<PAGE> 1
EXHIBIT 2.3
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement") is made and entered into as of
August 31, 2000, by and among Immersion Corporation, a Delaware corporation
("Parent"), James F. Kramer, as the Shareholder Representative (the "Shareholder
Representative"), and U.S. Trust Company, National Association, as Escrow Agent
("Escrow Agent"), with reference to the following facts:
A. Parent, Parent's wholly owned subsidiary, VT Acquisition, Inc.
("Merger Sub"), Virtual Technologies, Inc., a California corporation (the
"Company") and the Shareholder Representative are parties to an Agreement and
Plan of Merger dated as of July 28, 2000 (the "Merger Agreement"), pursuant to
which, among other things, Merger Sub will be merged (the "Merger") with and
into the Company, which will be the surviving corporation in the Merger (the
"Surviving Corporation"), and the Company's shareholders (the "Shareholders")
will be entitled to receive shares of Parent's common stock, $0.001 par value
per share ("Parent Common Stock"), all in accordance with the terms, and subject
to the conditions, of the Merger Agreement.
B. Under the Merger Agreement, Parent is be indemnified for Losses (as
defined in the Merger Agreement), in accordance with the terms and conditions of
the Merger Agreement.
C. James F. Kramer and Marc Tremblay, the two principal shareholders of
the Company (the "Principal Shareholders"), and Parent are parties to an
Indemnification and Joinder Agreement dated as of July 28, 2000 (the
"Indemnification and Joinder Agreement"), pursuant to which, among other things,
the Principal Shareholders have also agreed to indemnify Parent for Losses and
have accepted the terms and conditions of the Merger Agreement and this
Agreement.
D. The parties are entering into this Agreement to establish an escrow
to facilitate the ability of Parent to recover amounts to which it would be
entitled as a result of the Merger Agreement and the Indemnification and Joinder
Agreement.
ACCORDINGLY, in consideration of the foregoing, and intending to be
legally bound hereby, each of the parties hereby agrees as follows:
1. ESTABLISHMENT OF ESCROW FUND. Escrow Agent is hereby appointed
depository and agent for Parent and the Shareholder Representative, on behalf of
the Shareholders, with respect to an aggregate of 60,000 shares of Parent Common
Stock, to be deposited with Escrow Agent plus any stock dividends, stock
distribution, stock splits,
<PAGE> 2
recapitalizations and the like made in respect thereof (collectively, the
"Escrowed Shares"). Parent will deliver to Escrow Agent a certificate or
certificates representing the Escrowed Shares, and Escrow Agent will acknowledge
receipt of such certificate(s) by executing the Receipt for Escrowed Shares
attached as ANNEX A to this Agreement (as increased by any stock dividends,
stock distributions, stock splits, recapitalizations and the like with respect
to the Escrowed Shares and as reduced by any disbursements made under Sections
3, 4 and 6, this fund is referred to as the "Escrow Fund"). Any shares of
Parent's common stock, or other securities which, by their terms, are or may be
exercisable, convertible or exchangeable for or into Parent's Common Stock that
are issued or distributed by Parent ("New Shares") in respect of the Escrowed
Shares will be added to the Escrow Fund; provided, however, that any New Shares
issued in respect of any Escrowed Shares, that prior to the time of such
issuance have been released from the Escrow Fund in accordance with the terms of
this Agreement, will not be added to the Escrow Fund, but will instead be
distributed by Parent to the record holders entitled thereto. Escrow Agent
hereby accepts such appointment and agrees to hold the Escrow Fund pursuant to
the terms and conditions of this Agreement.
2. NOTICE OF CLAIMS. Pursuant to the Merger Agreement and the
Indemnification and Joinder Agreement, Parent is entitled to make claims for
indemnification to be paid from the Escrow Fund for Losses incurred, or
anticipated to be incurred, by Parent or Parent Indemnitees (as defined in the
Merger Agreement). If Parent asserts any claim for indemnification against the
Escrow Fund, it will deliver to Escrow Agent and the Shareholder Representative
a written notice thereof (a "Notice of Claim") setting forth (i) a demand for
payment of a specified amount from the Escrow Fund and the basis of calculation
of such amount or, if such amount cannot be specified, the basis upon which the
amount would be determined and the amount of the Escrow Fund that should be held
as security for such claim pending determination of the actual amount of the
claim (a "Security Reserve"), and (ii) a description of the asserted claim and
the basis thereof.
3. PAYMENT OF CLAIMS.
(a) If the Shareholder Representative gives notice to Parent
and Escrow Agent disputing any claim (a "Counter Notice") in its entirety within
30 days following receipt by Escrow Agent of the Notice of Claim regarding such
claim, then such claim will be resolved as provided in Section 3(c).
(b) If the Shareholder Representative gives notice to Parent
and Escrow Agent accepting all or any part of any claim within 30 days following
receipt by Escrow Agent of the Notice of Claim regarding such claim, then (i)
the dollar amount of Losses specified by Parent in its Notice of Claim, that are
agreed to by the Shareholder Representative in such written notice to Parent and
Escrow Agent, will be deemed established for purposes of this Escrow Agreement,
the Merger Agreement and the Indemnification and
<PAGE> 3
Joinder Agreement, and the Escrow Agent will pay Parent the amount so agreed to
from the Escrow Fund, and (ii) any disputed portion of such claim will be
resolved as provided in Section 3(c). If no Counter Notice is received by Escrow
Agent within 30 days following receipt by the Escrow Agent of the Notice of
Claim regarding such claim, then the dollar amount of Losses specified by Parent
in its Notice of Claim will be deemed established for purposes of this Escrow
Agreement, the Merger Agreement and the Indemnification and Joinder Agreement
and, at the end of such 30-day period, Escrow Agent will pay to Parent the
amount claimed in the Notice of Claim from the Escrow Fund. In order to so pay
Parent, Escrow Agent will return to Parent that number of shares of Parent
Common Stock equal in Value (as defined below) to the amount claimed in the
Notice of Claim. For purposes of this Agreement, (i) the "Value" of a share of
Parent Common Stock will be equal to the average of the closing sale prices of a
share of Parent Common Stock on the Nasdaq Stock Market for the five trading
days immediately preceding the Effective Time (as defined below) and (ii) the
"Effective Time" will be the effective time of the Merger (i.e., the time of the
filing of an applicable agreement of merger with the California Secretary of
State). Escrow Agent will not inquire or be required to inquire into or consider
whether a claim complies with the requirements of, or inquire into or consider
any of the other terms and conditions of, the Merger Agreement, the
Indemnification and Joinder Agreement or any other agreement entered into in
connection therewith.
(c) If the Shareholder Representative gives a Counter Notice
with respect to a claim within the time specified in Section 3(a), Escrow Agent
will make payment with respect thereto only in accordance with (i) joint written
instructions of Parent and the Shareholder Representative, or (ii) a final
non-appealable order of a court of competent jurisdiction. Any court order will
be accompanied by a legal opinion by counsel for the presenting party reasonably
satisfactory to Escrow Agent to the effect that the order is final and
non-appealable. Escrow Agent will act on such court order and legal opinion
without further question.
(d) If Parent delivers a Notice of Claim pursuant to Section 2
for a Security Reserve, Escrow Agent will hold the Security Reserve until Parent
gives Escrow Agent and the Shareholder Representative notice of the actual
amount of the claim underlying the Security Reserve, at which time the claim
will be resolved as contemplated by Sections 3(b) and 3(c); provided, that
before such notice and resolution, the Security Reserve may be extinguished or
reduced, if at all, only in accordance with joint written instructions of Parent
and the Shareholder Representative.
4. RELEASE OF ESCROWED SHARES AND OTHER PAYMENTS BY ESCROW AGENT;
TERMINATION.
<PAGE> 4
(a) On the first anniversary of the Effective Time, if no
claims (including Security Reserves) are then pending, Escrow Agent will release
to the Shareholder Representative that number of Escrowed Shares equal to the
difference between 30,000 less the number of Escrowed Shares previously paid to
Parent pursuant to Sections 3(b) and 3(c).
(b) On the second anniversary of the Effective Time, Escrow
Agent will release to the Shareholder Representative an amount equal to the then
remaining Escrowed Shares, if any, less that number of Escrowed Shares equal to
the total of all claims (including Security Reserves) that have not been both
(i) resolved as provided in Sections 3(b) and 3(c), and (ii) paid to Parent,
based upon the Value of the Parent Common Stock. Thereafter, upon the final
resolution of each claim, on a claim-by-claim basis, for which Escrow Agent has
received a Notice of Claim on or prior to such date or the extinguishment or
reduction of a Security Reserve as provided in Section 3(d), Escrow Agent will
distribute to Parent the amount, if any, that it is entitled to receive pursuant
to Sections 3(b) or 3(c), and to the Shareholder Representative the balance,
less that number of Escrowed Shares equal to the total of all claims (including
Security Reserves) that have not been both (i) resolved as provided in Sections
3(b) and 3(c), and (ii) paid to Parent, based upon the Value of the Parent
Common Stock.
(c) In the event that Parent and the Shareholder
Representative agree that the Principal Shareholders have collectively satisfied
claims in an amount equal to the maximum liability of the Principal Shareholders
under the Indemnification and Joinder Agreement, Parent and the Shareholder
Representative will issue joint written instructions to Escrow Agent, who will
then immediately release the Escrowed Shares attributable to the Principal
Shareholders to the Shareholder Representative on behalf of the Principal
Shareholders (and the Shareholder Representative will distribute such shares to
the Principal Shareholders entitled thereto).
(d) This Agreement will terminate and Escrow Agent will have
no further responsibilities hereunder once the Escrow Fund has been distributed
by Escrow Agent and its fees and expenses have been paid.
(e) Any cash dividends declared and paid by Parent on the
Escrowed Shares will be delivered to Escrow Agent as the record holder of the
Escrowed Shares. As soon as reasonably practicable after such receipt, Escrow
Agent will pay such dividends to the Shareholder Representative on behalf of the
Shareholders (and the Shareholder Representative will distribute such dividends
to the Shareholders entitled thereto). At anytime, during which Escrowed Shares
are being held in escrow, that the stockholders of Parent are entitled to vote
on any matter, Escrow Agent will vote such share as instructed in writing by the
Shareholder Representative as agent for the Shareholders.
<PAGE> 5
(f) If at any time, Escrow Agent must deliver less than all
the Escrowed Shares to Parent under this Agreement and Escrow Agent does not
have certificates evidencing such number of shares, Parent agrees that upon
delivery by Escrow Agent of certificates evidencing a larger number of Escrowed
Shares, duly endorsed for transfer, Parent will subtract the appropriate number
of shares from the number of shares evidenced by the delivered stock
certificates, issue new certificates for the difference and return the new
certificates to Escrow Agent.
5. ESCROW AGENT RESPONSIBILITIES.
(a) Escrow Agent will hold and safeguard the Escrow Fund
during the Escrow Period, will treat the Escrow Fund as a trust fund in
accordance with the terms of this Agreement, and not as the property of the
Parent, the Surviving Corporation, the Shareholder Representative or any
Shareholder, and will hold and dispose of the Escrow Fund only in accordance
with the terms of this Agreement.
(b) Escrow Agent may act upon any instrument or other writing
believed by Escrow Agent in good faith to be genuine and to have been signed
(with an original signature or signature by facsimile transmission) and
presented by the proper person (including the signature of any person purporting
to be an officer or authorized representative of a corporate party) and will not
be liable to any party hereto in connection with the performance of Escrow
Agent's duties hereunder, except for Escrow Agent's own breach, gross negligence
or willful misconduct. Escrow Agent will not incur any liability for following
the instructions herein contained or expressly provided for, or written
instructions given by the parties hereto in accordance with this Agreement.
Escrow Agent's duties will be determined only with reference to this Agreement
and applicable laws, and Escrow Agent is not charged with knowledge of, or any
duties or responsibilities in connection with, any other document or agreement.
If in doubt as to its duties and responsibilities hereunder, Escrow Agent may
consult with counsel of its choice and will be protected in any action taken or
omitted in connection with the reasonable advice or opinion of such counsel.
(c) In the event that Escrow Agent is uncertain as to its
duties or rights hereunder or receives instructions, claims or demands from any
party hereto which, in its opinion, conflict with any of the provisions of this
Agreement, it will be entitled to refrain from taking any action and its sole
obligation will be to keep safely all property held in escrow until it is
directed otherwise in writing by joint written instructions, or an order and
legal opinion as referred to in Section 3(c).
(d) Escrow Agent is to act as a depository agent only and is
hereby relieved of any liability in connection with any representations,
promises or agreements
<PAGE> 6
made by the other parties to this Agreement. Escrow Agent is not be responsible
for and is not under a duty to examine any other agreement or to determine if
parties have performed under any other agreement.
(e) Escrow Agent will send to the Shareholder Representative
and Parent, statements detailing receipts, disbursements and balances of the
Escrow Fund on a calendar quarterly basis.
(f) In the event that the Escrow Fund includes any cash,
Escrow Agent will invest and reinvest the Escrow Fund as instructed by the
Shareholder Representative in short-term U.S. Treasury Bills and Notes or other
direct obligations of the United States. Income from any such investment will be
held by Escrow Agent and will be reinvested in accordance with this Section
5(f). Escrow Agent will have the right to liquidate any investments held, in
order to provide funds necessary to make required payments under this Agreement.
Escrow Agent in its capacity as escrow agent hereunder will not have any
liability for any loss sustained as a result of any investment made pursuant to
the instructions of the Shareholder Representative that comply with this Section
5(f) or as a result of any liquidation of any investment prior to its maturity
or for the failure of the Shareholder Representative to give Escrow Agent
instructions to invest or reinvest the Escrow Fund or any earnings thereon
except to the extent arising from Escrow Agent's breach, gross negligence or
willful misconduct.
6. INDEMNIFICATION AND FEES.
(a) In consideration of Escrow Agent's acceptance of this
Agreement, (i) Parent will indemnify and hold Escrow Agent harmless as to any
liability incurred by Escrow Agent to Parent (or any of Parent's successors,
assigns or affiliates) in carrying out any of the terms of this Agreement, and
will reimburse Escrow Agent for all out-of-pocket expenses related solely
thereto, including reasonable attorneys' fees and court costs, incurred by
reason of its position under this Agreement or actions taken pursuant to this
Agreement, (ii) the Shareholder Representative will indemnify and hold Escrow
Agent harmless as to any liability incurred by Escrow Agent to any shareholder
of the Company (or any of such shareholders' successors, assigns, heirs, legal
representatives, affiliates or spouses) by reason of accepting the same or in
carrying out any of the terms of this Agreement, and will reimburse Escrow Agent
for all out-of-pocket expenses, including reasonable attorneys' fees and court
costs, incurred by reason of its position under this Agreement or actions taken
pursuant to this Agreement, and (iii) Parent and the Shareholder Representative
will jointly and severally indemnify and hold Escrow Agent harmless as to any
liability incurred by Escrow Agent to any other person by reason of accepting
the same or in carrying out any of the terms of this Agreement (including any
liability for taxes or any penalties or interest related thereto related to any
cash dividends or other income paid from the Escrow Fund in accordance with this
Agreement), and will
<PAGE> 7
each reimburse Escrow Agent for all reasonable out-of-pocket expenses, including
reasonable attorneys' fees and court costs, incurred by reason of its position
under this Agreement or actions taken pursuant to this Agreement; provided,
however, in no event will Parent or the Shareholder Representative indemnify or
hold Escrow Agent harmless as to any liability incurred, or reimburse it for any
out-of-pocket expenses, under this Section 6(a) for the Escrow Agent's breach,
gross negligence or willful misconduct. In the event that Parent and the
Shareholder Representative are required to pay any amount to Escrow Agent under
clause (iii) of the immediately preceding sentence, then (A) Parent and the
Shareholder Representative will each pay 50% of any such amount owed to Escrow
Agent, and (B) Parent and the Shareholder Representative will each indemnify and
hold the other harmless for any amount paid by either of them, to Escrow Agent
pursuant to such clause (iii), to the extent such payment exceeds 50% of the
total amount owed to Escrow Agent pursuant to such clause (iii). The parties
hereto acknowledge that the foregoing indemnities will survive the resignation
or removal of Escrow Agent or the termination of this Agreement. The fees and
charges set forth below for Escrow Agent's services will be considered
compensation for its ordinary services as contemplated by this Agreement. If
Escrow Agent renders any service not provided for in this Agreement or there is
any assignment of any interest in the subject matter of this escrow or
modification of any interest or if any controversy arises in connection with it,
Escrow Agent will be reasonably compensated for such extraordinary services, and
will be reimbursed for all reasonable costs, attorneys' fees and expenses
occasioned thereby, which compensation, costs, fees and expenses will be payable
to Escrow Agent by Parent and the Shareholder Representative.
(b) Escrow Agent will receive fees and expenses for its
services hereunder in accordance with ANNEX B to this Agreement. All such fees
and expenses will be paid by Parent. Escrow Agent's initial fees, as shown on
such ANNEX B, will be paid by Parent on or prior to the Effective Time.
7. CERTAIN TAX RELATED MATTERS. The parties agree that, for tax
reporting purposes, any cash dividends payable by Escrow Agent to the
Shareholder Representative under Section 4(e) or any other income earned on the
Escrow Fund will be allocated among the Shareholders in proportion to their
beneficial interests therein. If any cash dividends or other income is to be
paid by Escrow Agent in accordance with this Agreement, such payment will be
subject to backup withholding unless the Shareholder Representative provides the
Escrow Agent with either (i) a schedule of certified taxpayer identification
numbers and addresses for each of the Shareholders or (ii) a certified Internal
Revenue Service Form W-8 or W-9 (as applicable) for each of the Shareholders. If
required to do so, Escrow Agent will timely file with the Internal Revenue
Service any applicable Forms 1099 following the relevant tax year for any
payment of cash dividends or other income that it makes in accordance with this
Agreement.
<PAGE> 8
8. NOTICES. Any notices, consents, waivers or other communications
required or permitted under this Agreement will be given in writing and will be
deemed to have been duly given when delivered personally, or if delivered in
another manner, the earlier of when it is actually received by the party to whom
it is directed, or when the following period expires (whether or not it is
actually received) (i) if transmitted by telecopier, 24 hours following
transmission to the party's telecopier number set forth below, with the party's
name and address clearly shown on the first page and confirmation of
transmission produced by the transmitting party's equipment; (ii) if deposited
in the mail, postage prepaid, and addressed to the party to receive it as set
forth below, 72 hours following such deposit,; or (iii) if accepted by Federal
Express, or similar delivery service in general usage, for delivery to the
address of the party to receive it as set forth below, 24 hours following the
delivery time promised by the delivery service; provided that, if any such
transmission, mailing or express delivery is made on a day immediately preceding
a Saturday, Sunday or national holiday, then the subject transmission, mailing
or express delivery, as the case may be, will be deemed to be made at the
beginning of the next succeeding day that is not a Saturday, Sunday or national
holiday:
If to Parent:
Immersion Corporation
801 Fox Lane
San Jose, California 95131
Attention: Louis Rosenberg, Chief Executive Officer
Telecopier no.: (408) 467-1901
With a copy to:
Sarah A. O'Dowd, Esq.
Heller Ehrman White & McAuliffe LLP
525 University Avenue
Palo Alto, California 94301
Telecopier no.: (650) 324-0638
If to the Shareholder Representative:
Confidential
James F. Kramer, Shareholder Representative
c/o Virtual Technologies, Inc.
2175 Park Boulevard
Palo Alto, California 94306
Telecopier no.: (650) 321-4912
<PAGE> 9
With a copy to:
Lloyd A. Schmidt, Esq.
Hopkins & Carley
70 South First Street
San Jose, California 95113
Telecopier no.: (408) 998-4790
If to Escrow Agent:
U.S. Trust Company, National Association
515 South Flower Street, Suite 2700
Los Angeles, California 90071
Attention: Corporate Trust Department
Telecopier no.: (213) 488-1370
or to such other address or telecopier number as the party to whom notice is to
be given has furnished to the other party in the manner provided above, provided
that notice of such change has actually been received by the party to whom it is
directed.
9. RESIGNATION. Escrow Agent may resign and be discharged from its
duties hereunder at any time by giving not less than 60 days prior written
notice of such resignation to Parent and the Shareholder Representative, which
notice will specify the date when such resignation will take effect. Upon such
notice, Parent and the Shareholder Representative will appoint a successor
escrow agent. Escrow Agent will continue to serve until its successor delivers
to Parent and the Shareholder Representative a duly executed instrument of
acceptance of the terms and conditions of this Agreement and receives the Escrow
Fund, at which time Escrow Agent will have no further duties or responsibilities
hereunder.
10. MISCELLANEOUS.
(a) AMENDMENT. This Agreement may not be amended, modified,
supplemented, cancelled or discharged except in a writing signed by Parent, the
Shareholder Representative and Escrow Agent.
(b) HEADINGS. The Section and subsection headings contained in
this Agreement are for reference purposes only and will not affect in any way
the meaning or interpretation of this Agreement.
(c) SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other terms and provisions of this Agreement will
nevertheless remain in full force and
<PAGE> 10
effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner adverse to any party. Upon
such determination that any term or other provision is invalid, illegal or
incapable of being enforced, Parent, the Shareholder Representative and Escrow
Agent will negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the fullest
extent possible.
(d) GOVERNING LAW. This Agreement will be governed by, and
construed in accordance with, the internal laws of the State of California
applicable to contracts executed and fully performed within the State of
California, without regard to any principles of conflicts or choice of laws.
(e) INTERPRETATION; RULES OF CONSTRUCTION. This Agreement has
been negotiated and is to be interpreted according to its fair meaning and not
strictly for or against any party. The parties waive any rule of law or judicial
precedent that provides that contractual ambiguities are to be construed against
the party who drafted the contractual provision in question. All references in
this Agreement to "parties" refer to the parties to this Agreement unless
expressly indicated otherwise. References in this Agreement to Sections or
subsections are to Sections and subsections of this Agreement unless expressly
indicated otherwise. At each place in this Agreement where the context so
requires, the masculine, feminine or neuter gender includes the others and the
singular or plural number includes the other. "Including" means "including
without limitation" and "or" is used in the inclusive sense of "and/or."
(f) WAIVER. Either Parent or the Shareholder Representative
(on his behalf and behalf of the shareholders of the Company) may extend the
time for the performance of any of the obligations or other acts of the other
party or waive compliance with any of the agreements of the other party. No
waiver of any breach or default hereunder will be considered valid unless in
writing and signed by the party (either Parent or the Shareholder
Representative) giving such waiver, and no such waiver will be deemed a waiver
of any subsequent breach or default of the same or similar nature.
(g) PARTIES IN INTEREST. Nothing in this Agreement, expressed
or implied, is intended to confer upon any person or entity other than the
parties any rights or remedies under or by reason of this Agreement.
(h) SUCCESSORS AND ASSIGNS. This Agreement will inure to the
benefit of and be binding upon the successors and assigns of the parties.
Notwithstanding the foregoing, neither this Agreement nor any rights or
obligations hereunder may be assigned, pledged, hypothecated or otherwise
transferred by the Shareholder Representative or
<PAGE> 11
Escrow Agent without the prior written consent of Parent, which consent may be
withheld in the sole discretion of Parent.
(i) COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument. The exchange of copies of
this Agreement and of signature pages by telecopier transmission will constitute
effective execution and delivery of this Agreement as to the parties and may be
used in lieu of the original for all purposes. Signatures of the parties
transmitted by telecopier will be deemed to be their original signatures for any
purpose whatsoever.
(j) CONSENT TO JURISDICTION. Each of the parties hereto (i)
consents to submit itself to the personal jurisdiction of the United States
District Court for the Northern District of California or the courts of the
State of California located in the County of Santa Clara with respect to any and
all disputes arising out of (A) this Agreement, including the validity
construction and interpretation hereof and thereof and the rights and remedies
of the parties hereunder and thereunder; (B) any of the transactions
contemplated by this Agreement; and (C) any matters related to but not covered
hereby or thereby, in each case to the extent such court would have subject
matter jurisdiction with respect to such dispute; (ii) agrees that it will not
attempt to deny or defeat such personal jurisdiction or venue by motion or other
request for leave from any such court; and (iii) agrees that nothing herein will
affect the right to effect service of process in any manner permitted by law.
(k) HOLIDAYS. If any date on which action is to be taken under
this Agreement occurs, or if any period during which action is to be taken under
this Agreement ends, on a Saturday, Sunday or national holiday, the date or
period will be extended to the next succeeding day which is not a Saturday,
Sunday or national holiday.
[BALANCE OF THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 12
IN WITNESS WHEREOF, the parties have caused this Escrow Agreement to be
executed as of the date first above written.
PARENT:
IMMERSION CORPORATION
By /s/ Louis Rosenberg
--------------------------------------
Its: President
-------------------------------
SHAREHOLDER REPRESENTATIVE:
/s/ James F. Kramer
-----------------------------------------
James F. Kramer
ESCROW AGENT:
U.S. TRUST COMPANY, NATIONAL
ASSOCIATION
By /s/ M. Deborah Gibbons
--------------------------------------
Its: V.P.
-------------------------------
