Document:

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                                                                   EXHIBIT 10.21

                             SECURED PROMISSORY NOTE

US$ 2,800,000.00                                      Farmington Hills, Michigan
                                                      August 31, 2001

1.        PROMISE TO PAY

          FOR VALUE RECEIVED, the undersigned ("Maker") promises to pay to the
order of TRW Inc. ("TRW"), at 24175 Research Drive, Farmington Hills, Michigan
48335-2642, or at such other place as the holder hereof may designate in
writing, the principal sum of United States Two Million Eight Hundred Thousand
and No/100 Dollars (US$2,800,000.00), together with interest on all amounts from
time to time outstanding hereunder calculated on the basis of a 365 day year for
the number of days in a month actually outstanding at the rate of six percent
per annum (6%), while Maker is not in default of its obligations to the holder
hereof, and at the rate of sixteen percent (16%) per annum during any period of
Maker's default under this Note. The interest hereunder is chargeable only on
amounts from time to time actually outstanding.

          The principal amount of this Note shall be paid in installment
payments, and at the time each installment payment of principal is paid it shall
be accompanied by a payment of all accrued interest as of the date of such
payment. The amounts and due dates of the principal payments are as follows:

               $500,000.00, plus all accrued interest, on or before November 15,
               2001

               $500,000.00, plus all accrued interest, on or before December 14,
               2001

               $450,000.00, plus all accrued interest, on or before March 29,
               2002

               $450,000.00, plus all accrued interest, on or before June 28,
               2002

               $450,000.00, plus all accrued interest, on or before September
               30, 2002

               $450,000.00, plus all accrued interest, on or before December 13,
               2002

This Note is given by Maker as part of the consideration payable by Maker under
that certain Termination Agreement of even date herewith made between Maker and
TRW and the documents executed by and between Maker and TRW under and in
connection with that Agreement. Payment by Maker of all amounts payable under
this Note and performance by Maker of all other obligations of Maker under this
Note and the Termination Agreement and documents referenced in, and executed in
connection with, that Agreement are secured by the collateral and other rights
granted

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to TRW by Maker under that certain General Security Agreement of even date
herewith that Maker executed and delivered to TRW with this Note, and under the
Guaranty executed by Maker's subsidiaries and delivered to TRW with this Note.

2.        COLLECTION RIGHTS

          Maker waives presentment, protest and notice of dishonor, and Maker
waives the right to all other notices or demands that might otherwise be
required by law. The holder may grant releases or compromises of this Note or
release any collateral therefor to any party who is liable to make payment on
this Note, without notice or consent of Maker, and without affecting the
liability of Maker.

3.        PREPAYMENT

          The Maker shall have the right to prepay the principal amount
outstanding in whole or in part without notice or penalty. Any partial
prepayment shall be applied first to payment of any accrued interest and then
against the principal amount outstanding and shall not extend or postpone the
due date of any subsequent installments or change such installments, unless the
holder hereof shall otherwise agree in writing.

4.        RIGHTS ON DEFAULT

          If any sum payable is not paid when due; if Maker, or other person
liable on this Note, shall become insolvent, become subject to an order for
relief under a bankruptcy law, either voluntary or involuntary, or make a
general assignment for the benefit of creditors; or if any proceeding for
enforcement of a judgment is commenced against Maker or any property of Maker;
or if Maker fails to perform any other obligation under this Note, the General
Security Agreement under which this Note is secured, or any of the agreements by
and between Maker and TRW pursuant to which this Note is given, all the amounts
owed, including accrued interest, shall become and be, at the option and
discretion of the holder, due and payable immediately without demand by, or
notice from, the holder. No delay on the part of holder in exercising any power
or right under this Note shall operate as a waiver of the power or right, nor
shall any single or partial exercise of any power or right preclude further
exercise of that power or right. Maker shall pay to holder all expenses incurred
by holder, including actual attorneys fees expended by holder, in enforcing any
of the provisions of this Note or the General Security Agreement.

5.        SECURITY AGREEMENT AND GUARANTY

          To secure payment of all obligations hereunder and the Maker's
performance of all obligations to TRW, the Maker has executed and delivered to
TRW the General Security Agreement. For any default in payment or the
performance of any other obligation of the Maker, the holder may, without
notice, declare this Note due forthwith and may realize on, or dispose of, the
collateral in any manner allowed by law. Payment of this Note and Maker's
performance of all obligations to TRW is further secured by the delivery to TRW
of that certain Guaranty executed by Maker's subsidiaries.

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6.        MISCELLANEOUS

        Holder and the Maker, after consulting or having had the opportunity to
consult with counsel, knowingly, voluntarily and intentionally waive any right
either of them may have to a trial by jury in any litigation based upon or
arising out of this Note or any related instrument or agreement or any of the
transactions contemplated by this Note or any course of conduct, dealing,
statements, whether oral or written, or actions of either of them. Neither
Holder nor the Maker shall seek to consolidate, by counterclaims or otherwise,
any such action in which a jury trial has been waived with any other action in
which a jury trial cannot be or has not been waived. These provisions shall not
be deemed to have been modified in any respect or relinquished by either Holder
or the Maker, except by a written instrument executed by both of them.

          This Note has been made and delivered in the State of Michigan and
this Note shall be construed in accordance with the laws of the State of
Michigan. This Note and the provisions hereof are binding on the heirs,
executors, administrators, assigns, or successors of Maker.

                                      SmarTire Systems Inc., a British Columbia
                                      Corporation

                                      By: /s/ ROBERT V. RUDMAN
                                          --------------------
                                      Its: President and Chief Executive Officer
                                          --------------------------------------
                                                        "Maker"

                                      Dated: August 31, 2001

                                       3<PAGE>
                                                                   EXHIBIT 10.22

                                                                  EXECUTION COPY

                        SETTLEMENT AND RELEASE AGREEMENT

This Settlement and Release Agreement (the "Release") is entered into effective
as of this 31st day of August 2001 (the "Effective Date"), by and between
SmarTire Systems Inc. ("SmarTire"), a British Columbia, Canada corporation, and
TRW Inc. ("TRW"), an Ohio corporation.

                              W I T N E S S E T H:

        WHEREAS, TRW and SmarTire entered into a license agreement (the "License
Agreement") dated as of April 20, 1998, as amended by an Assignment and
Amendment Agreement dated December 13, 2000 (the "Assignment Agreement"); and

        WHEREAS, TRW and SmarTire entered into a technical cooperation agreement
dated as of April 20, 1998, as amended by the Assignment Agreement (the
"Technical Cooperation Agreement"); and

        WHEREAS, TRW and SmarTire entered into a supply agreement dated April
20, 1998 (the "Supply Agreement"); and

        WHEREAS, TRW and SmarTire entered into a Mutual Secrecy Agreement dated
January 6, 1998, as amended by a First Amendment of Mutual Secrecy Agreement
dated February 18, 1998 (collectively, the "Secrecy Agreement"); and

        WHEREAS, TRW and SmarTire have agreed to terminate the License
Agreement, the Technical Cooperation Agreement, the Supply Agreement and the
Secrecy Agreement (together, the "April 1998 Agreements"); and

        WHEREAS, TRW and SmarTire desire to settle any and all claims among
themselves arising out of, or in any way relating to, the April 1998 Agreements.

        NOW, THEREFORE, in consideration of One United States Dollar (US$1.00)
and the mutual promises set forth in this Release, and intending to be legally
bound hereby, TRW and SmarTire agree as follows:

1.      GENERAL RELEASES.

        (a) Except as set forth in Section 2 below, TRW, for itself and its
officers, directors, shareholders, employees, partners, agents, assigns,
successors, heirs, subsidiary corporations and related or affiliated
corporations, partnerships, persons and entities (collectively,
"Representatives"), does hereby remise, release and forever discharge SmarTire
and SmarTire's Representatives from any and all Claims (as defined below) TRW
and its Representatives may or shall have against SmarTire and SmarTire's
Representatives arising out of, or in any way relating

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to: (i) the April 1998 Agreements; and (ii) the activities, events and/or
transactions undertaken in connection with, or pursuant to, the April 1998
Agreements.

        (b) Except as set forth in Section 2 below, SmarTire, for itself and its
Representatives, does hereby remise, release and forever discharge TRW and TRW's
Representatives from any and all Claims (as defined below) SmarTire and
SmarTire's Representatives may or shall have against TRW and TRW's
Representatives, including without limitation any and all Claims arising out of,
or in any way relating to: (i) the April 1998 Agreements; (ii) the activities,
events and/or transactions undertaken in connection with, or pursuant to, the
April 1998 Agreements; and (iii) the activities, actions or inactions of any TRW
employee serving on SmarTire's Board of Directors.

        (c) SmarTire, for itself and its Representatives, does hereby remise,
release and forever discharge Dana Stonerook to the maximum extent permitted
under the Company Act (British Columbia) and SmarTire's Articles of
Incorporation from any and all Claims (as defined below) SmarTire may or shall
have against Dana Stonerook.

        (d) For the purposes hereof, "Claims" shall mean any and all present and
future claims, actions, causes of action, suits, cross claims, counterclaims,
sums of money, judgments, liabilities, obligations, damages, debts, losses,
indemnities, costs, expenses, penalties, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, extents, executions, and demands of any kind and of any
nature whatsoever, whether direct, indirect, known or unknown, accrued,
inchoate, contingent, potential or otherwise in statutory or common law, or in
equity.

2.      CLAIMS NOT RELEASED. Nothing in this Release constitutes, and no party
shall claim that this Release constitutes, a release, or otherwise impairs the
enforceability, of any or all of the following:

        (a) The rights and obligations of the parties under the Termination
Agreement entered into by the parties on the date hereof, or the other documents
referenced therein, or any Claim for breach of or default under any of the
provisions of such documents; or

        (b) TRW's rights as a shareholder of SmarTire; or

        (c) Claims for breach of those provisions of the Secrecy Agreement that
survive termination thereof, but only for breaches of the surviving provisions
that occur after the date of this Release and that are not otherwise permitted
by the Termination Agreement or the documents referenced therein.

3.      INDEMNIFICATION AND EXCULPATION OF TRW APPOINTED SMARTIRE DIRECTORS.
SmarTire covenants to maintain in effect for a period of at least six (6) years
after the Effective Date policies of directors' and officers' liability
insurance equivalent in all material respects to those maintained by or on
behalf of SmarTire on the date hereof (and having coverage and containing terms
and conditions which in the aggregate are not less advantageous to the persons
currently covered by such policies as insured) with respect to Claims arising
from any actual or alleged

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wrongful act or omission by any TRW employees who served as a SmarTire director
prior to the Effective Date. If at any time during the six (6) years after the
Effective Date SmarTire desires to change any of the material terms of its
directors' and officers' liability insurance or the carrier(s) of such
insurance, SmarTire will give to TRW and each TRW employee who served as a
SmarTire director advance written notice sufficient to permit them to protect
their interest in such policies of insurance, but not less than fourteen (14)
days notice. Notwithstanding any other provision hereof, the provisions of this
Section are (i) intended to be for the benefit of, and will be enforceable by,
TRW, each TRW employee who served as a director of SmarTire, their heirs and
representatives, and (ii) are in addition to, and not in substitution for, any
other rights to indemnification or contribution that any such person may have by
contract or otherwise. SmarTire represents and warrants that a true, correct and
complete copy of SmarTire's existing officers' and directors' liability
insurance policies have been, or will be within ten (10) days after the date on
which SmarTire receives copies of such policies from its insurers, provided to
TRW.

4.      COVENANT NOT TO SUE. Each of SmarTire and TRW hereby covenants to and
agrees with the other that it will not commence or prosecute any action or suit
in law or in equity against the other involving any claim (including without
limitation any of the Claims) that now exists or may hereafter exist arising
from, or in any way relating to, any of the matters released by it in Section 1
of this Release. Upon the breach of this covenant by a party, the other party
hereto shall be entitled to recover from the breaching party, in addition to any
other damages or remedy, all liability and actual attorneys' fees and costs
incurred by the other party in the defense or settlement of such action or suit.

5.      REPRESENTATIONS AND WARRANTIES.

        (a) Each of SmarTire and TRW warrants and represents to the other that
no person or entity not bound legally by this Release has any right to assert
any of the Claims released by it in Section 1, above, by or through that party,
and that it has not assigned or otherwise transferred to any person or entity
not bound legally by this Release any of the Claims released by it in Section 1
or any interest in, or right to, any of such Claims. Each of SmarTire and TRW
hereby agrees to indemnify, defend and hold the other harmless from any and all
liability and expenses, including without limitation actual attorneys' fees,
arising from, or in any way relating to, any claim asserted by any person or
entity contending not to be bound legally by this Release and based upon such
person's or entity's claiming to have any right to assert any of such Claims.

        (b) Each of the parties warrants and represents that no promises or
inducements have been offered except as herein stated, and this Release is
executed without reliance upon any statement or representation by the other
party concerning the nature or extent of any claims, damages or legal liability.
By execution of this Release, the parties hereto agree to be deemed joint
authors and drafters of this Release.

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6.      GENERAL.

        (a) It is understood and acknowledged that the payment and promises set
forth herein represent the full and complete compromise and settlement of the
Claims. Nothing contained in this Release shall be construed as an admission of
liability on the part of any person.

        (b) Each party hereby acknowledges and agrees that this Release is
freely and voluntarily given without any duress or coercion and after it has
either consulted with legal counsel or been given the opportunity to do so, and
each party has carefully and completely read all of the terms and provisions of
this Release.

        (c) This Release constitutes the entire understanding between the
parties hereto with respect to the settlement and release of claims by the
parties hereto, and, except to the extent contemplated by Section 1(c) above,
any other agreement made by the parties at any time prior to the date hereof
with respect to the foregoing shall not be of any force or effect. The
provisions herein are, and shall be, binding upon, and shall inure to the
benefit of, the respective heirs, executors, administrators, assigns and
successors of the parties.

        (d) Each provision, covenant, obligation, warranty or representation
stated herein shall be deemed to be effective, operative, made, entered into and
taken in the manner and to the fullest extent permitted by law. If any provision
of this Release, or any covenant, obligation, warranty or representation
contained in this Release is determined by a court to be invalid or
unenforceable, that determination shall not affect any other provision,
covenant, obligation or representation, each of which shall be construed and
enforced as if the invalid or unenforceable portion were not contained herein.

        (e) This Release may be amended, modified or supplemented only by a
written instrument signed by the parties hereto.

        (f) This Release may be executed in counterparts, each of which shall be
deemed an original and all of which shall constitute one and the same
instrument.

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        (g) This Release is governed by, and shall be construed and enforced in
accordance with, the law of the State of Ohio.

        IN WITNESS WHEREOF, the parties, by their respective, duly authorized
representatives, have executed this Release to be effective on the day and year
first above written.

                                     SMARTIRE SYSTEMS INC.

                                     By: /s/ ROBERT V. RUDMAN
                                        ---------------------

                                     Its: President & Chief Executive Officer
                                          ------------------------------------
                                                    ("SmarTire")

                                     TRW INC.

                                     By: /s/ RONALD A. MUCKLEY
                                         ---------------------

                                    Its: Vice President and General Manager
                                         Safety & Security Systems
                                         -------------------------------------
                                                    ("TRW")

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