Filed by Automated Filing Services Inc. (604) 609-0244 - Carbiz Inc. - Exhibit 4.10






CARBIZ INC.

INVESTORS’ RIGHTS AGREEMENT

THIS INVESTORS’ RIGHTS AGREEMENT (the “Agreement”) is
entered into as of October 6, 2004, by and among Carbiz, Inc., a corporation
formed under the laws of the Province of Ontario, Canada (the
“Corporation”), and the Schedule of Investors listed on Schedule A
attached hereto (each an “Investor”, collectively, the
“Investors”).

RECITALS

WHEREAS the Corporation and each of the Investors are parties
to a certain subscription agreement dated as of the date hereof (each a
“Subscription Agreement”, collectively, the “Subscription
Agreements”), whereby the Corporation will sell, and each Investor will
purchase, a Debenture of the Corporation (each a “Debenture”,
collectively, the “Debentures”) that is convertible into units (the
“Units”) of the Corporation, with each Unit consisting of one Common
Share (the “Common Share”), one Class A Warrant (the “Class A
Warrant”) and one-half of one Class B Warrant (the “Class B
Warrant”), (the Class A Warrants and the Class B Warrants collectively, the
“Warrants”), subject to the terms and conditions of such Agreement; 

AND WHEREAS the obligations of the Corporation and the
Investors under the Subscription Agreements are conditioned, among other things,
upon the execution and delivery of this Agreement by the Corporation and the
Investors; 

NOW THEREFORE, in consideration of the foregoing recitals and
the mutual premises hereinafter set forth, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

	1. 	Certain Definitions: As used
        in this Agreement, the following terms shall have the respective meanings:
      

	 	 	 
		1.1 
	Closing Date. The term “Closing
        Date” means October 6, 2004 or such other date as may be determined
        by the Corporation in accordance with the Subscription Agreements. 

	 	 	 
		1.2 
	Conversion Date. The term “Conversion
        Date” means the date on which the Corporation obtains a listing on
        the United States Over The Counter Bulletin Board and delists from the
        TSX Venture Exchange. 

	 	 	 
		1.3 
	Conversion Rate. The term “Conversion
        Rate” means the automatic conversion on the Conversion Date of the
        principal amount of the Debenture and all accrued and unpaid interest
        of the Debenture as of the Conversion Date into Units at a price CDN$0.22
        per Unit. 









		1.4 	Holder. For purposes of this
        Agreement, the term “Holder” or “Holders” means any
        person or persons owning of record Registrable Securities that have not
        been sold to the public or pursuant to Rule 144 promulgated under the
        U.S. Securities Act, or any assignee of record of such Registrable Securities
        to whom rights under this Agreement have been duly assigned in accordance
        with this Agreement; provided, however, that a holder of Excluded Securities
        shall not be a Holder with respect to such Excluded Securities for purposes
        of Section 2.1 of this Agreement. 

	 	 	 
		1.5 	Qualified Public Offering. The
        term “Qualified Public Offering” means a firm commitment underwritten
        public offering with gross proceeds to the Corporation of at least US$10,000,000
        (prior to any payment of any underwriter discounts and commissions) pursuant
        to a registration statement filed under the U.S. Securities Act. 

	 	 	 
		1.6 	Registrable Securities. The
        term “Registrable Securities” means: (i) any of the Common Shares
        (including the Common Shares underlying the Warrants (the “Warrant
        Shares”)) issued pursuant to the terms and conditions of the
        Subscription Agreements and (ii) any Common Shares of the Corporation
        issued (or issuable upon the conversion or exercise of any warrant, right
        or other security which is issued) as a dividend or other distribution
        with respect to, in exchange for or in replacement of, all such Common
        Shares or Warrant Shares described in clause (i) of this Section 1.6;
        excluding in all cases, however, any Registrable Securities sold by a
        person in a transaction in which rights under this Agreement are not assigned
        in accordance with this Agreement or any Registrable Securities sold to
        the public or sold pursuant to Rule 144 promulgated under the U.S. Securities
        Act (the “Excluded Securities”). 

	 	 	 
		1.7 	Registration. The terms “register,”
        “registered,” and “registration” refer to a registration
        effected by preparing and filing a registration statement in compliance
        with the U.S. Securities Act, and the declaration or ordering of effectiveness
        of such registration statement. 

	 	 	 
		1.8 	SEC. The term “SEC”
        means the United States Securities and Exchange Commission. 

	 	 	 
		1.9 	U.S. Exchange Act. The term “U.S.
        Exchange Act” means the United States Securities Exchange Act
        of 1934, as amended. 

	 	 	 
		1.10 	U.S. Securities Act. The term
        “U.S. Securities Act” means the United States Securities
        Act of 1933, as amended. 

	 	 	 
	2. 	Registration Rights. 
	 	 	 
		2.1 	Automatic Registration. The
        Corporation shall prepare and file with the SEC a registration statement
        (the “Registration Statement”) and such other documents,
        including a prospectus, as may be necessary, in order to comply with the
        provisions of the U.S. Securities Act and applicable state securities
        laws, so as to 



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			permit the public sale of the Registrable
        Securities. The Corporation shall file the Registration Statement no later
        than thirty (30) days after the Conversion Date, and use its best efforts
        to have the Registration Statement declared effective within one hundred
        eighty (180) days after the Closing Date. 

	 	 	 	 
	 	2.2 
	Expenses. All expenses
        incurred in connection with a registration pursuant to this Section 2,
        including without limitation registration and qualification fees, printers’
        and accounting fees, fees and disbursements of counsel for the Corporation,
        shall be borne by the Corporation; provided, however, the Holder shall
        be solely responsible for the fees of any counsel or advisor retained
        by Holder in connection with such registration and any transfer taxes
        or brokerage discounts, selling commissions or selling fees applicable
        to Registrable Securities sold by the Holder pursuant thereto. 

	 	 	 	 
	 	2.3 
	Obligations of the Corporation.
        The Corporation hereby covenants and agrees as follows: 

	 	 	 	 
			(a) 
	it shall use its best efforts to keep the Registration
        Statement effective until the twelve (12) month anniversary of the Conversion
        Date or, if earlier, until the distribution contemplated in the Registration
        Statement has been completed; 

	 	 	 	 
			(b) 
	it shall prepare and file with the SEC such amendments
        and supplements to such Registration Statement and the prospectus used
        in connection with such Registration Statement as may be necessary to
        comply with the provisions of the U.S. Securities Act with respect to
        the disposition of all securities covered by the Registration Statement;
      

	 	 	 	 
			(c) 
	it shall furnish to the Holders such number of copies
        of a prospectus, including a preliminary prospectus, in conformity with
        the requirements of the U.S. Securities Act, and such other documents
        as they may reasonably request in order to facilitate the disposition
        of the Registrable Securities owned by them that are included in such
        registration; 

	 	 	 	 
			(d) 
	it shall use its best efforts to register and qualify
        the securities covered by such Registration Statement under such other
        securities or “blue sky” laws of such jurisdictions as shall
        be reasonably requested by the Holders, provided that the Corporation
        shall not be required in connection therewith or as a condition thereto
        to qualify to do business or to file a general consent to service of process
        in any such states or jurisdictions; and 

	 	 	 	 
			(e) 
	it shall notify each Holder of Registrable Securities
        covered by such Registration Statement at any time when a prospectus relating
        thereto is required to be delivered under the U.S. Securities Act of the
        happening of any event as a result of which the prospectus included in
        such Registration Statement, as then in effect, includes an untrue statement
        of a material fact or omits to state a material fact required to be stated
        therein or necessary 



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	to make the statements therein not misleading in the light of the circumstances
      then existing. 
	 	 	 
	 	2.4 
	Furnish Information.
        It shall be a condition precedent to the obligations of the Corporation
        to take any action pursuant to this Section 2 that the selling Holders
        shall furnish to the Corporation such information regarding themselves,
        the Registrable Securities held by them and the intended method of disposition
        of such securities as shall be required to timely effect the registration
        of their Registrable Securities. 

	 	 	 
	 	2.5 
	Delay of Registration.
        No Holder shall have any right to obtain or seek an injunction restraining
        or otherwise delaying any such registration as the result of any controversy
        that might arise with respect to the interpretation or implementation
        of this Section 2. 

	 	 	 
	 	2.6 
	Black-Out Period. Without
        limiting the other provisions of this Section 2, each Holder agrees that,
        if so requested by the Corporation upon a good faith determination by
        the Corporation’s board of directors (the “Board”)
        that the imposition of a “Suspension Period” is necessary to
        enable the Corporation to pursue the objectives described in this Section
        2.6, not to effect any offer or sale of securities pursuant to the Registration
        Statement, or otherwise, or engage in any hedging or other transaction
        intended to reduce or transfer the risk of ownership for any period (not
        to exceed 45 days) reasonably deemed necessary (i) by the Corporation
        or any underwriter in connection with the offering of securities by the
        Corporation for its own account or (ii) by the Corporation in connection
        with any proposal or plan by the Corporation to engage in any material
        financing or material acquisition or disposition by the Corporation or
        any subsidiary thereof of the securities or substantially all of the assets
        of any other person (other than in the ordinary course of business), any
        tender offer or any merger, consolidation, corporate reorganization, strategic
        partnership arrangement or restructuring or other similar transaction
        (each, a “Business Combination”) material to the Corporation
        and its subsidiaries taken as a whole. Any period during which the Corporation
        fails to keep the Registration Statement effective and usable for resales
        of securities, or requires pursuant to this Section 2.6 that the Holders
        not effect sales of securities pursuant to the Registration Statement,
        is hereafter referred to as a “Suspension Period”. A
        Suspension Period shall commence on the date set forth in a written notice
        by the Corporation to the Holders that the Registration Statement is no
        longer effective or that the prospectus included in the Registration Statement
        is no longer usable for resales of securities or, in the case of a suspension
        pursuant to this Section 2.6, and shall end on the date when each Holder
        of securities covered by the Registration Statement either receives copies
        of the supplemented or amended prospectus contemplated by Section 2.3
        or is advised in writing by the Corporation that use the prospectus or
        sales may be resumed. The Corporation may only impose a Suspension Period
        on the Holders two (2) times during any twelve (12) month period. The
        obligation under Section 



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			2.3 to keep the Registration Statement
        effective shall not include any period of time such Registration Statement
        was subject to a Suspension Period. 

	 	 	 	 	 
	 	2.7 
	Indemnification. 

	 	 	 	 	 
			(a) 
	By the Corporation. To
        the extent permitted by law, the Corporation will indemnify and hold harmless
        each Holder, the partners, officers and directors of each Holder, and
        each person, if any, who controls such Holder within the meaning of the
        U.S. Securities Act or U.S. Exchange Act, against any losses, claims,
        damages, or liabilities (joint or several) to which they may become subject
        under the U.S. Securities Act, the U.S. Exchange Act or other federal
        or state law, insofar as such losses, claims, damages, or liabilities
        (or actions in respect thereof) arise out of or are based upon any of
        the following statements, omissions or violations (collectively, a “Violation”):
      

	 	 	 	 	 
				(i) 
	any untrue statement or alleged untrue statement
        of a material fact contained in the Registration Statement, including
        any preliminary prospectus or final prospectus contained therein or any
        amendments or supplements thereto; 

	 	 	 	 	 
				(ii) 
	the omission or alleged omission to state therein
        a material fact required to be stated therein, or necessary to make the
        statements therein not misleading; or 

	 	 	 	 	 
				(iii) 
	any violation or alleged violation by the Corporation
        of the U.S. Securities Act, the U.S. Exchange Act, any federal or state
        securities law or any rule or regulation promulgated under the U.S. Securities
        Act, the U.S. Exchange Act or any federal or state securities law in connection
        with the offering covered by the Registration Statement. 

	 	 	 	 	 
				The Corporation will reimburse each such
        Holder, partner, officer or director, or controlling person for any legal
        or other expenses reasonably incurred by them, as incurred, in connection
        with investigating or defending any such loss, claim, damage, liability
        or action; provided, however, that the indemnity agreement contained in
        this subsection 2.7(a) shall not apply to amounts paid in settlement of
        any such loss, claim, damage, liability or action if such settlement is
        effected without the consent of the Corporation (which consent shall not
        be unreasonably withheld), nor shall the Corporation be liable in any
        such case for any such loss, claim, damage, liability or action to the
        extent that it arises out of or is based upon a Violation which occurs
        in reliance upon and in conformity with written information furnished
        expressly for use in connection with such registration by such Holder,
        partner, officer, director or controlling person of such Holder. 



5





	 	 	(b) 	By Selling Holders. To
        the extent permitted by law, each selling Holder will indemnify and hold
        harmless the Corporation, each of its directors, each of its officers
        who have signed the Registration Statement, each person, if any, who controls
        the Corporation within the meaning of the U.S. Securities Act, or any
        of such other Holder’s partners, directors or officers or any person
        who controls such Holder within the meaning of the U.S. Securities
        Act or the U.S. Exchange Act, against any losses, claims, damages
        or liabilities (joint or several) to which the Corporation or any such
        director, officer, controlling person or other such Holder, partner or
        director, officer or controlling person of such other Holder may become
        subject under the U.S. Securities Act, the U.S. Exchange Act or other
        federal or state law, insofar as such losses, claims, damages or liabilities
        (or actions in respect thereto) arise out of or are based upon any Violation,
        in each case to the extent (and only to the extent) that such Violation
        occurs in reliance upon and in conformity with written information furnished
        by such Holder expressly for use in connection with such registration;
        and each such Holder will reimburse any legal or other expenses reasonably
        incurred by the Corporation or any such director, officer, controlling
        person or other Holder, partner, officer, director or controlling person
        of such other Holder in connection with investigating or defending any
        such loss, claim, damage, liability or action; provided, however, that
        the indemnity agreement contained in this subsection 2.7(b) shall not
        apply to amounts paid in settlement of any such loss, claim, damage, liability
        or action if such settlement is effected without the consent of the Holder,
        which consent shall not be unreasonably withheld; and provided further,
        that the total amounts payable in indemnity by a Holder under this Section
        2.7(b) in respect of any Violation shall not exceed the net proceeds received
        by such Holder in the registered offering out of which such Violation
        arises.

	 	 	 	 
	 	 	(c) 	Notice. Promptly after
        receipt by an indemnified party under this Section 2.7 of notice of the
        commencement of any action (including any governmental action), such indemnified
        party will, if a claim in respect thereof is to be made against any indemnifying
        party under this Section 2.7, deliver to the indemnifying party a written
        notice of the commencement thereof and the indemnifying party shall have
        the right to participate in, and, to the extent the indemnifying party
        so desires, jointly with any other indemnifying party similarly noticed,
        to assume the defense thereof with counsel mutually satisfactory to the
        parties; provided, however, that an indemnified party shall have the right
        to retain its own counsel, with the fees and expenses to be paid by the
        indemnifying party, if representation of such indemnified party by the
        counsel retained by the indemnifying party would be inappropriate due
        to actual or potential conflict of interests between such indemnified
        party and any other party represented by such counsel in such proceeding.
        The failure to deliver written notice to the indemnifying party within
        a reasonable time of the 



6





				commencement of any such action, if prejudicial
        to its ability to defend such action, shall relieve such indemnifying
        party of any liability to the indemnified party under this Section 2.7,
        but the omission so to deliver written notice to the indemnifying party
        will not relieve it of any liability that it may have to any indemnified
        party otherwise than under this Section 2.7. 

	 	 	 	 	 
	 	 	(d) 	Defect Eliminated in Final Prospectus.
        The foregoing indemnity agreements of the Corporation and Holders
        are subject to the condition that, insofar as they relate to any Violation
        made in a preliminary prospectus but eliminated or remedied in the amended
        prospectus on file with the SEC at the time the Registration Statement
        becomes effective or the amended prospectus filed with the SEC pursuant
        to SEC Rule 424(b) (the “Final Prospectus”), such indemnity
        agreement shall not inure to the benefit of any person if a copy of the
        Final Prospectus (i) was furnished to the indemnified party and (ii) was
        not furnished to the person asserting the loss, liability, claim or damage
        at or prior to the time such action is required by the U.S. Securities
        Act. 

	 	 	 	 	 
	 	 	(e)         	Contribution.
        In order to provide for just and equitable contribution to joint liability
        under the U.S. Securities Act in any case in which either    
        (i) any Holder exercising rights under this Agreement, or any controlling
            person of any such Holder, makes a claim for indemnification
        pursuant to this Section 2.7 but it is judicially determined (by the entry
        of a final judgment or decree by a court of competent jurisdiction and
        the expiration of time to appeal or the denial of the last right of appeal)
        that such indemnification may not be enforced in such case notwithstanding
        the fact that this Section 2.7 provides for indemnification in such case,
        or     (ii) contribution under the U.S. Securities Act may be
        required on the part     of any such selling Holder or any such
        controlling person in circumstances for which indemnification is provided
        under this Section 2.7; then, and in each such case, the Corporation and
        such Holder will contribute to the aggregate losses, claims, damages or
        liabilities to which they may be subject (after contribution from others)
        in such proportion so that such Holder is responsible for the portion
        represented by the percentage that the public offering price of its Registrable
        Securities offered by and sold under the Registration Statement bears
        to the public offering price of all securities offered by and sold under
        the Registration Statement, and the Corporation and other selling Holders
        are responsible for the remaining portion; provided, however, that, in
        any such case, (A) no such Holder will be required to contribute any amount
        in excess of the public offering price of all such Registrable Securities
        offered and sold by such Holder pursuant to the Registration Statement
        and (B) no person or entity guilty of fraudulent misrepresentation (within
        the meaning of Section 11(f) of the U.S. Securities Act) will be entitled
        to contribution from any person or entity who was not guilty of such fraudulent
        misrepresentation. 











7





			(f) 
	Survival. The obligations of
        the Corporation and Holders under this Section 2.7 shall survive the completion
        of any offering of Registrable Securities in the Registration Statement,
        and otherwise. 

	 	 	 	 
	 	2.8 	“Market Stand-Off”
        Agreement. 

	 	 	 	 
			(a) 
	Each Holder hereby agrees that he, she or it shall
        not, to the extent requested by the managing underwriter of a Qualified
        Public Offering in which Securities (as defined below) are sold, directly
        or indirectly, offer, sell, pledge, contract to sell, transfer the economic
        risk of ownership in, make any short sale, grant any option to purchase
        or otherwise dispose of any Securities of the Corporation or any securities
        convertible into or exchangeable or exercisable for or any other rights
        to purchase or acquire Securities, including, without limitation, Securities
        which may be deemed to be beneficially owned by each Holder in accordance
        with the rules and regulations of the SEC and Securities which may be
        issued upon exercise of an option or warrant, or enter into any Hedging
        Transaction (as defined below) relating to Securities (each of the foregoing
        referred to as a “Disposition”) for a period of 180 days
        after the effective date of the registration statement relating to such
        Qualified Public Offering (the “Lock-Up Period”) unless
        the managing underwriter otherwise agrees; provided, however, such restrictions
        shall apply only if all of the Corporation’s executive officers,
        directors and holders of five percent (5%) or more of the Corporation’s
        voting Securities (collectively, “Other Restricted Sellers”)
        enter into similar agreements; provided, further, however, that the undersigned
        shall be permitted to participate on a pro rata basis in any early release
        from the Lock-Up Period of any Other Restricted Seller by the managing
        underwriter. The foregoing restriction is expressly intended to preclude
        the undersigned from engaging in any Hedging Transaction or other transaction
        which is designed to or reasonably expected to lead to or result in a
        Disposition during the Lock- Up Period even if the Securities would be
        disposed of by someone other than the undersigned. “Hedging Transaction”
        means any short sale (whether or not against the box) or any purchase,
        sale or grant of any right (including, without limitation, any put or
        call option) with respect to any security (other than a broad-based market
        basket or index) that includes, relates to or derives any significant
        part of its value from the Securities. For purposes of this paragraph
        2.8(a), “Securities” shall means any equity securities
        of the Corporation that are, or that are convertible or exercisable directly
        or indirectly into, voting common shares or non-voting common shares of
        the Corporation. 

	 	 	 	 
			(b) 
	Each Holder hereby agrees to execute and deliver
        in a timely manner an agreement in customary form proposed by such managing
        underwriter confirming the foregoing covenants. 



8





		
	(c) 
	In order to enforce the foregoing covenants, the Corporation
      may impose stop transfer instructions with respect to the Securities of
      the Holder (and the securities of every other person subject to the foregoing
      restriction) until the end of such period. 
	 	 	 	 
		2.9 
	Rule 144 Reporting.
        With a view to making available the benefits of certain rules and
        regulations of the SEC which may at any time permit the sale of the Registrable
        Securities to the public without registration, the Corporation agrees
        to: 

	 	 	 	 
			(a) 
	make and keep public information available,
        as those terms are understood and defined in Rule 144 under the U.S. Securities
        Act, at all times when the Corporation is subject to the reporting requirements
        of the U.S. Exchange Act; 

	 	 	 	 
			(b) 
	use its best efforts to file with the
        SEC in a timely manner all reports and other documents required of the
        Corporation under the U.S. Securities Act and the U.S. Exchange Act when
        the Corporation is subject to the U.S. Exchange Act; and 

	 	 	 	 
			(c) 
	as long as a Holder owns any Registrable
        Securities, to furnish to the Holder forthwith upon request a written
        statement by the Corporation as to its compliance with the reporting requirements
        of said Rule 144, a copy of the most recent annual or quarterly report
        of the Corporation and such other reports and documents of the Corporation
        as a Holder may reasonably request in availing itself of any rule or regulation
        of the SEC allowing a Holder to sell any such securities without registration
        when the Corporation is subject to the U.S. Exchange Act. 

	 	 	 	 
		2.10 
	Termination of Registration
        Rights. The registration rights granted pursuant to this
        Agreement shall terminate as to a Holder on the date on which all of such
        Holder’s Registrable Securities can be sold under Rule 144 promulgated
        under the U.S. Securities Act. 

	 	 	 	 
	3. 	Right of First Offer. 

	 	 	 	 
		3.1 
	Right of First Offer.
        In the event that a minimum of US$1,000,000 in gross proceeds are
        raised through the offering of the Debentures pursuant to the Subscription
        Agreements, the Investor shall have a right of first offer (the “Right
        of First Offer”) to purchase such Investor’s Pro Rata Share
        of all or part of any Subsequent Financing. 

	 	 	 	 
		3.2 
	Pro Rata Share.
        For purposes of this Section 3, each Investor’s “Pro Rata
        Share” shall be equal to the fraction obtained by dividing (a) the
        sum of the total number of Common Shares issued or issuable upon the exercise
        of any stock options or warrants then held by such Investor or upon the
        conversion of any convertible securities then held by such Investor by
        (b) the sum of the total 



9





			number of Common Shares issued or issuable
        upon exercise upon any options or warrants then outstanding or the upon
        the conversion of any convertible securities then outstanding. 

	 	 	 	 
	 	3.3 	Subsequent Financing.
        For purposes of this Section 3, “Subsequent Financing” shall
        mean any private equity or private equity linked financing completed by
        the Corporation within twelve (12) months after the Closing Date; provided,
        however, that a Subsequent Financing shall not include: 

	 	 	 	 
			(a) 
	the Common Shares, Warrants and Warrant Shares issued
        pursuant to the terms and conditions of the Subscription Agreements; 

	 	 	 	 
			(b) 
	Common Shares, options or other rights to purchase
        Common Shares issued or granted to employees, officers, directors and
        consultants of the Corporation pursuant to one or more employee stock
        plans or agreements approved by the Board; 

	 	 	 	 
			(c) 
	securities issued or issuable to financial institutions
        or lessors in connection with real estate leases, commercial credit arrangements,
        equipment financings or similar transactions approved by the Board, including,
        but not limited to, equipment leases or bank lines of credit; 

	 	 	 	 
			(d) 
	securities issued as a dividend or distribution on,
        or in connection with a split of or recapitalization of, any of the capital
        stock of the Corporation; 

	 	 	 	 
			(e) 
	securities issued by the Corporation pursuant to
        strategic partnership, joint venture or other similar arrangements approved
        by the Board where the primary purpose of the arrangement is not to raise
        capital; 

	 	 	 	 
			(f) 
	securities issued pursuant to a registration statement
        filed by the Corporation under the U.S. Securities Act; 

	 	 	 	 
			(g) 
	securities issued by the Corporation pursuant to
        an acquisition of another corporation or other entity by the Corporation
        by merger, purchase of all or substantially all of the capital stock or
        assets, or other reorganization; or 

	 	 	 	 
			(h) 
	securities issued pursuant to currently outstanding
        options, warrants or other rights to acquire securities of the Corporation.
      

	 	 	 	 
	 	3.4 	Procedure. The Corporation
        shall provide notice (the “Notice”) to the Investor of
        the terms and conditions of any such Subsequent Financing and the Investor
        shall have ten (10) business days to respond with its indication to participate
        in such Subsequent Financing. If no response is received within such ten
        (10) business day period, the Investor shall be deemed to have refused
        to participate in the Subsequent Financing. If the Investor indicates
        its desire to participate in the Subsequent Financing, the closing shall
        occur after an additional five (5) business day period, on the same terms
        and conditions set forth in the Notice from the 



10





			Corporation. No commissions shall be payable
        in connection with an Investor’s exercise of its Right of First Offer
        under any such Subsequent Financing. 

	 	 	 	 
		3.5 
	Waiver of Right of First Offer.
        The Right of First Offer may be waived as to any Subsequent Financing
        on behalf of all Investors, by Investors holding a majority of the Registrable
        Securities then held by all Investors or their permitted assignees or
        transferees. 

	 	 	 	 
		3.6 
	Termination and Assignment.
        The Right of First Offer granted in this Section 3 shall expire twelve
        (12) months from the Closing Date. The Right of First Offer is non-assignable
        except to any permitted transferee pursuant to Section 5.1 of this Agreement.
      

	 	 	 	 
		3.7 
	Corporation Right to Terminate Subsequent
        Financing. Notwithstanding the foregoing, the Corporation
        may in its sole discretion terminate any Subsequent Financing in respect
        of which the Corporation has provided Notice at any time prior to the
        consummation thereof. The foregoing provision shall apply even in the
        event one or more Investors have exercised their Rights of First Offer
        hereunder, provided, however, that no Subsequent Financing shall have
        been consummated. 

	 	 	 	 
	4. 	Sale of Additional Securities.
      

	 	 	 	 
		4.1 
	Sale of Securities Below Purchase
        Price. In the event the Corporation issues or sells Common Shares
        within twelve (12) months after the Closing Date at a price per Common
        Share below CDN$0.22 or issues or sells securities exercisable or convertible
        into Common Shares of the Corporation at a price per Common Share below
        CDN$0.22 (the “Down Round Financing”), the Investor shall be
        issued an additional number of Common Shares (at no additional cost to
        the Investor) for each Retained Share of the Investor, such that the Investor’s
        blended purchase price per Retained Share shall be equal to the price
        per share under the Down Round Financing. Such additional Common Shares
        shall be issued by the Corporation to the Investor within ten (10) days
        of the closing of such Down Round Financing. For purposes of this Section
        4, “Retained Shares” shall mean all Common Shares acquired
        by the Investor upon conversion of the Debenture (excluding any Common
        Shares issued upon exercise of any of the Warrants). 

	 	 	 	 
		4.2 
	Down Round Financing. For
        purposes of this Section 4, “Down Round Financing” shall include
        all securities issued by the Corporation other than: 

	 	 	 	 
			(a) 
	Common Shares, Warrants or Warrant Shares issued
        pursuant to the terms and conditions of the Subscription Agreements; 

	 	 	 	 
			(b) 
	Common Shares, options or other rights to purchase
        Common Shares issued or granted to employees, officers, directors and
        consultants of the Corporation pursuant to one or more employee stock
        plans or agreements approved by the Board; 



11





			(c) 
	securities of the Corporation issued or issuable
        to financial institutions or lessors in connection with real estate leases,
        commercial credit arrangements, equipment financings or similar transactions
        approved by the Board, including, but not limited to, equipment leases
        or bank lines of credit; 

	 	 	 	 
			(d)  
	securities issued as a dividend or distribution
        on, or in connection with a split of or recapitalization of, any of the
        capital stock of the Corporation; 

	 	 	 	 
			(e) 
	securities issued by the Corporation pursuant to
        strategic partnership, joint venture or other similar arrangements approved
        by the Board where the primary purpose of the arrangement is not to raise
        capital; 

	 	 	 	 
			(f) 
	securities of the Corporation issued pursuant to
        a registration statement filed by the Corporation under the U.S. Securities
        Act; 

	 	 	 	 
			(g) 
	securities issued by the Corporation pursuant to
        an acquisition of another corporation or other entity by the Corporation
        by merger, purchase of all or substantially all of the capital stock or
        assets, or other reorganization; or 

	 	 	 	 
			(h) 
	securities of the Corporation issued pursuant to
        currently outstanding options, warrants or other rights to acquire securities
        of the Corporation. 

	 	 	 	 
	5. 	General Provisions.
      

	 	 	 	 
		5.1 
	Assignment. Notwithstanding
        anything herein to the contrary, unless otherwise consented to in writing
        by the Corporation, the rights of a Holder under this Agreement may be
        assigned only to (A) a shareholder, partner, member, Affiliate (as that
        term is defined in Rule 405 of Regulation C under the U.S. Securities
        Act), or beneficiary of such Holder; (B) a spouse, child, parent or beneficiary
        of the estate of such Holder or (C) a trust for the benefit of the persons
        set forth in (A) or (B); provided, however, that any transfer to any Affiliate
        is permitted only if such Affiliate is not: (i) a competitor of the Corporation;
        (ii) a holder of 5% or more of the equity of a competitor of the Corporation,
        or (iii) an entity of which 5% or more of its securities are held by a
        competitor of the Corporation; provided further that no party may be assigned
        any of the foregoing rights unless the Corporation is given written notice
        by the assigning party at the time of such assignment stating the name,
        address and tax identification number of the assignee(s) and identifying
        the securities of the Corporation as to which the rights in question are
        being assigned; and provided further that any such assignee shall receive
        such assigned rights subject to all the terms and conditions of this Agreement,
        including without limitation the provisions of this Section 5. 

	 	 	 	 
		5.2 
	Amendment of Rights. Any
        provision of this Agreement may be amended and the observance thereof
        may be waived (either generally or in a particular instance and either
        retroactively or prospectively), only with the written consent of the
        Corporation and two-thirds (2/3) of all Registrable Securities then held
        by all 



12





			Investors or their permitted assignees or transferees
        (except with respect to Section 3 where only a majority of all Registrable
        Securities then held by all Investors or their permitted assignees or
        transferees is required). Any amendment or waiver effected in accordance
        with this Section 5.2 shall be binding upon each Holder and the Corporation.
      

	 	 	 
	 	5.3 	Notices. Any notice, request
        or other communication required or permitted hereunder shall be in writing
        and shall be deemed to have been duly given if: (i) upon delivery if personally
        delivered to the party to be notified, (ii) three (3) days following deposit
        in the mail by registered or certified mail, return receipt requested,
        postage prepaid, or (iii) when receipt is confirmed as evidenced by a
        transmittal report if sent via facsimile to the appropriate facsimile
        number listed on the signature pages attached hereto. Any party hereto
        may designate a new address by ten (10) days advance written notice to
        the other parties in the matter set forth above. 

	 	 	 
	 	5.4 	Entire Agreement. This Agreement
        constitutes and contains the entire agreement and understanding of the
        parties with respect to the subject matter hereof and supersedes any and
        all prior negotiations, correspondence, agreements, understandings, duties
        or obligations between the parties respecting the subject matter hereof.
      

	 	 	 
	 	5.5 	Governing Law. This Agreement
        shall be governed by and construed in accordance with the laws of the
        Province of Alberta and the laws of Canada applicable therein. The parties
        hereto hereby submit to the exclusive jurisdiction and venue of the courts
        of Alberta. 

	 	 	 
	 	5.6 	Severability. If one or more
        provisions of this Agreement are held to be unenforceable under applicable
        law, then such provision(s) shall be excluded from this Agreement and
        the balance of this Agreement shall be interpreted as if such provision(s)
        were so excluded and shall be enforceable in accordance with its terms.
      

	 	 	 
	 	5.7 	Third Parties. Nothing in this
        Agreement, express or implied, is intended to confer upon any person,
        other than the parties hereto and their successors and assigns, any rights
        or remedies under or by reason of this Agreement. 

	 	 	 
	 	5.8 	Successors and Assigns. Subject
        to the provisions of Section 5.1, the provisions of this Agreement shall
        inure to the benefit of, and shall be binding upon, the successors and
        permitted assigns of the parties hereto. 

	 	 	 
	 	5.9 	Captions. The captions to sections
        of this Agreement have been inserted for identification and reference
        purposes only and shall not be used to construe or interpret this Agreement.
      



13





	 	5.10 	Counterparts. This Agreement
        may be executed in counterparts, each of which shall be deemed an original,
        but all of which together shall constitute one and the same instrument.
      

	 	 	 
	 	5.11 	Costs and Attorneys’ Fees.
        In the event that any action, suit or other proceeding is instituted
        concerning or arising out of this Agreement or any transaction contemplated
        hereunder, the prevailing party shall recover all of such party’s
        costs and attorneys’ fees incurred in each such action, suit or other
        proceeding, including any and all appeals or petitions therefrom. 

	 	 	 
	 	5.12 	Adjustments in Securities and Certain Other
        Changes. Wherever in this Agreement there is a reference
        to a specific number of securities of the Corporation of any class or
        series, then, upon the occurrence of any subdivision, combination or dividend
        of such class or series of securities, the specific number of securities
        so referenced in this Agreement shall automatically be proportionally
        adjusted to reflect the affect on the outstanding securities of such class
        or series of securities by such subdivision, combination or dividend.
      

	 	 	 
	 	5.13 	Aggregation of Securities. All
        securities held or acquired by affiliated entities or persons shall be
        aggregated together for the purpose of determining the availability of
        any rights under this Agreement. 



[Signature Page Follows]

14




SIGNATURE PAGE TO INVESTORS’ RIGHTS AGREEMENT

                     
  IN WITNESS WHEREOF, the parties hereto have executed this Investors’
Rights Agreement as of the date and year first above written.

	 	CORPORATION: 
	 	  
	 	  
	 	  
	 	CARBIZ INC., 
	 	A corporation formed under the laws of the
      province of Ontario, Canada 
	 	  
	 	  
	 	  
	 	  
	 	  
	 	Carl Ritter, Chief Executive Officer 
	 	  
	 	Address: ___________________________________________
	 	___________________________________________________
	 	Facsimile Number:
  ____________________________________






SIGNATURE PAGE TO INVESTORS’ RIGHTS AGREEMENT

	 	INVESTORS: 
	 	  
	 	  
	 	  
	 	  
	 	By:
      _______________________________________________
	 	Its:
      _______________________________________________
	 	Print
      Name: _________________________________________
	 	__________________________________________________
	 	Address: ___________________________________________
	 	Facsimile Number:
  ____________________________________


ii




EXHIBIT A

SCHEDULE OF INVESTORS


	Investor 	Amount of Debenture 	Address