Filed by Automated Filing Services Inc. (604) 609-0244 -  Carbiz, Inc - Exhibit 10.13






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 AN 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 THE DATE THAT IS FOUR MONTHS AND ONE DAY FROM
      THE DATE OF ISSUANCE OF THIS SECURITY. 
	


CARBIZ INC. 

Warrant To Purchase Common Shares 

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



Date of Issuance: August 31, 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 (1,000,000) fully paid and nonassessable 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 Common
Shares beneficially owned by the holder and its affiliates to exceed 4.99% of
the outstanding Common Shares following such exercise, except within sixty (60)
days of the Expiration Date. For purposes of the foregoing proviso, the
aggregate number of Common Shares beneficially owned by the holder and its
affiliates shall include the number of Common Shares issuable upon exercise of
this Warrant with respect to which the determination of such proviso is being
made, but shall exclude 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
Common Shares a holder may rely on the number of outstanding 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 Common Shares outstanding. Upon the written request of any
holder, the Company shall promptly, but in no event later than one (1) Business
Day (as defined below) following the receipt of such notice, confirm in writing
to any such holder the number of Common Shares then outstanding. In any case,
the number of outstanding 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 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 August 31, 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. 

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

2 




          (iv)
“Common Shares” means (i) the Company’s Common Shares, no par value 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 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 three (3) 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.

          (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 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 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 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 hereof.

3 




          (xiv)
“Warrant Exercise Price” shall be the Fixed Price as defined in the Convertible
Debenture or as subsequently adjusted as provided in Section 8 hereof.

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

          (xvi)
“Convertible Securities” means any security convertible into Common Shares. 

     (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 Common Shares 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 described below 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 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 are DTC
eligible, credit such aggregate number 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 are not DTC eligible then the Company shall, on 

4 




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 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 the Company computed using the
following formula:

	 	X= 	Y(A-B)
	 	  	     A 
	 	  	  
	 	Where X = 	
       the number of Common Shares to be issued to the
      holder 

	 	  	
       

		Y = 	
      the number of Common Shares 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)
      

	 	  	
       

		A = 	
      the Fair Market Value of one Common Share (at the date of
      such calculation) 

	 	  	
       

		B = 	
      the Exercise Price per Common 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. 

5 




     (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 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 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. 

     (e) This Warrant may not be
exercised unless an exemption is available from the registration requirements
under the 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 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 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 

6 




of a Canadian resident until the date that is four months and
one day after the date of issuance of this Warrant.

     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 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 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 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 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 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 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. 

7 




     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 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. 

     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: 

8 




     (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 Common Shares (other than (i)
Excluded Securities and (ii) 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 Common Share 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 Common Share 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 Common Share is
issuable upon exercise of such Options or upon conversion or exchange of any
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 Common Share 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. 

          (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 Common
Share is issuable upon the conversion or exchange thereof is less than the
Applicable Price, then such Common Share 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 

9 




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 therefor will be deemed to be the net
amount received by the Company therefor. 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 consideration therefor 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 

10 




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 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
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 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 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 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. 

     (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 Bid Price of the Common
Shares on the trading day immediately preceding such record date; and 

11 




          (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 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 are 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 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 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. 

          (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 

12 




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 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 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 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 

13 




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 
	  	  	  
	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 other than Trafalgar, to it at
the address and facsimile number as shall be delivered to the Company upon the
issuance or transfer of this Warrant and with copies to such holder’s
representatives 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


14 




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 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 Warrant 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: 	


15 




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 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 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
laws or Canadian securities laws. With respect to Box A above, the undersigned
holder agrees to 

A-1 




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