Filed by Automated Filing Services Inc. (604) 609-0244 - Carbiz, Inc. - Exhibit 10.11






WARRANT 


  
    
      THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES
        ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED
        STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”),
        OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THESE SECURITIES
        MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS SUCH
        SECURITIES ARE REGISTERED UNDER THE 1933 ACT AND APPLICABLE STATE SECURITIES
        LAWS OR SUCH SECURITIES ARE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
        IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE 1933 ACT
        OR ANY APPLICABLE STATE SECURITIES LAW AND THE COMPANY WILL BE PROVIDED
        WITH OPINION OF COUNSEL IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY
        OR OTHER SUCH INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT
        SUCH EXEMPTIONS ARE AVAILABLE.

      WITHOUT COMPLIANCE WITH ALL APPLICABLE CANADIAN SECURITIES
        LEGISLATION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE
        SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED IN CANADA OR TO OR
        FOR THE BENEFIT OF A CANADIAN RESIDENT UNTIL JULY 1, 2007 

    

  



CARBIZ INC. 

Warrant To Purchase Common Shares 

	Warrant No.: _____	Number of Shares: 1,250,000



Date of Issuance: February 28, 2007 

Carbiz Inc., an Ontario, Canada corporation (the “Company”),
hereby certifies that, for Ten United States Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Trafalgar Capital Specialized Investment Fund, Luxembourg,
(“Trafalgar”), the registered holder hereof or its permitted assigns, is
entitled, subject to the terms set forth below, to purchase from the Company
upon surrender of this Warrant, at any time or times on or after the date
hereof, but not after 11:59 P.M. Eastern Time on the Expiration Date (as defined
herein) one million two hundred fifty thousand (1,250,000) fully paid and
nonassessable shares of Common Shares (as defined herein) of the Company (the
“Warrant Shares”) at the exercise price per share provided in Section 1(b) below
or as 




subsequently adjusted; provided, however, that in no event
shall the holder be entitled to exercise this Warrant for a number of Warrant
Shares in excess of that number of Warrant Shares which, upon giving effect to
such exercise, would cause the aggregate number of shares of Common Shares
beneficially owned by the holder and its affiliates to exceed 4.99% of the
outstanding shares of the Common Shares following such exercise, except within
sixty (60) days of the Expiration Date. For purposes of the foregoing proviso,
the aggregate number of shares of Common Shares beneficially owned by the holder
and its affiliates shall include the number of shares of Common Shares issuable
upon exercise of this Warrant with respect to which the determination of such
proviso is being made, but shall exclude shares of Common Shares which would be
issuable upon (i) exercise of the remaining, unexercised Warrants beneficially
owned by the holder and its affiliates and (ii) exercise or conversion of the
unexercised or unconverted portion of any other securities of the Company
beneficially owned by the holder and its affiliates (including, without
limitation, any convertible notes or preferred stock) subject to a limitation on
conversion or exercise analogous to the limitation contained herein. Except as
set forth in the preceding sentence, for purposes of this paragraph, beneficial
ownership shall be calculated in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended. For purposes of this Warrant, in determining
the number of outstanding shares of Common Shares a holder may rely on the
number of outstanding shares of Common Shares as reflected in (1) the Company’s
most recent Form 10-QSB or Form 10-KSB, or such comparable form as the case may
be, (2) a more recent public announcement by the Company or (3) any other notice
by the Company or its transfer agent setting forth the number of shares of
Common Shares outstanding. Upon the written request of any holder, the Company
shall promptly, but in no event later than one (1) Business Day following the
receipt of such notice, confirm in writing to any such holder the number of
shares of Common Shares then outstanding. In any case, the number of outstanding
shares of Common Shares shall be determined after giving effect to the exercise
of Warrants (as defined below) by such holder and its affiliates since the date
as of which such number of outstanding shares of Common Shares was reported.


          Section
1. 

                    (a)      This
Warrant is the Common Shares purchase warrant (the “Warrant”) issued pursuant to
a secured convertible debenture dated February 28, 2007 by and between the
Company and Trafalgar (the “Convertible Debenture”). 

                    (b)     
Definitions. The following words and terms as used in this Warrant shall
have the following meanings: 

                              (i)      “Approved
Stock Plan” means any employee benefit plan which has been approved by the
Board of Directors of the Company, pursuant to which the Company’s securities
may be issued to any employee, officer or director for services provided to the
Company. 

                              (ii)     
“Business Day” means any day other than Saturday, Sunday or other day on
which commercial banks in the City of New York are authorized or required by law
to remain closed. 

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                              (iii)     
“Closing Bid Price” means the closing bid price of Common Shares as
quoted on the Principal Market (as reported by Bloomberg Financial Markets
(“Bloomberg”) through its “Volume at Price” function). 

                              (iv)     
“Common Shares” means (i) the Company’s Common Shares, par value $.01 per
share, and (ii) any capital stock into which such Common Shares shall have been
changed or any capital stock resulting from a reclassification of such Common
Shares. 

                              (v)     
“Excluded Securities” means, provided such security is issued at a price
which is greater than or equal to the arithmetic average of the Closing Bid
Prices of the Common Shares for the ten (10) consecutive trading days
immediately preceding the date of issuance, any of the following: (a) any
issuance by the Company of securities in connection with a strategic partnership
or a joint venture (the primary purpose of which is not to raise equity
capital), (b) any issuance by the Company of securities as consideration for a
merger or consolidation or the acquisition of a business, product, license, or
other assets of another person or entity and (c) options to purchase shares of
Common Shares, provided (I) such options are issued after the date of this
Warrant to employees of the Company within thirty (30) days of such employee’s
starting his employment with the Company, and (II) the exercise price of such
options is not less than the Closing Bid Price of the Common Shares on the date
of issuance of such option. 

                              (vi)      “Expiration
Date” means the date five (5) years from the Issuance Date of this Warrant
or, if such date falls on a Saturday, Sunday or other day on which banks are
required or authorized to be closed in the City of New York or the State of New
York or on which trading does not take place on the Principal Exchange or
automated quotation system on which the Common Shares is traded (a “Holiday”),
the next date that is not a Holiday. 

                              (vii)      “Issuance
Date” means the date hereof. 

                              (viii)      “Options”
means any rights, warrants or options to subscribe for or purchase Common Shares
or Convertible Securities.

                              (ix)     
“Other Securities” means (i) those options and warrants of the Company
issued prior to, and outstanding on, the Issuance Date of this Warrant, (ii) the
shares of Common Shares issuable on exercise of such options and warrants,
provided such options and warrants are not amended after the Issuance Date of
this Warrant and (iii) the shares of Common Shares issuable upon exercise of
this Warrant.

                              (x)     
“Person” means an individual, a limited liability company, a partnership,
a joint venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof. 

                              (xi)     
“Principal Market” means the New York Stock Exchange, the American Stock
Exchange, the Nasdaq Global Market, the Nasdaq Capital Market, whichever is at
the time the principal trading exchange or market for such security, or the
over-the-counter market on the electronic bulletin board for such security as
reported by Bloomberg or, if no bid or sale information is reported for such
security by Bloomberg, then the average of the bid prices 

3 




of each of the market makers for such security as reported in
the “pink sheets” by the National Quotation Bureau, Inc. 

                              (xii)      “Securities
Act” means the Securities Act of 1933, as amended.

                              (xiii)     
“Warrant” means this Warrant and all Warrants issued in exchange,
transfer or replacement thereof.

                              (xiv)     
“Warrant Exercise Price” shall be fifteen cents (US$0.15), or as
subsequently adjusted as provided in Section 8 hereof.

                              (xv)      “Warrant
Shares” means the shares of Common Shares issuable at any time upon exercise
of this Warrant.

                    (c)      Other
Definitional Provisions.

                              (i)     
Except as otherwise specified herein, all references herein (A) to the Company
shall be deemed to include the Company’s successors and (B) to any applicable
law defined or referred to herein shall be deemed references to such applicable
law as the same may have been or may be amended or supplemented from time to
time.

                              (ii)      When
used in this Warrant, the words “herein”, “hereof”, and “hereunder” and
words of similar import, shall refer to this Warrant as a whole and not to any
provision of this Warrant, and the words “Section”, “Schedule”, and “Exhibit”
shall refer to Sections of, and Schedules and Exhibits to, this Warrant unless
otherwise specified.

                              (iii)     
Whenever the context so requires, the neuter gender includes the masculine or
feminine, and the singular number includes the plural, and vice versa.

          Section
2.      Exercise of Warrant. Subject to the
terms and conditions hereof, this Warrant may be exercised by the holder hereof
then registered on the books of the Company, pro rata as hereinafter provided,
at any time on any Business Day on or after the opening of business on such
Business Day, commencing with the first day after the date hereof, and prior to
11:59 P.M. Eastern Time on the Expiration Date, by (i) delivery of a written
notice, in the form of the subscription notice attached as Exhibit A hereto (the
“Exercise Notice”), of such holder’s election to exercise this Warrant, which
notice shall specify the number of Warrant Shares to be purchased, (ii) payment
to the Company of an amount equal to the Warrant Exercise Price(s) applicable to
the Warrant Shares being purchased, multiplied by the number of Warrant Shares
(at the applicable Warrant Exercise Price) as to which this Warrant is being
exercised (plus any applicable issue or transfer taxes) (the “Aggregate Exercise
Price”): (a) in cash or wire transfer of immediately available funds, (b) using
shares of Common Stock of the Company having a fair market value equal to the
Aggregate Exercise Price, or (c) by delivery of a written notice of Net
Exercise, as defined in the following paragraph and (iii) the surrender of this
Warrant (or an indemnification undertaking with respect to this Warrant in the
case of its loss, theft or destruction) to a common carrier for overnight
delivery to the Company as soon as practicable following such date. In the event
of any exercise of the rights represented by this Warrant in compliance with
this Section 2(a), the Company shall on the fifth (5th) Business Day following
the date of receipt of the Exercise Notice, the Aggregate Exercise Price and
this 

4 




Warrant (or an indemnification undertaking with respect to this
Warrant in the case of its loss, theft or destruction) and the receipt of the
representations of the holder specified in Section 6 hereof, if requested by the
Company (the “Exercise Delivery Documents”), and if the Common Shares is DTC
eligible credit such aggregate number of shares of Common Shares to which the
holder shall be entitled to the holder’s or its designee’s balance account with
The Depository Trust Company; provided, however, if the holder who submitted the
Exercise Notice requested physical delivery of any or all of the Warrant Shares,
or, if the Common Shares is not DTC eligible then the Company shall, on or
before the fifth (5th) Business Day following receipt of the Exercise
Delivery Documents, issue and surrender to a common carrier for overnight
delivery to the address specified in the Exercise Notice, a certificate,
registered in the name of the holder, for the number of shares of Common Shares
to which the holder shall be entitled pursuant to such request. Upon delivery of
the Exercise Notice and Aggregate Exercise Price referred to in clause (ii)
above the holder of this Warrant shall be deemed for all corporate purposes to
have become the holder of record of the Warrant Shares with respect to which
this Warrant has been exercised. In the case of a dispute as to the
determination of the Warrant Exercise Price, the Closing Bid Price or the
arithmetic calculation of the Warrant Shares, the Company shall promptly issue
to the holder the number of Warrant Shares that is not disputed and shall submit
the disputed determinations or arithmetic calculations to the holder via
facsimile within one (1) Business Day of receipt of the holder’s Exercise
Notice. If the holder and the Company are unable to agree upon the determination
of the Warrant Exercise Price or arithmetic calculation of the Warrant Shares
within one (1) day of such disputed determination or arithmetic calculation
being submitted to the holder, then the Company shall immediately submit via
facsimile (i) the disputed determination of the Warrant Exercise Price or the
Closing Bid Price to an independent, reputable investment banking firm or (ii)
the disputed arithmetic calculation of the Warrant Shares to its independent,
outside accountant. The Company shall cause the investment banking firm or the
accountant, as the case may be, to perform the determinations or calculations
and notify the Company and the holder of the results no later than forty-eight
(48) hours from the time it receives the disputed determinations or
calculations. Such investment banking firm’s or accountant’s determination or
calculation, as the case may be, shall be deemed conclusive absent manifest
error. 

          In
lieu of exercising this Warrant via cash payment or delivery of shares, holder
may elect to receive shares equal to the value of this Warrant (or portion
thereof being exercised) by surrender of this Warrant at the principal office of
the Company together with notice of election to exercise by means of a Net
Exercise in which event the Company shall issue to holder a number of shares of
the Company computed using the following formula:

	 	X= 	Y(A-B)    
	 	  	      A
    
	 	  	  
	 	Where X = 	the number of shares of Common
      Stock to be issued to the holder 
	 	  	  
		
      Y = 
	
      the number of shares of Common Stock purchasable under
      this Warrant or, if only a portion of this Warrant is being exercised, the
      portion of this Warrant being exercised (at the date of such calculation)
      



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		A = 	the Fair Market Value of one
      share of the Company’s Common Stock (at the date of such calculation)
  
	 	  	  
	 	B = 	the Exercise Price per share (as
      adjusted to the date of such calculation). 


          The
foregoing notwithstanding, this Warrant may be exercised only by the payment of
cash as provided under clause (ii)(a) of the first paragraph of Section 2 above
in the event that at the time of exercise the Company is not in default under
the Convertible Debentures and the Warrant Shares are subject to an effective
registration statement or are capable of being freely transferred within the
United States by the Warrant holder pursuant to Regulation S. 

                    (a)      Unless
the rights represented by this Warrant shall have expired or shall have been
fully exercised, the Company shall, as soon as practicable and in no event later
than five (5) Business Days after any exercise and at its own expense, issue a
new Warrant identical in all respects to this Warrant exercised except it shall
represent rights to purchase the number of Warrant Shares purchasable
immediately prior to such exercise under this Warrant exercised, less the number
of Warrant Shares with respect to which such Warrant is exercised. 

                    (b)      No
fractional Warrant Shares are to be issued upon any pro rata exercise of this
Warrant, but rather the number of Warrant Shares issued upon such exercise of
this Warrant shall be rounded up or down to the nearest whole number. 

                    (c)     
If the Company or its Transfer Agent shall fail for any reason or for no reason
to issue to the holder within ten (10) days of receipt of the Exercise Delivery
Documents, a certificate for the number of Warrant Shares to which the holder is
entitled or to credit the holder’s balance account with The Depository Trust
Company for such number of Warrant Shares to which the holder is entitled upon
the holder’s exercise of this Warrant, the Company shall, in addition to any
other remedies under this Warrant or the Placement Agent Agreement or otherwise
available to such holder, pay as additional damages in cash to such holder on
each day the issuance of such certificate for Warrant Shares is not timely
effected an amount equal to 0.025% of the product of (A) the sum of the number
of Warrant Shares not issued to the holder on a timely basis and to which the
holder is entitled, and (B) the Closing Bid Price of the Common Shares for the
trading day immediately preceding the last possible date which the Company could
have issued such Common Shares to the holder without violating this Section 2.


                    (d)     
If within ten (10) days after the Company’s receipt of the Exercise Delivery
Documents, the Company fails to deliver a new Warrant to the holder for the
number of Warrant Shares to which such holder is entitled pursuant to Section 2
hereof, then, in addition to any other available remedies under this Warrant or
the Placement Agent Agreement, or otherwise available to such holder, the
Company shall pay as additional damages in cash to such holder on each day after
such tenth (10th) day that such delivery of such new Warrant is not
timely effected in an amount equal to 0.25% of the product of (A) the number of
Warrant Shares represented by the portion of this Warrant which is not being
exercised and (B) the Closing Bid Price of the Common Shares for the trading day
immediately preceding the last possible date which the Company could have issued
such Warrant to the holder without violating this Section 2. 

6 




                    (e)      This
Warrant may not be exercised unless an exemption is available from the
registration requirements under the United States Securities Act of 1933, as
amended (the “U.S. Securities Act”), and the securities laws of all applicable
states, and the Company has received an opinion of counsel or other evidence to
such effect satisfactory to it; provided, however, that a holder who acquired
this Warrant in the Company’s private placement of such securities who was and
remains outside the United States and not a “U.S. person,” as such term is
defined in Regulation S under the U.S. Securities Act, will not be required to
deliver an opinion of counsel in connection with the exercise of such Warrant.
Upon exercise of this Warrant, the certificate representing the Warrant Shares
will bear a legend restricting transfer without registration under the U.S.
Securities Act and applicable state securities laws unless an exemption from
registration is available and will contain any other restrictions required by
applicable United States federal or state securities laws. Further,
without compliance with all applicable Canadian securities legislation, the
securities represented by this certificate may not be sold, transferred,
hypothecated or otherwise traded in Canada or to or for the benefit of a
Canadian resident until July 1, 2007.

          Section
3.      Covenants as to Common Shares. The
Company hereby covenants and agrees as follows: 

                    (a)     
This Warrant is, and any Warrants issued in substitution for or replacement of
this Warrant will upon issuance be, duly authorized and validly issued. 

                    (b)      All
Warrant Shares which may be issued upon the exercise of the rights represented
by this Warrant will, upon issuance, be validly issued, fully paid and
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof. 

                    (c)     
During the period within which the rights represented by this Warrant may be
exercised, the Company will at all times have authorized and reserved at least
one hundred percent (100%) of the number of shares of Common Shares needed to
provide for the exercise of the rights then represented by this Warrant and the
par value of said shares will at all times be less than or equal to the
applicable Warrant Exercise Price. If at any time the Company does not have a
sufficient number of shares of Common Shares authorized and available, then the
Company shall call and hold a special meeting of its shareholders within sixty
(60) days of that time for the sole purpose of increasing the number of
authorized shares of Common Shares. 

                    (d)      If
at any time after the date hereof the Company shall file a registration
statement, the Company shall include the Warrant Shares issuable to the holder,
pursuant to the terms of this Warrant. 

                    (e)     
The Company will not, by amendment of its Articles of Incorporation or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed by it hereunder, but will at all times in good faith assist in the
carrying out of all the provisions of this Warrant and in the taking of all such
action as may reasonably be requested by the holder of this Warrant in order to
protect the exercise 

7 




privilege of the holder of this Warrant against dilution or
other impairment, consistent with the tenor and purpose of this Warrant. The
Company will not increase the par value of any shares of Common Shares
receivable upon the exercise of this Warrant above the Warrant Exercise Price
then in effect, and (ii) will take all such actions as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of Common Shares upon the exercise of this Warrant.


                    (f)      This
Warrant will be binding upon any entity succeeding to the Company by merger,
consolidation or acquisition of all or substantially all of the Company’s
assets. 

          Section
4.      Taxes. The Company shall pay any and all
taxes, except any applicable withholding, which may be payable with respect to
the issuance and delivery of Warrant Shares upon exercise of this Warrant. 

          Section
5.      Warrant Holder Not Deemed a
Shareholder. Except as otherwise specifically provided herein, no holder, as
such, of this Warrant shall be entitled to vote or receive dividends or be
deemed the holder of shares of capital stock of the Company for any purpose, nor
shall anything contained in this Warrant be construed to confer upon the holder
hereof, as such, any of the rights of a shareholder of the Company or any right
to vote, give or withhold consent to any corporate action (whether any
reorganization, issue of stock, reclassification of stock, consolidation,
merger, conveyance or otherwise), receive notice of meetings, receive dividends
or subscription rights, or otherwise, prior to the issuance to the holder of
this Warrant of the Warrant Shares which he or she is then entitled to receive
upon the due exercise of this Warrant. In addition, nothing contained in this
Warrant shall be construed as imposing any liabilities on such holder to
purchase any securities (upon exercise of this Warrant or otherwise) or as a
shareholder of the Company, whether such liabilities are asserted by the Company
or by creditors of the Company. Notwithstanding this Section 5, the Company will
provide the holder of this Warrant with copies of the same notices and other
information given to the shareholders of the Company generally,
contemporaneously with the giving thereof to the shareholders. 

          Section
6.      Representations of Holder. If such
holder cannot make the appropriate representations set forth in the Exercise
Notice in order to confirm compliance with any applicable United States federal
or state securities laws, the Company is under no obligation to issue the
Warrant Shares. 

          Section
7.      Ownership and Transfer. 

                    (a)      The
Company shall maintain at its principal executive offices (or such other office
or agency of the Company as it may designate by notice to the holder hereof), a
register for this Warrant, in which the Company shall record the name and
address of the person in whose name this Warrant has been issued, as well as the
name and address of each transferee. The Company may treat the person in whose
name any Warrant is registered on the register as the owner and holder thereof
for all purposes, notwithstanding any notice to the contrary, but in all events
recognizing any transfers made in accordance with the terms of this Warrant.


8 




          Section
8.      Adjustment of Warrant Exercise Price
and Number of Shares. Other than as a result of (i) issuances or sales of
any Options or Warrants to purchase Common Shares directly to Trafalgar, or any
Person which controls, is controlled by, or is under common control with,
Trafalgar, or as a result of the issuance of any Common Shares upon the
conversion of the Convertible Debenture or any other convertible debentures
issued to Trafalgar, or any Person which controls, is controlled by, or is under
common control with, Trafalgar, or (ii) the issuance to other Persons of
Warrants and/or Convertible Securities which contain terms that would require an
adjustment under this Section 8 but for the waiver of such adjustment by
Trafalgar, which waiver is received prior to the issuance thereof, the Warrant
Exercise Price and the number of Common Shares issuable upon exercise of this
Warrant shall be adjusted from time to time as follows: 

                    (a)      Adjustment
of Warrant Exercise Price and Number of Shares upon Issuance of Common
Shares. If and whenever on or after the Issuance Date of this Warrant, the
Company issues or sells, or is deemed to have issued or sold, any shares of
Common Shares (other than (i) Excluded Securities and (ii) shares of Common
Shares which are issued or deemed to have been issued by the Company in
connection with an Approved Stock Plan or upon exercise or conversion of the
Other Securities) for a consideration per share less than a price (the
“Applicable Price”) equal to the Warrant Exercise Price in effect immediately
prior to such issuance or sale, then immediately after such issue or sale the
Warrant Exercise Price then in effect shall be reduced to an amount equal to
such consideration per share. Upon each such adjustment of the Warrant Exercise
Price hereunder, the number of Warrant Shares issuable upon exercise of this
Warrant shall be adjusted to the number of shares determined by multiplying the
Warrant Exercise Price in effect immediately prior to such adjustment by the
number of Warrant Shares issuable upon exercise of this Warrant immediately
prior to such adjustment and dividing the product thereof by the Warrant
Exercise Price resulting from such adjustment. 

                    (b)     
Effect on Warrant Exercise Price of Certain Events. For purposes of
determining the adjusted Warrant Exercise Price under Section 8(a) above, the
following shall be applicable: 

                              (i)      Issuance
of Options. If after the date hereof, the Company in any manner grants any
Options and the lowest price per share for which one share of Common Shares is
issuable upon the exercise of any such Option or upon conversion or exchange of
any convertible securities issuable upon exercise of any such Option is less
than the Applicable Price, then such share of Common Shares shall be deemed to
be outstanding and to have been issued and sold by the Company at the time of
the granting or sale of such Option for such price per share. For purposes of
this Section 8(b)(i), the lowest price per share for which one share of Common
Shares is issuable upon exercise of such Options or upon conversion or exchange
of such Convertible Securities shall be equal to the sum of the lowest amounts
of consideration (if any) received or receivable by the Company with respect to
any one share of Common Shares upon the granting or sale of the Option, upon
exercise of the Option or upon conversion or exchange of any convertible
security issuable upon exercise of such Option. No further adjustment of the
Warrant Exercise Price shall be made upon the actual issuance of such Common
Shares or of such convertible securities upon the exercise of such Options or
upon the actual issuance of such Common Shares upon conversion or exchange of
such convertible securities. 

9 




                              (ii)      Issuance
of Convertible Securities. If the Company in any manner issues or sells any
convertible securities and the lowest price per share for which one share of
Common Shares is issuable upon the conversion or exchange thereof is less than
the Applicable Price, then such share of Common Shares shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the
issuance or sale of such convertible securities for such price per share. For
the purposes of this Section 8(b)(ii), the lowest price per share for which one
share of Common Shares is issuable upon such conversion or exchange shall be
equal to the sum of the lowest amounts of consideration (if any) received or
receivable by the Company with respect to one share of Common Shares upon the
issuance or sale of the convertible security and upon conversion or exchange of
such convertible security. No further adjustment of the Warrant Exercise Price
shall be made upon the actual issuance of such Common Shares upon conversion or
exchange of such convertible securities, and if any such issue or sale of such
convertible securities is made upon exercise of any Options for which adjustment
of the Warrant Exercise Price had been or are to be made pursuant to other
provisions of this Section 8(b), no further adjustment of the Warrant Exercise
Price shall be made by reason of such issue or sale.

                              (iii)     
Change in Option Price or Rate of Conversion. If the purchase price
provided for in any Options, the additional consideration, if any, payable upon
the issue, conversion or exchange of any convertible securities, or the rate at
which any convertible securities are convertible into or exchangeable for Common
Shares changes at any time, the Warrant Exercise Price in effect at the time of
such change shall be adjusted to the Warrant Exercise Price which would have
been in effect at such time had such Options or convertible securities provided
for such changed purchase price, additional consideration or changed conversion
rate, as the case may be, at the time initially granted, issued or sold and the
number of Warrant Shares issuable upon exercise of this Warrant shall be
correspondingly readjusted. For purposes of this Section 8(b)(iii), if the terms
of any Option or convertible security that was outstanding as of the Issuance
Date of this Warrant are changed in the manner described in the immediately
preceding sentence, then such Option or convertible security and the Common
Shares deemed issuable upon exercise, conversion or exchange thereof shall be
deemed to have been issued as of the date of such change. No adjustment pursuant
to this Section 8(b) shall be made if such adjustment would result in an
increase of the Warrant Exercise Price then in effect. 

                    (c)      Effect
on Warrant Exercise Price of Certain Events. For purposes of determining the
adjusted Warrant Exercise Price under Sections 8(a) and 8(b), the following
shall be applicable: 

                              (i)      Calculation
of Consideration Received. If any Common Shares, Options or convertible
securities are issued or sold or deemed to have been issued or sold for cash,
the consideration received therefore will be deemed to be the net amount
received by the Company therefore. If any Common Shares, Options or convertible
securities are issued or sold for a consideration other than cash, the amount of
such consideration received by the Company will be the fair value of such
consideration, except where such consideration consists of marketable
securities, in which case the amount of consideration received by the Company
will be the market price of such securities on the date of receipt of such
securities. If any Common Shares, Options or convertible securities are issued
to the owners of the non-surviving entity in connection with any merger in which
the Company is the surviving entity, the amount of 

10 




consideration therefore will be deemed to be the fair value of
such portion of the net assets and business of the non-surviving entity as is
attributable to such Common Shares, Options or convertible securities, as the
case may be. The fair value of any consideration other than cash or securities
will be determined jointly by the Company and the holders of Warrants
representing at least two-thirds (b) of the Warrant Shares issuable upon
exercise of the Warrants then outstanding. If such parties are unable to reach
agreement within ten (10) days after the occurrence of an event requiring
valuation (the “Valuation Event”), the fair value of such consideration will be
determined within five (5) Business Days after the tenth (10th) day
following the Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the holders of Warrants representing at least
two-thirds (b) of the Warrant Shares issuable upon exercise of the Warrants then
outstanding. The determination of such appraiser shall be final and binding upon
all parties and the fees and expenses of such appraiser shall be borne jointly
by the Company and the holders of Warrants. 

                              (ii)      Integrated
Transactions. In case any Option is issued in connection with the issue or
sale of other securities of the Company, together comprising one integrated
transaction in which no specific consideration is allocated to such Options by
the parties thereto, the Options will be deemed to have been issued for a
consideration of $.01. 

                              (iii)      Treasury
Shares. The number of shares of Common Shares outstanding at any given time
does not include shares owned or held by or for the account of the Company, and
the disposition of any shares so owned or held will be considered an issue or
sale of Common Shares. 

                              (iv)      Record
Date. If the Company takes a record of the holders of Common Shares for the
purpose of entitling them (1) to receive a dividend or other distribution
payable in Common Shares, Options or in convertible securities or (2) to
subscribe for or purchase Common Shares, Options or convertible securities, then
such record date will be deemed to be the date of the issue or sale of the
shares of Common Shares deemed to have been issued or sold upon the declaration
of such dividend or the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may be. 

                    (d)      Adjustment
of Warrant Exercise Price upon Subdivision or Combination of Common Shares.
If the Company at any time after the date of issuance of this Warrant subdivides
(by any stock split, stock dividend, recapitalization or otherwise) one or more
classes of its outstanding shares of Common Shares into a greater number of
shares, any Warrant Exercise Price in effect immediately prior to such
subdivision will be proportionately reduced and the number of shares of Common
Shares obtainable upon exercise of this Warrant will be proportionately
increased. If the Company at any time after the date of issuance of this Warrant
combines (by combination, reverse stock split or otherwise) one or more classes
of its outstanding shares of Common Shares into a smaller number of shares, any
Warrant Exercise Price in effect immediately prior to such combination will be
proportionately increased and the number of Warrant Shares issuable upon
exercise of this Warrant will be proportionately decreased. Any adjustment under
this Section 8(d) shall become effective at the close of business on the date
the subdivision or combination becomes effective. 

11 




                    (e)      Distribution
of Assets. If the Company shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to holders of
Common Shares, by way of return of capital or otherwise (including, without
limitation, any distribution of cash, stock or other securities, property or
options by way of a dividend, spin off, reclassification, corporate
rearrangement or other similar transaction) (a “Distribution”), at any time
after the issuance of this Warrant, then, in each such case: 

                              (i)      any
Warrant Exercise Price in effect immediately prior to the close of business on
the record date fixed for the determination of holders of Common Shares entitled
to receive the Distribution shall be reduced, effective as of the close of
business on such record date, to a price determined by multiplying such Warrant
Exercise Price by a fraction of which (A) the numerator shall be the Closing
Sale Price of the Common Shares on the trading day immediately preceding such
record date minus the value of the Distribution (as determined in good faith by
the Company’s Board of Directors) applicable to one share of Common Shares, and
(B) the denominator shall be the Closing Sale Price of the Common Shares on the
trading day immediately preceding such record date; and 

                              (ii)      either
(A) the number of Warrant Shares obtainable upon exercise of this Warrant shall
be increased to a number of shares equal to the number of shares of Common
Shares obtainable immediately prior to the close of business on the record date
fixed for the determination of holders of Common Shares entitled to receive the
Distribution multiplied by the reciprocal of the fraction set forth in the
immediately preceding clause (i), or (B) in the event that the Distribution is
of Common Shares of a company whose Common Shares is traded on a national
securities exchange or a national automated quotation system, then the holder of
this Warrant shall receive an additional warrant to purchase Common Shares, the
terms of which shall be identical to those of this Warrant, except that such
warrant shall be exercisable into the amount of the assets that would have been
payable to the holder of this Warrant pursuant to the Distribution had the
holder exercised this Warrant immediately prior to such record date and with an
exercise price equal to the amount by which the exercise price of this Warrant
was decreased with respect to the Distribution pursuant to the terms of the
immediately preceding clause (i). 

                    (f)      Certain
Events. If any event occurs of the type contemplated by the provisions of
this Section 8 but not expressly provided for by such provisions (including,
without limitation, the granting of stock appreciation rights, phantom stock
rights or other rights with equity features), then the Company’s Board of
Directors will make an appropriate adjustment in the Warrant Exercise Price and
the number of shares of Common Shares obtainable upon exercise of this Warrant
so as to protect the rights of the holders of the Warrants; provided, except as
set forth in section 8(d),that no such adjustment pursuant to this Section 8(f)
will increase the Warrant Exercise Price or decrease the number of shares of
Common Shares obtainable as otherwise determined pursuant to this Section 8.


                    (g)      Notices.


                              (i)     
Immediately upon any adjustment of the Warrant Exercise Price, the Company will
give written notice thereof to the holder of this Warrant, setting forth in
reasonable detail, and certifying, the calculation of such adjustment. 

12 




                              (ii)      The
Company will give written notice to the holder of this Warrant at least ten (10)
days prior to the date on which the Company closes its books or takes a record
(A) with respect to any dividend or distribution upon the Common Shares, (B)
with respect to any pro rata subscription offer to holders of Common Shares or
(C) for determining rights to vote with respect to any Organic Change (as
defined below), dissolution or liquidation, provided that such information shall
be made known to the public prior to or in conjunction with such notice being
provided to such holder. 

                              (iii)     
The Company will also give written notice to the holder of this Warrant at least
ten (10) days prior to the date on which any Organic Change, dissolution or
liquidation will take place, provided that such information shall be made known
to the public prior to or in conjunction with such notice being provided to such
holder. 

          Section
9.      Purchase Rights; Reorganization,
Reclassification, Consolidation, Merger or Sale. 

                    (a)     
In addition to any adjustments pursuant to Section 8 above, if at any time the
Company grants, issues or sells any Options, Convertible Securities or rights to
purchase stock, warrants, securities or other property pro rata to the record
holders of any class of Common Shares (the “Purchase Rights”), then the holder
of this Warrant will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which such holder could have
acquired if such holder had held the number of shares of Common Shares
acquirable upon complete exercise of this Warrant immediately before the date on
which a record is taken for the grant, issuance or sale of such Purchase Rights,
or, if no such record is taken, the date as of which the record holders of
Common Shares are to be determined for the grant, issue or sale of such Purchase
Rights. 

                    (b)      Any
recapitalization, reorganization, reclassification, consolidation, merger, sale
of all or substantially all of the Company’s assets to another Person or other
transaction in each case which is effected in such a way that holders of Common
Shares are entitled to receive (either directly or upon subsequent liquidation)
stock, securities or assets with respect to or in exchange for Common Shares is
referred to herein as an “Organic Change.” Prior to the consummation of any (i)
sale of all or substantially all of the Company’s assets to an acquiring Person
or (ii) other Organic Change following which the Company is not a surviving
entity, the Company will secure from the Person purchasing such assets or the
successor resulting from such Organic Change (in each case, the “Acquiring
Entity”) a written agreement (in form and substance satisfactory to the holders
of Warrants representing at least two-thirds of the Warrant Shares issuable upon
exercise of the Warrants then outstanding) to deliver to each holder of Warrants
in exchange for such Warrants, a security of the Acquiring Entity evidenced by a
written instrument substantially similar in form and substance to this Warrant
and satisfactory to the holders of the Warrants (including an adjusted warrant
exercise price equal to the value for the Common Shares reflected by the terms
of such consolidation, merger or sale, and exercisable for a corresponding
number of shares of Common Shares acquirable and receivable upon exercise of the
Warrants without regard to any limitations on exercise, if the value so
reflected is less than any Applicable Warrant Exercise Price immediately prior
to such consolidation, merger or sale). Prior to the consummation of any other
Organic Change, the Company shall make appropriate provision (in form and
substance satisfactory to the holders of 

13 




Warrants representing a majority of the Warrant Shares
issuable upon exercise of the Warrants then outstanding) to insure that each of
the holders of the Warrants will thereafter have the right to acquire and
receive in lieu of or in addition to (as the case may be) the Warrant Shares
immediately theretofore issuable and receivable upon the exercise of such
holder’s Warrants (without regard to any limitations on exercise), such shares
of stock, securities or assets that would have been issued or payable in such
Organic Change with respect to or in exchange for the number of Warrant Shares
which would have been issuable and receivable upon the exercise of such holder’s
Warrant as of the date of such Organic Change (without taking into account any
limitations or restrictions on the exercisability of this Warrant). 

          Section
10.      Lost, Stolen, Mutilated or Destroyed
Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the
Company shall promptly, on receipt of an indemnification undertaking (or, in the
case of a mutilated Warrant, the Warrant), issue a new Warrant of like
denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.


          Section
11.      Notice. Any notices, consents,
waivers or other communications required or permitted to be given under the
terms of this Warrant must be in writing and will be deemed to have been
delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile (provided confirmation of receipt is received by the sending
party transmission is mechanically or electronically generated and kept on file
by the sending party); or (iii) one Business Day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for such
communications shall be: 

	If to Trafalgar: 	Trafalgar Capital Specialized
      Investment Fund, Luxembourg 
	 	8-10 Rue Mathias
      Hardt 
	  	BP 3023 
	  	Luxembourg L-1030 
	  	Facsimile: 
	 	011-44-207-405-0161
    
	 	And
      001-786-323-1651 
	  	
	With Copy to: 	James G. Dodrill II, P.A. 
	  	5800 Hamilton Way 
	 	Boca Raton, FL
      33496 
	  	Attention: James Dodrill, Esq.
  
	  	Telephone: (561) 862-0529 
	  	Facsimile: (561) 892-7787
  


14 





	If to the Company, to: 	Carbiz Inc. 
	  	7405 North Tamiami Trail 
	  	Sarasota, FL 34243 
	  	Attn: Mr. Carl Ritter, CEO 
	  	Telephone: (800) 547-2277 
	  	Facsimile: (941) 308-2718 
	  	 
	With a copy to: 	Troutman Sanders LLP 
	  	222 Central Park Avenue, Suite
      2000 
	  	Virginia Beach, VA 23462 
	  	Attn: Mr. Thomas M. Rose, Esq.
  
	  	Telephone: (757) 687-7715 
	  	Facsimile: (757) 687-1529
  


If to a holder of this Warrant, to it at the address and
facsimile number set forth on Exhibit C hereto, with copies to such holder’s
representatives as set forth on Exhibit C, or at such other address and
facsimile as shall be delivered to the Company upon the issuance or transfer of
this Warrant. Each party shall provide five days’ prior written notice to the
other party of any change in address or facsimile number. Written confirmation
of receipt (A) given by the recipient of such notice, consent, facsimile, waiver
or other communication, (or (B) provided by a nationally recognized overnight
delivery service shall be rebuttable evidence of personal service, receipt by
facsimile or receipt from a nationally recognized overnight delivery service in
accordance with clause (i), (ii) or (iii) above, respectively. 

          Section
12.      Date. The date of this Warrant is set
forth on page 1 hereof. This Warrant, in all events, shall be wholly void and of
no effect after the close of business on the Expiration Date, except that
notwithstanding any other provisions hereof, the provisions of Section 8(b)
shall continue in full force and effect after such date as to any Warrant Shares
or other securities issued upon the exercise of this Warrant. 

          Section
13.      Amendment and Waiver. Except as
otherwise provided herein, the provisions of the Warrants may be amended and the
Company may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, only if the Company has obtained the written
consent of the holders of Warrants representing at least two-thirds of the
Warrant Shares issuable upon exercise of the Warrants then outstanding; provided
that, except for Section 8(d), no such action may increase the Warrant Exercise
Price or decrease the number of shares or class of stock obtainable upon
exercise of any Warrant without the written consent of the holder of such
Warrant. 

          Section
14.      Descriptive Headings; Governing
Law. The descriptive headings of the several sections and paragraphs of this
Warrant are inserted for convenience only and do not constitute a part of this
Warrant. The corporate laws of the State of Florida shall govern all issues
concerning the relative rights of the Company and its shareholders. All other
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of Florida
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Florida or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of Florida
Each 

15 




party hereby irrevocably submits to the exclusive jurisdiction
of the state courts sitting in Broward County, Florida and the United States
District Court for the Southern District of Florida for the adjudication of any
dispute hereunder or in connection herewith or therewith, or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.

          Section
15.      Waiver of Jury Trial. AS A
MATERIAL INDUCEMENT FOR EACH PARTY HERETO TO ENTER INTO THIS WARRANT, THE
PARTIES HERETO HEREBY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
RELATED IN ANY WAY TO THIS WARRANT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS
ASSOCIATED WITH THIS TRANSACTION. 

          IN
  WITNESS WHEREOF, the Company has caused this Warrant to be signed as of
  the date first set forth above. 

CARBIZ INC. 

By: ________________________________________________

  Name: 

  Title: 

16 




EXHIBIT A TO WARRANT 

  

EXERCISE NOTICE 



  TO BE EXECUTED

  BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT 

  

CARBIZ INC. 

          The
undersigned holder hereby exercises the right to purchase ______________ of the
shares of Common Shares (“Warrant Shares”) of Carbiz Inc.., an Ontario, Canada
corporation (the “Company”), evidenced by the attached Warrant (the “Warrant”).
Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Warrant. 

          1.      Form
of Warrant Exercise Price. The Holder intends that payment of the Warrant
Exercise Price shall be made as a “Cash Exercise” with respect to ______________
Warrant Shares. 

          2.      Payment
of Warrant Exercise Price. The holder shall pay the sum of $______________ to
the Company in accordance with the terms of the Warrant.

          3.      Delivery
of Warrant Shares. The Company shall deliver to the holder _________ Warrant
Shares in accordance with the terms of the Warrant.

          4.      The
undersigned represents, warrants and certifies as follows (only one of the
following must be checked): 

		A. [   ] 	
      The undersigned holder (a) acquired this Warrant directly
      from the Company pursuant to a written purchase agreement for the
      acquisition of such securities, (b) at the time of exercise of this
      Warrant is not in the United States, (c) is not a “U.S. person” (a “U.S.
      Person”), as such term is defined in Regulation S under the United States
      Securities Act of 1933, as amended (the “U.S. Securities Act”), and is not
      exercising such securities on behalf of a U.S. Person or a person in the
      United States, and (d) did not execute this Notice of Exercise in the
      United States; or 

	 	  	
       

		B. [   ] 	
      The undersigned holder has delivered to the Company a
      written opinion of counsel or such other evidence in a form reasonably
      acceptable to the Company to the effect that an exemption from the
      registration requirements of the United States Securities Act of 1933, as
      amended (the “U.S. Securities Act”), and applicable state securities laws
      is available for the issuance of the Warrant Shares.




The undersigned holder understands that the certificate
representing the Warrants Shares will bear a legend restricting transfer without
registration under the U.S. Securities Act and applicable state securities laws
unless an exemption from registration is available and will contain any other
restrictions required under applicable United States federal or state securities


A-1 




laws or Canadian securities laws. With respect to Box A above,
the undersigned holder agrees to provide any additional information that the
Company may reasonably request to establish that an exclusion from registration
under the U.S. Securities Act is available for the issuance of the Warrant
Shares. Unless Box B above is checked, certificates representing Common Shares
will not be registered or delivered to an address in the United States. 

If Box B is checked, any opinion tendered or other evidence
delivered must be in form and substance reasonably satisfactory to the Company.
Holders planning to deliver such documentation in connection with the exercise
of a Warrant should contact the Company in advance to determine whether such
documentation will be acceptable to the Company. 

Date: _______________ __, ______



Name of Registered Holder 

By: _______________________________

  Name: _____________________________

  Title: ______________________________

A-2 




EXHIBIT B TO WARRANT 

FORM OF WARRANT POWER 

          FOR
VALUE RECEIVED, the undersigned does hereby assign and transfer to
________________, Federal Identification No. __________, a warrant to purchase
____________ shares of the capital stock of Carbiz Inc., an Ontario, Canada
corporation, represented by warrant certificate no. _____, standing in the name
of the undersigned on the books of said corporation. The undersigned does hereby
irrevocably constitute and appoint ______________, attorney to transfer the
warrants of said corporation, with full power of substitution in the premises.


Dated: ________________________________________                          
  __________________________________________________

By: _________________________________________

  Name: _______________________________________

  Title: ________________________________________



B-1