Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Carbiz Inc. - Exhibit 10.4

	 	
      “This Security Agreement and the indebtedness evidenced
      hereby are subordinate in the manner and to the extent set forth in that
      certain Subordination and Intercreditor Agreement (the “Subordination
      Agreement”) dated as of February 28, 2007 among Trafalgar Capital
      Specialized Investment Fund, Luxembourg, the “Obligors” signatories
      thereto and SWC Services, LLC, as Administrative Agent, to the Senior
      Indebtedness (as such terms are defined in the Subordination Agreement),
      and each holder of this Security Agreement, by its acceptance hereof,
      shall be bound by the provisions of the Subordination Agreement.” 
	 

SECURITY AGREEMENT 

     THIS SECURITY AGREEMENT
(the “Agreement”), is entered into and made effective as of
February 28, 2007, by and between CARBIZ INC., (the “Company”),
and TRAFALGAR CAPITAL SPECIALIZED INVESTMENT FUND, LUXEMBOURG (the
“Secured Party”)

     WHEREAS, to induce the
Secured Party to enter into the transactions contemplated by the Securities
Purchase Agreement dated the date hereof between Company and Secured Party (the
“Securities Purchase Agreement;” capitalized terms that are not otherwise
defined herein shall have the meanings assigned to them in the Securities
Purchase Agreement), the Company is executing and delivering this Agreement and
granting the Secured Party a security interest as provided herein.

     NOW, THEREFORE, in
consideration of the premises and the mutual covenants herein contained, and for
other good and valuable consideration, the adequacy and receipt of which are
hereby acknowledged, the parties hereto hereby agree as follows: 

ARTICLE 1. 

DEFINITIONS AND INTERPRETATIONS 

     Section 1.1. Recitals.

     The above recitals are true and
correct and are incorporated herein, in their entirety, by this reference. 

     Section 1.2.
Interpretations.

     Nothing herein expressed or
implied is intended or shall be construed to confer upon any person other than
the Secured Party any right, remedy or claim under or by reason hereof. 

     Section 1.3. Obligations
Secured. 

     The obligations secured hereby
are any and all obligations of the Company to the Secured Party now existing or
hereinafter incurred without limitation, those obligations of the Company to the
Secured Party under the Securities Purchase Agreement, the Irrevocable Transfer
Agent 

Instructions, the Convertible Debenture (collectively, the
“Transaction Documents”) and this Agreement and any other amounts now or
hereafter owed to the Secured Party by the Company thereunder or hereunder
(collectively, the “Obligations”). 

ARTICLE 2. 

PLEDGED PROPERTY, ADMINISTRATION OF COLLATERAL
AND
TERMINATION OF SECURITY INTEREST 

Section 2.1. Pledged Property. 

     (a) Company hereby pledges to the
Secured Party, and creates in the Secured Party for its benefit, a security
interest for such time until the Obligations are paid in full, in and to all of
the property of the Company as set forth in Exhibit “A” attached hereto
(collectively, the “Pledged Property”): 

     (b) Subject to the terms of the
Subordination Agreement, simultaneously with the execution and delivery of this
Agreement, the Company shall make, execute, acknowledge, file, record and
deliver to the Secured Party any documents reasonably requested by the Secured
Party to perfect its security interest in the Pledged Property. Subject to the
terms of the Subordination Agreement, simultaneously with the execution and
delivery of this Agreement, the Company shall make, execute, acknowledge and
deliver to the Secured Party such documents and instruments, including, without
limitation, financing statements, certificates, affidavits and forms as may, in
the Secured Party’s reasonable judgment, be necessary to effectuate, complete or
perfect, or to continue and preserve, the security interest of the Secured Party
in the Pledged Property, and the Secured Party shall hold such documents and
instruments as secured party, subject to the terms and conditions contained
herein. 

Section 2.2. Rights; Interests; Etc. 

     (a) So long as no Event of
Default (as hereinafter defined) shall have occurred and be continuing: 

     (i) the Company shall be entitled
to exercise any and all rights pertaining to the Pledged Property or any part
thereof for any purpose not inconsistent with the terms hereof; and 

     (ii) the Company shall be
entitled to receive and retain any and all payments paid or made in respect of
the Pledged Property. 

     (b) Upon the occurrence and during
  the continuance of an Event of Default: 

     (i) All rights of the Company to
exercise the rights which it would otherwise be entitled to exercise pursuant to
Section 2.2(a)(i) hereof and to receive payments which it would otherwise be
authorized to receive and retain pursuant to Section 2.2(a)(ii) hereof shall be
suspended, and all such rights shall thereupon become vested in the Secured
Party who shall thereupon have the sole right to exercise such rights and to
receive and hold as Pledged Property such payments; provided, however,
that if the Secured Party shall become entitled and 

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shall elect to exercise its right to realize on the Pledged
Property pursuant to Article 5 hereof, then all cash sums received by the
Secured Party, or held by Company for the benefit of the Secured Party and paid
over pursuant to Section 2.2(b)(ii) hereof, shall be applied against any
outstanding Obligations; and 

     (ii) All interest, dividends,
income and other payments and distributions which are received by the Company
contrary to the provisions of Section 2.2(b)(i) hereof shall be received in
trust for the benefit of the Secured Party, shall be segregated from other
property of the Company and shall be forthwith paid over to the Secured Party;
or

     (iii) The Secured Party in its
sole discretion shall be authorized to sell any or all of the Pledged Property
at public or private sale in order to recoup all of the outstanding principal
plus accrued interest owed pursuant to the Convertible Debenture as described
herein 

     (c) Each of the following events
shall constitute a default under this Agreement (each an “Event of
Default”): 

     (i) any default, whether in whole
or in part, shall occur in the payment to the Secured Party of principal,
interest or other item comprising the Obligations as and when due or with
respect to any other debt or obligation of the Company to a party other than the
Secured Party; 

     (ii) any default, whether in
whole or in part, shall occur in the due observance or performance of any
obligations or other covenants, terms or provisions to be performed under this
Agreement or the Transaction Documents, subject to the lapse of applicable cure
periods;

     (iii) the Company shall: (1) make
a general assignment for the benefit of its creditors; (2) apply for or consent
to the appointment of a receiver, trustee, assignee, custodian, sequestrator,
liquidator or similar official for itself or any of its assets and properties;
(3) commence a voluntary case for relief as a debtor under the United States
Bankruptcy Code; (4) file with or otherwise submit to any governmental authority
any petition, answer or other document seeking: (A) reorganization, (B) an
arrangement with creditors or (C) to take advantage of any other present or
future applicable law respecting bankruptcy, reorganization, insolvency,
readjustment of debts, relief of debtors, dissolution or liquidation; (5) file
or otherwise submit any answer or other document admitting or failing to contest
the material allegations of a petition or other document filed or otherwise
submitted against it in any proceeding under any such applicable law, or (6) be
adjudicated a bankrupt or insolvent by a court of competent jurisdiction; or

     (iv) any case, proceeding or
other action shall be commenced against the Company for the purpose of
effecting, or an order, judgment or decree shall be entered by any court of
competent jurisdiction approving (in whole or in part) anything specified in
Section 2.2(c)(iii) hereof, or any receiver, trustee, assignee, custodian,
sequestrator, liquidator or other official shall be appointed with respect to
the Company, or shall be appointed to take or shall otherwise acquire possession
or control of all or a substantial part of the assets and 

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properties of the Company, and any of the foregoing shall
continue unstayed and in effect for any period of thirty (30) days. 

ARTICLE 3. 

ATTORNEY-IN-FACT; PERFORMANCE 

Section 3.1. Secured Party Appointed Attorney-In-Fact.

     Upon the occurrence of an Event
of Default, the Company hereby appoints the Secured Party as its
attorney-in-fact, with full authority in the place and stead of the Company and
in the name of the Company or otherwise, from time to time in the Secured
Party’s discretion, subject to the terms of the Subordination Agreement, to take
any action and to execute any instrument which the Secured Party may reasonably
deem necessary to accomplish the purposes of this Agreement., including, without
limitation, to receive and collect all instruments made payable to the Company
representing any payments in respect of the Pledged Property or any part thereof
and to give full discharge for the same. The Secured Party may demand, collect,
receipt for, settle, compromise, adjust, sue for, foreclose, or realize on the
Pledged Property as and when the Secured Party may determine. To facilitate
collection, the Secured Party may notify account debtors and obligors on any
Pledged Property or Pledged Property to make payments directly to the Secured
Party. 

Section 3.2. Secured Party May Perform. 

     If the Company fails to perform
any agreement contained herein, the Secured Party, at its option, may itself
perform, or cause performance of, such agreement, and the expenses of the
Secured Party incurred in connection therewith shall be included in the
Obligations secured hereby and payable by the Company under Section 8.3. 

ARTICLE 4. 

REPRESENTATIONS AND WARRANTIES 

Section 4.1. Authorization; Enforceability. 

     Each of the parties hereto
represents and warrants that it has taken all action necessary to authorize the
execution, delivery and performance of this Agreement and the transactions
contemplated hereby; and upon execution and delivery, this Agreement shall
constitute a valid and binding obligation of the respective party, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors’ rights or by the principles governing the availability of
equitable remedies. 

Section 4.2. Ownership of Pledged Property. 

     The Company warrants and
represents that it is the legal and beneficial owner of the Pledged Property
free and clear of any lien, security interest, option or other charge or
encumbrance except for the security interest created by this Agreement and for
the Permitted Liens. For purposes hereof, “Permitted Liens” shall mean (i) liens
securing the Senior Indebtedness, (ii) liens for taxes or other governmental
charges which are not yet delinquent or 

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are being contested in good faith by appropriate proceedings,
(iii) liens for carriers, contractors, warehousemen, mechanics, materialmen,
laborers, employees, suppliers or other similar persons arising by operation of
law and incurred in the ordinary course of business for sums not yet delinquent
or being contested in good faith, (iv) liens relating to deposits made in the
ordinary course of business in connection with workers’ compensation,
unemployment insurance and other types of social security or to secure the
performance of leases, trade contracts or other similar agreements; and (v) in
the case of real property, any matters, restrictions, covenants, conditions,
limitations, rights, rights of way, encumbrances, encroachments, reservations,
easements, agreements and other matters of record, such state of facts of which
an accurate survey or inspection of the property would reveal and do not
materially interfere with the use or value of the property. 

ARTICLE 5. 

DEFAULT; REMEDIES; SUBSTITUTE COLLATERAL

Section 5.1. Default and Remedies. 

     (a) If an Event of Default
described in Section 2.2(c)(i) and (ii) occurs, then in each such case the
Secured Party may declare the Obligations to be due and payable immediately, by
a notice in writing to the Company, and upon any such declaration, the
Obligations shall become immediately due and payable. If an Event of Default
described in Sections 2.2(c)(iii) or (iv) occurs and is continuing for the
period set forth therein, then the Obligations shall automatically become
immediately due and payable subject to the terms of the Subordination Agreement
with regard to cash payments, without declaration or other act on the part of
the Secured Party. 

     (b) Upon the occurrence of an
Event of Default, subject to the terms of the Subordination Agreement, the
Secured Party shall be entitled to realize upon any and all rights in the
Pledged Property then held by the Secured Party as provided herein. 

Section 5.2. Method of Realizing Upon the Pledged Property:
Other Remedies. 

     Upon the occurrence of an Event
of Default, in addition to any rights and remedies available at law or in
equity, the following provisions shall govern the Secured Party’s right to
realize upon the Pledged Property: 

     (a) Subject to the terms of the
Subordination Agreement, any item of the Pledged Property may be sold for cash
or other value in any number of lots at brokers board, public auction or private
sale and may be sold without demand, advertisement or notice (except that the
Secured Party shall give the Company ten (10) days’ prior written notice of the
time and place or of the time after which a private sale may be made (the
“Sale Notice”)), which notice period is hereby agreed to be commercially
reasonable. At any sale or sales of the Pledged Property, the Company may bid
for and purchase the whole or any part of the Pledged Property and, upon
compliance with the terms of such sale, may hold, exploit and dispose of the
same without further accountability to the Secured Party. The Company will
execute and deliver, or cause to be executed and delivered, such instruments,
documents, assignments, waivers, certificates, and affidavits and supply or
cause to be supplied such further information and take 

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such further action as the Secured Party reasonably shall
require in connection with any such sale. 

     (b) Subject to the terms of the
Intercreditor Agreement, any cash being held by the Secured Party as Pledged
Property and all cash proceeds received by the Secured Party in respect of, sale
of, collection from, or other realization upon all or any part of the Pledged
Property shall be applied as follows: 

     (i) to the payment of all amounts
due the Secured Party for the expenses reimbursable to it hereunder or owed to
it pursuant to Section 8.3 hereof; 

     (ii) to the payment of the Obligations
then due and unpaid. 

     (iii) the balance, if any, to the
person or persons entitled thereto, including, without limitation, the Company.

     (c) In addition to all of the
rights and remedies which the Secured Party may have pursuant to this Agreement,
subject to the terms of the Subordination Agreement, the Secured Party shall
have all of the rights and remedies provided by law, including, without
limitation, those under the Uniform Commercial Code. 

     (d) If the Company fails to pay
such amounts due upon the occurrence of an Event of Default which is continuing,
then, subject to the terms of the Subordination Agreement, the Secured Party may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company and collect the monies adjudged or decreed
to be payable in the manner provided by law out of the property of Company,
wherever situated. 

     (e) The Company agrees that it
shall be liable for any reasonable fees, expenses and costs incurred by the
Secured Party in connection with enforcement, collection and preservation of the
Transaction Documents, including, without limitation, reasonable legal fees and
expenses, and such amounts shall be deemed included as Obligations secured
hereby and payable as set forth in Section 8.3 hereof. 

Section 5.3. Proofs of Claim. 

     In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relating to the Company or
the property of the Company or of such other obligor or its creditors, the
Secured Party (irrespective of whether the Obligations shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Secured Party shall have made any demand on the Company for the
payment of the Obligations), shall be entitled and empowered, by intervention in
such proceeding or otherwise: 

     (i) to file and prove a claim for
the whole amount of the Obligations and to file such other papers or documents
as may be necessary or advisable in order to have the claims of the Secured
Party (including any claim for the reasonable legal fees and expenses and 

6 

other expenses paid or incurred by the Secured Party permitted
hereunder and of the Secured Party allowed in such judicial proceeding), and

     (ii) to collect and receive any
monies or other property payable or deliverable on any such claims and to
distribute the same; and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby
authorized by the Secured Party to make such payments to the Secured Party and,
in the event that the Secured Party shall consent to the making of such payments
directed to the Secured Party, to pay to the Secured Party any amounts for
expenses due it hereunder. 

Section 5.4. Duties Regarding Pledged Property. 

     The Secured Party shall have no
duty as to the collection or protection of the Pledged Property or any income
thereon or as to the preservation of any rights pertaining thereto, beyond the
safe custody and reasonable care of any of the Pledged Property actually in the
Secured Party’s possession. 

ARTICLE 6.

AFFIRMATIVE COVENANTS 

     The Company covenants and agrees
that, from the date hereof and until the Obligations have been fully paid and
satisfied, unless the Secured Party shall consent otherwise in writing (as
provided in Section 8.4 hereof): 

Section 6.1. Existence, Properties, Etc. 

     (a) The Company shall do, or
cause to be done, all things, or proceed with due diligence with any actions or
courses of action, that may be reasonably necessary (i) to maintain Company’s
due organization, valid existence and good standing under the laws of its state
of incorporation, and (ii) to preserve and keep in full force and effect all
qualifications, licenses and registrations in those jurisdictions in which the
failure to do so could have a Material Adverse Effect (as defined below); and
(b) the Company shall not do, or cause to be done, any act impairing the
Company’s corporate power or authority (i) to carry on the Company’s business as
now conducted, and (ii) to execute or deliver this Agreement or any other
document delivered in connection herewith, including, without limitation, any
UCC-1 Financing Statements required by the Secured Party to which it is or will
be a party, or perform any of its obligations hereunder or thereunder. For
purpose of this Agreement, the term “Material Adverse Effect” shall mean
any material and adverse affect as determined by Secured Party in its sole
discretion, whether individually or in the aggregate, upon (a) the Company’s
assets, business, operations, properties or condition, financial or otherwise;
(b) the Company’s ability to make payment as and when due of all or any part of
the Obligations; or (c) the Pledged Property. 

Section 6.2. Financial Statements and Reports. 

     The Company shall furnish to the
Secured Party such financial data as the Secured Party may reasonably request.
Without limiting the foregoing, the Company shall furnish to the Secured Party
(or cause to be furnished to the Secured Party) the following: 

7 

     (a) as soon as practicable and in
any event within ninety (90) days after the end of each fiscal year of the
Company, the balance sheet of the Company as of the close of such fiscal year,
the statement of earnings and retained earnings of the Company as of the close
of such fiscal year, and statement of cash flows for the Company for such fiscal
year, all in reasonable detail, prepared in accordance with United States
generally accepted accounting principles consistently applied, certified by the
chief executive and chief financial officers of the Company as being true and
correct and accompanied by a certificate of the chief executive and chief
financial officers of the Company, stating that the Company has kept, observed,
performed and fulfilled each covenant, term and condition of this Agreement
during such fiscal year and that no Event of Default hereunder has occurred and
is continuing, or if an Event of Default has occurred and is continuing,
specifying the nature of same, the period of existence of same and the action
the Company proposes to take in connection therewith; 

     (b) within thirty (30) days of
the end of each calendar month, a balance sheet of the Company as of the close
of such month, and statement of earnings and retained earnings of the Company as
of the close of such month, all in reasonable detail, and prepared substantially
in accordance with United States generally accepted accounting principles
consistently applied, certified by the chief executive and chief financial
officers of the Company as being true and correct; and 

     (c) promptly upon receipt
thereof, copies of all accountants' reports and accompanying financial reports
submitted to the Company by independent accountants in connection with each
annual examination of the Company. 

Section 6.3. Accounts and Reports. 

     The Company shall maintain a
standard system of accounting in accordance with United States generally
accepted accounting principles consistently applied and provide, at its sole
expense, to the Secured Party the following: 

     (a) as soon as available, a copy
of any notice or other communication alleging any nonpayment or other material
breach or default, or any foreclosure or other action respecting any material
portion of its assets and properties, received respecting any of the
indebtedness of the Company in excess of $15,000 (other than the Obligations),
or any demand or other request for payment under any guaranty, assumption,
purchase agreement or similar agreement or arrangement respecting the
indebtedness or obligations of others in excess of $15,000, including any
received from any person acting on behalf of the Secured Party or beneficiary
thereof; and 

     (b) within fifteen (15) days
after the making of each submission or filing, a copy of any report, financial
statement, notice or other document, whether periodic or otherwise, submitted to
the shareholders of the Company, or submitted to or filed by the Company with
any governmental authority involving or affecting (i) the Company that could
have a Material Adverse Effect; (ii) the Obligations; (iii) any part of the
Pledged Collateral; or (iv) any of the transactions contemplated in this
Agreement or the Loan Instruments. 

8 

Section 6.4. Maintenance of Books and Records;
Inspection. 

     The Company shall maintain its
books, accounts and records in accordance with United States generally accepted
accounting principles consistently applied, and permit the Secured Party, its
officers and employees and any professionals designated by the Secured Party in
writing, at any time to visit and inspect any of its properties (including but
not limited to the collateral security described in the Transaction Documents,
corporate books and financial records, and to discuss its accounts, affairs and
finances with any employee, officer or director thereof. 

Section 6.5. Maintenance and Insurance. 

     (a) The Company shall maintain or
cause to be maintained, at its own expense, all of its assets and properties in
good working order and condition, making all necessary repairs thereto and
renewals and replacements thereof. 

     (b) The Company shall maintain or
cause to be maintained, at its own expense, insurance in form, substance and
amounts (including deductibles), which the Company deems reasonably necessary to
the Company’s business, (i) adequate to insure all assets and properties of the
Company, which assets and properties are of a character usually insured by
persons engaged in the same or similar business against loss or damage resulting
from fire or other risks included in an extended coverage policy; (ii) against
public liability and other tort claims that may be incurred by the Company;
(iii) as may be required by the Transaction Documents and/or applicable law and
(iv) as may be reasonably requested by Secured Party, all with adequate,
financially sound and reputable insurers. 

Section 6.6. Contracts and Other Collateral. 

     The Company shall perform all of
its obligations under or with respect to each instrument, receivable, contract
and other intangible included in the Pledged Property to which the Company is
now or hereafter will be party on a timely basis and in the manner therein
required, including, without limitation, this Agreement. 

Section 6.7. Defense of Collateral, Etc. 

     The Company shall defend and
enforce its right, title and interest in and to any part of: (a) the Pledged
Property; and (b) if not included within the Pledged Property, those assets and
properties whose loss could have a Material Adverse Effect, each against all
manner of claims and demands on a timely basis to the full extent permitted by
applicable law. 

Section 6.8. Payment of Debts, Taxes, Etc. 

     The Company shall pay, or cause
to be paid, all of its indebtedness and other liabilities and perform, or cause
to be performed, all of its obligations in accordance with the respective terms
thereof, and pay and discharge, or cause to be paid or discharged, all taxes,
assessments and other governmental charges and levies imposed upon it (other
than those being contested by the Company in good faith), upon any of its assets
and properties on or before the last day on 

9 

which the same may be paid without penalty, as well as pay all
other lawful claims (whether for services, labor, materials, supplies or
otherwise) as and when due. 

Section 6.9. Taxes and Assessments; Tax Indemnity. 

     The Company shall (a) file all
tax returns and appropriate schedules thereto that are required to be filed
under applicable law, prior to the date of delinquency, (b) pay and discharge
all taxes, assessments and governmental charges or levies imposed upon the
Company, upon its income and profits or upon any properties belonging to it,
prior to the date on which penalties attach thereto, and (c) pay all taxes,
assessments and governmental charges or levies that, if unpaid, might become a
lien or charge upon any of its properties; provided, however, that the
Company in good faith may contest any such tax, assessment, governmental charge
or levy described in the foregoing clauses (b) and (c) so long as appropriate
reserves are maintained with respect thereto.

Section 6.10. Compliance with Law and Other
Agreements.

     The Company shall maintain its
business operations and property owned or used in connection therewith in
compliance with (a) all applicable federal, state and local laws, regulations
and ordinances governing such business operations and the use and ownership of
such property, and (b) all agreements, licenses, franchises, indentures and
mortgages to which the Company is a party or by which the Company or any of its
properties is bound. Without limiting the foregoing, the Company shall pay all
of its indebtedness promptly in accordance with the terms thereof. 

Section 6.11. Notice of Default.

     The Company shall give written
notice to the Secured Party of the occurrence of any default or Event of Default
under this Agreement, the Transaction Documents or any other agreement of
Company for the payment of money, promptly upon the occurrence thereof. 

Section 6.12. Notice of Litigation. 

     The Company shall give notice, in
writing, to the Secured Party of (a) any actions, suits or proceedings wherein
the amount at issue is in excess of $50,000, instituted by any persons against
the Company, or affecting any of the assets of the Company, and (b) any dispute,
not resolved within fifteen (15) days of the commencement thereof, between the
Company on the one hand and any governmental or regulatory body on the other
hand, which might reasonably be expected to have a Material Adverse Effect on
the business operations or financial condition of the Company. 

ARTICLE 7.

NEGATIVE COVENANTS 

     The Company covenants and agrees
that, from the date hereof until the Obligations have been fully paid and
satisfied, the Company shall not, unless the Secured Party shall consent
otherwise in writing: 

10 

Section 7.1. Indebtedness. 

     Other than the Senior
Indebtedness (as defined in the Subordination Agreement), the Company shall not
directly or indirectly permit, create, incur, assume, permit to exist, increase,
renew or extend on or after the date hereof any indebtedness on its part,
including commitments, contingencies and credit availabilities, or apply for or
offer or agree to do any of the foregoing. 

Section 7.2. Liens and Encumbrances. 

     Except for the Permitted Liens
and for transfers in the ordinary course of business, the Company shall not
directly or indirectly make, create, incur, assume or permit to exist any
assignment, transfer, pledge, mortgage, security interest or other lien or
encumbrance of any nature in, to or against any part of the Pledged Property, or
offer or agree to do so, or own or acquire or agree to acquire any asset or
property of any character subject to any of the foregoing encumbrances
(including any conditional sale contract or other title retention agreement), or
assign, pledge or in any way transfer or encumber its right to receive any
income or other distribution or proceeds from any part of the Pledged Property;
or enter into any sale-leaseback financing respecting any part of the Pledged
Property as lessee, or cause or assist the inception or continuation of any of
the foregoing. 

Section 7.3. Articles of Incorporation, By-Laws, Mergers,
Consolidations, Acquisitions and Sales. 

     Without the prior express written
consent of the Secured Party, the Company shall not: (a) Amend its Articles of
Incorporation or By-Laws; (b) issue or sell its stock, stock options, bonds,
notes or other corporate securities or obligations; (c) be a party to any
merger, consolidation or corporate reorganization, (d) purchase or otherwise
acquire all or substantially all of the assets or stock of, or any partnership
or joint venture interest in, any other person, firm or entity, (e) sell,
transfer, convey, grant a security interest in (except for the Permitted Liens)
or lease all or any substantial part of its assets, nor (f) create any new
subsidiaries nor convey any of its assets to any subsidiary. 

Section 7.4. Management, Ownership. 

     The Company shall not materially
change its ownership, executive staff or management without the prior written
consent of the Secured Party. The ownership, executive staff and management of
the Company are material factors in the Secured Party's willingness to institute
and maintain a lending relationship with the Company. 

Section 7.5. Dividends, Etc. 

     The Company shall not declare or
pay any dividend of any kind, in cash or in property, on any class of its
capital stock, nor purchase, redeem, retire or otherwise acquire for value any
shares of such stock, nor make any distribution of any kind in respect thereof,
nor make any return of capital to shareholders, nor make any payments in respect
of any pension, profit sharing, retirement, stock option, stock bonus, incentive
compensation or similar plan (except as required or permitted hereunder),
without the prior written consent of the Secured Party. 

11 

Section 7.6. Guaranties; Loans. 

     The Company shall not guarantee
nor be liable in any manner, whether directly or indirectly, or become
contingently liable after the date of this Agreement in connection with the
obligations or indebtedness of any person or persons, except for (i) the
indebtedness currently secured by the liens identified on the Pledged Property
identified on Exhibit A hereto and (ii) the endorsement of negotiable
instruments payable to the Company for deposit or collection in the ordinary
course of business. The Company shall not make any loan, advance or extension of
credit to any person other than in the normal course of its business. 

Section 7.7. Debt. 

     The Company shall not create,
incur, assume or suffer to exist any additional indebtedness of any description
whatsoever in an aggregate amount in excess of $25,000 (excluding any
indebtedness of the Company to the Secured Party, trade accounts payable and
accrued expenses incurred in the ordinary course of business and the endorsement
of negotiable instruments payable to the Company, respectively for deposit or
collection in the ordinary course of business). 

Section 7.8. Conduct of Business. 

     The Company will continue to
engage in a business of the same general type as conducted by it on the date of
this Agreement. 

Section 7.9. Places of Business. 

     The location of the Company’s
chief place of business is ___________________. The Company shall not change the
location of its chief place of business, chief executive office or any place of
business disclosed to the Secured Party or move any of the Pledged Property from
its current location without thirty (30) days' prior written notice to the
Secured Party in each instance.

ARTICLE 8.

MISCELLANEOUS 

Section 8.1. Notices. 

     All notices or other
communications required or permitted to be given pursuant to this Agreement
shall be in writing and shall be considered as duly given on: (a) the date of
delivery, if delivered in person, by nationally recognized overnight delivery
service or (b) five (5) days after mailing if mailed from within the continental
United States by certified mail, return receipt requested to the party entitled
to receive the same: 

12 

	 	If to the Secured Party: 	Trafalgar Capital Specialized Investment Fund,
    
	 	  	Luxembourg 
	 	  	8-10 Rue Mathias Hardt 
	 	  	BP 3023 
	 	  	L-1030 Luxembourg 
	 	  	Facsimile: 
	 	  	011-44-207-405-0161 
	 	  	 
	 	  	and 
	 	  	001-786-323-1651 
	 	  	 
	 	With a 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 

     Any party may change its address
by giving notice to the other party stating its new address. Commencing on the
tenth (10th) day after the giving of such notice, such newly
designated address shall be such party’s address for the purpose of all notices
or other communications required or permitted to be given pursuant to this
Agreement. 

Section 8.2. Severability. 

     If any provision of this
Agreement shall be held invalid or unenforceable, such invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render invalid or unenforceable any other severable provision of this
Agreement, and this Agreement shall be carried out as if any such invalid or
unenforceable provision were not contained herein. 

13 

Section 8.3. Expenses. 

     In the event of an Event of
Default, the Company will pay to the Secured Party the amount of any and all
reasonable expenses, including the reasonable fees and expenses of its counsel,
which the Secured Party may incur in connection with: (i) the custody or
preservation of, or the sale, collection from, or other realization upon, any of
the Pledged Property; (ii) the exercise or enforcement of any of the rights of
the Secured Party hereunder or (iii) the failure by the Company to perform or
observe any of the provisions hereof. 

Section 8.4. Waivers, Amendments, Etc. 

     The Secured Party’s delay or
failure at any time or times hereafter to require strict performance by Company
of any undertakings, agreements or covenants shall not waiver, affect, or
diminish any right of the Secured Party under this Agreement to demand strict
compliance and performance herewith. Any waiver by the Secured Party of any
Event of Default shall not waive or affect any other Event of Default, whether
such Event of Default is prior or subsequent thereto and whether of the same or
a different type. None of the undertakings, agreements and covenants of the
Company contained in this Agreement, and no Event of Default, shall be deemed to
have been waived by the Secured Party, nor may this Agreement be amended,
changed or modified, unless such waiver, amendment, change or modification is
evidenced by an instrument in writing specifying such waiver, amendment, change
or modification and signed by the Secured Party. 

Section 8.5. Continuing Security Interest. 

     This Agreement shall create a
continuing security interest in the Pledged Property and shall: (i) remain in
full force and effect until payment in full of the Obligations (whether by
payment in cash or Conversion Shares); and (ii) be binding upon the Company and
its successors and heirs and (iii) inure to the benefit of the Secured Party and
its successors and assigns. Upon the payment or satisfaction in full of the
Obligations, the Company shall be entitled to the return, at its expense, of
such of the Pledged Property as shall not have been sold in accordance with
Section 5.2 hereof or otherwise applied pursuant to the terms hereof. 

Section 8.6. Independent Representation. 

     Each party hereto acknowledges
and agrees that it has received or has had the opportunity to receive
independent legal counsel of its own choice and that it has been sufficiently
apprised of its rights and responsibilities with regard to the substance of this
Agreement. 

Section 8.7. Applicable Law: Jurisdiction. 

     This Agreement shall be governed
by and interpreted in accordance with the laws of the State of Florida without
regard to the principles of conflict of laws. The parties further agree that any
action between them shall be heard in the state courts of Florida located in
Broward County, Florida or the United States District Court for the Southern
District of Florida, and expressly consent to the jurisdiction and venue of
these courts for the adjudication of any civil action asserted pursuant to this
Paragraph. 

14 

Section 8.8. Waiver of Jury Trial. 

     AS A FURTHER INDUCEMENT FOR THE
SECURED PARTY TO ENTER INTO THIS AGREEMENT AND TO MAKE THE FINANCIAL
ACCOMMODATIONS TO THE COMPANY, THE COMPANY HEREBY WAIVES ANY RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS AGREEMENT AND/OR ANY AND
ALL OTHER DOCUMENTS RELATED TO THIS TRANSACTION.

Section 8.9. Entire Agreement. 

     This Agreement constitutes the
entire agreement among the parties and supersedes any prior agreement or
understanding among them with respect to the subject matter hereof. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 

15 

     IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date first above written.

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

16 

EXHIBIT A
DEFINITION OF PLEDGED
PROPERTY 

     For the purpose of securing
prompt and complete payment and performance by the Company of all of the
Obligations, the Company unconditionally and irrevocably hereby grants to the
Secured Party a continuing security interest in and to, and lien upon, the
following Pledged Property of the Company: 

     (a) all goods of the Company,
including, without limitation, machinery, equipment, furniture, furnishings,
fixtures, signs, lights, tools, parts, supplies and motor vehicles of every kind
and description, now or hereafter owned by the Company or in which the Company
may have or may hereafter acquire any interest, and all replacements, additions,
accessions, substitutions and proceeds thereof, arising from the sale or
disposition thereof, and where applicable, the proceeds of insurance and of any
tort claims involving any of the foregoing; 

     (b) all inventory of the Company,
including, but not limited to, all goods, wares, merchandise, parts, supplies,
finished products, other tangible personal property, including such inventory as
is temporarily out of Company’s custody or possession and including any returns
upon any accounts or other proceeds, including insurance proceeds, resulting
from the sale or disposition of any of the foregoing; 

     (c) all contract rights and
general intangibles of the Company, including, without limitation, goodwill,
trademarks, trade styles, trade names, leasehold interests, partnership or joint
venture interests, patents and patent applications, copyrights, deposit accounts
whether now owned or hereafter created; 

     (d) all documents, warehouse
receipts, instruments and chattel paper of the Company whether now owned or
hereafter created; 

     (e) all accounts and other
receivables, instruments or other forms of obligations and rights to payment of
the Company (herein collectively referred to as “Accounts”), together
with the proceeds thereof, all goods represented by such Accounts and all such
goods that may be returned by the Company’s customers, and all proceeds of any
insurance thereon, and all guarantees, securities and liens which the Company
may hold for the payment of any such Accounts including, without limitation, all
rights of stoppage in transit, replevin and reclamation and as an unpaid vendor
and/or lienor, all of which the Company represents and warrants will be bona
fide and existing obligations of its respective customers, arising out of the
sale of goods by the Company in the ordinary course of business; 

     (f) to the extent assignable, all
of the Company’s rights under all present and future authorizations, permits,
licenses and franchises issued or granted in connection with the operations of
any of its facilities; 

     (g) all products and proceeds
(including, without limitation, insurance proceeds) from the above-described
Pledged Property. 

A-1Filed by Automated Filing Services Inc. (604) 609-0244 - Carbiz Inc. - Exhibit 10.5

REGISTRATION RIGHTS AGREEMENT 

     THIS REGISTRATION RIGHTS
AGREEMENT (this “Agreement”), dated as of February 28, 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 “Investor” 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 up to Two Million Five Hundred
Thousand U.S. Dollars (US$2,500,000). 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 premises 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 Investor 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
forty-five (45) days from the date hereof (the “Scheduled Filing
Deadline”), with the SEC a registration statement on Form F-1 or SB-2
(or, if the Company is then eligible, 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 [_________] Common Shares, which represents the lesser of
(i)at least five (5) times the number of shares which are anticipated to be
issued upon conversion of the Convertible Debentures or (ii) thirty percent
(30%) of the Company’s issued and outstanding Common Shares. 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, such that
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 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 declared effective by the
SEC. In the event such limitation occurs, the Company shall file such additional
Registration Statements, within thirty days of the Investor’s demand, 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. Furthermore, in such event, the Company shall use its best efforts to
have such subsequent Registration Statement declared effective within one
hundred twenty (120) 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) twenty-four (24) hours of the receipt thereof from the Company
and (b) the close of the first 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 one hundred twenty (120) days after the date hereof (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
terms and conditions of this Agreement. It shall be an event of default
hereunder if the Initial Registration Statement is not declared effective by the
SEC within one hundred twenty (120) days after filing thereof. An event of
default shall not be triggered, however, if the Initial Registration Statement
is not declared effective by the SEC within one hundred twenty (120) 

2 

days after the filing thereof exclusively due to issues raised
by the SEC 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 Investor, at the Investor’s 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 Investor 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 Investor, 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 Secheduled Effective Date and thereafter, (iii) one of the
reasons for the Company and the Investor 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 Investor 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) 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 

3 

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 Investor 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
Investor may reasonably request) and (iii) such other documents as such Investor
may reasonably request from time to time in order to facilitate the disposition
of the Registrable Securities owned by such Investor. 

     (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 Investor 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 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 Investor 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 

4 

“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
Investor 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 Investor. The Company shall also promptly notify
each Investor 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 Investor 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 Investor 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 Investor, the Company shall furnish to such Investor, on the date of the
effectiveness of the Registration Statement and thereafter from time to time on
such dates as an Investor 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 Investor 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
each Inspector shall agree, and each Investor hereby agrees, to hold in strict
confidence and shall not make any disclosure (except to an Investor) 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 

5 

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 Investor has knowledge. Each Investor 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 Investor
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 Investor is sought in
or by a court or governmental body of competent jurisdiction or through other
means, give prompt written notice to such Investor and allow such Investor, at
the Investor’s 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 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. 

6 

     (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 Investor 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 Investor will
immediately discontinue disposition of Registrable Securities pursuant to any
Registration Statement(s) covering such Registrable Securities until such
Investor’s 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 Investor in accordance with the terms of the
Securities Purchase Agreement in connection with any sale of Registrable
Securities with respect to which an Investor has entered into a contract for
sale prior to the Investor’s 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 Investor has not yet settled. No Investor
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 Investor, the directors, officers, partners, employees, agents,
representatives of, and each Person, if any, who controls any Investor 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, “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 

7 

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 Investor 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 Investor 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 Investor expressly for use in connection with
such Registration Statement; and, subject to Section 6(d), such Investor 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 Investor, which consent 

8 

shall not be unreasonably withheld; provided, further, however,
that the Investor 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
Investor 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 Investor
prior to such Investor’s 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 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 

9 

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 

     (c) furnish to each Investor so
long as such Investor 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 

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 Investor 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: 

	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 an Investor, to its address and facsimile number on the
Schedule of Investors attached hereto, with copies to such Investor’s
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 

11 

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 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 Pledge
Agreement, the Irrevocable Transfer Agent Instructions, the Securities Purchase
Agreement and related documents including the Convertible Debenture and the
Escrow Agreement dated the date hereof by and among the Company, the Investors
set forth on the Schedule of Investors attached hereto, and James G. Dodrill II,
P.A. (the “Escrow Agreement”) 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 Pledge
Agreement, the Irrevocable Transfer Agent Instructions, the Securities Purchase
Agreement and related 

12 

documents including the Convertible Debenture, the Escrow
Agreement 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. 

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. 

     (m) 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 

     IN WITNESS WHEREOF, the
parties have caused this Investor 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 

14 

SCHEDULE I 

SCHEDULE OF INVESTORS 

	Name 	Signature 	 	Address/Facsimile Formatted
  
	  	  	  	 	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 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]

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