**Exhibit
      10.68**




**RENEWAL
        AND AMENDMENT AGREEMENT**
   THIS
        AGREEMENT dated the 9th day of August, 2006 (the “Agreement Date”)
  BETWEEN:
  **ROBERT
        RUDMAN** , a
        business person with an address at 500 Australian Avenue, Suite 700 West
        Palm
        Beach, FL  33401
  (the
        “Consultant”)
  OF
        THE
        FIRST PART
  AND:
  **SMARTIRE
        SYSTEMS INC.** ,
        a
        company duly incorporated pursuant to the laws of the Province of British
        Columbia, having an office at 150 - 13151 Vanier Place, Richmond, British
        Columbia, V6V 2J1
  (“SmarTire“
        or the “Company”)
  OF
        THE
        SECOND PART
  
  A.  The
        Manager and SmarTire entered into a consulting agreement (the “Consulting
        Agreement”) dated June 30, 2005 whereby SmarTire engaged the consultant for the
        period of one year;
  B.  SmarTire
        and the Consultant wish to renew the terms of the Consulting Agreement on
        the
        terms and conditions set forth herein.
  THEREFORE,
        in consideration of the mutual covenants and premises contained herein, and
        payment of $10, the receipt and sufficiency of which is hereby acknowledged,
        the
        parties covenant and agree as follows:
  **1.**
            **AMENDMENT**  1.1  The
        following is added to section 3.0 of the Agreement, entitled “Compensation”, and
        shall be construed and interpreted in accordance with this Extension and
        Amendment Agreement;
  1.2  The
        Company agrees to pay to the Consultant and the Consultant agrees to accept
        consulting fees as follows: commencing on the Effective Date and ending on
        the
        date of termination of this Agreement, the Company shall pay to the Consultant
        monthly as a fee for the Consulting Services an amount equal to US$10,000
        (the
“ **Consulting
        Fee** ”).
        The
        Company shall pay the Consulting Fee to the Consultant not later than 30
        days
        following the month in which the relevant Consulting Services were rendered.
        The
        Consultant is not entitled to any employee benefits. Any stock options in
        the
        capital of the Company held by the Consultant will remain exercisable for
        the
        period that this Agreement is in effect and including 90 days after its
        termination if the Consultant resigns as a Director.
  
 **2.**
            **TERM
                AND EFFECT OF TERMINATION OF
                AGREEMENT**   2.1  This
        Renewal is deemed effective as of June 30, 2006 and will continue in force
        and
        effect for 12 months unless renewed by mutual agreement of both
        parties.
  **3.**
            **GENERAL**  3.1  In
        all
        other respects, the Agreement shall remain in full force and effect.
  3.2  This
        Agreement will enure to the benefit of and be binding upon the parties and
        their
        respective successors and permitted assigns.
  3.3  This
        Agreement will be governed by and construed in accordance with the laws of
        British Columbia.
  3.4  This
        Agreement may be executed in several counterparts, each of which will be
        deemed
        to be an original and all of which will together constitute one and the same
        instrument.
  3.5  Except
        as
        expressly amended by this Agreement, the Consulting Agreement is hereby ratified
        and confirmed.
  IN
        WITNESS WHEREOF the parties have executed this Agreement as of the date first
        above written.
 
 SIGNED,
                  SEALED and DELIVERED by**ROBERT
                  RUDMAN**in
                  the presence of:
                
                */s/
                  David Cohen*
                Signature
                
                David
                  Cohen
                Print
                  Name
                
                423
                  Juno Dunes Way
                June
                  Beach Fl 3340
                Address
                
                President
                  - Petro Plus USA
                Occupation
              )
                )
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                )
                )
                )
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                )
                )
                )
              */s/Robert
                  Rudman*
                **ROBERT
                  RUDMAN**
  
  **SMARTIRE
        SYSTEMS INC.**
  Per:  */s/
        Jeff Finkelstein*
  Authorized
        Signatory
  Title:  Chief
        Financial Officer