exhibit1095.htm


    
      

      

    

    Exhibit
      10.95

     

    


     

    SECURITY
      AGREEMENT

     

     

    (Patent)

     

    THIS
      SECURITY AGREEMENT (PATENT) (“Agreement”), is entered into and
      made effective as of April 27, 2007, by and between SMARTIRE SYSTEMS
      INC., a British Columbia corporation with its principal place of
      business located at Suite #150 - 13151 Vanier Place, Richmond, BC V6V 2J1,
      British Columbia, Canada (the “Debtor”) in favor of the parties listed on
      Schedule I attached hereto (each a “Secured
      Party” and, collectively, the “Secured
      Parties”).

     

     

    WITNESETH:

     

    WHEREAS,
      the Debtor has issued to the Secured Parties the convertible debentures
      listed on Schedule I attached hereto (collectively, the “Convertible
      Debentures”), which are convertible into shares (the “Conversion
      Shares”) of the Debtor’s common stock, no par value, in the respective
      original principal amounts set forth opposite each Secured Party’s name on
      Schedule I;

     

    WHEREAS,
      the Debtor has provided the Secured Party a general security interest in Pledged
      Property (as this term is defined in the Security Agreement by and between
      the
      Debtor and the Secured Party, dated January 23, 2007 and which, together with
      all amendments, supplements, restatements and other modifications, if any,
      from
      time to time made thereto, will hereinafter be referred to as the “Security
      Agreement”);

     

    WHEREAS,
      the parties desire to enter into this Agreement to specify the
      particular Patent Collateral (as defined below) which is included as part of
      the
      Pledged Property and to perfect the Secured Parties’ security interest in the
      Patent Collateral granted pursuant to the Security Agreement and this
      Agreement.

     

    NOW
      THEREFORE, for good and valuable consideration, the receipt of which is
      hereby acknowledged, the Company agrees as follows:

     

    SECTION
      1.  Definitions.  Unless
      otherwise defined herein, terms used in this Agreement, including its preamble
      and recitals, have the meanings provided in the Security Agreement.

     

    SECTION
      2.  Grant
      of Security Interest.  For good and valuable consideration, the
      receipt and sufficiency of which are hereby acknowledged, and in order to secure
      the payment and performance of all of the Obligations, the Debtor does hereby
      mortgage, pledge and hypothecate to the Secured Party and grant to the Secured
      Party a security interest in all of the following property (the “Patent
      Collateral”), now owned and existing:

     

    (a)  all
      letters patent and applications for letters patent throughout the world,
      including all patent applications in preparation for filing anywhere in the
      world and including each patent and patent application referred to in
Schedule A hereto;

     

    (b)  all
      reissues, divisions, continuations, continuations-in-part, extensions, renewals
      and reexaminations of any of the items described in clause (a);

     

    (c)  all
      patent licenses and other agreements providing the Company with the right to
      use
      any of the items of the type referred to in clauses (a) and (b), including
      each
      patent license referred to in Schedule A hereto;

     

    (d)  the
      right
      to sue third parties for past, present or future infringements of any Patent
      Collateral described in clauses (a) and (b) and, to the extent applicable,
      clause (c); and

     

    (e)  all
      proceeds of, and rights associated with, the foregoing, (including license
      royalties and proceeds of infringement suits), and all rights corresponding
      thereto throughout the world.

     

    SECTION
      3.  Security
      Agreement.  This Agreement has been executed and delivered by the
      Debtor for the purpose of recording the security interest of the Secured Party
      in the Patent Collateral relating to patents referred to in Schedule A
      with the United States Patent and Trade Marks Office, to the extent it may
      be so
      registered therein.  The security interest granted hereby has been
      granted as a supplement to, and not in limitation of, the security interest
      granted to the Secured Party under the Security Agreement.  The
      Security Agreement (and all rights and remedies of the Secured Party thereunder)
      shall remain in full force and effect in accordance with its terms.

     

    SECTION
      4.  Release
      of Security Interest.  Upon payment in full of all Obligations the
      Secured Party shall, at the Debtor’s expense, execute and deliver to the Debtor
      all instruments and other documents as may be necessary or proper to release
      the
      lien on any security interest in the Patent Collateral which has been granted
      hereunder.

     

    SECTION
      5.  Acknowledgement.  The
      Debtor does hereby further acknowledge and affirm that the rights and remedies
      of the Secured Party with respect to the security interest in the Patent
      Collateral granted hereby are more fully set forth in the Security Agreement,
      the terms and provisions of which (including the remedies provided for therein)
      are incorporated by references herein as if fully set forth herein.

     

    SECTION
      6.  Security
      Agreement.  Notwithstanding any other term or provision hereof, in
      the event that any provisions hereof contradict and are incapable of being
      construed in conjunction with the provisions of the Security Agreement, the
      provisions of the Security Agreement shall take precedence over those contained
      herein and, in particular, if any act of the Debtor is expressly permitted
      under
      the Security Agreement but is prohibited hereunder, any such act shall be
      permitted hereunder and any encumbrance expressly permitted under the Security
      Agreement to exist or to remain outstanding shall be permitted hereunder and
      thereunder.

     

    SECTION
      7.  Counterparts.  This
      Agreement may be executed by the parties hereto in several counterparts, each
      of
      which shall be deemed to be an original and all of which shall constitute
      together but one and the same agreement.

     

    IN
      WITNESS WHEREOF, the parties hereto have executed this Security
      Agreement (Patent) as of the date first above written.

     

    
      	 	
              Smartire
                Systems Inc.

            
	 	 
	 	
              By:      
                /s/ Jeff Finkelstein

            
	 	
              Name:  Jeff
                Finkelstein

            
	 	
              Title:   
                Chief Financial Officer

            
	 	 
	 	 


    

    


    


    PROVINCE
      OF BRITISH COLUMBIA)

    )
      SS:

    CITY
      OF VANCOUVER)

    


    BEFORE
      ME, a Notary Public in and for said City and Province, personally
      appeared the above-named Jeffrey Finkelstein who acknowledged that he/she
      did sign the foregoing agreement and that the same is his/her free act and
      deed.

     

    IN
      TESTIMONY WHEREOF, I have hereunto set my hand an official seal at
Vancouver, British Columbia, this 26 day of April,
      2007.

     

    
      	 	
              /s/
                Shabbir Nanji

              Shabbir
                Nanji

            
	 	
              Notary
                Public

            


    

    


     

    Signatures
      continued on following page: IN WITNESS WHEREOF, the parties
      hereto have executed this Security Agreement (Patent) as of the date first
      above
      written.

     

    


    
      	 	 
	 	
              SECURED
                PARTY:

            
	 	
              CORNELL
                CAPITAL PARTNERS, L.P.

            
	 	 
	 	
              By:      Yorkville
                Advisors, LLC

            
	 	
              Its:       Investment
                Manager

            
	 	 
	 	
              By:       /s/
                Mark
                Angelo                                                       

            
	 	
              Name: 
                Mark Angelo

            
	 	
              Title:

            
	 	 
	 	 
	 	
              SECURED
                PARTY:

            
	 	
              XENTENIAL
                HOLDINGS LIMITED

            
	 	 
	 	 
	 	
              By:   
                   /s/ Mark Angelo

            
	 	
              Name:
                 Mark Angelo

            
	 	
              Title:

            
	 	 
	 	
              SECURED
                PARTY:

            
	 	
              STAROME
                INVESTMENTS LIMITED

            
	 	 
	 	
              By:      
                /s/ Michael Weiss

            
	 	
              Name:  Michael
                Weiss

            
	 	
              Title:   
                Director

            
	 	 
	 	 
	 	
              SECURED
                PARTY:

            
	 	
              STARAIM
                ENTERPRISES LIMITED

            
	 	 
	 	 
	 	
              By:      
                /s/ Mark Angelo

            
	 	
              Name: 
                Mark Angelo

            
	 	
              Title:

            
	 	 


    

    


     

    


    


    
      
        
                

                    CW1174657.1      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    SCHEDULE
      I

    


     

    NAME
      OF SECURED PARTIES AND

     

    CONVERTIBLE
      DEBENTURES ISSUED TO EACH SECURED PARTY

     

    
      	
              SECURED
                PARTY

            	
              CONVERTIBLE
                DEBENTURE

            
	
              Cornell
                Capital Partners, LP

            	
              5%
                convertible debenture issued on May 20, 2005 in the original principal
                amount of $1,500,000, as amended.

            
	 	 
	
              Starome
                Investments Limited

            	
              10%
                convertible debenture issued on December 30, 2005 in the original
                principal amount of $20 Million.

            
	 	 
	
              Xentenial
                Holdings Limited

            	
              10%
                convertible debenture issued on December 30, 2005 in the original
                principal amount of $8 Million.

            
	 	
              10%
                convertible debenture issued on January 23, 2007 in the original
                principal
                amount of $684,000.

            
	 	
              10%
                convertible debenture issued on February 9, 2007 in the original
                principal
                amount of $334,000.

            
	 	
              10%
                convertible debenture issued on March 2, 2007 in the original principal
                amount of $782,000.

            
	 	
              10%
                convertible debenture issued on April 24, 2007 in the original principal
                amount of $1,150,000.

            
	 	 
	
              Staraim
                Enterprises Limited

            	
              10%
                convertible debenture issued on December 30, 2005 in the original
                principal amount of $2.0 Million.

            


    

    


    


    
      
        
                

                    CW1174657.1      
    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    


    SCHEDULE
      A

    US
      and CANADIAN PATENTS AND APPLICATIONS

    


    
      	
              TITLE

               

            	
              FILING
                DATE

            	
              SERIAL
                NUMBER

            	
              DATE
                ISSUED

            	
              PATENT
                NUMBER

            
	
              US
                Patents

            	 	 	 	 
	
               

              Fluid
                pressure sensing method and apparatus

            	
               

              10/13/2006

            	
               

              11/580,693

            	
               

              Pending

            	
               

              N/A

            
	
               

              Apparatus
                and method for mounting a tire condition sensor capsule to a wheel
                rim

            	 	 	
               

               

              10/25/2004

            	
               

               

              6805000

            
	
               

              Wheel
                component with cavity for mounting a housing for measurement
                apparatus

            	 	 	
               

               

              03/19/2002

            	
               

               

              6357833

            
	
               

              Data
                logging tire monitor with condition predictive capabilities and integrity
                checking

            	 	 	
               

               

              09/24/1996

            	
               

               

              5559484

            
	
               

              Data
                logging tire monitor with condition predictive capabilities and integrity
                checking

            	 	 	
               

               

              08/07/1996

            	
               

               

              5945908

            
	
               

              Tire
                monitoring apparatus and method

            	 	 	
               

              08/09/1994

            	
               

              5335540

            
	
               

              Abnormal
                tire condition warning system

            	 	 	
               

              02/08/1994

            	
               

              5285189

            
	
               

              Tire
                monitoring apparatus and method

            	 	 	
               

              08/03/1993

            	
               

              5231872

            
	
              TRW
                Patents Licensed to SmarTire by TRW per License Agreement dated effective
                August 31, 2001

            	 	 	 	 
	
              Apparatus
                and method for controlling a tire condition module of a vehicle
                tire

            	 	 	
              05/15/2001

            	
              6232875

            
	
              Tire
                pressure sensor wheel attachment apparatus

            	 	 	
              05/02/2000

            	
              6055855

            
	
              Apparatus
                and method for sensing a condition of a vehicle tire

            	 	 	
              06/20/2002

            	
              2002075144

            
	
               

              Canadian
                Patents

            	 	 	 	 
	
               

              Tire
                monitoring apparatus and method

            	 	 	
               

              05/28/2002

            	
               

              2221174

            
	
               

              Tire
                monitoring apparatus and method

            	 	 	
               

              02/20/1992

            	
               

              2104696

            


    

    


     

    CW1174657.1