Document:

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                                                                    Exhibit 10.5

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

                              SUBLICENSE AGREEMENT

      THIS SUBLICENSE AGREEMENT ("SUBLICENSE AGREEMENT") is entered into and is
effective on this 25th day of July, 2003 (the "EFFECTIVE DATE") by and between
MICROSOFT CORPORATION, a Washington corporation with principal offices in
Redmond, Washington ("MICROSOFT") and IMMERSION CORPORATION, a Delaware
corporation with principal offices in San Jose, California ("IMMERSION"), each a
"PARTY" and collectively, the "PARTIES."

                                    RECITALS

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

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

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

                                    AGREEMENT

1.    DEFINITIONS.

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

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

      C.    "FOUNDRY PRODUCT" means [****].

      D.    "GAME PLATFORM" means: [****].

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

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

      G.    "MEDICAL PRODUCT" means [****]. General purpose hardware or software
            whose primary function is not the delivery of one of the foregoing
            is not a Medical Product.
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                             PROVIDED UNDER RULE 408

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

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

            (I)   [****] except to the extent that such devices constitute Adult
                  Products, Medical Products, or Foundry Products; and

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

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

      J.    [****]

      K.    [****]

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

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

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

2.    SUBLICENSING RIGHTS AND PAYMENTS.

      A.    SUBLICENSE RIGHTS FOR GAME PLATFORM VENDORS.

            (I)   Grant of Rights. Immersion on behalf of itself and its
                  Subsidiaries, hereby grants to Microsoft and its Subsidiaries
                  the worldwide, irrevocable, non-terminable right, subject to
                  and during the period set forth in Section 2(j), to sublicense
                  Game Platform Vendors and their Subsidiaries under the
                  Licensed Patents (excluding Patents not directed to Touch
                  Technology) to:

                  (1)   make, have made, use, lease, distribute, have
                        distributed, publish, have published, import, provide as
                        a service, offer to sell, sell or

                                       2
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                             PROVIDED UNDER RULE 408

                        otherwise dispose of such Game Platform Vendor's and its
                        Subsidiaries' Game Platforms; and

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

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

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

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

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

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

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

            (IV)  the greater of [****] or the amount that is [****] of any
                  [****] that has been [****] if the Game Platform Sublicense is
                  entered into after the delivery of the [****] referenced in
                  (3) above. Microsoft shall be entitled to deduct [****] of the
                  cash amount received by Microsoft [****] for the Game Platform
                  Sublicense from the amounts payable under this clause (4);
                  provided that the amount payable by Microsoft under this
                  clause (4) will in no event be less than [****].

                                       3
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                             PROVIDED UNDER RULE 408

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

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

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

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

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

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

            The [****] amounts specified in clauses (i) - (iii) above shall
            include all amounts, including all royalty payments and upfront,
            annual or other license fees (regardless of when received), received
            by Immersion on account of any license, [****], or similar
            consideration granted by Immersion to [****] in respect of the
            Licensed Patents, including for fields of use outside of the area of
            Game Platforms, and(a) in connection with the [****], including any
            agreement, license,

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                             PROVIDED UNDER RULE 408

            sublicense, option, investment, or other transaction associated with
            [****], and (b) with respect to any other agreement, license,
            sublicense, option, investment, or other transaction entered into
            during the time period that is the lesser of (1) the period set
            forth in Section 2(j), or (2) eighteen (18) months after [****]. Any
            amounts due under this Section 2(e) shall be paid to Microsoft
            within ten (10) days of Immersion's [****]. Immersion further agrees
            to promptly provide Microsoft with sufficient documentation of
            [****] to enable Microsoft to determine and confirm the payment owed
            to Microsoft in the event of such [****].

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

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

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

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

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

                                       5
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                             PROVIDED UNDER RULE 408

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

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

5.    WARRANTIES.

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

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

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

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

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

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                             PROVIDED UNDER RULE 408

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

            (VI)  [****];

            (VII) [****];

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

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

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

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

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

6.    TERM; TERMINATION.

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                             PROVIDED UNDER RULE 408

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

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

7.    LIMITATION OF LIABILITIES.

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

8.    GENERAL.

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

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

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

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

                                       8
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                             PROVIDED UNDER RULE 408

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

      D.    ASSIGNMENT. This Sublicense Agreement will be binding upon and inure
            to the benefit of each Party's respective successors and lawful
            assigns. Microsoft will have the right to assign this Sublicense
            Agreement or any or all of its rights under this Sublicense
            Agreement, in whole or in part (in any case together with all
            restrictive terms continuing with such assignment) to any purchaser
            of any Microsoft business that grants the sublicenses authorized
            herein; provided, that Microsoft may not make any such assignment to
            [****]. This Sublicense Agreement may be assigned by Immersion to
            any acquiror of all or substantially all of the business or assets
            of Immersion, or in connection with a merger. Microsoft and
            Immersion will each have the right to merge or consolidate without
            the prior approval of the other Party. Except as permitted above,
            assignment of this Sublicense Agreement, whether by contract,
            operation of law, or otherwise, will be void.

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

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

                                       9
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                             PROVIDED UNDER RULE 408

            effective as delivery of an originally executed counterpart of this
            Sublicense Agreement.

                  [Remainder of page intentionally left blank]

                                       10
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                   -------------------------------------------
                              SIGNATURE PAGE TO THE
                        GAME CONSOLE SUBLICENSE AGREEMENT
                   -------------------------------------------

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

<TABLE>
<S>                                      <C>
                                         IMMERSION CORPORATION

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

                                         MICROSOFT CORPORATION

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

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

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

                                          By:
                                               ---------------------------------
                                               Name:
                                               Title:
</TABLE>
<PAGE>
                                    EXHIBIT A

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

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

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

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

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

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

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

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

                                      A-1<PAGE>
                                                                    Exhibit 10.6

                    INDEPENDENT CONTRACTOR SERVICES AGREEMENT

This Agreement is made and entered into as of July 1, 2003 ("Effective Date"),
by and between Immersion Corporation, a corporation having a principal place of
business at 801 Fox Lane, San Jose, CA ("Immersion"), and Robert Van Naarden, an
individual residing at 514 Long Lane, Huntington Valley, PA 19006 ("Van
Naarden").

      1. Engagement of Services. Immersion hereby retains Van Naarden for the
sole and specific purpose of completion of the Statement of Work ("SOW")
attached hereto as Exhibit 1. During the term of this Agreement, Van Naarden
shall commit to working at least three (3) days per week, completing the tasks
set forth in the SOW and shall report to Victor Viegas, President and CEO of
Immersion.

      2. Term and Termination.

            2.1 Term. This Agreement shall commence as of the Effective Date and
continue for an initial six (6) month term. Thereafter, this Agreement shall
automatically be renewed for subsequent three (3) month terms unless either
party notifies the other in writing at least ten (10) days prior to the
expiration of the then-current term of its election to terminate this Agreement.

            2.2 Termination by Immersion. Immersion may terminate this Agreement
without cause at any time, with termination effective fifteen (15) days after
Immersion's delivery to Van Naarden of written notice of termination. Immersion
also may terminate this Agreement (i) immediately upon Van Naarden's breach of
Paragraph 5 ("Intellectual Property Rights") or 6 ("No Conflict of Interest"),
or (ii) thirty (30) days after Immersion's delivery to Van Naarden of written
notice of Van Naarden's material breach of any other provision or obligation
owed by Van Naarden under this Agreement, which is not cured within such thirty
(30) day period

            2.3 Termination by Van Naarden. Van Naarden may terminate this
Agreement without cause at any time, with termination effective fifteen (15)
days after Van Naarden's delivery to Immersion of written notice of termination.
Van Naarden also may terminate this Agreement for material breach by Immersion
if Immersion has not cured the breach within thirty (30) days of receiving
written notice from Van Naarden.

      3. Compensation; Expenses.

            3.1 Compensation. Immersion will pay Van Naarden a monthly fee of
$15,000.00 for Van Naarden's work hereunder. Upon termination of this Agreement
for any reason, Van Naarden will be paid fees for any work completed by that
date that has not yet been compensated, but shall be entitled to no other
compensation from Immersion.

            3.2 Expenses. Van Naarden will be reimbursed for any reasonable,
out-of-pocket, travel-related expenses incurred in furtherance of Van Naarden's
performance hereunder. Van Naarden will be reimbursed only for expenses which
are incurred prior to termination of this Agreement for any reason and which
have been expressly authorized by Immersion in writing.
<PAGE>
Van Naarden will be reimbursed for such fees and expenses no later than thirty
(30) days after Immersion's receipt of Van Naarden's invoice, provided that
reimbursement for expenses may be delayed until such time as Van Naarden has
furnished such documentation for authorized expenses as Immersion may reasonably
request.

      4. Independent Contractor Relationship. Van Naarden's relationship with
Immersion is that of an independent contractor, and nothing in this Agreement is
intended to, or should be construed to, create a partnership, agency, joint
venture or employment relationship. Van Naarden will not be entitled to any of
the benefits, which Immersion may make available to its employees, including,
but not limited to, group health or life insurance, profit-sharing or retirement
benefits. Van Naarden is not authorized to make any representation, contract or
commitment on behalf of Immersion unless specifically requested or authorized in
writing to do so by an Immersion manager. Van Naarden is solely responsible for,
and will file, on a timely basis, all tax returns and payments required to be
filed with, or made to, any federal, state or local tax authority with respect
to the performance of services and receipt of fees under this Agreement. Van
Naarden is solely responsible for, and must maintain adequate records of
expenses incurred in the course of performing services under this Agreement. No
part of Van Naarden's compensation will be subject to withholding by Immersion
for the payment of any social security, federal, state or any other employee
payroll taxes. Immersion will regularly report amounts paid to Van Naarden by
filing Form 1099-MISC with the Internal Revenue Service as required by law.

      5. Intellectual Property Rights.

            5.1 Disclosure and Assignment of Innovations.

                  (a) Innovations; Immersion Innovations. "Innovations" includes
processes, machines, compositions of matter, improvements, inventions (whether
or not protectable under patent laws), works of authorship, information fixed in
any tangible medium of expression (whether or not protectable under copyright
laws), moral rights, mask works, trademarks, trade names, trade dress, trade
secrets, know-how, ideas (whether or not protectable under trade secret laws),
and all other subject matter protectable under patent, copyright, moral right,
mask work, trademark, trade secret or other laws, and includes without
limitation all new or useful art, combinations, discoveries, formulae,
manufacturing techniques, technical developments, discoveries, artwork,
software, and designs. "Immersion Innovations" are Innovations that Van Naarden,
solely or jointly with others, conceives, reduces to practice, creates, derives,
develops or makes within the scope of Van Naarden's work for Immersion under
this Agreement.

                  (b) Disclosure and Ownership of Immersion Innovations. Van
Naarden agrees to make and maintain adequate and current records of all
Immersion Innovations, which records shall be and remain the property of
Immersion. Van Naarden agrees to promptly disclose to Immersion every Immersion
Innovation. Van Naarden hereby does and will assign to Immersion or Immersion's
designee Van Naarden's entire worldwide right, title and interest in and to all
Immersion Innovations and all associated records and intellectual property
rights.
<PAGE>
                  (c) Assistance. Van Naarden agrees to execute upon Immersion's
request a signed transfer of Immersion Innovations to Immersion as reasonably
requested by Immersion, including but not limited to computer programs, notes,
sketches, drawings and reports. Van Naarden agrees to assist Immersion in any
reasonable manner to obtain, perfect and enforce, for Immersion's benefit,
Immersion's rights, title and interest in any and all countries, in and to all
patents, copyrights, moral rights, mask works, trade secrets, and other property
rights in each of the Immersion Innovations. Van Naarden agrees to execute, when
requested, for each of the Immersion Innovations (including derivative works,
improvements, renewals, extensions, continuations, divisionals, continuations in
part, or continuing patent applications thereof), (i) patent, copyright, mask
work or similar applications related to such Immersion Innovation, (ii)
documentation (including without limitation assignments) to permit Immersion to
obtain, perfect and enforce Immersion's right, title and interest in and to such
Immersion Innovation, and (iii) any other lawful documents deemed necessary by
Immersion to carry out the purpose of this Agreement. If called upon to render
assistance under this paragraph, Van Naarden will be entitled to a fair and
reasonable fee in addition to reimbursement of authorized expenses incurred at
the prior written request of Immersion. In the event that Immersion is unable
for any reason to secure Van Naarden's signature to any document Van Naarden is
required to execute under this Paragraph 4.1(c) ("Assistance"), Van Naarden
hereby irrevocably designates and appoints Immersion and Immersion's duly
authorized officers and agents as Van Naarden's agents and attorneys-in-fact to
act for and in Van Naarden's behalf and instead of Van Naarden, to execute such
document with the same legal force and effect as if executed by Van Naarden.

                  (d) Out-of-Scope Innovations. If Van Naarden incorporates into
any Immersion Innovations any Innovations relating in any way to Immersion's
business or demonstrably anticipated research or development or business which
were conceived, reduced to practice or created by Van Naarden either outside of
the scope of Van Naarden's work for Immersion under this Agreement or prior to
the Effective Date (collectively, the "Out-of-Scope Innovations"), Van Naarden
hereby grants to Immersion or Immersion's designees a royalty-free, irrevocable,
worldwide, fully paid-up license (with rights to sublicense through multiple
tiers of sublicensees) to practice all applicable patent, copyright, moral
right, mask work, trade secret and other intellectual property rights relating
to any Out-of-Scope Innovations which Van Naarden incorporates, or permits to be
incorporated, in any Immersion Innovations. Van Naarden agrees that Van Naarden
will not incorporate, or permit to be incorporated, any Innovations conceived,
reduced to practice, created, derived, developed or made by others into any of
the Immersion Innovations without Immersion's prior written consent.

            5.2 Confidential Information.

                  (a) Definition of Confidential Information. "Confidential
Information" as used in this Agreement shall mean any and all technical and
non-technical information including patent, copyright, trade secret, and
proprietary information, techniques, sketches, drawings, models, inventions,
know-how, processes, apparatus, equipment, algorithms, software programs,
software source documents, and formulae related to the current, future and
proposed products and services of Immersion, Immersion's suppliers and
customers, and includes, without limitation, Immersion Innovations, Immersion
Property, and Immersion's information concerning research, experimental work,
development, design details and specifications, engineering, financial
information, procurement requirements, purchasing
<PAGE>
manufacturing, customer lists, business forecasts, sales and merchandising and
marketing plans and information.

                  (b) Nondisclosure and Nonuse Obligations. Except as permitted
in this paragraph, Van Naarden shall neither use nor disclose the Confidential
Information. Van Naarden may use the Confidential Information solely to perform
services hereunder for the benefit of Immersion. Van Naarden agrees that Van
Naarden shall treat all Confidential Information of Immersion with the same
degree of care as Van Naarden accords to Van Naarden's own Confidential
Information, but in no case less than reasonable care. Van Naarden agrees not to
communicate any information to Immersion in violation of the proprietary rights
of any third party. Van Naarden will immediately give notice to Immersion of any
unauthorized use or disclosure of the Confidential Information. Van Naarden
agrees to assist Immersion in remedying any such unauthorized use or disclosure
of the Confidential Information.

                  (c) Exclusions from Nondisclosure and Nonuse Obligations. Van
Naarden's obligations under Paragraph 5.2(b) ("Nondisclosure and Nonuse
Obligations") with respect to any portion of the Confidential Information shall
not apply to any such portion which Van Naarden can demonstrate, (a) was,
through no fault of Van Naarden, in the public domain at the time such portion
was communicated to Van Naarden by Immersion; (b) was rightfully in Van
Naarden's possession free of any obligation of confidence at the time such
portion was communicated to Van Naarden by Immersion; or (c) was developed by
Van Naarden independently of and without reference to any information
communicated to Van Naarden by Immersion. A disclosure of Confidential
Information by Van Naarden, either (a) in response to a valid order by a court
or other governmental body, (b) otherwise required by law, or (c) necessary to
establish the rights of either party under this Agreement, shall not be
considered to be a breach of this Agreement or a waiver of confidentiality for
other purposes; provided, however, that Van Naarden shall provide prompt prior
written notice thereof to Immersion to enable Immersion to seek a protective
order or otherwise prevent such disclosure. Nothing in this Agreement shall be
interpreted or construed as granting a license to Van Naarden under Immersion's
patents, copyrights or trademarks, except as necessary to carry out Project
Assignment(s) authorized hereunder.

            5.3 Ownership and Return of Immersion Property. All materials
(including, without limitation, documents, drawings, models, apparatus,
sketches, designs, lists, and all other tangible media of expression) furnished
to Van Naarden by Immersion, whether delivered to Van Naarden by Immersion or
made by Van Naarden in the performance of services under this Agreement
(collectively, the "Immersion Property") are the sole and exclusive property of
Immersion or Immersion's suppliers or customers, and Van Naarden hereby does and
will assign to Immersion all rights, title and interest Van Naarden may have or
acquire in the Immersion Property. Van Naarden agrees to keep all Immersion
Property at Van Naarden's premises unless otherwise permitted in writing by
Immersion. At Immersion's request and no later than five (5) days after such
request, Van Naarden shall destroy or deliver to Immersion, at Immersion's
option, (a) all Immersion Property, (b) all tangible media of expression in Van
Naarden's possession or control which incorporate or in which are fixed any
Confidential Information, and (c) written certification of Van Naarden's
compliance with Van Naarden's obligations under this sentence.
<PAGE>
            5.4 Observance of Immersion Rules. At all times while on Immersion's
premises, Van Naarden will observe Immersion's rules and regulations with
respect to conduct, health and safety and protection of persons and property.

      6. No Conflict of Interest. During the term of this Agreement, Van Naarden
will not accept work, enter into a contract, or accept an obligation,
inconsistent or incompatible with Van Naarden's obligations, or the scope of
services rendered for Immersion, under this Agreement. Van Naarden warrants
that, to the best of Van Naarden's knowledge, there is no other contract or duty
on Van Naarden's part which conflicts with or is inconsistent with this
Agreement. Van Naarden agrees to indemnify Immersion from any and all loss or
liability incurred by reason of the alleged breach by Van Naarden of any
obligation owed by Van Naarden to any third party.

      7. Survival. The definitions contained in this Agreement and the rights
and obligations contained in Paragraphs 5 ("Intellectual Property Rights"), 7
("Survival"), and 8 ("General Provisions") will survive any termination or
expiration of this Agreement.

      8. General Provisions.

            8.1 Successors and Assigns. Van Naarden may not subcontract or
otherwise delegate Van Naarden's obligations under this Agreement without
Immersion's prior written consent. Subject to the foregoing, this Agreement will
be for the benefit of Immersion's successors and assigns, and will be binding on
Van Naarden's assignees.

            8.2 Notices. Any notice required or permitted by this Agreement
shall be in writing and shall be delivered as follows, with notice deemed given
as indicated: (a) by personal delivery, when delivered personally; (b) by
overnight courier, upon written verification of receipt; (c) by telecopy or
facsimile transmission, upon acknowledgment of receipt of electronic
transmission; or (d) by certified or registered mail, return receipt requested,
upon verification of receipt. Notice shall be sent to the addresses set forth
above or to such other address as either party may specify in writing.

            8.3 Governing Law. This Agreement shall be governed in all respects
by the laws of the United States of America and by the laws of the State of
California; as such laws are applied to agreements entered into and to be
performed entirely within California between California residents. Each of the
parties irrevocably consents to the exclusive personal jurisdiction of the
federal and state courts located in the State of California, as applicable, for
any action brought to enforce the terms of this Agreement, except that in
actions seeking to enforce any order or any judgment of such federal or state
courts located in Maryland, such personal jurisdiction shall be nonexclusive.

            8.4 Severability. If any provision of this Agreement is held by a
court of law to be illegal, invalid or unenforceable, (i) that provision shall
be deemed amended to achieve as nearly as possible the same economic effect as
the original provision, and (ii) the legality, validity and enforceability of
the remaining provisions of this Agreement shall not be affected or impaired
thereby.

            8.5 Waiver; Amendment; Modification. No term or provision hereof
will be considered waived by Immersion, and no breach excused by Immersion,
unless such waiver or
<PAGE>
consent is in writing signed by Immersion. The waiver by Immersion of, or
consent by Immersion to, a breach of any provision of this Agreement by Van
Naarden, shall not operate or be construed as a waiver of, consent to, or excuse
of any other or subsequent breach by Van Naarden. This Agreement may be amended
or modified only by mutual agreement of authorized representatives of the
parties in writing.

            8.6 Injunctive Relief for Breach. Van Naarden's obligations under
this Agreement are of a unique character that gives them particular value. Van
Naarden's breach of any of such obligations will result in irreparable and
continuing damage to Immersion for which there will be no adequate remedy at
law; and, in the event of such breach, Immersion will be entitled to seek
injunctive relief and/or a decree for specific performance, and such other and
further relief as may be proper (including monetary damages if appropriate).

            8.7 Entire Agreement. This Agreement constitutes the entire
agreement between the parties relating to this subject matter and supersedes all
prior or contemporaneous oral or written agreements concerning such subject
matter. The terms of this Agreement will govern all Project Assignments and
services undertaken by Van Naarden for Immersion.

      IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.

IMMERSION CORPORATION                         ROBERT VAN NAARDEN

By: /s/ Victor Viegas                         /s/ Robert Van Naarden
    ------------------------                  -----------------------------

Name: Victor Viegas

Title:   President & CEO
<PAGE>
                                    EXHIBIT 1
                                STATEMENT OF WORK

Van Naarden will complete the following tasks within the first term of this
Agreement:

      1. Identify those medical associations that could provide accreditation
and influence in the industry.

      2. Develop a plan to bring the above into the fold

      3. Assess the viability of a medical advisory committee to become the
industry guru evangelists for Immersion Medical

      4. Determine whether a change in product mix is appropriate (this is an
issue of focus relative to maximizing the available resources to be applied to
the largest revenue potential)

      5. Determine what the market is asking for (this can best be done by going
on some sales calls around the country with sales staff)

      6. Determine what additional services could be added to increase revenues
without straining the organization

      7. Assess the sales process and make recommendations for improvement in
order to reach a goal of 10X revenue from today's levels, if possible.

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