exhibit101.htm


     

    
      

    

    
      

    

    EXHIBIT
10.1

     

    


    YA
GLOBAL INVESTMENTS, L.P.

    101
Hudson Street, Suite 3700

    Jersey
City, New Jersey 07092

    


    March 11,
2008

    


    


    SmarTire
Systems Inc.

    13151
Vanier Place, Suite 150

    Richmond,
British Columbia V6V 2J1

    


    ATTN:  Jeff
Finkelstein, Chief Financial Officer

    


    Dear Mr.
Finkelstein:

    


    This letter sets forth our agreement
regarding the March 2005 Convertible Preferred and the May 2005 Debenture owed
by SmarTire Systems, Inc. (“SmarTire” or the “Company”) to YA Global
Investments, L.P. (f/k/a Cornell Capital Partners,
L.P.).  (hereinafter, “YA)

    


    
      	
              1.  

            	
              YA
      hereby agrees (i) to extend the Maturity Date of (a) the convertible
      preferred stock issued by the Company to YA with issue date March 22, 2005
      (the “March 2005 Convertible Preferred”) and (b) the May 5, 2005,
      debenture (the “May 2005 Debenture”), issued by the Company held by YA as
      well as the due date for any periodic payments due under either of the
      March 2005 Convertible Preferred or the May 2005 Debenture to March 31,
      2008.  As modified herein, the Existing Debentures and Existing
      Agreements remain in full force and
effect.

            


    

     

    
      	
              2.  

            	
              All
      amounts owed by the Company to YA pursuant to the March 2005 Convertible
      Preferred, or on any other instrument of indebtedness, together with any
      fees, costs, expenses and other charges now or hereafter payable by the
      Company to YA are unconditionally owing by the Company to YA, without
      offset, setoff, defense or counterclaim of any kind, nature or description
      whatsoever except as set forth in this Agreement.  The Company
      further acknowledges, confirms and agrees that (a) all agreements
      between SmarTire and YA (the “Existing
      Agreements”) have been duly executed and delivered by the Company
      to YA, and each is in full force and effect as of the date hereof;
      (b) the agreements and obligations of SmarTire contained in the
      Existing Agreements, as amended by this Agreement, constitute the legal,
      valid and binding obligations of SmarTire, enforceable against it in
      accordance with their respective terms, and the Company has no valid
      defense to the enforcement of such obligations; and (c)  YA is and
      shall be entitled to the rights, remedies and benefits provided for in the
      Existing Agreements and applicable law, without offset, setoff, defense or
      counterclaim of any kind, nature or descriptions
    whatsoever.

            


    

     

    
      	
              3.  

            	
              In
      exchange for the consideration described herein, and except as otherwise
      set forth in this Agreement, SmarTire does hereby RELEASE AND FOREVER
      DISCHARGE YA and its subsidiaries and its respective affiliates, parents,
      joint ventures, officers, directors, shareholders, interest holders,
      members, managers, employees, consultants, representatives, successors and
      assigns, heirs, executors and administrators (collectively, “Buyer Parties”)
      from all causes of action, suits, debts, claims and demands whatsoever
      known or unknown, at law, in equity or otherwise, which the Company had,
      now has, or hereafter may have, arising from or relating in any way to the
      Company’s status as a debtor of YA on or prior to the date hereof, any
      agreement between SmarTire and YA entered into prior to the date hereof,
      any claims for reasonable attorneys’ fees and costs, and including,
      without limitation, any claims relating to fees, penalties, liquidated
      damages, and indemnification for losses, liabilities and
      expenses.  This release is effective without regard to the legal
      nature of the claims raised and without regard to whether any such claims
      are based upon tort, equity, or implied or express contract.  It
      is expressly understood and agreed that this release shall operate as a
      clear and unequivocal waiver by SmarTire of any such claim
      whatsoever.

            


    

     

    If the
foregoing correctly sets forth the terms of our agreement, please sign this
letter on the line provided below, whereupon it will constitute a binding
agreement among us.

     

    Sincerely,

    


    YA GLOBAL INVESTMENTS,
L.P.

    


    By: Yorkville Advisors,
LLC

    Its:  General
Partner

    


    By:                         /s/ Mark
Angelo                             

    Name:                    Mark
Angelo

                          
 Title:                      Portfolio
Manager

    


    


    


    ACCEPTED
AND AGREED:

    SMARTIRE
SYSTEMS INC.

    


    By:      /s/ Jeff
Finkelstein                                                

    Name:
Jeff Finkelstein

    Title:  Chief
Financial Officer