<PAGE>

                                                                    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").

<PAGE>

         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

<PAGE>

                           (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
                                    Exhibit 2.5 attached hereto (the "IEE
                                    Patents").

                           (b)      The IEE Patents and any continuations,
                                    continuations-in-part, divisionals,
                                    re-examinations and reissues of the IEE
                                    Patents shall

<PAGE>

                                    be included in the term "Core Technology"
                                    under the License Agreement, as amended and
                                    restated.

                           (c)      Interlink shall maintain the IEE Patents in
                                    full force and effect and not take any
                                    action, or allow any action to occur, which
                                    will adversely affect the IEE Patents. If
                                    Interlink decides to abandon such patents or
                                    wishes not to maintain them, Interlink shall
                                    offer to IEE to transfer such patents to IEE
                                    at Interlink's expense.

                  2.6      CHANGE OF NAME. IEE will use its best efforts to
                           change its name within the next six months, in
                           consultation with Interlink.

         3.       REPRESENTATIONS. The parties each represent to the others as
                  follows:

         3.1      FINANCIAL INFORMATION. The written financial reports (whether
                  or not published) that have been provided by the parties to
                  each other are true, accurate and complete, and contain no
                  material misstatements or omissions of material facts. Since
                  the last written financial reports provided to the other
                  parties, there have been no financial or business developments
                  of a material nature which have not been disclosed to the
                  other parties.

         3.2      AUTHORIZATION. The individuals who have signed this Agreement
                  as representatives of the parties are each authorized by the
                  party he represents to execute this Agreement on its behalf
                  and to legally bind it thereby; and each party on whose behalf
                  this Agreement has been executed has the legal power and
                  authority to enter into and carry out all of the provisions of
                  this Agreement.

         4.       EXTERNAL COMMUNICATIONS. Because of Interlink's
                  responsibilities as a publicly traded U.S. corporation, any
                  and all press releases or other public announcements regarding
                  this transaction must be in full compliance with the rules and
                  regulations of the U.S. Securities and Exchange Commission;
                  accordingly, any and all such communications by any of the
                  parties hereto must be reviewed and approved in advance by the
                  other parties before public release, which approval shall not
                  be unreasonably withheld.

         5.       COOPERATION.

                  5.1      MANAGEMENT MEETINGS. Representatives of the
                           management of InvestAR and Interlink will meet at
                           least semi-annually for the purpose of discussing any
                           issues arising under this Agreement and the related
                           agreements and such other matters as they wish to
                           discuss.

                  5.2      TECHNICAL MEETINGS. If technical advice is requested,
                           the party requesting such advice will bear any
                           reasonable travel related expenses.

<PAGE>

         6.       SALE OF IEE. InvestAR will not sell, assign, pledge,
                  distribute, or otherwise transfer a controlling interested in
                  IEE, or all or substantially all of the assets of IEE, to any
                  entity which is a significant customer or competitor of
                  Interlink in Product lines other than Automotive Safety and
                  Automotive Horn and Horn Door Applications (as such terms are
                  defined in the License Agreement) without the prior written
                  consent of Interlink, which consent shall not be unreasonably
                  withheld.

         7.       ENTIRE AGREEMENT. This Agreement (which hereby incorporates
                  the License Agreement, as amended and restated hereby, as an
                  integral part of this Agreement), along with the agreements
                  described in Section 2.2 hereof, constitutes the full and
                  complete agreement and understanding among the parties hereto,
                  and supersedes any and all prior oral or written
                  communications or agreements concerning the subject matter
                  hereof.

         8.       AMENDMENT. This Agreement may not be modified or amended, nor
                  may any provision hereof be waived, unless by a dated, written
                  instrument signed by a duly authorized representative of each
                  of the parties hereto.

         9.       WAIVER. No failure or delay by any party to insist upon the
                  strict performance of any term, condition, covenant or
                  agreement of this Agreement, or to exercise any right, power
                  or remedy hereunder, or consequent upon a breach hereto shall
                  constitute a waiver of any such term, condition, covenant,
                  agreement, right, power or remedy, or of any such breach, or
                  preclude such party from exercising any such right, power or
                  remedy at any later time or times.

         10.      GOVERNING LAW AND LANGUAGE. The English language version of
                  this Agreement shall control. This Agreement shall be governed
                  by, and construed, interpreted and enforced in accordance
                  with, the internal law of the State of Delaware, applied
                  without reference to the conflicts of laws rules thereof.

         11.      DISPUTE RESOLUTION.

                  11.1     PROCESS. In the event any dispute arises hereunder,
                           the parties shall, to the extent commercially
                           practicable, meet to discuss and attempt to resolve
                           the matter among themselves. If such a meeting is
                           neither practicable nor successful, then the dispute
                           shall be settled by binding arbitration, to be
                           conducted in New York, New York before a panel of
                           three arbitrators (one each to be selected by a
                           party, the third to be selected by the first two or,
                           if they fail to agree within 30 days, by the
                           President of the Court of Arbitration of the
                           International Chamber of Commerce in Paris), under
                           the Rules of Conciliation and Arbitration of the
                           International Chamber of Commerce. At _least two of
                           the arbitrators shall be familiar with the commercial
                           and manufacturing practices of the sensor industry.

<PAGE>

                  11.2     ARBITRATION AWARD. The arbitration award shall be
                           final, binding upon the parties, not subject to any
                           appeal, and may, in the arbitrators' discretion,
                           include the award of the costs of the arbitration
                           (including reasonable attorneys fees) to the
                           prevailing party. No award shall be made for any
                           punitive or special damages. The award shall be
                           written in English. The parties hereto hereby agree
                           that judgment upon the award rendered may be entered
                           in any court having jurisdiction, and that an
                           application may be made to such court for judicial
                           recognition of the award, or for an order of
                           enforcement thereof, as the case may be. The parties
                           agree that any arbitration award rendered pursuant to
                           this Section with respect to any dispute arising out
                           of or relating to this Agreement will be enforceable
                           under the laws of both the Grand Duchy of Luxembourg,
                           and the States of California and Delaware without
                           prejudice to its enforcement in other states.

                  11.3     Equitable Relief Nothing contained in this Section
                           shall be construed as prohibiting any party hereto
                           from seeking equitable relief in any court for any
                           violation of this Agreement, when, in that party's
                           reasonable judgment, legal or arbitral relief would
                           be inadequate to protect that party's interests, and,
                           in the absence of equitable relief, said party would
                           suffer irreparable harm.

         12.      BINDING EFFECT. This Agreement shall be binding upon and inure
                  to the benefit of the parties hereto, and their successors and
                  assigns.

         13.      AGREEMENT TO PERFORM NECESSARY ACTS. Each party agrees to
                  perform such further acts, and to prepare, execute, and
                  deliver such further documents and instruments as may be
                  reasonably necessary to carry out the intent of the provisions
                  of this Agreement.

         14.      VALIDITY . If for any reason any portion of this Agreement, or
                  the application of such provision in a particular context or
                  situation should be held unenforceable, invalid, or in
                  violation of the law by any court or tribunal, then the
                  application of such provision in contexts or to situations,
                  circumstances, or persons other than that in or to which it is
                  held unenforceable, invalid, or in violation of law shall not
                  be affected thereby, and the remaining provisions of this
                  Agreement shall nevertheless remain in full force and effect;
                  provided, however, that should the nonenforceability of any
                  provision hereof act to materially reduce the overall benefit
                  of this Agreement to any party hereto, then the parties shall
                  promptly confer in good faith to discuss the possible
                  modification of the remaining terms of this Agreement to best
                  accomplish the intent of the original Agreement.

         15.      NOTICES. All notices or other communications required or
                  permitted

<PAGE>

                  hereunder shall be in writing and shall be given or made by
                  personal delivery, by telecopy (with follow-up copy sent via
                  first class mail, postage prepaid), or by a nationally
                  recognized courier service for overnight delivery, addressed:

                  if to Interlink, at:

                           Interlink Electronics
                           546 Flynn Road Camarillo,
                           California 93012
                           Attention: President

                           Telecopy No: (805)484-8989

                  if to InvestAR, at:

                           InvestAR S.a. r.l.
                           19, avenue de la Liberte
                           L - 2930 Luxembourg
                           Attention: Managing Director

                           Telecopy No: 011-352-4792-2023

                  if to IEE, at:

                           Interlink Electronics Europe S.a. r.l.
                           B.P.8 Zone Industrielle
                           L - 6401 Echternach Luxembourg
                           Attention: Managing Director

                           Telecopy No: 011-352-728262

                  or at such other place as the party to whom such notice or
                  communication is to be addressed may have designated to the
                  other parties by notice conforming to this Section 16. Notices
                  shall be deemed effective and received (i) on the actual
                  receipt in the case of hand delivery, (ii) upon receipt of
                  written confirmation in the case of telecopy, or (iii) on the
                  third business day after deposit in the case of notices by
                  nationally recognized overnight courier services.

         WHEREFORE, this Agreement is entered into as of the _________day of
September, 1994.

                                      InvestAR, S.a. r.l.

                                      By ______________________________________
                                              Pierre THEIN      Georges BOLLIG

<PAGE>

                                              Director                Director

                                      Interlink Electronics

                                      By  ______________________________________
                                              CEO/Chairman

                                      Interlink Electronics Europe, S.a. r.l.

                                      By _______________________________________
                                              Pierre THEIN      Georges BOLLIG
                                              Director                Director

                                      IEE Finance, S.a. r.l.

                                      By _______________________________________
                                              Pierre THEIN      Georges BOLLIG
                                              Director                Director