Exhibit
10.2

     

    INDEPENDENT CONTRACTOR
AGREEMENT

     

    BETWEEN:

     

    DAVID WARKENTIN of 20580 Powell Ave Maple Ridge,
B.C.V2X3M2

     

    (the
“Contractor”)

     

    AND:

     

    SMARTIRE SYSTEMS INC. INC., a
company incorporated under the laws of British Columbia (the “Company”)

     

    


     

    IN
CONSIDERATION OF the covenants and agreements contained in this Agreement, the
Contractor and the Company agree as follows:

     

     

    
      	
              1.

            	
              Services

            


    

     

    
      	
               
      

            	
              (a)

            	
              The
      Company engages the Contractor to provide consulting services in the
      nature and amount requested by the Company (the “Services”) relating to
      the Company’s patent infringement litigation. The Contractor represents
      and warrants to the Company that the Contractor has and will have the
      required skills and experience to perform the Services.  The
      Contractor hereby accepts such
engagement.

            


    

     

    
      	
               
      

            	
              (b)

            	
              The
      Contractor will provide progress reports every 2 weeks and will seek
      approvals for litigation strategy and settlement
    negotiations.

            


    

     

    
      	
               
      

            	
              (c)

            	
              Nothing
      herein shall preclude the Contractor from acting in a similar or any other
      capacity for any other person, firm or company so long as such activities
      do not prevent the Contractor from fulfilling all of the Contractor’s
      obligations to the Company under this Agreement and the Contractor does
      nothing in connection with such activities that adversely affects the
      interests of the Company.

            


    

     

    
      	
               
      

            	
              (d)

            	
              The
      Contractor may add or substitute another individual to perform all or part
      of the Services only with the prior written consent of the
      Company.  Such consent may be granted or withheld at the sole
      discretion of the Company and on any such conditions as the Company may
      determine.

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              2.

            	
              Term
      and Scope of Agreement

            


    

     

    
      	
               
      

            	
              (a)

            	
              This
      Agreement will be effective commencing Monday, May 4, 2009 and will
      continue in force until terminated pursuant to the provisions of Section 7
      of this Agreement.

            


    

     

    
      	
               
      

            	
              (b)

            	
              The
      provisions of this Agreement shall govern all transactions between the
      Company and the Contractor and his employees, unless otherwise agreed to
      in writing by both parties.

            


    

     

    
      	
              3.

            	
              Fee
      and Expenses for Services

            


    

     

    
      	
               
      

            	
              (a)

            	
              The
      Company shall pay to the Contractor for the provision of the Services a
      fee of USD$3000.00 per month and 5% of any proceeds realized by the
      company from any patent litigations efforts that have been initiated prior
      to the termination of this
agreement.

            


    

     

    
      	
               
      

            	
              (b)

            	
              The
      Contractor shall remit  invoices to the Company for the Services
      provided on on the first of each month. The Company shall pay such
      invoices within 5 days of receipt.

            


    

     

    
      	
               
      

            	
              (c)

            	
              The
      Contractor shall be responsible for the payment of all expenses incurred
      by the Contractor in providing the Services, including without limitation,
      office, telephone, travel, entertainment, mileage and vehicle expenses
      unless agreed to in advance by the Company. The Company will be
      responsible for out of province travel expenses which will be agreed upon
      in advance by both parties.

            


    

     

    
      	
              4.

            	
              Indemnity

            


    

     

    The
Contractor shall indemnify and save harmless the Company and any related or
associated companies and their respective boards of directors, officers,
employees or agents, from and against all claims, actions, demands, suits,
liabilities, losses, expenses, costs or damages (“Claims”) of every nature and
kind whatsoever which the Company, or any related or associated companies, and
their respective boards of directors, officers, employees or agents may have or
suffer arising out of:

     

    
      	
               
      

            	
              (a)

            	
              claims
      regarding the failure of the Contractor or any of his employees to comply
      with applicable laws, regulations or
orders;

            


    

     

    
      	
               
      

            	
              (b)

            	
              claims
      regarding any act, omission or misconduct on the part of the Contractor or
      any of his employees;

            


    

     

    
      	
               
      

            	
              (c)

            	
              claims
      regarding any breach of any obligation of the Contractor contained in this
      Agreement;

            


    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (d)

            	
              claims
      regarding workplace safety insurance benefits, bodily injury, death or
      property damage of or caused by the Contractor or any of his employees;
      and

            


    

     

    
      	
               
      

            	
              (e)

            	
              claims
      regarding the employment and/or termination of employment of any person
      employed by the Contractor including any claim by such person based on any
      alleged employment relationship between such person and the
      Company.

            


    

     

    
      	
              5.

            	
              Independent
      Contractor

            


    

     

    
      	
               
      

            	
              (a)

            	
              In
      the performance of this Agreement, the Contractor will at all times act in
      the Contractor’s own capacity and right as an independent
      contractor.  The Company will not be required to pay for or
      maintain any employee benefits including but not limited to workplace
      safety insurance, Canada Pension Plan, employer health tax, employment
      insurance and other similar levies nor to make withholdings and
      remittances for income tax in respect of any remuneration payable by the
      Company to the Contractor or by the Contractor to any person employed by
      the Contractor, pursuant to this Agreement or otherwise.  The
      Contractor will be solely responsible for making all such contributions,
      premium payments and income tax remittances in conformity with all
      applicable statutory requirements.

            


    

     

    
      	
               
      

            	
              (b)

            	
              The
      Contractor and his employees are not employees of the Company and shall
      not be entitled to receive from the Company any benefits
      whatsoever.  The Contractor agrees that neither the Contractor
      or any of his employees are entitled to any of the rights and benefits
      afforded to the Company’s employees, including but not limited to
      participation in any of the Company’s group insurance plans, vacation pay,
      overtime pay, termination pay or severance
pay.

            


    

     

    
      	
               
      

            	
              (c)

            	
              Unless
      authorized in writing by the Company, the Contractor and any of his
      employees shall not act nor purport to be acting as the legal agent of the
      Company and shall not enter or purport to enter into any agreements on
      behalf of the Company or otherwise bind or purport to bind the
      Company.

            


    

     

    
      	
              6.

            	
              Restrictive
      Covenants

            


    

     

    As a term
and condition of this Agreement, the Contractor shall sign and abide by, and the
Contractor shall cause any person employed by the Contractor in performing the
Services to sign and abide by, a Restrictive Covenant Agreement in the form
attached hereto as Appendix “B”.

     

    
      	
              7.

            	
              Termination
      and/or Renewal

            


    

     

    This
Agreement shall remain in force until terminated by either party by providing 30
days’ written notice to the other party.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
              8.

            	
              Provisions
      Which Operate Following Termination of the
  Services

            


    

     

    Notwithstanding
the termination of this Agreement for any reason, with or without cause, the
provisions of Sections 8, 9, 10 and Appendix “B” hereto shall continue in
full force and effect following such termination.

     

    
      	
              9.

            	
              Entire
      Agreement

            


    

     

    This
Agreement constitutes the entire Agreement between the parties with respect to
the subject matter of this Agreement and cancels and supersedes any prior
understandings and agreements between the parties with respect
thereto.  There are no representations, warranties, conditions,
undertakings or collateral agreements, express or implied or statutory between
the parties other than as expressly set out in this Agreement.

     

    
      	
              10.

            	
              Amendments
      and Waivers

            


    

     

    No
amendment to this Agreement shall be valid or binding unless in writing and duly
executed by both parties.  No waiver of any breach of any term or
provision of this Agreement shall be effective or binding unless made in writing
and signed by the party purporting to give the same and, unless otherwise
provided in the written waiver, shall be limited to the specific breach
waived.

     

    
      	
              11.

            	
              Severability

            


    

     

    If any
provision of this Agreement is determined to be invalid or unenforceable in full
or in part, such invalidity or unenforceability shall attach only to such
provision or part thereof and the remaining part of such provision and all other
provisions of this Agreement shall continue in full force and
effect.

     

    
      	
              12.

            	
              Governing
      Law

            


    

     

    This
Agreement shall be governed by and construed in accordance with the laws of the
Province of British Columbia and the laws of Canada applicable
therein.

     

    
      	
              13.

            	
              Copy
      of Agreement

            


    

     

    The
Contractor hereby acknowledges receipt of a copy of this Agreement duly signed
by the Company.

     

    IN
WITNESS WHEREOF the parties have executed this Agreement this 4th day of May,
2009.

     

    
      	 
      
	 
      
	 
      
	 
      	
              /s/
      David Warkentin

            
	 
      	
              DAVID
      WARKENTIN

            


    

    


     

    
      	
              SMARTIRE
      SYSTEMS  INC.

            
	 
      
	 
      
	
              By:

            	
              /s/
      David Dodge

            
	 
      	
              DAVID
      DODGE

              CHIEF
      FINANCIAL OFFICER

            


    

    


    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    APPENDIX
“B”

     

    RESTRICTIVE COVENANT
AGREEMENT

     

    BETWEEN:

     

    DAVID
WARKENTIN

     

    (the
“Covenantor”)

     

    AND:

     

    SMARTIRE
SYSTEMS INC.

     

    (the
“Company”).

     

    


     

    IN
CONSIDERATION OF the covenants and agreements contained in the Independent
Contractor Agreement to which this Restrictive Covenant Agreement is attached as
Appendix “B”, the parties hereto agree as follows:

     

     

    
      	
              1.

            	
              Definitions

            


    

     

    
      	
               
      

            	
              (a)

            	
              “Services” shall have the
      meaning assigned to that term by the Independent Contractor Agreement to
      which this Restrictive Covenant Agreement is attached as Appendix
      “B”.

            


    

     

    
      	
               
      

            	
              (b)

            	
              “Confidential
      Information” includes any information relating to the private or
      confidential affairs of the Company or relating to any secrets of the
      Company in connection with the Services and, without limiting the
      generality of the foregoing,
includes:

            


    

     

    
      	
               
      

            	
              (i)

            	
              information
      or material that is not generally available to or used by others, or the
      utility or value of which is not generally known or recognized, whether or
      not the underlying details are in the public
  domain;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              any
      information disclosed to the Company by a third party that the Company is
      obligated to treat as confidential or
  proprietary;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              any
      proprietary information belonging to the
  Company;

            


    

     

    
      	
               
      

            	
              (iv)

            	
              information
      regarding the Company’s business, operations, financing, strategies,
      methods and practices, including marketing strategies, product mix,
      product pricing, sales, margins, pay and compensation for staff, and any
      other information regarding the financial affairs of the Company;
      and

            


    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (v)

            	
              the
      identity of the Company’s clients, business partners, licensees, agents
      and suppliers, and the nature of the Company’s relationships with such
      clients, partners, licensees, agents and
  suppliers.

            


    

     

    
      	
              2.

            	
              Confidential
      and Proprietary Information

            


    

     

    
      	
               
      

            	
              (a)

            	
              The
      Company and its subsidiary and affiliated companies have invested
      substantial time, money and resources in developing the Confidential
      Information.  The Company will provide the Covenantor with the
      Confidential Information that the Company believes is necessary in order
      for the Covenantor to perform the
Services.

            


    

     

    
      	
               
      

            	
              (b)

            	
              In
      as much as the disclosure or use of Confidential Information could be
      detrimental to the best interests of the Company, the Covenantor hereby
      confirms and agrees that the Covenantor shall not copy, use or disclose to
      others any Confidential Information that the Covenantor acquires or
      creates while providing the Services either during the provision of the
      Services or at any time thereafter, as long as such Confidential
      Information remains confidential or
proprietary.

            


    

     

    
      	
              3.

            	
              Non-Solicitation
      of Employees

            


    

     

    During
the provision of the Services and for one year following the termination of the
provision of the Services for any reason whatsoever, the Covenantor shall not,
directly or indirectly, in any capacity whatsoever, employ, offer employment to,
or solicit the employment or other engagement of, or otherwise entice away from
the employ of the Company, any individual who was employed by the Company during
the provision of the Services or at the time the provision of the Services was
terminated for any reason whatsoever, whether or not such individual would
commit a breach of his or her contract of employment by resigning from that the
Company.

     

    
      	
              4.

            	
              Return
      of Property

            


    

     

    Immediately following the termination
of the provision of the Services for any reason whatsoever, or upon demand by
the Company, the Covenantor shall return to the Company all Confidential
Information, books, files, documents, records, software or other property
belonging to the Company or relating to the Services which may be in the
possession, or under the control, of the Covenantor.

     

    
      	
              5.

            	
              Confirmation
      and Agreement Respecting Restrictive
Covenants

            


    

     

    The
Covenantor hereby acknowledges, confirms and agrees that, in the Covenantor’s
opinion:

     

    
      	
               
      

            	
              (a)

            	
              the
      Company has a material interest in preserving and protecting the
      relationships that it has developed with its employees and other persons
      connected with the Company’s business, against impairment by the
      Covenantor;

            


    

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              (b)

            	
              the
      restrictive covenants set out in numbered paragraphs  and 3 above are
      fair and reasonable and are reasonably required for the protection of the
      Company’s business;

            


    

     

    
      	
               
      

            	
              (c)

            	
              the
      Covenantor’s agreement to such restrictive covenants constitutes a
      material inducement to the Company to enter into the Independent
      Contractor Agreement to which this Restrictive Covenant Agreement is
      attached as Appendix “B”;

            


    

     

    
      	
               
      

            	
              (d)

            	
              the
      Company would not have been prepared to agree to enter into the
      Independent Contractor Agreement to which this Restrictive Covenant
      Agreement is attached as Appendix “B” absent such an
      inducement;

            


    

     

    and the
Covenantor agrees that, upon termination of the provision of the Services for
any reason, whatsoever:

     

    
      	
               
      

            	
              (e)

            	
              the
      restrictive covenants contained in this Restrictive Covenant Agreement
      shall each be construed as independent of any other portion of this
      Restrictive Covenant Agreement;

            


    

     

    
      	
               
      

            	
              (f)

            	
              if
      any provision of this Restrictive Covenant Agreement is determined to be
      invalid or unenforceable in whole or in part, and cannot be amended in
      accordance with s. 5(g) below, such invalidity or unenforceability will
      attach only to such provision or part thereof and the remaining part of
      such provision and all other provisions of this Restrictive Covenant
      Agreement will continue in full force and
  effect;

            


    

     

    
      	
               
      

            	
              (g)

            	
              if
      any provision of this Restrictive Covenant Agreement is held by a court of
      competent jurisdiction to be excessively broad as to duration, activity,
      geography, or subject, such court will deem and interpret such provision
      to be valid and enforceable to the maximum duration, activity, geographic
      extent and subject permissible under applicable
  law;

            


    

     

    
      	
               
      

            	
              (h)

            	
              all
      defences to the strict enforcement by the Company of the restrictive
      covenants contained in this Restrictive Covenant Agreement are waived by
      the Covenantor; and

            


    

     

    
      	
               
      

            	
              (i)

            	
              without
      prejudice to any and all other rights of the Company, in the event of the
      Covenantor’s violation or attempted or threatened violation of any of the
      restrictive covenants contained in this Restrictive Covenant Agreement, an
      injunction or other like remedy would be the only effective method to
      protect the Company’s rights and property as set out in this Restrictive
      Covenant Agreement, and that an interim injunction may be granted
      immediately upon the commencement of any suit against the Covenantor by
      the Company.

            


    

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF the parties have executed this Agreement this 12th day of
December, 2008.

     

    
      	 
      
	 
      
	 
      
	 
      	
              /s/
      David Warkentin

            
	 
      	
              DAVID
      WARKENTIN

            


    

    


     

    
      	
              SMARTIRE
      SYSTEMS INC.

            
	 
      
	 
      
	
              By:

            	
              /s/
      David Dodge

            
	 
      	
              DAVID
      DODGE

              CHIEF
      FINANCIAL OFFICER

            


    

     

    
      
         

      

      
        4