April 6, 2006

SmarTire Systems Inc.
150-13151 Vanier Place
Richmond, British Columbia, V6V 2J1

Re: SmarTire Systems, Inc. -
    $2,000,000 Amended and Restated Convertible Debenture
    -----------------------------------------------------

Dear Sirs:

      Reference is made to the $2,000,000 Amended and Restated Convertible
Debenture, dated December 30, 2005 (the "Convertible Debenture"), issued by
SmarTire Syst 6 0 tems Inc., a company organized under the laws of the Yukon
territory ("SmarTire") in favor of Staraim Enterprises Limited (the "Holder").
In consideration of the promises and mutual promises, conditions and covenants
contained in the Convertible Debenture and for other good and valuable
consideration, receipt of which is hereby acknowledged, and intending to be
legally bound, the Holder hereby agrees that on June 23, 2008, the maturity date
of the Convertible Debenture, the Holder will first, before any outstanding
principal is so converted, convert all accrued and outstanding interest
("Interest") under the Convertible Debenture that has not been converted into
shares of common stock of Smartire ("Common Stock") in accordance with the
"Maturity Date" section of the Convertible Debenture. To the extent that such
conversion of Interest would cause the Holder and its affiliates to beneficially
own more than 4.9% (the "Limitation") of the then outstanding shares of Common
Stock, the Holder hereby agrees to waive the Limitation in accordance with
Section 3(a)(ii)(A) of the Convertible Debenture and shall convert such excess
Interest or principal due and outstanding, if any, that has not been converted
into the right to receive cash, into shares of Common Stock. The Holder further
acknowledges and agrees that at no time during the term of the Convertible
Debenture or at or after the Maturity Date, will the Interest be convertible
into cash or the right to receive cash.

                                               Very truly yours,

                                               Staraim Enterprises Limited

                                               By: /s/ Mark A. Angelo
                                                   -----------------------------
                                               Name:
                                               Title: