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Sample Business Contracts

Marketing Development Fund Letter Agreement - Immersion Corp. and Logitech Inc.

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                                November 15, 1999

VIA OVERNIGHT COURIER

Wolfgang Hausen
Senior Vice President, General Manager
Logitech, Inc.
6505 Kaiser Drive
Fremont California 94555-3615

     RE:  MARKETING DEVELOPMENT FUND LETTER AGREEMENT

Dear Wolfgang,

     On behalf of Immersion, I am pleased to offer Logitech, Inc., support for a
Marketing Development Fund ("MDF") which will be used to support Logitech's
launch and promotion of the Wingman Force Feedback Mouse and subsequent force
feedback mouse products. In order to enable Logitech to evangelize this
important new class of peripheral devices and because Logitech is Immersion's
first-to-market strategic partner with respect to force feedback cursor control
devices, Immersion agrees to reimburse Logitech up to a total of one million
U.S. dollars, US$1,000,000, for the MDF subject to the terms set forth below.

     QUARTERLY REIMBURSEMENTS: For a period of five calendar quarters, beginning
the first calendar quarter of 2000 and terminating at the end of the first
calendar quarter of 2001 (the "MDF Period"), Immersion agrees to reimburse
Logitech up to US$200,000 per quarter for certain promotional activities
undertaken by Logitech to launch and promote Logitech's Wingman Force Feedback
Mouse and other force feedback mouse products (Immersion's reimbursement is
intended for, but is not required to be used by, Logitech's Control Device
Business Unit). All but the first US$200,000 to be reimbursed to Logitech by
Immersion pursuant to the MDF is contingent on Immersion's successful completion
of an underwritten public offering before January 1, 2000.

     REIMBURSEMENT PROCEDURE: Within thirty days of the end of the applicable
calendar quarter during the MDF Period, Logitech will submit a reimbursement
request to Immersion. Such reimbursement request will include a reasonably
detailed summary of each promotional activity for which Logitech is requesting
reimbursement, and receipts for third party expenses incurred by Logitech.
Subject to the conditions described below, Immersion shall reimburse Logitech
for an amount equal to but not exceeding US$200,000 within forty-five days of
the end of the applicable quarter within the MDF Period.

     Immersion's quarterly reimbursement obligations will be subject to the
following conditions:


          CONFIDENTIAL TREATMENT REQUESTED - THE SYMBOL `[**]' IS USED
           TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN OMITTED
                    AND FILED SEPARATELY WITH THE COMMISSION.

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     Future Version of Force Feedback Mouse. In order to remain eligible for
     quarterly MDF reimbursements, Logitech must agree in good faith to commit
     to a product roadmap for a new version of the force feedback mouse
     positioned for use as a [**] and [**] product. The new version of the force
     feedback mouse will be launched under a new name other than Wingman (i.e.
     MouseMan) and will contain a [**]. In addition, in order to remain eligible
     for quarterly MDF reimbursements, Logitech must meet the following
     milestones:

          (A)  on or before [**], Logitech must publicly announce the new
               version (new SKU) of the force feedback mouse product; and

          (B)  on or before [**], Logitech's new version (new SKU) of the force
               feedback mouse product must be available in commercial quantities
               through internet distribution and through retail distribution.

     Immersion and Logitech may agree to modify the milestone schedule described
     above by means of a written amendment signed by both parties setting forth
     a new milestone schedule.

     Promotional Campaigns. Only third party expenses that are incurred by
     Logitech specifically to fund promotional campaigns that are reasonably
     calculated to promote Logitech's force feedback mice products shall be
     eligible for reimbursement from Immersion under the MDF. In addition, MDF
     funds may only be used to reimburse moneys spent by Logitech on projects
     mutually agreed upon as confirmed in writing by email in advance. Immersion
     and Logitech agree to work together in good faith in order to approve
     reimbursable projects expeditiously.

     Use of MDF Funds. Logitech's expenditure of funds will only be reimbursed
     by Immersion if Logitech has used such funds to pay third parties who have
     provided services or products specifically targeted at promoting Logitech's
     force feedback mouse products properly marked with Immersion's FEELit logo
     (or successor replacement logo). Immersion can not and will not reimburse
     Logitech for funds used to pay Logitech employees or for Logitech's
     internal projects.

     Force Feedback Product Commitment. To be eligible for each quarterly
     reimbursement, Logitech must remain reasonably committed to the success of
     its new version of the force feedback mouse product positioned for the [**]
     and [**] market and to allocate reasonably sufficient marketing,
     manufacturing, and engineering resources to these force feedback products.
     For clarification, Logitech will maintain the Wingman version of the
     product until the new version (non-Wingman) is available, at which point
     Logitech may chose to market only a single SKU. Of course Logitech is free
     to pursue multiple SKUs if it so desires.

          CONFIDENTIAL TREATMENT REQUESTED - THE SYMBOL `[**]' IS USED
           TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN OMITTED
                    AND FILED SEPARATELY WITH THE COMMISSION.

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     Marketing Collateral. To be eligible for each quarterly reimbursement,
     Logitech must include the Immersion brand logo and slogan on those
     marketing materials that reference or depict force feedback functionality
     or force feedback products. This includes but is not limited to product
     datasheets, advertisements, web pages, and trade show promotions.

If Logitech is in material noncompliance with the conditions set forth above in
whole or in part, then Immersion will notify Logitech in writing and will not be
responsible for subsequent reimbursements to the extent of such noncompliance.

     This letter agreement is the entire agreement between Logitech and
Immersion related to the MDF, and supersedes all prior statements, proposals or
agreements, whether written or oral, with respect to the subject matter herein
and may be modified only by a writing executed by an authorized representative
of Immersion. This letter agreement is governed by the laws of the State of
California without application of its conflicts of law principles.

     We look forward to working with you on these marketing efforts. We are
happy to make this contribution to your force feedback mouse efforts, and are
confident that by working together we can achieve the goal of bringing feel to
every desktop.

                                       Sincerely,

                                       /s/ LOUIS ROSENBERG
                                       ---------------------------
                                       Louis Rosenberg, Ph.D.
                                       President & CEO

Please sign below to indicate Logitech's understanding and agreement with the
terms described above and return a copy of this letter agreement to me at
Immersion.

Acknowledged and Agreed

/s/ WOLFGANG HAUSEN
-----------------------
Wolfgang Hausen
S.V.P., General Manager
Logitech, Inc.


          CONFIDENTIAL TREATMENT REQUESTED - THE SYMBOL `[**]' IS USED
           TO INDICATE THAT A PORTION OF THE EXHIBIT HAS BEEN OMITTED
                    AND FILED SEPARATELY WITH THE COMMISSION.