Filed by Automated Filing Services Inc. (604) 609-0244 -  Carbiz,  Inc. - Exhibit 10.6






REGISTRATION RIGHTS AGREEMENT 

     THIS REGISTRATION RIGHTS
AGREEMENT (this “Agreement”), dated as of September 26, 2007, by and among
CARBIZ INC., an Ontario, Canada corporation, with its principal office
located at 7405 N. Tamiami Trail, Sarasota, FL 34243 (the “Company”), and the
undersigned Investors (each, an “Investors” and collectively, the “Investors”).


     WHEREAS: 

     A. In connection with the
Securities Purchase Agreement by and among the parties hereto of even date
herewith (the “Securities Purchase Agreement”), the Company has agreed, upon the
terms and subject to the conditions of the Securities Purchase Agreement, to
issue and sell to the Investors secured convertible debentures (the “Convertible
Debentures”) which shall be convertible into that number of shares of the
Company’s common shares, with no par value (the “Common Shares”), pursuant to
the terms of the Securities Purchase Agreement for an aggregate purchase price
of One Million Five Hundred Thousand U.S. Dollars (US$1,500,000). Capitalized
terms not defined herein shall have the meaning ascribed to them in the
Securities Purchase Agreement. 

     B. To induce the Investors to
execute and deliver the Securities Purchase Agreement, the Company has agreed to
provide certain registration rights under the Securities Act of 1933, as
amended, and the rules and regulations there under, or any similar successor
statute (collectively, the “1933 Act”), and applicable state securities laws.


     NOW, THEREFORE, in
consideration of the promises and the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Investors hereby agree as follows: 

      1. DEFINITIONS. 

     As used in this Agreement, the
following terms shall have the following meanings: 

     (a) “Person” means a corporation,
a limited liability company, an association, a partnership, an organization, a
business, an individual, a governmental or political subdivision thereof or a
governmental agency. 

     (b) “Register,” “registered,” and
“registration” refer to a registration effected by preparing and filing one or
more Registration Statements (as defined below) in compliance with the 1933 Act
and pursuant to Rule 415 under the 1933 Act or any successor rule providing for
offering securities on a continuous or delayed basis (“Rule 415”), and the
declaration or ordering of effectiveness of such Registration Statement(s) by
the United States Securities and Exchange Commission (the “SEC”). 

     (c) “Registrable Securities”
means the Common Shares issuable to Investors upon conversion of the Convertible
Debentures pursuant to the Securities Purchase 




Agreement, excluding in all cases, however, any Registrable
Securities sold by Investors to the public or sold pursuant to Rule 144
promulgated under the 1933 Act. 

     (d) “Registration Statement”
means a registration statement under the 1933 Act which covers the Registrable
Securities. 

     2. REGISTRATION. 

     (a) Subject to the terms and
conditions of this Agreement, the Company shall prepare and file, no later than
ninety (90) days from the date hereof (the “Scheduled Filing Deadline”), with
the SEC a registration statement on Form F-3 under the 1933 Act (the “Initial
Registration Statement”) for the registration for the resale by all Investors
who purchased Convertible Debentures pursuant to the Securities Purchase
Agreement two hundred percent (200%) of the Common Shares which are anticipated
to be issued upon conversion of the Convertible Debentures and one hundred
percent of the shares underlying the Warrants. Such registration obligation
shall be further subject to any registration rights that predate this Agreement,
which are set forth on Schedule 2(a) attached hereto. Should the Company be
limited by the SEC (as evidenced by a written comment from the SEC) under Rule
415 with respect to the number of shares it may register in the Initial
Registration Statement or any subsequent Registration Statement filed pursuant
to this Agreement, it may limit the number of shares held by the Investors which
are included in such Registration Statement as may be necessary in order to have
such Initial Registration Statement or subsequent Registration Statement
declared effective by the SEC. In the event such limitation occurs, the Company
shall file such additional Registration Statements, by the later of thirty days
of the Investors’ demand and as soon as permitted by the SEC, as shall be
necessary for the Company to register all Common Shares which would have been
included in the Initial Registration Statement but for the limitation described
above. Additionally, subject to the Rule 415 qualifications set forth above, if
the Convertible Debentures have an outstanding balance on the one year
anniversary date of the original issuance date of the Convertible Debentures,
the Company shall file with the SEC a registration statement on Form F-1 or SB-2
(or, if the Company is then eligible, on Form F-3) covering the shares
underlying the remaining balance of the Convertible Debentures. Furthermore, in
any such event, the Company shall use its best efforts to have such subsequent
Registration Statement declared effective within sixty (60) days of the filing
thereof. The Company shall cause the Registration Statements to remain effective
for so long as the Convertible Debentures remain outstanding. Prior to the
filing of any Registration Statement registering the Registrable Securities with
the SEC, the Company shall furnish a copy of such Registration Statement to the
Investors and James G. Dodrill II, P.A. for their review and comment. The
Investors and James G. Dodrill II, P.A. shall furnish comments on the Initial
Registration Statement to the Company by the later of: (a) forty-eight (48)
hours of the receipt thereof from the Company and (b) the close of the second
business day following receipt thereof from the Company. 

     (b) Effectiveness of the Initial
Registration Statement. The Company shall use its best efforts (i) to have the
Initial Registration Statement declared effective by the SEC no later than sixty
(60) days after the filing thereof (the “Scheduled Effective Deadline”) and (ii)
to insure that the Initial Registration Statement and any subsequent
Registration Statement remains in effect until all of the Registrable Securities
have been sold, subject to the 

2 




terms and conditions of this Agreement. It shall be an event of
default hereunder if the Initial Registration Statement or any subsequent
Registration Statement is not declared effective by the SEC within sixty (60)
days after filing thereof. An event of default shall not be triggered, however,
if the Initial Registration Statement or any subsequent Registration Statement
is not declared effective by the SEC within sixty (60) days after the filing
thereof exclusively due to issues raised by the SEC in writing related to Rule
415 promulgated under the 1933 Act. 

     (c) Failure to File or Obtain
Effectiveness of the Registration Statement. In the event the Initial
Registration Statement is not filed by the Scheduled Filing Deadline or is not
declared effective by the SEC on or before the Scheduled Effective Date, or if
after the Initial Registration Statement has been declared effective by the SEC,
sales cannot be made pursuant to the Initial Registration Statement (whether
because of a failure to keep the Initial Registration Statement effective,
failure to disclose such information as is necessary for sales to be made
pursuant to the Initial Registration Statement, failure to register sufficient
Common Shares or otherwise then as partial relief for the damages to any holder
of Registrable Securities by reason of any such delay in or reduction of its
ability to sell the underlying Common Shares (which remedy shall not be
exclusive of any other remedies at law or in equity), subject to the terms of
the Subordination Agreement, the Company will pay as liquidated damages (the
“Liquidated Damages”) to the Investors, at the Investors’ option, either a cash
amount or the Company’s Common Shares within three (3) business days, after
demand therefore, equal to two percent (2%) of the principal value of the
Convertible Debentures outstanding as Liquidated Damages for each thirty (30)
day period after the Scheduled Filing Deadline or the Scheduled Effective Date
as the case may be. Total Liquidated Damages paid, however, shall not exceed an
amount equal to fifteen percent (15%) of the outstanding principal amount of the
Convertible Debentures. The Company shall not be liable, however, to pay any
Liquidated Damages if the Initial Registration Statement has not been declared
effective prior to the Scheduled Effective Date exclusively due to issues raised
by the SEC related to Rule 415 promulgated under the 1933 Act.

     (d) Liquidated Damages. The
Company and the Investors hereto acknowledge and agree that the sums payable
under subsection 2(c) above shall constitute liquidated damages and not
penalties and are in addition to all other rights of the Investors, including
the right to call a default. The parties further acknowledge that (i) the amount
of loss or damages likely to be incurred is incapable or is difficult to
precisely estimate, (ii) the amounts specified in such subsections bear a
reasonable relationship to, and are not plainly or grossly disproportionate to,
the probable loss likely to be incurred in connection with any failure by the
Company to obtain or maintain the effectiveness of the Initial Registration
Statement by the Scheduled Effective Date and thereafter, (iii) one of the
reasons for the Company and the Investors reaching an agreement as to such
amounts was the uncertainty and cost of litigation regarding the question of
actual damages, and (iv) the Company and the Investors are sophisticated
business parties and have been represented by sophisticated and able legal
counsel and negotiated this Agreement at arm’s length.

     3. RELATED OBLIGATIONS. 

     (a) The Company shall keep the
Initial Registration Statement, and any additional Registration Statement filed
as a result of the limitation set forth in Section 2(a) 

3 




hereof, effective pursuant to Rule 415 at all times until the
Convertible Debentures are no longer outstanding (the “Registration Period”),
which Registration Statements (including any amendments or supplements thereto
and prospectuses contained therein) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading. 

     (b) The Company shall prepare and
file with the SEC such amendments (including post-effective amendments) and
supplements to such Registration Statements and the prospectuses used in
connection with such Registration Statements, which prospectuses are to be filed
pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary to keep
such Registration Statements effective at all times during the Registration
Period, and, during such period, comply with the provisions of the 1933 Act with
respect to the disposition of all Registrable Securities of the Company covered
by such Registration Statements until such time as all of such Registrable
Securities shall have been disposed of or until the Registration Period
terminates in accordance with the intended methods of disposition by the seller
or sellers thereof as set forth in such Registration Statement. In the case of
amendments and supplements to a Registration Statement which are required to be
filed pursuant to this Agreement (including pursuant to this Section 3(b)) by
reason of the Company’s filing a report on Form 10-KSB, Form 10-QSB or Form 8-K
or any analogous report under the Securities Exchange Act of 1934, as amended
(the “1934 Act”), the Company shall incorporate such report by reference into
the Registration Statement, if applicable, or shall file such amendments or
supplements with the SEC on the same day on which the 1934 Act report is filed
which created the requirement for the Company to amend or supplement the
Registration Statement.

     (c) The Company shall furnish to
each Investors whose Registrable Securities are included in any Registration
Statement, without charge, (i) at least one (1) copy of such Registration
Statement as declared effective by the SEC and any amendment(s) thereto,
including financial statements and schedules, all documents incorporated therein
by reference, all exhibits and each preliminary prospectus, (ii) ten (10) copies
of the final prospectus included in such Registration Statement and all
amendments and supplements thereto (or such other number of copies as such
Investors may reasonably request) and (iii) such other documents as such
Investors may reasonably request from time to time in order to facilitate the
disposition of the Registrable Securities owned by such Investors. 

     (d) The Company shall use its
best efforts to (i) register and qualify the Registrable Securities covered by a
Registration Statement under such other securities or “blue sky” laws of such
jurisdictions in the United States as any Investors reasonably requests, (ii)
prepare and file in those jurisdictions, such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period, and (iv) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (w) make any change to its certificate of
incorporation or by-laws, (x) qualify to do business in any jurisdiction where
it would not otherwise be required to qualify but for this Section 3(d), (y)
subject itself to 

4 




general taxation in any such jurisdiction, or (z) file a
general consent to service of process in any such jurisdiction. The Company
shall promptly notify each Investors who holds Registrable Securities of the
receipt by the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or “blue sky” laws of any jurisdiction in the United States
or its receipt of actual notice of the initiation or threat of any proceeding
for such purpose. 

     (e) As promptly as practicable
after becoming aware of such event or development, the Company shall notify each
Investors in writing of the happening of any event as a result of which the
prospectus included in a Registration Statement, as then in effect, includes an
untrue statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading (provided
that in no event shall such notice contain any material, nonpublic information),
and promptly prepare a supplement or amendment to such Registration Statement to
correct such untrue statement or omission, and deliver ten (10) copies of such
supplement or amendment to each Investors. The Company shall also promptly
notify each Investors in writing (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, and when a Registration
Statement or any post-effective amendment has become effective (notification of
such effectiveness shall be delivered to each Investors by facsimile on the same
day of such effectiveness), (ii) of any request by the SEC for amendments or
supplements to a Registration Statement or related prospectus or related
information, and (iii) of the Company’s reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate. 

     (f) The Company shall use its
best efforts to prevent the issuance of any stop order or other suspension of
effectiveness of a Registration Statement, or the suspension of the
qualification of any of the Registrable Securities for sale in any jurisdiction
within the United States of America and, if such an order or suspension is
issued, to obtain the withdrawal of such order or suspension at the earliest
possible moment and to notify each Investors who holds Registrable Securities
being sold of the issuance of such order and the resolution thereof or its
receipt of actual notice of the initiation or threat of any proceeding for such
purpose. 

     (g) At the reasonable request of
any Investors, the Company shall furnish to such Investors, on the date of the
effectiveness of the Registration Statement and thereafter from time to time on
such dates as an Investors may reasonably request (i) a letter, dated such date,
from the Company’s independent certified public accountants in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, and (ii) an opinion, dated as
of such date, of counsel representing the Company for purposes of such
Registration Statement, in form, scope and substance as is customarily given in
an underwritten public offering, addressed to the Investors. 

     (h) The Company shall make
available for inspection by (i) any Investors and (ii) one (1) firm of
accountants or other agents retained by the Investors (collectively, the
“Inspectors”) all pertinent financial and other records, and pertinent
corporate documents and properties of the Company (collectively, the “Records”),
as shall be reasonably deemed necessary by each Inspector, and cause the
Company’s officers, directors and employees to supply all information which any
Inspector may reasonably request; provided, however, that 

5 




each Inspector shall agree, and each Investors hereby agrees,
to hold in strict confidence and shall not make any disclosure (except to an
Investors) or use any Record or other information which the Company determines
in good faith to be confidential, and of which determination the Inspectors are
so notified, unless (a) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in any Registration Statement or is otherwise
required under the 1933 Act, (b) the release of such Records is ordered pursuant
to a final, non-appealable subpoena or order from a court or government body of
competent jurisdiction, or (c) the information in such Records has been made
generally available to the public other than by disclosure in violation of this
or any other agreement of which the Inspector and the Investors has knowledge.
Each Investors agrees that it shall, upon learning that disclosure of such
Records is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to the Company and allow
the Company, at its expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, the Records deemed
confidential. 

     (i) The Company shall hold in
confidence and not make any disclosure of information concerning an Investors
provided to the Company unless (i) disclosure of such information is necessary
to comply with federal or state securities laws, (ii) the disclosure of such
information is necessary to avoid or correct a misstatement or omission in any
Registration Statement, (iii) the release of such information is ordered
pursuant to a subpoena or other final, non-appealable order from a court or
governmental body of competent jurisdiction, or (iv) such information has been
made generally available to the public other than by disclosure in violation of
this Agreement or any other agreement. The Company agrees that it shall, upon
learning that disclosure of such information concerning an Investors is sought
in or by a court or governmental body of competent jurisdiction or through other
means, give prompt written notice to such Investors and allow such Investors, at
the Investors’ expense, to undertake appropriate action to prevent disclosure
of, or to obtain a protective order for, such information. 

     (j) [reserved] 

     (k) The Company shall cooperate
with the Investors who hold Registrable Securities being offered and, to the
extent applicable, to facilitate the timely preparation and delivery of
certificates (not bearing any restrictive legend) representing the Registrable
Securities to be offered pursuant to a Registration Statement and enable such
certificates to be in such denominations or amounts, as the case may be, as the
Investors may reasonably request and registered in such names as the Investors
may request. 

     (l) The Company shall use its
best efforts to cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to consummate the
disposition of such Registrable Securities. 

     (m) The Company shall otherwise
use its best efforts to comply with all applicable rules and regulations of the
SEC in connection with any registration hereunder. 

     (n) Within two (2) business days
after a Registration Statement which covers Registrable Securities is declared
effective by the SEC, the Company shall deliver, and shall 

6 




cause legal counsel for the Company to deliver, to the transfer
agent for such Registrable Securities (with copies to the Investors whose
Registrable Securities are included in such Registration Statement) confirmation
that such Registration Statement has been declared effective by the SEC in the
form attached hereto as Exhibit A. 

     (o) The Company shall take all
other reasonable actions necessary to expedite and facilitate disposition by the
Investors of Registrable Securities pursuant to a Registration Statement. 

     4. OBLIGATIONS OF THE INVESTORS. 

     Each Investors agrees that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 3(f) or the first sentence of 3(e), such Investors will
immediately discontinue disposition of Registrable Securities pursuant to any
Registration Statement(s) covering such Registrable Securities until such
Investors’ receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3(e) or receipt of notice that no supplement or
amendment is required. Notwithstanding anything to the contrary, the Company
shall cause its transfer agent to deliver unlegended certificates for Common
Shares to a transferee of an Investors in accordance with the terms of the
Securities Purchase Agreement in connection with any sale under any effective
Registration Statement of Registrable Securities with respect to which an
Investors has entered into a contract for sale prior to the Investors’ receipt
of a notice from the Company of the happening of any event of the kind described
in Section 3(f) or the first sentence of 3(e) and for which the Investors has
not yet settled. No Investors shall have any right to obtain or seek an
injunction restraining or otherwise delaying any registration under this
Agreement as a result of any controversy that might arise with respect to the
interpretation or implementation of this Agreement. It shall be a condition
precedent to the obligations of the Company to take any actions pursuant to this
Agreement that the selling Investors furnish 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 the Registrable Securities, including any Liquidated Damages
relating thereto. 

     5. EXPENSES OF REGISTRATION. 

     All expenses incurred in
connection with registrations, filings or qualifications pursuant to Sections 2
and 3, including, without limitation, all registration, listing and
qualifications fees, printers, legal and accounting fees shall be paid by the
Company.

     6. INDEMNIFICATION. 

     With respect to Registrable
Securities which are included in a Registration Statement under this Agreement:


     (a) To the fullest extent
permitted by law, the Company will, and hereby does, indemnify, hold harmless
and defend each Investors, the directors, officers, partners, employees, agents,
representatives of, and each Person, if any, who controls any Investors within
the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Person”),
against any losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, reasonable attorneys’ fees, amounts paid in settlement or
expenses, joint or several (collectively, 

7 




“Claims”) incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or other
regulatory agency, body or the SEC, whether pending or threatened, whether or
not an indemnified party is or may be a party thereto (“Indemnified Damages”),
to which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon: (i) any untrue statement or alleged untrue statement of a
material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other “blue sky” laws of any jurisdiction in
which Registrable Securities are offered (“Blue Sky Filing”), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; (ii) any untrue
statement or alleged untrue statement of a material fact contained in any final
prospectus (as amended or supplemented, if the Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading; or (iii) any violation or alleged violation by the Company
of the 1933 Act, the 1934 Act, any other law, including, without limitation, any
state securities law, or any rule or regulation there under relating to the
offer or sale of the Registrable Securities pursuant to a Registration Statement
(the matters in the foregoing clauses (i) through (iii) being, collectively,
“Violations”). The Company shall reimburse the Investors and each such
controlling person promptly as such expenses are incurred and are due and
payable, for any legal fees or disbursements or other reasonable expenses
incurred by them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (x) shall not apply to a Claim by an
Indemnified Person arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by such Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto; (y) shall not be available to the extent such Claim is based
on a failure of the Investors to deliver or to cause to be delivered the
prospectus made available by the Company, if such prospectus was timely made
available by the Company pursuant to Section 3(c); and (z) shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of the Company, which consent shall not be
unreasonably withheld. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified Person
and shall survive the transfer of the Registrable Securities by the Investors
pursuant to Section 9 hereof. 

     (b) In connection with a
Registration Statement, each Investors agrees to severally and not jointly
indemnify, hold harmless and defend, to the same extent and in the same manner
as is set forth in Section 6(a), the Company, each of its directors, each of its
officers, employees, representatives, or agents and each Person, if any, who
controls the Company within the meaning of the 1933 Act or the 1934 Act (each an
“Indemnified Party”), against any Claim or Indemnified Damages to which any of
them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar
as such Claim or Indemnified Damages arise out of or is 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 to the Company by such Investors expressly for use in connection with
such Registration Statement; 

8 




and, subject to Section 6(d), such Investors will reimburse any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such Claim; provided, however, that the indemnity
agreement contained in this Section 6(b) and the agreement with respect to
contribution contained in Section 7 shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written
consent of such Investors, which consent shall not be unreasonably withheld;
provided, further, however, that the Investors shall be liable under this
Section 6(b) for only that amount of a Claim or Indemnified Damages as does not
exceed the net proceeds to such Investors as a result of the sale of Registrable
Securities pursuant to such Registration Statement. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of
such Indemnified Party and shall survive the transfer of the Registrable
Securities by the Investors pursuant to Section 9. Notwithstanding anything to
the contrary contained herein, the indemnification agreement contained in this
Section 6(b) with respect to any prospectus shall not inure to the benefit of
any Indemnified Party if the untrue statement or omission of material fact
contained in the prospectus was corrected and such new prospectus was delivered
to each Investors prior to such Investors’ use of the prospectus to which the
Claim relates. 

     (c) Promptly after receipt by an
Indemnified Person or Indemnified Party under this Section 6 of notice of the
commencement of any action or proceeding (including any governmental action or
proceeding) involving a Claim, such Indemnified Person or Indemnified Party
shall, if a Claim in respect thereof is to be made against any indemnifying
party under this Section 6, 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 control of the
defense thereof with counsel mutually satisfactory to the indemnifying party and
the Indemnified Person or the Indemnified Party, as the case may be; provided,
however, that an Indemnified Person or Indemnified Party shall have the right to
retain its own counsel with the fees and expenses of not more than one (1)
counsel for such Indemnified Person or Indemnified Party to be paid by the
indemnifying party, if, in the reasonable opinion of counsel retained by the
indemnifying party, the representation by such counsel of the Indemnified Person
or Indemnified Party and the indemnifying party would be inappropriate due to
actual or potential differing interests between such Indemnified Person or
Indemnified Party and any other party represented by such counsel in such
proceeding. The Indemnified Party or Indemnified Person shall cooperate fully
with the indemnifying party in connection with any negotiation or defense of any
such action or claim by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the Indemnified Party
or Indemnified Person which relates to such action or claim. The indemnifying
party shall keep the Indemnified Party or Indemnified Person fully apprised at
all times as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of any
action, claim or proceeding effected without its prior written consent;
provided, however, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, without the prior
written consent of the Indemnified Party or Indemnified Person, consent to entry
of any judgment or enter into any settlement or other compromise which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party or Indemnified Person of a release from all liability
in respect to such claim or litigation. Following indemnification as provided
for hereunder, the indemnifying party shall be subrogated to all 

9 




rights of the Indemnified Party or Indemnified Person with
respect to all third parties, firms or corporations relating to the matter for
which indemnification has been made. The failure to deliver written notice to
the indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is prejudiced in its ability to defend such
action. 

     (d) The indemnification required
by this Section 6 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills are
received or Indemnified Damages are incurred. 

     (e) The indemnity agreements
contained herein shall be in addition to (i) any cause of action or similar
right of the Indemnified Party or Indemnified Person against the indemnifying
party or others, and (ii) any liabilities the indemnifying party may be subject
to pursuant to the law. 

     7. CONTRIBUTION. 

     To the extent any indemnification
by an indemnifying party is prohibited or limited by law, the indemnifying party
agrees to make the maximum contribution with respect to any amounts for which it
would otherwise be liable under Section 6 to the fullest extent permitted by
law; provided, however, that: (i) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any seller of Registrable Securities
who was not guilty of fraudulent misrepresentation; and (ii) contribution by any
seller of Registrable Securities shall be limited in amount to the net amount of
proceeds received by such seller from the sale of such Registrable Securities.


     8. [Reserved] 

     9. REPORTS UNDER THE 1934 ACT. 

     With a view to making available
to the Investors the benefits of Rule 144 promulgated under the 1933 Act or any
similar rule or regulation of the SEC that may at any time permit the Investors
to sell securities of the Company to the public without registration (“Rule
144”) the Company agrees to: 

     (a) make and keep public
information available, as those terms are understood and defined in Rule 144 at
all times while the Company is subject to the reporting requirements of the 1934
Act; 

     (b) use its best efforts to file
with the SEC in a timely manner all reports and other documents required of the
Company under the 1933 Act and the 1934 Act so long as the Company remains
subject to such requirements (it being understood that nothing herein shall
limit the Company’s obligations under Section 4(c) of the Securities Purchase
Agreement) and the filing of such reports and other documents as are required by
the applicable provisions of Rule 144; and 

10 




     (c) furnish to each Investors so
long as such Investors owns Registrable Securities, promptly upon request, (i) a
written statement by the Company that it has complied with the reporting
requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most
recent annual or quarterly report of the Company and such other reports and
documents so filed by the Company, and (iii) such other information as may be
reasonably requested to permit the Investors to sell such securities pursuant to
Rule 144 without registration. 

     10. AMENDMENT OF REGISTRATION RIGHTS.


     Provisions 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 Company and Investors who then hold at least two-thirds
(2/3) of the Registrable Securities. Any amendment or waiver effected in
accordance with this Section 10 shall be binding upon each Investors and the
Company. No such amendment shall be effective to the extent that it applies to
fewer than all of the holders of the Registrable Securities. No consideration
shall be offered or paid to any Person to amend or consent to a waiver or
modification of any provision of any of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement. 

     11. MISCELLANEOUS. 

     (d) A Person is deemed to be a
holder of Registrable Securities whenever such Person owns or is deemed to own
of record such Registrable Securities. If the Company receives conflicting
instructions, notices or elections from two (2) or more Persons with respect to
the same Registrable Securities, the Company shall act upon the basis of
instructions, notice or election received from the registered owner of such
Registrable Securities. 

     (e) Any notices, consents,
waivers or other communications required or permitted to be given under the
terms of this Agreement 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 transmission is mechanically or
electronically generated and kept on file by the sending party); or (iii) one
(1) 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: 

11 





	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: 	Shumaker, Loop & Kendrick, LLP
  
	  	101 E. Kennedy Blvd., Suite 2800
  
	  	Tampa, Florida 33602 
	  	Attn: Mr. Michael H. Robbins, Esq.
  
	  	Telephone: 	 (813) 227-2230 
	  	Facsimile: 	 (813) 229-1660 


If to an Investors, to its address and facsimile number on the
Schedule of Investors attached hereto, with copies to such Investors’
representatives as set forth on the Schedule of Investors or to such other
address and/or facsimile number and/or to the attention of such other person as
the recipient party has specified by written notice given to each other party
five (5) days prior to the effectiveness of such change. Written confirmation of
receipt (A) given by the recipient of such notice, consent, waiver or other
communication, (B) mechanically or electronically generated by the sender’s
facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C) provided by a courier or
overnight courier 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. 

     (f) Failure of any party to
exercise any right or remedy under this Agreement or otherwise, or delay by a
party in exercising such right or remedy, shall not operate as a waiver thereof.


     (g) The laws of the State of
Florida shall govern all issues concerning the relative rights of the Company
and the Investors as its stockholders. 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 jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of Florida Each party hereby
irrevocably submits to the non-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 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 

12 




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. If
any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the validity
or enforceability of the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in any other
jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY
TRANSACTION CONTEMPLATED HEREBY. 

     (h) This Agreement, the
Irrevocable Transfer Agent Instructions, the Securities Purchase Agreement and
related documents including the Convertible Debentures and the Security
Agreement dated the date hereof (the “Security Agreement”) constitute the entire
agreement among the parties hereto with respect to the subject matter hereof and
thereof. There are no restrictions, promises, warranties or undertakings, other
than those set forth or referred to herein and therein. This Agreement, the
Irrevocable Transfer Agent Instructions, the Securities Purchase Agreement and
related documents including the Convertible Debentures and the Security
Agreement supersede all prior agreements and understandings among the parties
hereto with respect to the subject matter hereof and thereof. 

     (i) This Agreement shall inure to
the benefit of and be binding upon the permitted successors and assigns of each
of the parties hereto. 

     (j) The headings in this
Agreement are for convenience of reference only and shall not limit or otherwise
affect the meaning hereof. 

     (k) This Agreement may be
executed in identical counterparts, each of which shall be deemed an original
but all of which shall constitute one and the same agreement. This Agreement,
once executed by a party, may be delivered to the other party hereto by
facsimile transmission of a copy of this Agreement bearing the signature of the
party so delivering this Agreement. 

     (l) Each party shall do and
perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby. 

     (m) The language used in this
Agreement will be deemed to be the language chosen by the parties to express
their mutual intent and no rules of strict construction will be applied against
any party. (n) This Agreement is intended for the benefit of the parties hereto
and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

13 




14 




     IN WITNESS WHEREOF, the
parties have caused this Investors Registration Rights Agreement to be duly
executed as of day and year first above written. 

	 	COMPANY: 
	 	CARBIZ INC. 
	 	  	  
	 	By: 	 
    
	 	Name: 	  
	 	Title: 	  
	 	  	  
	 	TRAFALGAR CAPITAL SPECIALIZED
    
	 	INVESTMENT FUND, LUXEMBOURG
  
	 	  	  
	 	By: 	Trafalgar Capital Sarl 
	 	Its: 	General Partner 
	 	  	  
	 	By: 	 
    
	 	Name: 	Andrew Garai 
	 	Title: 	Chairman of the Board 


15 




SCHEDULE I 

SCHEDULE OF INVESTORS 

	  	  	  	Address/Facsimile
  
	Name 	  	Signature 	Number of Buyer 
	  	  	  	8-10 Rue Mathias Hardt 
	Trafalgar Capital Specialized 	By: 	Trafalgar Capital Sarl 	BP 3023 
	Investment Fund, 	Its: 	General Partner 	L-1030 Luxembourg 
	Luxembourg 	  	  	Facsimile: 
	  	  	  	011-44-207-405-0161 
	  	By: 	  	and 
	  	Name: 	Andrew Garai 	001-786-323-1651 
	  	Its: 	Chairman of the Board 	  






EXHIBIT A 

FORM OF NOTICE OF EFFECTIVENESS 
OF REGISTRATION
STATEMENT 

Attention: 

	 	Re: 	CARBIZ INC. 


Ladies and Gentlemen: 

     We are counsel to Carbiz inc., an
Ontario, Canada corporation (the “Company”), and have represented the Company in
connection with that certain Securities Purchase Agreement (the “Securities
Purchase Agreement”) entered into by and among the Company and the Investors
named therein (collectively, the “Investors”) pursuant to which the Company
issued to the Investors its Common Shares of the Company without par value (the
“Common Shares”). Pursuant to the Securities Purchase Agreement, the Company
also has entered into a Registration Rights Agreement with the Investors (the
“Registration Rights Agreement”) pursuant to which the Company agreed, among
other things, to register the Registrable Securities (as defined in the
Registration Rights Agreement) under the Securities Act of 1933, as amended (the
“1933 Act”). In connection with the Company’s obligations under the Registration
Rights Agreement, on ________________, the Company filed a Registration
Statement on Form ________(File No. 333-_____________) (the “Registration
Statement”) with the Securities and Exchange SEC (the “SEC”) relating to the
Registrable Securities which names each of the Investors as a selling
shareholder thereunder. 

     In connection with the foregoing,
we advise you that a member of the SEC’s staff has advised us by telephone that
the SEC has entered an order declaring the Registration Statement effective
under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF
EFFECTIVENESS] and we have no knowledge, after telephonic inquiry of a
member of the SEC’s staff, that any stop order suspending its effectiveness has
been issued or that any proceedings for that purpose are pending before, or
threatened by, the SEC and the Registrable Securities are available for resale
under the 1933 Act pursuant to the Registration Statement. 

	 	Very truly yours, 
	 	 
	 	[INSERT NAME OF COMPANY COUNSEL]
      
	 	 	 
	 	 By: 	



	cc: 	[LIST NAMES OF INVESTORS]