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                                                                     EXHIBIT 4.1

                                                                       Exhibit A

                   7% SENIOR REDEEMABLE CONVERTIBLE DEBENTURE
                                       OF
                              IMMERSION CORPORATION

$____________                                                Seattle, Washington
                                                                _________, 200_

         IMMERSION CORPORATION (the "COMPANY"), a Delaware corporation, for
value received, hereby promises to pay to MICROSOFT CORPORATION, (the
"PURCHASER"), the principal sum of _____________ Dollars ($_________), plus
accrued and unpaid interest, in accordance with Section 3 hereof, but subject to
the prior prepayment, conversion or redemption of this 7% senior redeemable
convertible debenture as provided herein, in one lump sum on the Maturity Date.
This senior redeemable convertible debenture is issued in connection with that
certain 7% Senior Redeemable Convertible Debenture Purchase Agreement dated
____________, 2003 by and between the Company and the Purchaser (the "DEBENTURE
PURCHASE AGREEMENT").

         The following is a statement of the rights of the Purchaser and the
conditions to which this 7% senior redeemable convertible debenture is subject,
and to which the Purchaser, by the acceptance of this 7% senior redeemable
convertible debenture, agrees:

         (1)      Principal Amount and Designation. The Company shall be
authorized to issue this 7% senior redeemable convertible debenture having a
principal amount of ___________________ Dollars ($________). The Company is
authorized to issue additional 7% senior redeemable convertible debentures
having terms identical terms hereto, in no less than $500,000 principal amount
increments (other than Interest Debentures which may be issued in lesser
increments), in an aggregate principal amount not to exceed Nine Million Dollars
($9,000,000) (such additional debentures, together with this debenture, being
referred to hereinafter collectively as "DEBENTURES" and each singularly as a
"DEBENTURE").

         (2)      Definitions. Unless hereinafter defined or otherwise defined
herein, all capitalized terms used in this Debenture shall have the meanings
ascribed to such terms in the Debenture Purchase Agreement.

                  "Alternate Settlement Redemption Amount" shall have the
meaning set forth in Section 7 hereof.

                  "Base Rate" means seven percent (7.0%).

                  "Business Day" means any day other than a Saturday or a Sunday
or other day on which commercial banks are authorized or required to close in
Seattle, Washington.

                  "Change in Control" means (i) any sale of all or substantially
all of its assets by the Company, (ii) a merger, consolidation, liquidation or
other transaction in which holders of the Company's voting power prior to such
transaction will hold, after such transaction, less than

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50% of the Company's voting power, (iii) a sale of all or substantially all of
the intellectual property of the Company in one or a series of transactions,
(iv) the withdrawal from or dismissal of the Lawsuit with or without prejudice
before a settlement or judicial resolution of the Lawsuit by the plaintiff in
the Lawsuit, other than as a result of a settlement agreement with the remaining
defendant in the Lawsuit, except that in the event that after a court of
competent jurisdiction in the Lawsuit issues a ruling or order the effect of
which is to eliminate claims or narrow the scope of the Lawsuit and the Company,
within ten (10) days, reasonably desires to withdraw or dismiss the Lawsuit, and
the Company either (I) upon exercise of the holder's rights under the Purchase
Agreement, direct the assignments of the Lawsuit to a third party and any such
third party purchases the Lawsuit from the Company , or (II) assigns all of its
right, title and interest to the Lawsuit to either the holder or its designee,
then no Change in Control event shall be deemed to have occurred, and (v) at the
sole discretion of Purchaser, a change in any twelve (12) month period of two
(2) or more incumbent directors of the Company not eligible for reelection in
that year or any expansion of the number of seats on the Board of Directors
above nine (9), with no more than one (1) additional director per year from the
date of the first issuance of a Debenture pursuant to the Debenture Purchase
Agreement.

                  "Code" means the Internal Revenue Code of 1986, and all rules
and regulations promulgated thereunder, as such may be amended from time to
time.

                  "Common Stock" means shares of the Company's common stock.

                  "Conversion" means the right of the Purchaser to convert any
or all of the Conversion Amount into shares of Common Stock in accordance with
Section 8 hereof.

                  "Conversion Amount" shall have the meaning set forth in
Section 8(a) hereof.

                  "Conversion Notice" shall have the meaning set forth in
Section 8(b) hereof.

                  "Conversion Price" shall have the meaning set forth in Section
9(a) hereof.

                  "Debenture" has the meaning given in Section 1 hereof.

                  "Debenture Purchase Agreement" has the meaning given in the
Preamble hereof.

                  "Default" means an act, event or condition, which, with the
giving of notice and/or the lapse of time or both would constitute an Event of
Default.

                  "Dollar" and "$" means lawful money of the United States of
America.

                  "Event of Default" means any of the events, acts or conditions
specified in Section 5; provided; however, that any requirement for the giving
of notice and/or lapse of time has been satisfied.

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                  "GAAP" means generally accepted accounting principles in the
United States of America, consistently applied in effect from time to time.

                  "Game Console Sublicense Agreement" means that certain Game
Console Sublicense Agreement between the Company and the Purchaser dated July
25, 2003.

                  "Interest Debentures" shall have the meaning set forth in
Section 3 hereof.

                  "Lawsuit" means the 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).

                  "License Agreement" means that certain License Agreement
between the Company and the Purchaser dated July 25, 2003.

                  "Market Price" shall mean the closing price per share of
Common Stock on the preceding trading day as reported on the Nasdaq National
Market System.

                  "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. However, none
of the following shall be deemed in and of themselves, either alone or in
combination, to constitute, a "material adverse effect":

                  (1)      any change in the market price or trading volume of
the Common Stock after the date hereof;

                  (2)      any adverse change, event, circumstance or effect
that results from changes attributable to conditions affecting the industries in
which the Company participates, the United States economy as a whole, or foreign
economies in any locations where the Company or any of its Subsidiaries have
material operations or sales (which changes in each case do not
disproportionately adversely affect the Company or its subsidiaries, as the case
may be); or

                  (3)      any adverse change, effect, event, occurrence, state
of facts or development to the extent attributable to the announcement of the
execution of the Transaction Documents or resulting from or relating to
compliance with the terms of, or the taking of any action required by the
Transaction Documents.

                  "Maturity Date" means ___________, 20__; provided; however, if
such date is not a Business Day, such date shall be the immediately succeeding
Business Day.

                                      -3-

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                  "Payment Date" shall have the meaning set forth in Section 3
hereof.

                  "Person" means an individual, partnership, corporation,
business trust, limited liability company, limited liability partnership, trust,
unincorporated association, joint venture, governmental authority, or other
entity of whatever nature.

                  "Purchaser" shall have the meaning given in the Preamble
hereof.

                  "Purchase Agreement" means that certain Series A Redeemable
Convertible Preferred Stock Purchase Agreement between the Company and the
holder of the Series A Preferred Stock dated July 25, 2003.

                  "Redemption Amount" shall have the meaning set forth in
Section 6(a) hereof.

                  "Redemption Date" shall have the meaning set forth in Section
6(a) hereof.

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

                  "Series A Preferred Stock" means the Company's Series A
Redeemable Convertible Preferred Stock.

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

                  "Settlement Redemption Amount" shall have the meaning set
forth in Section 7 hereof.

                  "Transaction Documents" means the Debenture Purchase
Agreement, the Purchase Agreement, the License and the Game Console Sublicense
Agreement.

         (3)      Principal; Interest.

                  (a)      The principal sum of __________________________
Dollars ($____________) of this Debenture plus accrued and unpaid interest in
accordance with this Section 3 but subject to the early repayment of this
Debenture pursuant to Section 4 hereof, the redemption of this Debenture
pursuant to Section 7, or prior conversion of this Debenture pursuant to Section
8 hereof, shall be paid in one lump sum on the Maturity Date in cash in
immediately available funds to an account designated by Purchaser.

                  (b)      Interest shall accrue on the outstanding and unpaid
principal amount of this Debenture for the period commencing from and including
the initial issuance date of this Debenture to the date prior to date this
Debenture is repaid in full, at a fixed rate equal to the Base Rate. Interest on
this Debenture shall be calculated on the basis of a year of 365 days for the
actual number of days elapsed. All accrued and unpaid interest on the
outstanding and unpaid principal amount of this Debenture will be paid semi
annually on the last Business Day of ____________ and ____________ of each year
(each a "PAYMENT DATE") in arrears and at the Company's option (a) by issuing to
Purchaser that number of Debentures computed by dividing:

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(i) the amount of all accrued but unpaid interest on this Debenture; by (ii) the
amount of this Debenture (the "INTEREST DEBENTURES"); or (b) in cash in
immediately available funds to an account designated by Purchaser.

         (4)      Events of Default. The occurrence of any of the following
events, for any reason, shall constitute an Event of Default.

                  (a)      The Company shall fail to pay when due (whether at
scheduled maturity, or by required prepayment) the principal amount of this
Debenture and such failure shall continue for a period of two (2) Business Days
after notice thereof to the Company from the Purchaser;

                  (b)      The Company shall fail to pay when due any
Obligation, and such failure shall not be remedied within five (5) Business Days
after notice thereof to the Company from the Purchaser;

                  (c)      Any representation or warranty of the Company
contained herein or in the Debenture Purchase Agreement or in any certificate,
notice, document, legal opinion or statement, financial or otherwise, furnished
to the Purchaser hereunder shall prove to have been incorrect or misleading, in
any material respect, on or as of the date made or deemed made, and the
occurrence, act, event or condition giving rise to such incorrect or misleading
misrepresentation or warranty shall not have been corrected within thirty (30)
days after notice thereof to the Company from the Purchaser so that the same
shall no longer be materially incorrect or misleading;

                  (d)      The Company shall fail to perform or observe any
other term, covenant or agreement contained in the Debenture Purchase Agreement
which is to be performed or observed by the Company and such failure shall
remain unremedied for a period of fifteen (15) days after notice thereof to the
Company from the Purchaser;

                  (e)      The Company shall: (i) fail to pay any Indebtedness
greater than $250,000 or any interest or premium thereon, when due (whether by
scheduled maturity, required prepayment, acceleration, demand, or otherwise), or
within any applicable grace period; or (ii) fail to perform or observe any term,
covenant, or within any applicable grace period, or condition on its part to be
performed or observed under any agreement or instrument relating to any such
Indebtedness, when required to be performed or observed or within any applicable
grace period, if the effect of such failure is to accelerate the maturity of
such Indebtedness; or any such Indebtedness shall be declared to be due and
payable or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;

                  (f)      The Company, or any Subsidiary: (i) shall generally
not, or shall be unable to, or shall admit in writing its inability to pay its
debts as such debts become due; or (ii) shall make a general assignment for the
benefit of creditors, petition or apply to any tribunal for the appointment of a
custodian, receiver, or trustee, or similar officer for it or for all or a
substantial part of its assets; or (iii) shall commence or have its Board of
Directors vote in favor of commencing any case under any bankruptcy,
reorganization, arrangement, readjustment of debt,

                                      -5-

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dissolution, or liquidation law or statute of any jurisdiction, whether now or
hereafter in effect; or (iv) shall have, whether voluntarily or involuntarily,
any such petition or application filed or any such case commenced against it in
which an order for relief is entered or adjudication or appointment is made and
such petition, application or case shall remain undismissed for a period of
sixty (60) days; or (v) by any act or omission shall indicate its consent to,
approval of, or acquiescence in any such petition, application, or case, or
order for relief, or the appointment of a custodian, receiver, or trustee or
similar officer for all or any substantial part of its properties;

                  (g)      One or more judgments, decrees or orders for the
payment of money in excess of $250,000 in the aggregate shall be rendered
against the Company or any of its Subsidiaries, and such judgments, decrees or
orders shall continue unsatisfied and in effect for a period of thirty (30)
consecutive days without being vacated, discharged, satisfied, or stayed or
bonded pending appeal or otherwise complied with in accordance with its terms;

                  (h)      This Debenture or the Debenture Purchase Agreement
shall at any time after its execution and delivery and for any reason cease to
be in full force and effect or shall be declared null and void, or the validity
or enforceability thereof shall be contested by the Company, or the Company
shall deny it has any further liability or obligation under the Debenture
Purchase Agreement;

                  (i)      Any act, event, circumstance or condition shall occur
after the date hereof which the Purchaser has claimed in good faith has had a
Material Adverse Effect, and such act, event, circumstance or condition shall
continue, and such claim has not been disproved by the Company to the
Purchaser's reasonable satisfaction, after thirty (30) days from the date on
which the Company receives notice thereof from the Purchaser.

         (5)      Rights and Remedies. (a) Notwithstanding any other term or
condition of this Debenture, upon the occurrence of any Event of Default
described in Section 4(f) with respect to the Company, the unpaid principal
amount of this Debenture and all accrued interest outstanding on this Debenture
and all other Obligations shall automatically become immediately due and payable
by the Company, in immediately available funds with all additional interest from
time to time accrued thereon and without presentation, demand, or protest or
other requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and notice of acceleration), all of which are hereby expressly waived by the
Company, and upon the occurrence and during the continuance of any other Event
of Default hereof, the Purchaser, by written notice to the Company, may take
either or both of the following actions: (i) terminate the obligation of
Purchaser to extend any further credit under the Debenture Purchase Agreement or
hereunder (including but not limited to accepting Interest Debentures in lieu of
cash interest) on the date (which may be the date thereof) stated in such notice
and (ii) declare the unpaid principal amount of and all accrued and unpaid
interest under this Debenture and all other Obligations to be, and the same
shall thereupon be, immediately due and payable by the Company, in immediately
available funds, with all additional interest from time to time accrued thereon
and without presentation, demand, or protest or other requirements of any kind
(including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by the Company.

                                      -6-

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                  (b)      If an Event of Default occurs and is continuing, the
Purchaser hereof may proceed to protect and enforce its rights by such
appropriate judicial proceedings against the Company as the Purchaser shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Debenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.

                  (c)      The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any usury, stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Debenture and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or impede
the execution of any power herein granted to the Purchaser, but will suffer and
permit the execution of every such power as though no such law has been enacted.

         (6)      Optional Redemption.

                  (a)      On and after the third anniversary of the Closing
Date, the Purchaser shall have the right to require the Company to repay all,
but not less than all, of the outstanding principal amount of this Debenture and
all accrued interest thereon prior to the Maturity Date. In the event of such
redemption, and in order to compensate the Purchaser for interest foregone as a
consequence of such redemption, this Debenture shall be redeemed by the Company
in an amount in cash equal to One Hundred Ten Percent (110%) of the outstanding
principal amount of this Debenture plus all accrued interest thereon (the
"REDEMPTION AMOUNT").

                  (b)      If and/or when the Purchaser elects to have the
Company redeem all of the principal amount of this Debenture pursuant to
Sections (6)(a), the Purchaser shall provide notice to the Company of such
redemption by certified mail, return receipt requested, postage prepaid, mailed
not less than thirty (30) Business Days prior to the requested redemption date
("REDEMPTION DATE"). Such notice shall state: (i) the redemption date; (ii) the
Redemption Amount; and (iii) any additional instructions required for payment of
such amount.

                  (c)      If notice has been mailed as aforesaid, from and
after the applicable date (unless default shall be made by the Company in
providing for the payment of the applicable redemption price and interest
accrued and unpaid thereon, if any): (i) except as otherwise provided herein,
interest on the principal amount of this Debenture so called for redemption
shall cease to accrue; (ii) the principal amount of this Debenture so called for
redemption shall no longer be deemed to be outstanding; (iii) all rights of the
Purchaser thereof as Purchaser of the principal amount of this Debenture so
called for redemption shall cease (except the right to receive from the Company
the applicable Redemption Amount); and (iv) upon receipt from the Company of the
applicable Redemption Amount, the Debenture shall be cancelled and cease to be
deemed outstanding.

                                      -7-

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                  (d)      Upon compliance with the redemption procedures set
forth in this Section 6, the principal amount of this Debenture subject to such
redemption shall be redeemed by the Company at the applicable Redemption Amount.

         (7)      Mandatory Redemption.

                  (a)      Upon reaching a settlement of the Lawsuit prior to
the Maturity Date (the "SETTLEMENT DATE"), the Company shall repay all, but not
less than all, of the outstanding principal amount of this Debenture and all
accrued interest thereon. In the event of such redemption, and in order to
compensate the Purchaser for interest foregone as a consequence of such
redemption, this Debenture shall be redeemed by the Company in an amount in cash
equal to One Hundred Twenty-Five Percent (125%) of the outstanding principal
amount of this Debenture plus all accrued interest thereon (the "SETTLEMENT
REDEMPTION AMOUNT.").

                  (b)      Upon the Settlement Date the Company shall provide
notice to the Purchaser. Such notice shall state the Settlement Date. The
Settlement Redemption Amount shall be paid to the Purchaser within ten (10) days
of the Settlement Date.

                  (c)      Upon payment to the Purchaser of the Settlement
Redemption Amount, interest on the principal amount of this Debenture so called
for redemption shall cease to accrue; (ii) the principal amount of this
Debenture so called for redemption shall no longer be deemed to be outstanding;
(iii) all rights of the Purchaser thereof as Purchaser of the principal amount
of this Debenture so called for redemption shall cease; and (iv) this Debenture
shall be cancelled and cease to be deemed outstanding.

                  (d)      In the event that the Purchaser negotiates the terms
of a settlement with the defendant in the Lawsuit, and requests that the Company
settle the Lawsuit based upon those terms (provided that those terms are within
the scope agreed upon in the Game Console Sublicense Agreement), but the Company
declines to do so (the "REFUSAL DATE"), the Company shall immediately repay all,
but not less than all, of the outstanding principal amount of this Debenture and
all accrued interest thereon prior to the Maturity Date in cash in immediately
available funds at an account designated by Purchaser. In the event of such
redemption and in order to compensate the Purchaser for negotiating such
settlement and for interest foregone as a consequence of such redemption, this
Debenture shall be redeemed by the Company in an amount in cash equal to One
Hundred Twenty Five Percent (125%) of the outstanding principal amount of this
Debenture plus all accrued interest thereon (the "ALTERNATE SETTLEMENT
REDEMPTION AMOUNT").

                  (e)      Within ten (10) days of the Refusal Date, the Company
shall pay to the Purchaser the Alternate Settlement Redemption Amount of this
Debenture pursuant to Section (7)(d).

                  (f)      Upon payment to the Purchaser of the Alternate
Settlement Redemption Amount, interest on the principal amount of this Debenture
so called for redemption shall cease to accrue; (ii) the principal amount of
this Debenture so called for redemption shall no longer be deemed to be
outstanding; (iii) all rights of the Purchaser thereof as Purchaser of the
principal

                                      -8-

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amount of this Debenture so called for redemption shall cease; and
(iv) this Debenture shall be cancelled and cease to be deemed outstanding.

                  (g)      Upon compliance with the redemption procedures set
forth in this Section 7, the principal amount of this Debenture subject to such
redemption shall be redeemed by the Company at the Settlement Redemption Amount
or the Alternate Settlement Redemption Amount, as applicable.

         (8)      Conversion.

                  (a)      In addition to the Interest Debentures to be issued
pursuant to Section 3 hereof, at any time after the issuance of this Debenture
up until the Business Day occurring immediately preceding the earliest of the
Redemption Date, the Settlement Date, the Alternate Settlement Date, the Refusal
Date, the Maturity Date, or the date upon which this Debenture is converted in
full pursuant to Section 8 hereof, the Purchaser may at any time convert all or
a portion of the outstanding principal amount of this Debenture plus any and all
accrued interest to date (the "CONVERSION AMOUNT") into Common Stock of the
Company calculated as follows: that number of shares of Common Stock equal to:
(i) the Conversion Amount; divided by (ii) the Conversion Price then in effect.
Except as otherwise provided herein, the Conversion shall be deemed to have been
effected as of the close of business on the date on which the Conversion Notice
has been delivered to the Company pursuant to Section 8(b) hereof. Upon any
conversion the Common Stock shall be held by the Purchaser for a period of
thirty-two (32) days prior to any sale.

                  (b)      The Purchaser shall exercise its right of conversion
by delivering to the Company upon five (5) Business Days prior written notice
provided in accordance with Sections 9(f) and 10 hereof, a notice setting forth
the following: (i) the Conversion Amount; and (ii) the name or names (and
addresses) in which the Purchaser wishes the certificate or certificates of
shares of Common Stock to be issued (the "CONVERSION NOTICE").

                  As soon as possible after receipt by the Company of the
Conversion Notice (but in any event within five (5) Business Days), the Company
shall deliver to the Purchaser or its designee(s):

                           (i)      a certificate or certificates representing
the number of shares of Common Stock, issuable by reason of such Conversion in
such name or names as the Purchaser has specified; and

                           (ii)     in the event that the Conversion Amount is
less than the entire outstanding principal amount of this Debenture, a new
Debenture with identical terms shall be issued by the Company to the Purchaser
to reflect a deduction for the Conversion Amount.

                  (c)      The issuance of certificates for shares of Common
Stock shall be made without charge to the Purchaser for any issuance tax in
respect thereof or other cost incurred by the Company in connection with the
Conversion and the related issuance of shares thereof. Upon the Conversion, the
Company shall take all such actions as are necessary in order to insure

                                      -9-

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that such stock issuable with respect to the Conversion Notice shall be validly
issued, fully paid and nonassessable, free and clear of taxes, liens, charges
and encumbrances with respect to the issuance thereof.

                  (d)      The Company shall not close its books against the
transfer of any Common Stock issued or issuable upon delivery of the Conversion
Notice in any manner which interferes with the timely Conversion. The Company
shall assist and cooperate with the Purchaser to make any governmental filings
or obtain any governmental approval prior to or in connection with the
Conversion hereunder (including, without limitation, making any filings required
to be made by the Company).

                  (e)      If any fractional interest in a share of Common Stock
would, except for the provisions of this Section 8(e), be delivered upon the
Conversion, the Company, in lieu of delivering the fractional share therefor,
shall pay an amount to the Purchaser or its assignee(s) thereof equal to the
Market Price of such fractional interest as of the date of Conversion.

                  (f)      Nothing set forth in this Debenture or the Debenture
Purchase Agreement shall be construed to limit the number of conversions that
the Purchaser may elect to exercise prior to the earliest of the Redemption
Date, Settlement Repayment Date, or the Maturity Date.

         (9)      Conversion Price. (a) Subject to adjustment as set forth in
this Section 9, the initial price per share for the Conversion shall be $2.745
(the "CONVERSION PRICE").

                  (b)      Upon issuance, sale or grant by the Company of any
equity securities, equity linked securities or securities convertible into
equity securities at a purchase price less than the Conversion Price then owed
on the Debentures plus any accrued and unpaid interest thereon (the "OUTSTANDING
AMOUNT"), the Purchaser shall be entitled to a payment equal to 50% of the
Outstanding Amount. Notwithstanding the provisions set forth above, no
protection against dilutive issuances shall exist for (i) Common Stock issuable
upon conversion of any Series A Preferred Stock or warrants outstanding as of
the Closing Date; (ii) issuances of securities to employees, directors and
consultants as approved by the Company's Board of Directors, Compensation
Committee or similar committee of the Board of Directors performing such
functions pursuant to the Company's stock option and incentive plans as in
effect on the Closing Date, including the exercise of options granted under such
stock option and incentive plans; (iii) Common Stock or other securities issued
to equipment lessors, landlords, banks financial institutions or similar
entities in a transaction approved by the Company's Board of Directors, in an
amount not to exceed 5% of the shares of the Company calculated on a fully
diluted basis, in any twelve (12) month period; or (iv) Common Stock or other
securities issued pursuant to any transactions approved by the Company's Board
of Directors primarily for the purpose of research and development, distribution
or manufacture of the Company's products or services, in an amount not to exceed
5% of the shares of the Company calculated on a fully diluted basis, in any
twelve (12) month period.

                  (c)      Subdivision or Combination of Common Stock. If the
Company at any time subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, the

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applicable Conversion Price in effect immediately prior to such subdivision
shall be proportionately reduced, so that the number of shares of Common Stock
issuable on conversion of this Debenture shall be increased in proportion to
such increase of the aggregate number of shares of Common Stock outstanding and
if the Company at any time combines (by reverse stock split or otherwise) one or
more classes of its outstanding shares of Common Stock into a smaller number of
shares, the Conversion Price in effect immediately prior to such combination
shall be MULTIPLIED BY a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior thereto and the denominator
of which shall be the number of shares of Common Stock outstanding immediately
thereafter.

                  (d)      Change of Control Transaction. Prior to the
consummation of a Change in Control or other liquidation of the Company, the
Purchaser, in its sole discretion, shall have the right to either (i) convert
this Debenture into the Company's Common Stock based upon the then applicable
Conversion Price pursuant to the provisions of Section 8; or (ii) receive, in
immediately available funds, prior to and in preference of the holders of any
other debt obligation, preferred security (other than the Series A Preferred
Stock), Common Stock or any other stock ranking junior to the Series A Preferred
Stock, an amount in cash equal to One Hundred Ten Percent (110%) of the
outstanding principal amount of this Debenture plus all accrued interest
thereon. Upon any such conversion the Common Stock shall be held by the
Purchaser for a period of thirty-two (32) days prior to any sale.

                  (e)      Certain Events. If any event occurs of the type
contemplated by the provisions of this Section 9 but not expressly provided for
by such provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity features),
then the Company's Board of Directors shall make an appropriate adjustment in
the then applicable Conversion Price so as to protect the rights of the
Purchaser; provided; however, that no such adjustment shall increase the
Conversion Price as otherwise determined pursuant to this Section 9 or decrease
the number of shares of issuable upon the Conversion.

                  (f)      Notices. Immediately upon any adjustment of the
Conversion Price, the Company shall give written notice thereof to the
Purchaser, setting forth in reasonable detail and certifying the calculation of
such adjustment.

                  (g)      Registration Rights. In the event of the issuance to
the Purchaser of any Common Stock in connection with one or more conversions in
whole or in part pursuant to Section 8 hereof, the Purchaser agrees that such
Common Stock shall be subject to that certain Registration Rights Agreement
between the Company and Purchaser dated as of the July 25 , 2003.

         (10)     General Provisions.

                  (a)      Subject to the prior optional redemption of this
Debenture pursuant to Section 6 hereof, the mandatory redemption of this
Debenture pursuant to Section 7 or the conversion of this Debenture pursuant to
Section 8 hereof, the Company agrees to repay the entire amount of this
Debenture in one lump sum on the Maturity Date.

                                      -11-

<PAGE>

                  (b)      All payments by the Company hereunder and under the
Debenture Purchase Agreement shall be made to the Purchaser at the Purchaser's
principal office on or before 1:00 P.M., Pacific Standard Time, on the due date
thereof in lawful money of the United States in immediately available funds. If
any such payment is required to be made on a day, which is not a Business Day,
such payment may be made on the next succeeding Business Day and such extension
of time shall be included in the computation of interest with respect thereto.
All such payments shall be made respective of, and without giving effect to, any
right of setoff, counterclaim or deduction, which the Company may have.

                  (c)      Notwithstanding any other term or condition of this
Debenture, in the event that it becomes unlawful for the Purchaser to maintain
this Debenture hereunder, then the Purchaser shall promptly notify the Company
thereof and the Company shall, within fifteen (15) Business Days of such notice,
prepay this Debenture, without penalty.

                  (d)      In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
the Purchaser is hereby authorized at any time or from time to time, without
demand, protest or other notice of any kind to the Company or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all amounts at any time held or owing by the
Purchaser to or for the credit or the account of the Company against and on
account of the obligations of the Company to the Purchaser under this Debenture
or under the Debenture Purchase Agreement, and all other claims of any nature or
description arising out of or connected with this Debenture or the Debenture
Purchase Agreement, irrespective of whether or not the Purchaser shall have made
any demand hereunder and although said obligations, liabilities or claims, or
any of them, shall be contingent or unmatured.

                  (e)      The Purchaser shall not be under any obligation to
marshal any assets in favor of the Company or any other party or against or in
payment of any or all of the Obligations. To the extent the Purchaser receives
any payment by or on behalf of the Company, which payment or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to the Company or its estate, trustee, receiver,
custodian or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such payment or repayment,
the obligation or part thereof which has been paid, reduced or satisfied by the
amount so repaid shall be reinstated by the amount so repaid and shall be
included within the liabilities of the Company to the Purchaser as of the date
such initial payment, reduction or satisfaction occurred.

                  (f)      Except as otherwise expressly provided herein, all
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by telecopy), and shall be deemed to
have been duly given or made when delivered by hand, or five (5) days after
being deposited in the United States mail, postage prepaid, or, in the case of
telecopy notice, when sent, or, in the case of a nationally recognized overnight
courier service, one (1) Business Day after delivery to such courier service,
addressed, in the case of each party hereto, at its address specified opposite
its signature below, or to such other address as may be designated by any party
in a written notice to the other parties hereto.

                                      -12-

<PAGE>

                  (g)      This provisions of this Debenture shall be binding
upon and inure to the benefit of the Company and the Purchaser, and their
respective transferees, successors and assigns, except that neither party shall
have the right to assign or transfer any right or interest herein or hereunder
to a transferee other than an Affiliate of Purchaser or the Company without the
other party's prior written consent.

                  (h)      No failure or delay on the part of the Purchaser in
exercising any right, power or privilege hereunder or under the Debenture
Purchase Agreement and no course of dealing between the Company and the
Purchaser or the holder of this Debenture shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under the Debenture Purchase Agreement preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder. The rights and remedies herein expressly provided are cumulative and
not exclusive of any rights or remedies, which the Purchaser or the holder of
this Debenture would otherwise have. No notice to or demand on the Company in
any case shall entitle the Company to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Purchaser or the holder of this Debenture to any other or further action in any
circumstances without notice or demand.

                  (i)      This Debenture and the Debenture Purchase Agreement
and the rights and obligations of the parties hereunder and thereunder 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 Debenture or the Debenture
Purchase Agreement or to interpret any provision of such agreements, the
prevailing party shall be entitled to recover its reasonable attorneys' fees,
costs and other expenses.

                  (j)      The headings of the sections, subsections, and
paragraphs of this Debenture have been added for convenience only and shall not
be deemed to be a part of this Debenture.

                  (k)      If any term, provision, covenant or restriction of
this Debenture 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.

                                      -13-

<PAGE>

                  (l)      Except as otherwise expressly set forth in this
Debenture, any term of this Debenture may be amended and the observance of any
term of this Debenture 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. Any amendment or waiver effected in accordance
with this Section shall be binding upon the Company and Purchaser. No waivers of
or exceptions to any term, condition or provision of this Debenture, 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.

                  (m)      ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY,
EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT
ENFORCEABLE UNDER WASHINGTON LAW.

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                                      -14-

<PAGE>

                              SIGNATURE PAGE TO THE
                     SENIOR REDEEMABLE CONVERTIBLE DEBENTURE
                            OF IMMERSION CORPORATION

         IN WITNESS WHEREOF, Immersion Corporation has caused its duly
authorized officers to execute and deliver this Debenture as of the date first
above written.

                                            COMPANY:

                                            IMMERSION CORPORATION

                                            By: ________________________________
                                                Name:
                                                Title:

                                                Address:
                                                     801 Fox Lane
                                                     San Jose, California 95131