<PAGE>
                                                               EXECUTION VERSION


                                                                   EXHIBIT 10.19


                                LICENSE AGREEMENT

        THIS LICENSE AGREEMENT is made to be effective as of this 31st day of
August 2001 (the "Effective Date"), by and between SMARTIRE SYSTEMS INC., a
British Columbia corporation having its principal place of business at 13151
Vanier Place, Suite 150, Richmond, British Columbia, Canada V6V 2J1
("SmarTire"), and TRW INC., a corporation existing under the laws of the State
of Ohio, United States of America, acting for and on behalf of its Automotive
Electronics operation in the U.S., having a place of business at 24175 Research
Drive, Farmington Hills, Michigan, United States of America 48335-2642 ("TRW").

        WHEREAS, the parties have been cooperating in the development and
marketing of tire pressure monitoring systems pursuant to certain agreements
including a License Agreement, Technical Cooperation Agreement, and Supply
Agreement, all dated as of 20 April 1998 and amended (in the case of the License
Agreement and Technical Cooperation Agreement) via an Assignment and Amending
Agreement dated as of 13 December 2000, and a Mutual Secrecy Agreement dated as
of 6 January 1998 and amended in a First Amendment dated 18 February 1998;

        WHEREAS, through their respective activities in the area of tire
pressure monitoring systems, the parties now each own respective intellectual
property that is useful in connection with the design and manufacture of tire
pressure monitoring systems;

        WHEREAS, pursuant to a Termination Agreement of even date herewith, the
parties are terminating the existing cooperation and the agreements associated
therewith; and,

        WHEREAS, each party wishes to receive from the other party a license to
use such other party's intellectual property in the manufacture and sale of tire
pressure monitoring systems subsequent to the termination of the existing
cooperation;

        NOW, THEREFORE, in view of the foregoing premises and in consideration
of the mutual promises and covenants contained in this and the related
termination agreements, SmarTire and TRW agree as follows:

                                    Article 1
                                   Definitions

        The following words and phrases will have the meanings set forth below
where used herein with initial capital letters:

        1.1    Affiliate: Any corporation, partnership, or other business entity
in which SmarTire or TRW owns or controls more than fifty percent (50%) of the
voting stock or otherwise has more than fifty percent (50%) of the right to
control the entity.

        1.2    Licensed Products: Tire pressure monitoring systems and
components of such systems, including but not limited to tire pressure
transmitters and receivers.



                                      -Page 1-
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        1.3    SmarTire Patents: All utility patents, design patents, utility
models, or applications for patents or utility models that (a) were originally
filed before the Effective Date or, although filed after the Effective Date, are
directed to inventions made before the Effective Date, and (b) have a claim
covering Licensed Products, components of Licensed Products, or methods of
making or using same, and (c) SmarTire has the right, whether by reason of
ownership of the patent, utility model or application or otherwise, to grant
licenses to TRW on the Effective Date. The term "SmarTire Patents" does not
include any patents under which SmarTire acquired rights from Transense
Technologies plc. or from SensoNor asa, but does include patents filed on
inventions developed and owned by Affiliates of SmarTire. The term "SmarTire
Patents" includes, without limitation, the publicly known patents and pending
patent applications listed on Attachment 1 hereto.

        1.4    Other Definitions and Meanings: For purposes of this Agreement,
(a) the term "person" includes any natural person, firm, association,
partnership, corporation, or other entity and (b) the words "hereof", "herein",
"hereby" and other words of similar import refer to this Agreement as a whole.

                                    Article 2
                                 Licensed Rights

        2.1    Grant: SmarTire hereby grants to TRW the perpetual, royalty-free,
non-exclusive, worldwide right under the SmarTire Patents to make, have made,
import, use, and sell Licensed Products.

        2.2    Sublicenses: TRW may grant to its Affiliates sublicenses under
the rights granted herein.

        2.3    Patents owned by SmarTire Affiliates: If any of the SmarTire
Patents are owned by any SmarTire Affiliate, then SmarTire will cause such
SmarTire Affiliate to endorse and confirm the licenses granted to TRW hereunder.

                                    Article 3
                                    Warranty

        SmarTire warrants that it owns the SmarTire Patents, that it has the
right to enter into this Agreement, and that SmarTire's performance of this
Agreement will not violate any agreement between SmarTire and any third person.

                                    Article 4
                                SmarTire Patents

        4.1    Title: Nothing contained in this Agreement will be deemed to
convey to TRW the legal title to any SmarTire patent.


                                      -Page 2-
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        4.2    Maintenance of Patents: SmarTire will have no obligation under
this Agreement (a) to file, prosecute, or maintain any SmarTire patent or (b) to
respond to or otherwise defend any action for reexamination or revocation of any
SmarTire patent.

                                    Article 5
                              Term and Termination

        5.1    Term: This Agreement is effective as of the Effective Date upon
execution by both parties. The Agreement will not expire.

        5.2    Termination: This Agreement may not be terminated except upon the
express written agreement of both parties.

                                    Article 6
                                   Assignment

        Neither party may assign or transfer this Agreement or any of its rights
or duties under this Agreement without the prior written consent of the other
party. For purposes of this Article, any change of control of TRW will be
considered to be a transfer of the Agreement.

                                    Article 7
                                     Notice

        Any notice or other communication to any party under this Agreement will
be in writing and will be deemed to have been duly given, if communicated by
facsimile, cable or similar electronic means, at the time receipt thereof has
been confirmed by return electronic communication or signal that the message has
been clearly received, or if mailed, ten (10) days after mailing, registered
mail, postage prepaid, return receipt requested:

               if to TRW:         TRW Automotive Electronics
                                  24175 Research Drive
                                  Farmington Hills, Michigan 48335-2642
                                  U.S.A.
                                  FAX: 248.442.5290
                                  Attention: General Manager

with a copy of the notice being sent to the same address, to the attention of
the Vice President, Law, and

               If to SmarTire:    SmarTire Systems Inc.
                                  13151 Vanier Place
                                  Suite 150
                                  Richmond, British Columbia
                                  CANADA V6V 2J1


                                      -Page 3-
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                                  FAX: 604.276.2350
                                  Attention: President

provided, however, that if either party will have designated a different address
by notice to the other party given as provided above, then to the last address
so designated.

                                    Article 8
                                  Miscellaneous

        8.1    Headings: Except for the headings for the Definitions in
Article 1, the headings and titles to the Articles and Sections of this
Agreement are inserted for convenience only and will not be deemed a part of
this Agreement or affect the construction or interpretation of any provision of
this Agreement.

        8.2    Entire Agreement: This Agreement comprises the entire agreement
between TRW and SmarTire and supersedes all other agreements, oral or written,
heretofore made with respect to the licensing of patents for the manufacture and
sale of Licensed Products.

        8.3    Modification: This Agreement may be amended only in writing
signed by both parties which specifically refers to the provision of this
Agreement to be amended and clearly recites the amendment thereto.

        8.4    Waiver: No waiver of any right or remedy in respect of any
occurrence or event on one occasion will be deemed a waiver of such right or
remedy in respect of such occurrence or event on any subsequent occasion.

        8.5    Remedies: Unless otherwise expressly provided in this Agreement,
the rights and remedies set forth in this Agreement are in addition to, and not
in limitation of, other rights and remedies under the Agreement, at law or in
equity, and the exercise of one right or remedy will not be deemed a waiver of
any other right or remedy.

        8.6    Governing Law: The validity, construction, interpretation and
enforceability of this Agreement will be determined and governed by the laws of
the State of Ohio, United States of America.

        8.7    Counterparts: This Agreement may be executed in multiple
counterparts with equal force and effect in the English language, and each such
counterpart will be deemed an original of this Agreement.


                                      -Page 4-
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        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
Effective Date, and this Agreement will be deemed dated as of such date.


TRW INC.                                          SMARTIRE SYSTEMS INC.
Automotive Electronics in the U.S.


By: /s/ RONALD A. MUCKLEY                         By: /s/ ROBERT V. RUDMAN
    ---------------------------------                 --------------------------

RONALD A. MUCKLEY                                 ROBERT V. RUDMAN
-------------------------------------             ------------------------------
      (Typed/Printed Name)                              (Typed/Printed Name)

Title: Vice President and General                 Title: President and Chief
       Manager Safety and Security Systems               Executive Officer

Attachment 1:  SmarTire Patents and Pending Patent Applications



                                    -Page 5-
<PAGE>


                                  Attachment 1
                SmarTire Patents and Pending Patent Applications


<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
PATENT/PATENT
APPLICATION NO.        FILING/ISSUE DATE                  TITLE                      JURISDICTION
--------------------------------------------------------------------------------------------------
<S>                    <C>                   <C>                                     <C>
5,285,189              February 8, 1994      ABNORMAL TIRE CONDITION WARNING         US
(Patent Granted)                             SYSTEM
--------------------------------------------------------------------------------------------------
5,559,484              September 4, 1996     DATA LOGGING TIRE MONITOR WITH          US
(Patent Granted)                             CONDITION PREDICTIVE CAPABILITIES
                                             AND INTEGRITY CHECKING
--------------------------------------------------------------------------------------------------
5,231,872              August 3, 1993        TIRE MONITORING APPARATUS AND METHOD    US
(Patent Granted)
--------------------------------------------------------------------------------------------------
5,335,540              August 9, 1994        TIRE MONITORING APPARATUS AND METHOD    US
(Patent Granted)
--------------------------------------------------------------------------------------------------
09/351,002             July 12, 1999         WHEEL COMPONENT WITH CAVITY FOR         US
(Application)                                MOUNTING A HOUSING FOR MEASUREMENT
                                             APPARATUS
--------------------------------------------------------------------------------------------------
2,104,696              Feb. 20, 1992         TIRE MONITORING APPARATUS AND METHOD    Canada
(Application)
--------------------------------------------------------------------------------------------------
2,221,174              Feb. 20, 1992         TIRE MONITORING APPARATUS AND METHOD    Canada
(Application)
--------------------------------------------------------------------------------------------------
</TABLE>


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