SmarTire Fully Retires Debt to TRW

Settlement of promissory note secures ongoing rights to key technologies

SMTR : OTCBB

RICHMOND, BC, July 21 -- SmarTire Systems Inc. (OTCBB: SMTR) announces that it has arranged to fully retire the secured promissory note held by TRW Automotive U.S. LLC. This settlement secures SmarTire's perpetual rights and royalty-free access to certain technologies granted under a License Agreement with TRW.

"Securing the ongoing rights to this technology is a major milestone for SmarTire as this intellectual property represents an important complement to our own extensive IP portfolio," says Erwin Bartz, Vice President of Business Development at SmarTire. "Finalizing this technology transaction has reinforced SmarTire's position as a pre-eminent developer and supplier of tire pressure monitoring systems to the transportation industry worldwide."

Formerly strategic partners, SmarTire and TRW ended their partnership with the signing of a Termination Agreement dated August 31, 2001. Pursuant to this agreement, SmarTire issued TRW a Secured Promissory Note for the payment of $2,800,000. On this same date, SmarTire and TRW entered into a License Agreement whereby TRW granted SmarTire a perpetual, royalty-free, non- exclusive, worldwide right to use certain TRW patented technologies.

SmarTire Systems Inc. develops and markets proprietary tire monitoring systems for the worldwide transportation industries. Incorporated in 1987, SmarTire is a public company with offices in North America and Europe. Additional information can be found at www.smartire.com.

  Al Kozak

  Chief Operating Officer

This news release includes statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. It is important to note that the Company's actual results could differ materially from those in such forward-looking statements. Readers should also refer to the risk disclosures outlined in the Company's annual report or Form 10-KSB for the last completed fiscal year filed with the SEC.

  Email: investor_relations@smartire.com
  Contact: Judy Leclercq
  1.800.982.2001