**Exhibit
      10.66**




July
          31,
          2006
 
 SmarTire
          Systems Inc.
 13151
          Vanier Place, Suite 150
 Richmond,
          British Columbia
 V6V
          2J1
 
 Re:
          Registration rights on financial instruments held by Cornell Capital Partners,
          LP (“ Cornell ”),
          Starome Investments Limited (“ Starome ”),
          Xentennial Holdings Limited (“ Xentennial ”)
          and
          Staraim Enterprises Limited (“ Staraim ”)
 
 The
          following financial instruments are held by the entities identified
          below:
 
 **Date
                    of Instrument**
                **Financial
                    Instrument**
                **Amount**
                **Held
                    by**March
                    22 05
                5%
                    convertible preferred stock and warrants
                $
                    4.0 million
                CornellMay
                    27 05
                5%
                    convertible debenture and warrants
                $
                    1.5 million
                CornellDec.
                    30 05
                10%
                    convertible debenture and warrants
                $
                    8.0 million
                XentennialDec.
                    30 05
                10%
                    convertible debenture and warrants
                $
                    20.0 million
                StaromeDec.
                    30 05
                10%
                    convertible debenture and warrants
                $
                    2.0 million
                Staraim
 
 On
          January 11, 2006, SmarTire filed with the SEC a registration statement
          on Form
          SB-2, as amended (the “ Registration
          Statement ”).
          The
          Registration Statement was not declared effective on or before May 11,
          2006,
          resulting in SmarTire being in non-compliance with Section 2 of the financial
          instruments and related agreements identified above (the “ Financial
          Instruments ”).
 
 Each
          of
          Cornell, Starome, Xentennial and Staraim agrees that an Event of Default
          (as
          defined in the applicable Financial Instrument) has not occurred as a result
          of
          the Registration Statement not being declared effective by the SEC pending
          the
          filing of an amended or new registration statement, or a withdrawal of
          the
          Registration Statement as mutually agreed by SmarTire and each of the
          undersigned, and each of Cornell, Starome, Xentennial and Staraim waives
          any and
          all of its rights under the applicable default provisions of the Financial
          Instruments affected by this non-compliance until October 31,
          2006.
 
 Yours
          very truly,
 
 Cornell
          Capital Partners, LP     Xentennial
          Holdings Limited
 
 */s/
          Mark Angelo                 /s/ Mark Angelo*
 By:
          Mark
          Angelo     By:
          Mark
          Angelo
 Its:
          President and Portfolio Manager   Its:
          President and Portfolio Manager
 
 Starome
          Investments Limited     ________________________
 By:
 */s/
          Michael Weiss*   Its:
 By: 
          Michael Weiss
 Its:
          Director
 Staraim
          Enterprises Limited
 ____________________________
 By:        */s/
          Mark Angelo*
 Its:        By:
          Mark
          Angelo
 Its:
 
 _________________________
 By:
 Its: