Yeah, I think this will be a bit of a mutual decision to wait it out. That team is in such a transition right now, that it doesn't make sense for them to commit to paying Smith, and it doesn't make sense for Smith to commit to them yet.
I think what happens on the free agent market next summer (in particular with Chris Paul), will dictate what happens with Smith. If they get Paul (or someone like that), then I think they will keep Smith. If they strike out on him, I think they could let Smith walk and try to basically rebuild...or at least restructure their roster.