EX-10.74


    Exhibit
      10.74

    

      December
        15, 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

              	
                Cornell
                  

              
	
                May
                  27 05

              	
                5%
                  convertible debenture and warrants

              	
                $
                  1.5 million

              	
                Cornell
                  

              
	
                Dec.
                  30 05

              	
                10%
                  convertible debenture and warrants

              	
                $
                  8.0 million

              	
                Xentennial

              
	
                Dec.
                  30 05

              	
                10%
                  convertible debenture and warrants

              	
                $
                  20.0 million

              	
                Starome

              
	
                Dec.
                  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 on or prior to March 31,
        2007, 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 March 31,
        2007. 

      


      We
        understand that on November 7, 2006 SmarTire Systems Inc. closed on a $1.2
        million securities purchase agreement providing for the sale by SmarTire,
        and
        the purchase by TAIB Bank, B.S.C. and Certain Wealth Ltd., of 10% convertible
        debentures due in October 2008 (the "New Financing").

       

      As
        a
        result of the New Financing, the warrant exercise price of $0.16 per share
        in
        each of the following warrants (the "Warrants") was adjusted to $0.0298
        per share: 


      	1.  	
              Amended
                and Restated Warrant to Purchase 41,668,750 shares of common stock,
                dated
                as of December 30, 2005, issued by SmarTire Systems Inc. to Starome
                Investments Ltd.;

            


      	2.  	
              Amended
                and Restated Warrant to Purchase 16,668,750 shares of common stock,
                dated
                as of December 30, 2005, issued by SmarTire Systems Inc. to Xentennial
                Investments Ltd.; and

            


      	3.  	
              Amended
                and Restated Warrant to Purchase 4,162,500 shares of common stock,
                dated
                as of December 30, 2005, issued by SmarTire Systems Inc. to Staraim
                Investments Ltd.

            


      


      Each
        of
        Starome, Xentennial ans Staraim waives, and agrees that New Financing and
        issuance any securities of SmarTire in connection therewith will not trigger,
        any adjustment to the number of warrant shares issuable upon exercise of
        the
        Warrants.

       

      Yours
        very truly,

       

      
        	
                Cornell
                  Capital Partners, LP

                 

                /s/
                  Mark Angelo

                By:
                  Mark Angelo

                Its:
                  President and Portfolio Manager

              	
                Starome
                  Investments Limited

                 

                /s/
                  Michael Weiss

                By:
                  Michael Weiss

                Its:
                  Director

              	
                Staraim
                  Enterprises Limited

                 

                /s/
                  Mark Angelo

                By:
                  Mark Angelo

                Its:
                  President and Portfolio Manager

              
	
                 

                Agreed
                  and Acknowledged on December 15, 2006

                 

                SmarTire
                  Systems Inc.  

                 

                /s/
                  Jeff Finkelstein

                By:
                  Jeff Finkelstein

                Its:
                  Chief Financial Officer

              	 	
                 

                Xentennial
                  Holdings Limited

                 

                /s/
                  Mark Angelo

                By:
                  Mark Angelo

                Its:
                  President and Portfolio Manager