date hereof and ending on the
Closing Date (all such materials required to be furnished to each Purchaser
pursuant to this sentence being called, collectively, the "SEC DOCUMENTS"). The
Company has filed in a timely manner all documents that the Company was required
to file under the Exchange Act during the 12 months preceding the date of this
Agreement. As of their respective filing dates, the Filed SEC Documents
complied, and the SEC Documents will comply, in all material respects with the
requirements of the Exchange Act, and none of the Filed SEC Documents, as of
their respective filing dates, contained, and none of the SEC Documents will
contain, any untrue statement of a material fact or omitted or omit, as the case
may be, to state a material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the circumstances

Immersion Corporation
Series A Preferred Stock Purchase Agreement

                                       7
<PAGE>

under which they were or are, as the case may be, made, not misleading, except
to the extent corrected by a subsequent Filed SEC Document.

                  3.19     No Manipulation of Stock. The Company has not taken
and will not, in violation of applicable law, take, any action designed to or
that might reasonably be expected to cause or result in unlawful manipulation of
the price of the Common Stock.

                  3.20     Related Party Transactions. Except as set forth in
Schedule 3.20, none of the officers or directors of the Company or its
Subsidiaries and, to the knowledge of the Company, none of their respective
employees is presently a party to any transaction with the Company or its
Subsidiaries, including any contract, agreement or other arrangement providing
for the furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner.

                  3.21     Employees. Except as set forth in Schedule 3.21, each
employee of the Company who has access to the Company's confidential or
proprietary information has executed a proprietary information agreement, in
substantially the form delivered to the Purchaser. To the best of the Company's
knowledge, no officer or key employee is in violation of any prior employee
contract or proprietary information or noncompetition agreement. No employees of
the Company are represented by any labor union or covered by any collective
bargaining agreement. There is no pending or, to the best of the Company's
knowledge, threatened labor dispute involving the Company and any group of its
employees. To the best of its knowledge, the Company has complied in all
material respects with all applicable state and federal equal employment
opportunity and other laws related to employment.

                  3.22     Investment Company. The Company is not an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for an investment company, within the meaning of the Investment Company Act of
1940, as amended.

                  3.23     Insurance. The Company maintains insurance against
such losses and risks and in such amounts as the Company believes in good faith
is adequate, prudent and customary for the businesses in which the Company and
its Subsidiaries are engaged.

                  3.24     Environmental Matters. Each of the Company its
Subsidiaries has obtained all permits, licenses and other authorizations that
are required under federal, state and local laws in the U.S. and outside the
U.S. relating to pollution or protection of the environment, including laws
related to emissions, discharges, releases or threatened releases of pollutants,
contaminants or hazardous or toxic material or wastes into ambient air, surface
water, ground water or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants or hazardous or toxic materials or wastes
("ENVIRONMENTAL LAWS"), except for any failures to obtain the permits, licenses
or authorizations that would not, individually or in the aggregate, have or
result in a Material Adverse Effect. The Company and each of its Subsidiaries is
in compliance with all terms and conditions of the required permits, licenses
and authorizations and is also in full compliance with all other limitations,
restrictions, conditions and requirements contained in the

Immersion Corporation
Series A Preferred Stock Purchase Agreement

                                       8

<PAGE>

Environmental Laws or contained in any plan, order, judgment, decree or notice,
except for any non-compliance which could not, individually or in the aggregate,
have or result in a Material Adverse Effect. The Company is not aware of, nor
has the Company received notice of, any events, conditions, circumstances,
actions or plans which may interfere with or prevent continued compliance or
which would give rise to any liability under any Environmental Laws, except for
any liability which could not, individually or in the aggregate, have or result
in a Material Adverse Effect.

                  3.25     Accuracy of Information Furnished. The information
furnished to the Purchaser or its representatives or advisors by the Company or
its representatives or advisors furnished prior to the date of this Agreement,
does not contain any untrue statement of a material fact and does not omit to
state any material fact required to be stated therein or necessary to make any
statement therein, in light of the circumstances under which such statement is
made, not misleading.

                  3.26     No Material Adverse Effect. Since March 31, 2003,
except as disclosed in the SEC Documents filed subsequent to that date, if any,
the business, properties, assets, condition (financial or otherwise), prospects
or operating results of the Company and its Subsidiaries have not suffered any
Material Adverse Effect.

                  3.27     Absence of Certain Developments. Except as described
in or contemplated by this Agreement or the filed SEC Documents, since March 31,
2003, through the closing Date, the Company and its Subsidiaries have not (a)
issued any stock, options (other than to employees and directors consistent with
past practices) bonds or other corporate securities; (b) borrowed any amount or
incurred or become subject to any direct or indirect liabilities (absolute,
accrued or contingent), other than current liabilities incurred in the ordinary
course of business and liabilities under contracts entered into in the ordinary
course of business; (c) discharged or satisfied any lien or adverse claim or
paid any obligation or liability (absolute, accrued or contingent), other than
current liabilities shown on the consolidated balance sheet and current
liabilities incurred in the ordinary course of business; (d) made any material
change in the nature or operations of the business of the Company and its
Subsidiaries; (e) sustained any material loss or interference with its business
or properties not covered by insurance; (f) paid or declared any dividends or
other distributions with respect to the capital stock (other than customary
dividends paid to all holders of Common Stock); (g) defaulted in the payment of
principal and interest on any outstanding debt obligations or (h) entered into
any agreement or commitment to do any of the foregoing.

                  3.28     Contributions. Neither the Company, its employees
nor, to the Company's knowledge, any agent or other person acting on behalf of
the Company, has (i) directly or indirectly, used any corporate funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related
to foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials, or employees or to foreign or domestic
political parties or campaigns from corporate funds, (iii) failed to disclose
fully any contribution made by the Company or made by any person acting on its
behalf and of which the Company is aware in violation of law or (iv) violated in
any material respect any provision of the Foreign Corrupt Practices Act of 1977,
as amended.

Immersion Corporation
Series A Preferred Stock Purchase Agreement

                                       9

<PAGE>

         4.       REPRESENTATIONS OF THE PURCHASER. The Purchaser represents and
warrants to the Company as follows:

                  4.1      Investment. The Purchaser is acquiring the Shares and
the shares of Common Stock into which the Shares may be converted for its own
account for investment and not with a view to, or for sale in connection with,
any distribution thereof, nor with any present intention of distributing or
selling the same; and, except as contemplated by this Agreement and the
Ancillary Agreement, the Purchaser has no present or contemplated agreement,
undertaking, arrangement, obligation, indebtedness or commitment providing for
the disposition thereof.

                  4.2      Authority. The Purchaser has full power and authority
to enter into and to perform this Agreement in accordance with its terms.

                  4.3      Experience. The Purchaser has carefully reviewed the
representations concerning the Company contained in this Agreement and has had
the opportunity to make detailed inquiry concerning the Company, its business
and its personnel; and the Purchaser has adequate net worth and means of
providing for its current needs and contingencies to sustain a complete loss of
its investment in the Company; the Purchaser's overall commitment to investments
which are not readily marketable is not disproportionate to its net worth and
the Purchaser's investment in the Shares will not cause such overall commitment
to become excessive.

                  4.4      Accredited Investor. The Purchaser is an Accredited
Investor within the definition set forth in Rule 501(a) promulgated by the
Securities and Exchange Commission under the Securities Act.

                  4.5      Brokers. The Purchaser has not retained or been
represented by any broker or finder in connection with the transactions
contemplated by this Agreement.

                  4.6      Restricted Securities. The Purchaser understands
that, although the Company is undertaking to file a registration statement
covering the resale of the Shares and the shares of common stock into which the
Shares are convertible, the registration statement will not be effective for an
indeterminate time following the Closing, the Shares to be purchased hereunder
and the shares of Common Stock into which the Shares are convertible are
"restricted securities" under the Securities Act inasmuch as they are being
acquired from the Company in a transaction not involving a public offering and
that under the Securities Act and applicable regulations thereunder, such
securities may not be resold except in limited circumstances. The Purchaser is
familiar with Rule 144 under the Securities Act, as amended from time to time,
and understands the resale limitations imposed thereby and by the Securities
Act.

         5.       CONDITIONS TO THE OBLIGATIONS OF THE PURCHASER. The obligation
of the Purchaser to purchase the Shares at the Closing, is subject to the
fulfillment, or the waiver by the Purchaser, of the following conditions on or
before the Closing:

                  5.1      Accuracy of Representations and Warranties. Each
representation and warranty contained in Section 3 shall be true and correct as
of the date hereof and shall be true

Immersion Corporation
Series A Preferred Stock Purchase Agreement

                                       10

<PAGE>

and correct on and as of the Closing Date with the same effect as though such
representation and warranty had been made on and as of that date. The Company
hereby agrees that for purposes of this Agreement, the representations and
warranties of the Company shall be deemed to have been restated on and as of the
Closing Date.

                  5.2      Performance. The Company shall have performed and
complied with all agreements and conditions contained in this Agreement required
to be performed or complied with by the Company prior to or at the Closing.

                  5.3      Approvals. The Company shall have obtained any and
all authorizations, approvals, consents, permits, and waivers and shall have
made all filings necessary or appropriate for the consummation of the
transactions contemplated hereby and under the Ancillary Agreements.

                  5.4      Registration Rights Agreement. The Registration
Rights Agreement attached hereto as Exhibit B shall have been executed and
delivered by the Company and the Purchaser.

                  5.5      Stockholders' Agreement. The Stockholders' Agreement
attached hereto as Exhibit C shall have been executed and delivered by the
Company, by the Purchaser and by each of the parties identified therein.

                  5.6      Debenture Agreement. The Debenture Agreement attached
hereto as Exhibit D shall have been executed and delivered by the Company and
the Purchaser.

                  5.7      Settlement. The Settlement Agreement and Mutual
Release attached hereto as Exhibit E shall have been executed and delivered by
the Company and the Purchaser.

                  5.8      License Agreement. The License Agreement attached
hereto as Exhibit F shall have been executed and delivered by the Company and
the Purchaser.

                  5.9      Game Console Agreement. The Game Console Sublicense
Agreement attached hereto as Exhibit G shall have been executed and delivered by
the Company and the Purchaser.

                  5.10     Certificates and Documents. The Company shall have
delivered to the Purchaser:

                           (i)      The Certificate of Designation of the
Company, as amended and in effect prior to the Closing, certified by the
Secretary of State of the State of Delaware;

                           (ii)     A certificate, as of the most recent
practicable date, as to the corporate good standing of the Company issued by the
Secretary of State of the State of Delaware confirming such good standing on or
immediately prior to the Closing;

Immersion Corporation
Series A Preferred Stock Purchase Agreement

                                       11

<PAGE>

                           (iii)    Bylaws of the Company, certified by its
Secretary or Assistant Secretary as of the Closing Date; and

                           (iv)     Resolutions of the Directors of the Company,
authorizing and approving all matters in connection with this Agreement and the
transactions contemplated hereby, certified by the Secretary or Assistant
Secretary of the Company as of the Closing Date.

                  5.11     Compliance Certificate. The Company shall have
delivered to the Purchaser a certificate, executed by the President of the
Company, dated the Closing Date, certifying to the fulfillment of the conditions
specified in subsections 5.1, 5.2, 5.3, 5.14 and 5.15 of this Agreement.

                  5.12     Opinion of Counsel. Gray Cary Ware & Freidenrich LLP
shall have delivered its opinion, addressed to the Purchaser, in the form
attached hereto as Exhibit H.

                  5.13     Adoption and Filing of Certificate of Designation.
The Company shall have taken all requisite corporate action to adopt and file
the Certificate of Designation with the Secretary of the State of Delaware.

                  5.14     No Material Adverse Effect. The Company shall not
have suffered any Material Adverse Effect prior to the Closing Date.

                  5.15     No Constraints. No proceeding challenging this
Agreement or the transactions contemplated hereby, or seeking to prohibit,
alter, prevent or delay the Closing, shall have been instituted before any
court, arbitrator or governmental body, agency or official and shall be pending.
The purchase of and payment for the Series A Preferred Stock by the Purchaser
shall not be prohibited by any law or governmental order or regulation. All
necessary consents, approvals, licenses, permits, orders and authorizations of,
or registrations, declarations and filings with, any governmental or
administrative agency with respect to any of the transactions contemplated
hereby shall have been duly obtained or made and shall be in full force and
effect.

                  5.16     Other Matters. All corporate and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to the Purchaser, and the Purchaser shall
have received all such counterpart originals or certified or other copies of
such documents as they may reasonably request.

         6.       CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligations
of the Company under subsection 1.2 of this Agreement are subject to
fulfillment, on or before the Closing, of each of the following conditions:

                  6.1      Accuracy of Representations and Warranties. The
representations and warranties of the Purchaser contained in Section 4 shall be
true on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of that date. The
Purchaser hereby agrees that for purposes of this Agreement the representations
and warranties of the Purchaser shall be deemed to have been restated on and as
of the Closing Date.

Immersion Corporation
Series A Preferred Stock Purchase Agreement

                                       12

<PAGE>

                  6.2      Purchase Consideration. The Purchaser shall have
delivered the aggregate purchase consideration as set forth in Section 2.

                  6.3      Ancillary Agreements. The Registration Rights
Agreement, Stockholders' Agreement and Debenture Agreement by shall have been
executed and delivered by each of the parties identified therein.

         7.       COVENANTS OF THE COMPANY.

                  7.1      Reduction Of Lawsuit Claims. In the event that a
court of competent jurisdiction in the case of 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) (the "LAWSUIT") issues a ruling or order which eliminates any claims
asserted in the Lawsuit by the Company or narrows the scope of the Lawsuit and
the Company desires to withdraw or dismiss the Lawsuit, the Purchaser shall have
the right to either (i) direct the assignment of the Lawsuit to any third party
and if any such third party purchases such Lawsuit from the Company, the
Purchaser shall receive any and all proceeds from such sale; or (ii) assign the
Lawsuit and all right, title and interest therein to either the Purchaser or its
designee for no cash or other consideration.

                  7.2      Listing And Maintenance Requirements Compliance. So
long as the Company shall continue the listing and trading of its Common Stock
on Nasdaq, the Company will use its commercially reasonable efforts to comply in
all respects with the Company's reporting, filing and other obligations under
the bylaws or rules of such exchange or quotation system.

                  7.3.     Hedging Activities. Notwithstanding the anything to
the contrary herein, the Purchaser shall have the right at any time to enter
into hedging or remarketing activities with respect to the Series A Preferred
Stock or the shares of Common Stock into which such the Series A Preferred Stock
is convertible.

         8.       SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
be binding upon, and inure to the benefit of, the respective successors,
assigns, heirs, executors and administrators of the parties hereto.

         9.       CONFIDENTIALITY. In addition to, but not in substitution for,
any pre-existing confidentiality agreement between the Company and the
Purchaser, the Purchaser agrees that it will keep confidential and will not
disclose or divulge any confidential, proprietary or secret information that the
Purchaser may obtain from the Company pursuant to reports and other materials
submitted by the Company to such Purchaser pursuant to this Agreement, or
pursuant to visitation or inspection rights granted hereunder, unless such
information is known, or until such information becomes known, to the public
other than as a result of a disclosure by the Purchaser; provided, however, that
the Purchaser may disclose such information to its attorneys, accountants,
consultants and other professionals to the extent necessary to obtain their
services in connection with its investment in the Company.

Immersion Corporation
Series A Preferred Stock Purchase Agreement

                                       13

<PAGE>

         10.      SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All agreements,
representations and warranties contained herein shall survive the execution and
delivery of this Agreement and the closing of the transactions contemplated
hereby until the third anniversary of the Closing.

         11.      NOTICES. All notices, demands, requests, consents or other
communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been received when sent personally to the recipient:
(i) one (1) business day after it has been dispatched (with charges prepaid) to
the recipient by a reputable overnight courier service; or (ii) three (3)
business days after deposit in the mail when mailed (with postage prepaid) by
first class certified or registered mail, return receipt requested. Such
notices, demands, requests, consents or other communications shall be addressed:

If to the Company, to:

                  Victor Viegas, President,
                  Chief Executive Officer and Chief Financial Officer
                  Immersion Corporation
                  801 Fox Lane
                  San Jose, CA 95131
                  Facsimile: (408) 467-1901

or at such other address or addresses as may later have been furnished in
writing by the Company to the Purchaser, with a copy to:

                  James Koshland
                  Gray Cary Ware & Freidenrich LLP
                  2000 University Avenue
                  East Palo Alto, CA 94303
                  Facsimile: (650) 833-2001
                  Email: jkoshland@graycary.com

If to the Purchaser, to:

                  Microsoft Corporation
                  One Microsoft Way
                  Redmond, WA 98052
                  Fax: (425) 936-7329
                  Attn: Law and Corporate Affairs

and               Microsoft Corporation
                  One Microsoft Way
                  Redmond, WA 98052
                  Fax: (425) 936-7329
                  Attn: Corporate Development and Business Strategies, c/o Marc
                        Brown

Immersion Corporation
Series A Preferred Stock Purchase Agreement

                                       14

<PAGE>

                  and with respect to all corporate actions and income
                  notifications to:

                  The Northern Trust Company
                  Attn: Ms. Robyn Spillane
                  801 Canal Street
                  C1-S
                  Chicago, IL 60607
                  Reference: Microsoft Corporation, account #26-06819

                  All Shares should be delivered via Federal Express to:

                  The Northern Trust Company New York
                  40 Broad Street
                  8th Floor
                  New York, N.Y. 10004
                  Reference: Microsoft Corporation, account #26-06819

or at such other address or addresses as may later have been furnished in
writing by Microsoft to the Company, with a copy to:

                  Preston Gates & Ellis LLP
                  425 Fourth Avenue, Suite 2900
                  Seattle, WA 98104-1158
                  Attn.: Richard B. Dodd
                  Facsimile: (206) 623-7022
                  E-mail: rdodd@prestongates.com

Any party may give any notice, demand, request, consent or other communication
required or permitted under this Agreement using any other means (including,
without limitation, personal delivery, messenger service, facsimile, first class
mail or electronic mail), but no such notice, request, consent or other
communication shall be deemed to have been duly given unless and until it is
actually received by the party for whom it is intended within the specified
period. Any party may change the address to which notices, requests, consents or
other communications hereunder are to be delivered by giving the other parties
notice in the manner set forth in this Section 10.

         12.      EXPENSES. Each party will bear its own costs and expenses in
connection with the negotiation, execution and consummation of the Agreement and
the Ancillary Agreements and the closing of the transactions contemplated
hereby.

         13.      BROKERS. Each party will bear the cost and expenses incurred
by it in connection with a broker or finder in regard to the transactions
contemplated by this Agreement.

         14.      ENTIRE AGREEMENT. This Agreement and the Ancillary Agreements
embody the entire agreement and understanding between the parties hereto with
respect to the

Immersion Corporation
Series A Preferred Stock Purchase Agreement

                                       15

<PAGE>

subject matter hereof and supersede all prior agreements and understandings
relating to such subject matter.

         15.      AMENDMENTS AND WAIVERS. Except as otherwise expressly set
forth in this Agreement, any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), with the written
consent of the Company and the Purchaser(s) holding a majority of the Shares.
Any amendment or waiver effected in accordance with this Section 14 shall be
binding upon each holder of any Shares (including shares of Common Stock into
which such Shares have been converted), as well as each future holder of all
such securities and the Company. No waivers of or exceptions to any term,
condition or provision of this Agreement, in any one or more instances, shall be
deemed to be, or construed as, a further or continuing waiver of any such term,
condition or provision.

         16.      COUNTERPARTS; SIGNATURES. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which when taken together shall constitute one and the same instrument. This
Agreement may be executed by actual, facsimile or electronic signatures, or
combinations thereof.

         17.      HEADINGS. The headings of the sections, subsections, and
paragraphs of this Agreement have been added for convenience only and shall not
be deemed to be a part of this Agreement.

         18.      SEVERABILITY. The remedies provided in this Agreement are
cumulative and not exclusive of any remedies provided by law. If any term,
provision, covenant or restriction of this Agreement is held by a board of
arbitration or a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their best efforts to find and employ an alternative means to achieve the same
or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of those that may
be hereafter declared invalid, illegal, void or unenforceable.

         19.      GOVERNING LAW. This Agreement and the rights and obligations
of the parties hereunder 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.

Immersion Corporation
Series A Preferred Stock Purchase Agreement

                                       16

<PAGE>

         20.      CUSTODIANS. Notwithstanding anything to the contrary contained
herein, upon receipt of a written request from the Purchaser, the Company will
issue the Shares, the Series A Conversion Shares and any other shares of capital
stock to be issued to the Purchaser pursuant to this Agreement or any of the
Ancillary Agreements in the name of a Custodian. All of the Shares issued to
Microsoft at the Closing shall be issued in the name of Booth and Co. (Tax ID
number 36-6033750), which is the nominee name of the Purchaser's Custodian, The
Northern Trust Company. "CUSTODIAN" shall mean a Person who holds any capital
stock or securities convertible into capital stock as a nominee for the benefit
of the owner for the purpose of receiving notices and handling certification
issues, or any other purpose necessary to manage the portfolio of the owner
pursuant to an arrangement in which the owner retains control of the vote of the
shares in question, the economic benefits and risks of the shares in question
and of any disposition of the shares in question.

                            {SIGNATURE PAGE FOLLOWS}

Immersion Corporation
Series A Preferred Stock Purchase Agreement

                                       17

<PAGE>

                              SIGNATURE PAGE TO THE
                    SERIES A REDEEMABLE CONVERTIBLE PREFERRED
                            STOCK PURCHASE AGREEMENT

         IN WITNESS WHEREOF, the undersigned have hereunto set their hands as of
the day and year first above written.

                                     COMPANY:

                                     IMMERSION CORPORATION

                                     By: /s/ Victor Viegas
                                         ---------------------------------------
                                         VICTOR VIEGAS
                                         President, Chief Executive Officer and
                                         Chief Financial Officer

                                     PURCHASER:

                                     MICROSOFT CORPORATION

                                     By: /s/ William H. Gates
                                         ---------------------------------------
                                         Name:  William H. Gates
                                         Title: Chairman of the Board

                                     By: /s/ Richard Emerson
                                         ---------------------------------------
                                         Name:  Richard Emerson
                                         Title: Sr. VP. Corp. Development

                                     By: /s/ Bryan Lee
                                         ---------------------------------------
                                         Name:  Bryan Lee
                                         Title: Corporate Vice President and
                                         Chief Financial Officer



Immersion Corporation
Series A Preferred Stock Purchase Agreement

<PAGE>

                                   APPENDIX A

                                  DEFINITIONS

         "Agreement" means this Series A Preferred Stock Purchase Agreement.

         "Ancillary Agreements" shall have the meaning set forth in Section 3.1
hereof.

         "Certificate of Designation" shall have the meaning set forth in
Section 1.1 hereof.

         "Closing" shall have the meaning set forth in Section 2 hereof.

         "Closing Date" shall have the meaning set forth in Section 2 hereof.

         "Code" shall have the meaning set forth in Section 3.11 hereof.

         "Commission" shall have the meaning set forth in Section 3.1 hereof.

         "Common Stock" shall have the meaning set forth in Section 1.1 hereof.

         "Company" means Immersion Corporation, a Delaware corporation having
its corporate headquarters at 801 Fox Lane, San Jose, California 95131.

         "Company Contract" shall have the meaning set forth in Section 3.14
hereof.

         "Custodian" shall have the meaning set forth in Section 23 hereof.

         "Debenture Agreement" shall have the meaning set forth in Section 3.1
hereof.

         "Environmental Laws" shall have the meaning set forth in Section 3.28
hereof.

         "Filed SEC Documents" shall have the meaning set forth in Section 3.19
hereof.

         "Financial Statements" shall have the meaning set forth in Section 3.18
hereof.

         "Intellectual Property Rights" shall have the meaning set forth in
Section 3.13 hereof.

         "Lawsuit" shall have the meaning set forth in Section 7 hereof.

         "Liens" shall have the meaning set forth in Section 3.2 hereof.

         "Material Adverse Effect" shall have the meaning set forth in Section
3.1 hereof.

         "Nasdaq" shall have the meaning set forth in Section 1.2 hereof.

         "Publicly Available Software" shall have the meaning set forth in
Section 3.13(iii) hereof.

                                      A - 1

<PAGE>

         "Purchase Price" shall have the meaning set forth in Section 1.2
hereof.

         "Purchaser" means Microsoft Corporation, a Washington corporation
having its corporate headquarters at One Microsoft Way, Redmond, Washington
98052-6399.

         "Registration Rights Agreement" shall have the meaning set forth in
Section 3.1 hereof.

         "SEC Documents" shall have the meaning set forth in Section 3.19
hereof.

         "Securities Act" shall have the meaning set forth in Section 3.3(v)
hereof.

         "Series A Conversion Shares" shall have the meaning set forth in
Section 1.1 hereof.

         "Series A Preferred Stock" shall have the meaning set forth in Section
1.1 hereof.

         "Shares" shall have the meaning set forth in Section 1.1 hereof.

         "Stockholders' Agreement" shall have the meaning set forth in Section
3.1 hereof.

         "Subsidiaries" shall have the meaning set forth in Section 3.2 hereof.

                                      A - 2