Restructuring Agreement

EXHIBIT 10.6


RESTRUCTURING AGREEMENT


This RESTRUCTURING AGREEMENT (this "Agreement") is entered into and is effective as of the date set forth below by and between INVESTAR S.a. r.l. ("InvestAR"), a Luxembourg private limited liability corporation, INTERLINK ELECTRONICS ("Interlink"), a California corporation, INTERLINK ELECTRONICS EUROPE, S.a. r.l. ("IEE"), a Luxembourg private limited liability corporation, and IEE FINANCE, S.a. r.l. ("IEEF"), a Luxembourg private limited liability corporation.


RECITALS


WHEREAS, InvestAR and Interlink are parties to a Joint Venture Agreement, dated as of November 7, 1989 (the "Joint Venture Agreement").


WHEREAS, InvestAR, Interlink, IEE and IEEF are parties, as stated below, to the following agreements relating to the Joint Venture:


a) Exclusive License and Distributor Agreement between Interlink
and IEE, dated as of November 7, 1989 (the "License
Agreement").


b) Manufacturing and Supply Agreement between Interlink and IEE,
dated as of November 7, 1989 (the "Supply Agreement").


c) Letter Agreement among InvestAR, IEE and Interlink, dated as
of November 7, 1989 (the "Letter Agreement").


d) Agreement among InvestAR, IEE and Interlink, dated December
14, 1990 (the "December 14, 1990 Agreement").


e) Interlink Europe Financing Agreement between InvestAR and
Interlink, dated June 25, 1992 (the "June 25, 1992
Agreement").


f) Ink . Technology Transfer Agreement among InvestAR, IEE and
Interlink, dated as of December 11, 1992 (the "Ink
Agreement").


g) Financing Agreement in relation with Ink Technology Transfer
Agreement, dated December 11, 1992 (the "Ink Financing
Agreement").


h) Escrow Agreement for Ink Technology among Interlink, InvestAR,
IEE and Banque et Caisse d'Epargne de l'Etat, dated as of
January, 1992 (the "Ink Escrow Agreement").


i) Interlink Europe Financing Agreement between Interlink and
InvestAR, dated April 7, 1993 (the "April 7, 1993 Agreement").


j) Technology Purchase Agreement between IEE and Interlink, dated
as of December 6, 1993 (the 'Technology Agreement").


WHEREAS, InvestAR owns 510,775 shares of the Common Stock of Interlink (the "Interlink Shares").


WHEREAS, Interlink owns 250 shares of the Common Stock of IEE, and 77,250 shares of the Common Stock of IEEF (together the "IEE Shares").


WHEREAS, Interlink may be reincorporated in Delaware in 1994 and IEE may relocate within the Grand Duchy of Luxembourg.


WHEREAS, the parties wish to restructure the arrangement between and among them, 1) including exchanging the Interlink Shares and the IEE shares, 2) terminating the Joint Venture Agreement and certain of the other agreements, and 3) amending and restating the License Agreement.


NOW, THEREFORE, intending to be legally bound, the parties agree as follows:


TERMS AND CONDITIONS


1. EXCHANGE OF INTERLINK SHARES AND IEE SHARES. Interlink hereby
agrees to transfer its entire right, title and interest in the
IEE Shares to InvestAR, and in exchange therefor InvestAR
hereby agrees to transfer its entire right, title and interest
in the Interlink Shares to Interlink. Upon the signing hereof,
Interlink and InvestAR shall execute and deliver all documents
and instruments necessary to effect the transfer of the IEE
Shares and the Interlink Shares, respectively, and any other
ownership documents. Upon receipt by Interlink, the Interlink
Shares shall be treated as authorized but unissued shares of
Interlink.


2. TERMINATION OF CERTAIN AGREEMENTS AND OTHER ACTIONS.


2.1 Termination of Certain Agreements. The following
agreements are hereby terminated effective as of the
date set forth below:


(a) Joint Venture Agreement


(b) Supply Agreement


(c) Letter Agreement


(d) December 14, 1990 Agreement


(e) June 25, 1992 Agreement


(f) Ink Financing Agreement


(g) April 7, 1993 Agreement


Concurrently with the execution of this Agreement,
ARBED S.A. and InvestAR have delivered to Interlink a
letter confirming the termination of the undated
letter agreement among ARBED, InvestAR and Interlink,
to which termination Interlink agrees.


2.2 CONTINUATION OF CERTAIN AGREEMENTS. The following
agreements shall continue in full force and effect:


(a) Technology Agreement


(b) Ink Agreement


(c) Ink Escrow Agreement


In the event of any conflict or inconsistency between
this Agreement and such agreements, the terms of this
Agreement shall govern.


2.3 AMENDMENT AND RESTATEMENT OF THE LICENSE AGREEMENT.
The License Agreement shall be amended and restated
in the form attached hereto as Exhibit A.


2.4 AMENDMENT OF CORPORATE CHARTERS. Interlink hereby
agrees to take all action and to prepare and execute
any and all documents that InvestAR, in its
reasonable discretion, may deem necessary or
advisable to permit the amendment of the IEE Charter
and the IEEF Charter to reflect the changes in the
ownership of those entities resulting from this
Agreement and take any other actions as InvestAR may
reasonably request.


2.5 TRANSFER CERTAIN IEE PATENTS.


(a) InvestAR hereby agrees to take all action,
including the preparation and execution of
all documents, as may be reasonably required
to transfer to Interlink legal title in the
patents and patent applications described on
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