exhibit1098.htm


    
      

    

    
      

    

    Exhibit 10.98     

     

    
       

      SmarTire
        Systems Inc.

      Suite
        150, 13151 Vanier Place

      Richmond,
        British Columbia

      Canada,
        V6V 2J1

       

      T:
        604.276.9884

      F:
        604.276.2350

      www.smartire.com

      SMTR:
        OTCBB

      


       

      May
        7,
        2007

       

      Robert
        Rudman

      500
        Australian Avenue

      Suite
        700

      West
        Palm
        Beach, FL

      33401

      


       

      Dear
        Robert:

       

      Re:           Resignation
        as Director and Termination of Consulting Contract

       

      We
        accept
        your resignation as a Director and Chairman of SmarTire Systems Inc. and
        as
        Director of its subsidiaries, SmarTire USA Inc. and SmarTire Europe Limited.
        As
        discussed, we agree to a full and final settlement with you as
        follows:

       

      
        	
                1.  

              	
                Termination
                  of Renewal and Amendment of Consulting Agreement entered into August
                  9,
                  2006 between the Company and yourself effective February 28,
                  2007.

              


      

       

      
        	
                2.  

              	
                All
                  stock options previously granted to you will expire thirty days
                  after the
                  date of this letter except for 5,840,000 stock options granted
                  to you on
                  December 20, 2004 which will remain exercisable into common shares
                  of the
                  Company at $0.03 per share until the option expiry date of December
                  19,
                  2009.

              


      

       

      
        	
                3.  

              	
                Director
                  fees of US$72,525 owed to you will be paid in 3,679,604 free trading
                  shares of the Company.

              


      

       

      
        	
                4.  

              	
                You
                  agree to sell shares in accordance with the terms of the lock-up
                  agreements entered into in certain financings by the
                  Company.

              


      

       

      This
        letter agreement is intended to be a binding agreement between the parties
        subject to the terms and conditions hereof. You hereby release and forever
        discharge remise, release and forever discharge SmarTire Systems Inc., its
        successors and assigns of and from any and all actions, causes of action,
        claims
        and demands which you had or now has, or which your successors and assigns
        hereafter can, shall or may have, and, without limiting the generality of
        the
        foregoing, any actions, causes of action, claims and demands, whether known
        or
        unknown, suspected or unsuspected, whatsoever and wheresoever, whether at
        law or
        in equity, which have resulted from or may in any way arise out of this
        engagement by SmarTire Systems Inc.

       

      This
        letter agreement may be executed in several counterparts, each of which will
        be
        deemed to be an original and all of which will together constitute one and
        the
        same instrument.  Delivery of a copy by facsimile or other electronic
        means will be deemed to be delivery of an original.

       

      This
        letter agreement shall be construed and enforced in accordance with the laws
        of
        the Province of British Columbia.

       

      Please
        indicate your agreement with the terms of this letter by signing one copy
        of the
        letter below and returning it to me.

       

      Sincerely,

       

      SmarTire
        Systems Inc.

       

      


      /s/
        Dave
        Warkentin

      Dave
        Warkentin

       

      President
        and Chief Executive Officer

       

      


       

      


       

      I
        understand and agree to the above terms:

       

      /s/
        Robert
        Rudman                                                                                                                

      Robert
        Rudman                                                                                                Date: 
May 7, 2007