8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
__________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

__________________

Date of report: August 17, 2007
(Date of earliest event reported)

INCENTRA SOLUTIONS, INC.
(Exact name of Registrant as specified in its charter)

Nevada
(State or other jurisdiction of incorporation)

333-16031	86-0793960
(Commission File No.)	(I.R.S. Employer
	Identification No.)

1140 Pearl Street
Boulder, Colorado 80302
(Address of principal executive offices; zip code)

(303) 449-8279
(Registrant’s telephone number, including area code)

N/A
(Former Name or Former Address, if changed Since Last Report)

          Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13-4(e) under the Exchange Act (17 CFR 240.13e-4(c))

SECTION 1 – REGISTRANTS BUSINESS AND OPERATIONS

Item 1.01      Entry Into A Material Definitive Agreement

(A)	In connection with the closing of our acquisition of Helio Solutions, Inc., a California corporation (“Helio”), on August 17, 2007, as discussed in Item 2.01 below, we entered into several material agreements. The material agreements include a merger agreement, a stock purchase agreement, a convertible note, registration rights agreements, a warrant, a lock-up and voting agreement and various employment agreements. The descriptions of such agreements contained in Item 2.01 below are incorporated herein by reference.
(B)	On August 17, 2007, we issued and sold a $12 million promissory note (the “Term Note”), together with a common stock purchase warrant (the “Common Stock Purchase Warrant”) to purchase 3,750,000 of our common stock (collectively, the documents are referred to as the “Term Loan Facility”), to Calliope Capital Corporation (“Calliope”), an affiliate of Laurus Master Fund, Ltd. (“Laurus”) pursuant to a Securities Purchase Agreement, dated July 31, 2007, between our company and Calliope (the “Securities Purchase Agreement”). Although we executed the agreement on July 31, 2007, the closing of the financing was conditioned upon the closing of our acquisition of Helio, among other conditions. In connection with the Term Loan Facility, we also entered into a master security agreement, a subsidiary guarantee agreement, a registration rights agreement and a stock pledge agreement. In connection with the Term Loan Facility, we paid to Laurus Capital Management, LLC a non-refundable fee of $415,000.
	On August 16, 2007, we borrowed a total of $6.95 million of the $12 million available to us. Of the $6.95 million drawn, $5.6MM was used to finance the Helio Solutions, Inc. acquisition, $415,000 was used to pay Laurus fees, and $932,000 was used to refinance our existing obligation to Laurus on a secured convertible term note which was convertible at $1.40 per share. We did not incur any prepayment or other penalties associated with the early repayment of that secured convertible term note. The remaining $5 million is available to us for additional acquisitions.
	The Term Note provides that interest on the unpaid principal balance is payable monthly and interest shall accrue at a rate per annum equal to the “prime rate,” as published in The Wall Street Journal from time to time, plus two percent (2%), subject to a floor of ten percent (10%). Principal is payable monthly commencing on February 1, 2008 at the monthly rate of $285,714.28 with remaining principal and unpaid interest due on July 31, 2010. We may prepay the Term Note in whole or in part at any time without penalty. In the event of a default by us or any of our subsidiaries, the entire unpaid balance of the Term Note shall become due and payable. Such events of default include without limitation: a) failure to pay, b) breach of covenant, c) breach of representation and warranties, d) default under other agreements, e) bankruptcy, f) judgements, g) insolvency, h) the indictment or threatened indictment of the Company or any executive officer or the Company under any criminal statute, or commencement or threatened commencement of criminal or civil proceedings against the Company or any executive officer of the Company pursuant to which statute or proceeding penalties or remedies sought or available include forfeiture of any of the property of the Company, i) an event of default as defined in the Purchase Agreement or any Related Agreement, j) stop trade, or k) Failure to deliver Common Stock or replacement note.
	As security for our obligations under the Term Note, we granted Calliope a security interest in all of our assets [and a security interest in all of the assets of our subsidiaries] pursuant to a Master Security Agreement, dated July 31, 2007, between our company, our subsidiaries and Calliope. As further security, we pledged all of the capital stock of all of our subsidiaries, pursuant to a Stock Pledge Agreement, dated July 31, 2007, between our company and Calliope. Our obligations under the Term Note are guaranteed by each of our subsidiaries

pursuant to a Subsidiary Guarantee, dated July 31, 2007, among each of our subsidiaries and Calliope.

     The Warrant provides for the purchase of 3,750,000 shares of our common stock at a purchase price of $ .01 per share at any time after July 31, 2007 but prior to July 31, 2027. Calliope may not exercise the Warrant in the event the number of shares of common stock beneficially owned by Calliope would exceed the difference between (i) 9.99% of the issued and outstanding shares of our common stock and (ii) the aggregate number of shares of common stock beneficially owned by Calliope and Laurus except upon (i) seventy-five (75) days’ prior notice from Calliope to us or (ii) upon the occurrence and continuance of an event of default under the Term Note. In addition, the sale of the shares issuable upon exercise of the warrants are subject to certain volume trading restrictions consistent with those in previous Laurus financings.

     Pursuant to a Registration Rights Agreement, dated July 31, 2007, between our company and Calliope , we are obligated to (a) file a registration statement on or before October 16, 2007 to register the resale of the shares of our common stock underlying the Warrant and the Term Note, (b) use our best efforts to have the registration statement declared effective not later than February 16, 2008 and (c) use reasonable commercial efforts to keep the registration statement continuously effective under the Securities Act of 1933 (the “Securities Act”) until the earlier date of when (i) all registrable securities covered by such registration statement have been sold or (ii) all registrable securities covered by such registration statement may be sold immediately without registration under the Securities Act and without volume restrictions pursuant to Rule 144(k) under the Securities Act, as determined by our counsel pursuant to a written opinion letter to such effect, addressed and acceptable to our transfer agent and the affected holders of our registrable securities.

     The above description of the above material agreements is not a complete description of all of the terms of such material agreements and is qualified in its entirety by reference to the actual agreements, copies of which are included as an exhibit to this Current Report on Form 8-K.

                  SECTION 2 – FINANCIAL INFORMATION

Item 2.01  Completion of Acquisition or Disposition of Assets

     On August 17, 2007 (the “Closing Date”), we acquired Helio, a provider of IT and secure data center solutions to mid-tier enterprises and Fortune 1000 companies. The transaction was effected pursuant to (1) a Merger Agreement dated as of the Closing Date between our company, Incentra Helio Acquisition Corp., a newly formed wholly owned subsidiary of Incentra, Helio, David Condensa as the Shareholders’ representative and all shareholders of Helio by joinder agreement (the “Continuing Shareholders”), and (2) , a stock purchase agreement between Incentra and Paul Chopra, a former Helio shareholder.

     The initial purchase price was approximately $10.3 million, subject to certain post-closing working capital adjustments in the event that working capital as of August 31, 2007 is less than $1.8 million. The price paid at closing to the Continuing Shareholders included $3.4 million in cash and 5,000,000 restricted shares of Incentra common stock. Of the $3.4 million paid in cash, $750,000 was placed into escrow to secure certain working capital and indemnification obligations of Helio, which funds will be released one year after the closing of the transaction according to the terms of the Escrow Agreement, dated as of August 14, 2007, between Incentra Solutions, Inc., Incentra Helio Acquisition Corp., Helio Solutions, Inc., Dave Condensa, as Shareholders’ Representative, and JPMorgan Chase Bank, N.A. The cash amounts paid at closing were provided by proceeds from the Term Note from Calliope as described in Item 1.01.

     The earn-out provisions provide that the Continuing Shareholders can earn up to $15 million (our Company will recover 1,000,000 of the common shares issued at the closing out of any earn-out shares earned before any additional shares are granted) in additional consideration over the next three years based on the achievement of EBITDA greater than a minimum threshold of $2.0 million, $2.5 million and $3.0 million for the first, second and third 12-month periods after closing, respectively. The amount is payable dollar for dollar up to a maximum amount of $5.0 million per year. However, in the event EBITDA does not exceed the previously mentioned minimum thresholds in any of the next three years, there shall be no earn-out payable for that year. The earn-out is payable 50% in cash and 50% in stock of our Company, the number of common shares to be calculated using a price per share of $1.00 in the first year, the greater of $1.00 or 90% of the fair market value of our Company’s stock at the beginning of the second year for year two, and the greater of $2.00 or 90% of the fair market value of our Company’s stock at the beginning of the third year for year three. There is also a “catchup” adjustment mechanism at the end of the three year period if in any of the three years the shareholders do not receive an earn-out payment as a result of not achieving the minimum EBITDA in that year. If at the end of the three-year period the cumulative EBITDA is greater than $7.5MM, we will remeasure the earn-out amount payable based upon the three year cumulative EBITDA amount, subject to the maximum of $15 million. Any earn-out payable as “catch up” shall be payable 50% in cash and 50% in stock of our Company, the number of common shares to be calculated using a price per share equal to the greater of $2.00 or 90% of the fair market value of our Company’s stock at the end of the third year. In the event (a) Dave Condensa is terminated without cause, or should terminate his employment for good reason, (b) of a fundamental change in the business, or (c) the occurrence of a change of control, all future earn-out which has not been earned to that point is accelerated and immediately payable to the Continuing Shareholders in their pro-rata portions. Additionally, should any Continuing Shareholder other than Dave Condensa terminate their employment or be terminated for cause prior to the completion of the three-year earn-out period, they shall forfeit any unearned earnout, and such forfeited earn-out shall be reallocated to the remaining Continuing Shareholders. Should Dave Condensa terminate his employment other than for good reason or be terminated for cause, he shall forfeit any unearned earn-out, and such forfeited earn-out shall be eliminated and not become available to any other Continuing Shareholders.

     The price paid at closing to Paul Chopra, a former Helio shareholder and not a continuing shareholder, included $1.6 million in cash, 1,000,000 restricted shares of our common stock and the issuance of an unsecured, convertible three-year note for $770,000. The convertible note bears interest at a rate of 8% per annum with quarterly principal and interest payments and is convertible into shares of our common stock at a price of $1.00 at the option of Paul Chopra. The note is subject to certain event of default provisions as described more fully in the note.

     The Continuing Shareholders and Paul Chopra were both granted registration rights covering the shares issued in the transaction. At any time after August 14, 2009, upon the request of 66 2/3% of the Continuing Shareholders or Paul Chopra , we will be obligated to file a registration statement covering the registrable securities so requested as soon as practicable.

     We also entered into a lock-up and voting agreement with the Continuing Shareholders as of the closing date. The Continuing Shareholders agreed not to sell or transfer the shares received as of the closing date until August of 2009 except in certain circumstances. The Continuing Shareholders also agreed to vote at least half of the shares

issued and outstanding to them for any resolutions proposed by the Board of Directors, approved by Thomas P. Sweeney III and submitted to a vote by our shareholders.

     In conjunction with the acquisition of Helio, we entered into a three-year employment agreement with Dave Condensa, who will serve as President. The agreement provides for a base salary of $120,000 per year, an annual performance based bonus as determined by the compensation committee of the board of directors of Incentra Helio Acquisition Corp., as well as other standard benefits and terms regarding termination and change of control. All Continuing Shareholders signed five (5) year non-compete and non-solicitation covenants.

     PageMill Partners LLC (“PageMill”) acted as our exclusive mergers and acquisitions advisor in the transaction and, in consideration of its services, we paid a fee of $600,000 in cash and issued a five-year warrant to purchase 600,000 shares of our common stock at $0.80 per share. We also granted PageMill registration rights with respect to the shares of common stock underlying such warrant. At any time after August 14, 2009, upon the request of PageMill, we are obligated to file a registration statement covering the warrant as soon as practicable after such request.

     On August 20, 2007 we issued a press release ( the “Press Release”) in connection with the transactions set forth in item 2.01 above, a copy of which is attached hereto as exhibit 99.1.

     The above description of the transaction and material agreements is not a complete description of all of the terms of such material agreements and is qualified in its entirety by reference to the actual agreements, a copy of which are included as exhibits to this Current Report on Form 8-K

Item 2.03 Creation Of A Direct Financial Obligation Or An Obligation Under An Off-Balance Sheet Arrangement Of A Registrant.

     The description of the note disclosed in Item 1.01 and earn-out provision disclosed in Item 2.01 are incorporated herein by reference.

     SECTION 3 - SECURITIES AND TRADING MARKETS

Item 3.02 Unregistered Sales Of Equity Securities

     In connection with the material contract described in Item 1.01, we issued to Calliope the Common Stock Purchase Warrant described therein. In connection with the transaction described in Item 2.01, we issued shares of our Common Stock to the Continuing Shareholders and Paul Chopra and a warrant to purchase common stock to

PageMill. The warrant and shares were issued in reliance on the exemption from registration provided by Section 4(2) of the Securities Act of 1933, on the basis that their issuance did not involve a public offering, no underwriting fees or commissions were paid by us in connection with such issuance and Calliope, the Continuing Shareholders and Paul Chopra, and PageMill represented to us that they are “accredited investors,” as defined in the Securities Act of 1933.

SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS.

Item 9.01      Financial Statements and Exhibits.

(A)	Financial Statements of Business Acquired
	Financial Statements , if any, required by this item will be provided within the time period prescribed by this item.
(B)	Pro Forma Financial Information
	Pro Forma Financial Information, if any, required by this item will be provided within the time period prescribed by this item.

          (c)           Exhibits.

Number	Documents
10.1	Helio Merger Agreement, dated as of August 14, 2007 by and among Incentra Solutions, Inc., Incentra Helio Acquisition Corp., Helio Solutions, Inc., and Dave Condensa, as Shareholders’ Representative.
10.2	First Amendment to Helio Merger Agreement, dated as of August 14, 2007, between Incentra Solutions, Inc., Incentra Helio Acquisition Corp., Helio Solutions, Inc., and Dave Condensa, as Shareholders’ Representative.
10.3	Security Agreement, dated as of August 16, 2007, between Incentra Solutions and subsidiaries and Dave Condensa, Bert Condensa, Dave Auerweck, Kevin Hawkins and Terri Marine.
10.4	Second Amendment to the Helio Merger Agreement, dated as of August 17, 2007, between Incentra Solutions, Inc., Incentra Helio Acquisition Corp., Helio Solutions, Inc., and Dave Condensa, as Shareholders’ Representative.
10.5	Registration Rights Agreement, dated as of August 14, 2007, between Incentra Solutions, Inc. and Dave Condensa, Bert Condensa, Dave Auerweck, Kevin Hawkins, Terri Marine and Paul Chopra.

10.6	Lock-up and Voting Agreement, dated as of August 14, 2007, between Dave Condensa, Bert Condensa, Dave Auerweck, Kevin Hawkins and Terri Marine.
10.7	Stock Purchase Agreement, dated as of August 14, 2007, between Incentra Solutions, Inc. and Paul Chopra.
10.8	Convertible Promissory Note, dated as of August 14, 2007, issued by Incentra Solutions Inc. to Paul Chopra .
10.9	Registration Rights Agreement, dated as of August 14, 2007, between Incentra Solutions, Inc. and Paul Chopra.
10.10	Employment Agreement, dated as of August 17, 2007, between Incentra Helio Acquisition Corp. and Dave Condensa.
10.11	Escrow Agreement, dated as of August 14, 2007, between Incentra Solutions, Inc., Incentra Helio Acquisition Corp, Helio Solutions, Inc. and Dave Condensa, as Shareholders’ Representative.
10.12	Securities Purchase Agreement, dated as of July 31, 2007, between Incentra Solutions, Inc. and Calliope Capital Corporation.
10.13	Term Note, dated as of July 31, 2007, between Incentra Solutions, Inc. and Calliope Capital Corporation.
10.14	Common Stock Purchase Warrant, dated as of July 31, 2007, by Incentra Solutions, Inc. in favor of Calliope Capital Corporation.
10.15	Master Security Agreement, dated as of July 31, 2007, by Incentra Solutions, Inc. in favor of Calliope Capital Corporation.
10.16	Subsidiary Guarantee, dated as of July 31, 2007, by Incentra Solutions, Inc. in favor of Calliope Capital Corporation.
10.17	Registration Rights Agreement, dated as of July 31, 2007, between Incentra Solutions, Inc. and Calliope Capital Corporation.
10.18	Stock Pledge Agreement, dated as of July 31, 2007, between Incentra Solutions, Inc., Managed Storage International, Inc. and Calliope Capital Corporation.
10.19	Grant of Security Interest in IP, dated as of July 31, 2007, between Incentra Solutions, Inc., Managed Storage International, Inc. and Calliope Capital Corporation.

10.20	Form of Warrant issued to PageMill Partners, LLC.
10.21	Registration Rights Agreement, dated as of August 20, 2007, between Incentra Solutions, Inc. and PageMill Partners, LLC.
99.1	Press Release, dated as of August 20, 2007, announcing our acquisition of Helio Solutions, Inc.

SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	INCENTRA SOLUTIONS, INC.
Date: August 23, 2007	By:	/s/ Thomas P. Sweeney III
		Thomas P. Sweeney III
		Chief Executive Officer

Exhibit Index

NumberDocuments

10.1	Helio Merger Agreement, dated as of August 14, 2007 by and among Incentra Solutions, Inc., Incentra Helio Acquisition Corp., Helio Solutions, Inc., and Dave Condensa, as Shareholders’ Representative.
10.2	First Amendment to Helio Merger Agreement, dated as of August 14, 2007, between Incentra Solutions, Inc., Incentra Helio Acquisition Corp., Helio Solutions, Inc., and Dave Condensa, as Shareholders’ Representative.
10.3	Security Agreement, dated as of August 16, 2007, between Incentra Solutions and subsidiaries and Dave Condensa, Bert Condensa, Dave Auerweck, Kevin Hawkins and Terri Marine.
10.4	Second Amendment to the Helio Merger Agreement, dated as of August 17, 2007, between Incentra Solutions, Inc., Incentra Helio Acquisition Corp., Helio Solutions, Inc., and Dave Condensa, as Shareholders’ Representative.
10.5	Registration Rights Agreement, dated as of August 14, 2007, between Incentra Solutions, Inc. and Dave Condensa, Bert Condensa, Dave Auerweck, Kevin Hawkins, Terri Marine and Paul Chopra.
10.6	Lock-up and Voting Agreement, dated as of August 14, 2007, between Dave Condensa, Bert Condensa, Dave Auerweck, Kevin Hawkins and Terri Marine.
10.7	Stock Purchase Agreement, dated as of August 14, 2007, between Incentra Solutions, Inc. and Paul Chopra.
10.8	Convertible Promissory Note, dated as of August 14, 2007, issued by Incentra Solutions Inc. to Paul Chopra .
10.9	Registration Rights Agreement, dated as of August 14, 2007, between Incentra Solutions, Inc. and Paul Chopra.
10.10	Employment Agreement, dated as of August 17, 2007, between Incentra Helio Acquisition Corp. and Dave Condensa.
10.11	Escrow Agreement, dated as of August 14, 2007, between Incentra Solutions, Inc., Incentra Helio Acquisition Corp, Helio Solutions, Inc. and Dave Condensa, as Shareholders’ Representative.
10.12	Securities Purchase Agreement, dated as of July 31, 2007, between Incentra Solutions, Inc. and Calliope Capital Corporation.

10.13	Term Note, dated as of July 31, 2007, between Incentra Solutions, Inc. and Calliope Capital Corporation.
10.14	Common Stock Purchase Warrant, dated as of July 31, 2007, by Incentra Solutions, Inc. in favor of Calliope Capital Corporation.
10.15	Master Security Agreement, dated as of July 31, 2007, by Incentra Solutions, Inc. in favor of Calliope Capital Corporation.
10.16	Subsidiary Guarantee, dated as of July 31, 2007, by Incentra Solutions, Inc. in favor of Calliope Capital Corporation.
10.17	Registration Rights Agreement, dated as of July 31, 2007, between Incentra Solutions, Inc. and Calliope Capital Corporation.
10.18	Stock Pledge Agreement, dated as of July 31, 2007, between Incentra Solutions, Inc., Managed Storage International, Inc. and Calliope Capital Corporation.
10.19	Grant of Security Interest in IP, dated as of July 31, 2007, between Incentra Solutions, Inc., Managed Storage International, Inc. and Calliope Capital Corporation.
10.20	Form of Warrant issued to PageMill Partners, LLC.
10.21	Registration Rights Agreement, dated as of August 20, 2007, between Incentra Solutions, Inc. and PageMill Partners, LLC.
99.1	Press Release, dated as of August 20, 2007, announcing our acquisition of Helio Solutions, Inc.

EX-10.1

Exhibit 10.1

AGREEMENT AND PLAN OF MERGER

BY AND AMONG

INCENTRA SOLUTIONS, INC.

INCENTRA HELIO ACQUISITION CORP.

HELIO SOLUTIONS, INC.

AND

DAVID CONDENSA,

AS SHAREHOLDERS’ REPRESENTATIVE

Dated as of August ___, 2007

TABLE OF CONTENTS

			Page
RECITALS			10
ARTICLE I
THE MERGER			11
	Section 1.1	The Merger	11
	Section1.2	Closing	11
	Section 1.3	Effective Time	11
	Section 1.4	Effects of the Merger	11
	Section 1.5	Certificate of Incorporation and By-Laws of the Surviving Corporation	11
	Section 1.6	Directors and Officers	12
ARTICLE II
MERGER CONSIDERATION; EFFECT ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES			12
	Section 2.1	Merger Consideration	12
	Section 2.2	Fractional Shares	18
	Section 2.3	Exchange of Certificates	18
	Section 2.4	Certain Adjustments	19
	Section 2.5	Shares of Dissenting Shareholders	20
	Section 2.6	Tax-Free Reorganization	20
ARTICLE III
REPRESENTATIONS AND WARANTIES OF THE COMPANY			20
	Section 3.1	Organization, Standing and Corporate Power	21
	Section 3.2	Subsidiaries	21
	Section 3.3	Capital Structure	21
	Section 3.4	Authority; Noncontravention	22
	Section 3.5	Financial Statements; Undisclosed Liabilities	23
	Section 3.6	Material Contracts	25
	Section 3.7	Permits; Compliance with Applicable Laws	27
	Section 3.8	Absence of Litigation	28
	Section 3.9	Tax Matters	28
	Section 3.10	Employee Benefit Plans	30
	Section 3.11	Labor Matters	33
	Section 3.12	Environmental Matters	34
	Section 3.13	Intellectual Property	35
	Section 3.14	Insurance Matters	38

Page 2

	Section 3.15	Transactions with Affiliates	38
	Section 3.16	Voting Requirements	38
	Section 3.17	Brokers	38
	Section 3.18	Real Property	38
	Section 3.19	Tangible Personal Property	39
	Section 3.20	Powers of Attorney	39
	Section 3.21	Offers	39
	Section 3.22	Warranties	40
	Section 3.23	Investment Company	40
	Section 3.24	Board Approval	40
	Section 3.25	Books and Records	40
	Section 3.26	Status of Shares Being Transferred	40
	Section 3.27	Investment in Parent Common Stock	40
	Section 3.28	Disclosure	41
	Section 3.29	No Shareholder Competing Business	42
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT			42
	Section 4.1	Organization; Standing and Corporate Power	42
	Section 4.2	Capital Structure	43
	Section 4.3	Authority; Noncontravention	43
	Section 4.4	Parent Documents	44
	Section 4.5	Voting Requirements	44
	Section 4.6	Brokers	45
	Section 4.7	Board Approval	45
	Section 4.8	Books and Records	45
	Section 4.9	Sarbanes Oxley Act Compliance	45
	Section 4.10	Additional Representations	45
	Section 4.11	Litigation	46
	Section 4.12	Compliance	46
	Section 4.13	Contracts with Third Parties	46
	Section 4.14	Disclosure	46
ARTICLE V
COVENANTS RELATING TO CONDUCT OF BUSINESS			47
	Section 5.1	Conduct of Business by the Company	47
	Section 5.2	Advice of Changes	48
	Section 5.3	No Solicitation by the Company	48
	Section 5.4	Conduct of Business by Parent	49
	Section 5.5	Transition	49
ARTICLE VI
ADDITIONAL AGREEMENTS			49

Page 3

	Section 6.1	Access to Information; Confidentiality	49
	Section 6.2	Commercially Reasonable Efforts	50
	Section 6.3	Fees and Expenses	51
	Section 6.4	Public Announcements	51
	Section 6.5	Regulation D	51
	Section 6.6	Shareholders Covenant Not to Compete	52
	Section 6.7	Parent Audit of Company	52
ARTICLE VII
CONDITIONS PRECEDENT			52
	Section 7.1	Conditions to Each Party’s Obligation to Consummate the Merger	52
	Section 7.2	Conditions to Obligations of Parent and Merger Sub	53
	Section 7.3	Conditions to Obligations of the Shareholders	55
	Section 7.4	Frustration of Closing Conditions	56
ARTICLE VIII
INDEMNIFICATION; ARBITRATION			57
	Section 8.1	Survival of Representations and Warranties	57
	Section 8.2	Indemnification by Shareholders	57
	Section 8.3	Indemnification by Parent	59
	Section 8.4	Claims and Procedures	59
	Section 8.5	Arbitration	61
	Section 8.6	Shareholders’ Representative	61
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER			63
	Section 9.1	Termination	63
	Section 9.2	Effect of Termination	64
	Section 9.3	Amendment	64
	Section 9.4	Extension; Waiver	64
ARTICLE X
GENERAL PROVISIONS			65
	Section 10.1	Notices	65
	Section 10.2	Definitions	66
	Section 10.3	Interpretation	66
	Section 10.4	Counterparts	67
	Section 10.5	Entire Agreement; no Third-Party Beneficiaries	67
	Section 10.6	Governing Law	67

Page 4

Section 10.7	Assignment	67
Section 10.8	Consent to Jurisdiction	67
Section 10.9	Headings	68
Section 10.10	Severability	68
Section 10.11	Enforcement	68

Page 5

EXHIBITS

Exhibit A - Surviving Corporation Certificate of Incorporation

Exhibit B - Form of Escrow Agreement

Exhibit C - Form of Employment Agreements

Exhibit D –Form of Registration Rights Agreements

Exhibit E - Form of Legal Opinion of Counsel to the Company and Shareholders

Exhibit F - Form of Lock-Up and Voting Agreement

Exhibit G - Form of Legal Opinion of Counsel to Parent

Exhibit H - Mutual Release and Settlement Agreement

Exhibit I - Form of Joinder Agreement

SCHEDULES

Company Disclosure Schedule

Parent Disclosure Schedule

Page 6

INDEX OF DEFINED TERMS

DEFINED TERMS	SECTION
DEFINED
Affiliate	Section 9.3(a)
Agreement	Preamble
Cash Consideration	Section 2.1(b)
Certificate of Merger	Section 1.3
CGCL	Preamble
Closing	Section 1.2
Closing Date	Section 1.2
Closing Statement	Section 1.2(c)(i)
Closing Net Working Capital	Section 2.1(e)(i)
Code	Section 2.9(e)
Company	Preamble
Company Acquisition Proposal	Section 4.3(a)
Company Certificate of Incorporation	Section 2.2(b)
Company Common Stock	Preamble
Company Disclosure Schedule	Article II
Company Financial Statements	Section 2.5(a)
Company IP Agreements	Section 2.13(g)
Company Material Contracts	Section 2.6(b)
Company Permitted Lien	Section 2.19
Competing Business	Section 5.9
DGCL	Preamble
Dispute	Section 7.3
Earn Out Payment	Section 1.1
EBITDA	Section 2.11(f)(vi)
Effective Time	Section 1.3
Employee Plans	Section 2.10(a)
Employment Agreements	Section 6.2(h)
Encumbrance	Section 9.3(c)
Environmental Laws	Section 2.12(d)(i)
Environmental Permits	Section 2.12(d)(ii)
ERISA	Section 2.10(a)
ERISA Affiliate	Section 2.10(a)
Escrow Agreement	Section 2.1(d)
Escrow Deposit	Section 2.1(d)
Escrow Account	Section 2.1(d)
Escrow Fund	Section 2.1(d)
Escrow Termination Date	Section 1.2(d)
Excluded Assets	Section 1.3
Fair Market Value	Section 2.1(e)(iv)
Fiduciary	Section 2.10(e)

Page 7

GAAP	Section 2.1(e)
Government Entities	Section 2.4(c)
Governmental Entity	Section 2.4(c)
Hazardous Substances	Section 2.12(d)(iii)
Indemnified party	Section 7.2(a)
Indemnifying party	Section 7.2(a)
Initial Consideration	Section 1.1
Intellectual Property	Section 2.13(a)
IRS	Section 2.10(g)
Knowledge	Section 9.3(d)
Liens	Section 2.4(d)
Material adverse change	Section 9.3(e)
Material adverse effect	Section 9.3(e)
Merger	Preamble
Merger Consideration	Section 2.1(b)
Merger Sub	Preamble
Measurement Period	Section 2.1(f)(i)
Measurement Period Earn Out Payment	Section 2.1(f)(i)
Multi-Employer Plans	Section 2.10(d)
Net Working Capital	Section 1.2(c)
NVGL	Preamble
NWC Deficit	Section 2.1(e)(iii)
NWC Excess	Section 2.1(e)(iv)
Other Company Documents	Section 2.7(c)
Over 90 Collections	Section 1.2(c)(iv)
Person	Section 9.3(f)
Parent	Preamble
Parent Common Stock	Section 3.2(a)
Parent Employee Stock Options	Section 3.2(a)
Parent Indemnified Parties	Section 7.1(a)
Parent Losses	Section 7.1(a)
Parent SEC Documents	Section 3.4(a)
Parent Preferred Stock	Section 3.2(a)
Parent Shares	Section 2.1(a)(ii)
Parent Stock Plans	Section 3.2(a)
Permits	Section 2.7(a)
Release	Section 2.12(d)(iv)
Registration Rights Agreement	Section 6.2(i)
Requisite Regulatory Approvals	Section 6.1(b)
Restraints	Section 6.1(c)
Sarbanes Oxley Act	Section 3.9
SEC	Section 3.4(a)
Secretary	Section 1.3
Securities Act	Section 2.24(a)
Shareholder Indemnified Parties	Section 7.1(b)
Shareholder Losses	Section 7.1(b)

Page 8

Shareholders	Preamble
Shares	Recitals
Software	Section 2.13(a)
Subsidiary	Section 9.3(g)
Surviving Corporation	Section 1.1
Tangible Personal Property	Section 2.18
Tax	Section 2.9(i)(i)
Taxes	Section 2.9(i)(i)
Tax Return	Section 2.9(i)(ii)
Third Party Rights	Section 2.13(d)
Working Capital	Section 6.2(e)

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AGREEMENT AND PLAN OF MERGER

          AGREEMENT AND PLAN OF MERGER (this “Agreement”) dated as of August ___, 2007, by and among INCENTRA SOLUTIONS, INC., a Nevada corporation (“Parent”), INCENTRA HELIO ACQUISITION CORP., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), HELIO SOLUTIONS, INC., a California corporation (the “Company”), and DAVID CONDENSA, as Shareholders’ Representative (as defined in Section 8.6).

RECITALS

          WHEREAS, each of Parent, Merger Sub and the Company desire Parent to consummate a business combination with the Company in a transaction whereby, upon the terms and subject to the conditions set forth in this Agreement, the Company will merge with and into Merger Sub (the “Merger”), each outstanding share of Common Stock of the Company (“Company Common Stock”) (other than Dissenting Shares (as defined herein), will be converted into the right to receive the Merger Consideration, and Merger Sub will be the surviving corporation in the Merger;

          WHEREAS, the Board of Directors of the Company has unanimously determined and resolved that the Merger and all of the transactions contemplated by this Agreement are in the best interest of the holders of Company Common Stock and that the Merger is fair and advisable, and has approved this Agreement in accordance with the California General Corporation Law, as amended (the “CGCL”), and has further resolved unanimously to recommend to all holders of Company Common Stock that they authorize, approve and adopt this Agreement and the transactions contemplated hereby; and

          WHEREAS, the Boards of Directors of Parent and Merger Sub have unanimously determined and resolved that the Merger and all of the transactions contemplated by this Agreement are in the best interest of Parent and the holders of Parent Common Stock and has adopted this Agreement in accordance with the Nevada General Corporation Law, as amended (the “NVGCL”) and Parent, as sole Shareholder of Merger Sub, has adopted this Agreement in accordance with the Delaware General Corporation Law, as amended (the “DGCL”).

          NOW, THEREFORE, in consideration of the foregoing and the mutual representations, warranties, covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto intending to be legally bound do hereby agree as follows:

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ARTICLE I

THE MERGER

          SECTION 1.1 The Merger. Upon the terms and subject to the conditions set forth in this Agreement and in accordance with the DGCL, at the Effective Time, the Company shall be merged with and into Merger Sub and Merger Sub shall be the surviving corporation in the Merger (the “Surviving Corporation”) and, as such, Merger Sub shall continue its corporate existence as a direct, wholly owned subsidiary of Parent under the laws of the State of Delaware, and the separate corporate existence of the Company thereupon shall cease.

          SECTION 1.2 Closing. Subject to the satisfaction or, to the extent permitted by applicable law, waiver of the conditions to consummation of the Merger contained in Article VII hereof, the closing of the Merger (the “Closing”) shall take place at 9:00 a.m., Denver, CO time, on a date to be specified by the parties (the “Closing Date”), which date shall not be later than the third business day next following the satisfaction or, to the extent permitted by applicable law, waiver of the conditions set forth in Article VII (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or, to the extent permitted by applicable law, waiver of those conditions), unless another time or date is agreed to by the parties hereto. The Closing will be held at the offices of Parent, located at 1140 Pearl Street, Boulder, CO 80302 or at such other location as is agreed to by the parties hereto.

          SECTION 1.3 Effective Time. Upon the terms and subject to the conditions set forth in this Agreement, at the Closing the parties shall cause the Merger to be consummated by filing with the Secretary of State of the State of Delaware (the “Secretary”) a certificate of merger in form and substance acceptable to the parties hereto (the “Certificate of Merger”) duly executed and so filed in accordance with the DGCL and shall make all other filings and recordings required under the DGCL and CGCL to effectuate the Merger and the transactions contemplated by this Agreement. The Merger shall become effective at such time as the Certificate of Merger is duly filed with the Secretary, or at such subsequent date or time as Parent and the Company mutually shall agree and specify in the Certificate of Merger (the time the Merger becomes so effective being hereinafter referred to as the “Effective Time”). The parties shall cooperate with each other and take all commercially reasonable action to pre-position and/or pre-clear the Certificate of Merger with the Secretary of State of Delaware so that the Certificate of Merger is accepted and becomes effective on the Closing Date.

          SECTION 1.4 Effects of the Merger. The Merger shall have the effects set forth in the DGCL.

          SECTION 1.5 Certificate of Incorporation and By-laws of the Surviving Corporation. The certificate of incorporation of Merger Sub as set forth in Exhibit A attached hereto shall be the certificate of incorporation of the Surviving Corporation until thereafter amended or restated as provided therein or by applicable law. The by-laws of

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Merger Sub in effect immediately prior to the Effective Time shall be the by-laws of the Surviving Corporation until thereafter amended or restated as provided therein or by applicable law.

          SECTION 1.6 Directors and Officers. The directors of Merger Sub at the Effective Time shall, from and after the Effective Time, be and become the directors of the Surviving Corporation until their successors shall have been duly elected and qualified or until their earlier death, resignation or removal in accordance with the certificate of incorporation and by-laws of the Surviving Corporation and the DGCL; provided that the board of directors of the Merger Sub shall be comprised of two (2) directors, consisting of Thomas P. Sweeney III and Matthew G. Richman. The officers of Merger Sub at the Effective Time shall, from and after the Effective Time, be and become the officers of the Surviving Corporation until their successors shall have been duly appointed and qualified or until their earlier death, resignation or removal in accordance with the certificate of incorporation and the by-laws of the Surviving Corporation.

ARTICLE II

MERGER CONSIDERATION; EFFECT ON CAPITAL STOCK; EXCHANGE
OF CERTIFICATES

          SECTION 2.1 Merger Consideration. At the Effective Time, by virtue of the Merger and without any action on the part of Parent, Merger Sub, the Company or the holders of any of the following securities:

          (a) The Company Common Stock issued and outstanding immediately prior to the Effective Time (other than any Dissenting Shares, as defined in Section 2.5 hereof) shall be converted into the right for each stockholder of the Company, as set forth in Section 3.3(a) of the Company Disclosure Schedule (the “Shareholders”) to receive his or her respective pro rata share of:

          (i) cash in the amount of Three Million Four Hundred Thousand Dollars ($3,400,000.00); and

          (ii) Five Million shares of Parent’s unregistered common stock, par value $.001 per share (the “Parent Shares”).

          (iii) For purposes of this Agreement, a Shareholder’s pro rata share shall be such Shareholder’s percentage interest in the total number of shares of Company Common Stock as set forth in Section 3.3(a) of the Company Disclosure Schedule.

          (b) For purposes of this Agreement, the payment pursuant to Section 2.1(a)(i) shall be referred to as the “Cash Consideration”, and the term “Merger Consideration” shall mean, collectively, the Parent Shares and the Cash Consideration. At the Closing, Parent shall (i) pay the Cash Consideration described in Section 2.1(a)(i), less the Escrow

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Deposit (as defined in Section 2.1(c) hereof), to the Shareholders by wire transfer of immediately available U.S. federal funds to such accounts as the Shareholders may direct by written notice delivered to Parent or Parent’s counsel; and (ii) issue and deliver stock certificates to the Shareholders representing their respective pro rata shares of the Parent Shares.

          (c) Simultaneously with the Closing, Shareholders’ Representative and Parent shall enter into an escrow agreement (the “Escrow Agreement”) with an escrow agent selected by Parent and reasonably acceptable to the Shareholder Representative (the “Escrow Agent”) substantially in the form of Exhibit B hereto. Pursuant to the terms of the Escrow Agreement, Parent shall deposit Seven Hundred Fifty Thousand Dollars ($750,000.00) of the Cash Consideration (the “Escrow Deposit”) into an interest bearing escrow account, which account is to be managed by the Escrow Agent (the “Escrow Account”). Any Escrow Deposit, any interest thereon, and any other property in the Escrow Account are referred to as the “Escrow Fund”. The Escrow Fund shall be available to satisfy any NWC Deficit (as defined in Section 2.1(d)(iii) below) and any amounts owed by Shareholders to Parent pursuant to Article VIII of this Agreement and the terms of the Escrow Agreement (which amounts shall be paid first from the Escrow Fund until the Escrow Fund is exhausted). Distributions from the Escrow Account shall be governed by the terms and conditions of the Escrow Agreement. The adoption of this Agreement and the approval of the transactions contemplated herein by Shareholders shall constitute approval of the Escrow Agreement and all of the arrangements relating thereto, including, without limitation, the placement of the Escrow Deposit in escrow.

(d)        (i) As promptly as practicable, but no later than ninety (90) days after the Closing Date, Parent shall cause to be prepared and delivered to the Shareholders’ Representative a closing statement (the “Closing Statement”) presenting the Net Working Capital (defined in accordance with generally accepted accounting principles (“GAAP”) as current assets minus current liabilities) as of the end of business on the Closing Date (“Closing Net Working Capital”). Accounts receivable included within Net Working Capital for this purpose shall be valued at face value if the age of the receivable is ninety (90) days or less , and at zero (0) if the age of the receivable is more than ninety (90) days; provided, however receivables aged more than ninety (90) days shall be valued at the face value with respect to purchase orders that have extended terms as a result of extended terms granted to the Company by its vendors, all of which purchase orders are identified in Section __ of Schedule III hereto. Shareholders’ Representative shall have twenty (20) days from receipt of the Closing Statement to dispute the calculation of Net Working Capital by Parent. Shareholders’ Representative shall provide notice to Parent of any such dispute in accordance with the notice provisions of Section 10.1 below. In the event no notice of dispute is provided to Parent, the Closing Statement shall be deemed final and binding on the parties. In the event Shareholders and Parent are not able to agree within thirty (30) days of receipt of the Closing Statement by the Shareholders’ Representative on such calculation, it shall be submitted to a mutually agreed upon independent public accounting firm for final resolution in accordance with the guidelines as provided herein.

Page 13

          (ii) The independent accounting firm selected by Parent and Shareholders’ Representative will be a firm with offices in more than one location. Each party may present financial information to the accounting firm for review within ten (10) days of selection of the firm provided that all such information is simultaneously provided to the other party. No such firm will be engaged that does not undertake to provide its final determination within thirty (30) days of submission of all materials to be reviewed. The decision of the selected accounting firm will be presented in a written report to include the basis for all adjustments made to the Closing Statement. The fees of the accounting firm will be paid one-half by the Parent and one-half by the Shareholders.

          (iii) In the event Closing Net Working Capital is less than One Million Eight Hundred Thousand Dollars ($1,800,000.00), the shortfall shall be referred to herein as the “NWC Deficit”, the Purchase Price shall be reduced by the amount of the NWC Deficit, and an amount equal to the NWC Deficit shall be released from the Escrow Account to Parent. As soon as reasonably practicable (which shall in any case be within fifteen (15) days after the Closing Statement is deemed final), the Parties shall execute and deliver to the Escrow Agent joint instructions as contemplated in Section 4 of the Escrow Agreement, instructing the Escrow Agent to liquidate such portion of the Escrow Fund as required and deliver to Parent funds from the Escrow Fund in an amount equal to the NWC Deficit. In the event the Escrow Fund is less than the NWC Deficit, then each Shareholder shall, within fifteen (15) days of the Closing Working Capital Statement being deemed final, pay to Parent his or her pro rata share of the amount by which the NWC Deficit exceeds the Escrow Fund.

          (iv) In the event Closing Net Working Capital is greater than Two Million Two Hundred Thousand Dollars ($2,200,000.00), the excess shall be referred to herein as the “NWC Excess”, the Purchase Price shall be increased by the amount of the NWC Excess, and an amount equal to the NWC Excess shall be paid to Shareholders in their respective pro rata shares by Parent within fifteen (15) days after the Closing Statement is deemed to be final.

          (v) As soon as reasonably practicable (which shall in any case be within fifteen (15) days after the twelve (12) month anniversary date hereof), the Parties shall execute and deliver to the Escrow Agent joint instructions, as contemplated in Section 4 of the Escrow Agreement, instructing the Escrow Agent immediately to liquidate the Escrow Fund and deliver to Shareholders or Incentra (together with interest earned thereon in proportion to the distribution being made), as designated in such joint instructions, funds then remaining in the Escrow Fund, less the aggregate amount of all disputed amounts relating to any claims made pursuant to Section 8.2 of this Agreement, if any, not paid or otherwise resolved by the aforementioned date. If any such claims are pending resulting in disputed amounts remaining in escrow, the Parties shall, as soon as reasonably practicable after the resolution of such claim, execute and deliver to

Page 14

the Escrow Agent joint instructions (which shall be within fifteen (15) days of such resolution) as contemplated in Section 4 of the Escrow Agreement, instructing the Escrow Agent to liquidate the Escrow Fund and deliver the funds then remaining in escrow in accordance with the resolution of the claim or dispute.

          (e) Subject to the conditions set forth below, Parent will pay Shareholders their respective pro rata shares of Measurement Period Earn Out Payments, as defined below and to be computed as follows:

          (i) For the first twelve (12) calendar month period beginning on the first day of the first calendar month after Closing (the “First Measurement Period”), in the event Company’s EBITDA is in excess of Two Million Dollars ($2,000,000.00), Parent will pay Shareholders, in their respective pro rata shares, additional consideration (the “First Measurement Period Earn Out Payment”) equal to One Dollar for each dollar of Company EBITDA earned during the First Measurement Period, up to a maximum First Measurement Period Earn Out Payment of Five Million Dollars ($5,000,000.00). The First Measurement Period Earn Out Payment shall be payable within ninety (90) days after the end of the First Measurement Period and shall be paid one-half (1/2) in cash and one-half (1/2) in unregistered Parent Common Stock, with the total number of shares of Parent Common Stock to be issued pursuant to this Subsection 2.1(e)(i) determined by dividing one-half (1/2) of the total First Measurement Period Earn Out Payment by One Dollar ($1.00). In the event First Measurement Period EBITDA exceeds Four Million Dollars ($4,000,000.00), the excess EBITDA above Four Million Dollars ($4,000,000.00) shall be carried over and considered EBITDA earned for the Second Measurement Period and thus included in the determination of the Second Measurement Period Earn Out Payment.

          (ii) For the second twelve (12) calendar month period beginning on the first day of the first calendar month after Closing (the “Second Measurement Period”), in the event Company’s EBITDA is in excess of Two Million Five Hundred Thousand Dollars ($2,500,000.00), Parent will pay Shareholders, in their respective pro rata shares, additional consideration (the “Second Measurement Period Earn Out Payment”) equal to One Dollar for each dollar of Company EBITDA earned during the Second Measurement Period, up to a maximum Second Measurement Period Earn Out Payment of Five Million Dollars ($5,000,000.00). The Second Measurement Period Earn Out Payment shall be payable within ninety (90) days after the end of the Second Measurement Period and shall be paid one-half (1/2) in cash and one-half (1/2) in unregistered Parent Common Stock, with the total number of shares of Parent Common Stock to be issued pursuant to this Subsection 2.1(e)(ii) determined by dividing one-half (1/2) of the total Second Measurement Period Earn Out Payment by the greater of One Dollar ($1.00) or ninety percent (90%) of the Fair Market Value of Parent Common Stock (as defined in Section 2.1(e)(iv) below) at the end of the Second Measurement Period (the “Second Period Determination Date”). In the event

Page 15

Second Measurement Period EBITDA exceeds Five Million Dollars ($5,000,000.00), the excess EBITDA above Five Million Dollars ($5,000,000.00) shall be carried over and considered EBITDA earned for the Third Measurement Period and thus included in the determination of the Third Measurement Period Earn Out Payment.

          (iii) For the third twelve (12) calendar month period beginning on the first day of the first calendar month after Closing (the “Third Measurement Period”), in the event Company’s EBITDA is in excess of Three Million Dollars ($3,000,000.00), Parent will pay Shareholders, in their respective pro rata shares, additional consideration (the “Third Measurement Period Earn Out Payment”) equal to One Dollar for each dollar of Company EBITDA earned during the Third Measurement Period, up to a maximum Third Measurement Period Earn Out Payment of Five Million Dollars ($5,000,000.00). The Third Measurement Period Earn Out Payment shall be payable within ninety (90) days after the end of the Third Measurement Period and shall be paid one-half (1/2) in cash and one-half (1/2) in unregistered Parent Common Stock, with the total number of shares of Parent Common Stock to be issued pursuant to this Subsection 2.1(e)(iii) determined by dividing one-half (1/2) of the total Third Measurement Period Earn Out Payment by the greater of Two Dollars ($2.00) or ninety percent (90%) of the Fair Market Value of Parent Common Stock (as defined in Section 2.1(f)(iv) below) at the end of the Third Measurement Period (the “Third Period Determination Date”).

          (iv) For purposes of this Agreement, the Fair Market Value of Parent Common Stock, shall be: (i) if the Company’s common stock is traded on the American Stock Exchange or another national exchange or is quoted on the National or SmallCap Market of The Nasdaq Stock Market, Inc. (“Nasdaq”), then the average of the closing price, reported for the last five (5) business days immediately preceding and including the Determination Date, or (ii) if the Company’s common stock is not traded on the American Stock Exchange or another national exchange or on the Nasdaq but is traded on the National Association of Securities Dealers, Inc. Over-the-Counter Bulletin Board, then the mean of the average of the closing prices reported for the last five (5) business days immediately preceding and including the Determination Date.

          (v) In the event that Company EBITDA for any individual Measurement Period is less than the respective EBITDA threshold for that Measurement Period, there shall be no Measurement Period Earn Out Payment for that Measurement Period.

          (vi) In the event Company EBITDA for any individual Measurement Period is less than the amount of EBITDA required for a Measurement Period Earn Out Payment for that Measurement Period and the Company’s aggregate EBITDA for the three Measurement Periods is greater than Seven Million Five

Page 16

Hundred Thousand Dollars ($7,500,000.00), an adjustment to the earn-out consideration will be calculated whereby Parent shall pay Shareholders their respective pro rata shares of an amount equal to the difference between (y) the actual aggregate EBIDTA over the three Measurement Periods, up to a maximum of Fifteen Million Dollars ($15,000,000.00), and (z) the actual Measurement Period Earn Out Payments made by Parent to Shareholders pursuant to Sections 2.1(e)(i) - (iii) above (the “Adjusting Earn Out Payment”). Any payment pursuant to this Section 2.1(e)(vi) shall be made within ninety (90) days of the end of the final Measurement Period and shall be paid one-half (1/2) in cash and one-half (1/2) in unregistered Parent Common Stock. The number of shares of unregistered Parent Common Stock to be issued shall be determined by dividing one-half (1/2) of the Adjusting Earn Out Payment by the greater of Two Dollars ($2.00) or ninety percent (90%) of the per share Fair Market Value of Parent’s unregistered Common Stock.

          (vii) Notwithstanding anything herein to the contrary, One Million (1,000,000) shares of the Parent Shares issued to Shareholders at Closing pursuant to Section 2.1(a)(ii) above shall be deemed issued as an advance against Parent Common Stock to be issued in payment of Measurement Period Earn Out Payments such that Parent shall not be required to issue any new Parent Common Stock to Shareholders in payment of any Measurement Period Earn Out Payment unless and until Shareholders shall become entitled to receive, in the aggregate, in excess of One Million (1,000,000) shares of Parent Common Stock in payment of one or more Measurement Period Earn Out Payments, and then, and only then, Parent shall be required to issue to Shareholders only the number of shares of Parent Common Stock by which the total to which they are otherwise entitled pursuant to this Section 2.1(e) exceeds One Million (1,000,000). Parent shall not, however, be entitled to recover any Parent Shares issued to Shareholders at Closing which have not been applied to payment of one or more Measurement Period Earn Out Payments pursuant to this Section 2.1(e)(vii) as of the end of the third Measurement Period.

          (viii) For purposes of this Agreement, EBITDA shall be defined as the net income of the Company, as determined by generally accepted accounting principles, plus interest, taxes, depreciation and amortization and subject to the other restrictions or limitations on allocation of expenses as provided in this Agreement.The parties agree that no headquarters or overhead expenses or costs of Parent or its Affiliates or Subsidiaries or other charges of or from Parent, its affiliates or subsidiaries will be allocated or charged to Company for purposes of determining EBITDA under this Agreement, provided that direct costs incurred by Parent, its affiliates or subsidiaries for services provided to and paid for by customers of the Company to the Company, at rates agreed to by the Company and Parent with respect to such services, shall be included at such agreed upon rates for purposes of determining EBITDA hereunder. The parties agree that no new “line items” reflecting costs or expenses shall be permitted to be included as

Page 17

an expense in arriving at this EBITDA, unless previously approved by the Shareholder Representative in his reasonable discretion. In the event of a merger, consolidation or other combination of the Company with another entity, the EBITDA calculation, for purposes of this Agreement, shall be made in a manner that as nearly as is reasonably possible reflects the EBITDA of the Company as it would have been but for such merger, consolidation or combination. Nothing in this Section 2.1(e) shall, however, be construed to prevent any such merger, consolidation or combination or the introduction of new goods and/or services to the line of goods and services provided by the Company. An accountant of Shareholders’ choosing shall be permitted to review and approve the computation of EBITDA following each of the Measurement Periods in question, which approval will not be unreasonably withheld.

          (ix) Parent shall have the right to withhold payment of any Measurement Period Earn Out Payment to a Shareholder up to the amount of the Shareholder’s pro rata liability for any claim reasonably made by Parent pursuant to Article VIII hereof to the extent such claim or claims (A) are not limited by the amount of the Shareholder’s pro rata share of the Escrow Funds in accordance with Section 8.2 below, and (B) exceed the Shareholder’s pro rata share of the then current Escrow Funds.

          (x) Notwithstanding anything herein to the contrary, in the event a Shareholder other than David Condensa resigns his or her employment with the Surviving Corporation during any Measurement Period, such Shareholder shall receive a percentage of his or her pro rata share of the Measurement Period Earn Out Payment for the Measurement Period during which he or she left equal to the percentage of such Measurement Period he or she was employed by Surviving Corporation during such Measurement Period, and shall forfeit and not be entitled to receive any Measurement Period Earn Out Payment for any future Measurement Period. In the event a Shareholder is terminated by the Surviving Corporation For Cause (as defined in his or her employment agreement), such Shareholder shall forfeit and not be entitled to receive any Measurement Period Earn Out Payment for the Measurement Period in which such termination For Cause occurred or for any future Measurement Period thereafter. Any Measurement Period Earn Out Payment forfeited by a Shareholder other than David Condensa pursuant to this Section 2.1(e)(x) shall be reallocated among the non-forfeiting Shareholders in their pro rata shares.

          (xi) In the event David Condensa resigns his or her employment with the Surviving Corporation without Good Reason (as defined in his or her employment agreement) during any Measurement Period, he shall receive a percentage of his pro rata share of the Measurement Period Earn Out Payment for the Measurement Period during which he left equal to the percentage of such Measurement Period he was employed by Surviving Corporation during such Measurement Period, and shall forfeit and not be entitled to receive any Measurement Period Earn Out Payment for any future Measurement Period. In the event David Condensa is terminated by the Surviving Corporation For Cause

Page 18

(as defined in his employment agreement), he shall forfeit and not be entitled to receive any Measurement Period Earn Out Payment for the Measurement Period in which such termination For Cause occurred or for any future Measurement Period thereafter. Any Measurement Period Earn Out Payment forfeited by David Condensa pursuant to this Section 2.1(e)(xi) shall be forfeited in full and shall not be reallocated among non-forfeiting Shareholders.

          (xii) Notwithstanding anything herein to the contrary, in the event Parent or Surviving Corporation engages in any Fundamental Business Changes (as defined below) without the prior written consent of the Shareholder Representative, which consent shall not be unreasonably withheld or delayed, Parent shall pay the Shareholders, in their then applicable percentage interests, the sum of Fifteen Million Dollars ($15,000,000), less the amount of any Measurement Period Earn Out Payments already paid to the Shareholders (such difference, the “Accelerated Earn Out Payment”). The Accelerated Earn Out Payment shall be payable within ninety (90) days after the occurrence of the Fundamental Business Change (unless the prior consent of the Shareholder Representative was obtained) and shall be paid one-half (1/2) in cash and one-half (1/2) in unregistered Parent Common Stock, with the total number of shares of Parent Common Stock to be issued pursuant to this Subsection 2.1(e)(xii) determined by dividing one-half (1/2) of the total Accelerated Earn Out Payment by the greater of One Dollars ($1.00) or the Fair Market Value of Parent Common Stock (as defined in Section 2.1(e)(iv)) at the time of the Fundamental Business Change. “Fundamental Business Change” shall mean (A) the termination of employment of Dave Condensa other than For Cause (as defined in his employment agreement) after Closing; (B) the resignation of Dave Condensa for Good Reason (as defined in his employment agreement); (C) a Change of Control (as defined below) of Parent or Surviving Corporation; (D) a change in the business strategy, fundamental areas of business or corporate objectives of the Surviving Corporation, other than changes consistent with the natural evolution of the business, as operated by the Company, or the industry that results in a Material Adverse Effect on the EBITDA of Surviving Corporation; (G) any material changes in the accounting practices, revenue recognition policies, cost allocation methodologies or categories or types of operating expenses of the Surviving Corporation in a manner inconsistent with those used in the preparation of the prior financial statements of the Company (except to the extent necessary to comply with any changes in GAAP) that results in a Material Adverse Effect on the EBITDA of Surviving Corporation; or (H) any acceleration of recognition of revenue or delay in incurrence of capital expenditures or expenses in a manner inconsistent with past practices of the Company (except to the extent necessary to comply with any changes in GAAP) that results in a Material Adverse Effect on the EBITDA of Surviving Corporation; provided, however, in no event shall a Fundamental Business Change be deemed to have occurred as a result of the addition of services offered by Parent or its Affiliates to the Surviving Corporation’s line of business and accounting or revenue recognition practices required thereby, changes to accounting or revenue recognition practices to the extent necessary to comply with any changes in GAAP or SEC reporting

Page 19

requirements, or by any change in business strategy or accounting practices implemented by the Shareholder Representative in his capacity as an officer or manager of Surviving Corporation. “Change of Control” means any sale of voting securities or sale of assets (whether by sale, merger, consolidation, share exchange, or otherwise in one transaction or a series of transactions) of Parent or Surviving Corporation that results in any third party that is not a shareholder immediately prior to the Closing becoming the owner of securities or assets of the Surviving Corporation or Parent representing over fifty percent (50%) of the combined voting power of Surviving Corporation’s or Parent’s then outstanding securities or all or substantially all of their respective assets; provided, however, no Change of Control shall be deemed to have occurred as a result of any transfer or acquisition of Parent shares or other Parent securities by one or more Shareholders.

          SECTION 2.2 Fractional Shares. No certificates representing fractional shares of Parent Common Stock shall be issued upon the surrender for exchange of certificates representing Company capital stock (“Company Stock Certificates”), no dividend or distribution by Parent shall relate to such fractional share interests, and such fractional share interests shall not entitle the owner thereof to vote or to any rights as a Shareholder of Parent. Further, no holder of a Company Stock Certificate who otherwise would have been entitled to receive in the Merger a fractional share interest in exchange for such Company Stock Certificate shall have the right to receive cash payment in lieu thereof. In lieu of any such fractional shares or cash payment, (x) any such fractional share interest greater than or equal to one-half of a share (0.5) shall be rounded up to the next whole share number, and (y) any such fractional share less than one-half of a share (0.5) shall be rounded down to the preceding whole share number and the certificates representing shares of Parent Common Stock to be issued in the Merger shall reflect such adjustments.

          SECTION 2.3 Exchange of Certificates. (a) At the Closing, the Shareholders shall surrender to the Parent all Company Stock Certificates in proper form for cancellation, and upon such surrender shall be entitled to receive in exchange therefor his or her respective Merger Consideration, including a certificate (or certificates) representing such whole number of shares of Parent Common Stock as such holder is entitled to receive pursuant to this Article II in such denominations and registered in such names as such holder may request. The shares represented by the Company Stock Certificate so surrendered shall forthwith be cancelled. Without limiting the generality of the foregoing (and notwithstanding any other provisions of this Agreement), no interest shall be paid or accrued in respect of any of the Merger Consideration payable to holders of Company Common Stock in accordance with this Article II. Until surrendered in accordance with this Section 2.3, each Company Stock Certificate shall be deemed at all times from and after the Effective Time to represent only the right to receive upon such surrender the Merger Consideration.

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          (b) If any Company Stock Certificate shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Company Stock Certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the posting by such person of a bond, in such reasonable amount as the Surviving Corporation may direct, as indemnity against any claim that may be made against it with respect to such Company Stock Certificate, Parent shall issue in exchange for such lost, stolen or destroyed Company Stock Certificate, the applicable Merger Consideration to which such person is entitled pursuant to the provisions of this Article II.

          (c) Notwithstanding any other provisions of this Agreement, no dividends or other distributions declared or made after the Effective Time in respect of shares of Parent Common Stock having a record date after the Effective Time shall be paid to the holder of any unsurrendered Company Stock Certificate until the holder shall surrender such Company Stock Certificate as provided in this Section 2.3. Subject to applicable law, following surrender of any such Company Stock Certificate, there shall be paid to the holder of the certificates representing whole shares of Parent Common Stock issued in exchange therefore, in each case without any interest thereon, (i) at the time of such surrender, the amount of dividends or other distributions, if any, having a record date after the Effective Time theretofore payable with respect to such whole shares of Parent Common Stock and not paid, less the amount of all required withholding Taxes in respect thereof, and (ii) at the appropriate payment date subsequent to surrender, the amount of dividends or other distributions having a record date after the Effective Time but prior to the date of such surrender and having a payment date subsequent to the date of such surrender and payable with respect to such whole shares of Parent Common Stock, less the amount of all required withholding Taxes in respect thereof.

          (d) All shares of Parent Common Stock issued upon surrender of Company Stock Certificates in accordance with this Article II shall be deemed to have been issued and paid in full satisfaction of all rights pertaining to such shares of Company Common Stock represented thereby and, as of the Effective Time, the stock transfer books and records of the Company shall be closed and there shall be no further registration of transfers on the stock transfer books and records of the Company of shares of Company Common Stock outstanding immediately prior to the Effective Time. If, after the Effective Time, Company Stock Certificates are properly presented to the Surviving Corporation for any reason (but otherwise in accordance with this Article II), they shall be cancelled and exchanged for the Merger Consideration as provided in this Section 2.3.

          SECTION 2.4 Certain Adjustments. If, after the date hereof and prior to the Effective Time and to the extent permitted by this Agreement, the outstanding shares of Parent Common Stock or Company Common Stock shall be changed into a different number, class or series of shares by reason of any reclassification, recapitalization or combination, forward stock split, reverse stock split, stock dividend or rights issued in respect of such stock, or any similar event shall occur (any such action, an “Adjustment Event”), the Merger Consideration shall be adjusted correspondingly to provide to the

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holders of Company Common Stock the right to receive shares of Parent Common Stock having the same economic value as contemplated by this Agreement immediately prior to such Adjustment Event and Parent’s payment obligations likewise shall be correspondingly adjusted such that it shall be required to pay and deliver not more than the aggregate Merger Consideration contemplated by this Agreement. Notwithstanding the foregoing provision, the aggregate amount of the Cash Consideration shall not change under any circumstances.

          SECTION 2.5 Shares of Dissenting Shareholders. Notwithstanding anything in this Agreement to the contrary, any shares of Company Common Stock that are outstanding as of the Effective Time and that are held by a holder of Company Common Stock who has properly exercised his or her rights under Section 1300 et. seq. of the CGCL (the “Dissenting Shares”) or under the DGCL shall not be converted into the right to receive the Merger Consideration; provided, however, if any such holder shall have failed to perfect or shall have effectively withdrawn or lost his right to dissent from the Merger under the CGCL or DGCL and to receive such consideration as may be determined to be due with respect to such Dissenting Shares pursuant to and subject to the requirements of the CGCL or DGCL, each share of such holder’s Company Common Stock thereupon shall be deemed to have been converted into and to have become, as of the Effective Time, the right to receive, without any interest thereon, the Merger Consideration in accordance with Article II. The Company shall give Parent prompt written notice of (i) all demands for appraisal or payment for shares of Company Common Stock received by the Company prior to the Effective Time in accordance with the CGCL or DGCL, and (ii) any settlement or offer to settle any such demands. The Company shall not, except with the prior written consent of Parent, make any payment with respect to any demands for appraisal or offer to settle or settle any such demands.

          SECTION 2.6 Tax-Free Reorganization. The Merger is intended to qualify as a reorganization described in Section 368(a)(2)(D) of the Internal Revenue Code of 1986, as amended (the “Code”), and the parties hereto agree not to take any action which could result in the Merger failing to so qualify. The parties hereto further agree to report the Merger for all purposes as a reorganization under Section 368 of the Code, and that this Agreement is intended to be a “plan of reorganization” within the meaning of Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations. The parties agree to cooperate to minimize the taxes payable with the respect to the transactions contemplated by this Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

          Except as set forth on the Disclosure Schedule delivered by the Company to Parent prior to the execution of this Agreement which hereby is incorporated by reference

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in and constitutes an integral part of this Agreement (the “Company Disclosure Schedule”), Company hereby represents and warrants to Parent as follows:

          SECTION 3.1 Organization, Standing and Corporate Power.

     (a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the state of its incorporation or organization and has the requisite corporate power and authority to carry on its business as presently being conducted. The Company is duly qualified or licensed to conduct business and is in good standing in each jurisdiction in which the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, except for those jurisdictions where the failure to be so qualified or licensed or to be in good standing individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect on the Company.

     (b) The Company has delivered or made available to Parent prior to the execution of this Agreement complete and correct copies of the certificate of incorporation and by-laws of the Company and each of its subsidiaries, each as in effect at the date of this Agreement.

          SECTION 3.2. Subsidiaries. The Company has no Subsidiaries. Except as set forth in Section 3.2 of the Company Disclosure Schedule, the Company does not own, directly or indirectly, any capital stock of or other equity or voting interests in any person.

          SECTION 3.3. Capital Structure. As of the date hereof:

                    (a) (i) The only class of capital stock authorized by the Company is common stock (“Company Common Stock”); and (ii) 8,000,000 shares of Company Common Stock are authorized and 3,940,000shares of Company Common Stock are issued and outstanding, all held by those persons named in Section 3.3(a) of the Company Disclosure Schedule in the amounts set forth next to their respective names therein.

                    (b) Except as set forth on Section 3.3(b) of the Company Disclosure Schedule, all outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable and are not subject to preemptive rights created by the Company’s Articles of Incorporation (the “Company Certificate of Incorporation”) or any agreement to which the Company is a party or by which the Company may be bound.

                    (c) Except as set forth in Section 3.3(c) of the Company Disclosure Schedule, there are outstanding (i) no shares of capital stock or other voting securities of the Company, (ii) no securities of the Company convertible into or exchangeable for shares of capital stock or voting securities of the Company, and (iii) no options or other

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rights to acquire from the Company, and no obligation of the Company to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock of the Company, other than the shares of Company Common Stock set forth in Section 3.3(a) of the Company Disclosure Schedule.

          SECTION 3.4. Authority; Noncontravention.

                    (a) The Companyhas all necessary corporate power and authority to execute, deliver and perform this Agreement and, subject to obtaining the necessary approvals of the Shareholders, to perform its obligations hereunder and to consummate the Merger and the other transactions contemplated by this Agreement. The execution and delivery of this Agreement by the Company and the consummation by the Company of the Merger and the other transactions contemplated by this Agreement have been duly and validly authorized by all necessary corporate action and no other corporate proceedings on the part of Company are necessary to authorize this Agreement or to consummate the Merger and the other transactions contemplated by this Agreement (other than the approval and adoption of this Agreement and the Merger by the Shareholders as described in Section 3.16 hereof and the filing and recordation of the appropriate merger documents as required by the CGCL, NGCL and DGCL). This Agreement has been duly and validly delivered by the Company and, assuming the due authorization, execution and delivery by Parent and Merger Sub, constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.

                    (b) Except as set forth in Section 3.4(b) of the Company Disclosure Schedule, the execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, conflict with or result in a violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any material obligation under (i) any provision of the Company Certificate of Incorporation or by-laws, (ii) any material loan or credit agreement, note, mortgage, indenture, lease or other material agreement or (iii) material instrument, permit, license, judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Company or its properties or assets.

                    (c) The execution, delivery and performance by the Shareholders of this Agreement and the consummation of the purchase and sale of the Shares by Shareholders require no consent, approval, order or authorization of, action by or in respect of, or registration or filing with, any governmental body, court, agency, official or authority (each, a “Governmental Entity”, collectively “Government Entities”).

                    (d) The execution and delivery of this Agreement and the consummation of the purchase and sale of the Shares will not result in the creation of any pledges, claims, liens, charges, encumbrances, adverse claims, mortgages and security

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interests of any kind or nature whatsoever (collectively, “Liens”) upon any asset of the Company.

                    (e) Except as set forth in Section 3.4(e) of the Company Disclosure Schedule, no consent, approval, waiver or other action by any person (other than the Governmental Entities referred to in (d) above) under any Company Material Contract is required or necessary for, or made necessary by reason of, the execution, delivery and performance of this Agreement by the Shareholders or the consummation of the purchase and sale of the Shares.

          SECTION 3.5. Financial Statements; Undisclosed Liabilities.

                    (a) The Company has furnished to the Parent true, correct and complete copies of a balance sheet, income statement, statement of cash flows and statement of Shareholders equity and the footnotes thereto for each of the fiscal years ended December 31, 2004, December 31, 2005, and December 31, 2006 reviewed by the Company’s independent accountants, and Company prepared balance sheets, income statements, statements of cash flow and statements of Shareholders equity for each of the fiscal years ended December 31, 2005, December 31, 2006 and for the three month period ended March 31, 2007 (collectively, the “Company Financial Statements”). Except as set forth in Section 3.5(a) of the Company Disclosure Schedule, the Company Financial Statements have been prepared in accordance with Generally Accepted Accounting Principles in the United States and fairly present in all material respects the financial condition of the Company and its subsidiaries as at the respective dates thereof; provided, however, that the Company prepared financial statements for the three month period ended March 31, 2007 are subject to normal year-end adjustments (which will not be material individually or in the aggregate) and lack footnotes and other presentation items.

                    (b) Except for liabilities (i) set forth in Section 3.5 of the Company Disclosure Schedule, (ii) reflected in the Company Financial Statements or described in any notes thereto (or for which neither accrual nor footnote disclosure is required pursuant to GAAP), or (iii) incurred in the ordinary course of business, consistent with past practice or in connection with this Agreement or the transactions contemplated hereby, neither the Company nor any of its subsidiaries has any material liabilities or obligations of any nature. The Company is not in default in respect of any terms or conditions of any indebtedness.

                    (c) Other than changes in the usual and ordinary conduct of business since December 31, 2006, there have been, and at the Closing Date there will be, no material, adverse changes in the financial condition of the Company. Specifically, but, not by way of limitation, since its balance sheet of December 31, 2006 the Company has not, and prior to the Closing Date will not have:

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                         (i) Issued or sold any stock, bond, or other Company securities;

                         (ii) Except for current liabilities incurred and obligations under contracts entered into in the ordinary course of business and except as set forth in Section 3.5(c)(ii) of the Company Disclosure Schedule, incurred any obligation or liability, whether absolute or contingent (in excess of $100,000 individually or in the aggregate);

                         (iii) Except for current liabilities shown on the balance sheet and current liabilities incurred since that date in the ordinary course of business and except as set forth in Section 3.5(c)(iii) of the Company Disclosure Schedule, discharged or satisfied any lien or encumbrance, or paid any obligation or liability, absolute or contingent nor has it delayed or postponed the payment of accounts payable and other Liabilities outside the ordinary course of business;

                         (iv) Mortgaged, pledged or subjected to lien or any other encumbrance, any of its assets, tangible or intangible;

                         (v) Except in the ordinary course of business, sold or transferred any of its inventory or other tangible assets or canceled any debts or claims, except any excluded assets, or canceled debts or claims as listed in Section 3.5(c)(v) of the Company Disclosure Schedule;

                         (vi) Sold, assigned, or transferred any patents, formulas, trademarks, trade names, copyrights, licenses, or other intangible assets other than in the ordinary course of business;

                         (vii) Suffered any extraordinary losses, been subjected to any strikes or other labor disturbances, or waived any rights of any substantial value; or

                         (viii) Except for transactions contemplated by this Agreement, entered into any transaction other than in the ordinary course of business; including, but not limited to, any loan to or other transaction with any of its owners, directors, officers, and employees outside the ordinary course of business.

                    (d) Subject to any changes that may have occurred in the ordinary and usual course of business, the assets of the Company at the Closing Date will be substantially those owned by it and shown on the Company Financial Statements.

                    (e) All accounts receivable of the Company and the Subsidiaries reflected on the Company Financial Statements are valid receivables subject to no setoffs

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or counterclaims and are current and collectible (within 90 days after the date on which they first become due and payable), net of the applicable reserve for bad debts on the Company Financial Statements. All accounts receivable reflected in the financial or accounting records of the Company and the Subsidiaries that have arisen since the date of the Company Financial Statements are valid receivables subject to no setoffs or counterclaims and are current and collectible (within 90 days after the date on which they first become due and payable), net of the applicable reserve for bad debts on the Company Financial Statements.

                    (f) Section 3.5(f) of the Company Disclosure schedule describes each account maintained by or for the benefit of the Company or any Subsidiary at any bank or other financial institution.

                    (g) All inventory of the Company and the Subsidiaries whether or not reflected on the Company Financial Statements, consists of a quality and quantity usable and saleable in the ordinary course of business, except for obsolete items and items of below-standard quality, all of which have been written-off or written-down to net realizable value on the Company Financial Statements. All inventories not written-off have been priced at the lower of net realizable value on a first -in, first-out basis. The quantity of each type of inventory, whether raw materials, or work-in-process or finished goods, are not excessive in the present circumstances of the Company and the Subsidiaries.

          SECTION 3.6. Material Contracts.

                    (a) Each Company Material Contract is valid and binding on and enforceable against the Company (or, to the extent a subsidiary is a party, such subsidiary) and each other party thereto and is in full force and effect. Except as set forth in Section 3.6 of the Company Disclosure Schedule, neither the Company nor any of the individual Shareholders nor any of the Company’s subsidiaries nor any related parties is in breach or default under any Company Material Contract nor has caused an event, committed any act or failed to commit any act which would create a breach or default under any Company Material Contract. Except as set forth in Section 3.6 of the Company Disclosure Schedule, neither the Shareholders, the Company nor any of its subsidiaries knows of, regardless of whether or not notice has been received, any violation or default under (nor does there exist any condition which with the passage of time or the giving of notice or both would result in such a violation or default under) any Company Material Contract by any other party thereto. In addition, the Company is not in breach or default and none of the Shareholders, individually, has performed any act that would create a breach or default under the Sun Microsystems reseller and partner agreements nor that would violate the spirit of the aforementioned agreements. Prior to the date hereof, the Shareholders have made available to Parent true and complete copies of all Company Material Contracts.

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                    (b) Section 3.6(b) of the Company Disclosure Schedule lists (under the appropriate subsection) each of the following written or oral contracts and agreements of the Company or any Subsidiary of the Company (such contracts and agreements being the “Company Material Contracts”):

(i) each contract and agreement for the purchase or lease of personal property with any supplier or for the furnishing of services to the Company or any Subsidiary with payments greater than One Hundred Thousand Dollars ($100,000.00) in the aggregate;

(ii) all contracts and agreements relating to indebtedness other than trade indebtedness of the Company or any, including any contracts and agreements in which the Company is a guarantor of indebtedness;

(iii) all contracts and agreements that limit or purport to limit the ability of the Company or any Company Subsidiary to compete in any line of business or with any person or in any geographic area or during any period of time;

(iv) all contracts and agreements between or among the Company and any Shareholder of the Company or any Affiliate of a Shareholder;

(v) all contracts and agreements relating to the voting and any rights or obligations of a stockholder of the Company or any

(vi) all contracts regarding the acquisition, issuance or transfer of any securities and each contract affecting or dealing with any securities of the Company, including, without limitation, any restricted stock agreements or escrow agreements;

(vii) any agreement of the Company that is terminable upon or prohibits assignment or a change of ownership or control of the Company;

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(viii) all other contracts and agreements, whether or not made in the ordinary course of business, that contemplate an exchange of consideration with an aggregate value greater than One Hundred Thousand Dollars ($100,000.00); and

(ix) all contracts with Sun Microsystems, Arrow Electronics (Moca) and other contracts and agreements with distributors or manufacturers essential to the ongoing operation of the business of Company.

                    (c) The Company has delivered or made available to Parent accurate and complete copies of (i) all Company Material Contracts identified in Section 3.6(b) of the Company Disclosure Schedule, including all amendments thereto, and (ii) all correspondence related to the status of, any alleged breach of or noncompliance with Company agreements with Sun Microsystems and Arrow Electronics (Moca). Section 3.6(b) of the Company Disclosure Schedule provides an accurate description of the terms of each Company Material Contract that is not in written form.

                    SECTION 3.7. Permits; Compliance with Applicable Laws.

                    (a) The Company owns and/or possess all material permits, licenses, variances, authorizations, exemptions, orders, registrations and approvals of all Governmental Entities which are required for the operation of the business of the Company (the “Permits”) as presently conducted. The Company is in compliance in all material respects with the terms of the Permits. All the Permits are in full force and effect and no suspension, modification or revocation of any of them is pending or threatened nor do grounds exist for any such action.

                    (b) Except as set forth in Section 3.7(b) of the Company Disclosure Schedule, the Company, to its Knowledge, is in compliance in all material respects with all applicable statutes, laws, regulations, ordinances, Permits, rules, writs, judgments, orders, decrees and arbitration awards of each Governmental Entity applicable to the Company.

                    (c) Except for filings with respect to Taxes, which are the subject of Section 3.9 and not covered by this Section 3.7(c) and except as set forth in Section 3.7(c) of the Company Disclosure Schedule, the Company has timely filed all material regulatory reports, schedules, forms, registrations and other documents, together with any amendments required to be made with respect thereto, that they were required to file with each Governmental Entity (the “Other Company Documents”), and have timely paid all fees and assessments, if any, due and payable in connection therewith, except where the

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failure to make such payments and filings individually or in the aggregate would not have a Material Adverse Effect on the Company.

                    SECTION 3.8. Absence of Litigation. Section 3.8 of the Company Disclosure Schedule contains a true and current summary description of each pending and, to the Knowledge of the Company, threatened litigation, action, suit, case, proceeding, investigation or arbitration. Except as set forth in Section 3.8 of the Company Disclosure Schedule, no action, inquiry, demand, charge, requirement or investigation by any Governmental Entity and no litigation, action, suit, case, proceeding, investigation or arbitration by any person, shareholder, former shareholder or Governmental Entity, in each case with respect to the Company, its officers or directors in such capacities, or any of its subsidiaries or any of their respective properties or Permits, is pending or, to the knowledge of Shareholders, threatened.

                    SECTION 3.9. Tax Matters.

                    (a) Except as set forth in Section 3.9 of the Company Disclosure Schedule, the Company has (i) filed with the appropriate Governmental Entities all United States federal and state income and other material Tax Returns required to be filed by it (giving effect to all extensions) and such Tax Returns are true, correct and complete in all material respects; (ii) paid in full all United States federal income and other material Taxes required to have been paid by it; and (iii) made adequate provision for all accrued Taxes not yet due. The accruals and provisions for Taxes reflected in the Company Financial Statements are adequate for all Taxes accrued or accruable through the date of such statements.

                    (b) Except as set forth in Section 3.9 of the Company Disclosure Schedule, as of the date of this Agreement, no Federal, state, local or foreign audits or other administrative proceedings or court proceedings are presently pending with regard to any Taxes or Tax Returns of the Company, and the Company has not received a written notice of any material pending or proposed claims, audits or proceedings with respect to Taxes.

                    (c) Except as set forth in Section 3.9 of the Company Disclosure Schedule, no deficiency or proposed adjustment which has not been settled or otherwise resolved for any amount of Tax has been proposed, asserted, or assessed in writing by any Governmental Entity against, or with respect to, the Company or any of its subsidiaries. There is no action, suit or audit now in progress, pending or, to the Knowledge of the Company, threatened against or with respect to the Company or any of its subsidiaries with respect to any material Tax.

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                    (d) Neither the Company nor any of its subsidiaries has been included in any “consolidated,” “unitary” or “combined” Tax Return (other than Tax Returns which include only the Company) provided for under the laws of the United States, any foreign jurisdiction or any state or locality with respect to Taxes for any taxable year.

                    (e) No election under Section 341(f) of the Internal Revenue Code as from time to time amended (the “Code”) has been made by the Company or any of its subsidiaries.

                    (f) No claim has been made in writing by any Governmental Entities in a jurisdiction where the Company or any of its subsidiaries does not file Tax Returns that the Company is, or may be, subject to taxation by that jurisdiction.

                    (g) Except as set forth in Section 3.9 of the Company Disclosure Schedule, the Company has made available to Parent correct and complete copies of (i) all of its material Tax Returns filed within the past three (3) years, (ii) all audit reports, letter rulings, technical advice memoranda and similar documents issued by a Governmental Entity within the past three (3) years relating to the Federal, state, local or foreign Taxes due from or with respect to the Company or any of its subsidiaries, and (iii) any closing letters or agreements entered into by the Company with any Governmental Entities within the past three (3) years with respect to Taxes.

                    (h) Except as set forth in Section 3.9 of the Company Disclosure Schedule, the Company has not received any notice of deficiency or assessment from any Governmental Entity for any amount of Tax that has not been fully settled or satisfied, and to the knowledge of the Shareholders, no such deficiency or assessment is proposed.

                    (i) For purposes of this Agreement:

     (i) “Tax” or “Taxes” shall mean all federal, state, county, local, foreign and other taxes of any kind whatsoever (including, without limitation, income, profits, premium, excise, sales, use, occupancy, gross receipts, franchise, ad valorem, severance, capital levy, production, transfer, license, stamp, environmental, withholding, employment, unemployment compensation, payroll related and property taxes, import duties and other governmental charges and assessments), whether or not measured in whole or in part by net income, and including deficiencies, interest, additions to tax or interest, and penalties with respect thereto, and including expenses associated with contesting any proposed adjustment related to any of the foregoing.

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     (ii) “Tax Return” shall mean any return, information report or filing with respect to Taxes, including any schedules attached thereto and including any amendments thereof.

                    SECTION 3.10. Employee Benefit Plans.

                    (a) Section 3.10 of the Company Disclosure Schedule contains a true and complete list of all pension, stock option, stock purchase, benefit, welfare, profit-sharing, retirement, disability, vacation, severance, hospitalization, insurance, incentive, deferred compensation and other similar fringe or employee benefit plans, funds, programs or arrangements, whether written or oral, in each of the foregoing cases which (i) covers, is maintained for the benefit of, or relates to any or all current or former employees of the Company or any of its subsidiaries and any other entity (“ERISA Affiliate”) related to the Company under Section 414(b), (c), (m) and (o) of the Code and (ii) is not a “multiemployer plan” as defined in Section 3(37) or Section 4001(a)(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) or Section 414 of the Code (the “Employee Plans”). Section 3.10 of the Company Disclosure Schedule identifies and includes but is not limited to, each of the Employee Plans that is subject to Section 302 or Title IV of ERISA or Section 412 of the Code. Neither the Company, any of its subsidiaries nor any ERISA Affiliate of the Company or any of its subsidiaries has any commitment or formal plan, whether or not legally binding, to create any additional employee benefit plan or modify or change any existing Employee Plan other than as may be required by the express terms of such Employee Plan or applicable law.

                    (b) With respect to each Employee Plan that has been qualified or is intended to be qualified under the Code or that is an “Employee Benefit Plan” within the meaning of Section 3.3 of ERISA, such Employee Plan has been duly approved and adopted by all necessary and appropriate action of the Board of Directors of the Company (or a duly constituted committee thereof).

                    (c) Except as set forth in Section 3.10 of the Company Disclosure Schedule, with respect to the Employee Plans, all required contributions for all periods ending before the Closing Date have been or will be paid in full by the Closing Date. Subject only to normal retrospective adjustments in the ordinary course, all required insurance premiums have been or will be paid in full with regard to such Employee Plans for policy years or other applicable policy periods ending on or before the Closing Date by the Closing Date. As of the date hereof, none of the Employee Plans has unfunded benefit liabilities, as defined in Section 4001(a)(16) of ERISA.

                    (d) The Company has no “multi-employer plans,” as defined in Section 3(37) or Section 4001(a)(3) of ERISA or Section 414 (“Multi-Employer Plans”), and never has had any such plans.

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                    (e) With respect to each Employee Plan (i) no prohibited transactions as defined in Section 406 of ERISA or Section 4975 of the Code have occurred or are expected to occur as a result of the Purchase or the transactions contemplated by this Agreement, (ii) no action, suit, grievance, arbitration or other type of litigation, or claim with respect to the assets of any Employee Plan (other than routine claims for benefits made in the ordinary course of plan administration for which plan administrative review procedures have not been exhausted) is pending or, to the knowledge of the Shareholders, threatened or imminent against the Company, any ERISA Affiliate or any fiduciary, as such term is defined in Section 3(21) of ERISA (“Fiduciary”), including, but not limited to, any action, suit, grievance, arbitration or other type of litigation, or claim regarding conduct that allegedly interferes with the attainment of rights under any Employee Plan. To the knowledge of the Shareholders, neither the Company, nor its directors, officers, employees nor any Fiduciary has any liability for failure to comply with ERISA or the Code for any action or failure to act in connection with the administration or investment of such plan. None of the Employee Plans is subject to any pending investigations or to the knowledge of the Company threatened investigations from any Governmental Agencies who enforce applicable laws under ERISA and the Code.

                    (f) Except as set forth in Section 3.10 of the Company Disclosure, each of the Employee Plans is, and has been, operated in accordance with its terms and each of the Employee Plans, and administration thereof, is, and has been, in all material respects in compliance with the requirements of any and all applicable statutes, orders or governmental rules or regulations currently in effect, including, but not limited to, ERISA and the Code. Except as set forth in Section 3.10 of the Company Disclosure Schedule, all required reports and descriptions of the Employee Plans (including but not limited to Form 5500 Annual Reports, Form 1024 Application for Recognition of Exemption Under Section 501(a), Summary Annual Reports and Summary Plan Descriptions) have been timely filed and distributed as required by ERISA and the Code. Any notices required by ERISA or the Code or any other state or federal law or any ruling or regulation of any state or federal administrative agency with respect to the Employee Plans, including but not limited to any notices required by Section 4980B of the Code, have been appropriately given.

                    (g) The Internal Revenue Service (the “IRS”) has issued a favorable determination letter or opinion letter with respect to each Employee Plan intended to be “qualified” within the meaning of Section 401(a) of the Code that has not been revoked and, to the knowledge of the Shareholders, no circumstances exist that could adversely affect the qualified status of any such plan and the exemption under Section 501(a) of the Code of the trust maintained thereunder. Each Employee Plan intended to satisfy the requirements of Section 125, 501(c)(9) or 501(c)(17) of the Code has satisfied such requirements in all material respects.

                    (h) With respect to each Employee Plan to which the Company or any ERISA Affiliate made, or was required to make, contributions on behalf of any employee

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during the five-year period ending on the last day of the most recent plan year end prior to the Closing Date, (i) no liability under Title IV or Section 302 of ERISA has been incurred by the Company or any ERISA Affiliate that has not been satisfied in full, and (ii) to the knowledge of Shareholders, no condition exists that presents a material risk to the Company or any ERISA Affiliate of incurring any such liability and (iii) the present value of accrued benefits under such plan, based upon the actuarial assumptions used for funding purposes in the most recent actuarial report prepared by such plan’s actuary with respect to such plan did not exceed, as of its latest valuation date, the then current value of the assets of such plan allocable to such accrued benefits. No Employee Plan or any trust established thereunder has incurred any “accumulated funding deficiency” (as defined in Section 302 of ERISA and Section 412 of the Code), whether or not waived, as of the last day of the most recently ended fiscal year.

                    (i) Except as set forth in Section 3.10 of the Company Disclosure Schedule, no Employee Plan provides medical, surgical, hospitalization, death or similar benefits (whether or not insured) for employees for periods extending beyond their retirement or other termination of service, other than (i) coverage mandated by Section 4980B of the Code, Section 601 of ERISA or other applicable law, (ii) death benefits under any “pension plan,” (iii) benefits the full cost of which is borne by the employee (or his beneficiary) or (iv) Employee Plans that can be amended or terminated by the Company without consent. The Company does not have any current or projected liability with respect to post-employment or post-retirement welfare benefits for retired, former, or current employees of the Company.

                    (j) No material amounts payable under the Employee Plans will fail to be deductible for Federal income tax purposes by virtue of Section 162(m) of the Code.

                    (k) To the extent that the Company is deemed to be a fiduciary with respect to any Plan that is subject to ERISA, the Company (i) during the past five years has complied with the requirements of ERISA and the Code in the performance of its duties and responsibilities with respect to such employee benefit plan and (ii) has not knowingly caused any of the trusts for which it serves as an investment manager, as defined in Section 3(38) of ERISA, to enter into any transaction that would constitute a “prohibited transaction” under Section 406 of ERISA or Section 4975 of the Code, with respect to any such trusts, except for transactions that are the subject of a statutory or administrative exemption.

                    (l) No person will be entitled to a “gross up” or other similar payment in respect of excise taxes under Section 4999 of the Code with respect to the transactions contemplated by this Agreement.

                    (m) None of the Employee Plans have been completely or partially terminated and none has been the subject of a “reportable event” as that term is defined in

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Section 4043 of ERISA. No amendment has been adopted which would require the Company or any ERISA Affiliate to provide security pursuant to Section 307 of ERISA or Section 401(a)(29) of the Code.

          SECTION 3.11. Labor Matters.

                    (a) With respect to employees of the Company or its subsidiaries: (i) to the Knowledge of the Company, no senior executive or key employee has any plans to terminate employment with the Company or any of its subsidiaries; (ii) there is no unfair labor practice charge or complaint against the Company pending or, to the knowledge of Shareholders, threatened before the National Labor Relations Board or any other comparable Governmental Entity; (iii) there is no demand for recognition made by any labor organization or petition for election filed with the National Labor Relations Board or any other comparable Governmental Entity; (iv) no grievance or any arbitration proceeding arising out of or under collective bargaining agreements is pending and no claims therefor have been threatened other than grievances or arbitrations incurred in the ordinary course of business; (v) the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and thereby will not give rise to termination of any existing collective bargaining agreement or permit any labor organization to commence or initiate any negotiations in respect of wages, hours, benefits, severance or working conditions under any such existing collective bargaining agreements; and (vi) there is no litigation, arbitration proceeding, governmental investigation, administrative charge, citation or action of any kind pending or, to the knowledge of Shareholders, proposed or threatened against the Company relating to employment, employment practices, terms and conditions of employment or wages, benefits, severance and hours.

                    (b) Section 3.11(b) of the Company Disclosure Schedule lists the name, title, date of employment and current annual salary of each current salaried employee whose annual salary exceeds $100,000. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby and thereby will not (i) result in any payment (including severance, unemployment compensation, tax gross-up, bonus or otherwise) becoming due to any current or former director, employee or independent contractor of the Company or any of its subsidiaries, from the Company or any of its subsidiaries under any Employee Plan or other agreement, (ii) materially increase any benefits otherwise payable under any Employee Plan or other agreement, or (iii) result in the acceleration of the time of payment, exercise or vesting of any such benefits.

                    (c) Section 3.11(c) of the Company Disclosure Schedule sets forth all contracts, agreements, plans or arrangements covering any employee of the Company or its subsidiaries containing “change of control,” “stay-put,” transition, retention, severance or similar provisions, and sets forth the names and titles of all such employees, the amounts payable under such provisions, whether such provisions would become payable

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as a result of the Purchase and the transactions contemplated by this Agreement, and when such amounts would be payable to such employees, all of which are in writing, have heretofore been duly approved by the Company’s Shareholders, and true and complete copies of all of which have heretofore been delivered to Parent. There is no contract, agreement, plan or arrangement (oral or written) covering any employee of the Company that individually or collectively could give rise to the payment of any amount that would not be deductible pursuant to the terms of Section 280G of the Code.

          SECTION 3.12 Environmental Matters. Except for such matters which would not, individually or in the aggregate, reasonably be expected to result in a material adverse effect on the Company or are listed in Section 3.12 of the Company Disclosure Schedule, to the best of Shareholders’ knowledge:

                    (a) Compliance. To the Knowledge of the Company (i) the Company is in compliance in all material respects with all applicable Environmental Laws; (ii) neither the Company nor any of its subsidiaries has received any written communication from any person or governmental entity that alleges that the Company or any of its subsidiaries is not in compliance with applicable Environmental Laws; and (iii) there have not been any Releases of Hazardous Substances by the Company or, by any other party, at any property currently or formerly owned or operated by the Company or any of its subsidiaries that occurred during the period of the Company’s or any of its subsidiaries’ ownership or operation of such property.

                    (b) Environmental Permits. The Company and its subsidiaries have all Environmental Permits necessary for the conduct and operation of its business, and all such permits are in good standing or, where applicable, a renewal application has been timely filed and is pending agency approval, and the Company or its subsidiaries are in compliance with all terms and conditions of all such Environmental Permits and is not required to make any expenditure in order to obtain or renew any Environmental Permits.

                    (c) Environmental Claims. There are no Environmental Claims pending or, to the Knowledge of the Company, threatened, against the Company, or against any real or personal property or operation that the Company owns, leases or manages.

                    (d) As used in this Agreement:

(i) “Environmental Laws” shall mean any and all binding and applicable local, municipal, state, federal or international law, statute, treaty, directive, decision, judgment, award, regulation, decree, rule, code of practice, guidance, order, direction, consent, authorization, permit or similar requirement, approval or standard concerning (A)

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occupational, consumer and/or public health and safety, and/or (B) environmental matters (including clean-up standards and practices), with respect to buildings, equipment, soil, sub-surface strata, air, surface water, or ground water, whether set forth in applicable law or applied in practice, whether to facilities such as those of the Company Properties in the jurisdictions in which the Company Properties are located or to facilities such as those used for the transportation, storage or disposal of Hazardous Substances generated by the Company or otherwise.

(ii) “Environmental Permits” shall mean Permits required by Environmental Laws.

(iii) “Hazardous Substances” shall mean any and all dangerous substances, hazardous substances, toxic substances, radioactive substances, hazardous wastes, special wastes, controlled wastes, oils, petroleum and petroleum products, computer component parts, hazardous chemicals and any other materials which are regulated by the Environmental Laws or otherwise found or determined to be potentially harmful to human health or the environment.

(iv) “Release” shall mean any spilling, leaking, pumping, emitting, emptying, discharging, injecting, escaping, leaching, migrating, dumping or disposing of Hazardous Substances (including the abandonment or discarding of barrels, containers or other closed receptacles containing Hazardous Substances) into the environment.

                    SECTION 3.13 Intellectual Property.

                    (a) Section 3.13(a) of the Company Disclosure Schedule sets forth, for the Intellectual Property (as defined below) owned or purported to be owned by the Company or any of its subsidiaries, a complete and accurate list of all U.S. and foreign (i) patents and patent applications, (ii) trademarks and service marks which are registered or the subject of an application for registration and material unregistered trademarks or service marks , (iii) copyrights which are registered or the subject of an application for registration, and (iv) Internet domain names. The Company or one of its subsidiaries owns or has the valid right to use all patents and patent applications, patent rights, trademarks, service marks, trademark or service mark registrations and applications, trade names, logos, designs, Internet domain names, slogans and general intangibles of like nature, together with all goodwill related to the foregoing, copyrights, copyright registrations, renewals and applications, Software (as defined below), technology, inventions, discoveries, trade secrets and other confidential information, know-how, proprietary processes, designs, processes, techniques, formulae, algorithms, models and methodologies, licenses, and all other proprietary rights (collectively, the “Intellectual

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Property”) that it owns or purports to own or is licensed to Company in a manner sufficient for the conduct of the business of the Company as it currently is conducted. “Software” means any and all (i) computer programs, including any and all software implementations of algorithms, models and methodologies, whether in source code or object code, (ii) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise, (iii) descriptions, flow-charts and other work product used to design, plan, organize and develop any of the foregoing, (iv) the technology supporting and content contained on any owned or operated Internet site(s), and (v) all documentation, including user manuals and training materials, relating to any of the foregoing.

                    (b) Except as set forth in Section 3.13(b) of the Company Disclosure Schedule, all of the Intellectual Property owned or purported to be owned by the Company is free and clear of all Liens. The Company is listed in the records of the appropriate United States, state or foreign agency as, the sole owner of record for each patent and patent application and trademark, service mark and copyright which is registered or the subject of an application for registration that is listed in Section 3.13(a) of the Company Disclosure Schedule.

                    (c) All of the patents, patent applications, trademarks, service marks and copyrights owned or purported to be owned by the Company which have been issued by, or registered or the subject of an application filed with, as applicable, the U.S. Patent and Trademark Office, the U.S. Copyright Office or in any similar office or agency anywhere in the world, including, but not limited to the items listed in Section 3.13(a) of the Company Disclosure Schedule are subsisting, enforceable, in full force and effect, and have not been cancelled, expired, abandoned or otherwise terminated and all renewal fees in respect thereof have been duly paid and are currently in compliance with all formal legal requirements (including the timely post-registration filing of affidavits of use and incontestability and renewal applications) and are valid. There is no pending or, to the Knowledge of the Company, threatened opposition, interference, invalidation or cancellation proceeding before any court or registration authority in any jurisdiction against any of the items listed in Section 2.13(a) of the Company Disclosure Schedule or against any other Intellectual Property used by the Company or its subsidiaries.

                    (d) To the Knowledge of the Company, the conduct of the Company’s business as currently conducted does not infringe upon (either directly or indirectly such as through contributory infringement or inducement to infringe), dilute, misappropriate or otherwise violate (i) any Intellectual Property owned or controlled by any third party (“Third Party Rights”), other than the rights of any third party under any patent, or (ii) the rights of any third party under any patent. Neither the Company nor Shareholders have received any communication alleging or claiming that the Company has been or may be engaged in, liable for or contributing to any infringement of any Third Party Rights, nor does the Company or Shareholders have any reason to expect that any such communication will be forthcoming. There are no pending or, to the Knowledge of the

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Company threatened claims against the Company or any of its subsidiaries alleging that the operation of the business as currently conducted, infringes on or conflicts with any Third Party Rights.

                    (e) To the Knowledge of the Company, no third party is misappropriating, infringing, diluting, or violating any Intellectual Property owned or purported to be owned by or licensed to or by the Company or its subsidiaries and no such claims have been made against a third party by the Company or any of its subsidiaries.

                    (f) Each material item of Software, which is used by the Company or any of its subsidiaries in connection with the operation of its business as currently conducted, is either (i) owned by the Company or any of its subsidiaries, (ii) currently in the public domain or otherwise available to the Company without the need of a license, lease or consent of any third party, or (iii) used under rights granted to the Company or any of its subsidiaries pursuant to a written agreement, license or lease from a third party.

                    (g) Section 3.13(g) of the Company Disclosure Schedule sets forth a complete list of all agreements under which the Company or any of its subsidiaries is granted rights to acquire or use the Intellectual Property of a third party (other than shrink-wrap or click on-downloadable general purpose software) (the “Company IP Agreements”). Except as set forth in Section 3.13(g) of the Company Disclosure Schedule, the Company is not under any obligation to pay royalties or other payments in connection with any Company IP Agreement, nor restricted from assigning its rights respecting Intellectual Property nor will the Company otherwise be, as a result of the execution and delivery of this Agreement or the performance of its obligations under this Agreement, in breach of any Company IP Agreement. Each Company IP Agreement is in full force and effect and has not been amended. Neither the Company nor any other party thereto, is in default or breach under any such Company IP Agreement. No event has occurred which, with the passage of time or the giving of notice or both, would cause a breach of or default by the Company under any of the Company IP Agreements and there is no breach or anticipated breach by any other party to any Company IP Agreement.

                    (h) The Company does not sell any products that intentionally contain any “viruses”, “time-bombs”, “key-locks”, or any other devices intentionally created that could disrupt or interfere with the operation of the products or the integrity of the data, information or signals they produce in a manner adverse to the Company, any of its subsidiaries or any licensee or recipient.

                    (i) Neither the Company nor any of its subsidiaries has embedded any open source, copyleft or community source code in any of its Products which are generally available or in development, including but not limited to any libraries or code

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licensed under the GNU General Public License, GNU Lesser General Public License or similar license arrangement.

                    SECTION 3.14 Insurance Matters. All policies providing insurance coverage as set forth in Section 3.14 of the Company Disclosure Schedule are in full force and effect, all premiums due and payable thereon have been paid and no written or oral notice of cancellation or termination has been received and is outstanding.

                    SECTION 3.15 Transactions with Affiliates. Except as set forth on Section 3.15 of the Company Disclosure Schedule, there are no outstanding amounts payable to or receivable from, loans, leases or other existing agreements between the Company, on the one hand, and any member, officer, manager, employee or Affiliate of the Company or any of the Shareholders, Shareholder affiliated companies, or any family member or affiliate of such member, officer, manager, employee, affiliate or otherwise related party on the other hand.

                    SECTION 3.16 Voting Requirements. The affirmative vote (in person or by duly authorized and valid proxy at a Company Shareholders’ meeting or by written consent) of the holders of not less than One Hundred Percent (100%) of the outstanding Company Common Stock in favor of the adoption of this Agreement is the only vote of the holders of any class or series of the Company’s Shares required by applicable law and the Company’s organizational instruments to duly effect such adoption.

                    SECTION 3.17 Brokers. No broker, investment banker, financial advisor, finder, consultant or other person other than Pagemill Partners, LLC is entitled to any broker’s, finder’s, financial advisor’s or other similar fee, compensation or commission, however and whenever payable, in connection with the Purchase and the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company. Parent shall be solely responsible for any fees charged by Pagemill Partners LLC.

                    SECTION 3.18 Real Property.

                    (a) The Company does not own any real property. Section 3.18(a) of the Company Disclosure Schedule sets forth a complete list of all real property leased, subleased, or otherwise occupied or used by the Company or any of its subsidiaries as lessee. With respect to each parcel of real property leased, subleased, or otherwise occupied or used by the Company as lessee: (i) the Company has a valid leasehold interest or other right of use and occupancy, free and clear of any Liens on such leasehold interest or other rights of use and occupancy, or any covenants, easements or title defects known to or created by the Company , except as do not materially affect the occupancy or uses of such property. The Company’s agreement with respect to real property leased, subleased, or otherwise occupied or used by the Company as lessee is in full force and

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effect and has not been amended. The Company nor, to the Knowledge of the Company, any other party thereto, is in material default or material breach under any such agreement. To the Knowledge of the Company, no event has occurred which, with the passage of time or the giving of notice or both, would cause a breach of or default by the Company or the applicable subsidiary under any of such agreement and, to the Knowledge of the Company or the applicable subsidiary, there is no breach or anticipated breach by any other party to such agreements.

                    (b) As used in this Agreement, Company Permitted Liens shall mean: (i) Any Lien reflected in Section 3.18(b)(i) of the Company Disclosure Schedule, (ii) Liens for Taxes not yet due or delinquent or as to which there is a good faith dispute and for which there are adequate provisions on the books and records of the Company, (iii) with respect to real property, any Lien, encumbrance or other title defect which is not in a liquidated amount (whether material or immaterial) and which does not, individually or in the aggregate, interfere materially with the current use or materially detract from the value or marketability of such property (assuming its continued use in the manner in which it is currently used) and (iv) inchoate materialmen’s, mechanics’, carriers’, workmen’s and repairmen’s liens arising in the ordinary course and not past due and payable or the payment of which is being contested in good faith by appropriate proceedings.

                    SECTION 3.19 Tangible Personal Property. Except as would not materially impair the Company and its operations, the machinery, equipment, furniture, fixtures and other tangible personal property (the “Tangible Personal Property”) owned, leased or used by the Company or any of its subsidiaries is in the aggregate sufficient and adequate to carry on business in all material respects as presently conducted and is, in the aggregate and in all material respects, in operating condition and repair, normal wear and tear excepted. The Company is in possession of and has good title to, or valid leasehold interests in or valid rights under contract to use, the Tangible Personal Property material to the Company, taken as a whole, free and clear of all Liens, other than the Company Permitted Liens as set forth in Section 3.18(b) of the Company Disclosure Schedule.

                    SECTION 3.20 Powers of Attorney. There are no outstanding powers of attorney executed on behalf of the Company or any Subsidiary.

                    SECTION 3.21 Offers. The Company has suspended or terminated, and has the legal right to terminate or suspend, all negotiations and discussions of any acquisition, merger, consolidation or sale of all or substantially all of the assets of Company and the Subsidiaries with parties other than Parent.

                    SECTION 3.22 Warranties. No product or service manufactured, sold, leased, licensed or delivered by the Company or any Subsidiary is subject to any guaranty, warranty, right of return, right of credit or other indemnity other than (i) the applicable standard terms and conditions of sale or lease by the Company, which are set forth in Section 3.22 of the Company Disclosure Schedule, in the ordinary course of

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business, and (ii) manufacturers’ warranties. Section 3.22 of the Company Disclosure Schedules sets forth the aggregate expenses incurred by the Company and the Subsidiaries in fulfilling their obligations under their guaranty, warranty, right of return and indemnity provisions during each of the fiscal years and the interim period covered by the Company Financial Statements and the Company does not know of any reason why such expenses should significantly increase as a percentage of sales in the future.

                    SECTION 3.23 Investment Company. Neither the Company nor any of its subsidiaries is an investment company required to be registered as an investment company pursuant to the Investment Company Act.

                    SECTION 3.24 Board Approval. Pursuant to meetings duly noticed and convened in accordance with all applicable laws and at each of which a quorum was present, or by written consent as permitted by applicable law and governing documents, the Board of Directors of the Company, after full and deliberate consideration, unanimously (other than for directors who abstain) has (i) duly approved this Agreement and resolved that the transactions contemplated hereby are fair to, advisable and in the best interests of the Company’s Shareholders, (ii) resolved to unanimously recommend that the Company’s Shareholders approve the transactions contemplated hereby and (iii) directed that the Merger be submitted for consideration by the holders of the Company Common Stock.

                    SECTION 3.25 Books and Records. Except as to certain accruals and expenses as set forth in Section 3.5(a) of the Company Disclosure Schedule, each of the Company and its subsidiaries maintains and has in all material respects, maintained accurate books and records reflecting its assets and liabilities and accounts, notes and other receivables and inventory are recorded accurately, and proper and adequate procedures are implemented to effect the collection thereof on a current and timely basis.

                    SECTION 3.26 Status of Shares Being Transferred. Subject to Section 3.23 of the Company Disclosure Schedule, Shareholders own all of the issued and outstanding shares of capital stock of the Company. Shareholders have full power to convey good and marketable title to their Shares, free of any liens, charges, or encumbrances of any nature.

                    SECTION 3.27 Investment in Parent Common Stock.

                    (a) Each Shareholder is an “accredited investor” as defined in Rule 501(a)(5) or (6) under the Securities Act of 1933, as amended (the “Securities Act”).

                    (b) Shareholders are acquiring the shares of common stock of Parent to be issued hereunder for investment for their own account, and not for the account of another Person and not with a view to, or for sale in connection with, any distribution, assignment, or resale of any part thereof in violation of the Securities Act of 1933 (the “Securities Act”), nor with any present intention of any such distribution, assignment, or resale. Notwithstanding the foregoing, Parent hereby acknowledges Shareholders’ intention to assign certain shares of the Parent Common Stock to employees of the

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Company to be designated by Shareholders subject to such assignees making to Parent the representations contained in this Section 3.27. Shareholders understand that the shares of Parent Common Stock to be issued to them hereunder have not been and will not be, registered in the United States under the Securities Act or applicable state securities laws, and may not be sold, hypothecated or otherwise disposed of unless subsequently registered under the Securities Act and applicable state securities laws or unless disposed of in a transaction exempt from such laws, such as in compliance with Rule 144 promulgated by the SEC, and that certificates representing the shares of Parent Common Stock shall bear legends to this effect. Shareholders understand that Parent’s issuance of shares of Parent Common Stock contemplated by this Agreement is intended to be exempt from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Shareholders’ representations as expressed herein. No Shareholder is a party to nor bound by any agreement regarding the ownership or disposition of the shares of Parent Common Stock other than this Agreement.

                    (c) Shareholders have made independent investigation of Parent and related matters as (i) they deem to be necessary or advisable in connection with the their investment in and acceptance of the shares of Parent Common Stock to be issued to them hereunder and (ii) they believe to be necessary in order to reach an informed decision as to the advisability of making an investment in and accepting the shares of Parent Common Stock to be issued to them hereunder. Without limiting the foregoing, Shareholders have reviewed the Parent SEC Documents (as hereinafter defined) and the Parent’s other publicly-available SEC filings. In evaluating their investment in and acceptance of the shares of Parent Common Stock to be issued to them hereunder, Shareholders have not relied upon any representation or other information (oral or written) other than as set forth in this Agreement or in such Parent SEC Documents and other SEC filings.

                    (d) Shareholders have such knowledge and experience in financial and business matters that they are capable of evaluating the merits and risks of their investment in the Parent Common Stock as contemplated by this Agreement, and are able to bear the economic risk of such investment for an indefinite period of time. Shareholders are not relying on Parent for advice with respect to economic considerations involved in their acquisition and acceptance of the shares of Parent Common Stock.

                    SECTION 3.28 Disclosure. On the date of this Agreement, the Company, Shareholders and all officers of the Company have, and at the Closing Date will have, disclosed all events, conditions, and facts materially affecting the business of the Company. Shareholders and all officers of the Company have not now and will not have, at the Closing Date, withheld knowledge of any such events, conditions, and facts which they know, or have reasonable ground to know, may materially affect the business of the Company. None of the representations and warranties made by the Company or Shareholders in this Agreement and contained in any certificate or other instrument furnished or to be furnished to Parent pursuant to this Agreement contains or will contain any untrue statement of a material fact, or omits or will omit to state a material fact necessary in order to make the statements contained in this Agreement not misleading.

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                    SECTION 3.29 No Shareholder Competing Business. As of the Closing Date, no Shareholder directly or indirectly, whether as owner, partner, shareholder, consultant, agent, employee, co-venturer or otherwise, engages, participates, assists or is invested in any Competing Business (as defined in Section 6.6 below).

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PARENT

          Except as set forth on the Disclosure Schedule delivered by Parent to the Company prior to execution of this Agreement which hereby is incorporated by reference in and constitutes an integral part of this Agreement (the “Parent Disclosure Schedule”), Parent hereby represents and warrants to the Shareholders as follows:

                    SECTION 4.1 Organization, Standing and Corporate Power.

                    (a) Each of Parent and its Subsidiaries, including the Surviving Corporation, is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized and has the requisite corporate power and requisite authority to carry on its business as presently being conducted. Each of Parent and its Subsidiaries is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, except for those jurisdictions where the failure to be so qualified or licensed or to be in good standing individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect on Parent.

                    (b) Parent has delivered or made available to the Company prior to the execution of this Agreement complete and correct copies of the certificate of incorporation and by-laws or other organizational documents of Parent and its Subsidiaries, including Surviving Corporation, each as in effect at the date of this Agreement.

                    SECTION 4.2 Capital Structure.

                    (a) The authorized capital stock of Parent consists of 200,000,000 shares of common stock, $.001 par value (the “Parent Common Stock”), and 5,000,000 shares of Series A Preferred Stock, par value $.001 per share, of Parent (“Parent Preferred Stock”). As of the date hereof: (i) 13,087,142 shares of Parent Common Stock were issued and outstanding and 1,000,000 shares of Parent Common Stock will be issued concurrently with the Closing as partial consideration for the Chopra Stock (as defined in Section 7.2(s) below; (ii) no shares of Parent Common Stock were held by Parent in its treasury;

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(iii) no shares of Parent Common Stock were held by subsidiaries of Parent; (iv) approximately 3,367,486 shares of Parent Common Stock were reserved for issuance pursuant to stock-based plans (such plans, collectively, the “Parent Stock Plans”), all of which are subject to outstanding employee stock options or other rights to purchase or receive Parent Common Stock granted under the Parent Stock Plans (collectively, “Parent Employee Stock Options”); (v) 964,286 shares of Parent Common Stock are reserved for issuance pursuant to convertible notes and an additional 770,000 shares of Parent Common Stock will be reserved concurrently with the Closing pursuant to a Convertible Note issued as partial consideration for the Chopra Stock, (vi) 7,703,118 shares of Parent Common Stock were reserved for issuance pursuant to outstanding warrants. As of the date hereof, (w) 2,466,971 shares of Parent Preferred Stock were issued and outstanding; (x) no shares of Parent Preferred Stock were held by Parent in its treasury; (y) no shares of Parent Preferred Stock were held by subsidiaries of Parent; and (z) 16,551 shares of Parent Preferred Stock were reserved for issuance pursuant to outstanding warrants.

                    (b) All outstanding shares of capital stock of Parent have been, and all shares thereof which may be issued pursuant to this Agreement or otherwise (including upon the conversion of the Parent Series A Preferred Stock) will be, when issued, duly authorized and validly issued and are fully paid and nonassessable and are not subject to preemptive rights created by statute, the Parent’s articles of incorporation or any agreement to which Parent is a party or by which Parent may be bound. Except as set forth in this Section and except for changes since the date of this Agreement resulting from the exercise of Parent’s employee stock options outstanding on such date, there are outstanding (i) no shares of capital stock or other voting securities of Parent, (ii) no securities of Parent convertible into or exchangeable for shares of capital stock or voting securities of Parent, and (iii) no options or other rights to acquire from Parent, other than Employee Stock Options, and no obligation of Parent to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock of Parent.

                    (c) Parent has a sufficient number of duly authorized but unissued shares of Parent Common Stock to issue the maximum number of such shares contemplated by Article II of this Agreement as the Merger Consideration. The shares of Parent common stock to be issued and delivered hereunder will be duly and validly issued, fully paid and non-assessable, free and clear of all Encumbrances.

                    SECTION 4.3 Authority; Noncontravention. Parent has the corporate power and authority to execute, deliver and perform this Agreement and the other agreements to be executed and delivered by Parent in connection herewith and to consummate the transactions contemplated hereby and thereby. All corporate acts and proceedings required to be taken by or on the part of Parent to authorize Parent to execute, deliver and perform this Agreement and the other agreements to be executed and delivered by Parent in connection herewith and to consummate the transactions contemplated hereby and thereby have been duly and validly taken. This Agreement

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constitutes a valid and binding agreement, and the other agreements to be executed and delivered by Parent in connection herewith when so executed and delivered will constitute valid and binding agreements, of Parent.

                    SECTION 4.4 Parent Documents.

                    (a) Except as set forth in Section 4.4 of the Parent Disclosure Schedule, as of their respective filing dates, (i) all reports filed by Parent and which must be filed by Parent in the future with the Securities and Exchange Commission (the “SEC”) pursuant to the Exchange Act (the “Parent SEC Documents”) complied and, with respect to future filings, will comply in all material respects with the requirements of the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such Parent SEC Documents, and (ii) no Parent SEC Documents, as of their respective dates contained any untrue statement of a material fact or omitted, and no Parent SEC Document filed subsequent to the date hereof will omit as of their respective dates, to state a material fact required to be stated therein or necessary to make the statements therein (in the case of registration statements of the Parent under the Securities Act, in light of the circumstances under which they were made) not misleading.

                    (b) The financial statements of Parent included in the Parent SEC Documents (including the related notes) complied as to form, as of their respective dates of filing with the SEC, in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto, have been prepared in accordance with GAAP (except, in the case of unaudited statements, as permitted by Quarterly Report Form 10-Q of the SEC) applied on a consistent basis during the periods and at the dates involved (except as may be indicated in the notes thereto) and fairly present the consolidated financial condition of Parent and its subsidiaries at the dates thereof and the consolidated results of operations and cash flows of Parent and its subsidiaries for the periods then ended (subject, in the case of unaudited statements, to notes and normal year-end audit adjustments that were not material in amount or effect). Except for liabilities (i) reflected in Parent’s unaudited balance sheet as of December 31, 2006 or described in any notes thereto (or for which neither accrual nor footnote disclosure is required pursuant to GAAP), or (ii) incurred in the ordinary course of business since December 31, 2006 consistent with past practice or in connection with this Agreement or the transactions contemplated hereby, neither Parent nor any of its subsidiaries has any material liabilities or obligations of any nature.

                    SECTION 4.5 Voting Requirements. No consent or approval of the holders of the outstanding shares of Parent Common Stock or any other class of Parent capital stock is required to approve the Purchase and the transactions contemplated by this Agreement under applicable law or the Parent’s organizational instruments.

                    SECTION 4.6 Brokers. Except for Pagemill Partners, LLC, no broker, investment banker, financial advisor, finder, consultant or other person is entitled to any

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broker’s, finder’s, financial advisor’s or other similar fee, compensation or commission, however and whenever payable, in connection with the Purchase and the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Parent. Parent shall be solely responsible for any fees charged by Pagemill Partners LLC.

                    SECTION 4.7 Board and Other Approvals. Pursuant to meetings duly noticed and convened in accordance with all applicable laws and at each of which a quorum was present, or by written consent as permitted by applicable law and governing documents, the Board of Directors of Parent, after full and deliberate consideration, unanimously (other than for directors who abstain) has duly adopted this Agreement and resolved that the Purchase and the transactions contemplated hereby are fair to, advisable and in the best interests of Parent’s Shareholders. The Board of Directors of Parent unanimously has duly approved this Agreement and has determined that the Purchase is advisable. Parent has obtained all other approvals or consents required in connection with the execution and delivery of this Agreement or the consummation or performance of any of the transactions contemplated herein.

                    SECTION 4.8 Books and Records. Each of Parent and its subsidiaries maintains and has maintained accurate books and records reflecting its assets and liabilities and accounts, notes and other receivables and inventory are recorded accurately, and proper and adequate procedures are implemented to effect the collection thereof on a current and timely basis.

                    SECTION 4.9 Sarbanes Oxley Act Compliance. Parent is in compliance with all presently effective and applicable provisions of the Sarbanes Oxley Act of 2002 (the “Sarbanes Oxley Act”) and is actively taking steps to ensure that it will be in compliance with other provisions of the Sarbanes Oxley Act upon the effectiveness or applicability to Parent of such provisions. Parent is currently in compliance and will use its reasonable efforts to continue to comply in all material respects with all public reporting requirements necessary to permit sales of its restricted shares by Shareholders pursuant to Rule 144.

                    SECTION 4.10 Additional Representations.

                    Neither the execution nor delivery of this Agreement nor the consummation or performance of any of the transactions contemplated herein will, directly or indirectly (with or without notice or lapse of time):

                              (i) Breach (a) any provision of any of the governing documents of Parent or (b) any resolution adopted by the Board of Directors or the Shareholders;

                              (ii) Breach or give any Governmental Entity or other Person the right to challenge any of the transactions contemplated herein, or to exercise any remedy or obtain any relief under any rule, ordinance, contract, order, decree, or agreement under any legally binding arrangement to which Parent is subject;

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                              (iii) Contravene, conflict with or result in a violation or breach of any of the terms or requirements of, or give any Governmental Entity the right to revoke, withdraw, suspend, cancel, terminate or modify, any Permit or governmental authorization that is held by Parent or that otherwise relates to the business of Parent;

                              (iv) Cause Shareholders or Company to become subject to, or to become liable for the payment of, any penalty or fine resulting from the contemplated transaction subsequent to the Closing Date; or

                              (v) result in a violation or Breach of, or constitute a default under, any of the terms, conditions or provisions of any agreement or other instrument or obligation to which Parent is a party or by which Parent or any of its properties or assets may be bound.

                    SECTION 4.11 Litigation. Except as set forth in the Parent SEC Documents or Section 4.11 of the Parent Disclosure Schedule, there is no suit, claim, action, proceeding or investigation pending or to the knowledge of Parent threatened against Parent or its Affiliates that is reasonably likely to have a material adverse effect on Parent or would prevent Parent from consummating the transactions contemplated herein. Parent is not subject to any outstanding order, writ, injunction or decree which in so far as can be reasonably foreseen, individually or in the aggregate, which now or in the future would have a material adverse effect or result in adverse consequences, or would prevent Parent from consummating the transactions contemplated herein.

                    SECTION 4.12 Compliance. Parent holds all Permits, and is in material compliance with the terms of the Permits. Parent is not in violation of any legal or governmental requirement, except where such a failure to comply would not have a material affect on Parent.

                    SECTION 4.13 Contracts with Third Parties. Parent and its Affiliates have no contract, agreement, or understanding with a third party concerning the potential sale of the assets, stock or business acquired under the terms of this Agreement, or any portion thereof, following the closing.

                    SECTION 4.14 Disclosure. No representation or warranty made by Parent in this Agreement, the Parent Disclosure Schedules or any certificate delivered or deliverable pursuant to the terms hereof, contains or will contain, any untrue statement of a material fact, or omits, or will omit, when taken as a whole, to state a material fact, necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

ARTICLE V

COVENANTS RELATING TO CONDUCT OF BUSINESS

                    SECTION 5.1 Conduct of Business by the Company. Except as required by applicable law or regulation and except as otherwise contemplated by this

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Agreement, until the earlier of the termination of this Agreement or the Closing Date, the Company shall, and shall cause each of its subsidiaries to, conduct its and their respective businesses in the ordinary course and consistent with past practices. Except as set forth in Section 5.1 of the Company Disclosure Schedule, as required by applicable law or regulation and except as otherwise contemplated by this Agreement or except as previously consented to by Parent, in writing, after the date hereof and until the earlier of the termination of this Agreement or the Closing Date, the Company shall not:

                    (a) amend or otherwise change its Certificate of Incorporation or by-laws;

                    (b) issue, sell, pledge, dispose of, encumber, or authorize the issuance, sale, pledge, disposition, grant or encumbrance of (i) any shares of any class, or options, warrants, convertible securities or other rights of any kind to acquire shares, or any other ownership interest, thereof, or (ii) any of its assets, tangible or intangible, other than in the ordinary course of business;

                    (c) declare, set aside, make or pay any dividend or other distribution, payable in cash, property or otherwise, with respect to its shares;

                    (d) reclassify, combine, split, subdivide or redeem, purchase or otherwise acquire, directly or indirectly, any of its shares;

                    (e) (i) acquire (including, without limitation, for cash or shares of stock, by Purchase, consolidation, or acquisition of stock or assets) any interest in any corporation, partnership or other business organization or division thereof, or make any investment either by purchase of stock or securities, contributions of capital or property transfer, or, except in the ordinary course of business, consistent with past practice, purchase any property or assets of any other person, (ii) except in the ordinary course of business, incur any indebtedness for borrowed money or issue any debt securities or assume, guarantee or endorse or otherwise as an accommodation become responsible for, the obligations of any person, or make any loans or advances, or (iii) enter into any Company Material Contract except in the ordinary course of business;

                    (f) make any capital expenditure in excess of $100,000 or enter into any contract or commitment therefore;

                    (g) except in the ordinary course of business, sell or transfer any of its inventory or other tangible assets;

                    (h) amend, terminate or extend any Company Material Contract;

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                    (i) delay or accelerate payment of any account payable or other liability of the Company beyond or in advance of its due date or the date when such liability would have been paid in the ordinary course of business consistent with past practice; or

                    (j) agree, in writing or otherwise, to take or authorize any of the foregoing actions or any action which would make any representation or warranty contained in Article III untrue or incorrect.

                    SECTION 5.2 Advice of Changes. Shareholders and the Company shall promptly advise the Parent, and Parent shall advise the Shareholders and the Company, orally and in writing to the extent it has knowledge of (i) any representation or warranty made by them contained in this Agreement that is qualified as to materiality becoming untrue or inaccurate in any respect or any such representation or warranty that is not so qualified becoming untrue or inaccurate in any material respect, (ii) the failure by any of them to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by them under this Agreement; (iii) any suspension, termination, limitation, modification, change or other alteration of any material agreement, arrangement, business or other relationship, in any material respect, with any of the Company’s customers, suppliers or sales or design personnel; or (iv) any change or event having, or which, insofar as reasonably can be foreseen, could have a material adverse effect on the Company or Parent or on the accuracy and completeness of the Company’s or Parent’s representations and warranties or the ability of the Shareholders or the Company or Parent to satisfy the conditions set forth in Article VII; provided, however, that no such notification shall affect the representations, warranties, covenants or agreements of the parties (or remedies with respect thereto) or the conditions to the obligations of the parties under this Agreement; and provided further that a failure to comply with this Section 5.2 shall not constitute a failure to be satisfied of any condition set forth in Article VII unless the underlying untruth, inaccuracy, failure to comply or satisfy, or change or event would independently result in a failure of a condition set forth in Article VII to be satisfied.

                    SECTION 5.3 No Solicitation by the Company.

                    (a) The Company will promptly notify Parent after receipt of any offer or indication that any person is considering making an offer with respect to a Company Acquisition Proposal or any request for nonpublic information relating to the Company or for access to the properties, books or records of the Company by any person that may be considering making, or has made, an offer with respect to a Company Acquisition Proposal and will keep Parent fully informed of the status and details of any such offer, indication or request. “Company Acquisition Proposal” means any proposal for a Purchase or other business combination involving the Company or the acquisition of any equity interest in, or a substantial portion of the assets of, the Company, other than the transactions contemplated by this Agreement.

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                    (b) From the date hereof until the termination hereof pursuant to Section 9.1, the Company and the officers of the Company will not and the Company will use commercially reasonable efforts to cause its officers, employees and agents not to, directly or indirectly, (i) take any action to solicit, initiate or encourage any offer or indication of interest from any person or entity with respect to any Company Acquisition Proposal, (ii) engage in negotiations with, or disclose any nonpublic information relating to the Company or (iii) afford access to the properties, books or records of the Company to, any person or entity that may be considering making, or has made, an offer with respect to a Company Acquisition Proposal.

                    SECTION 5.4 Conduct of Business by Parent. Except as required by applicable law or regulation and except as otherwise contemplated by this Agreement, until the earlier of the termination of this Agreement or the Closing Date, Parent shall conduct its business in the ordinary course and consistent with past practices. Except as required by applicable law or regulation and except as otherwise contemplated by this Agreement or except as previously consented to by the Shareholder Representative in writing, after the date hereof and until the earlier of the termination of this Agreement or the Closing Date, Parent shall not

                    (a) amend or otherwise change its Certificate of Incorporation or by-laws;

                    (b) declare, set aside, make or pay any dividend or other distribution, payable in cash, property or otherwise, with respect to its shares;

                    (c) agree, in writing or otherwise, to take or authorize any of the foregoing actions or any action which would make any representation or warranty contained in Article III untrue or incorrect.

                    SECTION 5.5 Transition. To the extent permitted by applicable law, Parent and the Company shall, and shall cause their respective subsidiaries, affiliates, officers and employees to, use their commercially reasonable efforts to facilitate the integration of the Company and its subsidiaries with the businesses of Parent and its subsidiaries to be effective as of the Closing Date.

ARTICLE VI

ADDITIONAL AGREEMENTS

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                    SECTION 6.1 Access to Information; Confidentiality.

                    (a) The Company and Shareholders shall, and shall cause the Company’s subsidiaries to, afford to Parent and to the officers, current employees, accountants, counsel, financial advisors, agents, lenders and other representatives of Parent, reasonable access during normal business hours during the period prior to the Effective Date to all the Company’s properties, books, contracts, commitments, personnel and records and, during such period, shall furnish promptly to Parent (i) a copy of each material report, schedule, registration statement and other document filed by it with any Governmental Entity, and (ii) all other information concerning its business, properties and personnel as Parent may reasonably request; provided, however, that prior to the Closing, the Company and Shareholders shall not be required to divulge any information precluded from being divulged under the Confidentiality Agreement between the parties dated as of March 27, 2007, (the “Confidentiality Agreement”). Notwithstanding any provision to the contrary contained herein, in no event shall Shareholders be required to disclose personal or personal financial information unless required by applicable law or regulation.

                    (b) The parties will hold, and will use their best efforts to cause their officers, directors, employees, consultants, advisors and agents to hold, in confidence, unless compelled to disclose by judicial or administrative process or by other requirements of law, all confidential documents and information concerning the other party and its subsidiaries furnished to it in connection with the transactions contemplated hereby, except to the extent that such information can be shown to have been (i) previously known on a nonconfidential basis by the receiving party, (ii) in the public domain through no fault of the receiving party, or (iii) later lawfully acquired by the receiving party from other sources; provided that each party may disclose such information to its officers, directors, employees, consultants, advisors and agents in connection with the Purchase so long as such persons are informed of the confidential nature of such information and are directed to treat such information confidentially. Each parties’ obligation to hold such information in confidence shall be satisfied if it exercises the same care with respect to such information as it would exercise to preserve the confidentiality of its own similar information. Notwithstanding any other provision of this Agreement, if this Agreement is terminated, such confidentiality shall be maintained and all confidential materials shall be destroyed or delivered to their owner, upon request. Notwithstanding any provisions of this Agreement to the contrary, this Agreement shall not be deemed to supersede, cancel or otherwise alter the Confidentiality Agreement until the Closing, at which time such Confidentiality Agreement shall be deemed superseded by the provisions herein.

                    SECTION 6.2 Commercially Reasonable Efforts. Except where otherwise provided in this Agreement, each party will use its commercially reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate the

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Purchase as soon as practicable after the satisfaction of the conditions set forth in Article VII hereof, provided that the foregoing shall not require the Company, any Shareholder or Parent to take any action or agree to any condition that might, in the reasonable judgment of the Company or Parent, as the case may be, have a material adverse effect on the Company or Parent, respectively; and further provided, that any action and the cost thereof shall be borne by the party hereto on which the burden of compliance is placed in order to permit consummation of the transaction. By way of example and not limitation, if a Governmental Entity must grant a Requisite Regulatory Approval to a party hereto to permit said party to consummate this transaction, then said party must bear the cost and expense including but not limited to attorneys’ fees, to attempt to obtain such Requisite Regulatory Approval, and the other party shall not have to participate in, contribute or otherwise pay any costs in obtaining such Requisite Regulatory Approval.

                    SECTION 6.3 Fees and Expenses. Except as stated to the contrary herein, all costs, fees and expenses incurred in connection with the Purchase, this Agreement (including all instruments and agreements prepared and delivered in connection herewith), and the transactions contemplated by this Agreement shall be paid by the party incurring such fees or expenses.

                    SECTION 6.4 Public Announcements. Parent, Shareholders and the Company shall consult with each other before issuing, and shall provide each other the opportunity to review, comment upon and concur with, and shall use reasonable efforts to agree on, any press release or other public statements or announcements (including pursuant to Rule 165 under the Securities Act and Rule 14a-12 under the Exchange Act) and any broadly distributed internal communications with respect to the Purchase, this Agreement and the transactions contemplated by this Agreement, and shall not issue any such press release or make any such public statement or announcement prior to such consultation, except as either party may determine is required by applicable law or court process (provided prior notice is given to the other party with a copy of any such disclosure). The parties agree that the initial press releases (or joint press release if the parties so determine) to be issued with respect to the Merger, this Agreement and the transactions contemplated by this Agreement shall be in the form heretofore agreed to by the parties.

                    SECTION 6.5 Regulation D. Each party hereto shall use all reasonable efforts to cause the shares of Parent Common Stock to be issued hereunder in connection with the Purchase to be issued in accordance with Regulation D promulgated under the Securities Act. Each party hereto shall cooperate with the other parties hereto with respect to all filings required pursuant to Regulation D promulgated under the Securities Act and shall not knowingly take any action or fail to act to the extent such action or failure to act would jeopardize the issuance of the shares of Parent Common Stock hereunder in accordance with such Regulation D. Notwithstanding the foregoing, Shareholders shall not have to expend funds or pay legal fees to undertake the actions indicated in this Section 6.5.

                    SECTION 6.6 Shareholders Covenant Not to Compete. Without the prior written consent of the Parent’s Chief Executive Officer, for a period of

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five (5) years after the Closing Date, Shareholders, and each of them, (i) will not, directly or indirectly, whether as owner, partner, shareholders, consultant, agent, employee, co-venturer or otherwise, engage, participate, assist or invest in any Competing Business (as hereinafter defined); (ii) will refrain from, recruiting or otherwise soliciting, inducing or influencing any person to leave employment with the Surviving Corporation or Parent; and (iii) will refrain from soliciting a customer or supplier of the Company, Parent or any Parent Affiliate to terminate or otherwise modify adversely its business relationship with the Surviving Corporation, Parent or Parent Affiliate. Shareholders understand that the restrictions set forth in this Section 6.6 are intended to protect the Parent’s and Company’s interests in their respective Confidential Information and established employee, customer and supplier relationships and goodwill, and agree that such restrictions are reasonable and appropriate for this purpose. For purposes of this Agreement, the term “Competing Business” shall mean any business that provides the same or similar types of services or products as those currently provided by the Company in any geographic area now served or targeted by the Company. Notwithstanding the foregoing, a Shareholder may own up to three percent (3%) of the outstanding stock of a publicly held corporation that is engaged in a Competing Business.

                    SECTION 6.7 Parent Audit of Company. Within seventy-five (75) days after the Closing Date, Parent shall cause to have been completed an audit of the Company’s Financial Statements for the twelve (12) month periods ended December 31, 2005 and December 31, 2006 for purposes of Net Working Capital Adjustments and the verification of the financial information used as a basis for valuation. Such audit shall be conducted by an independent certified public accounting firm, and Shareholders’ Representative or another Shareholder designated by Shareholders agrees to sign the standard management representation letter in connection with such audit on behalf of Company. The cost of such audit shall be paid by Parent.

                    SECTION 6.8 Shareholder Consent. The Company shall promptly, after the date of this Agreement and in accordance with applicable law, the Company’s Certificate of Incorporation and By-Laws, convene a meeting of the Shareholders or solicit written consents to obtain their approval and adoption of this Agreement. The Company shall ensure that the Shareholders’ meeting is called, noticed, convened, held and conducted, and that all proxies solicited by the Company in connection with the Shareholders’ meeting are solicited or, in the alternative that written consents are solicited from the Shareholders, in compliance with applicable law, the Company’s Certificate of Incorporation and By-Laws, and all other applicable legal requirements. The Company agrees to use its best efforts to take all action necessary or advisable to secure the necessary votes required by applicable law, the Company’s Certificate of Incorporation and By-Laws, and this Agreement to effect the Merger.

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ARTICLE VII

CONDITIONS PRECEDENT

                    SECTION 7.1 Conditions to Each Party’s Obligation to Consummate the Merger. The respective obligation of each party to consummate the Merger is subject to the satisfaction or, to the extent permitted by applicable law, waiver by each of Parent and the Company and the Shareholder Representative on or prior to the Closing Date of the following conditions:

                    (a) Shareholders and Board Approvals. The Company, Merger Sub and Parent shall each have obtained the consent of its Board of Directors and Shareholders to the Merger, this Agreement and the transactions contemplated hereby as in each case required.

                    (b) Governmental and Regulatory Approvals. All consents, approvals and actions of, filings with and notices to any Governmental Entity required by the Company, Parent or any of their subsidiaries under applicable law or regulation to consummate the Purchase and the transactions contemplated by this Agreement, the failure of which to be obtained or made would result in a material adverse effect on Parent’s ability to conduct the business of the Company in substantially the same manner as presently conducted, shall have been obtained or made (all such approvals and the expiration of all such waiting periods, the “Requisite Regulatory Approvals”), provided that, the party which is required to procure such Requisite Regulatory Approvals shall bear the cost of such procurement.

                    (c) No Injunctions or Restraints. No judgment, order, restraining order and/or injunction (temporary or otherwise), decree, statute, law, ordinance, rule or regulation, entered, enacted, promulgated, enforced or issued by any court or other Governmental Entity or other legal restraint or prohibition (collectively, “Restraints”) shall be in effect preventing or materially delaying the consummation of the Purchase; provided, however, that each of the parties shall have used its commercially reasonable efforts to have such Restraint lifted, vacated or rescinded, and; provided, further, that such efforts shall be all at the sole cost and expense of the party hereto which is the subject of the Restraint.

                    SECTION 7.2 Conditions to Obligations of Parent and Merger Sub. The obligation of Parent and Merger Sub to consummate the Merger is further subject to satisfaction or waiver as part of Closing or on or prior to the Closing Date of the following additional conditions:

                    (a) Representations and Warranties of the Company. The representations and warranties of the Company set forth herein and in the Company

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Disclosure Schedule shall be true and correct in all material respects at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case such representations and warranties shall be true and correct as of such date). Parent shall have received a certificate of the Company’s Chief Executive Officer to the foregoing effect.

                    (b) Performance of Obligations of the Company. The Company and the Shareholders shall have performed in all material respects all obligations required to be performed by them at or prior to the Closing Date under this Agreement. Parent shall have received a certificate of the Company’s Chief Executive Officer and Treasurer to the foregoing effect.

                    (c) Regulatory Condition. No condition or requirement shall have been imposed by one or more Governmental Entities in connection with any required approval by them of the Purchase that requires the Company or any of its subsidiaries to be operated in a manner that would have a material adverse effect on the Company.

                    (d) Vote in Favor of the Merger. Stockholders holding not less than One Hundred Percent (100%) of the Company Common Stock outstanding immediately prior to the Effective Time must have voted such stock in favor of the approval and adoption of this Agreement and the other transactions contemplated by this Agreement.

                    (e) No Company Material Adverse Effect. There shall not be or exist any change, effect, event, circumstance, occurrence or state of facts that has had, has or which reasonably could be expected to have, a material adverse effect on the Company.

                    (f) Escrow Agreement. Parent and Shareholders’ Representative shall have entered into the Escrow Agreement, and the Escrow Agreement shall be in full force and effect and shall not have been anticipatorily breached or repudiated.

                    (g) Employment Agreement. David Condensa, Bert Condensa, Kevin Hawkins, David Auerweck, Terri Marine and Surviving Corporation shall have executed the Employment Agreements in substantially the forms attached hereto as Exhibit C.

                    (h) Registration Rights Agreement. Parent and all Shareholders shall have entered into a Registration Rights Agreement in the form attached hereto as Exhibit D (the “Registration Rights Agreement”).

                    (i) Lock-Up and Voting Agreement. Parent and all Shareholders shall have entered into a Lock-Up and Voting Agreement in the form attached hereto as Exhibit E (the “Lock-Up and Voting Agreement”) and Shareholders shall have each executed and delivered to Parent the Irrevocable Proxies described therein.

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                    (j) SunMicrosystems. Parent and the Company shall have had a meeting with SunMicrosystems, which meeting shall take place prior to the Closing, and Parent shall have received reasonable assurances of a continuing positive relationship between SunMicrosystems and the Company.

                    (k) Certificate of Good Standing. Parent shall have received prior to or at the Closing a certificate of good standing regarding the Company from the Secretary of State of the State of California dated not more than fifteen (15) days prior to Closing.

                    (l) Legal Opinion. Parent shall have received an opinion of the law firm MBV Law, LLP, counsel to the Company and Shareholders, in substantially the form attached hereto as Exhibit F.

                    (m) Chopra Litigation. Dismissals with prejudice shall have been entered in Case No. CIV 462802, Superior Court of California, County of San Mateo (Chopra v. Helio Solutions, Inc., et. al.) and Case No. 1-06-CV-062181, Superior Court of California, County of Santa Clara (Chopra v. Helio Solutions, Inc., et. al.) and a Mutual Release and Settlement Agreement in the form attached hereto as Exhibit H shall have been entered into by all of the parties to each of the foregoing cases and any and all contingencies or conditions of such Mutual Release and Settlement Agreement shall have been satisfied.

                    (n) Joinder Agreement. Each Shareholder shall have entered into a Joinder Agreement in the form attached hereto as Exhibit I and thereby (i) become a party to this Agreement, (ii) individually acknowledged the representations and warranties made by the Company, and (iii) individually acknowledged and assumed the Shareholder indemnification obligations of Article VIII hereof.

                    (o) Third Party Consents. The Company shall have procured all of the third party consents specified in Section 3.4(e) of the Company Disclosure Schedule.

                    (p) Company 2006 Adjusted EBITDA. Adjusted EBITDA of the Company for the year ended December 31, 2006, shall be not less than Two Million Five Hundred Thousand Dollars ($2,500,000.00).

                    (q) Company Working Capital. Notwithstanding any provisions herein regarding adjustments for Net Working Capital of Company, Company Net Working Capital as of the Closing Date shall be not less than One Million Five Hundred Thousand Dollars ($1,500,000.00).

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                    (r) Resignation of Officers and Directors. There shall have been delivered to Parent the written resignations of the officers and directors of the Company.

                    (s) Acquisition of Chopra Shares. Concurrently with or immediately prior to the Closing, Parent shall have acquired all of the outstanding stock of Company issued to Paul Chopra (the “Chopra Stock”), and Shareholders shall have each waived, in writing, their rights to acquire the Chopra Stock pursuant to that certain Entity Buy-Sell Agreement dated as of May 3, 2001, by and among certain of the Shareholders, the Company and Paul Chopra.

                     SECTION 7.3 Conditions to Obligations of Company and Shareholders. The obligation of the Company, the Shareholder Representative and Shareholders to consummate the Merger is further subject to satisfaction or waiver on or prior to the Closing Date of the following additional conditions:

                    (a) Representations and Warranties. The representations and warranties of Parent set forth herein and in the Parent Disclosure Schedule shall be true and correct in all material respects at and as of the Closing Date, as if made at and as of such time (except to the extent expressly made as of an earlier date, in which case such representations and warranties shall be true and correct as of such date). The Company shall have received a certificate of Parent’s Chief Executive Officer and Chief Financial Officer to the foregoing effect.

                    (b) Performance of Obligations of Parent. Parent shall have performed in all material respects all obligations required to be performed by it at or prior to the Closing Date under this Agreement. The Company shall have received a certificate of Parent’s Chief Executive Officer and Chief Financial Officer to the foregoing effect.

                    (c) Regulatory Condition. No condition or requirement shall have been imposed by one or more Governmental Entities in connection with any required approval by them of the Purchase that requires Parent or any of its subsidiaries to be operated in a manner that would have a material adverse effect on Parent.

                    (d) No Parent Material Adverse Effect. There shall not be or exist any change, effect, event, circumstance, occurrence or state of facts that has had, has or which reasonably could be expected to have, a material adverse effect on Parent.

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                    (e) Escrow Agreement. Parent and Shareholders’ Representative shall have entered into the Escrow Agreement, and the Escrow Agreement shall be in full force and effect and shall not have been anticipatorily breached or repudiated.

                    (f) Employment Agreement. David Condensa, Bert Condensa, Kevin Hawkins, David Auerweck, Terri Marine and Surviving Corporation shall have executed Employment Agreements in substantially the forms attached hereto as Exhibit C.

                    (g) Legal Opinion. Shareholders shall have received an opinion of counsel to the Parent, Law Offices of Karl Reed Guest, in substantially the form attached hereto as Exhibit H.

                    (h) Registration Rights Agreement. Parent and the Shareholders shall have entered into the Registration Rights Agreement in the form attached hereto as Exhibit D.

                    (i) Certificate of Good Standing. Shareholders shall have received prior to or at the Closing a certificate of good standing regarding the Parent from the Secretary of State of the State of Nevada dated not more than fifteen (15) days prior to Closing.

                    (j) Vote in Favor of the Merger. Stockholders holding not less than One Hundred Percent (100%) of the Company Common Stock outstanding immediately prior to the Effective Time must have voted such stock in favor of the approval and adoption of this Agreement and the other transactions contemplated by this Agreement.

                    (k) Chopra Litigation. Dismissals with prejudice shall have been entered in Case No. CIV 462802, Superior Court of California, County of San Mateo (Chopra v. Helio Solutions, Inc., et. al.) and Case No. 1-06-CV-062181, Superior Court of California, County of Santa Clara (Chopra v. Helio Solutions, Inc., et. al.) and a Mutual Release and Settlement Agreement in the form attached hereto as Exhibit G shall have been entered into by all of the parties to each of the foregoing cases and any and all contingencies or conditions of such Mutual Release and Settlement Agreement shall have been satisfied.

                    (l) Joinder Agreement. Each Shareholder shall have entered into a Joinder Agreement in the form attached hereto as Exhibit I and thereby (i) become a party to this Agreement, (ii) individually acknowledged the representations and warranties made by the Company, and (iii) individually acknowledged and assumed the Shareholder indemnification obligations of Article VIII hereof.

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                    SECTION 7.4 Frustration of Closing Conditions. Neither Parent nor the Company nor the Shareholders may rely on the failure of any condition set forth in Section 7.1, 7.2 or 7.3, as the case may be, to be satisfied if such failure was caused by such party’s failure to use its own commercially reasonable efforts to consummate the Merger and the other transactions contemplated by this Agreement, as required by and subject to Section 6.2.

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ARTICLE VIII

INDEMNIFICATION; ARBITRATION

          SECTION 8.1. Survival of Representations and Warranties. The representations and warranties of the Company, Shareholders and Parent contained in this Agreement and any other document or certificate relating hereto (collectively, the “Acquisition Documents”) shall survive the Effective Time for a period of eighteen (18) months; provided, however, claims related to fraud, willful misconduct or gross negligence shall survive for a period of twenty-four (24) months. Neither the period of survival nor the liability of the parties with respect to their respective representations and warranties shall be affected by any investigation made at any time (whether before or after the Effective Time) by or on behalf of another party or by any actual, implied or constructive knowledge or notice of any facts or circumstances that the other parties may have as a result of such investigation or otherwise. The parties hereto agree that reliance shall not be an element of any claim for misrepresentation or indemnification under this Agreement. The waiver by a party of any condition based on the accuracy of any such representation or warranty, or based on the performance of, or the compliance with, any covenant or obligation, shall not affect the right to indemnification or other remedy based on such representations, warranties, covenants or obligations. If written notice of claim has been given prior to the expiration of the applicable representations and warranties, then the relevant representations and warranties shall survive as to such claim until such claim has been finally resolved.

          SECTION 8.2 Indemnification by Shareholders. (a) By virtue of their adoption of this Agreement and their approval of the transactions contemplated hereby, the Shareholders agree that after the Effective Time, Parent and is affiliates (including, after the Effective Time, the Surviving Corporation), officers, directors, employees, agents, successors and assigns (collectively, the “Parent Indemnified Parties”) shall be indemnified and held harmless by the Shareholders, jointly and severally, for any and all liabilities, losses, damages of any kind, diminution in value, claims, costs, expenses, fines, fees, deficiencies, interest, awards, judgments, amounts paid in settlement and penalties (including, without limitation, attorneys’ fees, consultants’ and experts’ fees and expenses and other costs of defending, investigations or settling claims) suffered, incurred, accrued (in accordance with GAAP) or paid by them (including, without limitation, in connection with any action brought or otherwise initiated by any of them) (collectively, “Parent Losses”), (but with adjustment for any insurance recovery or tax deduction relating thereto), to the extent arising out of or resulting therefrom:

                    (i) any inaccuracy or breach of any representation or warranty (without giving effect to any qualification as to materiality or knowledge (or similar qualifications) contained therein) made by the Company or any Shareholder in the Acquisition Documents;

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                    (ii) the material breach of any covenant or other agreement made by the Company or any Shareholder in the Acquisition Documents;

                    (iii) Parent Losses arising from breach of contract or other claims made by any party alleging to have had a contractual or other right to acquire the Company’s capital or assets, specifically including, but not limited to, pursuant to that Entity Buy-Sell Agreement entered into by and among the Company and certain of the Shareholders and dated as of May 3, 2001;

                    (iv) in the event that any Shareholder properly exercises appraisal rights under applicable law, the amount, if any, by which the fair market value (determined in accordance with applicable law) of the Dissenting Shares exceeds the amount such Shareholder was otherwise entitled to receive pursuant to Section 2.1 of this Agreement (including the Earn Out Payments);

                    (v) any cost, loss or other expense (including the value of any Tax deduction after such loss) as a result of the application of Section 280G of the Code to any of the transactions contemplated by this Agreement or any previous transactions which result in such liability after the Closing, plus any necessary gross up amount; or

                    (vi) any Shareholder expenses payable by the Surviving Corporation following the Closing which are incurred prior to the Closing and are not set forth in Section 3.15 of the Company Disclosure Schedule;

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                    (vii) provided, however, that (A) no Parent Indemnified Party shall be entitled to receive indemnification payments with respect to any Parent Loss unless and until the aggregate deductible amount of the Parent Losses exceeds $100,000.00, and then only to the extent of the Parent Losses in excess of such aggregate amount; (B) this Section 8.2 shall provide the sole and exclusive remedy of Parent or a Parent Indemnified Party with respect to any breach or failure of any representation or warranty or covenant under this Agreement or any of the Acquisition Documents; and (C) the aggregate liability of the Shareholders under this Section 8.2 shall not exceed Three Million Dollars ($3,000,000.00) except for claims related to willful misconduct (other than fraud) or gross negligence, in which case the aggregate liability of the Shareholders under this Section 8.2 shall not exceed the aggregate Merger Consideration actually paid to Shareholders (inclusive of any Escrow Fund), and the liability of each Shareholder under this Section 8.2 shall be limited to his or her pro rata share of Parent Losses and shall not exceed his or her pro rata share of such liability cap; provided, further, however, that the $100,000.00 threshold set forth above shall not apply and the aggregate Merger Consideration liability cap shall apply to the following Excepted Parent Losses (t) Parent Losses covered by Section 8.2(a)(iii) above, (u) tax obligations of the Company or Shareholders pertaining to periods prior to the Closing, (v) breach of the Company’s contracts with Sun Microsystems, (w) any claim brought by or based upon claims of any Company stockholder or related party accruing prior to the Closing, (x) damages and or costs incurred as a result of or in the defense of the legal actions set forth in Section 3.8 of the Company Disclosure Schedule, (y) claims related to the ownership or loans for the purchase of or secured by that building located at 3000 Lakeside Drive, Santa Clara, CA or (z) a breach by a Shareholder of his or her obligations under Section 6.6. With respect to such Excepted Parent Losses, the liability of each Shareholder under this Section 8.2 shall be limited to such Shareholder’s pro rata share of such Excepted Parent Losses and shall not exceed the Shareholder’s pro rata share of the Merger Consideration actually paid to the Shareholders. Parent agrees that in the case of a breach by an identifiable individual Shareholder (a “Breaching Shareholder”), Parent will look first for satisfaction of the indemnification claim to (i) such Breaching Shareholder’s pro rata share of the Escrow Fund, then (ii) to any Earn Out Payment then payable to such Breaching Shareholder, then (iii) to such Breaching Shareholder’s pro rata share of the remaining Merger Consideration actually received by such Breaching Shareholder, then, (iv) to the remaining Shareholders’ pro rata shares of the Escrow Fund in pro rata portions, then (v) to any Earn Out Payment then payable to the Remaining Shareholders, in pro rata portions, then (vi) to the remaining Shareholders’ pro rata shares of the remaining Merger Consideration actually received by such remaining Shareholders, in pro rata portions, and then (vii) to any future Earn Out Payment that may become payable to the Shareholders, in pro rate portions. In the case of a breach not attributable to an individual identifiable Shareholder, Parent agrees to look for satisfaction of the indemnification claim, in pro rata portions, to, first (1) the Escrow Fund, then (2) to any Earn Out Payment then payable to the Shareholders, in pro rata portions, then (3) to the Shareholders’ pro rata shares of the remaining Merger Consideration actually received by such remaining Shareholders, in pro rata portions, and, then (4) to any future Earn Out Payments that may become payable to Shareholders, in pro rata portions. At the Shareholder’s sole option, a Shareholder may pay any indemnification amount that may

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become due and payable from Merger Consideration actually received by directing Parent to first use shares of Parent Common Stock, without any discounts for brokerage or underwriting commissions. For purposes of any indemnity claim limited by the Merger Consideration, the value of the Parent Shares shall be the lesser of (X) their value at the time issued to the Shareholders, or (Y) their Fair Market Value at the time the indemnity claim is made.

          (b) As used herein, “Parent Losses” are not limited to matters asserted by third parties, but include Losses incurred or sustained by the Parent Indemnified Parties in the absence of claims by third parties, but subject to the limits set forth herein.

          (c) By virtue of their adoption of this Agreement and their approval of the transactions contemplated hereby, the Shareholders acknowledge and agree that, if the Surviving Corporation suffers, incurs or otherwise becomes subject to any Losses as a result of or in connection with any inaccuracy in or breach of any representation, warranty, covenant or obligation, then (without limiting any of the rights of the Surviving Corporation as an Indemnitee) Parent shall also be deemed, by virtue of its ownership of the stock of the Surviving Corporation, to have incurred Losses as a result of and in connection with such inaccuracy or breach, provided that there shall be no duplicate recovery with respect to any Parent Losses.

          (d) No Shareholder shall have any right of contribution, right of indemnity or other right or remedy against the Surviving Corporation in connection with any indemnification obligation or any other liability to which such Shareholder may become subject under or in connection with this Agreement.

          (e) Notwithstanding anything herein to the contrary, the Company’s representations and warranties contained in Article III of this Agreement shall, for purposes of the Company’s or Shareholders’ indemnification obligations, be deemed to be made as of the date of this Agreement and as of the Effective Time (except for any such representation or warranty that expressly speaks of and earlier date) without regard to the exceptions set forth in the certificates to be delivered in connection with Section 7.2.

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          SECTION 8.3 Indemnification by Parent. Shareholders (the “Shareholder Indemnified Parties”) shall be indemnified and held harmless by Surviving Corporation and Parent, jointly and severally, against all claims, losses, liabilities, damages, deficiencies, costs and expenses, including reasonable attorneys’ fees and expenses of investigation (hereinafter individually a “Shareholder Loss” and collectively “Shareholder Losses”) (but with adjustment for any insurance recovery or tax deduction relating thereto), to the extent arising out of or resulting therefrom, incurred by the Shareholder Indemnified Parties directly or indirectly as a result of: (i) any inaccuracy of a representation or warranty of Parent contained in this Agreement or (ii) any failure by Parent or Surviving Corporation to perform or comply with any covenant contained in this Agreement; provided, that the Shareholder Indemnified Parties shall not be entitled to receive indemnification payments with respect to any Shareholder Loss under (i) or (ii) above unless and until the aggregate deductible amount of the Shareholder Losses exceeds $100,000.00 and then only to the extent of such Shareholder Losses in excess of such aggregate amount; provided, however, such aggregate deductible amount shall not apply to Parent’s failure to make payments under Section 2.2(a)(i) hereof or under the Employment Agreements, so long as there has been no termination of the Employment Agreements in accordance with their terms which would relieve Parent of its payment obligations thereunder, or to Parent’s obligation to issue its Common Stock in accordance with the provisions of Section 2.1 of this Agreement.

          SECTION 8.4 Claims and Procedure

          (a) Claims. Whenever any claim shall arise for indemnification, the party seeking indemnification hereunder (the “indemnified party”) shall notify the party or parties from whom indemnification is sought (collectively, the “indemnifying party”) of the claim pursuant to Section 8.4(c) hereunder and, when known, the facts constituting the basis for such claim and the amount or estimate of the amount of the liability arising from such claim. The indemnified party shall not settle or compromise any claim by a third party for which the indemnified party is entitled to indemnification hereunder without the prior written consent of the indemnifying party unless (i) suit shall have been instituted against the indemnified party and (ii) the indemnifying party shall not have taken control of such suit as provided in Section 8.4(b) within 25 days after notification thereof.

          (b) Defense by Indemnifying Party. In connection with any claim giving rise to indemnity hereunder resulting from or arising out of any claim or legal proceeding by a third party, the indemnifying party, at its sole cost and expense, may, upon written notice to the indemnified party, assume the defense of any such claim or legal proceeding. If the indemnifying party assumes the defense of any such claim or legal proceeding, the indemnifying party shall select counsel reasonably acceptable to the indemnified party to conduct the defense of such claims or legal proceedings and at the indemnifying party’s sole cost and expense shall take all reasonable steps necessary in the defense or settlement thereof. The indemnifying party shall not consent to a settlement of, or the entry of any judgment arising from, any such claim or legal proceeding, without the prior written consent of the indemnified party, which consent shall not be

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unreasonably withheld, conditioned or delayed, if (a) the indemnifying party admits in writing its liability to hold the indemnified party harmless from and against any losses, damages, expenses and liabilities arising out of such settlement, (b) concurrently with such settlement the indemnifying party pays into court the full amount of all losses, damages, expenses and liabilities to be paid by the indemnifying party in connection with such settlement and obtains a full release of any liability of the indemnified party which is not conditioned upon any further payment and (c) such settlement would not otherwise have a material adverse effect on the indemnified party. The indemnified party shall be entitled to participate in (but not control) the defense of any such action, with its own counsel and at its own expense. If the indemnifying party does not assume the defense of any such claim or litigation resulting therefrom in accordance with the terms hereof, the indemnified party may defend against such claim or litigation in such manner as it may deem appropriate including, but not limited to, settling such claim or litigation, after giving notice of the same to the indemnifying party, on such terms as the indemnified party may deem appropriate. The indemnifying party shall be required to participate in the defense of any action by providing information necessary to permit the indemnified party to defend such action as indicated in (d) below and shall be advised of its status. In any action by the indemnified party seeking indemnification from the indemnifying party in accordance with the provisions of this Section, if the indemnifying party did not assume the defense of any such claim or litigation, the indemnifying party shall not be entitled to question the manner in which the indemnified party defended such claim or litigation or the amount or nature of any such settlement.

          (c) Notice. In the event of any occurrence which may give rise to a claim by an indemnified party against an indemnifying party hereunder, the indemnified party will give notice thereof to the indemnifying party within 20 days of the indemnified party becoming aware of events giving rise to the possibility of a right to indemnification and the first opportunity to reduce, remedy or incur the damages or potential damages caused by such occurrence; provided, however, that failure of the indemnified party to timely give the notice provided in this Section 8.4(c) shall not be a defense to the liability of an indemnifying party for such claim, but such indemnifying party may recover from the indemnified party any actual damages arising from the indemnified party’s failure to give such timely notice; provided, further that Parent may take preemptive legal action of a pressing nature, with respect to a third party Claim, only after providing notice to the Shareholders in the manner provided for in Section 10.1 hereof.

          (d) Access to Information. Regardless of which party shall assume the defense of a claim, each party shall provide to the other parties, upon written request, all information and documentation in the possession or control of such party and reasonably necessary to support and verify any Parent or Shareholder Losses which give rise to such claim for indemnification and shall provide reasonable access to all books, records and personnel in such party’s possession or control which would have a bearing on such claim.

          (e) Tax Audits. Notwithstanding any provision to the contrary contained herein, in all events Shareholders shall be permitted to retain legal counsel, accountants, and any and all professional assistance Shareholders desires, (all at Shareholders’ sole cost and expense) to defend against any audits involving taxes relating to the time during which

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Shareholders owned the Company. Parent agrees to give Shareholder notice in the event Parent has received notice of any such tax audit.

          (f) Fraud Claims. Notwithstanding anything to the contrary herein, the existence of this Article VIII and of the rights and restrictions set forth herein do not limit any legal remedy for claims based on common law fraud.

          SECTION 8.5 Arbitration. Any dispute, controversy or claim arising out of or relating to this Agreement (a “Dispute”), shall be settled by binding arbitration. Any such arbitration proceeding shall be conducted by one arbitrator mutually agreeable to Shareholders and Parent. In the event that within forty-five (45) days after submission of any Dispute to arbitration, Shareholders and Parent cannot mutually agree on one arbitrator, Shareholders and Parent shall each select one arbitrator, and the two arbitrators so selected shall select a third arbitrator who will arbitrate the case on his own. The agreed upon arbitrator or the third arbitrator, as the case may be, shall set a limited time period and establish procedures designed to reduce the cost and time for discovery while allowing the parties an opportunity, adequate in the sole judgment of the arbitrator or third arbitrator, as the case may be, to discover relevant information from the opposing parties about the subject matter of the Dispute. The arbitrator or the third arbitrator, as the case may be, shall rule upon motions to compel or limit discovery and shall have the authority to impose sanctions, including attorneys’ fees and costs, to the same extent as a competent court of law or equity, should the arbitrator or third arbitrator, as the case may be, determine that discovery was sought without substantial justification or that discovery was refused or objected to without substantial justification. The decision of the arbitrator shall be binding and conclusive upon the parties to this Agreement. Such decision shall be written and shall be supported by written findings of fact and conclusions which shall set forth the award, judgment, decree or order awarded by the arbitrator(s). Judgment upon any award rendered by the arbitrator(s) may be entered in any court having jurisdiction. Any such arbitration shall be held in San Francisco, California, under the rules then in effect of Judicial Arbitration and Mediation Services. The substantially non-prevailing party shall pay all expenses relating to the arbitration, including without limitation, the respective expenses of each party, the fees of each arbitrator and applicable administrative fees.

          SECTION 8.6 Shareholders’ Representative.

          (a) David Condensa (such person and any successor being the “Shareholders’ Representative”) shall act as the representative of the Shareholders, and shall be authorized to act on behalf of the Shareholders and to take any and all actions required or permitted to be taken by the Shareholders’ Representative under this Agreement with respect to any claims (including the settlement thereof) made by a Parent Indemnified Party for indemnification pursuant to this Article VIII and with respect to any actions to be taken by the Shareholders’ Representative pursuant to the Escrow Agreement (including, without limitation, the exercise of the power to (i) authorize the delivery of the Escrow Fund to a Parent Indemnified Party, (ii) agree to, negotiate, enter into

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settlements and compromises of, and comply with orders of courts with respect t any claims for indemnification and (iii) take all actions necessary in the judgment of the Shareholders’ Representative for the accomplishment of the foregoing). In all matters relating to this Article VIII, the Shareholders’ Representative shall be the only party entitled to assert the rights of the Shareholders, and the Shareholders’ Representative shall perform all of the obligations of the Shareholders hereunder. The Parent Indemnified Parties shall be entitled to rely on all statements, representations and decisions of the Shareholders’ Representative.

          (b) The Shareholders shall be bound by all actions taken by the Shareholders’ Representative in his, her or its capacity thereof, except for any action that conflicts with the limitations set forth in subsection (d) below. The Shareholders’ Representative shall promptly, and in any event within five (5) business days, provide written notice to the Shareholders of any action taken on behalf of them by the Shareholders’ Representative pursuant to the authority delegated to the Shareholders’ Representative under this Section 8.6. The Shareholders’ Representative shall, at all times, act in his or her capacity as Shareholders’ Representative in a manner that the Shareholders’ Representative believes to be in the best interest of the Shareholders. Neither the Shareholders’ Representative nor any of its directors, officers, agents or employees, if any, shall be liable to any person for any error of judgment, or any action taken, suffered or omitted to be taken under this Agreement or the Escrow Agreement, except in the case of its gross negligence, bad faith or willful misconduct. The Shareholders’ Representative may consult with legal counsel, independent public accountants and other experts selected by it. The Shareholders’ Representative shall not have any duty to ascertain or to inquire as to the performance or observance of any of the terms, covenants or conditions of this Agreement or the Escrow Agreement. As t any matters not expressly provided for in this Agreement or the Escrow Agreement, the Shareholders’ Representative shall not exercise any discretion or take any action.

          (c) Notwithstanding anything to the contrary herein or in the Escrow Agreement, the Shareholders’ Representative is not authorized to, and shall not, accept on behalf of any Shareholder any merger consideration to which such Shareholder is entitled under this Agreement and the Shareholders’ Representative shall not in any manner exercise, or seek to exercise, any voting power whatsoever with respect to shares of capital stock of the Company or Parent now or hereafter owned of record or beneficially by any Shareholder unless Shareholders’ Representative is expressly authorized to do so in a writing signed by such Shareholder.

          (d) If Shareholders’ Representative shall die, resign, become disabled or otherwise be unable to fulfill his responsibilities hereunder, or if Shareholders owning a majority of Shares of the Surviving Corporation owned by all Shareholders in the aggregate at the time (or as of the Closing, if after the Closing) shall elect to remove (with or without cause) Shareholders’ Representative, Shareholders shall (by consent of Shareholders owning at least a majority of shares of the Company owned by all Shareholders in the aggregate at the time (or as of the Closing, if after the Closing), within 10 days after such death, resignation, disability, inability or removal, appoint a successor to Shareholders’ Representative (who shall be reasonably satisfactory to

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Parent). Any such successor shall succeed Shareholders’ Representative as Shareholders’ Representative hereunder. If for any reason there is no Shareholders’ Representative at any time, all references herein to Shareholders’ Representative shall be deemed to refer to Shareholders holding a majority of the Shares.

          (e) Shareholders, jointly and severally, agree to indemnify Shareholders’ Representative and to hold Shareholders’ Representative harmless against any and all loss, liability or expense incurred without fraud, willful misconduct or gross negligence on the part of Shareholders’ Representative and arising out of or in connection with his duties as Shareholders’ Representative, including the reasonable costs and expenses incurred by Shareholders’ Representative in defending against any claim or liability in connection with this Agreement. This indemnification shall survive the termination of this Agreement. The costs of such indemnification (including the costs and expenses of enforcing the right of indemnification) shall be paid by the Shareholders pro rata in accordance with amounts of the total Purchase Price to be received by each Shareholder (and assuming payment in full of the Earn out Payments). Shareholders’ Representative may, in all questions arising under this Agreement, rely on the advice of counsel and for anything done, omitted or suffered by Shareholders’ Representative in accordance with such advice, Shareholders’ Representative, solely in its capacity as Shareholders’ Representative, shall not be liable to Shareholders, except as expressly provided hereunder. In no event shall Shareholders’ Representative be liable to Shareholders hereunder or in connection herewith, solely in its capacity as Shareholders’ Representative, for any consequential, special, consequential or punitive damages.

          (f) Neither Parent nor its Affiliates shall have the right to object to, protest or otherwise contest any matter related to the procedures for action being taken by Shareholders’ Representative as between Shareholders’ Representative and the Shareholders.

ARTICLE IX

TERMINATION, AMENDMENT AND WAIVER

                     SECTION 9.1 Termination. This Agreement may be terminated at any time prior to August 31, 2007:

(a) by mutual written consent of Parent and the Company;

(b) upon failure of any condition precedent set forth in Section 7.1 hereof;

(c) by Parent upon failure of any condition precedent set forth in Section 7.2 hereof;

(d) by Company or Shareholder Representative upon failure of any condition precedent set forth in Section 7.3 hereof

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(e) by Parent or the Company if the Effective Time shall not have occurred on or before August 31, 2007;

(f) by Parent upon a breach of any material representation, warranty, covenant or agreement on the part of the Company or Shareholders set forth in this Agreement, or if any representation or warranty of the Company or Shareholders shall have become untrue, in either case such that the conditions set forth in 7.2(a) or 7.2(b) would not be satisfied (“Terminating Company Breach”); provided, however, that if such Terminating Company Breach is curable by the Company or Shareholders through the exercise of their respective best efforts and for so long as the Company and Shareholders continue to exercise such best efforts, Parent may not terminate this Agreement under this Section 9.1(d) unless such breach is not cured within thirty (30) days after notice thereof is provided by Parent to the Company and Shareholders (but no cure period is required for a breach which, by its nature, cannot be cured); or

(g) by the Company or the Shareholder Representative upon a breach of any material representation, warranty, covenant or agreement on the part of Parent or Merger Sub set forth in this Agreement, or if any representation or warranty of the Company or Shareholders shall have become untrue, in either case such that the conditions set forth in 7.3(a) or 7.3(b) would not be satisfied (“Terminating Parent Breach”); provided, however, that if such Terminating Parent Breach is curable by Parent and Merger Sub through the exercise of their respective best efforts and for so long as Parent and Merger Sub continue to exercise such best efforts, the Company and Shareholders may not terminate this Agreement under this Section 9.1(e) unless such breach is not cured within thirty (30) days after notice thereof is provided by the Company or Shareholders to Parent (but no cure period is required for a breach which, by its nature, cannot be cured);

(h) provided, however, that neither Parent nor the Company may rely on the failure of any condition set forth in Section 7.1, 7.2 or 7.3, as the case may be, to be satisfied if such failure was caused by such party’s failure to use its own commercially reasonable efforts to consummate the Merger and the other transactions contemplated by this Agreement, as required by and subject to Section 6.2.

                     SECTION 9.2 Effect of Termination.

                     (a) If this Agreement is terminated as provided in Section 9.1, this Agreement forthwith shall become void and have no effect, without any liability or obligation on the part of Parent or Shareholders; provided, however, that nothing herein shall relieve any party from any liability (in contract, tort or otherwise, and whether pursuant to an action at law or in equity) for any knowing or willful breach by such party

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of any of its representations, warranties, covenants or agreements set forth in this Agreement or in respect of fraud by any party. Notwithstanding the foregoing, the provisions of this Article IX, Section 6.1(b), Section 6.3, Section 6.4, Article X shall survive any termination of this Agreement.

                     (b) Anything in this Agreement to the contrary notwithstanding, if any of the conditions specified in Article VII hereof for its benefit have not been satisfied, Parent, Shareholders or the Company (as applicable) shall have the right to waive the satisfaction thereof and to proceed with the transactions contemplated hereby.

                     SECTION 9.3 Amendment. This Agreement may be amended by the parties at any time. This Agreement may not be amended except by an instrument in writing signed on behalf of all of the parties to be bound thereby.

                     SECTION 9.4 Extension; Waiver. At any time prior to the Closing, a party may (a) extend the time for the performance of any of the obligations or other acts of the other party, (b) waive any inaccuracies in the representations and warranties of the other party contained in this Agreement or in any document delivered pursuant to this Agreement or (c) subject to the provisions of Section 9.3, waive compliance by the other party with any of the agreements or conditions contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. The failure of any party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights.

ARTICLE X

GENERAL PROVISIONS

                     SECTION 10.1 Notices. All notices, requests, claims, demands and other communications under this Agreement shall be in writing and shall be deemed given if delivered personally, telecopied (which is confirmed) or sent by overnight courier (providing proof of delivery) to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

(a) If to Parent, to:

Incentra Solutions, Inc.

1140 Pearl Street

Boulder, Colorado 80302

Fax No.: (303) 440-7114

Attention: Thomas P. Sweeney III

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with a copy (which shall not constitute notice pursuant to this Section 10.2) to:

Reed Guest, Esq.

94 Underhill Road

Orinda, CA 94563

Fax No.: (925) 254-9226.

(b) if to Shareholders, to:

David Condensa

5676 Scenic Meadow Lane

San Jose, CA 95135

Fax No.:

with a copy (which shall not constitute notice pursuant to this Section 10.2) to:

MBV Law LLP

855 Front Street

San Francisco, CA 94111

Attention: Donald Buder

Fax No.: (415) 989-5143

Telephone No. (415) 781-4400

                     SECTION 10.2 Definitions. For purposes of this Agreement:

                     (a) an “affiliate” of any person means another person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first person, where “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management policies of a person, whether through the ownership of voting securities, by contract, as trustee or executor, or otherwise.

                     (b) “Encumbrances” shall mean Liens, security interests, deeds of trust, encroachments, reservations, orders of Governmental Entities, decrees, judgments, contract rights, claims or equity of any kind.

                     (d) “Knowledge” means, (i) with respect to Shareholders, their actual knowledge after reasonable due inquiry, (ii) with respect to the Company, the actual knowledge after reasonable due inquiry of the Shareholders or any of Company’s executive officers; and (ii) with respect to Parent, the actual knowledge after reasonable due inquiry of any of Parent’s executive officers.

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                     (e) “Material Adverse Change” or “Material Adverse Effect” means, when used in reference to the Company or Parent, any change, effect, event, circumstance, occurrence or state of facts that is, or which reasonably could be expected to be, materially adverse to the business, assets, liabilities, condition (financial or otherwise), cash flows or results of operations of such party and its subsidiaries, considered as an entirety.

                     (f) “Person” means an individual, corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization or other entity.

                     (g) “Shareholders” shall mean David Condensa, Bert Condensa, David Auerweck, Kevin Hawkins and Terri Marine.

                     (h) a “Subsidiary” of any person means another person, an amount of the voting securities, other voting ownership or voting partnership interests of which is sufficient to elect not less than a majority of its Board of Directors or other governing body (or, if there are no such voting interests, 50% or more of the equity interests of which) is owned directly or indirectly by such first person.

                     SECTION 10.3 Interpretation. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

                     SECTION 10.4 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties. A facsimile copy of a signature page shall be deemed to be an original signature page.

                     SECTION 10.5 Entire Agreement; No Third-Party Beneficiaries. This Agreement (including the documents and instruments referred to herein, but excluding the Confidentiality Agreement to the extent stated herein) (a) constitutes the entire agreement, and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter of this Agreement, and; (b) except for the provisions of Section 6.4 which shall inure to the benefit of and be enforceable by the persons referred to therein, are not intended to confer upon any person

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other than the parties any rights or remedies; and (c) all Exhibits and Schedules to this Agreement are incorporated into this Agreement by reference.

                     SECTION 10.6 Governing Law. This Agreement shall be governed by, and construed in accordance with, the internal substantive and procedural laws of the State of California, regardless of the laws that might otherwise govern under applicable principles of conflicts of law of such state.

                     SECTION 10.7 Assignment. Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by operation of law or otherwise by any of the parties hereto without the prior written consent of the other parties. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the parties and their respective successors and assigns.

                     SECTION 10.8 Consent to Jurisdiction. Each of the parties hereto (a) consents to submit itself to the personal jurisdiction of any State or Federal court located in the Northern District of the State of California in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement and arbitration is first demanded or suit is first filed by Parent, (b) consents to submit itself to the personal jurisdiction of any Federal court located in the Northern District of the State of California event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement and arbitration is first demanded or suit is first filed by Shareholders, (c) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, and (d) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than a court as provided in (a) above with respect to claims by Parent or (b) with respect to claims by Shareholders. The parties irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or any of the transactions contemplated by this Agreement in any State or Federal court as provided above, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.

                     SECTION 10.9 Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

                     SECTION 10.10 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible to the fullest extent permitted by applicable law in a reasonably acceptable

Page 74

manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

                     SECTION 10.11 Enforcement. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, this being in addition to any other remedy to which they are entitled at law or in equity. If any litigation or arbitration shall be commenced to enforce, or relating to, any provision of this Agreement, the prevailing party shall be entitled to an award of reasonable attorneys fees and reimbursement of such other costs as it incurs in prosecuting or defending such litigation. For purposes of this section, “prevailing party” shall include a party awarded injunctive relief or a party prevailing based upon final, unappealable order.

[The remainder of this page is intentionally left blank.]

Page 75

                     IN WITNESS WHEREOF, Shareholders, and Parent have caused this Agreement to be signed by their respective officers thereunto duly authorized, all as of the date first written above.

INCENTRA SOLUTIONS, INC.

By:

Name: Thomas P. Sweeney III

Title: Chief Executive Officer

INCENTRA HELIO ACQUISITION CORP.

By:

Name: Thomas P. Sweeney III

Title: Chief Executive Officer

HELIO SOLUTIONS, INC.

By:

Name:

Title:

SHAREHOLDERS’ REPRESENTATIVE:

David Condensa, solely as Shareholders’ Representative

Page 76

EX-10.2

Exhibit 10.2

FIRST AMENDMENT TO

AGREEMENT AND PLAN OF MERGER

          FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this “First Amendment”) dated as of August ___, 2007, by and among INCENTRA SOLUTIONS, INC., a Nevada corporation (“Parent”), INCENTRA HELIO ACQUISITION CORP., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), HELIO SOLUTIONS, INC., a California corporation (the “Company”), and DAVID CONDENSA, as Shareholders’ Representative.

RECITALS

          WHEREAS, Parent, Merger Sub, Company and Shareholders’ Representative are parties to that certain Agreement and Plan of Merger dated August __, 2007 (the “Merger Agreement”). Capitalized terms not defined herein shall have the meaning set forth in the Merger Agreement.

          WHEREAS, the parties desire to amend the Merger Agreement on the terms and conditions set forth herein.

          NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto intending to be legally bound do hereby agree as follows:

          1. Closing. Closing shall occur on August 16, 2007, subject to the terms and conditions set forth in the Merger Agreement, as amended by this First Amendment.

          2. Waiver of Covenants and Closing Conditions. Parent and Merger Sub acknowledge and accept that as of Closing, notwithstanding the certificates of the President and Treasurer of the Company to be delivered at Closing, the Company will not have obtained consents from third parties required under the terms of agreements entered into between the Company and such third parties, including without limitation in relation to the Company’s lease for its San Jose office space and with respect to an SBA loan (the “SBA Loan”) used to acquire property owned by 3000 Lakeside LLC, a California limited liability company owned by certain of the Shareholders, under which SBA Loan the Company is an obligor (collectively, the “Third Party Consents”). Parent and Merger Sub hereby waive, as of the date hereof and as of Closing, the conditions and covenants set forth in the Merger Agreement to the extent such conditions or covenants are breached or not fulfilled as a result of the failure of the Company to obtain the Third Party Consents as of Closing, including without limitation the conditions to Closing set forth in subsections (a), (b) and (o) of Section 7.2 of the Merger Agreement (but such waiver to apply only to the extent the failure or breach of such Closing conditions and related covenants arise from the failure to obtain the Third Party Consents).

          3. SBA Loan. The Shareholders, jointly and severally, agree to repay the SBA Loan in full, or obtain a full release of the Company, Parent and Merger Sub with respect to any obligations or claims arising thereunder, on the earlier to occur of (a) the

SBA Loan becomes due and payable for any reason, including without limitation by reason of the lender declaring a default thereunder; or (b) one hundred eighty (180) days after Closing. The joint and several obligations of the Shareholders under this Section 3 of the First Amendment shall be subject to the indemnification obligations of the Shareholders under Section 8.2(a) of the Merger Agreement, provided that (w) the limitations set forth in subsection (vii) of Section 8.2 (a) shall not apply, (x) Shareholders shall not be allowed to satisfy their obligations under this Section 3 of the First Amendment with stock of Parent until the entire cash portion of each component of merger consideration is first paid to Parent in satisfaction of such obligations, (y) Shareholders hereby grant to Parent and Merger Sub a security interest in their respective interests in that limited liability company known as 3000 Lakeside, LLC, a California limited liability company (the “LLC”), of which each Shareholder is a member, and (z) Shareholders and further agree to enter into a Security Agreement with Parent and Merger Sub, in the form attached hereto as Exhibit A and made a part hereof, to secure Shareholders obligations hereunder.

          4. Scope of Amendment. Any provision of the Merger Agreement inconsistent with the terms of this First Amendment is hereby amended. Except as amended hereby, the Merger Agreement remains unamended and in full force and effect.

[Signature Pages Follow]

               IN WITNESS WHEREOF, Shareholders, and Parent have caused this Agreement to be signed by their respective officers thereunto duly authorized, all as of the date first written above.

INCENTRA SOLUTIONS, INC.
By:
Name: Thomas P. Sweeney III
Title: Chief Executive Officer
INCENTRA HELIO ACQUISITION CORP.
By:
Name: Thomas P. Sweeney III
Title: Chief Executive Officer
HELIO SOLUTIONS, INC.
By:
Name:
Title:
SHAREHOLDERS’ REPRESENTATIVE:
David Condensa, solely as Shareholders’ Representative
	SHAREHOLDERS
David Condensa

Bert Condensa

Dave Auerweck

Kevin Hawkins

Terri Marine

EX-10.3

Exhibit 10.3

SECURITY AGREEMENT

          Agreement made and entered into August 16, 2007, between Incentra Solutions, Inc. and its subsidiaries, affiliates (collectively referred to as “SECURED PARTY”) with its principal office at 1140 Pearl Street, Boulder, CO 80302 and David Condensa, Bert Condensa, Dave Auerweck, Kevin Hawkins and Terri Marine (hereinafter collectiely called “DEBTOR”).

1. SECURITY INTEREST GRANTED:

          DEBTOR hereby pledges, assigns, consigns, transfers, sets over and grants to SECURED PARTY a security interest in the COLLATERAL hereinafter described to secure the payment and/or performance of all OBLIGATIONS, as hereinafter defined, of DEBTOR to SECURED PARTY.

2. COLLATERAL:

          The COLLATERAL of this Security Agreement is as follows (hereinafter sometimes collectively referred to as the “COLLATERAL”):

          (a) any and all right, title and interest of DEBTOR, or any of them, in and to that California limited liability company known as 3000 Lakeside, LLC, and the property of any nature, owned by same.

3. OBLIGATIONS:

          The security interest granted hereby assigns the full, prompt and unconditional payment to SECURED PARTY, upon the terms and as and when due, of any and all indebtedness, obligations or liabilities of DEBTOR to SECURED PARTY related to the obligations of DEBTOR set forth in Section 3 of that First Amendment to Merger Agreement by and among the parties hereto, among others, of whatever nature, whether direct or indirect, absolute or contingent, now due or hereafter to become due, or now existing (all of which are hereinafter referred to as “OBLIGATIONS”).

4. WARRANTIES:

          DEBTOR warrants and covenants that:

          (a) Except for the security interest granted hereby, DEBTOR is and shall be the lawful owner of the COLLATERAL, which is and will be and remain free and clear of any adverse liens, encumbrances, security interests, claims, charges, taxes, levies and/or assessments.

          (b) DEBTOR shall defend its title to the COLLATERAL against all persons and against all claims of any kind whatsoever.

          (c) DEBTOR shall pay, when due, all charges, taxes, assessments and fees which may now or hereafter be imposed upon the ownership, sale, purchase or possession of the COLLATERAL; and SECURED PARTY may, but is under no duty to, pay said items and charge the cost of the same to DEBTOR.

5. BOOKS AND RECORDS; INSPECTION:

          (a) DEBTOR will keep and maintain such books and records with respect to the COLLATERAL and with respect to the general business of DEBTOR as SECURED PARTY may from time to time prescribe in order to enable SECURED PARTY to audit same.

          (b) DEBTOR shall at all reasonable times, and from time to time, without the necessity of any prior notice or demand, allow SECURED PARTY by and through any of its officers, agents, or attorneys, accountants or other representatives, to examine or inspect the Inventory Collateral wherever the same may be located and to examine, inspect and make extracts from or copies of DEBTOR’s books and records respecting any or all of the COLLATERAL.

          (c) SECURED PARTY shall have the right in its own name or in the name of the DEBTOR to verify the amount owing from DEBTOR’s customers with regard to the COLLATERAL.

6. EVENTS OF DEFAULT:

          DEBTOR shall be in default hereunder upon the occurrence of any of the following:

          (a) Failure at any time to pay in full and as when due any OBLIGATIONS of DEBTOR to SECURED PARTY or failure to perform any of the warranties, covenants or provisions contained or referred to herein or in any instrument evidencing any of the OBLIGATIONS, or any breach thereof;

          (b) The making by DEBTOR of any false or misleading representation, warranty, or statement in connection with

this Agreement;

          (c) Subjection by DEBTOR of any of the COLLATERAL to execution or other judicial process, or the loss, theft, substantial damage, destruction, transfer (other than in the ordinary course of the DEBTOR’s business) or the encumbrance of any of the COLLATERAL;

          (d) Any reduction in the value of the COLLATERAL or any act on the part of the DEBTOR which to any degree imperils the prospect of full performance or satisfaction of the OBLIGATIONS of the DEBTOR hereunder;

          (e) Death, dissolution, termination of existence, insolvency, business failure, appointment of a receiver of any part of the property of, assignment for the benefit of creditors by, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against DEBTOR or any guarantor or surety for DEBTOR’s OBLIGATIONS;

          (f) A breach by DEBTOR of any term of this or any other Agreement between DEBTOR and SECURED PARTY;

          (g) Such change in the financial or other condition of DEBTOR as in the opinion of SECURED PARTY unreasonably impairs SECURED PARTY’s security or increases its risks hereunder.

7. RIGHTS AND REMEDIES ON DEFAULT:

          Upon the occurrence of any event of default, and at any time thereunder, SECURED PARTY shall have all the rights and remedies of a secured party under the Uniform Commercial Code, including, without limitation, the following:

          (a) To declare all OBLIGATIONS of DEBTOR to SECURED PARTY immediately due and payable;

          (b) To make immediate and exclusive possession of the Collateral or any part thereof, and for that purpose SECURED PARTY may, so far as DEBTOR can give authority therefore, with or without judicial process, enter upon the premises on which the Collateral or any part thereof may be situated and remove the same therefrom;

          (c) To hold, maintain, preserve and prepare the Collateral for public or private sale at SECURED PARTY’s sole discretion, until disposed of, or to retain the Inventory Collateral subject to DEBTOR’s right of redemption in satisfaction of the DEBTOR’s OBLIGATIONS as provided in the Uniform Commercial Code. SECURED PARTY may require DEBTOR to assemble the Collateral and make it available to SECURED PARTY for possession at a place to be designated by SECURED PARTY which is reasonably convenient to both parties. Unless the Inventory is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, SECURED PARTY will give DEBTOR reasonable notice of the time and place of any public sale thereof or of the time after which any private sale or any other intended disposition thereof is to be made. SECURED PARTY may be the purchaser at any public or private sale of the Inventory Collateral. The net proceeds realized upon such disposition, after deduction for the expenses of retaking, holding, preparing for sale, selling or the like, and the reasonable attorney’s fees and legal expenses incurred by SECURED PARTY shall be applied in satisfaction of the OBLIGATIONS secured hereby. SECURED PARTY will account to DEBTOR for any surplus realized on such disposition and DEBTOR shall remain liable for any deficiency.

8. MODIFICATION:

          The security interest granted to SECURED PARTY hereunder shall not supercede; but will supplement all other agreements signed, or hereafter signed, between the DEBTOR and SECURED PARTY. The terms of this Security Agreement may not be changed, varied, modified or altered except by a writing signed by both parties and specifically referring to this Security Agreement.

9. NON-WAIVER OF RIGHTS:

          No delay or omission on the part of SECURED PARTY in exercising any of its rights hereunder, nor the acquiescence in or waiver by SECURED PARTY of a breach of any term, covenant or condition of this Security Agreement shall be deemed or construed to operate as a waiver of such rights or acquiescence thereto except in the specific instance for which given.

10. NOTICES:

          Notices to either party shall be in writing and shall be delivered personally or by registered or certified mail, postage prepaid, to the DEBTOR at its address first set forth herein, and to SECURED PARTY at its office located ________________________      _________________________________ and directed to the attention of _________________________________.

11. ASSIGNMENT:

          SECURED PARTY may assign this Agreement and, if so assigned the assignee shall be entitled, upon notifying the DEBTOR, to full performance by DEBTOR of all of DEBTOR’s warranties, covenants and agreement hereunder and the assignee shall be entitled to all of the rights and remedies of SECURED PARTY hereunder. DEBTOR will not assert

any claims, defenses or offsets against the assignee that it may have against SECURED PARTY.

12. FINANCING STATEMENTS:

          DEBTOR authorizes SECURED PARTY to sign and file financing statements at any time with respect to any of the COLLATERAL, without the DEBTOR’s signature. At SECURED PARTY’s request, DEBTOR will join with SECURED PARTY in executing one or more financing statements pursuant to the Uniform Commercial Code in forms satisfactory to the SECURED PARTY. DEBTOR will pay all costs and fees for filing any financing statement wherever SECURED PARTY deems it necessary or desirable to file same.

13. TERMINATION:

          This Agreement shall be a continuing agreement in every respect until such time as the DEBTOR has paid and/or performed all of its OBLIGATIONS to SECURED PARTY and has notified SECURED PARTY of its election to terminate this Agreement.

16. GOVERNING LAW:

          The Law of the State of California shall govern the rights, duties and remedies of the parties.

          IN WITNESS WHEREOF, the parties hereto have signed this Agreement the day and year first above written.

David Condensa

Bert Condensa

Kevin Hawkins

Dave Auerweck

Terri Marine

Incentra Solutions, Inc.

By:

Incentra Helio Acquisition Corp.

By:

EX-10.4

Exhibit 10.4

SECOND AMENDMENT TO

AGREEMENT AND PLAN OF MERGER

          SECOND AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this “Second Amendment”) dated as of August ___, 2007, by and among INCENTRA SOLUTIONS, INC., a Nevada corporation (“Parent”), INCENTRA HELIO ACQUISITION CORP., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”), HELIO SOLUTIONS, INC., a California corporation (the “Company”), and DAVID CONDENSA, as Shareholders’ Representative.

RECITALS

          WHEREAS, Parent, Merger Sub, Company and Shareholders’ Representative are parties to that certain Agreement and Plan of Merger dated August __, 2007 (the “Merger Agreement”), as amended by that certain First Amendment to Agreement and Plan of Merger dated as of August __, 2007 ( as amended by the First Amendment, the Merger Agreement). Capitalized terms not defined herein shall have the meaning set forth in the Merger Agreement and the First Amendment.

          WHEREAS, the parties desire to further amend the Merger Agreement on the terms and conditions set forth herein.

          NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and any provisions of the Merger Agreement to the contrary notwithstanding, the parties hereto intending to be legally bound do hereby agree as follows:

          1. Net Working Capital Measurement at Closing. The Net Working Capital measurement date shall be changed from the Closing Date to August 31, 2007 and the term “Closing Net Working Capital” as used in the Merger Agreement, as amended hereby, shall mean Net Working Capital of the Company as of August 31, 2007. In the event that as of August 31, 2007, Net Working Capital is less than $1,800,000, excluding any current assets arising from or related to the executive life insurance policies, the amount by which Net Working Capital is less than $1,800,000 will be paid to Incentra by the Helio Shareholders outside of escrow and not by way of the Escrow Funds, provided that Dave Condensa may cause the insurance policies to be liquidated, and if the proceeds thereof remain in the Company, such proceeds shall be included in determining Closing Net Working Capital and shall reduce the amount of any shortfall that otherwise would arise. Such payment shall be made to Incentra no later than September 21, 2007. From the Closing Date through August 31, 2007, the Company shall not unreasonably cause any decrease in Net Working Capital.

          2. Waiver of Covenants. Parent and Merger Sub acknowledge and accept that as of Closing, notwithstanding the certificates of the President and Treasurer of the Company to be delivered at Closing, the Company will not have the minimum $1,500,000 in Net Working Capital required for closing. Subject to the provisions of this Second Amendment, Parent and Merger Sub hereby waive, as of the date hereof and as of Closing, the conditions and covenants set forth in the Merger Agreement to the extent such conditions or covenants are breached or not fulfilled as a result of the failure of the Company to deliver $1,500,000 of Net Working Capital.

          3. Closing; Scope of Amendment. Closing shall occur on August 17, 2007, or such other date is as agreed upon by the parties, subject to the terms and conditions of the Merger Agreement. Any provision of the Merger Agreement, as amended by the First Amendment, inconsistent with the terms of this Second Amendment is hereby amended. Except as amended hereby, the Merger Agreement and the First Amendment remain unamended and in full force and effect.

[Signature Pages Follow]

          IN WITNESS WHEREOF, Shareholders, and Parent have caused this Agreement to be signed by their respective officers thereunto duly authorized, all as of the date first written above.

INCENTRA SOLUTIONS, INC.

By:

Name: Thomas P. Sweeney III

Title: Chief Executive Officer

INCENTRA HELIO ACQUISITION CORP.

By:

Name: Thomas P. Sweeney III

Title: Chief Executive Officer

HELIO SOLUTIONS, INC.

By:

Name:

Title:

SHAREHOLDERS’ REPRESENTATIVE:

David Condensa, solely as Shareholders’ Representative

SHAREHOLDERS

David Condensa

Bert Condensa

Dave Auerweck

Kevin Hawkins

Terri Marine

EX-10.5

Exhibit 10.5

REGISTRATION RIGHTS AGREEMENT

          REGISTRATION RIGHTS AGREEMENT, dated as of August ___, 2007, between INCENTRA SOLUTIONS, INC., a Nevada corporation (the “Company”), and Dave Condensa, Bert Condensa, Kevin Hawkins, David Auerweck, Terri Marine and Paul Chopra (collectively referred to herein as “Shareholders” and individually as “Shareholder”).

WITNESSETH:

          WHEREAS, pursuant to the terms of a Merger Agreement and Plan of Merger dated as of August ___, 2007 (the “Merger Agreement”) between the Company, Helio Solutions, Inc., Incentra Merger Corp. and the Shareholders, the Company has agreed to issue to the Shareholders such number of shares of Common Stock, $.001 par value, of the Company (the “Common Stock”) as determined pursuant to the Merger Agreement; and

          WHEREAS, as a condition precedent to the consummation of the transactions contemplated by the Merger Agreement, the Company has agreed to provide certain registration rights pursuant to the terms of this Agreement;

          NOW, THEREFORE, in consideration of the mutual covenants and obligations hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows:

          1. Definitions. For purposes of this Agreement, capitalized terms used herein shall have the meanings set forth in the preambles hereto and in this Section 1.

                    1.1 “Commission” shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

                    1.2 “Common Stock” shall mean the common stock, par value $.001 per share, of the Company or, in the case of a conversion, reclassification or exchange of such shares of such Common Stock, shares of the stock issued or issuable in respect of such shares of Common Stock, and all provisions of this Agreement shall be applied appropriately thereto and to any stock resulting therefrom.

                    1.3 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar federal statute enacted hereafter, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time.

                    1.4 “Existing Rights Agreements” shall mean (i) the Registration Rights Agreement dated as of October 10, 2000 between the Company and Equity Pier LLC (ii) the warrant agreement between the Company and Equity Pier LLC dated March 28, 2001, (iii) the Form S-1 Registration Statement filed on or about May 4, 2007, (iv) the Registration Rights

1

Agreement between the Company and former ManagedStorage International, Inc. shareholders dated August 18, 2004, (v) the Registration Rights Agreement dated as of March 30, 2005 between the Company and Barry R. Andersen and Gary L. Henderson, (vi) the Amended and Restated Registration Rights Agreement dated as of January 6, 2006, between the Company and Laurus Master Fund Ltd., (vii) the Registration Rights Agreement dated as of March 31, 2006 by and between the Company and Laurus Master Fund Ltd. (viii) the Registration Rights Agreement dated as of April 13, 2006 between the Company and Joseph J. Graziano, (ix) the Registration Rights Agreement dated as of April 13, 2006 between the Company and Transitional Management Consultants, Inc., (x) the Registration Rights Agreement dated June 26, 2006 between the Company, RAB American Opportunities Fund Limited, RAB North American Dynamic Fund and others, (xi) the Registration Rights Agreement dated August 24, 2006 between the Company, Craig Armstrong and Amherst Holdings, LLC, and (xii) the Registration Rights Agreement dated as of July 31, 2007 between the Company and Calliope Capital Corporation.

                    1.5 “Holder” shall mean any holder of Registrable Securities; provided, however, that any Person who acquires any of the Registrable Securities in a distribution pursuant to a registration statement filed by the Company under the Securities Act or pursuant to a public sale under Rule 144 under the Securities Act or any similar or successor rule shall not be considered a Holder.

                    1.6 “Initiating Holders” shall mean Holders representing (on a fully diluted basis) at least sixty-six and 2/3 percent (66 2/3%) of the total number of Registrable Securities.

                    1.7 “Person” shall mean any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind.

                    1.8 “Register”, “registered” and “registration” shall refer to a registration effected by preparing and filing a registration statement with the Commission in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement by the Commission.

                    1.9 “Registrable Securities” shall mean (A) the shares of Common Stock issued to the Shareholder pursuant to the Merger Agreement and (B) any stock of the Company issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares of Common Stock referred to in clause (A); provided, however, that such shares of Common Stock shall only be treated as Registrable Securities hereunder if and so long as they have not been sold in a registered public offering or have not been sold to the public pursuant to Rule 144 under the Securities Act or any similar or successor rule.

                    1.10 “Registration Expenses” shall mean all expenses incurred by the Company in compliance herewith, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, blue sky fees and expenses, the reasonable fees and expenses (subject to documentation thereof) of one counsel for all Holders and Other Stockholders that offer securities being sold pursuant to the Existing Rights

2

Agreements, and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company, which shall be paid in any event by the Company).

                    1.11 “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar federal statute enacted hereafter, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time.

                    1.12 “Selling Expenses” shall mean all underwriting discounts and commissions applicable to the sale of Registrable Securities.

          2. Requested Registration.

                    2.1 Request for Registration. At any time after August ___, 2009 (such date being hereinafter referred to as the “Demand Date”), if the Company shall receive from Initiating Holders a written request that the Company effect any registration with respect to Registrable Securities the Company will:

(a) promptly give written notice of the proposed registration to all other Holders; and
(b) as soon as practicable, use all reasonable efforts to effect such registration (including, without limitation, the execution of an undertaking to file post- effective amendments, appropriate qualification under the blue sky or other state securities laws requested by Initiating Holders and appropriate compliance with applicable regulations issued under the Securities Act) as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder or Holders joining in such request as are specified in a written request given within thirty (30) days after receipt of such written notice from the Company; provided, that the Company shall not be obligated to effect, or to take any action to effect, any such registration pursuant to this Section 2:
	(i) in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act or applicable rules or regulations thereunder;
	(ii) less than ninety (90) calendar days after the effective date of any registration declared or ordered effective other than a registration on Form S-3 or Form S-8;

3

          (iii) if, while a registration request is pending pursuant to this Section 2, the Company determines, in the good faith judgment of the Board of Directors of the Company, with the advice of counsel, that the filing of a registration statement would require the disclosure of non-public material information the disclosure of which would have a material adverse effect on the Company or would otherwise materially adversely affect a financing, acquisition, disposition, merger or other significant transaction, the Company shall deliver a certificate to such effect signed by its President to the proposed selling Holders and the Company shall not be required to effect a registration pursuant to this Section 2 until the earlier of (A) three (3) days after the date upon which such material information is disclosed to the public or ceases to be material or (B) 90 days after the Company makes such good faith determination; provided, however, that the Company shall not utilize this right more than once in any twelve month period; or

          (iv) except as set forth in Section 2.5, after the second such registration pursuant to this Section 2.1 has been declared or ordered effective.

          Subject to the foregoing clauses (i), (ii), (iii) and (iv), the Company shall file a registration statement covering the Registrable Securities so requested to be registered as soon as practicable after receipt of the request or requests of the Initiating Holders.

                    2.2 Additional Shares to be Included. The registration statement filed pursuant to the request of the Initiating Holders may, subject to the provisions of Sections 2.4 and 3.3 below, include (a) other securities of the Company (the “Additional Shares”) which are held by (i) officers or directors of the Company who, by virtue of agreements with the Company, are entitled to include their securities in any such registration or (ii) other persons who, by virtue of agreements with the Company, including the Existing Rights Agreements, are entitled to include their securities in any such registration (the “Other Stockholders”), and (b) securities of the Company being sold for the account of the Company.

                    2.3 Underwriting.

                    (a) If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2 and the Company shall include such information in the written notice to other Holders referred to in Section 2.1 above. The right of any Holder to registration pursuant to this Section 2 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein and subject to the limitations provided herein. A Holder may elect to include in such underwriting all or a part of the Registrable Securities he holds.

                    (b) The Company shall (together with all Holders, officers, directors and Other Stockholders proposing to distribute their securities through such underwriting) negotiate

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and enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected for such underwriting by a majority in interest of the Initiating Holders, which underwriter(s) shall be reasonably acceptable to the Company; provided that no Holder shall be required to make any representations or warranties to or agreements (other than a lock-up agreement pursuant to Section 11) with the Company or the underwriters, other than representations, warranties or agreements regarding the Holder, its Registrable Securities and its intended method of distribution and any other representation required by law.

                    2.4 Limitations on Shares to be Included. Notwithstanding any other provision of this Section 2, if the representative of the underwriters of a firm commitment underwriting advises the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, the number of shares of securities that are entitled to be included in the registration and underwriting shall be allocated as follows: first, among the Other Stockholders that offer securities being sold pursuant to the Existing Rights Agreements, in proportion, as nearly as practicable, to the respective amounts of Additional Shares which they had requested to be included in such registration pursuant to the Existing Rights Agreements; second, among the Holders, in proportion, as nearly as practicable, to the respective amounts of Registrable Securities which they had requested to be included in such registration; third, to the Company for securities being sold for its own account; and thereafter, the number of shares that may be included in the registration statement and underwriting shall be allocated among all officers or directors or remaining Other Stockholders, in each case in proportion, as nearly as practicable, to the respective amounts of Additional Shares which they had requested to be included in such registration at the time of filing the registration statement. If the Company or any Holder, officer, director or Other Stockholder who has requested inclusion in such registration as provided above disapproves of the terms of any such underwriting, such Person may elect to withdraw such Person’s Registrable Securities or Additional Shares therefrom by written notice to the Company and the underwriter and the Initiating Holders. Any Registrable Securities or other securities excluded shall also be withdrawn from such registration. No Registrable Securities or Additional Shares excluded from such registration by reason of such underwriters’ marketing limitation shall be included in such registration. To facilitate the allocation of shares in accordance with this Section 2.4, the Company or underwriter or underwriters selected as provided above may round the number of Registrable Securities of any Holder which may be included in such registration to the nearest 100 shares.

                    2.5 Additional Demand Registration. If with respect to the last registration permitted to be exercised by the Holders of Registrable Securities under Section 2.1, the Holders are unable to register all of their Registrable Securities because of the operation of Section 2.4 hereof, such Holders shall be entitled to require the Company to effect one additional registration to afford the Holders an opportunity to register all such Registrable Securities. Such additional registration shall again be subject to the provisions of this Section 2.

          3. Company Registration.

                    3.1 At any time after August ___, 2009, if the Company shall determine to register under the Securities Act any of its equity securities or securities convertible into equity securities either for its own account or the account of a security holder or holders exercising any

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demand registration rights, other than a registration relating solely to employee benefit plans, or a registration relating solely to a Commission Rule 145 transaction, or a registration on Form S-4 or S-8, or the Form SB-2 filed on or about June 29, 2004, (or any successor forms thereto), the Company will:

          (a) promptly give to each Holder written notice thereof (which shall include a list of the jurisdictions in which the Company intends to attempt to qualify such securities under the applicable blue sky or other state securities laws); and

          (b) include in such registration (and, subject to Section 2.1(b)(i), any related qualification under blue sky laws or other compliance), and in any underwriting involved therein, all the Registrable Securities specified in a written request or request, made by any Holder within thirty (30) days after receipt of the written notice from the Company described in clause (a) above, except as set forth in Section 3.3 below. Such written request may specify all or a part of a Holder’s Registrable Securities.

                    3.2 Underwriting. If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 3.1(a). The right of any Holder to registration pursuant to this Section 3 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company and any officers, directors or Other Stockholders distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected by the Company; provided that no Holder shall be required to make any representations or warranties to or agreements (other than a lock-up agreement pursuant to Section 11) with the Company or the underwriters, other than representations, warranties or agreements regarding the Holder, its Registrable Securities and its intended method of distribution and any other representation required by law.

                    3.3 Limitations on Shares to be Included. Notwithstanding any other provision of this Section 3, if the representative of the underwriters of a firm commitment underwriting advises the Company in writing that marketing factors require a limitation or elimination on the number of shares to be underwritten, the representative may (subject to the allocation priority set forth below) limit the number of or eliminate the Registrable Securities to be included in the registration and underwriting. The Company shall so advise all holders of securities requesting registration, and the number of shares of securities that are entitled to be included in the registration and underwriting shall be allocated as follows: first, if such underwritten offering shall have been initiated by the Company for the sale of securities for its own account, to the Company for securities being sold for its own account; second, among the Other Stockholders that offer securities being sold pursuant to the Existing Rights Agreements, in proportion, as nearly as practicable, to the respective amounts of Additional Shares which they had requested to be included in such registration pursuant to the Existing Rights Agreements; third, among the

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Holders, in proportion, as nearly as practicable, to the respective amounts of Registrable Securities which they had requested to be included in such registration; fourth, if such underwritten offering shall not have been initiated by the Company, to the Company for securities being sold for its own account; and thereafter, the number of shares that may be included in the registration statement and underwriting shall be allocated among all officers or directors or remaining Other Stockholders, in each case in proportion, as nearly as practicable, to the respective amounts of Additional Shares which they had requested to be included in such registration at the time of filing the registration statement. If any Holder of Registrable Securities or any officer, director or Other Stockholder disapproves of the terms of any such underwriting, he may elect to withdraw therefrom by written notice to the Company and the underwriter. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall also be withdrawn from such registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 3 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration.

          4. Expenses of Registration. All Registration Expenses incurred in connection with any registration, qualification or compliance pursuant to Sections 2, 3 or 4 of this Agreement shall be borne by the Company, except that Selling Expenses shall be borne pro rata by each Holder in accordance with the number of shares sold.

          5. Registration Procedures.

                    5.1 In the case of each registration effected by the Company pursuant to this Agreement, the Company will keep each Holder advised in writing as to the initiation of each registration and as to the completion thereof and will, at its expense:

          (a) use all reasonable efforts to keep such registration effective for a period of 180 days or until the Holder or Holders have completed the distribution described in the registration statement relating thereto, whichever first occurs; provided, however, that the Company will keep such registration effective for longer than 180 days if the costs and expenses associated with such extended registration are borne by the selling Holders;

          (b) Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement;

          (c) Furnish such number of prospectuses and other documents incident thereto, including any amendment of or supplement to the prospectus, as a Holder from time to time may reasonably request;

          (d) Notify each seller of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of

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which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing, and at the request of any such seller, prepare and furnish to such seller a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing;
(e) List all such Registrable Securities registered in such registration on each securities exchange or automated quotation system on which the Common Stock of the Company is then listed;
(f) Provide a transfer agent and registrar for all Registrable Securities and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;
(g) Make available for inspection by any seller of Registrable Securities, any underwriter participating in any disposition pursuant to such registration statement, and any attorney or accountant retained by any such seller or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers and directors to supply all information reasonably requested by any such seller, underwriter, attorney or accountant in connection with such registration statement;
(h) Furnish to each selling Holder upon request a signed counterpart, addressed to each such selling Holder, of
	(i) an opinion of counsel for the Company, dated the effective date of the registration statement in form reasonably acceptable to the Company and such counsel, and
	(ii) “comfort” letters signed by the Company’s independent public accountants who have examined and reported on the Company’s financial statements included in the registration statement, to the extent permitted by the standards of the American Institute of Certified Public Accountants, covering such matters as are customarily covered in opinions of issuer’s counsel and accountants’ “comfort” letters delivered to underwriters in underwritten public offerings of securities;
(i) Furnish to each selling Holder upon request a copy of all documents filed with and all correspondence from or to the Commission in connection with any such offering; and

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          (j) Make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months, but not more than eighteen months, beginning with the first month after the effective date of the Registration Statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act.

                    5.2 It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement that the Holders proposing to register Registrable Securities shall furnish to the Company such information regarding themselves, the Registrable Securities held by them, and their intended method of distribution of such Registrable Securities as the Company shall reasonably request and as shall be required in connection with the action to be taken by the Company; provided that no Holder shall be required to make any representations or warranties to or agreements (other than a lock-up agreement pursuant to Section 11) with the Company or the underwriters, other than representations, warranties or agreements regarding the Holder, its Registrable Securities and its intended method of distribution and any other representation required by law.

                    5.3 In connection with the preparation and filing of each registration statement under this Agreement, the Company will give the Holders on whose behalf such Registrable Securities are to be registered and their underwriters, if any, and their respective counsel and accountants, the opportunity to review such registration statement, each prospectus included therein or filed with the Commission, and each amendment thereof or supplement thereto, and will give each such Holder such access to the Company’s books and records and such opportunities to discuss the business of the Company with its officers, its counsel and the independent public accountants who have certified the Company’s financial statements, as shall be necessary, in the opinion of such Holders or such underwriters or their respective counsel, in order to conduct a reasonable and diligent investigation within the meaning of the Securities Act.

          6. Indemnification.

                    6.1 Indemnification by the Company. The Company will indemnify each Holder, each of its officers, directors and partners, and each person controlling such Holder, with respect to which registration, qualification or compliance has been effected pursuant to this Agreement, and each underwriter, if any, and each Person who controls any underwriter, against all claims, losses, damages and liabilities (or actions, proceedings or settlements in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any prospectus, offering circular or other document (including any related registration statement, notification or the like) incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Securities Act or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and will reimburse each such Holder, each of its officers, directors and partners, and each Person controlling such Holder, each such underwriter and each Person who controls any such underwriter, for any legal and any other

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expenses reasonably incurred in connection with investigating and defending or settling any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission made in reliance upon and based upon written information furnished to the Company by such Holder or underwriter and stated to be specifically for use therein.

                    6.2 Indemnification by the Holders. Each Holder will, if Registrable Securities held by him are included in the securities as to which such registration, qualification or compliance is being effected, indemnify the Company, each of its directors and officers and each underwriter, if any, of the Company’s securities covered by such a registration statement, each person who controls the Company (other than such Holder) or such underwriter within the meaning of the Securities Act and the rules and regulations thereunder, each other such Holder and each of their officers, directors and partners, and each Person controlling such Holder or other stockholder, against all claims, losses, damages, expenses and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company, each of its directors and officers, each underwriter or control Person, each other Holder and each of their officers, directors and partners and each Person controlling such Holder or other stockholder for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by such Holder and stated to be specifically for use therein.

                    6.3 Notices of Claims, Procedures, etc. Each party entitled to indemnification under this Section 6 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at the Indemnified Party’s sole expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 7 unless such failure is prejudicial to the ability of Indemnifying Party to defend such claim or action. Notwithstanding the foregoing, such Indemnified Party shall have the right to employ its own counsel in any such litigation, proceeding or other action if (i) the employment of such counsel has been authorized by the Indemnifying Party, in its sole and absolute discretion, or (ii) the named parties in any such claims (including any impleaded parties) include any such Indemnified Party and the Indemnified Party and the Indemnifying Party shall have been advised in writing (in suitable detail) by counsel to the Indemnified Party either (A) that there may be one or more legal defenses available to such Indemnified Party

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which are different from or additional to those available to the Indemnifying Party, or (B) that there is a conflict of interest by virtue of the Indemnified Party and the Indemnifying Parties having common counsel, in any of which events, the legal fees and expenses of a single counsel for all Indemnified Parties with respect to each such claim, defense thereof, or counterclaims thereto shall be borne by Indemnifying Party. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. Each Indemnified Party shall cooperate to the extent reasonably required and furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.

          7. Information by Holder. Each Holder of Registrable Securities shall furnish to the Company such information regarding such Holder and the distribution proposed by such Holder as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration, qualification or compliance referred to in this Agreement; provided that no Holder shall be required to make any representations or warranties to or agreements (other than a lock-up agreement pursuant to Section 11) with the Company or the underwriters, other than representations, warranties or agreements regarding the Holder, its Registrable Securities and its intended method of distribution and any other representation required by law.

          8. Transfer or Assignment of Registration Rights. The rights to cause the Company to register securities granted by the Company under this Agreement may be transferred or assigned by a Holder to a transferee or assignee of any Registrable Securities; provided that the Company is given written notice at or prior to the time of said transfer or assignment, stating the name and address of said transferee or assignee and identifying the securities with respect to which such registration rights are being transferred or assigned; and provided further that the transferee or assignee of such rights assumes in writing the obligations of a Holder under this Agreement to the Company and other Holders in effect at the time of transfer under all effective agreements.

          9. Termination of Registration Rights. No Holder shall be entitled to exercise any right provided for in Section 2 or Section 3 above after the earlier of, as to each Holder, the time at which such Holder (i) has sold all shares of Common Stock to which this agreement applies, or (ii) can sell all shares of Common Stock held by it and to which this agreement applies without restriction in compliance with Rule 144(k).

          10. Exchange Act Compliance. So long as the Company remains subject to the reporting requirements of the Exchange Act, the Company shall file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the Commission thereunder, and will take all actions reasonably necessary to enable holders of Registrable Securities to sell such securities without registration under the Securities Act within the limitation of the provisions of (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, (b) Rule 144A under the Securities Act, as such Rule may be

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amended from time to time, if applicable or (c) any similar rules or regulations hereunder adopted by the Commission. Upon the request of any Holder of Registrable Securities, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements. After any sale of Registrable Securities pursuant to the provisions of Rule 144 or 144A, the Company will, to the extent allowed by law, cause any restrictive legends to be removed and any transfer restrictions to be rescinded with respect to such Registrable Securities. In order to permit a Holder to sell the same, if it so desires, pursuant to Rule 144A promulgated by the Commission (or any successor to such rule), the Company will comply with all rules and regulations of the Commission applicable in connection with use of Rule 144A (or any successor thereto). Prospective transferees of Registrable Securities that are Qualified Institutional Buyers (as defined in Rule 144A) that would be purchasing such Registrable Securities in reliance upon Rule 144A may request from the Company information regarding the business, operations and assets of the Company. Within five (5) business days of any such request, the Company shall deliver to any such prospective transferee copies of annual audited and quarterly unaudited financial statements of the Company and such other information as may be required to be supplied by the Company for it to comply with Rule 144A.

          11. No Conflict of Rights. The Company will not hereafter enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Holders in this Agreement. Without limiting the generality of the foregoing, the Company will not hereafter enter into any agreement with respect to its securities which grants, or modifies any existing agreement with respect to its securities to grant, to the holder of its securities equal or higher priority to the rights granted to the Holders under Sections 2 and 3 of this Agreement.

          12. Lockup Agreement. In consideration for the Company agreeing to its obligations hereunder, the Holders of Registrable Securities agree in connection with any registration of the Company’s securities (which includes Registrable Securities of at least $75,000 in value) pursuant to Section 3 hereof that, upon the request of the Company not to sell, make any short sale of, loan, grant any option for the purchase of or otherwise dispose of any Registrable Securities (other than those shares included in such registration) without the prior written consent of the Company for such period of time (not to exceed 180 days) from the effective date of such registration as the Company may specify.

          13. Benefits of Agreement; Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns, legal representatives and heirs. This Agreement does not create, and shall not be construed as creating, any rights enforceable by any other Person.

          14. Complete Agreement. This Agreement constitutes the complete understanding among the parties with respect to its subject matter and supersedes all existing agreements and understandings, whether oral or written, among them. No alteration or modification of any provisions of this Agreement shall be valid unless made in writing and signed, on the one hand, by the Holders of a majority of the Registrable Securities then outstanding and, on the other, by the Company.

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          15. Section Headings. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

          16. Notices. All notices, offers, acceptances and other communications required or permitted to be given or to otherwise be made to any party to this Agreement shall be deemed to be sufficient if contained in a written instrument delivered by hand, first class mail (registered or certified, return receipt requested), telecopier or overnight air courier guaranteeing next day delivery, if to the Company, at 1140 Pearl Street, Boulder, Colorado 80302, Attention: Chief Financial Officer, with a copy to Reed Guest, Esq., 94 Underhill Road, Orinda, CA 94563, and if to the Shareholders, to each Shareholder at the address set forth next to his or her name on Exhibit A, attached hereto and made a part hereof, with a copy to MBV Law LLP, 855 Front Street, San Francisco, CA 94111, ATTN: Don Buder, or at such other address or addresses as may have been furnished the Company in writing.

          All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the next business day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any party may change the address to which each such notice or communication shall be sent by giving written notice to the other parties of such new address in the manner provided herein for giving notice.

          17. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware without giving effect to the provisions, policies or principles thereof respecting conflict or choice of laws.

          18. Counterparts. This Agreement may be executed in one or more counterparts each of which shall be deemed an original but all of which taken together shall constitute one and the same agreement.

          19. Severability. Any provision of this Agreement which is determined to be illegal, prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such illegality, prohibition or unenforceability without invalidating the remaining provisions hereof which shall be severable and enforceable according to their terms and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SIGNATURE PAGE FOLLOWS

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          IN WITNESS WHEREOF, the parties have signed this Agreement as of the date first set forth above.

INCENTRA SOLUTIONS, INC.
By:
	Name: Thomas P. Sweeney III
	Title:   Chief Executive Officer
THE SHAREHOLDERS
Dave Condensa
Bert Condensa
Kevin Hawkins
David Auerweck
Terri Marine

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EXHIBIT A

Shareholder Names and Addresses

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EX-10.6

Exhibit 10.6

LOCK-UP AND VOTING AGREEMENT

          LOCK-UP AND VOTING AGREEMENT (the “Agreement”) dated as of August ___, 2007, by and among INCENTRA SOLUTIONS, INC., a Nevada corporation (the “Company”), and each Person whose name appears on Schedule A attached hereto (each a “Former Helio Stockholder”).

WITNESSETH

          WHEREAS, pursuant to the terms of an Agreement and Plan of Merger dated as of July __, 2007 (the “Merger Agreement”) between the Company, Helio Solutions, Inc., a California corporation (“Helio”), and Incentra Helio Acquisition Corp., a Delaware corporation, on the date hereof, the Company has agreed to issue to each Former Helio Stockholder such number of shares of Common Stock, $.001 par value, of the Company (the “Common Stock”) as determined pursuant to the Merger Agreement; and

          WHEREAS, as a condition precedent to the consummation of the transactions contemplated by the Merger Agreement, the Company and the Former Helio Stockholders desire to provide for certain restrictions on the transfer of such shares by the Former Helio Stockholders and the voting agreement by the Former Helio Stockholders as to certain corporate action by the Company;

          NOW THEREFORE, in consideration of the premises and the mutual covenants of the parties hereto, it is hereby agreed as follows:

ARTICLE I

CERTAIN DEFINITIONS

          1.1 Definitions. Whenever used in this Agreement, unless otherwise defined or the subject matter or context dictates, the following terms shall have these respective meanings:

                    (a) “Affiliate” shall have the meaning ascribed to it in Rule 12(b)(2) promulgated under the Securities Exchange Act of 1934, as amended.

                    (b) “Agreement” means this Lock-Up and Voting Agreement, any agreement which is supplementary to or in amendment or confirmation of this Agreement, and any schedules hereto or thereto.

                              (c) “Disposition” shall have the meaning assigned in Section 2.1.

                    (d) “Person” means any individual, estate, trust, partnership, joint venture, limited liability company, association, firm, corporation, company or other entity.

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                    (e) “Shares” mean the shares of Common Stock issued to the Former Helio Stockholders pursuant to the Merger Agreement, as well as: (i) any shares into which such shares of Common Stock may be converted, reclassified, redesignated, subdivided, consolidated or otherwise changed; or (ii) any shares of the Company or any successor or other body corporate which may be received by the holders of such shares on a merger, amalgamation or other reorganization of or including the Company in exchange for or upon cancellation of such shares of Common Stock or shares into which such shares of Common Stock may be converted.

                    (f) “Transfer” shall have the meaning assigned in Section 2.1.

          1.2 Extended Meanings. Words importing the singular number include the plural and vice versa and words importing gender include all genders.

ARTICLE II

DISPOSITION OF SHARES

          2.1 Restriction on Transfer of Shares.

          (a) Except as provided in Section 2.1(b), prior to August ___, 2009, no Former Helio Stockholder may sell, assign, transfer, mortgage, alienate, pledge, hypothecate, create or permit to exist a security interest in or lien on, place in trust or in any other way encumber or otherwise dispose of (any of the foregoing shall constitute a “Transfer,” and the consummation of such being a “Disposition”) any Shares now owned or any interest therein except as expressly permitted by the terms and provisions of this Agreement. The Company shall have no obligation to recognize or accede to any Disposition or to register any Transfer of Shares on its books unless such Disposition is effected in accordance with the terms and provisions of this Agreement. No Person who purports to be a holder of Shares acquired in violation of the terms and provisions of this Agreement shall be entitled to any rights with respect to such Shares, including any rights to vote such Shares, to receive any dividends declared thereon, or to receive any notice with respect thereto under this Agreement or otherwise.

          (b) Any Former Helio Stockholder may Transfer all or a portion of his, her or its Shares to (i) any other Former Helio Stockholder, (ii) a trust, spouse, child, parent or sibling for bona fide estate planning purposes, (iii) in connection with any sale of all or substantially all of the Company’s assets, any transfer of at least a majority of the Company’s outstanding voting securities (as of immediately prior to such transfer) or any merger or consolidation in which the Company is not the surviving entity (any such transaction, a “Sale Transaction”), or (iv) in connection with its exercise of any demand, “piggy-back” or similar registration rights. If any Former Helio Stockholder intends to make a Disposition of all or a portion of his, her or its Shares pursuant to this paragraph, such Former Helio Stockholder shall give at least 15 days prior written notice of such proposed Disposition to the Company (except in respect of a Disposition pursuant to clauses (ii) or (iii) above). Any such notice shall specify the number of

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Shares subject to such proposed disposition, identify the proposed transferee and state the relationship between such Former Helio Stockholder and the proposed transferee.

ARTICLE III

VOTING AGREEMENT

          3.1 Agreement to Vote Shares. Until the Expiration Date (as defined in Section 4.3(a) hereof), at every meeting of stockholders of the Company, and at every adjournment thereof, and on every action or approval by written consent of stockholders of the Company, each Former Helio Shareholder shall vote, to the extent not voted by the person(s) appointed under the Proxy (as defined in Section 3.2 hereof), no less than one-half of the issued and outstanding Shares held by such Former Helio Shareholder (to the extent such shares may be voted) in favor of the resolutions hereafter proposed by the Board of Directors of the Company, approved by Thomas P. Sweeney III and submitted to a vote of the stockholders of the Company.

          3.2 Irrevocable Proxy. Concurrently with the execution of this Agreement, each of the Former Helio Stockholders agrees to deliver to Company an irrevocable proxy, coupled with an interest, in the form attached hereto as Appendix A (the “Proxy”), which shall be irrevocable to the fullest extent permitted by law, covering one-half of the Shares held by a a Former Helio Stockholder as set forth herein.

ARTICLE IV

MISCELLANEOUS

          4.1 Legend. The Company may cause each certificate representing Shares that are subject to this Agreement to have stamped, printed or typed thereon the following legend:

The securities represented by this certificate are subject to a Lock-Up and Voting Agreement, dated as of August __, 2007, among Incentra Solutions, Inc. (the “Company”) and certain of its stockholders, a copy of which may be examined at the principal office of the Company.

          4.2 Notice. Any notice or document required or permitted by this Agreement to be given to a party hereto shall be in writing and is sufficiently given if delivered personally, or if sent by prepaid certified mail, return receipt requested, to the Company or to a Former Helio Stockholder addressed as follows:

the Company:	Incentra Solutions, Inc.
	1140 Pearl Street
	Boulder, Colorado 80302
	Attention: Chief Financial Officer

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	with a copy to:	Reed Guest, Esq.
		Law Offices of Karl Reed Guest
		94 Underhill Road
		Orinda, CA 94563
Former Helio Stockholder:		To the address of such Former Helio Stockholder set forth on Schedule A attached hereto or at such other address as may have been furnished the Company in writing.

Notice so mailed shall be deemed to have been given upon receipt if delivered personally or on the fifth business day next following the date of the returned receipt. Any notice delivered to the party to whom it is addressed shall be deemed to have been given and received on the day it is delivered. Any party may from time to time notify the others in the manner provided herein of any change of address which thereafter, until changed by like notice, shall be the address of such party for all purposes hereof.

          4.3 Term of Agreement.

                    (a) The provisions of this Agreement shall terminate on the earlier to occur of (i) August ___, 2009, (ii) Thomas P. Sweeney III ceases to be the President and Chief Executive Officer of the Company for any reason, or (iii) on such earlier date as is mutually agreed in writing by the Company and the Former Helio Stockholders holding a majority of the then outstanding Shares (the “Expiration Date”).

                    (b) Nothing contained in this Section 4.3 shall affect or impair any rights or obligations arising prior to the time of the termination of this Agreement, or which may arise by an event causing the termination of this Agreement.

          4.4 Severability. If in any jurisdiction, any provision of this Agreement or its application to any party or circumstance is restricted, prohibited or unenforceable, such provision shall, as to such jurisdiction, be ineffective only to the extent of such restriction, prohibition or unenforceability without invalidating the remaining provisions hereof and without affecting the validity or enforceability of such provision in any other jurisdiction or its application to other parties or circumstances.

          4.5 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and together shall constitute one document.

          4.6 Entire Agreement; Etc. This Agreement sets forth the entire agreement among the parties hereto pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, among the parties hereto and there are no warranties, representations and other agreements between the parties hereto in connection with the subject matter hereof except as specifically set forth herein or therein. No

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supplement, modification, waiver or termination of this Agreement shall be binding unless executed in writing by the Company and the Former Helio Stockholders holding a majority of the then outstanding Shares. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.

          4.7 Transferees Bound. Except in connection with a Disposition pursuant to Section 2.1(b)(ii) or (iii) hereof, each Disposition otherwise permitted by Article II hereof shall not become effective unless and until the transferee executes and delivers to the Company a counterpart to this Agreement, agreeing to be treated in the same manner as a Former Helio Stockholder. Upon such Disposition and such execution and delivery, the transferee shall be bound by, and entitled to the benefits of, this Agreement with respect to the transferred Shares in the same manner as the transferring Former Helio Stockholder.

          4.8 Governing Law. This Agreement shall be construed in accordance with the internal laws of the State of California applicable to agreements made and to be performed in California.

          4.9 Rules of Construction. The parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

          4.10. Specific Performance. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any state or federal court located in the State of Nevada, this being in addition to any other remedy to which they are entitled at law or in equity.

          4.11. Attorneys’ Fees. If any action or other proceeding relating to the enforcement of any provision of this Agreement is brought by any party hereto, the prevailing party shall be entitled to recover reasonable attorneys’ fees, costs, and disbursements (in addition to any other relief to which the prevailing party may be entitled).

          IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of each of the parties hereto as of the date first above written.

[SIGNATURE PAGE FOLLOWS]
	INCENTRA SOLUTIONS, INC.

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By:

      Name: Thomas P. Sweeney III

      Title: Chairman and Chief Executive Officer

FORMER HELIO STOCKHOLDERS

_____________________________________

Dave Condensa

_____________________________________

Bert Condensa

_____________________________________

Kevin Hawkins

_____________________________________

David Auerweck

_____________________________________

Terri Marine

6

Schedule A

Names and Addresses of Former Helio Stockholders

David Condensa

Bert Condensa

Kevin Hawkins

David Auerweck

Terri Marine

7

APPENDIX A

Irrevocable Proxy

8

EX-10.7

Exhibit 10.7

STOCK SALE AND PURCHASE AGREEMENT

          THIS Agreement made and entered into this the 14th day of August, 2007, by and between Incentra Solutions, Inc., a Nevada corporation (“Purchaser”), and Paul Chopra (“Chopra”).

          WHEREAS, Purchaser desires to purchase all of the right, title and interest which Chopra has or claims to have in Helio Solutions, Inc., a California corporation (hereinafter “the Company”);

          WHEREAS, Chopra desires to sell all of his ownership in the Company to Purchaser;

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

1.	Sale of Stock. Subject to the conditions precedent set forth in Paragraph 3 hereof, Chopra does hereby agree to sell, convey and transfer to Purchaser, and Purchaser does hereby agree to purchase all of Chopra’s right, title and interest in the Company, including the 713,333 shares of the Company evidenced by stock certificate numbers 4 and 5 (hereinafter “Helio Stock”) at the purchase price set forth in Paragraph 2 below.
2.	Purchase Price. (a) The total purchase price to be paid by Purchaser for the Helio Stock and any other interests of Chopra in the Company shall be $2,370,000.00 plus 1,000,000 shares of unregistered Purchaser Common Stock. The Purchase Price due Chopra shall be paid to Chopra at Closing as follows:
		(i)	cash in the amount of $1,600,000.00 (the “Cash Consideration”);
		(ii)	an unsecured convertible promissory note in the amount of $770,000.00, bearing interest at the rate of 8% per annum, in the form attached hereto as

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			Exhibit A (the “Convertible Note”); and
		(iii)	1,000,000 shares of unregistered Common Stock of Purchaser (the “Purchase Consideration Stock”).
	(b) If, after the date hereof and prior to the Closing, the outstanding shares of Purchaser Common Stock shall be changed into a different number, class or series of shares by reason of any reclassification, recapitalization or combination, forward stock split, reverse stock split, stock dividend or rights issued in respect of such stock, or any similar event shall occur (any such action, an “Adjustment Event”), the Purchase Consideration Stock shall be adjusted correspondingly to obligate Purchaser to issue, and provide to Chopra the right to receive, the number of shares of Purchaser Common Stock or other securities or property of Purchaser to which a holder of the Purchase Consideration Stock would have been entitled on the occurrence of such Adjustment Event. Notwithstanding the foregoing provision, the aggregate amount of the Cash Consideration and the principal amount of the Convertible Note shall not change under any circumstances.
3.	Conditions Precedent to Sale.
(a) The obligation of Purchaser to purchase the Helio Stock and all other interests of Chopra in the Company pursuant to this Agreement is specifically subject to and conditioned on the following:
	(i)	A Settlement Agreement and Mutual Release in the form attached hereto as Exhibit B shall have been entered into by all of the parties to each of Case No. CIV 462802, Superior Court of California, County of San Mateo (Chopra v. Helio Solutions, Inc., et. al.) and Case No. 1-06-CV-062181, Superior Court of

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		California, County of Santa Clara (Chopra v. Helio Solutions, Inc., et. al.), any and all contingencies or conditions of such Mutual Release and Settlement Agreement shall have been satisfied, and Chopra’s counsel in the aforesaid cases shall have executed and delivered to Helio’s counsel in the aforesaid cases Requests for Dismissal with Prejudice in accordance with Paragraph 2 of the Settlement Agreement and Mutual Release.
	(ii)	Purchaser and Chopra shall have entered into a Registration Rights Agreement in the form attached hereto as Exhibit C and made a part hereof (the “Registration Rights Agreement”).
	(iii)	Each of the other parties thereto has waived any and all rights which each of them may have under the Entity Purchase Buy-Sell Agreement between such parties, dated May 3, 2001 related to the purchase and sale of stock in the Company, and they shall have consented to the transfer and conveyance of the Helio Stock contemplated by this Agreement notwithstanding any of the provisions or restrictions contained in said Entity Purchase Buy-Sell Agreement.
	(iv)	Purchaser shall have acquired One Hundred Percent (100%) of the Company stock owned by other than Chopra (the “Helio Majority Stock”) prior to or concurrently with the Closing under this Agreement.
(b) The obligation of Chopra to sell the Helio Stock to Purchaser and perform Chopra’s other obligations hereunder shall be subject to and conditioned upon:
	(i)	Delivery to Chopra at Closing of the Cash Consideration, the Convertible Note and the Purchase Consideration Stock;
	(ii)	Purchaser and Chopra shall have entered into a Registration Rights Agreement in

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		the form attached hereto as Exhibit C and made a part hereof (the “Registration Rights Agreement”); and
	(ii)	Delivery to Chopra of an officer’s certificate from Purchaser in the form attached hereto as Exhibit D and made a part hereof certifying that the Board of Directors of Purchaser has approved the purchase of the Helio Stock and other transactions contemplated hereunder.
4.	Chopra Representations and Warranties. As of the date hereof and on the Closing Date, Chopra warrants and represents as follows:
	(a)	Chopra has the full right, power and legal authority to sell, convey and transfer the Helio Stock and has not assigned or granted any rights in or to the Helio Stock;
	(b)	Chopra is an “accredited investor” as defined in Rule 501(a)(5) or (6) under the Securities Act of 1933, as amended (the “Securities Act”);
	(c)	Chopra is acquiring the shares of Purchaser Common Stock to be issued hereunder for investment for his own account, and not for the account of another person and not with a view to, or for sale in connection with, any distribution, assignment, or resale of any part thereof in violation of the Securities Act, nor with any present intention of any such distribution, assignment, or resale. Chopra understands that the shares of Purchaser Common Stock to be issued to him hereunder have not been and will not be, registered in the United States under the Securities Act or applicable state securities laws, and may not be sold, hypothecated or otherwise disposed of unless subsequently registered under the Securities Act and applicable state securities laws or unless disposed of in a

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	transaction exempt from such laws, such as in compliance with Rule 144 promulgated by the SEC, and that certificates representing the shares of Purchaser Common Stock shall bear legends to this effect. Chopra understands that Purchaser’s issuance of shares of Purchaser Common Stock contemplated by this Agreement is intended to be exempt from the registration provisions of the Securities Act, the availability of which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Chopra’s representations as expressed herein. Chopra is not a party to nor bound by any agreement regarding the ownership or disposition of the shares of Purchaser Common Stock other than this Agreement.
(d)	Chopra has made independent investigation of Purchaser and related matters as (i) he deems to be necessary or advisable in connection with his investment in and acceptance of the shares of Purchaser Common Stock to be issued to him hereunder and (ii) he believes to be necessary in order to reach an informed decision as to the advisability of making an investment in and accepting the shares of Purchaser Common Stock to be issued to him hereunder. Without limiting the foregoing, Chopra has reviewed Purchaser’s publicly-available SEC filings. In evaluating his investment in and acceptance of the shares of Purchaser Common Stock to be issued to him hereunder, Chopra has not relied upon any representation or other information (oral or written) other than as set forth in this Agreement or in such Purchaser SEC filings.
(e)	Chopra has such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of his investment in the Purchaser

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		Common Stock as contemplated by this Agreement, and is able to bear the economic risk of such investment for an indefinite period of time. Chopra is not relying on Purchaser for advice with respect to economic considerations involved in his acquisition and acceptance of the shares of Purchaser Common Stock.
	(f)	Chopra has not engaged any broker, investment banker, financial advisor, finder, consultant or other person who is entitled to any broker’s, finder’s, financial advisor’s or other similar fee, compensation or commission, however and whenever payable, in connection with the sale of the Helio Stock and the transactions contemplated by this Agreement and shall hold Purchaser harmless from any claims through Chopra for such fees.
5.	Purchaser Representations and Warranties. As of the date hereof and on the Closing Date, Purchaser warrants and represents as follows:
	(a)	Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized and has the requisite corporate power and requisite authority to carry on its business as presently being conducted. Purchaser is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary, except for those jurisdictions where the failure to be so qualified or licensed or to be in good standing individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect on Purchaser. For purposes of this Agreement, Material Adverse Effect shall mean any change, effect, event, circumstance, occurrence or state of facts that is, or which

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reasonably could be expected to be, materially adverse to the business, assets, liabilities, condition (financial or otherwise), cash flows or results of operations of Parent and its subsidiaries, considered as an entirety.(b) The authorized capital stock of Purchaser consists of 200,000,000 shares of common stock, $.001 par value (the “Purchaser Common Stock”), and 5,000,000 shares of Series A Preferred Stock, par value $.001 per share, of Purchaser (“Purchaser Preferred Stock”). As of the date hereof: (i) 13,087,142 shares of Purchaser Common Stock were issued and outstanding and 5,000,000 shares of Parent Common Stock will be issued concurrently with the Closing as partial initial consideration for the Helio Majority Stock (as defined in Section 3(a)(iv) above; (ii) no shares of Purchaser Common Stock were held by Purchaser in its treasury; (iii) no shares of Purchaser Common Stock were held by subsidiaries of Purchaser; (iv) approximately 3,367,486 shares of Purchaser Common Stock were reserved for issuance pursuant to stock-based plans (such plans, collectively, the “Purchaser Stock Plans”), all of which are subject to outstanding employee stock options or other rights to purchase or receive Purchaser Common Stock granted under the Purchaser Stock Plans (collectively, “Purchaser Employee Stock Options”); (v) 964,286 shares of Purchaser Common Stock are reserved for issuance pursuant to convertible notes, (vi) 7,703,118 shares of Purchaser Common Stock were reserved for issuance pursuant to outstanding warrants. As of the date hereof, (w) 2,466,971 shares of Purchaser Preferred Stock were issued and outstanding; (x) no shares of Purchaser Preferred Stock were held by Purchaser in its treasury; (y) no shares of Purchaser Preferred Stock were held by subsidiaries of Purchaser;

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and (z) 16,551 shares of Purchaser Preferred Stock were reserved for issuance pursuant to outstanding warrants. (c) All outstanding shares of capital stock of Purchaser have been, and all shares thereof which may be issued pursuant to this Agreement or otherwise (including upon the conversion of the Convertible Note) will be, when issued, duly authorized and validly issued and are fully paid and nonassessable and are not subject to preemptive rights created by statute, the Purchaser’s articles of incorporation or any agreement to which Purchaser is a party or by which Purchaser may be bound. Except as set forth in this Section and except for changes since the date of this Agreement resulting from the exercise of Purchaser’s employee stock options outstanding on such date, there are outstanding (i) no shares of capital stock or other voting securities of Purchaser, (ii) no securities of Purchaser convertible into or exchangeable for shares of capital stock or voting securities of Purchaser, and (iii) no options or other rights to acquire from Purchaser, other than Employee Stock Options, and no obligation of Purchaser to issue, any capital stock, voting securities or securities convertible into or exchangeable for capital stock of Purchaser.

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(d)	Purchaser has a sufficient number of duly authorized but unissued shares of Purchaser Common Stock to issue the maximum number of such shares contemplated by Section 2 of this Agreement and upon conversion of the Convertible Note. The shares of Purchaser common stock to be issued and delivered hereunder will be duly and validly issued, fully paid and non-assessable, free and clear of all encumbrances.
(e)	Purchaser has the corporate power and authority to execute, deliver and perform this Agreement and the other agreements to be executed and delivered by Purchaser in connection herewith and to consummate the transactions contemplated hereby and thereby. All corporate acts and proceedings required to be taken by or on the part of Purchaser to authorize Purchaser to execute, deliver and perform this Agreement and the other agreements to be executed and delivered by Purchaser in connection herewith and to consummate the transactions contemplated hereby and thereby have been duly and validly taken. This Agreement constitutes a valid and binding agreement, and the other agreements to be executed and delivered by Purchaser in connection herewith when so executed and delivered will constitute valid and binding agreements, of Purchaser.
(f)	Neither the execution nor delivery of this Agreement nor the consummation or performance of any of the transactions contemplated herein will, directly or indirectly (with or without notice or lapse of time):

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(i)	Breach (a) any provision of any of the governing documents of Purchaser or (b) any resolution adopted by the Board of Directors or the Shareholders of Purchaser;
(ii)	Breach or give any Governmental Entity or other Person the right to challenge any of the transactions contemplated herein, or to exercise any remedy or obtain any relief under any rule, ordinance, contract, order, decree, or agreement under any legally binding arrangement to which Purchaser is subject;
(iii)	Contravene, conflict with or result in a violation or breach of any of the terms or requirements of, or give any Governmental Entity the right to revoke, withdraw, suspend, cancel, terminate or modify, any Permit or governmental authorization that is held by Purchaser or that otherwise relates to the business of Purchaser;
(iv)	Result in a violation or Breach of, or constitute a default under, any of the terms, conditions or provisions of any agreement or other instrument or obligation to which Purchaser is a party or by which Purchaser or any of its properties or assets may be bound, specifically including but not limited to agreements between Purchaser and Laurus Master Fund or its affiliates; and
(v)	Purchaser is current with respect to filings required to be made by it with the SEC except for that Form 8-K/A due to be filed including the historical audited financial statements of Network System Technologies, Inc., a wholly owned subsidiary of Purchaser, a delinquency for which

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			Purchaser is entitled to relief that Purchaser is in the process of obtaining, and a delinquency which has no impact on Purchaser’s ability to register securities for resale by Chopra and which does not affect Purchaser’s filing status or standing on the OTC Bulletin board.
(g)	Purchaser has not engaged any broker, investment banker, financial advisor, finder, consultant or other person other than Pagemill Partners, LLC who is entitled to any broker’s, finder’s, financial advisor’s or other similar fee, compensation or commission, however and whenever payable, in connection with the purchase of the Helio Stock and the transactions contemplated by this Agreement. Purchaser shall be solely responsible for any fees charged by Pagemill Partners, LLC, and shall hold Chopra harmless from any claims through Purchaser for such fees, and from broker’s, finder’s, financial advisor’s or other similar fees of any other person claiming through Purchaser.
6.	Release.
	(a)	For and in consideration of the sums specified in this Agreement and the performance of all other terms, conditions and covenants of this Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, effective as of the Closing, Chopra releases and forever discharges Purchaser, its officers, directors, employees, agents and attorneys from any and all claims, demands, actions, causes of action, injuries and damages, of any kind known or unknown existing, arising out of or in any way connected with (i) Purchaser’s purchase of the Helio Stock and/or any other interests in or to Helio, whether owned by Chopra or others, and (ii) otherwise related to Helio and/or his ownership therein and accruing on or prior to the Closing Date;

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		provided, however, such release shall not apply if Purchaser fails to perform its obligations under this Agreement, the Registration Rights Agreement and/or the Convertible Note.
	(b)	Chopra acknowledges that there is a risk that, subsequent to the execution of this Agreement, he may incur, suffer or sustain injury, loss, damages, costs, attorney’s fees, expenses, or any of these, which are in some way caused by and/or connected with the parties hereto; or which are unknown and unanticipated at the time this Agreement is signed, or which are not presently capable of being ascertained. Chopra further acknowledges that there is a risk that such damages as are known may become more serious than he now expects or anticipates. Nevertheless, Chopra acknowledges that this Agreement has been negotiated and agreed upon in light of those risks and he hereby expressly waives all rights he may have in any such unknown claims and assumes the risk that the facts and law pertaining to the matters referred to in 6(a) above may change or be different than is now known to him. In so doing, Chopra has had the benefit of counsel, and has been advised of, understands, and knowingly and specifically waives his rights under California Civil Code Section 1542 which provides as follows:
A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the Release, which if known by him or her, must have materially affected his or her settlement with the debtor.
7.	Closing Date. The Closing Date shall be at a time agreed upon by the parties which shall be concurrent with or as soon as practicable after the closing of Purchaser’s acquisition of the Helio Majority Stock. At the Closing, all documents shall be executed and funds

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	delivered as is necessary to complete such purchase. A stock certificate or certificates representing the Purchaser Common Stock to be issued to Chopra shall be delivered at Closing.
8.	The parties shall, contemporaneously herewith or hereafter, execute such additional documents as may be reasonably necessary to evidence or effectuate the terms of this Agreement.
9.	No action or failure to act by the parties hereto shall constitute a waiver of any right or duty afforded them hereunder, nor shall any such action or failure to act constitute an approval of or acquiescence in any breach hereunder, except as may be specifically agreed in writing.
10.	This Agreement, and any of its terms, conditions and provisions may be modified, amended, altered, supplemented, added to, canceled or terminated only by mutual agreement in writing signed by all the parties hereto.
11.	This Agreement constitutes the entire agreement between the parties and supersedes and replaces any and all other negotiations, conversations, understandings and/or agreements, written, oral, implied or otherwise.
12.	This Agreement may be executed in multiple counterparts, each of which shall be deemed an original hereof, but all such multiple counterparts shall constitute but a single instrument. This Agreement may be executed by facsimile copy.
13.	The rights, obligations, guarantees, warranties, representations and agreements set forth in this Agreement shall survive the closing of the sale contemplated by this Agreement and the payment of funds hereunder, shall not be affected by any reviews, audits, and/or searches performed by or on behalf of Purchaser prior to said closing, and shall be

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	binding on and inure to the benefit of the heirs, personal representatives, successors and assigns of all the parties hereto.
14.	If it becomes necessary for any party to enforce this contract by employing an attorney, such party shall be entitled to collect reasonable attorney’s fees, and court costs from the non-performing party.
15.	This Agreement shall be governed by the laws of the State of California without regard to its conflicts of laws provisions, notwithstanding the fact that one or more of the parties to this Agreement is now or may become a resident or citizen of a different state. The invalidity, illegality, or unenforceability of any particular provision of this Agreement shall not affect the other provisions, and this Agreement shall be construed in all respects as if such invalid, illegal, or unenforceable provision had been omitted.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date set forth above.

CHOPRA
By:
	Paul Chopra
INCENTRA SOLUTIONS, INC.
By:
	Thomas P. Sweeney III
	Chief Executive Officer

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EXHIBIT A

CONVERTIBLE PROMISSORY NOTE

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EXHIBIT B

SETTLEMENT AGREEMENT AND MUTUAL RELEASE

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EXHIBIT C

REGISTRATION RIGHTS AGREEMENT

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EXHIBIT D

PURCHASER OFFICER’S CERTIFICATE

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EX-10.8

Exhibit 10.8

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

CONVERTIBLE PROMISSORY NOTE

$770,000 August 14,
2007

          FOR VALUE RECEIVED, Incentra Solutions, Inc., a Nevada corporation (the “Company”) and any successor corporation to the Company, hereby promises to pay to the order of PAUL CHOPRA and his assigns (together with his assigns, “Payee”), the principal amount of Seven Hundred Seventy Thousand Dollars ($770,000) on the terms set forth below. The Company promises to pay interest on the principal amount of this Note in arrears from and including the date hereof on the principal balance from time to time outstanding, computed daily, at an annual rate of eight percent (8%). Interest shall be calculated on the basis of actual number of days elapsed over a year of 360 days. Notwithstanding any other provision of this Note, the holder hereof does not intend to charge and the Company shall not be required to pay any interest or other fees or charges in excess of the maximum permitted by applicable law; any payments in excess of such maximum shall be refunded to the Company or credited to reduce principal hereunder. The Company may prepay any or all principal and accrued interest due under this Note at any time, upon ten (10) days prior notice to holder, without penalty.

          Twelve equal payments of principal and interest in the amount of Seventy Two Thousand Eight Hundred Ninety Nine and 95/100 Dollars ($72,899.95) shall be due and payable without notice or demand, the first payment being due on November 14, 2007, and the eleven remaining payments being due on the 14th day of each February, May, August and November during the period beginning on February 14, 2008 and ending on August 14, 2010. For purposes of this Note, each such date on which payment is due shall be referred to as a “Payment Due Date”. Payments shall be made by wire transfer of immediately available United States federal funds sent to an account or accounts designated by the holder in accordance with the instructions furnished to the Company for that purpose.

          Upon the happening of any of the following events, each of which shall constitute a default hereunder (herein referred to as an “Event of Default”), the entire unpaid principal balance and accrued interest evidenced by this Note and all other liabilities of the Company to

the Payee evidenced by this Note, shall thereupon or thereafter, at the option of the Payee, without notice or demand, become due and payable: (a) failure of the Company to pay in full, within ten (10) days after the applicable due date hereof, any installment of principal and/or interest under this Note or any other charge or liability hereunder; (b) failure of the Company to perform any other agreement hereunder; (c) the Company shall make an assignment for the benefit of creditors; (d) the Company shall petition or apply to any court or other tribunal for the appointment of a custodian, receiver or any trustee or shall commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect; (e) if there shall have been filed any such petition or application, or any such proceeding shall have been commenced against the Company in which an order for relief is entered or which remains undismissed for a period of sixty (60) days or more; (f) the Company by any act or omission shall indicate consent to, approval of or fail to timely object to any such petition, application or proceeding or order for relief or the appointment of a custodian, receiver or any trustee or shall suffer any such custodianship, receivership or trusteeship to continue undischarged for a period of sixty (60) days or more; (g) the Company shall have made or suffered a transfer of any of its property in contravention of any bankruptcy, fraudulent conveyance or similar law; or shall have made any transfer of its property to or for the benefit of a creditor at a time when other creditors similarly situated have not been paid; or (h) the taking of possession of any substantial part of the property of the Company at the instance of any governmental authority.

          This Note constitutes the “Promissory Note” described in that certain Stock Purchase Agreement dated August 14, 2007 (the “Purchase Agreement”), by and among the Company and Payee, and is entitled to all of the benefits of the Purchase Agreement and the Registration Rights Agreement. Unless defined herein, capitalized terms used herein that are defined in the Purchase Agreement have the meaning given to such terms in the Purchase Agreement.

          The Company agrees to pay all costs, charges and expenses incurred by the Payee and its assigns (including, without limitation, costs of collection, court costs, and reasonable attorneys’ fees and disbursements) in connection with the successful enforcement of the Payee’s rights under this Note (all such costs, fees and expenses being herein referred to as “Costs”). The Company hereby expressly waives presentment, demand, and protest, notice of demand, dishonor and nonpayment of this Note, and all other notices or demands of any kind in connection with the delivery, acceptance, performance, default or enforcement hereof. The rights and remedies of the holder as provided herein shall be cumulative and concurrent and in addition to any other rights the Payee may have at law, in equity or otherwise, and may be pursued singularly, successively or together at the sole discretion of the holder and may be exercised as often as occasion therefor shall occur. The Company agrees that any delay or failure on the part of the Payee in exercising any rights or remedies hereunder will not operate as a waiver of such rights, and further agrees that any payments and prepayments received hereunder will be applied first to Costs, then to interest and the balance to principal. The Payee shall not by any act, delay, omission or otherwise be deemed to have waived any of its rights or remedies, and no waiver of any kind shall be valid unless in writing and signed by the party or parties waiving such rights or remedies. All payments under this Note shall be made without counterclaim, offset or defense of any kind.

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          This Note will be registered on the books of the Company or its agent as to principal and interest. This Note applies to, inures to the benefit of, and binds the successors and assigns of the parties hereto; provided however that the Company shall not assign this Note without the prior written consent of the Payee. Any transfer of this Note will be effected only by surrender of this Note to the Company and reissuance of a new note to the transferee. The Payee and any subsequent holder of this Note receives this Note subject to the foregoing terms and conditions, and agrees to comply with the foregoing terms and conditions for the benefit of the Company and any other Payees.

          Any notice required or permitted under this Note shall be in writing and shall be deemed to have been given on the date of delivery, if personally delivered to the party to whom notice is to be given, or on the third business day after mailing, if mailed to the party to whom notice is to be given, by certified mail, return receipt requested, postage prepaid, and addressed as follows:

          if to the Company, at

Incentra Solutions, Inc.
1140 Pearl Street
Boulder, CO 80302
Attn: Chief Executive Officer

and, if to the holder, at the most recent address provided to the Company by the holder for such purpose; or, in each case, to the most recent address, specified by written notice, given to the sender pursuant to this paragraph.

          Without limiting any of Payee’s rights under this Note, Payee shall have the right, which right may be exercised at Payee’s sole and absolute discretion, at any time to convert (the “Conversion”) all or any portion of the principal and/or accrued but unpaid interest then outstanding under this Note into such number of fully paid and nonassessable shares of the common stock, par value $.001 per share, of the Company (the “Company Common Stock”), as shall be provided herein. For purposes of this Note, the price at which each share of Company Common Stock may be acquired upon any Conversion shall be $1.00 (the “Conversion Price”). Payee may exercise the Conversion right hereunder by giving written notice (the “Conversion Notice”) to the Company of the exercise of such right and stating the name or names in which the stock certificate or stock certificates for the shares of Company Common Stock are to be issued and the address to which such certificates shall be delivered. If prepayment of principal and/or interest is permitted under this Note, then the Company shall provide Payee at least ten (10) days’ advance written notice (each, a “Prepayment Notice”) of any proposed prepayment (each, a “Proposed Prepayment”) specifying the date of prepayment (each, a “Prepayment Date”) and the amounts that are proposed to be prepaid. In addition to the conversion rights set forth above, the Payee shall have the right, which right may be exercised at Payee’s sole and absolute discretion, to convert (a “Prepayment Conversion”) all or any portion of such Proposed Prepayment amount to shares of the Company Common Stock at a conversion price equal to $1.00 (the “Prepayment Conversion Price”). Payee may exercise the Prepayment Conversion right hereunder as to any Proposed Prepayment by giving written notice (the “Prepayment Conversion Notice”) to the Company of the exercise of such right at any time during the ten (10) day period after the date on which Payee receives the Prepayment Notice (the “Prepayment

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Conversion Exercise Period”) and stating the name or names in which the stock certificate or stock certificates for the shares of Company Common Stock are to be issued and the address to which such certificates shall be delivered. The number of shares of Company Common Stock that shall be issuable upon conversion of the Note shall equal the amount of principal and/or interest requested by Payee to be converted (the “Conversion Amount”) divided by the Conversion Price (or the Prepayment Conversion Price, as applicable) in effect on the date the Conversion Notice (or the Prepayment Conversion Notice, as applicable) is given (the “Conversion Date”). Within ten (10) business days after the Conversion Date, the Company shall issue and deliver by hand against a signed receipt therefor or by United States registered mail, return receipt requested, to the address designated in the Conversion Notice (or the Prepayment Conversion Notice, as applicable), a stock certificate or stock certificates of the Company representing the number of shares of Company Common Stock to which Payee is entitled and, in exchange for this Note, an executed replacement Convertible Promissory Note representing the balance of the Note not converted into shares of Company Common Stock. Any Conversion of principal hereunder shall be applied to the remaining installments of principal in the order of their maturities, and the payment schedule of the replacement Convertible Promissory Note shall reflect such application. In the case of any capital reorganization, reclassification or recapitalization of, including but not limited to any stock split or stock dividend issued in respect of, the Company Common Stock, then the conversion privilege in effect immediately before such action shall be adjusted so that the Payee may receive the kind and amount of shares of stock and other securities and property receivable upon such reorganization, reclassification or recapitalization by a holder of the number of shares of Company Common Stock into which this Note could have been converted immediately prior to such reorganization, reclassification or recapitalization; and any such resulting or surviving corporation shall expressly assume the obligation to deliver, upon the exercise of the conversion privilege, such shares, securities or property as the Payee may be entitled to and to make provisions for the protection of the conversion rights as herein provided. In case securities or property other than shares of Company Common Stock shall be issuable or deliverable upon conversion as aforesaid, then all references in this Note to the Company Common Stock shall be deemed to apply, so far as appropriate and as nearly as practicable, to such other securities or property. The Company will not, by amendment of its Organizational Documents or through any reorganization, transfer of assets, 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 hereunder by the Company but will at all times in good faith assist in the carrying out of all the provisions of this Note and in the taking of all such action as may be necessary or appropriate in order to protect the conversion rights of the Payee against impairment. No fractional shares of the Company Common Stock are to be issued upon the Conversion (or the Prepayment Conversion, as applicable) of this Note. In lieu of delivering any fractional shares to which the Payee would otherwise be entitled, the number of shares of Company Common Stock shall be rounded to the nearest whole number. The Company warrants and agrees that it shall at all times reserve and keep available, free from preemptive rights, sufficient authorized and unissued shares of Company Common Stock sufficient to effect Conversion (or Prepayment Conversion, as applicable) of this Note. Notwithstanding anything contained herein, any portion of the payment which is due on a Payment Due Date or a Prepayment Date, as applicable, that is not converted by Payee pursuant this provision shall be paid in full to Payee on such Payment Due Date or Prepayment Date, as applicable.

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          This Note is made under and shall be governed by and construed in accordance with the internal laws of, and enforced by the courts located within, the State of Colorado.

          IN WITNESS WHEREOF, the Company has executed this Note under seal as of the date first written above.

INCENTRA SOLUTIONS, INC.
By:
	Thomas P. Sweeney III
	Chief Executive Officer

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EX-10.9

Exhibit 10.9

REGISTRATION RIGHTS AGREEMENT

          REGISTRATION RIGHTS AGREEMENT, dated as of August ___, 2007, between INCENTRA SOLUTIONS, INC., a Nevada corporation (the “Company”), and PAUL CHOPRA (“Shareholder”).

WITNESSETH:

          WHEREAS, pursuant to the terms of a Stock Purchase Agreement dated as of August ___, 2007 (the “Purchase Agreement”) between the Company and Shareholder, the Company has agreed to issue to the Shareholder a Convertible Promissory Note (the “Convertible Note”), convertible into such number of shares of Common Stock, $.001 par value, of the Company (the “Common Stock”) as determined pursuant to the Convertible Note; and

          WHEREAS, as a condition precedent to the consummation of the transactions contemplated by the Purchase Agreement, the Company has agreed to provide certain registration rights pursuant to the terms of this Agreement;

          NOW, THEREFORE, in consideration of the mutual covenants and obligations hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows:

          1. Definitions. For purposes of this Agreement, capitalized terms used herein shall have the meanings set forth in the preambles hereto and in this Section 1.

                    1.1 “Commission” shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

                    1.2 “Common Stock” shall mean the common stock, par value $.001 per share, of the Company or, in the case of a conversion, reclassification or exchange of such shares of such Common Stock, shares of the stock issued or issuable in respect of such shares of Common Stock, and all provisions of this Agreement shall be applied appropriately thereto and to any stock resulting therefrom.

                    1.3 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar federal statute enacted hereafter, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time.

                    1.4 “Existing Rights Agreements” shall mean (i) the Registration Rights Agreement dated as of October 10, 2000 between the Company and Equity Pier LLC (ii) the warrant agreement between the Company and Equity Pier LLC dated March 28, 2001, (iii) the Form S-1 Registration Statement filed on or about May 4, 2007, (iv) the Registration Rights Agreement between the Company and former ManagedStorage International, Inc. shareholders

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dated August 18, 2004, (v) the Registration Rights Agreement dated as of March 30, 2005 between the Company and Barry R. Andersen and Gary L. Henderson, (vi) the Amended and Restated Registration Rights Agreement dated as of January 6, 2006, between the Company and Laurus Master Fund Ltd., (vii) the Registration Rights Agreement dated as of March 31, 2006 by and between the Company and Laurus Master Fund Ltd. (viii) the Registration Rights Agreement dated as of April 13, 2006 between the Company and Joseph J. Graziano, (ix) the Registration Rights Agreement dated as of April 13, 2006 between the Company and Transitional Management Consultants, Inc., (x) the Registration Rights Agreement dated June 26, 2006 between the Company, RAB American Opportunities Fund Limited, RAB North American Dynamic Fund and others, (xi) the Registration Rights Agreement dated August 24, 2006 between the Company, Craig Armstrong and Amherst Holdings, LLC, and (xii) the Registration Rights Agreement dated July 31, 2007 between the Company and Calliope Capital Corporation.

                    1.5 “Holder” shall mean any holder of Registrable Securities; provided, however, that any Person who acquires any of the Registrable Securities in a distribution pursuant to a registration statement filed by the Company under the Securities Act or pursuant to a public sale under Rule 144 under the Securities Act or any similar or successor rule shall not be considered a Holder.

                    1.6 “Initiating Holders” shall mean Holders representing (on a fully diluted basis) at least sixty-six and 2/3 percent (66 2/3%) of the total number of Registrable Securities.

                    1.7 “Person” shall mean any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind.

                    1.8 “Register”, “registered” and “registration” shall refer to a registration effected by preparing and filing a registration statement with the Commission in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement by the Commission.

                    1.9 “Registrable Securities” shall mean (A) the shares of Common Stock issued to the Shareholder pursuant to the Purchase Agreement, (B) the shares of Common Stock issued to the Shareholder upon conversion of the Convertible Note and (C) any stock of the Company issued as a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares of Common Stock referred to in clauses (A) and (B); provided, however, that such shares of Common Stock shall only be treated as Registrable Securities hereunder if and so long as they have not been sold in a registered public offering or have not been sold to the public pursuant to Rule 144 under the Securities Act or any similar or successor rule.

                    1.10 “Registration Expenses” shall mean all expenses incurred by the Company in compliance herewith, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, blue sky fees and expenses, the reasonable fees and expenses (subject to documentation thereof) of one counsel for all Holders

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and Other Stockholders that offer securities being sold pursuant to the Existing Rights Agreements, and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company, which shall be paid in any event by the Company).

                    1.11 “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar federal statute enacted hereafter, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time.

                    1.12 “Selling Expenses” shall mean all underwriting discounts and commissions applicable to the sale of Registrable Securities.

          2. Requested Registration.

                    2.1 Request for Registration. At any time after August 14, 2009 (such date being hereinafter referred to as the “Demand Date”), if the Company shall receive from Initiating Holders a written request that the Company effect any registration with respect to Registrable Securities the Company will:

          (a) promptly give written notice of the proposed registration to all other Holders; and

          (b) as soon as practicable, use all reasonable efforts to effect such registration (including, without limitation, the execution of an undertaking to file post- effective amendments, appropriate qualification under the blue sky or other state securities laws requested by Initiating Holders and appropriate compliance with applicable regulations issued under the Securities Act) as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder or Holders joining in such request as are specified in a written request given within thirty (30) days after receipt of such written notice from the Company; provided, that the Company shall not be obligated to effect, or to take any action to effect, any such registration pursuant to this Section 2:

          (i) in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act or applicable rules or regulations thereunder;

          (ii) less than ninety (90) calendar days after the effective date of any registration declared or ordered effective other than a registration on Form S-3 or Form S-8;

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          (iii) if, while a registration request is pending pursuant to this Section 2, the Company determines, in the good faith judgment of the Board of Directors of the Company, with the advice of counsel, that the filing of a registration statement would require the disclosure of non-public material information the disclosure of which would have a material adverse effect on the Company or would otherwise materially adversely affect a financing, acquisition, disposition, merger or other significant transaction, the Company shall deliver a certificate to such effect signed by its President to the proposed selling Holders and the Company shall not be required to effect a registration pursuant to this Section 2 until the earlier of (A) three (3) days after the date upon which such material information is disclosed to the public or ceases to be material or (B) 90 days after the Company makes such good faith determination; provided, however, that the Company shall not utilize this right more than once in any twelve month period; or

          (iv) except as set forth in Section 2.5, after the second such registration pursuant to this Section 2.1 has been declared or ordered effective.

          Subject to the foregoing clauses (i), (ii), (iii) and (iv), the Company shall file a registration statement covering the Registrable Securities so requested to be registered as soon as practicable after receipt of the request or requests of the Initiating Holders.

                    2.2 Additional Shares to be Included. The registration statement filed pursuant to the request of the Initiating Holders may, subject to the provisions of Sections 2.4 and 3.3 below, include (a) other securities of the Company (the “Additional Shares”) which are held by (i) officers or directors of the Company who, by virtue of agreements with the Company, are entitled to include their securities in any such registration or (ii) other persons who, by virtue of agreements with the Company, including the Existing Rights Agreements, are entitled to include their securities in any such registration (the “Other Stockholders”), and (b) securities of the Company being sold for the account of the Company.

                    2.3 Underwriting.

                    (a) If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2 and the Company shall include such information in the written notice to other Holders referred to in Section 2.1 above. The right of any Holder to registration pursuant to this Section 2 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein and subject to the limitations provided herein. A Holder may elect to include in such underwriting all or a part of the Registrable Securities he holds.

                    (b) The Company shall (together with all Holders, officers, directors and Other Stockholders proposing to distribute their securities through such underwriting) negotiate

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and enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected for such underwriting by a majority in interest of the Initiating Holders, which underwriter(s) shall be reasonably acceptable to the Company; provided that no Holder shall be required to make any representations or warranties to or agreements (other than a lock-up agreement pursuant to Section 11) with the Company or the underwriters, other than representations, warranties or agreements regarding the Holder, its Registrable Securities and its intended method of distribution and any other representation required by law.

                    2.4 Limitations on Shares to be Included. Notwithstanding any other provision of this Section 2, if the representative of the underwriters of a firm commitment underwriting advises the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, the number of shares of securities that are entitled to be included in the registration and underwriting shall be allocated as follows: first, among the Other Stockholders that offer securities being sold pursuant to the Existing Rights Agreements, in proportion, as nearly as practicable, to the respective amounts of Additional Shares which they had requested to be included in such registration pursuant to the Existing Rights Agreements; second, among the Holders, in proportion, as nearly as practicable, to the respective amounts of Registrable Securities which they had requested to be included in such registration; third, to the Company for securities being sold for its own account; and thereafter, the number of shares that may be included in the registration statement and underwriting shall be allocated among all officers or directors or remaining Other Stockholders, in each case in proportion, as nearly as practicable, to the respective amounts of Additional Shares which they had requested to be included in such registration at the time of filing the registration statement. If the Company or any Holder, officer, director or Other Stockholder who has requested inclusion in such registration as provided above disapproves of the terms of any such underwriting, such Person may elect to withdraw such Person’s Registrable Securities or Additional Shares therefrom by written notice to the Company and the underwriter and the Initiating Holders. Any Registrable Securities or other securities excluded shall also be withdrawn from such registration. No Registrable Securities or Additional Shares excluded from such registration by reason of such underwriters’ marketing limitation shall be included in such registration. To facilitate the allocation of shares in accordance with this Section 2.4, the Company or underwriter or underwriters selected as provided above may round the number of Registrable Securities of any Holder which may be included in such registration to the nearest 100 shares.

                    2.5 Additional Demand Registration. If with respect to the last registration permitted to be exercised by the Holders of Registrable Securities under Section 2.1, the Holders are unable to register all of their Registrable Securities because of the operation of Section 2.4 hereof, such Holders shall be entitled to require the Company to effect one additional registration to afford the Holders an opportunity to register all such Registrable Securities. Such additional registration shall again be subject to the provisions of this Section 2.

          3. Company Registration.

                    3.1 At any time after August 14, 2009, if the Company shall determine to register under the Securities Act any of its equity securities or securities convertible into equity securities either for its own account or the account of a security holder or holders exercising any

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demand registration rights, other than a registration relating solely to employee benefit plans, or a registration relating solely to a Commission Rule 145 transaction, or a registration on Form S-4 or S-8, or the Form SB-2 filed on or about June 29, 2004, (or any successor forms thereto), the Company will:

          (a) promptly give to each Holder written notice thereof (which shall include a list of the jurisdictions in which the Company intends to attempt to qualify such securities under the applicable blue sky or other state securities laws); and

          (b) include in such registration (and, subject to Section 2.1(b)(i), any related qualification under blue sky laws or other compliance), and in any underwriting involved therein, all the Registrable Securities specified in a written request or request, made by any Holder within thirty (30) days after receipt of the written notice from the Company described in clause (a) above, except as set forth in Section 3.3 below. Such written request may specify all or a part of a Holder’s Registrable Securities.

                    3.2 Underwriting. If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 3.1(a). The right of any Holder to registration pursuant to this Section 3 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company and any officers, directors or Other Stockholders distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected by the Company; provided that no Holder shall be required to make any representations or warranties to or agreements (other than a lock-up agreement pursuant to Section 11) with the Company or the underwriters, other than representations, warranties or agreements regarding the Holder, its Registrable Securities and its intended method of distribution and any other representation required by law.

                    3.3 Limitations on Shares to be Included. Notwithstanding any other provision of this Section 3, if the representative of the underwriters of a firm commitment underwriting advises the Company in writing that marketing factors require a limitation or elimination on the number of shares to be underwritten, the representative may (subject to the allocation priority set forth below) limit the number of or eliminate the Registrable Securities to be included in the registration and underwriting. The Company shall so advise all holders of securities requesting registration, and the number of shares of securities that are entitled to be included in the registration and underwriting shall be allocated as follows: first, if such underwritten offering shall have been initiated by the Company for the sale of securities for its own account, to the Company for securities being sold for its own account; second, among the Other Stockholders that offer securities being sold pursuant to the Existing Rights Agreements, in proportion, as nearly as practicable, to the respective amounts of Additional Shares which they had requested to be included in such registration pursuant to the Existing Rights Agreements; third, among the

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Holders, in proportion, as nearly as practicable, to the respective amounts of Registrable Securities which they had requested to be included in such registration; fourth, if such underwritten offering shall not have been initiated by the Company, to the Company for securities being sold for its own account; and thereafter, the number of shares that may be included in the registration statement and underwriting shall be allocated among all officers or directors or remaining Other Stockholders, in each case in proportion, as nearly as practicable, to the respective amounts of Additional Shares which they had requested to be included in such registration at the time of filing the registration statement. If any Holder of Registrable Securities or any officer, director or Other Stockholder disapproves of the terms of any such underwriting, he may elect to withdraw therefrom by written notice to the Company and the underwriter. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall also be withdrawn from such registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 3 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration.

          4. Expenses of Registration. All Registration Expenses incurred in connection with any registration, qualification or compliance pursuant to Sections 2, 3 or 4 of this Agreement shall be borne by the Company, except that Selling Expenses shall be borne pro rata by each Holder in accordance with the number of shares sold.

          5. Registration Procedures.

                    5.1 In the case of each registration effected by the Company pursuant to this Agreement, the Company will keep each Holder advised in writing as to the initiation of each registration and as to the completion thereof and will, at its expense:

          (a) use all reasonable efforts to keep such registration effective for a period of 180 days or until the Holder or Holders have completed the distribution described in the registration statement relating thereto, whichever first occurs; provided, however, that the Company will keep such registration effective for longer than 180 days if the costs and expenses associated with such extended registration are borne by the selling Holders;

          (b) Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement;

          (c) Furnish such number of prospectuses and other documents incident thereto, including any amendment of or supplement to the prospectus, as a Holder from time to time may reasonably request;

          (d) Notify each seller of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of

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which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing, and at the request of any such seller, prepare and furnish to such seller a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing;

          (e) List all such Registrable Securities registered in such registration on each securities exchange or automated quotation system on which the Common Stock of the Company is then listed;

          (f) Provide a transfer agent and registrar for all Registrable Securities and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;

          (g) Make available for inspection by any seller of Registrable Securities, any underwriter participating in any disposition pursuant to such registration statement, and any attorney or accountant retained by any such seller or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers and directors to supply all information reasonably requested by any such seller, underwriter, attorney or accountant in connection with such registration statement;

          (h) Furnish to each selling Holder upon request a signed counterpart, addressed to each such selling Holder, of

          (i) an opinion of counsel for the Company, dated the effective date of the registration statement in form reasonably acceptable to the Company and such counsel, and

          (ii) “comfort” letters signed by the Company’s independent public accountants who have examined and reported on the Company’s financial statements included in the registration statement, to the extent permitted by the standards of the American Institute of Certified Public Accountants, covering such matters as are customarily covered in opinions of issuer’s counsel and accountants’ “comfort” letters delivered to underwriters in underwritten public offerings of securities;

          (i) Furnish to each selling Holder upon request a copy of all documents filed with and all correspondence from or to the Commission in connection with any such offering; and

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          (j) Make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months, but not more than eighteen months, beginning with the first month after the effective date of the Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act.

                    5.2 It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement that the Holders proposing to register Registrable Securities shall furnish to the Company such information regarding themselves, the Registrable Securities held by them, and their intended method of distribution of such Registrable Securities as the Company shall reasonably request and as shall be required in connection with the action to be taken by the Company; provided that no Holder shall be required to make any representations or warranties to or agreements (other than a lock-up agreement pursuant to Section 11) with the Company or the underwriters, other than representations, warranties or agreements regarding the Holder, its Registrable Securities and its intended method of distribution and any other representation required by law.

                    5.3 In connection with the preparation and filing of each registration statement under this Agreement, the Company will give the Holders on whose behalf such Registrable Securities are to be registered and their underwriters, if any, and their respective counsel and accountants, the opportunity to review such registration statement, each prospectus included therein or filed with the Commission, and each amendment thereof or supplement thereto, and will give each such Holder such access to the Company’s books and records and such opportunities to discuss the business of the Company with its officers, its counsel and the independent public accountants who have certified the Company’s financial statements, as shall be necessary, in the opinion of such Holders or such underwriters or their respective counsel, in order to conduct a reasonable and diligent investigation within the meaning of the Securities Act.

          6. Indemnification.

                    6.1 Indemnification by the Company. The Company will indemnify each Holder, each of its officers, directors and partners, and each person controlling such Holder, with respect to which registration, qualification or compliance has been effected pursuant to this Agreement, and each underwriter, if any, and each Person who controls any underwriter, against all claims, losses, damages and liabilities (or actions, proceedings or settlements in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any prospectus, offering circular or other document (including any related registration statement, notification or the like) incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Securities Act or any rule or regulation thereunder applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and will reimburse each such Holder, each of its officers, directors and partners, and each Person controlling such Holder, each such underwriter and each Person who controls any such underwriter, for any legal and any other

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expenses reasonably incurred in connection with investigating and defending or settling any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission made in reliance upon and based upon written information furnished to the Company by such Holder or underwriter and stated to be specifically for use therein.

                    6.2 Indemnification by the Holders. Each Holder will, if Registrable Securities held by him are included in the securities as to which such registration, qualification or compliance is being effected, indemnify the Company, each of its directors and officers and each underwriter, if any, of the Company’s securities covered by such a registration statement, each person who controls the Company (other than such Holder) or such underwriter within the meaning of the Securities Act and the rules and regulations thereunder, each other such Holder and each of their officers, directors and partners, and each Person controlling such Holder or other stockholder, against all claims, losses, damages, expenses and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company, each of its directors and officers, each underwriter or control Person, each other Holder and each of their officers, directors and partners and each Person controlling such Holder or other stockholder for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by such Holder and stated to be specifically for use therein.

                    6.3 Notices of Claims, Procedures, etc. Each party entitled to indemnification under this Section 6 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at the Indemnified Party’s sole expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 7 unless such failure is prejudicial to the ability of Indemnifying Party to defend such claim or action. Notwithstanding the foregoing, such Indemnified Party shall have the right to employ its own counsel in any such litigation, proceeding or other action if (i) the employment of such counsel has been authorized by the Indemnifying Party, in its sole and absolute discretion, or (ii) the named parties in any such claims (including any impleaded parties) include any such Indemnified Party and the Indemnified Party and the Indemnifying Party shall have been advised in writing (in suitable detail) by counsel to the Indemnified Party either (A) that there may be one or more legal defenses available to such Indemnified Party

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which are different from or additional to those available to the Indemnifying Party, or (B) that there is a conflict of interest by virtue of the Indemnified Party and the Indemnifying Parties having common counsel, in any of which events, the legal fees and expenses of a single counsel for all Indemnified Parties with respect to each such claim, defense thereof, or counterclaims thereto shall be borne by Indemnifying Party. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. Each Indemnified Party shall cooperate to the extent reasonably required and furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.

          7. Information by Holder. Each Holder of Registrable Securities shall furnish to the Company such information regarding such Holder and the distribution proposed by such Holder as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration, qualification or compliance referred to in this Agreement; provided that no Holder shall be required to make any representations or warranties to or agreements (other than a lock-up agreement pursuant to Section 11) with the Company or the underwriters, other than representations, warranties or agreements regarding the Holder, its Registrable Securities and its intended method of distribution and any other representation required by law.

          8. Transfer or Assignment of Registration Rights. The rights to cause the Company to register securities granted by the Company under this Agreement may be transferred or assigned by a Holder to a transferee or assignee of any Registrable Securities; provided that the Company is given written notice at or prior to the time of said transfer or assignment, stating the name and address of said transferee or assignee and identifying the securities with respect to which such registration rights are being transferred or assigned; and provided further that the transferee or assignee of such rights assumes in writing the obligations of a Holder under this Agreement to the Company and other Holders in effect at the time of transfer under all effective agreements.

          9. Termination of Registration Rights. No Holder shall be entitled to exercise any right provided for in Section 2 or Section 3 above after the earlier of, as to each Holder, the time at which such Holder (i) has sold all shares of Common Stock to which this agreement applies, or (ii) can sell all shares of Common Stock held by it and to which this agreement applies without restriction in compliance with Rule 144(k).

          10. Exchange Act Compliance. So long as the Company remains subject to the reporting requirements of the Exchange Act, the Company shall file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the Commission thereunder, and will take all actions reasonably necessary to enable holders of Registrable Securities to sell such securities without registration under the Securities Act within the limitation of the provisions of (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, (b) Rule 144A under the Securities Act, as such Rule may be

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amended from time to time, if applicable or (c) any similar rules or regulations hereunder adopted by the Commission. Upon the request of any Holder of Registrable Securities, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements. After any sale of Registrable Securities pursuant to the provisions of Rule 144 or 144A, the Company will, to the extent allowed by law, cause any restrictive legends to be removed and any transfer restrictions to be rescinded with respect to such Registrable Securities. In order to permit a Holder to sell the same, if it so desires, pursuant to Rule 144A promulgated by the Commission (or any successor to such rule), the Company will comply with all rules and regulations of the Commission applicable in connection with use of Rule 144A (or any successor thereto). Prospective transferees of Registrable Securities that are Qualified Institutional Buyers (as defined in Rule 144A) that would be purchasing such Registrable Securities in reliance upon Rule 144A may request from the Company information regarding the business, operations and assets of the Company. Within five (5) business days of any such request, the Company shall deliver to any such prospective transferee copies of annual audited and quarterly unaudited financial statements of the Company and such other information as may be required to be supplied by the Company for it to comply with Rule 144A.

          11. No Conflict of Rights. The Company will not hereafter enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Holders in this Agreement. Without limiting the generality of the foregoing, the Company will not hereafter enter into any agreement with respect to its securities which grants, or modifies any existing agreement with respect to its securities to grant, to the holder of its securities equal or higher priority to the rights granted to the Holders under Sections 2 and 3 of this Agreement.

          12. Lockup Agreement. In consideration for the Company agreeing to its obligations hereunder, the Holders of Registrable Securities agree in connection with any registration of the Company’s securities (which includes Registrable Securities of at least $75,000 in value) pursuant to Section 3 hereof that, upon the request of the Company not to sell, make any short sale of, loan, grant any option for the purchase of or otherwise dispose of any Registrable Securities (other than those shares included in such registration) without the prior written consent of the Company for such period of time (not to exceed 180 days) from the effective date of such registration as the Company may specify.

          13. Benefits of Agreement; Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns, legal representatives and heirs. This Agreement does not create, and shall not be construed as creating, any rights enforceable by any other Person.

          14. Complete Agreement. This Agreement constitutes the complete understanding among the parties with respect to its subject matter and supersedes all existing agreements and understandings, whether oral or written, among them. No alteration or modification of any provisions of this Agreement shall be valid unless made in writing and signed, on the one hand, by the Holders of a majority of the Registrable Securities then outstanding and, on the other, by the Company.

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          15. Section Headings. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

          16. Notices. All notices, offers, acceptances and other communications required or permitted to be given or to otherwise be made to any party to this Agreement shall be deemed to be sufficient if contained in a written instrument delivered by hand, first class mail (registered or certified, return receipt requested), telecopier or overnight air courier guaranteeing next day delivery, if to the Company, at 1140 Pearl Street, Boulder, Colorado 80302, Attention: Chief Financial Officer, with a copy to Reed Guest, Esq., 94 Underhill Road, Orinda, CA 94563, and if to the Shareholder, at the address set forth next to his name on Exhibit A, attached hereto and made a part hereof, or at such other address or addresses as may have been furnished the Company in writing.

          All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the next business day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any party may change the address to which each such notice or communication shall be sent by giving written notice to the other parties of such new address in the manner provided herein for giving notice.

          17. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware without giving effect to the provisions, policies or principles thereof respecting conflict or choice of laws.

          18. Counterparts. This Agreement may be executed in one or more counterparts each of which shall be deemed an original but all of which taken together shall constitute one and the same agreement.

          19. Severability. Any provision of this Agreement which is determined to be illegal, prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such illegality, prohibition or unenforceability without invalidating the remaining provisions hereof which shall be severable and enforceable according to their terms and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

          IN WITNESS WHEREOF, the parties have signed this Agreement as of the date first set forth above.

INCENTRA SOLUTIONS, INC.
By:
	Name:      Thomas P. Sweeney III
	Title:        Chief Executive Officer

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THE SHAREHOLDER

Paul Chopra

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EXHIBIT A

Shareholder Name and Address

Paul Chopra

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EX-10.10

Exhibit 10.10

EMPLOYMENT AGREEMENT

          This AGREEMENT (the “Agreement”) is made as of the date signed (the “Effective Date”), by and between Incentra Helio Acquisition Corp., a Delaware corporation (“Employer”) with its headquarters located in Boulder, Colorado (the “Employer”), and Dave Condensa (the “Executive”). In consideration of the mutual covenants contained in this Agreement, the Employer and the Executive agree as follows:

          1. Employment. The Employer agrees to employ the Executive and the Executive agrees to be employed by the Employer on the terms and conditions set forth in this Agreement.

          2. Capacity; Location. The Executive shall serve the Employer as President. In his capacity as President, Executive will report to the President (the “President ”) of Incentra Solutions, Inc., a Nevada corporation, the parent corporation of Employer (“Parent”), and shall be responsible for Employer’s overall operations activities subject to the direction of the President. In such capacity, the Executive shall perform such services and duties in connection with the business, affairs and operations of the Employer as may be assigned or delegated to the Executive from time to time by or under the authority of the President. Executive’s employment with Employer will be based in Employer’s Santa Clara, California, offices; provided, that Employee may be required from time to time to travel in connection with Employer’s business needs.

          3. Term. The term of this Agreement shall be three (3) years unless otherwise terminated in accordance with its provisions.

          4. Compensation and Benefits. The regular compensation and benefits payable to the Executive under this Agreement shall be as follows:

          (a) Salary. For all services rendered by the Executive under this Agreement, the Employer shall pay the Executive a salary (the “Salary”) at the annual rate of One Hundred Twenty Thousand Dollars ($120,000.00), subject to increase from time to time in the discretion of the Employer. The Salary shall be payable in periodic installments in accordance with the Employer’s usual practice for its senior executives.

          (b) Bonus and Commissions. For the fiscal year ending December 31, 2007, Executive shall be eligible for an annual bonus based upon performance as determined by the Compensation Committee of Employer’s Board of Directors

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(the “Compensation Committee”). Thereafter, Executive shall be eligible to participate in an incentive program established by the Compensation Committee of Employer’, with such terms as may be established in the sole discretion of the Compensation Committee. For the period from September 1, 2007 to August 31, 2008, Executive shall be entitled to receive commissions as set forth in Exhibit A hereto.

          (c) Regular Benefits. The Executive shall be entitled to health insurance benefits from Employer, and shall also be entitled to participate in any employee benefit plans, life insurance plans, disability income plans, retirement plans, expense reimbursement plans and other benefit plans which the Employer may from time to time have in effect for all or most of its executive management employees. Such participation shall be subject to the terms of the applicable plan documents, generally applicable policies of the Employer, applicable law and the discretion of the Employer or any administrative or other committee provided for in or contemplated by any such plan. Except with respect to the aforementioned health insurance benefits, nothing contained in this Agreement shall be construed to create any obligation on the part of the Employer to establish any such plan or to maintain the effectiveness of any such plan which may be in effect from time to time.

          (d) Vacation. The Executive shall be entitled to vacation according to Employer’s vacation policy, such vacation time to accrue on a per-pay-period basis.

          (e) Taxation of Payments and Benefits. The Employer shall undertake to make deductions, withholdings and tax reports with respect to payments and benefits under this Agreement to the extent that it reasonably and in good faith believes that it is required to make such deductions, withholdings and tax reports. Payments under this Agreement shall be in amounts net of any such deductions or withholdings. Nothing in this Agreement shall be construed to require the Employer to make any payments to compensate the Executive for any adverse tax effect associated with any payments or benefits or for any deduction or withholding from any payment or benefit.

          (f) Expenses. The Employer shall reimburse the Executive for all reasonable and necessary business related travel and other business expenses incurred or paid by the Executive in performing his duties under this Agreement and which are consistent with applicable policies of the Employer. All payments for reimbursement of such expenses shall be made upon presentation by the Executive of expense statements or vouchers and such other supporting information as the Employer may from time to time reasonably request.

          (g) Stock Options. Executive shall also be eligible for participation in Employer’s Parent’s Stock Option Plan, and Executive shall be entitled to receive incentive stock options pursuant to the terms of option agreements.

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          (h) Exclusivity of Salary and Benefits. The Executive shall not be entitled to any payments or benefits other than those provided under this Agreement, except as otherwise approved by the Compensation Committee.

          5. Extent of Service. During the Executive’s employment under this Agreement, the Executive shall devote the Executive’s full business time, best efforts and business judgment, skill and knowledge to the advancement of the Employer’s interests and to the discharge of the Executive’s duties and responsibilities under this Agreement. The Executive shall not engage in any other business activity, except as may be approved by the Employer; provided, that nothing in this Agreement shall be construed as preventing the Executive from:

          (a) investing the Executive’s assets in any company or other entity in a manner not prohibited by Section 7(d) and in such form or manner as shall not require any material activities on the Executive’s part in connection with the operations or affairs of the companies or other entities in which such investments are made; or

          (b) engaging in religious, charitable or other community or non-profit activities that do not impair the Executive’s ability to fulfill the Executive’s duties and responsibilities under this Agreement.

          6. Termination. The Executive’s employment under this Agreement shall terminate under the following circumstances set forth in this Section 6.

(a) Termination by the Employer for Cause. The Executive’s employment under this Agreement may be terminated for “Cause” without further liability on the part of the Employer, effective immediately upon a vote of the managers of the Employer and written notice to the Executive. Only the following shall constitute “Cause” for such termination:
	(i) dishonest or fraudulent statements or acts of the Executive with respect to the Employer or any affiliate of the Employer;
	(ii) the Executive’s conviction of, or entry of a plea of guilty or nolo contendere for, (A) a felony or (B) any misdemeanor (excluding minor traffic violations) involving moral turpitude, deceit, dishonesty or fraud;
	(iii) gross negligence, willful misconduct or insubordination of the Executive with respect to the Employer or any affiliate of the Employer; or
	(iv) material breach by the Executive of any of the Executive’s obligations under this Agreement,.

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          (b) Termination by the Executive. The Executive’s employment under this Agreement may be terminated unilaterally by the Executive by written notice to Employer at least thirty (30) days prior to such termination.

          (c) Termination by Executive For Good Reason. The Executive may, at his option, terminate Executive’s employment for “Good Reason” by giving a notice of termination to Employer in the event that: (i) there is a failure of Employer (or successor employer) to promptly pay Executive’s salary or additional compensation or benefits hereunder in accordance with this Agreement in any material respect, (ii) Executive is assigned duties substantially inconsistent with his title without Executive’s prior written consent, (iii) Executive’s principal place of employment is assigned to a geographic location not agreed to by Executive, or (iv) any other material violation or breach by Employer of this Agreement. It shall also be considered Good Reason for termination by Executive if, in the event of a Change of Control (as hereinafter defined), any successor employer fails to fully assume Employer’s obligations under this Agreement. For the purposes of this Agreement, a “Change of Control” shall mean the occurrence of any of the following events: (A) a dissolution or liquidation of the Employer; (B) a sale or other disposition of all or substantially all of the Employer’s assets; (C) a merger or consolidation involving the Employer in which stockholders of the Employer immediately prior to such transaction do not own a majority of the voting power of the Employer or its successor immediately after such transaction; or (D) a sale or other transfer of capital stock of Employer in one or a series of related transactions whereby an individual or “group” (as such term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) which did not previously have direct or indirect “control” (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended) of Employer acquires such control.

          (d) Termination by the Employer Without Cause. Subject to the payment of Termination Benefits pursuant to Section 6(e), the Executive’s employment under this Agreement may be terminated by the Employer without Cause upon written notice to the Executive (a termination “Without Cause”).

          (e) Certain Termination Benefits. Unless otherwise specifically provided in this Agreement or otherwise required by law, all compensation and benefits payable to the Executive under this Agreement shall terminate on the date of termination of the Executive’s employment under this Agreement, if and only if such termination is consistent with termination For Cause under Section 6(a), or unilateral termination by the Executive under Section 6(b) above. In the event of termination of the Executive’s employment with the Employer is for Good Reason pursuant to Section 6(c) or Without Cause pursuant to Section 6(d) above, the Employer shall provide to the Executive the following termination benefits (“Termination Benefits”):

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          (i) payment of the Executive’s Salary at the rate then in effect pursuant to Section 4(a) for the period from the date of termination until the date which is six (6) months after the date of termination; and

          (ii) continuation of group health plan benefits to the extent authorized by and consistent with 29 U.S.C. § 1161 et seq. (commonly known as “COBRA”), with the cost of the regular premium for such benefits shared in the same relative proportion by the Employer and the Executive as in effect on the date of termination for twelve (12) months and at a cost of 102% of premium provided under COBRA, for up to an additional six (6) months.

          Notwithstanding the foregoing, nothing in this Section 6(e) shall be construed to affect the Executive’s right to receive COBRA continuation entirely at the Executive’s own cost to the extent that the Executive may continue to be entitled to COBRA continuation after the Executive’s right to cost sharing under Section 6(d)(ii) ceases.

          (f) Disability. If the Executive shall be disabled so as to be unable to perform the essential functions of the Executive’s then existing position or positions under this Agreement with reasonable accommodation, the Employer may remove the Executive from any responsibilities and/or reassign the Executive to another position with the Employer during the period of such disability. Notwithstanding any such removal or reassignment, the Executive shall continue to receive all payments and benefits contemplated under this Agreement the same as if the Executive employment with Employer was terminated Without Cause (in which case Executive would receive all Termination Benefits, less any disability pay or sick pay benefits to which the Executive may be entitled under the Employer’s policies). If any question shall arise as to whether during any period the Executive is disabled so as to be unable to perform the essential functions of the Executive’s then existing position or positions with reasonable accommodation, the Executive may, and at the request of the Employer shall, submit to the Employer a certification in reasonable detail by a physician selected by the Employer to whom the Executive or the Executive’s guardian has no reasonable objection as to whether the Executive is so disabled or how long such disability is expected to continue, and such certification shall for the purposes of this Agreement be conclusive of the issue. The Executive shall cooperate with any reasonable request of the physician in connection with such certification. If such question shall arise and the Executive shall fail to submit such certification, the Employer’s determination of such issue shall be binding on the Executive. Nothing in this Section 6(f) shall be construed to waive the Executive’s rights, if any, under existing law including, without limitation, the Family and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq.

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7. Confidential Information, Noncompetition and Cooperation.

          (a) Confidential Information. As used in this Agreement, “Confidential Information” means information belonging to the Employer which is of value to the Employer in the course of conducting its business and the disclosure of which could result in a competitive or other disadvantage to the Employer. Confidential Information includes, without limitation, financial information, reports, and forecasts; inventions, improvements and other intellectual property; trade secrets; know-how; designs, processes or formulae; software; market or sales information or plans; customer lists; and business plans, prospects and opportunities (such as possible acquisitions or dispositions of businesses or facilities) which have been discussed or considered by the management of the Employer. Confidential Information includes information developed by the Executive in the course of the Executive’s employment by the Employer, as well as other information to which the Executive may have access in connection with the Executive’s employment. Confidential Information also includes the confidential information of others with which the Employer has a business relationship. Notwithstanding the foregoing, Confidential Information does not include information in the public domain, unless due to breach of the Executive’s duties under Section 7(b).

          (b) Confidentiality. The Executive understands and agrees that the Executive’s employment creates a relationship of confidence and trust between the Executive and the Employer with respect to all Confidential Information. At all times, both during the Executive’s employment with the Employer and after its termination, the Executive will keep in confidence and trust all such Confidential Information, and will not use or disclose any such Confidential Information without the written consent of the Employer, except as may be necessary in the ordinary course of performing the Executive’s duties to the Employer.

          (c) Documents, Records, etc. All documents, records, data, apparatus, equipment and other physical property, whether or not pertaining to Confidential Information, which are furnished to the Executive by the Employer or are produced by the Executive in connection with the Executive’s employment will be and remain the sole property of the Employer. The Executive will return to the Employer all such materials and property as and when requested by the Employer. In any event, the Executive will return all such materials and property immediately upon termination of the Executive’s employment for any reason. The Executive will not retain with the Executive any such material or property or any copies thereof after such termination.

          (d) Noncompetition and Nonsolicitation. Without the prior written consent of Employer, during the period that Executive is employed by Employer and for five (5) years thereafter, the Executive (i) will not, directly or indirectly, whether as owner, partner, shareholder, consultant, agent, employee, co-venturer or otherwise, engage, participate, assist or invest in any Competing Business (as

6

hereinafter defined); (ii) will refrain from directly or indirectly recruiting or otherwise soliciting, inducing or influencing any person to leave employment with the Employer; and (iii) will refrain from soliciting or encouraging any customer or supplier to terminate or otherwise modify adversely its business relationship with the Employer. The Executive understands that the restrictions set forth in this Section 7(d) are intended to protect the Employer’s interest in its Confidential Information and established employee, customer and supplier relationships and goodwill, and agrees that such restrictions are reasonable and appropriate for this purpose. The Executive’s obligation to keep the Confidential Information confidential expires at the same time as indicated in the first sentence of this subparagraph (d). For purposes of this Agreement, the term “Competing Business” shall mean any business that provides or intends to provide the same or similar types of services or products as those provided by Employer, its parent company, or any of such parent company’s subsidiaries during Executive’s employment with the Company in any geographic area then served by Employer, Employer’s parent company, or any of such parent company’s subsidiaries. Notwithstanding the foregoing, the Executive may own up to two percent (2%) of the outstanding stock of a publicly held corporation.

          (e) Third-Party Agreements and Rights. The Executive hereby confirms that the Executive is not bound by the terms of any agreement with any previous employer or other party which restricts in any way the Executive’s use or disclosure of information or the Executive’s engagement in any business. The Executive represents to the Employer that the Executive’s execution of this Agreement, the Executive’s employment with the Employer and the performance of the Executive’s proposed duties for the Employer will not violate any obligations the Executive may have to any such previous employer or other party. In the Executive’s work for the Employer, the Executive will not disclose or make use of any information in violation of any agreements with or rights of any such previous employer or other party, and the Executive will not bring to the premises of the Employer any copies or other tangible embodiments of non-public information belonging to or obtained from any such previous employment or other party.

          (f) Litigation and Regulatory Cooperation. During and after the Executive’s employment, the Executive shall reasonably cooperate with the Employer in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Employer which relate to events or occurrences that transpired while the Executive was employed by the Employer. The Executive’s full reasonable cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Employer at mutually convenient times. During and after the Executive’s employment, the Executive also shall cooperate reasonably with the Employer in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or

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occurrences that transpired while the Executive was employed by the Employer. The Employer shall reimburse the Executive for any reasonable out-of-pocket expenses incurred in connection with the Executive’s performance of obligations pursuant to this Section 7(f) and shall pay the Executive for his time at his annual salary rate in effect at the time of the termination of his employment.

          (g) Injunction. The Executive agrees that it would be difficult to measure any damages caused to the Employer which might result from any breach by the Executive of the promises set forth in this Section 7, and that in any event money damages would be an inadequate remedy for any such breach. Accordingly, subject to Section 8 of this Agreement, the Executive agrees that if the Executive breaches, or proposes to breach, any portion of this Agreement, the Employer shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach without showing or proving any actual monetary yet sustained by Employer.

          8. Arbitration of Disputes. Any controversy or claim arising out of or relating to this Agreement or the breach thereof or otherwise arising out of the Executive’s employment or the termination of that employment (including, without limitation, any claims of unlawful employment discrimination whether based on age or otherwise) shall, to the fullest extent permitted by law, be settled by arbitration in any forum and form agreed upon by the parties or, in the absence of such an agreement, under the auspices of the American Arbitration Association (“AAA”) in Denver, Colorado, in accordance with the Employment Dispute Resolution Rules of the AAA, including, but not limited to, the rules and procedures applicable to the selection of arbitrators. In the event that any person or entity other than the Executive or the Employer may be a party with regard to any such controversy or claim, such controversy or claim shall be submitted to arbitration subject to such other person or entity’s agreement. Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. This Section 8 shall be specifically enforceable. Notwithstanding the foregoing, this Section 8 shall not preclude either party from pursuing a court action for the sole purpose of obtaining a temporary restraining order or a preliminary injunction in circumstances in which such relief is appropriate; provided, that any other relief shall be pursued through an arbitration proceeding pursuant to this Section 8.

          9. Consent to Jurisdiction. To the extent that any court action is permitted consistent with or to enforce Section 8 of this Agreement, the parties hereby consent to the jurisdiction of the courts of the State of Colorado. Accordingly, with respect to any such court action, the Executive and Employer both (a) submit to the personal jurisdiction of such courts; (b) consent to service of process; and (c) waive any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction or service of process.

          10. Integration. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements between the parties with respect to any related subject matter.

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          11. Assignment; Successors and Assigns, etc. Neither the Employer nor the Executive may make any assignment of this Agreement or any interest herein, by operation of law or otherwise, without the prior written consent of the other party; provided, that the Employer may assign its rights under this Agreement without the consent of the Executive in the event that the Employer shall effect a reorganization, consolidate with or merge into any other corporation, partnership, organization or other entity, or transfer all or substantially all of its properties or assets to any other corporation, partnership, organization or other entity. This Agreement shall inure to the benefit of and be binding upon the Employer and the Executive, their respective successors, executors, administrators, heirs and permitted assigns.

          12. Enforceability. If any portion or provision of this Agreement (including, without limitation, any portion or provision of any section of this Agreement) shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.

          13. Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.

          14. Notices. Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if in writing and delivered in person or sent by a nationally recognized overnight courier service or by registered or certified mail, postage prepaid, return receipt requested, to the Executive at the last address the Executive has filed in writing with the Employer or, in the case of the Employer, at 1140 Pearl Street, Boulder, CO 80302, ATTN: Thomas P. Sweeney III, and shall be effective on the date of delivery in person or by courier or three (3) days after the date mailed.

          15. Amendment. This Agreement may be amended or modified only by a written instrument signed by the Executive and by a duly authorized representative of the Employer.

          16. Governing Law. This is an Illinois contract and shall be construed under and be governed in all respects by the laws of the State of Colorado, without giving effect to the conflict of laws principles of such State.

          17. Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall together constitute one and the same document.

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IN WITNESS WHEREOF, this Agreement has been executed by the Employer and by the Executive as of the ___ day of August 2007.

INCENTRA HELIO ACQUISITION CORP.
By:
Name:	Thomas P. Sweeney III
Title:	Chief Executive Officer
EXECUTIVE:

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EX-10.11

Exhibit 10.11

ESCROW AGREEMENT

          This Escrow Agreement is dated as of the effective date (the “Effective Date”) set forth on schedule 1 attached hereto (“Schedule 1”) by and among the Parent identified on Schedule 1 (the “Parent”), David Condensa solely in his capacity as Shareholders’ Representative, as defined in that certain Agreement and Plan of Merger By and Among Incentra Solutions, Inc., Incentra Helio Acquisition Corp., Helio Solutions, Inc., and David Condensa, as Shareholders’ Representative, dated as of August __, 2007 (the “Shareholders’ Representative”), and JPMorgan Chase Bank, N.A. as escrow agent hereunder (the “Escrow Agent”).

          WHEREAS, the Parent and the Shareholders’ Representative have agreed to deposit in escrow certain funds and wish such deposit to be subject to the terms and conditions set forth herein.

          WHEREAS, the purpose of the escrow is to secure certain obligations of Helio Solutions, Inc. related to net working capital and indemnification pursuant to the Agreement and Plan of Merger and more specifically described therein;

          WHEREAS, the Parent and the Shareholders’ Representative hereby acknowledge and agree that the Escrow Agent has not reviewed, and is not a party to, the Agreement and Plan of Merger; and is not responsible for any of the duties or responsibilities set forth therein.

          NOW THEREFORE, in consideration of the foregoing and of the mutual covenants hereinafter set forth, the parties hereto agree as follows:

          1. Appointment. The Parent and Shareholders’ Representative hereby appoint the Escrow Agent as their escrow agent for the purposes set forth herein, and the Escrow Agent hereby accepts such appointment under the terms and conditions set forth herein.

          2. Escrow Fund. Simultaneous with the execution and delivery of this Escrow Agreement, Parent is depositing with the Escrow Agent the sum indicated as the escrow deposit on Schedule 1 (the “Escrow Deposit”). The Escrow Agent shall hold the Escrow Deposit and, subject to the terms and conditions hereof, shall invest and reinvest the Escrow Deposit and the proceeds thereof (the “Escrow Fund”) as directed in Section 3.

          3. Investment of Escrow Fund. Except as Parent and Shareholders’ Representative may from time to time jointly instruct the Escrow Agent in writing (a “Joint Instruction”), the Escrow Funds shall be invested in a trust deposit investment vehicle with JPMorgan Chase Bank, N.A. (the “Fund”) until all of the monies in the Escrow Fund have been liquidated or distributed pursuant to the terms hereof. Such Joint Instruction, if any, referred to in the foregoing sentence shall specify the type and identity of the investments to be purchased and/or sold. The Escrow Agent is hereby authorized to execute purchases and sales of investments through the facilities of its own trading or

1

capital markets operations or those of any affiliated entity. An agency fee may be assessed in connection with each transaction. The Escrow Agent is authorized to liquidate in accordance with its customary procedures any portion of the Escrow Funds consisting of investments to provide for payments required to be made under this Agreement. In addition:

          (a) The parties recognize and agree that the Escrow Agent will not provide supervision, recommendations or advice relating to either the investment of moneys held in the Escrow Account or the purchase, sale, retention or other disposition of any permitted investment;

          (b) Interest and other earnings on permitted investments shall be added to the Escrow Account. Any loss or expense incurred as a result of an investment will be borne by the Escrow Account;

          (c) The Escrow Agent is hereby authorized to execute purchases and sales of permitted investments through the facilities of its own trading or capital markets operations or those of any affiliated entity. The Escrow Agent shall send statements to each of the Parent and the Shareholders’ Representative on a monthly basis reflecting activity in the Escrow Account for the preceding month. Although Parent and the Shareholders’s Representative recognize that it may obtain a broker confirmation or written statement containing comparable information at no additional cost, Parent and the Shareholders’ Representative hereby agree that confirmations of permitted investments are not required to be issued by the Escrow Agent for each month in which a monthly statement is rendered. No statement need be rendered for the Escrow Account if no activity occurred for such month;

          (d) Parent and the Shareholders’ Representative acknowledge and agree that the delivery of the escrowed property is subject to the sale and final settlement of permitted investments. Proceeds of a sale of permitted investments will be delivered on the business day on which the appropriate instructions are delivered to the Escrow Agent if received prior to the deadline for same day sale of such permitted investments. If such instructions are received after the applicable deadline, proceeds will be delivered on the next succeeding business day; and

          (e) The Parent and the Shareholders’ Representative acknowledge that they have received, upon their request, and reviewed the Fund’s prospectus and have determined that the Fund is an appropriate investment for the Account..

          4. Disposition and Termination. The Escrow Agent shall deliver the Escrow Fund upon, and pursuant to, the joint written instructions of Parent and Shareholders’ Representative. Upon delivery of the Escrow Fund by the Escrow Agent, this Escrow Agreement shall terminate, subject to the provisions of Section 8.

          5. Escrow Agent. The Escrow Agent undertakes to perform only such duties as are expressly set forth herein and no duties shall be implied. The Escrow Agent shall have no liability under and no duty to inquire as to the provisions of any agreement other than this Escrow Agreement. The Escrow Agent may rely upon and shall not be liable for acting or refraining from acting upon any written notice, instruction or request furnished to it hereunder and believed by it to be genuine and to have been signed or presented by the proper party or

2

parties. The Escrow Agent shall be under no duty to inquire into or investigate the validity, accuracy or content of any such document. The Escrow Agent shall have no duty to solicit any payments which may be due it or the Escrow Fund. The Escrow Agent shall not be liable for any action taken or omitted by it in good faith except to the extent that a court of competent jurisdiction determines that the Escrow Agent’s gross negligence or willful misconduct was the primary cause of any loss to the Parent or Shareholders’ Representative. The Escrow Agent may execute any of its powers and perform any of its duties hereunder directly or through agents or attorneys (and shall be liable only for the careful selection of any such agent or attorney) and may consult with counsel, accountants and other skilled persons to be selected and retained by it. The Escrow Agent shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the advice or opinion of any such counsel, accountants or other skilled persons. In the event that the Escrow Agent shall be uncertain as to its duties or rights hereunder or shall receive instructions, claims or demands from any party hereto which, in its opinion, conflict with any of the provisions of this Escrow Agreement, it shall be entitled to refrain from taking any action and its sole obligation shall be to keep safely all property held in escrow until it shall be directed otherwise in writing by all of the other parties hereto or by a final order or judgment of a court of competent jurisdiction. Anything in this Escrow Agreement to the contrary notwithstanding, in no event shall the Escrow Agent be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.

          6. Succession. The Escrow Agent may resign and be discharged from its duties or obligations hereunder by giving ten (10) days advance notice in writing of such resignation to the other parties hereto specifying a date when such resignation shall take effect. The Escrow Agent shall have the right to withhold an amount equal to any amount due and owing to the Escrow Agent, plus any costs and expenses the Escrow Agent shall reasonably believe may be incurred by the Escrow Agent in connection with the termination of the Escrow Agreement. Any corporation or association into which the Escrow Agent may be merged or converted or with which it may be consolidated, or any corporation or association to which all or substantially all the escrow business of the Escrow Agent’s escrow line of business may be transferred, shall be the Escrow Agent under this Escrow Agreement without further act.

          7. Fees. The Parent and Shareholders’ Representative agree jointly and severally to (i) pay the Escrow Agent upon execution of this Escrow Agreement and from time to time thereafter reasonable compensation for the services to be rendered hereunder, which unless otherwise agreed in writing shall be as described in Schedule 1 attached hereto, and (ii) pay or reimburse the Escrow Agent upon request for all expenses, disbursements and advances, including reasonable attorney’s fees and expenses, incurred or made by it in connection with the preparation, execution, performance, delivery, modification and termination of this Escrow Agreement.

          8. Indemnity. The Parent and the Shareholders’ Representative shall jointly and severally indemnify, defend and save harmless the Escrow Agent and its directors, officers, agents and employees (the “indemnitees”) from all loss, liability or expense (including the fees

3

and expenses of in house or outside counsel) arising out of or in connection with (i) the Escrow Agent’s execution and performance of this Escrow Agreement, except in the case of any indemnitee to the extent that such loss, liability or expense is due to the gross negligence or willful misconduct of such indemnitee, or (ii) its following any instructions or other directions from the Parent or the Shareholders’ Representative, except to the extent that its following any such instruction or direction is expressly forbidden by the terms hereof. The parties hereto acknowledge that the foregoing indemnities shall survive the resignation or removal of the Escrow Agent or the termination of this Escrow Agreement. The parties hereby grant the Escrow Agent a lien on, right of set-off against and security interest in the Escrow Fund for the payment of any claim for indemnification, compensation, expenses and amounts due hereunder.

          9. Account Opening Information/TINs.

IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT

For accounts opened in the US:

          To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. When an account is opened, we will ask for information that will allow us to identify relevant parties.

For non-US accounts:

          To help in the fight against the funding of terrorism and money laundering activities we are required along with all financial institutions to obtain, verify, and record information that identifies each person who opens an account. When you open an account, we will ask for information that will allow us to identify you.

TINs:

          Taxpayer Identification Numbers (“TINs”). The Parent and Shareholders’ Representative have provided the Escrow Agent with their respective fully executed Internal Revenue Service (“IRS”) Form W-8, or W-9 and/or other required documentation. The Parent and the Shareholders’ Representative each represent that its correct TIN assigned by the IRS, or any other taxing authority, is set forth in the delivered documents, as well as in the Substitute IRS Form W-9 set forth in the signature page of this Agreement.

To the extent that any portion of the principal amount of the Escrow Funds represents part or all of the purchase price under the Purchase Agreement, Shareholders’ Representative shall provide all information required for Escrow Agent to perform tax reporting on IRS Form 1099-B on or prior to each distribution to the Shareholders’ Representative; which shall include a fully executed W-9, W-8, or any other applicable tax form then required by the IRS. Unless otherwise directed in a joint written instruction executed by the Shareholders’ Representative and Parent, Escrow Agent shall report to the IRS and as appropriate withhold and remit taxes to the IRS or to any other taxing authority as required by law based upon the information or documentation so provided and when schedule and documentation is not properly and timely provided prior to payment of principal to the Shareholders’ Representative. Escrow Agent shall be entitled to rely

4

on such information and documentation and shall not be responsible for and shall be indemnified by Shareholders’ Representative for any additional tax, interest or penalty arising from the inaccuracy or late receipt of such information or documentation.

[Shareholders’ Representative shall provide Escrow Agent on or before the effective date of the Escrow Agreement and at appropriate times thereafter, including prior to any disbursement, a detailed schedule indicating the allocation of the disbursement amount from the Escrow Funds between (i) principal, (ii) imputed interest to be reported on IRS Form 1099-INT or 1042S or (iii) Original Issue Discount (“OID”) to be reported on IRS Form 1099-OID along with the relevant payee tax information, documentation, and proportionate interest thereof.. Escrow Agent shall be entitled to rely on such information provided by Shareholders’ Representative and shall not be responsible for and shall be indemnified by Shareholders’ Representative for any additional tax, interest or penalty arising from the inaccuracy or late receipt of such information. In addition, all interest or other income earned under the Escrow Agreement shall be allocated to the Parent and reported, as and to the extent required by law, by the Escrow Agent to the IRS, or any other taxing authority, on IRS Form 1099 or 1042S (or other appropriate form) as income earned from the Escrow by the Parent whether or not said income has been distributed during such calendar year. Any other tax returns required to be filed will be prepared and filed by the Shareholders’ Representative and/or the Parent with the IRS and any other taxing authority as required by law, including but not limited to any applicable reporting or withholding pursuant to the Foreign Investment in Real Property Tax Act (“FIRPTA”). Shareholders’ Representative and Parent acknowledge and agree that Escrow Agent shall have no responsibility for the preparation and/or filing of any tax return or any applicable FIRPTA reporting or withholding with respect to the Escrow Funds or any income earned by the Escrow Funds. Parent further acknowledges and agrees that any taxes payable from the income earned on the investment of any sums held in the Escrow Funds shall be paid by the Parent respectively as required by law. In the absence of written direction from the Shareholders’ Representative and Parent, all proceeds of the Escrow Fund shall be retained in the Escrow Fund and reinvested from time to time by the Escrow Agent as provided in this Agreement. Escrow Agent shall withhold any taxes it is required to withhold, including but not limited to required withholding in the absence of proper tax documentation, and shall remit such taxes to the appropriate authorities.

          10. Notices. All communications hereunder shall be in writing and shall be deemed to be duly given and received:

(i) upon delivery if delivered personally or upon confirmed transmittal if by facsimile;

(ii) on the next Business Day (as hereinafter defined) if sent by overnight courier; or

(iii) four (4) Business Days after mailing if mailed by prepaid registered mail, return receipt requested, to the appropriate notice address set forth on Schedule 1 or at such other address as any party hereto may have furnished to the other parties in writing by registered mail, return receipt requested.

Notwithstanding the above, in the case of communications delivered to the Escrow Agent pursuant to (ii) and (iii) of this Section 10, such communications shall be deemed to have been

5

given on the date received by the Escrow Agent. In the event that the Escrow Agent, in its sole discretion, shall determine that an emergency exists, the Escrow Agent may use such other means of communication as the Escrow Agent deems appropriate. “Business Day” shall mean any day other than a Saturday, Sunday or any other day on which the Escrow Agent located at the notice address set forth on Schedule 1 is authorized or required by law or executive order to remain closed.

          11. Security Procedures. In the event funds transfer instructions are given (other than in writing at the time of execution of this Escrow Agreement, as indicated in Schedule 1 attached hereto), whether in writing or by telecopier, the Escrow Agent is authorized to seek confirmation of such instructions by telephone call-back to the person or persons designated on schedule 2 hereto (“Schedule 2”), and the Escrow Agent may rely upon the confirmation of anyone purporting to be the person or persons so designated. The persons and telephone numbers for call-backs may be changed only in a writing actually received and acknowledged by the Escrow Agent. If the Escrow Agent is unable to contact any of the authorized representatives identified in Schedule 2, the Escrow Agent is hereby authorized to seek confirmation of such instructions by telephone call-back to any one or more of your executive officers, (“Executive Officers”), which shall include the titles of Chief Executive Officer, Chief Operating Officer or Chief Financial Officer, as the Escrow Agent may select. Such “Executive Officer” shall deliver to the Escrow Agent a fully executed Incumbency Certificate, and the Escrow Agent may rely upon the confirmation of anyone purporting to be any such officer. The Escrow Agent and the beneficiary’s bank in any funds transfer may rely solely upon any account numbers or similar identifying numbers provided by the Parent or the Shareholders’ Representative to identify (i) the beneficiary, (ii) the beneficiary’s bank, or (iii) an intermediary bank. The Escrow Agent may apply any of the escrowed funds for any payment order it executes using any such identifying number, even when its use may result in a person other than the beneficiary being paid, or the transfer of funds to a bank other than the beneficiary’s bank or an intermediary bank designated. All funds transfer instructions must be executed by the individual(s) listed on Schedule 2 hereto. The parties to this Escrow Agreement acknowledge that these security procedures are commercially reasonable.

          12. Miscellaneous. The provisions of this Escrow Agreement may be waived, altered, amended or supplemented, in whole or in part, only by a writing signed by all of the parties hereto. Neither this Escrow Agreement nor any right or interest hereunder may be assigned in whole or in part by any party, except as provided in Section 6, without the prior consent of the other parties. This Escrow Agreement shall be governed by and construed under the laws of the State of California. Each party hereto irrevocably waives any objection on the grounds of venue, forum non-conveniens or any similar grounds and irrevocably consents to service of process by mail or in any other manner permitted by applicable law and consents to the jurisdiction of the courts located in the State of California. The parties further hereby waive any right to a trial by jury with respect to any lawsuit or judicial proceeding arising or relating to this Escrow Agreement. No party to this Escrow Agreement is liable to any other party for losses due to, or if it is unable to perform its obligations under the terms of this Escrow Agreement because of, acts of God, fire, floods, strikes, equipment or transmission failure, or other causes reasonably beyond its control. This Escrow Agreement may be executed in one or

6

more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

          IN WITNESS WHEREOF, the parties hereto have executed this Escrow Agreement as of the date set forth in Schedule 1.

as Escrow Agent

By: 

Name:

Title:

Tax Certification: Taxpayer ID#: ___________________________

Name & Address:	_______________________________
	_______________________________
	_______________________________

Customer is a (check one):

___ Corporation	___ Municipality	___ Partnership	___ Non-profit or Charitable Org
___ Individual	___ REMIC	___ Trust	___ Other ___________________

Under the penalties of perjury, the undersigned certifies that:

(1)	the entity is organized under the laws of the United States
(2)	the number shown above is its correct Taxpayer Identification Number (or it is waiting for a number to be issued to it); and
(3)	it is not subject to backup withholding because: (a) it is exempt from backup withholding or (b) it has not been notified by the Internal Revenue Service (IRS) that it is subject to backup withholding as a result of failure to report all interest or dividends, or (c) the IRS has notified it that it is no longer subject to backup withholding.

(If the entity is subject to backup withholding, cross out the words after the (3) above.)

Investors who do not supply a tax identification number will be subject to backup withholding in accordance with IRS regulations.

Note: The IRS does not require your consent to any provision of this document other than the certifications required to avoid backup withholding.

PARENT

INCENTRA SOLUTIONS, INC.

By: 

Name: Thomas P. Sweeney III

Title: Chief Executive Officer

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Tax Certification: Taxpayer ID#: ___________________________

Name & Address:	_______________________________
	_______________________________
	_______________________________

Customer is a (check one):

___ Corporation	___ Municipality	___ Partnership	___ Non-profit or Charitable Org
___ Individual	___ REMIC	___ Trust	___ Other ___________________

Under the penalties of perjury, the undersigned certifies that:

(4)	the entity is organized under the laws of the United States
(5)	the number shown above is its correct Taxpayer Identification Number (or it is waiting for a number to be issued to it); and
(6)	it is not subject to backup withholding because: (a) it is exempt from backup withholding or (b) it has not been notified by the Internal Revenue Service (IRS) that it is subject to backup withholding as a result of failure to report all interest or dividends, or (c) the IRS has notified it that it is no longer subject to backup withholding.

(If the entity is subject to backup withholding, cross out the words after the (3) above.)

Investors who do not supply a tax identification number will be subject to backup withholding in accordance with IRS regulations.

Note: The IRS does not require your consent to any provision of this document other than the certifications required to avoid backup withholding.

SHAREHOLDERS’ REPRESENTATIVE

    David Condensa

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Schedule 1

Effective Date:	August ___, 2007
Name of Parent:	Incentra Solutions, Inc.
Parent Notice Address:	1140 Pearl Street, Boulder, CO 80302
Parent TIN:
Wiring Instructions:

Name of Shareholders’ Representative: David Condensa

Shareholders’ Representative Notice Address: Helio Solutions, Inc.
5676 Scenic Meadow Lane
San Jose, CA 95135

Shareholders’ Representative TIN:
Wiring Instructions:

Escrow Deposit: $750,000
	Escrow Agent notice address:
	JPMorgan Chase Bank, N.A
	300 S Grand Ave, 4th Floor
	Los Angeles, CA 90071
	Attention: Michael Bergantino
	Fax No.: 213/621-8167
Escrow Agent’s compensation:	$_3,500.00_______________

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Schedule 2

Telephone Number(s) for Call-Backs and
Person(s) Designated to Give and Confirm Funds Transfer Instructions

If to Shareholders’ Representative:
Name	Telephone Number	Signature
1. David Condensa	(408) 361-6200	____________________________________
If to Parent:
Name	Telephone Number	Signature
1. Thomas P. Sweeney III	(303) 449-8279	____________________________________
2. Anthony DiPaolo	(720) 566-5000	____________________________________
3. George Vareldzis	(720) 566-5022	____________________________________

Telephone call-backs shall be made to each Parent and Shareholders’ Representative if joint instructions are required pursuant to this Escrow Agreement.

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EX-10.12

Exhibit 10.12

INCENTRA SOLUTIONS, INC.

SECURITIES PURCHASE AGREEMENT

July 31, 2007

TABLE OF CONTENTS

			Page
1.	Agreement to Sell and Purchase		1
2.	Fees and Warrant		1
3.	Closing, Delivery and Payment		2
	3.1	Closing	2
	3.2	Delivery	2
4.	Representations and Warranties of the Company		2
	4.1	Organization, Good Standing and Qualification	2
	4.2	Subsidiaries	3
	4.3	Capitalization; Voting Rights	3
	4.4	Authorization; Binding Obligations	4
	4.5	Liabilities; Solvency	5
	4.6	Agreements; Action	5
	4.7	Obligations to Related Parties	6
	4.8	Changes	7
	4.9	Title to Properties and Assets; Liens, Etc	8
	4.10	Intellectual Property	9
	4.11	Compliance with Other Instruments	9
	4.12	Litigation	9
	4.13	Tax Returns and Payments	10
	4.14	Employees	10
	4.15	Registration Rights and Voting Rights	11
	4.16	Compliance with Laws; Permits	11
	4.17	Environmental and Safety Laws	11
	4.18	Valid Offering	12
	4.19	Full Disclosure	12
	4.20	Insurance	12
	4.21	SEC Reports	12
	4.22	Listing	12
	4.23	No Integrated Offering	13
	4.24	Stop Transfer	13
	4.25	Dilution	13
	4.26	Patriot Act	13
5.	Representations and Warranties of the Purchaser		14
	5.1	No Shorting	14
	5.2	Requisite Power and Authority	14
	5.3	Investment Representations	15
	5.4	Purchaser Bears Economic Risk	15
	5.5	Acquisition for Own Account	15
	5.6	Purchaser Can Protect Its Interest	15
	5.7	Accredited Investor	15

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	5.8	Legends	15
6.	Covenants of the Company		16
	6.1	Stop-Orders	16
	6.2	Listing	17
	6.3	Market Regulations	17
	6.4	Reporting Requirements	17
	6.5	Use of Funds	17
	6.6	Access to Facilities	17
	6.7	Taxes	18
	6.8	Insurance	18
	6.9	Intellectual Property	19
	6.10	Properties	19
	6.11	Confidentiality	19
	6.12	Required Approvals	19
	6.13	Reissuance of Securities	20
	6.14	Opinion	21
	6.15	Margin Stock	21
	6.16	[Intentionally Deleted]	21
	6.17	Notice of Default	21
7.	Covenants of the Purchaser		21
	7.1	Confidentiality	21
	7.2	Non-Public Information	21
	7.3	Intentionally Omitted]	21
8.	Covenants of the Company and Purchaser Regarding Indemnification		21
	8.1	Company Indemnification	21
	8.2	Purchaser’s Indemnification	22
	8.3	Procedures	22
9.	Registration Rights		22
	9.1	Registration Rights Granted	22
	9.2	Offering Restrictions	22
10.	Miscellaneous		22
	10.1	Governing Law	22
	10.2	Survival	24
	10.3	Successors	24
	10.4	Entire Agreement; Maximum Interest	24
	10.5	Severability	25
	10.6	Amendment and Waiver	25
	10.7	Delays or Omissions	25
	10.8	Notices	25
	10.9	Titles and Subtitles	26
	10.10	Facsimile Signatures; Counterparts	26
	10.11	Broker’s Fees	26
	10.12	Construction	26

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LIST OF EXHIBITS

Form of Term Note	Exhibit A
Form of Warrant	Exhibit B
Form of Escrow Agreement	Exhibit C
Form of Disbursement Letter	Exhibit D
Form of Opinion	Exhibit E
Form of Subsidiary Guarantee	Exhibit F

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SECURITIES PURCHASE AGREEMENT

          THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of July 31, 2007, by and between INCENTRA SOLUTIONS, INC., a Nevada corporation (the “Company”), and CALLIOPE CAPITAL CORPORATION, a Delaware corporation (the “Purchaser”).

RECITALS

          WHEREAS, the Company has authorized the sale to the Purchaser of a Secured Term Note in the aggregate principal amount of Twelve Million Dollars ($12,000,000) (the “Note”);

          WHEREAS, the Company wishes to issue a penny warrant to the Purchaser to purchase up to 3,750,000 shares of the Company’s Common Stock (subject to adjustment as set forth therein) in connection with Purchaser’s purchase of the Note;

          WHEREAS, Purchaser desires to purchase the Note and the Warrant (as defined in Section 2) on the terms and conditions set forth herein; and

          WHEREAS, the Company desires to issue and sell the Note and Warrant to Purchaser on the terms and conditions set forth herein.

AGREEMENT

          NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises, representations, warranties and covenants hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. Agreement to Sell and Purchase. Pursuant to the terms and conditions set forth in this Agreement, on the Closing Date (as defined in Section 3), the Company agrees to sell to the Purchaser, and the Purchaser hereby agrees to purchase from the Company, the Note and the Warrant. The offering of the Note and the Warrant purchased on the Closing Date shall be known as the “Offering.” A form of the Note is annexed hereto as Exhibit A. The Note will mature on the Maturity Date (as defined in the Note). Collectively, the Note and the Warrant (as defined in Section 2) and the Common Stock issuable upon exercise of the Warrant are referred to as the “Securities.”

2. Fees and Warrant. On the Closing Date:

(a) The Company will issue and deliver to the Purchaser a Warrant to purchase up to 3,750,000 shares of Common Stock in connection with the Offering (the “Warrant”) pursuant to Section 1 hereof. The Warrant must be delivered on the Closing Date. A form of Warrant is annexed hereto as Exhibit B. The shares of Common Stock issuable upon exercise of the Warrant are hereinafter as referred to as the “Warrant Shares”.

(b)

Subject to the terms of Section 2(c) below, the Company shall pay to Laurus Capital Management, LLC, the investment manager of the Purchaser (“LCM”), a non-refundable payment in an amount equal to $415,000 (the “LCM Payment”) which LCM Payment is intended to defray certain of LCM’s due diligence, legal and other expenses incurred in connection with the entering into of this Agreement and the Related Agreements and all related matters.

(c)

The LCM Paymentshall be paid at closing out of funds held pursuant to a Funds Escrow Agreement of even date herewith among the Company, Purchaser and an Escrow Agent in the form attached hereto as Exhibit C (the “Funds Escrow Agreement”) and a disbursement letter in the form attached hereto as Exhibit D (the “Disbursement Letter”).

3. Closing, Delivery and Payment.

          3.1 Closing. Subject to the terms and conditions set forth herein, the closing of the transactions contemplated hereby (the “Closing”), shall take place on such date, and at such time or place, as the Company and Purchaser shall mutually agree (such date is hereinafter referred to as the “Closing Date”).

          3.2 Delivery. Pursuant to the Escrow Agreement in the form attached hereto as Exhibit C, at the Closing on the Closing Date, the Company will deliver to the Purchaser, among other things, a Note in the form attached as Exhibit A representing the aggregate principal amount of Twelve Million Dollars ($12,000,000) and a Warrant in the form attached as Exhibit B in the Purchaser’s name representing 3,750,000 Warrant Shares and the Purchaser will deliver to the Company, among other things, the amounts set forth in the Disbursement Letter by wire transfer of immediately available funds to an account of the Company as the Company shall direct in writing. The Company hereby acknowledges and agrees that Purchaser’s obligation to purchase the Note from the Company on the Closing Date shall be contingent upon the satisfaction (or waiver by the Purchaser in its sole discretion) of the items and matters set forth in the closing checklist provided by the Purchaser to the Company on or prior to the Closing Date.

4. Representations and Warranties of the Company. The Company hereby represents and warrants to the Purchaser as follows:

          4.1 Organization, Good Standing and Qualification. Each of the Company and each of its Subsidiaries is a corporation, partnership or limited liability company, as the case may be, duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. Each of the Company and each of its Subsidiaries has the corporate power and authority to own and operate its properties and assets. The Company has the corporate power and authority to execute and deliver (i) this Agreement, (ii) the Note and the Warrant to be issued in connection with this Agreement, (iii) the Master Security Agreement dated as of the date hereof between the Company, certain Subsidiaries of the Company and the Purchaser (as amended, modified and/or supplemented from time to time, the “Master Security Agreement”), (iv) the Registration Rights Agreement relating to the Warrant dated as of the date hereof between the Company and the Purchaser (as amended, modified or supplemented from time to time, the “Registration Rights Agreement”), (v) the Subsidiary Guaranty dated as of the date

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hereof made by certain Subsidiaries of the Company (as amended, modified and/or supplemented from time to time, the “Subsidiary Guaranty”), (vi) the Stock Pledge Agreement dated as of the date hereof among the Company, certain Subsidiaries of the Company and the Purchaser (as amended, modified and/or or supplemented from time to time, the “Stock Pledge Agreement”), (vii) the Grant of Security Interests in Patents and Trademarks dated as of the date hereof among the Company, certain Subsidiaries of the Company and the Purchaser (as amended, modified or supplemented from time to time, the “IP Grant”), (viii) the Funds Escrow Agreement dated as of the date hereof among the Company, the Purchaser and the escrow agent referred to therein (as amended, modified or supplemented from time to time, the “Funds Escrow Agreement”) and (ix) all other agreements related to this Agreement and the Securities and referred to herein (the preceding clauses (ii) through (ix), collectively, the “Related Agreements”), to issue and sell the Note, to issue and sell the Warrant and the Warrant Shares, and to carry out the provisions of this Agreement and the Related Agreements and to carry on its business as presently conducted. Each of the Company and each of its Subsidiaries is duly qualified and is authorized to do business and is in good standing as a foreign corporation, partnership or limited liability company, as the case may be, in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so has not, or could not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the business, assets, liabilities, condition (financial or otherwise), properties, operations or prospects of the Company and its Subsidiaries, taken individually and as a whole (a “Material Adverse Effect”).

          4.2 Subsidiaries. Each direct and indirect Subsidiary of the Company, the direct owner of such Subsidiary and its percentage ownership thereof, is set forth on Schedule 4.2. For the purpose of this Agreement, a “Subsidiary” of any person or entity means (i) a corporation or other entity whose shares of stock or other ownership interests having ordinary voting power (other than stock or other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the directors of such corporation, or other persons or entities performing similar functions for such person or entity, are owned, directly or indirectly, by such person or entity or (ii) a corporation or other entity in which such person or entity owns, directly or indirectly, more than 50% of the equity interests at such time.

          4.3 Capitalization; Voting Rights.

(a)

The authorized capital stock of the Company, as of the date hereof consists of 205,000,000 shares, of which 200,000,000 are shares of Common Stock, 13,087,142 shares of which are issued and outstanding, and 5,000,000 are shares of preferred stock, par value $0.001 per share, 2,450,457 of which shares of preferred stock are issued and outstanding. The authorized capital stock of each Subsidiary of the Company is set forth on Schedule 4.3.

(b)

Except as disclosed on Schedule 4.3, other than: (i) the shares reserved for issuance under the Company’s 2000 Equity Incentive Plan or the 2006 Stock Option Plan; and (ii) shares which may be granted pursuant to this Agreement, the Related Agreements and other agreements between the Company and the Purchaser, there are no outstanding options, warrants,

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	rights (including conversion or preemptive rights and rights of first refusal), proxy or stockholder agreements, or arrangements or agreements of any kind for the purchase or acquisition from the Company of any of its securities. Except as disclosed on Schedule 4.3, neither the offer, issuance or sale of the Note or the Warrant, or the issuance of any of the Warrant Shares, nor the consummation of any transaction contemplated hereby will result in a change in the price or number of any securities of the Company outstanding, under anti-dilution or other similar provisions contained in or affecting any such securities.
(c)	All issued and outstanding shares of the Company’s Common Stock: (i) have been duly authorized and validly issued and are fully paid and nonassessable; and (ii) were issued in compliance with all applicable state and federal laws concerning the issuance of securities.
(d)	The rights, preferences, privileges and restrictions of the shares of the Common Stock are as stated in the Company’s Certificate of Incorporation (the “Charter”). The Warrant Shares have been duly and validly reserved for issuance. When issued in compliance with the provisions of this Agreement and the Company’s Charter, the Securities will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances; provided, however, that the Securities may be subject to restrictions on transfer under state and/or federal securities laws as set forth herein or as otherwise required by such laws at the time a transfer is proposed.

          4.4 Authorization; Binding Obligations. All corporate action on the part of the Company (including its officers and directors) necessary for the authorization of this Agreement and the Related Agreements, the performance of all obligations of the Company hereunder and under the other Related Agreements at the Closing and, the authorization, sale, issuance and delivery of the Note and Warrant has been taken or will be taken prior to the Closing. This Agreement and the other Related Agreements, when executed and delivered, will be valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except:

(a)	as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights; and
(b)	general principles of equity that restrict the availability of equitable or legal remedies.

The sale of the Note is not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with. The issuance of the Warrant and the subsequent exercise of the Warrant for Warrant Shares are not and will not be subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with.

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          4.5 Liabilities; Solvency. (a) To the Company’s knowledge, neither the Company nor any of its Subsidiaries has any material contingent liabilities, except current liabilities incurred in the ordinary course of business and liabilities disclosed in any of the Company’s filings under the Securities Exchange Act of 1934 (“Exchange Act”) made prior to the date of this Agreement (collectively, the “Exchange Act Filings”), copies of which have been provided to the Purchaser.

          (b) Both before and after giving effect to (a) the transactions contemplated hereby that are to be consummated on the Closing Date, (b) the disbursement of the proceeds of, or the assumption of the liability in respect of, the Note pursuant to the instructions or agreement of the Company and (c) the payment and accrual of all transaction costs in connection with the foregoing, the Company and each Subsidiary of the Company, is and will be, Solvent. For purposes of this Section 4.5(b), “Solvent” means, with respect to any person on a particular date, that on such date (a) the fair value of the property of such person is greater than the total amount of liabilities, including contingent liabilities, of such person; (b) the present fair salable value of the assets of such person is not less than the amount that will be required to pay the probable liability of such person on its debts as they become absolute and matured; (c) such person does not intend to, and does not believe that it will, incur debts or liabilities beyond such person’s ability to pay as such debts and liabilities mature; and (d) such person is not engaged in a business or transaction, and is not about to engage in a business or transaction, for which such person’s property would constitute and unreasonably small capital. The amount of contingent liabilities (such as litigation, guaranties and pension plan liabilities) at any time shall be computed as the amount that, in light of all the facts and circumstances existing at the time, represents the amount that can reasonably be expected to become an actual or matured liability.

          4.6 Agreements; Action. Except as set forth on Schedule 4.6:

(a)

there are no agreements, understandings, instruments, contracts, proposed transactions, judgments, orders, writs or decrees to which the Company or any of its Subsidiaries is a party or by which it is bound which may involve: (i) obligations (contingent or otherwise) of, or payments to, the Company in excess of $100,000 (other than obligations of, or payments to, the Company arising from purchase, sale or license agreements entered into in the ordinary course of business); or (ii) the transfer or license of any patent, copyright, trade secret or other proprietary right to or from the Company (other than licenses arising from the purchase of “off the shelf” or other standard products); or (iii) provisions restricting the development, manufacture or distribution of the Company’s products or services; or (iv) indemnification by the Company with respect to infringements of proprietary rights.

(b)

Since December 31, 2006, except equipment leasing through CommVest, LLC, as previously consented to by Purchaser, neither the Company nor any of its Subsidiaries has: (i) declared or paid any dividends, or

5

authorized or made any distribution upon or with respect to any class or series of its capital stock; (ii) incurred any indebtedness for money borrowed or any other liabilities (other than ordinary course obligations) individually in excess of $100,000 or, in the case of indebtedness and/or liabilities individually less than $100,000, in excess of $250,000 in the aggregate; (iii) made any loans or advances to any person not in excess, individually or in the aggregate, of $100,000, other than ordinary course advances for travel expenses; or (iv) sold, exchanged or otherwise disposed of any of its assets or rights valued in excess of $100,000, other than in the ordinary course of business.

(c)

For the purposes of subsections (a) and (b) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated therewith) shall be aggregated for the purpose of meeting the individual minimum dollar amounts of such subsections.

          4.7 Obligations to Related Parties. Except as set forth on Schedule 4.7, there are no obligations of the Company or any of its Subsidiaries to officers, directors, stockholders or employees of the Company or any of its Subsidiaries other than:

(a)	for payment of salary for services rendered and for bonus payments;
(b)	reimbursement for reasonable expenses incurred on behalf of the Company and its Subsidiaries;
(c)	for other standard employee benefits made generally available to all employees (including stock option agreements outstanding under any stock option plan approved by the Board of Directors of the Company); and
(d)	obligations listed in the Company’s financial statements or disclosed in any of its Exchange Act Filings.

Except as described above or set forth on Schedule 4.7 or in the Company’s Exchange Act Filings, none of the officers, directors or, to the best of the Company’s knowledge, key employees or stockholders of the Company or any members of their immediate families, are indebted to the Company, individually or in the aggregate, in excess of $50,000 or have any direct or indirect ownership interest in any firm or corporation with which the Company is affiliated or with which the Company has a business relationship, or any firm or corporation which competes with the Company, other than passive investments in publicly traded companies (representing less than one percent (1%) of such company) which may compete with the Company. Except as described above, no officer, director or stockholder, or any member of their immediate families, is, directly or indirectly, interested in any material contract with the Company and no agreements, understandings or proposed transactions are contemplated between

6

the Company and any such person. Except as set forth on Schedule 4.7, the Company is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation.

          4.8 Changes. Since December 31, 2006, except as disclosed in any Exchange Act Filing or in any Schedule to this Agreement or to any of the Related Agreements, there has not been:

(a)	any change in the business, assets, liabilities, condition (financial or otherwise), properties, operations or prospects of the Company or any of its Subsidiaries, which individually or in the aggregate has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;
(b)	any resignation or termination of any officer, key employee or group of employees of the Company or any of its Subsidiaries;
(c)	any material change, except in the ordinary course of business, in the contingent obligations of the Company or any of its Subsidiaries by way of guaranty, endorsement, indemnity, warranty or otherwise;
(d)	any damage, destruction or loss, whether or not covered by insurance, has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;
(e)	any waiver by the Company or any of its Subsidiaries of a valuable right or of a material debt owed to it;
(f)	any direct or indirect loans made by the Company or any of its Subsidiaries to any stockholder, employee, officer or director of the Company or any of its Subsidiaries, other than advances made in the ordinary course of business;
(g)	any material change in any compensation arrangement or agreement with any employee, officer, director or stockholder of the Company or any of its Subsidiaries;
(h)	any declaration or payment of any dividend or other distribution of the assets of the Company or any of its Subsidiaries;
(i)	any labor organization activity related to the Company or any of its Subsidiaries;
(j)	any debt, except for equipment leasing through Commvest, LLC as previously consented to by Purchaser, obligation or liability incurred, assumed or guaranteed by the Company or any of its Subsidiaries, except those for immaterial amounts and for current liabilities incurred in the ordinary course of business;

7

(k)	any sale, assignment or transfer of any patents, trademarks, copyrights, trade secrets or other intangible assets owned by the Company or any of its Subsidiaries;
(l)	any change in any material agreement to which the Company or any of its Subsidiaries is a party or by which either the Company or any of its Subsidiaries is bound which either individually or in the aggregate has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;
(m)	any other event or condition of any character that, either individually or in the aggregate, has had, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; or
(n)	any arrangement or commitment by the Company or any of its Subsidiaries to do any of the acts described in subsection (a) through (m) above.

          4.9 Title to Properties and Assets; Liens, Etc. Except as set forth on Schedule 4.9, each of the Company and each of its Subsidiaries has good and marketable title to its properties and assets, and good title to its leasehold estates, in each case subject to no mortgage, pledge, lien, lease, encumbrance or charge, other than:

(a)	those resulting from taxes which have not yet become delinquent;
(b)	minor liens and encumbrances which do not materially detract from the value of the property subject thereto or materially impair the operations of the Company or any of its Subsidiaries; and
(c)	those that have otherwise arisen in the ordinary course of business.

All facilities, machinery, equipment, fixtures, vehicles and other properties owned, leased or used by the Company and its Subsidiaries are in good operating condition and repair (ordinary wear and tear excepted) and are reasonably fit and usable for the purposes for which they are being used. Except as set forth on Schedule 4.9, the Company and its Subsidiaries are in compliance with all material terms of each lease to which it is a party or is otherwise bound.

8

          4.10 Intellectual Property. Each of the Company and each of its Subsidiaries owns or possesses sufficient legal rights to all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights and processes necessary for its business as now conducted and to the Company’s knowledge, as presently proposed to be conducted (the “Intellectual Property”), without any known infringement of the rights of others. There are no outstanding options, licenses or agreements of any kind relating to the foregoing proprietary rights, nor is the Company or any of its Subsidiaries bound by or a party to any options, licenses or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and other proprietary rights and processes of any other person or entity other than such licenses or agreements arising from the purchase of “off the shelf” or standard products.

(b)	Neither the Company nor any of its Subsidiaries has received any communications alleging that the Company or any of its Subsidiaries has violated any of the patents, trademarks, service marks, trade names, copyrights or trade secrets or other proprietary rights of any other person or entity, nor is the Company or any of its Subsidiaries aware of any basis therefor.
(c)	The Company does not believe it is or will be necessary to utilize any inventions, trade secrets or proprietary information of any of its employees made prior to their employment by the Company or any of its Subsidiaries, except for inventions, trade secrets or proprietary information that have been rightfully assigned to the Company or any of its Subsidiaries.

          4.11 Compliance with Other Instruments. Except as disclosed on Schedule 4.11, neither the Company nor any of its Subsidiaries is in violation or default of (x) any term of its Charter or Bylaws, or (y) of any provision of any indebtedness, mortgage, indenture, contract, agreement or instrument to which it is party or by which it is bound or of any judgment, decree, order or writ, which violation or default, in the case of this clause (y), has had, or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. The execution, delivery and performance of and compliance with this Agreement and the Related Agreements to which it is a party, and the issuance and sale of the Note by the Company and the other Securities by the Company, each pursuant hereto and thereto, will not, with or without the passage of time or giving of notice, result in any such material violation, or be in conflict with or constitute a default under any such term or provision, or result in the creation of any mortgage, pledge, lien, encumbrance or charge upon any of the properties or assets of the Company or any of its Subsidiaries or the suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to the Company, its business or operations or any of its assets or properties.

          4.12 Litigation. Except as set forth on Schedule 4.12 hereto, there is no action, suit, proceeding or investigation pending or, to the Company’s knowledge, currently threatened

9

against the Company or any of its Subsidiaries that prevents the Company or any of its Subsidiaries from entering into this Agreement or the other Related Agreements, or from consummating the transactions contemplated hereby or thereby, or which has had, or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect or any change in the current equity ownership of the Company or any of its Subsidiaries, nor is the Company aware that there is any basis to assert any of the foregoing. Neither the Company nor any of its Subsidiaries is a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. There is no action, suit, proceeding or investigation by the Company or any of its Subsidiaries currently pending or which the Company or any of its Subsidiaries intends to initiate.

          4.13 Tax Returns and Payments. Except as set forth on Schedule 4.13, each of the Company and each of its Subsidiaries has timely filed all tax returns (federal, state and local) required to be filed by it. All taxes shown to be due and payable on such returns, any assessments imposed, and all other taxes due and payable by the Company or any of its Subsidiaries on or before the Closing, have been paid or will be paid prior to the time they become delinquent. Except as set forth on Schedule 4.13, neither the Company nor any of its Subsidiaries has been advised:

(a)	that any of its returns, federal, state or other, have been or are being audited as of the date hereof; or
(b)	of any deficiency in assessment or proposed judgment to its federal, state or other taxes.

The Company has no knowledge of any liability of any tax to be imposed upon its properties or assets as of the date of this Agreement that is not adequately provided for.

          4.14 Employees. Except as set forth on Schedule 4.14, neither the Company nor any of its Subsidiaries has any collective bargaining agreements with any of its employees. There is no labor union organizing activity pending or, to the Company’s knowledge, threatened with respect to the Company or any of its Subsidiaries. Except as disclosed in the Exchange Act Filings or on Schedule 4.14, neither the Company nor any of its Subsidiaries is a party to or bound by any currently effective employment contract, deferred compensation arrangement, bonus plan, incentive plan, profit sharing plan, retirement agreement or other employee compensation plan or agreement. To the Company’s knowledge, no employee of the Company or any of its Subsidiaries, nor any consultant with whom the Company or any of its Subsidiaries has contracted, is in violation of any term of any employment contract, proprietary information agreement or any other agreement relating to the right of any such individual to be employed by, or to contract with, the Company or any of its Subsidiaries because of the nature of the business to be conducted by the Company or any of its Subsidiaries; and to the Company’s knowledge the continued employment by the Company or any of its Subsidiaries of its present employees, and the performance of the Company’s and its Subsidiaries’ contracts with its independent contractors, will not result in any such violation. Neither the Company nor any of its Subsidiaries is aware that any of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with their

10

duties to the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries has received any notice alleging that any such violation has occurred. Except for employees who have a current effective employment agreement with the Company or any of its Subsidiaries, no employee of the Company or any of its Subsidiaries has been granted the right to continued employment by the Company or any of its Subsidiaries or to any material compensation following termination of employment with the Company or any of its Subsidiaries. Except as set forth on Schedule 4.14, the Company is not aware that any officer, key employee or group of employees intends to terminate his, her or their employment with the Company or any of its Subsidiaries, nor does the Company or any of its Subsidiaries have a present intention to terminate the employment of any officer, key employee or group of employees.

          4.15 Registration Rights and Voting Rights. Except as set forth on Schedule 4.15 and except as disclosed in Exchange Act Filings, neither the Company nor any of its Subsidiaries is presently under any obligation, and neither the Company nor any of its Subsidiaries has granted any rights, to register any of the Company’s or its Subsidiaries’ presently outstanding securities or any of its securities that may hereafter be issued. Except as set forth on Schedule 4.15 and except as disclosed in Exchange Act Filings, to the Company’s knowledge, no stockholder of the Company or any of its Subsidiaries has entered into any agreement with respect to the voting of equity securities of the Company or any of its Subsidiaries.

          4.16 Compliance with Laws; Permits. Neither the Company nor any of its Subsidiaries is in violation of any applicable statute, rule, regulation, order or restriction of any domestic or foreign government or any instrumentality or agency thereof in respect of the conduct of its business or the ownership of its properties which has had, or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. No governmental orders, permissions, consents, approvals or authorizations are required to be obtained and no registrations or declarations are required to be filed in connection with the execution and delivery of this Agreement or any other Related Agreement and the issuance of any of the Securities, except such as has been duly and validly obtained or filed, or with respect to any filings that must be made after the Closing, as will be filed in a timely manner. Each of the Company and its Subsidiaries has all material franchises, permits, licenses and any similar authority necessary for the conduct of its business as now being conducted by it, the lack of which could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

          4.17 Environmental and Safety Laws. Neither the Company nor any of its Subsidiaries is in violation of any applicable statute, law or regulation relating to the environment or occupational health and safety, and to its knowledge, no material expenditures are or will be required in order to comply with any such existing statute, law or regulation. Except as set forth on Schedule 4.17, no Hazardous Materials (as defined below) are used or have been used, stored, or disposed of by the Company or any of its Subsidiaries or, to the Company’s knowledge, by any other person or entity on any property owned, leased or used by the Company or any of its Subsidiaries. For the purposes of the preceding sentence, “Hazardous Materials” shall mean:

(a) materials which are listed or otherwise defined as “hazardous” or “toxic” under any applicable local, state, federal and/or foreign laws and regulations that govern the existence and/or remedy of contamination on property, the protection of the environment from contamination, the

11

	control of hazardous wastes, or other activities involving hazardous substances, including building materials; or
(b)	any petroleum products or nuclear materials.

          4.18 Valid Offering. Assuming the accuracy of the representations and warranties of the Purchaser contained in this Agreement, the offer, sale and issuance of the Securities will be exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), and will have been registered or qualified (or are exempt from registration and qualification) under the registration, permit or qualification requirements of all applicable state securities laws.

          4.19 Full Disclosure. Each of the Company and each of its Subsidiaries has provided the Purchaser with all information requested by the Purchaser in connection with its decision to purchase the Note and Warrant. Neither this Agreement, the Related Agreements, the exhibits and schedules hereto and thereto nor any other document delivered by the Company or any of its Subsidiaries to Purchaser or its attorneys or agents in connection herewith or therewith or with the transactions contemplated hereby or thereby, contain any untrue statement of a material fact nor omit to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances in which they are made, not misleading. Any financial projections and other estimates provided to the Purchaser by the Company or any of its Subsidiaries were based on the Company’s and its Subsidiaries’ experience in the industry and on assumptions of fact and opinion as to future events which the Company or any of its Subsidiaries, at the date of the issuance of such projections or estimates, believed to be reasonable.

          4.20 Insurance. Except as disclosed on Schedule 4.20, each of the Company and each of its Subsidiaries has general commercial, product liability, fire and casualty insurance policies with coverages which the Company believes are customary for companies similarly situated to the Company and its Subsidiaries in the same or similar business.

          4.21 SEC Reports. Except as set forth on Schedule 4.21, the Company has filed all proxy statements, reports and other documents required to be filed by it under the Securities Exchange Act 1934, as amended (the “Exchange Act”). The Company has furnished the Purchaser with a copy of its Annual Report on Form 10-KSB for its fiscal years ended December 31, 2005 and December 31, 2006 and its Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2007 (the “SEC Reports”). To the knowledge of the Company, the SEC Reports were, at the time of its filing, in substantial compliance with the requirements of its form and neither the SEC Reports, nor the financial statements (and the notes thereto) included in the SEC Reports, as of its filing date, contained any untrue statement of a material fact or omitted 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.

          4.22 Listing. The Company’s Common Stock is listed for trading on the National Association of Securities Dealers, Inc. Over-the-Counter Bulletin Board (“OTC BB”) and satisfies all requirements for the continuation of such listing. The Company has not received any

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notice that its Common Stock will be delisted from OTC BB or that its Common Stock does not meet all requirements for listing.

          4.23 No Integrated Offering. Neither the Company, nor any of its Subsidiaries or affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances that would cause the offering of the Securities pursuant to this Agreement or any of the Related Agreements to be integrated with prior offerings by the Company for purposes of the Securities Act which would prevent the Company from selling the Securities pursuant to Rule 506 under the Securities Act, or any applicable exchange-related stockholder approval provisions, nor will the Company or any of its affiliates or Subsidiaries take any action or steps that would cause the offering of the Securities to be integrated with other offerings.

          4.24 Stop Transfer. The Securities are restricted securities as of the date of this Agreement. Neither the Company nor any of its Subsidiaries will issue any stop transfer order or other order impeding the sale and delivery of any of the Securities at such time as the Securities are registered for public sale or an exemption from registration is available, except as required by state and federal securities laws.

4.25

Dilution. The Company specifically acknowledges that its obligation to issue the shares of Common Stock upon exercise of the Warrant is binding upon the Company and enforceable regardless of the dilution such issuance may have on the ownership interests of other shareholders of the Company.

4.26

Patriot Act. The Company certifies that, to the best of Company’s knowledge, neither the Company nor any of its Subsidiaries has been designated, and is not owned or controlled, by a “suspected terrorist” as defined in Executive Order 13224. The Company hereby acknowledges that the Purchaser seeks to comply with all applicable laws concerning money laundering and related activities. In furtherance of those efforts, the Company hereby represents, warrants and agrees that: (i) none of the cash or property that the Company or any of its Subsidiaries will pay or will contribute to the Purchaser has been or shall be derived from, or related to, any activity that is deemed criminal under United States law; and (ii) no contribution or payment by the Company or any of its Subsidiaries to the Purchaser, to the extent that they are within the Company’s and/or its Subsidiaries’ control shall cause the Purchaser to be in violation of the United States Bank Secrecy Act, the United States International Money Laundering Control Act of 1986 or the United States International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001. The Company shall promptly notify the Purchaser if any of these representations ceases to be true and accurate regarding the Company or any of its Subsidiaries. The Company agrees to provide the Purchaser any additional information regarding the Company or any of its Subsidiaries that the Purchaser deems necessary or convenient to ensure compliance with all applicable laws concerning money laundering and similar activities. The Company understands and agrees that if at any time it is discovered that any of the foregoing representations are incorrect, or if otherwise

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required by applicable law or regulation related to money laundering or similar activities, the Purchaser may undertake appropriate actions to ensure compliance with applicable law or regulation, including but not limited to segregation and/or redemption of the Purchaser’s investment in the Company. The Company further understands that the Purchaser may release confidential information about the Company and its Subsidiaries and, if applicable, any underlying beneficial owners, to proper authorities if the Purchaser, in its sole discretion, determines that it is in the best interests of the Purchaser in light of relevant rules and regulations under the laws set forth in subsection (ii) above.

          4.27 ERISA. Based upon the Employee Retirement Income Security Act of 1974 (“ERISA”), and the regulations and published interpretations thereunder: (i) neither the Company nor any of its Subsidiaries has engaged in any Prohibited Transactions (as defined in Section 406 of ERISA and Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”)); (ii) each of the Company and each of its Subsidiaries has met all applicable minimum funding requirements under Section 302 of ERISA in respect of its plans; (iii) neither the Company nor any of its Subsidiaries has any knowledge of any event or occurrence which would cause the Pension Benefit Guaranty Corporation to institute proceedings under Title IV of ERISA to terminate any employee benefit plan(s); (iv) neither the Company nor any of its Subsidiaries has any fiduciary responsibility for investments with respect to any plan existing for the benefit of persons other than the Company’s or such Subsidiary’s employees; and (v) neither the Company nor any of its Subsidiaries has withdrawn, completely or partially, from any multi-employer pension plan so as to incur liability under the Multiemployer Pension Plan Amendments Act of 1980.

5. Representations and Warranties of the Purchaser. The Purchaser hereby represents and warrants to the Company as follows (such representations and warranties do not lessen or obviate the representations and warranties of the Company set forth in this Agreement):

          5.1 No Shorting. Neither the Purchaser nor any of its affiliates and investment partners has, will nor will cause any person or entity, directly, to engage in “short sales” of the Company’s Common Stock, as long as the Note shall be outstanding.

          5.2 Requisite Power and Authority. The Purchaser has all necessary power and authority under all applicable provisions of law to execute and deliver this Agreement and the Related Agreements and to carry out their provisions. All corporate action on Purchaser’s part required for the lawful execution and delivery of this Agreement and the Related Agreements have been or will be effectively taken prior to the Closing. Upon their execution and delivery, this Agreement and the Related Agreements will be valid and binding obligations of Purchaser, enforceable in accordance with their terms, except:

(a)	as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights; and
(b)	as limited by general principles of equity that restrict the availability of equitable and legal remedies.

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          5.3 Investment Representations. Purchaser understands that the Securities are being offered and sold pursuant to an exemption from registration contained in the Securities Act based in part upon Purchaser’s representations contained in the Agreement, including, without limitation, that the Purchaser is an “accredited investor” within the meaning of Regulation D under the Securities Act. The Purchaser confirms that it has received or has had full access to all the information it considers necessary or appropriate to make an informed investment decision with respect to the Note and the Warrant to be purchased by it under this Agreement and the Warrant Shares acquired by it upon the exercise of the Warrant, respectively. The Purchaser further confirms that it has had an opportunity to ask questions and receive answers from the Company regarding the Company’s and its Subsidiaries’ business, management and financial affairs and the terms and conditions of the Offering, the Note, the Warrant and the Securities and to obtain additional information (to the extent the Company possessed such information or could acquire it without unreasonable effort or expense) necessary to verify any information furnished to the Purchaser or to which the Purchaser had access.

          5.4 Purchaser Bears Economic Risk. The Purchaser has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. The Purchaser must bear the economic risk of this investment until the Securities are sold pursuant to: (i) an effective registration statement under the Securities Act; or (ii) an exemption from registration is available with respect to such sale.

          5.5 Acquisition for Own Account. The Purchaser is acquiring the Note and Warrant and the Warrant Shares for the Purchaser’s own account for investment only, and not as a nominee or agent and not with a view towards or for resale in connection with their distribution.

          5.6 Purchaser Can Protect Its Interest. By reason of its, or of its management’s, business and financial experience, the Purchaser has the capacity to evaluate the merits and risks of its investment in the Note, the Warrant and the Securities and to protect its own interests in connection with the transactions contemplated in this Agreement and the other Related Agreements. Further, Purchaser is aware of no publication of any advertisement in connection with the transactions contemplated in the Agreement or the Related Agreements.

          5.7 Accredited Investor. The Purchaser is an accredited investor within the meaning of Regulation D under the Securities Act.

          5.8 Legends.

(a)	The Note shall bear substantially the following legend:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE

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UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO INCENTRA SOLUTIONS, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.
(b)	The Warrant Shares, if not issued by DWAC system (as hereinafter defined), shall bear a legend which shall be in substantially the following form until such shares are covered by an effective registration statement filed with the SEC:
“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT AND APPLICABLE STATE LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO INCENTRA SOLUTIONS, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.”
(c)	The Warrant shall bear substantially the following legend:
“THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT OR THE UNDERLYING SHARES OF COMMON STOCK UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO INCENTRA SOLUTIONS, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.”

6. Covenants of the Company. The Company covenants and agrees with the Purchaser that, so long as the Note remains outstanding:

          6.1 Stop-Orders. The Company will advise the Purchaser, promptly after it receives notice of issuance by the Securities and Exchange Commission (the “SEC”), any state securities commission or any other regulatory authority of any stop order or of any order preventing or suspending any offering of any securities of the Company, or of the suspension of the qualification of the Common Stock of the Company for offering or sale in any jurisdiction, or the initiation of any proceeding for any such purpose.

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          6.2 Listing. The Company shall promptly secure the listing of the shares of Common Stock issuable upon the exercise of the Warrant on the OTC BB (the “Principal Market”), and shall maintain such listing so long as any other shares of Common Stock shall be so listed. The Company will maintain the listing of its Common Stock on the Principal Market or on Nasdaq or any securities exchange acceptable to the Purchaser, and, to the extent applicable to the Company, will comply in all material respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the National Association of Securities Dealers (“NASD”) and such exchanges, as applicable.

          6.3 Market Regulations. The Company shall notify the SEC, NASD and applicable state authorities, in accordance with their requirements, to the extent applicable to the Company, of the transactions contemplated by this Agreement, and shall take all other necessary action and proceedings as may be required and permitted by applicable law, rule and regulation, for the legal and valid issuance of the Securities to the Purchaser and promptly provide copies thereof to the Purchaser.

          6.4 Reporting Requirements. The Company will timely file with the SEC all reports required to be filed pursuant to the Exchange Act and refrain from terminating its status as an issuer required by the Exchange Act to file reports thereunder even if the Exchange Act or the rules or regulations thereunder would permit such termination.

          6.5 Use of Funds. The Company agrees that it will use (i) $11,000,000 of the proceeds of the sale of the Note to consummate the Contemplated Acquisitions previously disclosed to the Purchaser, (ii) $1,000,000 of the proceeds of the sale of the Note to refinance that certain Term Note, issued as of March 31, 2006 by the Company to Laurus Master Fund, Ltd. and (iii) the remainder of the proceeds of the sale of the Note and the proceeds of the sale of the Warrant for general working capital and general business purposes of the Company and its Subsidiaries.

          6.6 Access to Facilities. Each of the Company and each of its Subsidiaries will permit any representatives designated by the Purchaser (or any successor of the Purchaser), upon reasonable notice and during normal business hours, at such person’s expense and accompanied by a representative of the Company, to:

(a)	visit and inspect any of the properties of the Company or any of its Subsidiaries;
(b)	examine the corporate and financial records of the Company or any of its Subsidiaries (unless such examination is not permitted by federal, state or local law or by contract) and make copies thereof or extracts therefrom; and
(c)	discuss the affairs, finances and accounts of the Company or any of its Subsidiaries with the directors, officers and independent accountants of the Company or any of its Subsidiaries.

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Notwithstanding the foregoing, neither the Company nor any of its Subsidiaries will provide any material, non-public information to the Purchaser unless the Purchaser signs a confidentiality agreement and otherwise complies with Regulation FD, under the federal securities laws.

          6.7 Taxes. Each of the Company and each of its Subsidiaries will promptly pay and discharge, or cause to be paid and discharged, when due and payable, all lawful taxes, assessments and governmental charges or levies imposed upon the income, profits, property or business of the Company and its Subsidiaries; provided, however, that any such tax, assessment, charge or levy need not be paid if the validity thereof shall currently be contested in good faith by appropriate proceedings and if the Company and/or such Subsidiary shall have set aside on its books adequate reserves with respect thereto, and provided, further, that the Company and its Subsidiaries will pay all such taxes, assessments, charges or levies forthwith upon the commencement of proceedings to foreclose any lien which may have attached as security therefor.

          6.8 Insurance. Each of the Company and its Subsidiaries will keep its assets which are of an insurable character insured by financially sound and reputable insurers against loss or damage by fire, explosion and other risks customarily insured against by companies in similar business similarly situated as the Company and its Subsidiaries; and the Company and its Subsidiaries will maintain, with financially sound and reputable insurers, insurance against other hazards and risks and liability to persons and property to the extent and in the manner which the Company reasonably believes is customary for companies in similar business similarly situated as the Company and its Subsidiaries and to the extent available on commercially reasonable terms. The Company and each of its Subsidiaries will jointly and severally bear the full risk of loss from any loss of any nature whatsoever with respect to the assets pledged to the Purchaser as security for its obligations hereunder and under the Related Agreements. At the Company’s and each of its Subsidiaries’ joint and several cost and expense in amounts and with carriers reasonably acceptable to Purchaser, the Company and each of its Subsidiaries shall (i) keep all its insurable properties and properties in which it has an interest insured against the hazards of fire, flood, sprinkler leakage, those hazards covered by extended coverage insurance and such other hazards, and for such amounts, as is customary in the case of companies engaged in businesses similar to the Company’s or the respective Subsidiary’s including business interruption insurance; (ii) maintain public liability insurance against claims for personal injury, death or property damage suffered by others, in each case consistent with past practices; (iii) maintain all such worker’s compensation or similar insurance as may be required under the laws of any state or jurisdiction in which the Company or the respective Subsidiary is engaged in business; and (iv) furnish Purchaser with (x) copies of all policies and evidence of the maintenance of such policies at least thirty (30) days before any expiration date, (y) excepting the Company’s workers’ compensation policy, endorsements to such polices naming Purchaser as “co insured” or “additional insured” and appropriate loss payable endorsements in form and substance satisfactory to Purchaser, naming Purchaser as loss payee, an (z) evidence that as to Purchaser the insurance coverage shall not be impaired or invalidated by any act or neglect of the Company or any Subsidiary and the insurer will provide Purchaser with at least thirty (30) days notice prior to cancellation. The Company and each Subsidiary shall instruct the insurance carriers that in the event of any loss thereunder, the carriers shall make payment for such loss to the Company and/or the Subsidiary and Purchaser jointly. In the event that as of the date of receipt of each loss recovery upon any such insurance, the Purchaser has not declared an Event of Default with

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respect to this Agreement or any of the Related Agreements, then the Company and/or such Subsidiary shall be permitted to direct the application of such loss recovery proceeds toward investment in property, plant and equipment that would comprise “Collateral” secured by Purchaser’s security interest pursuant to a security agreement, with any surplus funds to be applied by the Company for working capital purposes. In the event that Purchaser has properly declared an Event of Default with respect to this Agreement or any of the Related Agreements, then all loss recoveries received by Purchaser upon any such insurance thereafter may be applied to the obligations of the Company hereunder and under the Related Agreements, in such order as the Purchaser may determine. Any surplus (following satisfaction of all Company obligations to Purchaser) shall be paid by Purchaser to the Company or applied as may be otherwise required by law. Any deficiency thereon shall be paid by the Company or the Subsidiary, as applicable, to Purchaser, on demand.

          6.9 Intellectual Property. Each of the Company and each of its material Subsidiaries shall maintain in full force and effect its existence, rights and franchises and all licenses and other rights to use Intellectual Property owned or possessed by it and reasonably deemed to be necessary to the conduct of its business.

          6.10 Properties. Each of the Company and each of its Subsidiaries will keep its properties in good repair, working order and condition, reasonable wear and tear excepted, and from time to time make all needful and proper repairs, renewals, replacements, additions and improvements thereto; and each of the Company and each of its Subsidiaries will at all times comply with each provision of all leases to which it is a party or under which it occupies property if the breach of such provision could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

          6.11 Confidentiality. The Company agrees that it will not disclose, and will not include in any public announcement, the name of the Purchaser, unless expressly agreed to by the Purchaser or unless and until such disclosure is required by law or applicable regulation, and then only to the extent of such requirement. Notwithstanding the foregoing, the Company may disclose Purchaser’s identity and the terms of this Agreement and the Related Agreements to its current and prospective debt and equity financing sources. The Purchaser shall be permitted to discuss, distribute or otherwise transfer any non-public information of the Company and its Subsidiaries in the Purchaser’s possession now or in the future to potential or actual (i) direct or indirect investors in the Purchaser and (ii) third party assignees or transferees of all or a portion of the obligations of the Company and/or any of its Subsidiaries hereunder and under the Related Agreements, to the extent that such investor or assignee or transferee enters into a confidentiality agreement for the benefit of the Company in such form as may be necessary to address the Company’s Regulation FD or other securities law requirements.

          6.12 Required Approvals. (I) For so long as twenty-five percent (25%) of the principal amount of the Note is outstanding, the Company, without the prior written consent of the Purchaser (which consent shall not be unreasonably withheld), shall not:

(a) directly or indirectly declare or pay any dividends, other than dividends paid to the Company or any of its wholly owned Subsidiaries;

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	(b)	liquidate, dissolve or effect a material reorganization (it being understood that in no event shall the Company dissolve, liquidate or merge with any other person or entity (unless the Company is the surviving entity);
	(c)	become subject to (including, without limitation, by way of amendment to or modification of) any agreement or instrument which by its terms would (under any circumstances) restrict the Company’s or any of its Subsidiaries right to perform the provisions of this Agreement, any other Related Agreement or any of the agreements contemplated hereby or thereby; and/or
	(d)	(i) create, incur, assume or suffer to exist any secured indebtedness (exclusive of trade debt and debt incurred to finance the purchase of equipment, not in excess of five percent (5%) per annum of the fair market value of the Company’s assets) other than (x) the Company’s indebtedness to Laurus, (y) indebtedness set forth on Schedule 6.12(c) attached hereto and made a part hereof and any refinancings or replacements thereof on terms no less favorable to the Purchaser than the indebtedness being refinanced or replaced, and (z) any debt incurred in connection with the purchase of assets in the ordinary course of business, or any refinancings or replacements thereof on terms no less favorable to the Purchaser than the indebtedness being refinanced or replaced; or (ii) cancel any debt owning to it in excess of $250,000 in the aggregate during any 12 month period; and/or
(e)       The Company shall not, and shall not permit any of its Subsidiaries to create or acquire any Subsidiary after the date hereof unless (i) such Subsidiary is a wholly-owned Subsidiary of the Company and (ii) such Subsidiary becomes party to the Master Security Agreement, the Stock Pledge Agreement and the Subsidiary Guarantee (either by executing a counterpart thereof or an assumption or joinder agreement in respect thereof) and, to the extent required by the Purchaser, satisfies each condition of this Agreement and the Related Agreements as if such Subsidiary were a Subsidiary on the Closing Date.

          6.13 Reissuance of Securities. The Company agrees to reissue certificates representing the Securities without the legends set forth in Section 5.7 above at such time as:

(a)	the holder thereof is permitted to dispose of such Securities pursuant to Rule 144(k) under the Securities Act; or
(b)	upon resale subject to an effective registration statement after such Securities are registered under the Securities Act.

The Company agrees to cooperate with the Purchaser in connection with all resales pursuant to Rule 144(d) and Rule 144(k) and provide legal opinions necessary to allow such resales provided the Company and its counsel receive reasonably requested representations from the selling Purchaser and broker, if any.

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          6.14 Opinion. On the Closing Date, the Company will deliver to the Purchaser an opinion in substantially the form attached hereto as Exhibit E. The Company will provide, at the Company’s expense, such other legal opinions in the future as are reasonably necessary for the exercise of the Warrant.

6.15	Margin Stock. The Company will not permit any of the proceeds of the Note or the Warrant to be used directly or indirectly to “purchase” or “carry” “margin stock” or to repay indebtedness incurred to “purchase” or “carry” “margin stock” within the respective meanings of each of the quoted terms under Regulation U of the Board of Governors of the Federal Reserve System as now and from time to time hereafter in effect.
6.16	[Intentionally Deleted]
6.17	Notice of Default. The Company shall from time to time diligently review its obligations hereunder and under the Related Agreements to confirm its compliance in all material respects with its duties hereunder and thereunder, and shall promptly notify the Purchaser of any event or circumstance that has resulted in, or could reasonably be expected to result in, the occurrence of any default or Event of Default (as defined in the Note) hereunder or thereunder. For purposes of this Section 6.17, the term “default” shall mean an event or condition the occurrence of which is, or with the lapse of time or the giving of notice or both would be, an Event of Default.

7. Covenants of the Purchaser. The Purchaser covenants and agrees with the Company as follows:

          7.1 Confidentiality. The Purchaser agrees that it will not disclose, and will not include in any public announcement, the name of the Company, unless expressly agreed to by the Company or unless and until such disclosure is required by law or applicable regulation, and then only to the extent of such requirement.

          7.2 Non-Public Information. The Purchaser agrees not to effect any sales in the shares of the Company’s Common Stock while in possession of material, non-public information regarding the Company if such sales would violate applicable securities law.

          7.3 Intentionally Omitted].

8. Covenants of the Company and Purchaser Regarding Indemnification.

          8.1 Company Indemnification. The Company agrees to indemnify, hold harmless, reimburse and defend the Purchaser, each of the Purchaser’s officers, directors, agents, affiliates, control persons, and principal shareholders, against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Purchaser which results, arises out of or is based upon: (i) any misrepresentation by the Company or any of its Subsidiaries or breach of any warranty by the Company or any of its Subsidiaries in this Agreement, any other Related Agreement or in any exhibits or schedules attached hereto or thereto; or (ii) any breach or default in performance by Company or any of its

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Subsidiaries of any covenant or undertaking to be performed by the Company or any of its Subsidiaries hereunder, under any other Related Agreement or any other agreement entered into by the Company and/or any of its Subsidiaries and Purchaser relating hereto or thereto.

          8.2 Purchaser’s Indemnification. Purchaser agrees to indemnify, hold harmless, reimburse and defend the Company and each of the Company’s officers, directors, agents, affiliates, control persons and principal shareholders, at all times against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Company which results, arises out of or is based upon: (i) any misrepresentation by Purchaser or breach of any warranty by Purchaser in this Agreement or any Related Agreement or in any exhibits or schedules attached hereto; or (ii) any breach or default in performance by Purchaser of any covenant or undertaking to be performed by Purchaser hereunder, under any Related Agreement or any other agreement entered into by the Company and Purchaser relating hereto or thereto.

          8.3 Procedures. The procedures and limitations set forth in Section 10.2(c) and (d) shall apply to the indemnifications set forth in Sections 8.1 and 8.2 above.

9. Registration Rights.

          9.1 Registration Rights Granted. At the Closing, the Company shall grant registration rights to the Purchaser pursuant to a Registration Rights Agreement dated as of even date herewith between the Company and the Purchaser.

          9.2 Offering Restrictions. Except as previously disclosed in the SEC Reports or in the Exchange Act Filings, or stock or stock options granted to employees or directors of the Company (these exceptions hereinafter referred to as the “Excepted Issuances”), neither the Company nor any of its Subsidiaries will issue any securities with a continuously variable/floating conversion feature which are or could be (by conversion or registration) free-trading securities (i.e. common stock subject to a registration statement) prior to the full repayment of the Note (together with all accrued and unpaid interest and fees related thereto) (the “Exclusion Period”).

          10. Miscellaneous.

10.1	Governing Law. THIS AGREEMENT AND THE OTHER RELATED AGREEMENTS SHALL BE
		GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
	(b)	THE COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR

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DISPUTES BETWEEN THE COMPANY, ON THE ONE HAND, AND THE PURCHASER, ON THE OTHER HAND, PERTAINING TO THIS AGREEMENT OR ANY OF THE RELATED AGREEMENTS OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OF THE OTHER RELATED AGREEMENTS; PROVIDED, THAT THE PURCHASER AND THE COMPANY ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW YORK, STATE OF NEW YORK; AND FURTHER PROVIDED, THAT, NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE PURCHASER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL (AS DEFINED IN THE MASTER SECURITY AGREEMENT) OR ANY OTHER SECURITY FOR THE OBLIGATIONS (AS DEFINED IN THE MASTER SECURITY AGREEMENT), OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE PURCHASER. THE COMPANY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND THE COMPANY HEREBY WAIVES ANY OBJECTION THAT IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. THE COMPANY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE COMPANY AT THE ADDRESS SET FORTH IN SECTION 10.8 AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE COMPANY’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

(c) THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE PURCHASER AND/OR THE COMPANY ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT, ANY OTHER RELATED AGREEMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO.

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          10.2 Survival. The representations, warranties, covenants and agreements made herein shall survive any investigation made by the Purchaser and the closing of the transactions contemplated hereby to the extent provided therein. All statements as to factual matters contained in any certificate or other instrument delivered by or on behalf of the Company pursuant hereto in connection with the transactions contemplated hereby shall be deemed to be representations and warranties by the Company hereunder solely as of the date of such certificate or instrument.

          10.3 Successors. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, heirs, executors and administrators of the parties hereto and shall inure to the benefit of and be enforceable by each person or entity which shall be a holder of the Securities from time to time, other than the holders of Common Stock which has been sold by the Purchaser pursuant to Rule 144 or an effective registration statement. The Purchaser may assign any or all of its rights hereunder or under any Related Agreement to any person and any such assignee shall succeed to the Purchaser’s rights with respect thereto; provided that the Purchaser shall not be permitted to effect any such assignment to a competitor of the Company unless an Event of Default (as defined in the Note) has occurred and is continuing. Upon such assignment, the Purchaser shall be released from all responsibility for the Collateral (as defined in the Master Security Agreement, the Stock Pledge Agreement and each other security agreement, mortgage, cash collateral deposit letter, pledge and other agreements which are executed by the Company or any of its Subsidiaries in favor of the Purchaser) to the extent same is assigned to any transferee. The Purchaser may from time to time sell or otherwise grant participations in any of the Obligations (as defined in the Master Security Agreement) and the holder of any such participation shall, subject to the terms of any agreement between the Purchaser and such holder, be entitled to the same benefits as the Purchaser with respect to any security for the Obligations (as defined in the Master Security Agreement) in which such holder is a participant. The Company agrees that each such holder may exercise any and all rights of banker’s lien, set-off and counterclaim with respect to its participation in the Obligations (as defined in the Master Security Agreement) as fully as though the Company were directly indebted to such holder in the amount of such participation. The Company may not assign any of its rights or obligations hereunder without the prior written consent of the Purchaser. All of the terms, conditions, promises, covenants, provisions and warranties of this Agreement shall inure to the benefit of each of the undersigned, and shall bind the representatives, successors and permitted assigns of the Company.

          10.4 Entire Agreement; Maximum Interest. This Agreement, the Related Agreements, the exhibits and schedules hereto and thereto and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and no party shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein and therein. Nothing contained in this Agreement, any Related Agreement or in any document referred to herein or delivered in connection herewith shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum rate permitted by applicable law. In the event that the rate of interest or dividends required to be paid or other charges hereunder exceed the maximum rate permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by the Company to the Purchaser and thus refunded to the Company.

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          10.5 Severability. In case any provision of the Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

          10.6 Amendment and Waiver.

(a)	This Agreement may be amended or modified only upon the written consent of the Company and the Purchaser.
(b)	The obligations of the Company and the rights of the Purchaser under this Agreement may be waived only with the written consent of the Purchaser.
(c)	The obligations of the Purchaser and the rights of the Company under this Agreement may be waived only with the written consent of the Company.

          10.7 Delays or Omissions. It is agreed that no delay or omission to exercise any right, power or remedy accruing to any party, upon any breach, default or noncompliance by another party under this Agreement or the Related Agreements, shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or in any similar breach, default or noncompliance thereafter occurring. All remedies, either under this Agreement or the Related Agreements, by law or otherwise afforded to any party, shall be cumulative and not alternative.

          10.8 Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given:

(a)	upon personal delivery to the party to be notified;
(b)	when sent by confirmed facsimile if sent during normal business hours of the recipient, if not, then on the next business day;
(c)	three (3) business days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or
(d)	one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.

All communications shall be sent as follows:

If to the Company, to:	Incentra Solutions, Inc. 1140 Pearl Street Boulder, Colorado 80302
	Attention:	Chief Financial Officer
	Facsimile:	(303) 449-9584

25

with a copy to:	Law Offices of Karl Reed Guest 94 Underhill Road Orinda, CA 94563
	Attention:	Reed Guest, Esq.
	Facsimile:	(925) 254-9226
If to the Purchaser, to:	Calliope Capital Corporation 874 Walker Road Suite C Dover, DE 19904
	Facsimile:	914-949-9618
with a copy to:	Laurus Capital Management, LLC 335 Madison Avenue, 10th Floor New York, New York 10017
	Attn:	Portfolio Services
	Facsimile:	212-581-5037

or at such other address as the Company or the Purchaser may designate by written notice to the other parties hereto given in accordance herewith.

          10.9 Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement.

          10.10 Facsimile Signatures; Counterparts. This Agreement may be executed by facsimile signatures and in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.

          10.11 Broker’s Fees. Except as set forth on Schedule 10.11 hereof, each party hereto represents and warrants that no agent, broker, investment banker, person or firm acting on behalf of or under the authority of such party hereto is or will be entitled to any broker’s or finder’s fee or any other commission directly or indirectly in connection with the transactions contemplated herein. Each party hereto further agrees to indemnify each other party for any claims, losses or expenses incurred by such other party as a result of the representation in this Section 10.11 being untrue.

          10.12 Construction. Each party acknowledges that its legal counsel participated in the preparation of this Agreement and the Related Agreements and, therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Agreement to favor any party against the other.

                              [Intentionally Omitted].

26

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

27

          IN WITNESS WHEREOF, the parties hereto have executed the SECURITIES PURCHASE AGREEMENT as of the date set forth in the first paragraph hereof.

COMPANY:		PURCHASER:
INCENTRA SOLUTIONS, Inc.		CALLIOPE CAPITAL CORPORATION
By:		By:
Name:	Matthew G. Richman	Name:
Title:	Senior Vice President, Chief Corporate Development Officer & Treasurer
		Title:

28

EXHIBIT A

FORM OF NOTE

B-1

EXHIBIT B

FORM OF WARRANT

2

EXHIBIT C

FORM OF ESCROW AGREEMENT

3

EXHIBIT D

FORM OF DISBURSEMENT LETTER

D-1

EXHIBIT E

FORM OF OPINION

          1. Each of the Company and each of its Subsidiaries is a corporation duly incorporated, validly existing and in good standing under the laws of the State of [Nevada] [other jurisdiction] and has all requisite corporate power and authority to own, operate and lease its properties and to carry on its business as it is now being conducted.

          2. Each of the Company and each of its Subsidiaries has the requisite corporate power and authority to execute, deliver and perform its obligations under the Agreement and the Related Agreements. All corporate action on the part of the Company and each of its Subsidiaries and its officers, directors and stockholders necessary has been taken for: (i) the authorization of the Agreement and the Related Agreements and the performance of all obligations of the Company and each of its Subsidiaries thereunder; and (ii) the authorization, sale, issuance and delivery of the Securities pursuant to the Agreement and the Related Agreements. The Warrant Shares, when issued pursuant to and in accordance with the terms of the Agreement and the Related Agreements and upon delivery shall be validly issued and outstanding, fully paid and non assessable.

          3.The execution, delivery and performance by each of the Company and each of its Subsidiaries of the Agreement and the Related Agreements to which it is a party and the consummation of the transactions on its part contemplated by any thereof, will not, with or without the giving of notice or the passage of time or both:

          (a) Violate the provisions of their respective Charter or bylaws; or

          (b) Violate any judgment, decree, order or award of any court binding upon the Company or any of its Subsidiaries; or

          (c) Violate any [insert jurisdictions in which counsel is qualified] or federal law

          4. The Agreement and the Related Agreements will constitute valid and legally binding obligations of each of the Company and each of its Subsidiaries (to the extent such person is a party thereto), and are enforceable against each of the Company and each of its Subsidiaries in accordance with their respective terms, except:

          (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors’ rights; and

          (b) general principles of equity that restrict the availability of equitable or legal remedies.

          5. To such counsel’s knowledge, the sale of the Note is not subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with. To such counsel’s knowledge, the sale of the Warrant and the subsequent exercise of the Warrant

E-1

for Warrant Shares are not subject to any preemptive rights or, to such counsel’s knowledge, rights of first refusal that have not been properly waived or complied with.

          6. Assuming the accuracy of the representations and warranties of the Purchaser contained in the Agreement, the offer, sale and issuance of the Securities on the Closing Date will be exempt from the registration requirements of the Securities Act. To such counsel’s knowledge, neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances that would cause the offering of the Securities pursuant to the Agreement or any Related Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act which would prevent the Company from selling the Securities pursuant to Rule 506 under the Securities Act, or any applicable exchange-related stockholder approval provisions.

          7. There is no action, suit, proceeding or investigation pending or, to such counsel’s knowledge, currently threatened against the Company or any of its Subsidiaries that prevents the right of the Company or any of its Subsidiaries to enter into this Agreement or any of the Related Agreements, or to consummate the transactions contemplated thereby. To such counsel’s knowledge, the Company is not a party or subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality; nor is there any action, suit, proceeding or investigation by the Company currently pending or which the Company intends to initiate.

          8. The terms and provisions of the Master Security Agreement and the Stock Pledge Agreement create a valid security interest in favor of Calliope, in the respective rights, title and interests of the Company and its Subsidiaries in and to the Collateral (as defined in each of the Master Security Agreement and the Stock Pledge Agreement).Each UCC-1 Financing Statement naming the Company or any Subsidiary thereof as debtor and Calliope as secured party are in proper form for filing and assuming that such UCC-1 Financing Statements have been filed with the Secretary of State of [Nevada], the security interest created under the Master Security Agreement will constitute a perfected security interest under the Uniform Commercial Code in favor of Calliope in respect of the Collateral that can be perfected by filing a financing statement. After giving effect to the delivery to Calliope of the stock certificates representing the ownership interests of each Subsidiary of the Company (together with effective endorsements) and assuming the continued possession by Calliope of such stock certificates in the State of New York, the security interest created in favor of Calliope under the Stock Pledge Agreement constitutes a valid and enforceable perfected security interest in such ownership interests (and the proceeds thereof) in favor of Calliope,. No filings, registrations or recordings are required in order to perfect (or maintain the perfection or priority of) the security interest created under the Stock Pledge Agreement in respect of such ownership interests.

E-2

EXHIBIT F

FORM OF SUBSIDIARY GUARANTEE

F-1

EX-10.13

Exhibit 10.13

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO INCENTRA SOLUTIONS, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

SECURED TERM NOTE

          FOR VALUE RECEIVED, INCENTRA SOLUTIONS, INC., a Nevada Corporation (the “Company”), promises to pay to CALLIOPE CAPITAL CORPORATION, 874 Walker Road, Suite C, Dover, DE 19904, Fax: 914-949-9618 (the “Holder”) or its registered assigns or successors in interest, the sum of Twelve Million Dollars ($12,000,000), together with any accrued and unpaid interest hereon, on July 31, 2010 (the “Maturity Date”) if not sooner paid.

          Capitalized terms used herein without definition shall have the meanings ascribed to such terms in that certain Securities Purchase Agreement dated as of the date hereof by and between the Company and the Holder (as amended, modified and/or supplemented from time to time, the “Purchase Agreement”).

          The following terms shall apply to this Note:

ARTICLE I
CONTRACT RATE AND AMORTIZATION

          1.1 Contract Rate. Subject to Sections 2.2 and 3.9, interest payable on the outstanding principal amount of this Note (the “Principal Amount”) shall accrue at a rate per annum equal to the “prime rate” published in The Wall Street Journal from time to time (the “Prime Rate”), plus two percent (2.0%) (the “Contract Rate”). The Contract Rate shall be increased or decreased as the case may be for each increase or decrease in the Prime Rate in an amount equal to such increase or decrease in the Prime Rate; each change to be effective as of the day of the change in the Prime Rate. The Contract Rate shall not at any time be less than ten percent (10.0%). Interest shall be (i) calculated on the basis of a 360 day year, and (ii) payable monthly, in arrears, commencing on August 1, 2007, on the first business day of each consecutive calendar month thereafter through and including the Maturity Date, and on the Maturity Date, whether by acceleration or otherwise.

          1.2 Contract Rate Payments. The Contract Rate shall be calculated on the last business day of each calendar month hereafter (other than for increases or decreases in the Prime Rate which shall be calculated and become effective in accordance with the terms of Section 1.1) until the Maturity Date.

          1.3 Principal Payments. Amortizing payments of the aggregate principal amount outstanding under this Note at any time (the “Principal Amount”) shall be made in cash by the Company on February 1, 2008 and on the first business day of each succeeding month

thereafter through and including the Maturity Date (each, an “Amortization Date”). Commencing on the first Amortization Date, the Company shall make monthly payments to the Holder on each Amortization Date, each such payment in the amount of $285,714.28 together with any accrued and unpaid interest on such portion of the Principal Amount plus any and all other unpaid amounts which are then owing under this Note, the Purchase Agreement and/or any other Related Agreement (collectively, the “Monthly Amount”). Any outstanding Principal Amount together with any accrued and unpaid interest and any and all other unpaid amounts which are then owing by the Company to the Holder under this Note, the Purchase Agreement and/or any other Related Agreement shall be due and payable on the Maturity Date.

          1.4 Optional Prepayment. The Company may prepay this Note at any time, in whole or in part, without penalty or premium.

ARTICLE II
EVENTS OF DEFAULT

          2.1 Events of Default. The occurrence of any of the following events set forth in this Section 2.1 shall constitute an event of default (“Event of Default”) hereunder:

               (a) Failure to Pay. The Company fails to pay when due any installment of principal, interest or other fees hereon in accordance herewith, or the Company fails to pay any of the obligations of the Company or any of its Subsidiaries under the Purchase Agreement or any Related Agreement when due, and, in any such case, such failure shall continue for a period of five (5) days following the date upon which any such payment was due.

               (b) Breach of Covenant. The Company or any of its Subsidiaries breaches any covenant or any other term or condition of this Note in any material respect and such breach, if subject to cure, continues for a period of fifteen (15) days after the occurrence thereof.

               (c) Breach of Representations and Warranties. Any representation, warranty or statement made or furnished by the Company or any of its Subsidiaries in this Note, the Purchase Agreement or any other Related Agreement shall at any time be false or misleading in any material respect on the date as of which made or deemed made.

               (d) Default Under Other Agreements. The occurrence of any default (or similar term) in the observance or performance of any other agreement or condition relating to any indebtedness or contingent obligation of the Company or any of its Subsidiaries (including, without limitation, the indebtedness evidenced by (i) the Security Agreement dated as of February 6, 2006, by and among the Company, certain subsidiaries of the Company and Laurus Master Fund, Ltd. (“Laurus”) (as amended, modified or supplemented from time to time, the “2006 Security Agreement”) and/or any Ancillary Agreement referred to in the 2006 Security Agreement and/or (ii) that certain Securities Purchase Agreement, dated as of May 13, 2004, by and between the Company and Laurus (as amended, modified or supplemented from time to time, the “2004 Securities Purchase Agreement”) and/or any Related Agreement referred to in

2

the 2004 Securities Purchase Agreement, as amended, modified or supplemented from time to time) and/or (iii) that certain Securities Purchase Agreement, dated as of March 31, 2006, by and between the Company and Laurus (as amended, modified or supplemented from time to time, the “2006 Securities Purchase Agreement”) and/or any Related Agreement referred to in the 2006 Securities Purchase Agreement, as amended, modified or supplemented from time to time), in each case, beyond the period of grace (if any), the effect of which default is to cause, or permit the holder or holders of such indebtedness or beneficiary or beneficiaries of such contingent obligation to cause, such indebtedness to become due prior to its stated maturity or such contingent obligation to become payable;

               (e) Bankruptcy. The Company or any of its Subsidiaries shall (i) apply for, consent to or suffer to exist the appointment of, or the taking of possession by, a receiver, custodian, trustee or liquidator of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of creditors, (iii) commence a voluntary case under the federal bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vi) acquiesce to, without challenge within ten (10) days of the filing thereof, or failure to have dismissed, within thirty (30) days, any petition filed against it in any involuntary case under such bankruptcy laws, or (vii) take any action for the purpose of effecting any of the foregoing;

               (f) Judgments. Attachments or levies in excess of $250,000 in the aggregate are made upon the Company or any of its Subsidiary’s assets or a judgment is rendered against the Company’s property involving a liability of more than $250,000 which shall not have been vacated, discharged, stayed or bonded within ninety (90) days from the entry thereof;

               (g) Insolvency. The Company or any of its Subsidiaries shall admit in writing its inability, or be generally unable, to pay its debts as they become due or cease operations of its present business;

               (h) Change of Control. A Change of Control (as defined below) shall occur with respect to the Company, unless Holder shall have expressly consented to such Change of Control in writing. A “Change of Control” shall mean any event or circumstance as a result of which (i) any “Person” or “group” (as such terms are defined in Sections 13(d) and 14(d) of the Exchange Act, as in effect on the date hereof), other than the Holder, is or becomes the “beneficial owner” (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of 35% or more on a fully diluted basis of the then outstanding voting equity interest of the Company (other than a “Person” or “group” that beneficially owns 35% or more of such outstanding voting equity interests of the Company on the date hereof), (ii) the Board of Directors of the Company shall cease to consist of a majority of the Company’s board of directors on the date hereof (or directors appointed by a majority of the board of directors in effect immediately prior to such appointment) or (iii) the Company or any of its Subsidiaries merges or consolidates with, or sells all or substantially all of its assets to, any other person or entity;

               (i) Indictment; Proceedings. The indictment or threatened indictment of the Company or any of its Subsidiaries or any executive officer of the Company or any of its

3

Subsidiaries under any criminal statute, or commencement or threatened commencement of criminal or civil proceeding against the Company or any of its Subsidiaries or any executive officer of the Company or any of its Subsidiaries pursuant to which statute or proceeding penalties or remedies sought or available include forfeiture of any of the property of the Company or any of its Subsidiaries;

               (j) The Purchase Agreement and Related Agreements. (i) An Event of Default shall occur under and as defined in the Purchase Agreement or any Related Agreement, (ii) the Company or any of its Subsidiaries shall breach any term or provision of the Purchase Agreement or any other Related Agreement in any material respect and such breach, if capable of cure, continues unremedied for a period of fifteen (15) days after the occurrence thereof, (iii) the Company or any of its Subsidiaries attempts to terminate, challenges the validity of, or its liability under, the Purchase Agreement or any Related Agreement, (iv) any proceeding shall be brought to challenge the validity, binding effect of the Purchase Agreement or any Related Agreement or (v) the Purchase Agreement or any Related Agreement ceases to be a valid, binding and enforceable obligation of the Company or any of its Subsidiaries (to the extent such persons or entities are a party thereto);

               (k) Stop Trade. An SEC stop trade order or Principal Market trading suspension of the Common Stock shall be in effect for five (5) consecutive days or five (5) days during a period of ten (10) consecutive days, excluding in all cases a suspension of all trading on a Principal Market, provided that the Company shall not have been able to cure such trading suspension within thirty (30) days of the notice thereof or list the Common Stock on another Principal Market within sixty (60) days of such notice; or

          2.2 Default Interest. Following the occurrence and during the continuance of an Event of Default, the Company shall pay additional interest on this Note in an amount equal to one and one half percent (1.5%) per month, and all outstanding obligations under this Note, the Purchase Agreement and each other Related Agreement, including unpaid interest, shall continue to accrue interest at such additional interest rate from the date of such Event of Default until the date such Event of Default is cured or waived.

          2.3 Default Payment. Following the occurrence and during the continuance of an Event of Default, the Holder, at its option, may demand repayment in full of all obligations and liabilities owing by Company to the Holder under this Note, the Purchase Agreement and/or any other Related Agreement and/or may elect, in addition to all rights and remedies of the Holder under the Purchase Agreement and the other Related Agreements and all obligations and liabilities of the Company under the Purchase Agreement and the other Related Agreements, to require the Company to make a Default Payment (“Default Payment”). The Default Payment shall be 125% of the outstanding principal amount of the Note, plus accrued but unpaid interest, all other fees then remaining unpaid, and all other amounts payable hereunder. The Default Payment shall be applied first to any fees due and payable to the Holder pursuant to this Note, the Purchase Agreement, and/or the other Related Agreements, then to accrued and unpaid interest due on this Note and then to the outstanding principal balance of this Note. The Default Payment shall be due and payable immediately on the date that the Holder has exercised its rights pursuant to this Section 4.3.

4

ARTICLE III
MISCELLANEOUS

          3.1 Cumulative Remedies. The remedies under this Note shall be cumulative.

          3.2 Failure or Indulgence Not Waiver. No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege. All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

          3.3 Notices. Any notice herein required or permitted to be given shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party notified, (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day, (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the Company at the address provided in the Purchase Agreement executed in connection herewith, and to the Holder at the address provided in the Purchase Agreement for such Holder, with a copy to John E. Tucker, Esq., 825 Third Avenue, 14^th Floor, New York, New York 10022, facsimile number (212) 541-4434, or at such other address as the Company or the Holder may designate by ten days advance written notice to the other parties hereto.

          3.4 Amendment Provision. The term “Note” and all references thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented, and any successor instrument as such successor instrument may be amended or supplemented.

          3.5 Assignability. This Note shall be binding upon the Company and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns, and may be assigned by the Holder in accordance with the requirements of the Purchase Agreement. The Company may not assign any of its obligations under this Note without the prior written consent of the Holder, any such purported assignment without such consent being null and void.

          3.6 Cost of Collection. In case of any Event of Default under this Note, the Company shall pay the Holder reasonable costs of collection, including reasonable attorneys’ fees.

          3.7 Governing Law, Jurisdiction and Waiver of Jury Trial.

               (a) THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

5

               (b) THE COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE COMPANY, ON THE ONE HAND, AND THE HOLDER, ON THE OTHER HAND, PERTAINING TO THIS NOTE OR ANY OF THE OTHER RELATED AGREEMENTS OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS NOTE OR ANY OF THE RELATED AGREEMENTS; PROVIDED, THAT THE COMPANY ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW YORK, STATE OF NEW YORK; AND FURTHER PROVIDED, THAT NOTHING IN THIS NOTE SHALL BE DEEMED OR OPERATE TO PRECLUDE THE HOLDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE HOLDER. THE COMPANY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND THE COMPANY HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. THE COMPANY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE COMPANY AT THE ADDRESS SET FORTH IN THE PURCHASE AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE COMPANY’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

               (c) THE COMPANY DESIRES THAT ITS DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE COMPANY HERETO WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE HOLDER AND THE COMPANY ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS NOTE, ANY OTHER RELATED AGREEMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO.

          3.8 Severability. In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Note.

          3.9 Maximum Payments. Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum

6

permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum rate permitted by such law, any payments in excess of such maximum rate shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.

          3.10 Security Interest and Guarantee. The Holder has been granted a security interest (i) in certain assets of the Company and its Subsidiaries as more fully described in the Master Security Agreement and (ii) in the equity interests of the Company’s Subsidiaries pursuant to the Stock Pledge Agreement. The obligations of the Company under this Note are guaranteed by certain Subsidiaries of the Company pursuant to the Subsidiary Guarantee.

          3.11 Construction. Each party acknowledges that its legal counsel participated in the preparation of this Note and, therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Note to favor any party against the other.

          5.13 Registered Obligation. This Note is intended to be a registered obligation within the meaning of Treasury Regulation Section 1.871-14(c)(1)(i) and the Company (or its agent) shall register this Note (and thereafter shall maintain such registration) as to both principal and any stated interest. Notwithstanding any document, instrument or agreement relating to this Note to the contrary, transfer of this Note (or the right to any payments of principal or stated interest thereunder) may only be effected by (i) surrender of this Note and either the reissuance by the Company of this Note to the new holder or the issuance by the Company of a new instrument to the new holder, or (ii) transfer through a book entry system maintained by the Company (or its agent), within the meaning of Treasury Regulation Section 1.871-14(c)(1)(i)(B).

[Balance of page intentionally left blank; signature page follows]

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6

          IN WITNESS WHEREOF, the Company has caused this Secured Term Note to be signed in its name effective as of this 31^st day of July, 2007.

INCENTRA SOLUTIONS, INC.

By:

     Name: Matthew G. Richman

     Title: Senior Vice President, Chief Corporate Development Officer & Treasurer

WITNESS:

8

EX-10.14

Exhibit 10.14

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO INCENTRA SOLUTIONS, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

Right to Purchase up to 3,750,000 Shares of Common Stock of
Incentra Solutions, Inc.
(subject to adjustment as provided herein)

COMMON STOCK PURCHASE WARRANT

No. ____________________________ Issue Date: July 31, 2007

          INCENTRA SOLUTIONS, INC., a corporation organized under the laws of the State of Nevada (“ICNS”), hereby certifies that, for value received, CALLIOPE CAPITAL CORPORATION, or assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company (as defined herein) from and after the Issue Date of this Warrant and at any time or from time to time before 5:00 p.m., New York time, through the close of business July 31, 2027 (the “Expiration Date”), up to 3,750,000 fully paid and nonassessable shares of Common Stock (as hereinafter defined), at the applicable Exercise Price (as defined below) per share. The number and character of such shares of Common Stock and the applicable Exercise Price per share are subject to adjustment as provided herein.

          As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

          (a) The term “Company” shall include ICNS and any corporation which shall succeed, or assume the obligations of, ICNS hereunder.

          (b) The term “Common Stock” includes (i) the Company’s Common Stock, par value $0.001 per share; and (ii) any other securities into which or for which the Common Stock may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

          (c) The term “Note” means that certain Secured Term Note issued by the Company as of the date hereof to the Holder in the original principal amount of twelve million dollars ($12,000,000).

(d) The term “Other Securities” refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the Holder of this Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 4 or otherwise.

(e) The “Exercise Price” applicable under this Warrant shall be $0. 01.

1. Exercise of Warrant.

1.1	Number of Shares Issuable upon Exercise. From and after the date hereof, the Holder shall be entitled to receive, upon exercise of this Warrant in whole or in part, by delivery of an original or fax copy of an exercise notice in the form attached hereto as Exhibit A (the “Exercise Notice”) up to 3,750,000 shares of Common Stock of the Company, subject to adjustment pursuant to Section 4.
1.2	Fair Market Value. For purposes hereof, the “Fair Market Value” of a share of Common Stock as of a particular date (the “Determination Date”) shall mean:
(a) If the Company’s Common Stock is traded on the American Stock Exchange or another national exchange or is quoted on the National or Capital Market of The Nasdaq Stock Market, Inc. (“Nasdaq”), then the closing or last sale price, respectively, reported for the last business day immediately preceding the Determination Date.
(b) If the Company’s Common Stock is not traded on the American Stock Exchange or another national exchange or on the Nasdaq but is traded on the National Association of Securities Dealers, Inc. Over-the-Counter Bulletin Board, then the mean of the average of the closing bid and asked prices reported for the last business day immediately preceding the Determination Date.
(c) Except as provided in clause (d) below, if the Company’s Common Stock is not publicly traded, then as the Holder and the Company agree or in the absence of agreement by arbitration in accordance with the rules then in effect of the American Arbitration Association, before a single arbitrator to be chosen from a panel of persons qualified by education and training to pass on the matter to be decided.
(d) If the Determination Date is the date of a liquidation, dissolution or winding up, or any event deemed to be a liquidation, dissolution or winding up pursuant to the Company’s charter, then all amounts to be payable per share to holders of the Common Stock pursuant to the charter in the event of such liquidation, dissolution or winding up, plus all other amounts to be payable per share in respect of the Common Stock in liquidation under the charter, assuming for the purposes of this clause (d) that all of the shares of Common Stock then issuable upon exercise of the Warrant are outstanding at the Determination Date.

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1.3

Company Acknowledgment. The Company will, at the time of the exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing its continuing obligation to afford to such Holder any rights to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant. If the Holder shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such Holder any such rights.

1.4

Trustee for Warrant Holders. In the event that a bank or trust company shall have been appointed as trustee for the Holder of this Warrant pursuant to Subsection 3.2, such bank or trust company shall have all the powers and duties of a Warrant agent (as hereinafter described) and shall accept, in its own name for the account of the Company or such successor person as may be entitled thereto, all amounts otherwise payable to the Company or such successor, as the case may be, on exercise of this Warrant pursuant to this Section 1.

2. Procedure for Exercise.

2.1

Delivery of Stock Certificates, Etc., on Exercise. The Company agrees that the shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares in accordance herewith. As soon as practicable after the exercise of this Warrant in full or in part, and in any event within three (3) business days thereafter, the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in compliance with applicable securities laws, a certificate or certificates for the number of duly and validly issued, fully paid and nonassessable shares of Common Stock (or Other Securities) to which such Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which such Holder would otherwise be entitled, cash equal to such fraction multiplied by the then Fair Market Value of one full share, together with any other stock or other securities and property (including cash, where applicable) to which such Holder is entitled upon such exercise pursuant to Section 1 or otherwise.

2.2

Exercise. (a) Payment may be made either (i) in cash or by certified or official bank check payable to the order of the Company equal to the applicable aggregate Exercise Price, (ii) by delivery of this Warrant, or shares of Common Stock and/or Common Stock receivable upon exercise of this Warrant in accordance with Section (b) below, or (iii) by a combination of any of the foregoing methods, for the number of Common Shares specified in such Exercise Notice (as such exercise number shall be adjusted to reflect any adjustment in the total number of shares of Common Stock issuable to the Holder per the terms of this Warrant); provided, however, that if at the time of delivery of an Exercise Notice the shares of Common Stock to be issued upon payment of the Exercise Price have been

3

registered under the Securities Act of 1933, as amended (the “Securities Act”), and are covered by an effective registration statement under the Securities Act, payment of the Exercise Price may only be made pursuant to clause (i) above and may not be made pursuant to clause (ii) or (iii) above. Upon receipt by the Company of an Exercise Notice and proper payment of the aggregate Exercise Price, the Holder shall thereupon be entitled to receive the number of duly authorized, validly issued, fully-paid and non-assessable shares of Common Stock (or Other Securities) determined as provided herein.

          (b) Notwithstanding any provisions herein to the contrary, if the Fair Market Value of one share of Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in lieu of exercising this Warrant for cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being exercised) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Exercise Notice, in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula:

X=Y	(A-B)
	A
Where X =	the number of shares of Common Stock to be issued to the Holder
Y =	the number of shares of Common Stock purchasable under this Warrant or, if only a portion of this Warrant is being exercised, the portion of this Warrant being exercised (at the date of such calculation)
A =	the Fair Market Value of one share of the Company’s Common Stock (at the date of such calculation)
B =	the Exercise Price (as adjusted to the date of such calculation)

3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.

3.1 Reorganization, Consolidation, Merger, Etc. In case at any time or from time to time, the Company shall (a) effect a reorganization, (b) consolidate with or merge into any other person, or (c) transfer all or substantially all of its properties or assets to any other person under any plan or arrangement contemplating the dissolution of the Company, then, in each such case, as a condition to the consummation of such a transaction, proper and adequate provision shall be made by the Company whereby the Holder of this Warrant, on the exercise hereof as provided in Section 1 at any time after the consummation of such reorganization, consolidation or merger or the effective date of such dissolution, as the case may be, shall receive, in lieu of the Common Stock (or Other Securities) issuable on such exercise prior to such consummation or such effective date, the stock and other securities and property (including cash) to which such Holder would have been entitled upon such consummation or in connection with such dissolution, as

4

	the case may be, if such Holder had so exercised this Warrant, immediately prior thereto, all subject to further adjustment thereafter as provided in Section 4.
3.2	Dissolution. In the event of any dissolution of the Company following the transfer of all or substantially all of its properties or assets, the Company, concurrently with any distributions made to holders of its Common Stock, shall at its expense deliver or cause to be delivered to the Holder the stock and other securities and property (including cash, where applicable) receivable by the Holder of this Warrant pursuant to Section 3.1, or, if the Holder shall so instruct the Company, to a bank or trust company specified by the Holder and having its principal office in New York, NY as trustee for the Holder of this Warrant (the “Trustee”).
3.3	Continuation of Terms. Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the shares of stock and other securities and property receivable on the exercise of this Warrant after the consummation of such reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any such stock or other securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant as provided in Section 4. In the event this Warrant does not continue in full force and effect after the consummation of the transactions described in this Section 3, then the Company’s securities and property (including cash, where applicable) receivable by the Holders of the Warrant will be delivered to Holder or the Trustee as contemplated by Section 3.2.

4. Extraordinary Events Regarding Common Stock. In the event that the Company shall (a) issue additional shares of the

Common Stock as a dividend or other distribution on outstanding Common Stock or any preferred stock issued by the Company, (b) subdivide its outstanding shares of Common Stock, or (c) combine its outstanding shares of the Common Stock into a smaller number of shares of the Common Stock (each of the preceding clauses (a) through (c), inclusive, an “Event”), then, in each such event, the number of shares of Common Stock that the Holder shall thereafter, on the exercise hereof as provided in Section 1, be entitled to receive shall be increased or decreased to a number determined by multiplying the number of shares of Common Stock that would, immediately prior to such Event, be issuable upon the exercise of this Warrant by a fraction of which (a) the numerator is the number of issued and outstanding shares of Common Stock immediately after such Event, and (b) the denominator is the number of issued and outstanding shares of Common Stock immediately prior to such Event.

5. Certificate as to Adjustments. In each case of any adjustment or readjustment in the shares of Common Stock (or

Other Securities) issuable on the exercise of this Warrant, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the

5

terms of this Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the Holder of this Warrant and any Warrant agent of the Company (appointed pursuant to Section 11 hereof).

6. Reservation of Stock, Etc., Issuable on Exercise of Warrant. The Company will at all times reserve and keep available,

solely for issuance and delivery on the exercise of this Warrant, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of this Warrant.

7. Assignment; Exchange of Warrant. Subject to compliance with applicable securities laws, this Warrant, and the rights

evidenced hereby, may be transferred by any registered holder hereof (a “Transferor”) in whole or in part. On the surrender for exchange of this Warrant, with the Transferor’s endorsement in the form of Exhibit B attached hereto (the “Transferor Endorsement Form”) and together with evidence reasonably satisfactory to the Company demonstrating compliance with applicable securities laws, which shall include, without limitation, the provision of a legal opinion from the Transferor’s counsel that such transfer is exempt from the registration requirements of applicable securities laws, and with payment by the Transferor of any applicable transfer taxes, will issue and deliver to or on the order of the Transferor thereof a new Warrant of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a “Transferee”), calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant so surrendered by the Transferor.

8. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction

or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of this Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.

9. Registration Rights. The Holder of this Warrant has been granted certain registration rights by the Company. These

registration rights are set forth in the Registration Rights Agreement dated as of July 31, 2007 entered into by the Company and the initial Holder of this Warrant, as amended, modified or supplemented from time to time.

10. Maximum Exercise. Notwithstanding anything herein to the contrary, in no event shall the Holder be entitled to

exercise any portion of this Warrant in excess of that portion of this Warrant upon exercise of which the sum of (1) the number of shares of Common Stock

6

beneficially owned by the Holder and its Affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unexercised portion of the Warrant or the unexercised or unconverted portion of any other security of the Holder subject to a limitation on conversion analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the exercise of the portion of this Warrant with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its Affiliates of any amount greater than 9.99% of the then outstanding shares of Common Stock (whether or not, at the time of such exercise, the Holder and its Affiliates beneficially own more than 9.99% of the then outstanding shares of Common Stock). As used herein, the term “Affiliate” means any person or entity that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a person or entity, as such terms are used in and construed under Rule 144 under the Securities Act. For purposes of the second preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such sentence. For any reason at any time, upon written or oral request of the Holder, the Company shall within one (1) business day confirm orally and in writing to the Holder the number of shares of Common Stock outstanding as of any given date. The limitations set forth herein (x) shall automatically become null and void following notice to the Company upon the occurrence and during the continuance of an Event of Default (as defined in the Note) and (y) may be waived by the Holder upon provision of no less than sixty-one (61) days prior written notice to the Company; provided, however, that, such written notice of waiver shall only be effective if delivered at a time when no indebtedness (including, without limitation, principal, interest, fees and charges) of the Company of which the Holder or any of its Affiliates was, at any time, the owner, directly or indirectly is outstanding.

11. Restriction. Notwithstanding anything to the contrary contained herein, the Holder hereby agrees that during the

period on and after the Issue Date and prior to the date that is the one year anniversary of the Issue Date, it shall not sell any Common Stock acquired upon exercise of this Warrant. After the one year anniversary of the Issue Date, the Holder hereby agrees not to sell on any trading day such number of shares of Common Stock acquired upon exercise of this Warrant that is in excess of twenty-five percent (25%) of the aggregate dollar trading volume of the Common Stock for the twenty-two (22) day trading period (the “Period”) immediately preceding each such sale by Holder; provided, however, that the volume of the day of any sale up to, but not including, the volume as to any sale by Holder and any volume thereafter, shall be included in any Period. Notwithstanding anything contained herein to the contrary, the foregoing restrictions (a) shall not be applicable and shall have no further force or effect following the occurrence and during the continuance of an Event of Default under and as defined in the Securities Purchase Agreement dated as of the date hereof by and among the Company and Laurus (as amended, restated modified and/or supplemented from time to time) and (b) shall not apply to transfers in a private transaction including, without limitation, as a bona fide gift or gifts, provided that the transferee thereof agrees to be bound in writing by the restrictions set forth herein.

7

12. Warrant Agent. The Company may, by written notice to the Holder of this Warrant, appoint an agent for the purpose

of issuing Common Stock (or Other Securities) on the exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 7, and replacing this Warrant pursuant to Section 8, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.

13. Transfer on the Company’s Books. Until this Warrant is transferred on the books of the Company, the Company may

treat the registered Holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

14. Notices, Etc. All notices and other communications from the Company to the Holder of this Warrant shall be mailed

by first class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company in writing by such Holder or, until any such Holder furnishes to the Company an address, then to, and at the address of, the last Holder of this Warrant who has so furnished an address to the Company.

15. Miscellaneous. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an

instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. This Warrant shall be governed by and construed in accordance with the laws of State of New York without regard to principles of conflicts of laws. Any action brought concerning the transactions contemplated by this Warrant shall be brought only in the state courts of New York or in the federal courts located in the state of New York; provided, however, that the Holder may choose to waive this provision and bring an action outside the State of New York. The individuals executing this Warrant on behalf of the Company agree to submit to the jurisdiction of such courts and waive trial by jury. In the event that any provision of this Warrant is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Warrant. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision hereof. The Company acknowledges that legal counsel participated in the preparation of this Warrant and, therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Warrant to favor any party against the other party.

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS.]

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          IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.

	INCENTRA SOLUTIONS, INC.
WITNESS:
	By:
	Name:	Matthew G. Richman
	Title:	Senior Vice President, Chief Corporate Development Officer & Treasurer

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EXHIBIT A

FORM OF SUBSCRIPTION
(To Be Signed Only On Exercise Of Warrant)

TO:	INCENTRA SOLUTIONS, INC.
	1140 Pearl Street
	Boulder, CO 80302
	Attention: Chief Financial Officer

          The undersigned, pursuant to the provisions set forth in the attached Warrant (No.____), hereby irrevocably elects to purchase (check applicable box):

________	________ shares of the Common Stock covered by such Warrant; or
________	the maximum number of shares of Common Stock covered by such Warrant pursuant to the cashless exercise procedure set forth in Section 2.

          The undersigned herewith makes payment of the full Exercise Price for such shares at the price per share provided for in such Warrant, which is $___________. Such payment takes the form of (check applicable box or boxes):

________	$__________ in lawful money of the United States; and/or
________	the cancellation of such portion of the attached Warrant as is exercisable for a total of _______ shares of Common Stock (using a Fair Market Value of $_______ per share for purposes of this calculation); and/or
________	the cancellation of such number of shares of Common Stock as is necessary, in accordance with the formula set forth in Section 2.2, to exercise this Warrant with respect to the maximum number of shares of Common Stock purchasable pursuant to the cashless exercise procedure set forth in Section 2.

          The undersigned requests that the certificates for such shares be issued in the name of, and delivered to ______________________________________ whose address is ___________________________________________________________________________.

          The undersigned represents and Warrants that all offers and sales by the undersigned of the securities issuable upon exercise of the within Warrant shall be made pursuant to registration of the Common Stock under the Securities Act of 1933, as amended (the “Securities Act”) or pursuant to an exemption from registration under the Securities Act.

Dated:
	(Signature must conform to name of holder as specified on the face of the Warrant)
	Address:

A-1

EXHIBIT B

FORM OF TRANSFEROR ENDORSEMENT
(To Be Signed Only On Transfer Of Warrant)

          For value received, the undersigned hereby sells, assigns, and transfers unto the person(s) named below under the heading “Transferees” the right represented by the within Warrant to purchase the percentage and number of shares of Common Stock of INCENTRA SOLUTIONS, INC. into which the within Warrant relates specified under the headings “Percentage Transferred” and “Number Transferred,” respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to transfer its respective right on the books of INCENTRA SOLUTIONS, INC. with full power of substitution in the premises.

Transferees Address Percentage
Transferred Number
Transferred

Dated:
	(Signature must conform to name of holder as specified on the
	face of the Warrant)
	Address:
	SIGNED IN THE PRESENCE OF:
	(Name)
ACCEPTED AND AGREED:
[TRANSFEREE]
(Name)

B-1

EX-10.15

Exhibit 10.15

INCENTRA SOLUTIONS, INC. AND CERTAIN OF ITS SUBSIDIARIES
MASTER SECURITY AGREEMENT

To:	Calliope Capital Corporation
	c/o Laurus Capital Management, LLC
	335 Madison Avenue, 10th Floor
	New York, New York 10017

Date: July 31, 2007

To Whom It May Concern:

          1. To secure the payment of all Obligations (as hereafter defined), Incentra Solutions, Inc., a Nevada corporation (the “Company”), each of the other undersigned parties (other than Calliope Capital Corporation ( “Calliope”), and each other entity that is required to enter into this Master Security Agreement (each an “Assignor” and, collectively, the “Assignors”) hereby assigns and grants to Calliope a continuing security interest in all of the following property now owned or at any time hereafter acquired by any Assignor, or in which any Assignor now has or at any time in the future may acquire any right, title or interest (the “Collateral”): all cash, cash equivalents, accounts, accounts receivable, deposit accounts, inventory, equipment, goods, fixtures, documents, instruments (including, without limitation, promissory notes), contract rights, commercial tort claims set forth on Exhibit B to this Master Security Agreement, general intangibles (including, without limitation, payment intangibles and an absolute right to license on terms no less favorable than those currently in effect among our affiliates, but not own intellectual property), chattel paper, supporting obligations, investment property (including, without limitation, all equity interests owned by any Assignor), letter-of-credit rights, trademarks, trademark applications, tradestyles, patents, patent applications, copyrights, copyright applications and other intellectual property in which any Assignor now has or hereafter may acquire any right, title or interest, all proceeds and products thereof (including, without limitation, proceeds of insurance) and all additions, accessions and substitutions thereto or therefore. In the event any Assignor wishes to finance the acquisition in the ordinary course of business of any hereafter acquired equipment and has obtained a commitment from a financing source to finance such equipment from an unrelated third party, Laurus agrees to release its security interest on such hereafter acquired equipment so financed by such third party financing source. Except as otherwise defined herein, all capitalized terms used herein shall have the meaning provided such terms in the Securities Purchase Agreement (defined below). All items of Collateral which are defined in the UCC shall have the meanings set forth in the UCC. For purposes hereof, the term “UCC” means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, Caliope’s security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions of this Agreement relating to such attachment, perfection, priority or remedies and

for purposes of definitions related to such provisions; provided further, that to the extent that the UCC is used to define any term herein and such term is defined differently in different Articles or Divisions of the UCC, the definition of such term contained in Article or Division 9 shall govern.

          2. The term “Obligations” as used herein shall mean and include all debts, liabilities and obligations owing by each Assignor to Calliope arising under, out of, or in connection with: (i) that certain Securities Purchase Agreement dated as of the date hereof by and between the Company and Calliope (the “Securities Purchase Agreement”) and (ii) the Related Agreements referred to in the Securities Purchase Agreement (the Securities Purchase Agreement and each Related Agreement, as each may be amended, modified, restated or supplemented from time to time, are collectively referred to herein as the “Documents”), and in connection with any documents, instruments or agreements relating to or executed in connection with the Documents or any documents, instruments or agreements referred to therein or otherwise, including, without limitation, obligations and liabilities of each Assignor for post-petition interest, fees, costs and charges that accrue after the commencement of any case by or against such Assignor under any bankruptcy, insolvency, reorganization or like proceeding (collectively, the “Debtor Relief Laws”), and in connection with any other indebtedness, obligations or liabilities of any Assignor to Calliope, whether now existing or hereafter arising, direct or indirect, liquidated or unliquidated, absolute or contingent, due or not due and whether under, pursuant to or evidenced by a note, agreement, guaranty, instrument or otherwise, in each case, irrespective of the genuineness, validity, regularity or enforceability of such Obligations, or of any instrument evidencing any of the Obligations or of any collateral therefor or of the existence or extent of such collateral, and irrespective of the allowability, allowance or disallowance of any or all of the Obligations in any case commenced by or against any Assignor under Debtor Relief Laws.

          3. Each Assignor hereby jointly and severally represents, warrants and covenants to Laurus that:

(a)	it is a corporation, partnership or limited liability company, as the case may be, validly existing, in good standing and organized under the respective laws of its jurisdiction of organization set forth on Schedule A, and each Assignor will provide Calliope thirty (30) days’ prior written notice of any change in its jurisdiction of organization;
(b)	its legal name is as set forth in its Certificate of Incorporation or other organizational document (as applicable) as amended through the date hereof and as set forth on Schedule A, and it will provide Calliope thirty (30) days’ prior written notice of any change in its legal name;
(c)	its organizational identification number (if applicable) is as set forth on Schedule A hereto, and it will provide Calliope thirty (30) days’ prior written notice of any change in its organizational identification number;
(d)	it is the lawful owner of its respective Collateral and it has the sole right to grant a security interest therein and will defend such Collateral against all claims and demands of all persons and entities;

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(e)	it will keep its respective Collateral free and clear of all attachments, levies, taxes, liens, security interests and encumbrances of every kind and nature (“Encumbrances”), except (i) Encumbrances securing the Obligations and (ii) to the extent said Encumbrance does not secure indebtedness in excess of $100,000 and such Encumbrance is removed or otherwise released within ten (10) days of the creation thereof;
(f)	it will, at its and the other Assignors joint and several cost and expense keep the Collateral in good state of repair (ordinary wear and tear excepted) and will not waste or destroy the same or any part thereof other than ordinary course discarding of items no longer used or useful in its or such other Assignors’ business;
(g)	it will not without Calliope’s prior written consent, sell, exchange, lease or otherwise dispose of the Collateral, whether by sale, lease or otherwise, except in the ordinary course of business and except for the disposition or transfer in the ordinary course of business during any fiscal year of obsolete and worn-out equipment or equipment no longer necessary for its ongoing needs, having an aggregate fair market value of not more than $100,000.
(h)	(i) it will insure or cause the Collateral to be insured against loss or damage by fire, theft, burglary, pilferage, loss in transit and such other hazards consistent with past practices. If any such Assignor fails to do so, Calliope may procure such insurance and the cost thereof shall be promptly reimbursed by the Assignors, jointly and severally, and shall constitute Obligations;
	(ii) it will expressly agree that if additional loss payees and/or lender loss payees, other than Calliope, are named to the Collateral, Calliope will always be assigned to first lien position until all Calliope obligations have been met;
(i)	it will at all reasonable times and upon reasonable notice allow Calliope or Calliope’s representatives free access to and the right of inspection of the Collateral;
(j)	such Assignor (jointly and severally with each other Assignor, if any) hereby indemnifies and saves Calliope harmless from all loss, costs, damage, liability and/or expense, including reasonable attorneys’ fees, that Calliope may sustain or incur to enforce payment, performance or fulfillment of any of the Obligations and/or in the enforcement of this Master Security Agreement or in the prosecution or defense of any action or proceeding either against Calliope or any Assignor concerning any matter growing out of or in connection with this Master Security Agreement, and/or any of the Obligations and/or any of the Collateral except to the extent caused by Calliope’s own negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and nonappealable decision); and
(k)	all commercial tort claims (as defined in the Uniform Commercial Code as in effect in the State of New York) held by any Assignor are set forth on Schedule

3

B to this Master Security Agreement; each Assignor hereby agrees that it shall promptly, and in any event within five (5) Business Days after the same is acquired by it, notify Calliope of any commercial tort claim acquired by it and unless otherwise consented to in writing by Calliope, it shall enter into a supplement to this Master Security Agreement granting to Calliope a security interest in such commercial tort claim, securing the Obligations.

          4. The occurrence of any of the following events or conditions shall constitute an “Event of Default” under this Master Security Agreement:

          (a) Breach of any material covenant, warranty, representation or statement made or furnished to Calliope by any Assignor or on any Assignor’s benefit was false or misleading in any material respect when made or furnished, and if subject to cure, shall not be cured for a period of fifteen (15) days; or

          (b) the occurrence of an “Event of Default” as defined in the Securities Purchase Agreement.

          5. Upon the occurrence of any Event of Default and at any time thereafter, Calliope may declare all Obligations immediately due and payable and Calliope shall have the remedies of a secured party provided in the Uniform Commercial Code as in effect in the State of New York, this Agreement and other applicable law. Upon the occurrence of any Event of Default and at any time thereafter, Calliope will have the right to take possession of the Collateral and to maintain such possession on its premises or to remove the Collateral or any part thereof to such other premises as Calliope may desire. Upon Calliope’s request, each of the Assignors shall assemble or cause the Collateral to be assembled and make it available to Calliope at a place reasonably designated by Calliope. If any notification of intended disposition of any Collateral is required by law, such notification, if mailed, shall be deemed properly and reasonably given if mailed at least ten (10) business days before such disposition, postage prepaid, addressed to any Assignor either at such Assignor’s address shown herein or in the Securities Purchase Agreement or at any subsequent address appearing on Calliope’s records for such Assignor. Any proceeds of any disposition of any of the Collateral shall be applied by Calliope to the payment of all expenses in connection with the sale of the Collateral, including reasonable attorneys’ fees and other legal expenses and disbursements and the reasonable expense of retaking, holding, preparing for sale, selling, and the like, and any balance of such proceeds may be applied by Calliope toward the payment of the Obligations in such order of application as Calliope may elect, and each Assignor shall be liable for any deficiency. The parties hereto each hereby agree that the exercise by any party hereto of any right granted to it or the exercise by any party hereto of any remedy available to it (including, without limitation, the issuance of a notice of redemption, a borrowing request and/or a notice of default), in each case, hereunder, under the Securities Purchase Agreement or under any other Related Agreement shall not constitute confidential information and no party shall have any duty to the other party to maintain such information as confidential.

          6. If any Assignor defaults in the performance or fulfillment of any of the terms, conditions, promises, covenants, provisions or warranties on such Assignor’s part to be performed or fulfilled under or pursuant to this Master Security Agreement, Calliope may, at its

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option without waiving its right to enforce this Master Security Agreement according to its terms, immediately or at any time thereafter and without notice to any Assignor, perform or fulfill the same or cause the performance or fulfillment of the same for each Assignor’s joint and several account and at each Assignor’s joint and several cost and expense, and the reasonable cost and expense thereof (including reasonable attorneys’ fees) shall be added to the Obligations and shall be payable on demand with interest thereon at the highest rate permitted by law.

          7. Each Assignor appoints Calliope, any of Calliope’s officers, employees or any other person or entity whom Calliope may designate as its attorney, with power to execute such documents in its behalf and to supply any omitted information and correct patent errors in any documents executed by any Assignor or on any Assignor’s behalf; to file financing statements against the Assignors covering the Collateral; to sign the name of each Assignor on public records; and to do all other things Calliope deems necessary to carry out this Master Security Agreement. Each Assignor hereby ratifies and approves all acts of the attorney and neither Calliope nor the attorney will be liable for any acts of commission or omission, nor for any error of judgment or mistake of fact or law other than gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). This power being coupled with an interest, is irrevocable so long as any Obligations remains unpaid.

          8. No delay or failure on Calliope’s part in exercising any right, privilege or option hereunder shall operate as a waiver of such or of any other right, privilege, remedy or option, and no waiver whatever shall be valid unless in writing, signed by Calliope and then only to the extent therein set forth, and no waiver by Calliope of any default shall operate as a waiver of any other default or of the same default on a future occasion. Calliope’s books and records containing entries with respect to the Obligations shall be admissible in evidence in any action or proceeding, shall be binding upon each Assignor for the purpose of establishing the items therein set forth (absent manifest error) and shall constitute prima facie proof thereof. Calliope shall have the right to enforce any one or more of the remedies available to Calliope, successively, alternately or concurrently. Each Assignor agrees to join with Calliope in executing financing statements or other instruments to the extent required by the Uniform Commercial Code in form satisfactory to Calliope and in executing such other documents or instruments as may be required or reasonably deemed necessary by Calliope for purposes of affecting or continuing Calliope’s security interest in the Collateral.

          9. The Assignors shall jointly and severally pay all of Calliope’s out-of-pocket costs and expenses, including reasonable fees and disbursements of in-house or outside counsel and appraisers, in connection with the preparation, execution and delivery of the Documents, and in connection with the prosecution or defense of any action, contest, dispute, suit or proceeding concerning any matter in any way arising out of, related to or connected with any Document. The Assignors shall also jointly and severally pay all of Calliope’s reasonable fees, charges, out-of-pocket costs and expenses, including fees and disbursements of counsel and appraisers, in connection with (a) the preparation, execution and delivery of any waiver, any amendment thereto or consent proposed or executed in connection with the transactions contemplated by the Documents, (b) Calliope’s obtaining performance of the Obligations under the Documents, including, but not limited to the enforcement or defense of Calliope’s security interests, assignments of rights and liens hereunder as valid perfected security interests, (c) any attempt to inspect, verify, protect, collect, sell, liquidate or otherwise dispose of any Collateral, (d) any

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appraisals or re-appraisals of any property (real or personal) pledged to Calliope by any Assignor as Collateral for, or any other Person as security for, the Obligations hereunder and (e) any consultations in connection with any of the foregoing. The Assignors shall also jointly and severally pay Calliope’s customary bank charges for all bank services (including wire transfers) performed or caused to be performed by Calliope for any Assignor at any Assignor’s request or in connection with any Assignor’s loan account (if any) with Calliope. All such costs and expenses together with all filing, recording and search fees, taxes and interest payable by the Assignors to Calliope shall be payable on demand and shall be secured by the Collateral. If any tax by any nation or government, any state or other political subdivision thereof, and any agency, department or other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government (each, a “Governmental Authority”) is or may be imposed on or as a result of any transaction between any Assignor, on the one hand, and Calliope on the other hand, which Calliope is or may be required to withhold or pay, the Assignors hereby jointly and severally indemnify and hold Calliope harmless in respect of such taxes, and the Assignors will repay to Calliope the amount of any such taxes which shall be charged to the Assignors’ account; and until the Assignors shall furnish Calliope with indemnity therefor (or supply Calliope with evidence satisfactory to it that due provision for the payment thereof has been made), Calliope may hold without interest any balance standing to each Assignor’s credit (if any) and Calliope shall retain its liens in any and all Collateral.

          10. THIS MASTER SECURITY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. All of the rights, remedies, options, privileges and elections given to Calliope hereunder shall inure to the benefit of Calliope’s successors and assigns. The term “Calliope” as herein used shall include Calliope, any parent of Calliope’s, any of Calliope’s subsidiaries and any co-subsidiaries of Calliope’s parent, whether now existing or hereafter created or acquired, and all of the terms, conditions, promises, covenants, provisions and warranties of this Agreement shall inure to the benefit of and shall bind the representatives, successors and assigns of each Assignor and each of the foregoing.

          11. Each Assignor hereby consents and agrees that the state of federal courts located in the County of New York, State of New York shall have exclusive jurisdiction to hear and determine any claims or disputes between Assignor, on the one hand, and Calliope, on the other hand, pertaining to this Master Security Agreement or to any matter arising out of or related to this Master Security Agreement, provided, that Calliope and each Assignor acknowledges that any appeals from those courts may have to be heard by a court located outside of the County of New York, State of New York, and further provided, that nothing in this Master Security Agreement shall be deemed or operate to preclude Calliope from bringing suit or taking other legal action in any other jurisdiction to collect the Obligations, to realize on the Collateral or any other security for the Obligations, or to enforce a judgment or other court order in favor of Calliope. Each Assignor expressly submits and consents in advance to such jurisdiction in any action or suit commenced in any such court, and each Assignor hereby waives any objection which it may have based upon lack of personal jurisdiction, improper venue or forum non conveniens. Each Assignor hereby waives personal service of the summons, complaint and other process issues in any such action or suit and agrees that service of such summons, complaint and

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other process may be made by registered or certified mail addressed to such assignor at the address set forth on the signature lines hereto and that service so made shall be deemed completed upon the earlier of such Assignor’s actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid.

          The parties desire that their disputes be resolved by a judge applying such applicable laws. Therefore, to achieve the best combination of the benefits of the judicial system and of arbitration, the parties hereto waive all rights to trial by jury in any action, suit, or proceeding brought to resolve any dispute, whether arising in contract, tort, or otherwise between Calliope, and/or any Assignor arising out of, connected with, related or incidental to the relationship established between them in connection with this Master Security Agreement or the transactions related hereto.

          12. It is understood and agreed that any person or entity that desires to become an Assignor hereunder, or is required to execute a counterpart of this Master Security Agreement after the date hereof pursuant to the requirements of any Document, shall become an Assignor hereunder by (x) executing a Joinder Agreement in form and substance satisfactory to Calliope, (y) delivering supplements to such exhibits and annexes to such Documents as Calliope shall reasonably request and (z) taking all actions as specified in this Master Security Agreement as would have been taken by such Assignor had it been an original party to this Master Security Agreement, in each case with all documents required above to be delivered to Calliope and with all documents and actions required above to be taken to the reasonable satisfaction of Calliope.

          13. All notices from Calliope to any Assignor shall be sufficiently given if mailed or delivered to such Assignor’s address set forth below.

Very truly yours,

INCENTRA SOLUTIONS, INC.

By:

Name: Matthew G. Richman

Title: Senior Vice President, Chief
Corporate Development Officer & Treasurer

Address: 1140 Pearl Street

Boulder, CO 80302

MANAGEDSTORAGE INTERNATIONAL, INC.

By:

Name: Matthew G. Richman

Title: Assistant Secretary

Address: 1140 Pearl Street Boulder, CO 80302

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INCENTRA SOLUTIONS
INTERNATIONAL, INC.

By:

Name: Matthew G. Richman

Title: Assistant Secretary

Address: 1140 Pearl Street Boulder, CO 80302

INCENTRA SOLUTIONS OF THE
NORTHEAST, INC.

By:

Name: Matthew G. Richman

Title: Secretary

Address: 1140 Pearl Street Boulder, CO 80302

PWI TECHNOLOGIES, INC.

By:

Name: Matthew G. Richman

Title: Secretary

Address: 1140 Pearl Street Boulder, CO 80302

INCENTRA SOLUTIONS OF
CALIFORNIA, INC.

By:

Name: Matthew G. Richman

Title: Secretary

Address: 1140 Pearl Street Boulder, CO 80302

NETWORK SYSTEM TECHNOLOGIES, INC.

By:

Name: Matthew G. Richman

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Title: Secretary

Address: 1140 Pearl Street Boulder, CO 80302

TACTIX, INC.

By:

Name: Matthew G. Richman

Title: Secretary

Address: 1140 Pearl Street Boulder, CO 80302

INCENTRA HELIO ACQUISITION CORP., INC.

By:

Name: Matthew G. Richman

Title: Secretary

Address: 1140 Pearl Street Boulder, CO 80302

ACKNOWLEDGED:

CALLIOPE CAPITAL CORPORATION

By:

Name:

Title:

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SCHEDULE A

Borrower Name	Date of Organization	Jurisdiction of Organization	Organizational Identification Number	Federal Tax Identification Number
Incentra Solutions	4/27/95	Nevada	C7006-1995	86-0793960
ManagedStorage International, Inc.	3/7/2000	Delaware	3188876	04-3506252
Incentra Solutions International, Inc.	2/18/04	Delaware	3766180	20-8611239
PWI Technologies	12/23/97	Washington	601 840 570	91-1870684
Incentra Solutions of California	2/14/05	Delaware	3925903	20-2373782
Network System Technologies	10/10/96	Illinois	59061348	36-4108009
Tactix, Inc.	12/10/92	Oregon	323217-88	93-1098930
		Alaska	725139
Incentra Helio Acquisition Corporation – newly forming for acquisition corporation (not formed yet)	July 2007	Delaware	Not assigned	Not assigned
Helio Solutions, Inc. (company being merged into Incentra Helio Acquisition Corp)	4/19/2001	California	2340599	77-0572101

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SCHEDULE B

COMMERCIAL TORT CLAIMS

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EX-10.16

Exhibit 10.16

SUBSIDIARY GUARANTY

New York, New York July 31, 2007

          FOR VALUE RECEIVED, and in consideration of note purchases from, or credit otherwise extended or to be extended by Calliope Capital Corporation (“Calliope”) to or for the account of INCENTRA SOLUTIONS, INC., a Nevada corporation (the “Company”) from time to time and at any time and for other good and valuable consideration and to induce Calliope, in its discretion, to purchase such notes or make other extensions of credit and to make or grant such renewals, extensions, releases of collateral or relinquishments of legal rights as Calliope may deem advisable, each of the undersigned (and each of them if more than one, the liability under this Guaranty being joint and several) (jointly and severally referred to as “Guarantors” or “the undersigned”) unconditionally guaranties to Calliope, its successors, endorsees and assigns the prompt payment when due (whether by acceleration or otherwise) of all present and future obligations and liabilities of any and all kinds of each Company to Calliope and of all instruments of any nature evidencing or relating to any such obligations and liabilities upon which such Company or one or more parties and such Company is or may become liable to Calliope, whether incurred by such Company as maker, endorser, drawer, acceptor, guarantors, accommodation party or otherwise, and whether due or to become due, secured or unsecured, absolute or contingent, joint or several, and however or whenever acquired by Calliope, whether arising under, out of, or in connection with (i) that certain Securities Purchase Agreement dated as of the date hereof and between the Company and Calliope (the “Securities Purchase Agreement”) and (ii) each Related Agreement referred to in the Securities Purchase Agreement (the Securities Purchase Agreement and each Related Agreement, as each may be amended, modified, restated and/or supplemented from time to time, are collectively referred to herein as the “Documents”), or any documents, instruments or agreements relating to or executed in connection with the Documents or any documents, instruments or agreements referred to therein or otherwise, or any other obligations or liabilities of such Company to Calliope, whether now existing or hereafter arising, direct or indirect, liquidated or unliquidated, absolute or contingent, due or not due and whether under, pursuant to or evidenced by a note, agreement, guaranty, instrument or otherwise (all of which are herein collectively referred to as the “Obligations”), and irrespective of the genuineness, validity, regularity or enforceability of such Obligations, or of any instrument evidencing any of the Obligations or of any collateral therefor or of the existence or extent of such collateral, and irrespective of the allowability, allowance or disallowance of any or all of the Obligations in any case commenced by or against any Company under Title 11, United States Code, including, without limitation, obligations or indebtedness of any Company for post-petition interest, fees, costs and charges that would have accrued or been added to the Obligations but for the commencement of such case. Terms not otherwise defined herein shall have the meaning assigned such terms in the Securities Purchase Agreement. In furtherance of the foregoing, the undersigned hereby agrees as follows:

          1. No Impairment. Calliope may at any time and from time to time, either before or after the maturity thereof, without notice to or further consent of the undersigned, extend the time of payment of, exchange or surrender any collateral for, renew or extend any of the Obligations or increase or decrease the interest rate thereon, or any other agreement with any Company or with any other party to or person liable on any of the Obligations, or interested

therein, for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or for any modification of the terms thereof or of any agreement between Calliope and any Company or any such other party or person, or make any election of rights Calliope may deem desirable under the United States Bankruptcy Code, as amended, or any other federal or state bankruptcy, reorganization, moratorium or insolvency law relating to or affecting the enforcement of creditors’ rights generally (any of the foregoing, an “Insolvency Law”) without in any way impairing or affecting this Guaranty. This Guaranty shall be effective regardless of the subsequent incorporation, merger or consolidation of any Company, or any change in the composition, nature, personnel or location of any Company and shall extend to any successor entity to each Company, including a debtor in possession or the like under any Insolvency Law.

          2. Guaranty Absolute. Subject to Section 5(c) hereof, each of the undersigned jointly and severally guarantees that the Obligations will be paid strictly in accordance with the terms of the Documents and/or any other document, instrument or agreement creating or evidencing the Obligations, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Company with respect thereto. Guarantors hereby knowingly accept the full range of risk encompassed within a contract of “continuing guaranty” which risk includes the possibility that a Company will contract additional obligations and liabilities for which Guarantors may be liable hereunder after such Company’s financial condition or ability to pay its lawful debts when they fall due has deteriorated, whether or not such Company has properly authorized incurring such additional obligations and liabilities. The undersigned acknowledge that (i) no oral representations, including any representations to extend credit or provide other financial accommodations to any Company, have been made by Calliope to induce the undersigned to enter into this Guaranty and (ii) any extension of credit to any Company shall be governed solely by the provisions of the Documents. The liability of each of the undersigned under this Guaranty shall be absolute and unconditional, in accordance with its terms, and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever, including, without limitation: (a) any waiver, indulgence, renewal, extension, amendment or modification of or addition, consent or supplement to or deletion from or any other action or inaction under or in respect of the Documents or any other instruments or agreements relating to the Obligations or any assignment or transfer of any thereof, (b) any lack of validity or enforceability of any Document or other documents, instruments or agreements relating to the Obligations or any assignment or transfer of any thereof, (c) any furnishing of any additional security to Calliope or its assignees or any acceptance thereof or any release of any security by Calliope or its assignees, (d) any limitation on any party’s liability or obligation under the Documents or any other documents, instruments or agreements relating to the Obligations or any assignment or transfer of any thereof or any invalidity or unenforceability, in whole or in part, of any such document, instrument or agreement or any term thereof, (e) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to any Company, or any action taken with respect to this Guaranty by any trustee or receiver, or by any court, in any such proceeding, whether or not the undersigned shall have notice or knowledge of any of the foregoing, (f) any exchange, release or nonperfection of any collateral, or any release, or amendment or waiver of or consent to departure from any guaranty or security, for all or any of the Obligations or (g) any other circumstance which might otherwise constitute a defense available to, or a discharge of, the

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undersigned. Any amounts due from the undersigned to Calliope shall bear interest until such amounts are paid in full at the highest rate then applicable to the Obligations. Obligations include post-petition interest whether or not allowed or allowable.

          3. Waivers.

          (a) This Guaranty is a guaranty of payment and not of collection. Calliope shall be under no obligation to institute suit, exercise rights or remedies or take any other action against any Company or any other person or entity liable with respect to any of the Obligations or resort to any collateral security held by it to secure any of the Obligations as a condition precedent to the undersigned being obligated to perform as agreed herein and each of the Guarantors hereby waives any and all rights which it may have by statute or otherwise which would require Calliope to do any of the foregoing. Each of the Guarantors further consents and agrees that Calliope shall be under no obligation to marshal any assets in favor of Guarantors, or against or in payment of any or all of the Obligations. Each of the undersigned hereby waives all suretyship defenses and any rights to interpose any defense, counterclaim or offset of any nature and description which the undersigned may have or which may exist between and among Calliope, any Company and/or the undersigned with respect to the undersigned’s obligations under this Guaranty, or which any Company may assert on the underlying debt, including but not limited to failure of consideration, breach of warranty, fraud, payment (other than cash payment in full of the Obligations), statute of frauds, bankruptcy, infancy, statute of limitations, accord and satisfaction, and usury.

          (b) Each of the undersigned further waives (i) notice of the acceptance of this Guaranty, of the extensions of credit, and of all notices and demands of any kind to which the undersigned may be entitled, including, without limitation, notice of adverse change in any Company’s financial condition or of any other fact which might materially increase the risk of the undersigned and (ii) presentment to or demand of payment from anyone whomsoever liable upon any of the Obligations, protest, notices of presentment, non-payment or protest and notice of any sale of collateral security or any default of any sort.

          (c) Notwithstanding any payment or payments made by the undersigned hereunder, or any setoff or application of funds of the undersigned by Calliope, the undersigned shall not be entitled to be subrogated to any of the rights of Calliope against any Company or against any collateral or guarantee or right of offset held by Calliope for the payment of the Obligations, nor shall the undersigned seek or be entitled to seek any contribution or reimbursement from any Company in respect of payments made by the undersigned hereunder, until all amounts owing to Calliope by each Company on account of the Obligations are indefeasibly paid in full and Calliope’ obligation to extend credit pursuant to the Documents has been irrevocably terminated. If, notwithstanding the foregoing, any amount shall be paid to the undersigned on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full and Calliope’s obligation to extend credit pursuant to the Documents shall not have been terminated, such amount shall be held by the undersigned in trust for Calliope, segregated from other funds of the undersigned, and shall forthwith upon, and in any event within

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two (2) business days of, receipt by the undersigned, be turned over to Calliope in the exact form received by the undersigned (duly endorsed by the undersigned to Calliope, if required), to be applied against the Obligations, whether matured or unmatured, in such order as Calliope may determine, subject to the provisions of the Documents. Any and all present and future obligations and liabilities of each Company to any of the undersigned are hereby waived and postponed in favor of, and subordinated to the full payment and performance of, all Obligations of each Company to Calliope.

          4. Security. All sums at any time to the credit of the undersigned and any property of the undersigned in Calliope’s possession or in the possession of any bank, financial institution or other entity that directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, Calliope (each such entity, an “Affiliate”) shall be deemed held by Calliope or such Affiliate, as the case may be, as security for any and all of the undersigned’s obligations and liabilities to Calliope and to any Affiliate of Calliope, no matter how or when arising and whether under this or any other instrument, agreement or otherwise.

          5. Representations and Warranties. Each of the undersigned hereby jointly and severally represents and warrants (all of which representations and warranties shall survive until all Obligations are indefeasibly satisfied in full and the Documents have been irrevocably terminated), that:

          (a) Corporate Status. It is a corporation, partnership or limited liability company, as the case may be, duly formed, validly existing and in good standing under the laws of its jurisdiction of formation indicated on the signature page hereof and has full power, authority and legal right to own its property and assets and to transact the business in which it is engaged.

          (b) Authority and Execution. It has full power, authority and legal right to execute and deliver, and to perform its obligations under, this Guaranty and has taken all necessary corporate, partnership or limited liability company, as the case may be, action to authorize the execution, delivery and performance of this Guaranty.

          (c) Legal, Valid and Binding Character. This Guaranty constitutes its legal, valid and binding obligation enforceable in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting the enforcement of creditor’s rights and general principles of equity that restrict the availability of equitable or legal remedies.

          (d) Violations. The execution, delivery and performance of this Guaranty will not violate any requirement of law applicable to it or any contract, agreement or instrument to which it is a party or by which it or any of its property is bound or result in the creation or imposition of any mortgage, lien or other encumbrance other than in favor of Calliope on any of its property or assets pursuant to the provisions of any of the foregoing, which, in any of the foregoing cases, could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

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          (e) Consents or Approvals. No consent of any other person or entity (including, without limitation, any creditor of the undersigned) and no consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required in connection with the execution, delivery, performance, validity or enforceability of this Guaranty by it, except to the extent that the failure to obtain any of the foregoing could not reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

          (f) Litigation. No litigation, arbitration, investigation or administrative proceeding of or before any court, arbitrator or governmental authority, bureau or agency is currently pending or, to the best of its knowledge, threatened (i) with respect to this Guaranty or any of the transactions contemplated by this Guaranty or (ii) against or affecting it, or any of its property or assets, which, in each of the foregoing cases, if adversely determined, could reasonably be expected to have a Material Adverse Effect.

          (g) Financial Benefit. It has derived or expects to derive a financial or other advantage from each and every loan, advance or extension of credit made under the Documents or other Obligation incurred by the Companies to Calliope.

          (h) Solvency. As of the date of this Guaranty, (a) the fair saleable value of its assets exceeds its liabilities and (b) it is meeting its current liabilities as they mature.

          6. Acceleration.

          (a) If any breach of any covenant or condition or other event of default shall occur and be continuing under any agreement made by any Company or any of the undersigned to Calliope, or any Company or any of the undersigned should at any time become insolvent, or make a general assignment, or if a proceeding in or under any Insolvency Law shall be filed or commenced by, or in respect of, any of the undersigned, or if a notice of any lien, levy, or assessment is filed of record with respect to any assets of any of the undersigned by the United States of America or any department, agency, or instrumentality thereof, or if any taxes or debts owing at any time or times hereafter to any one of them becomes a lien or encumbrance upon any assets of the undersigned in Calliope’s possession, or otherwise, any and all Obligations shall for purposes hereof, at Calliope’s option, be deemed due and payable without notice notwithstanding that any such Obligation is not then due and payable by the Companies.

          (b) Each of the undersigned will promptly notify Calliope of any default by such undersigned in its respective performance or observance of any term or condition of any agreement to which the undersigned is a party if the effect of such default is to cause, or permit the holder of any obligation under such agreement to cause, such obligation to become due prior to its stated maturity and, if such an event occurs, Calliope shall have the right to accelerate such undersigned’s obligations hereunder.

          7. Payments from Guarantors. Calliope, in its sole and absolute discretion, with or without notice to the undersigned, may apply on account of the Obligations any payment from the undersigned or any other guarantors, or amounts realized from any security for the

5

Obligations, or may deposit any and all such amounts realized in a non-interest bearing cash collateral deposit account to be maintained as security for the Obligations.

          8. Costs. The undersigned shall pay on demand, all costs, fees and expenses (including expenses for legal services of every kind) relating or incidental to the enforcement or protection of the rights of Calliope hereunder or under any of the Obligations.

          9. No Termination. This is a continuing irrevocable guaranty and shall remain in full force and effect and be binding upon the undersigned, and each of the undersigned’s successors and assigns, until all of the Obligations have been indefeasibly paid in full and Calliope’s obligation to extend credit pursuant to the Documents has been irrevocably terminated. If any of the present or future Obligations are guarantied by persons, partnerships, corporations or other entities in addition to the undersigned, the death, release or discharge in whole or in part or the bankruptcy, merger, consolidation, incorporation, liquidation or dissolution of one or more of them shall not discharge or affect the liabilities of any undersigned under this Guaranty.

          10. Recapture. Anything in this Guaranty to the contrary notwithstanding, if Calliope receives any payment or payments on account of the liabilities guaranteed hereby, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver, or any other party under any Insolvency Law, common law or equitable doctrine, then to the extent of any sum not finally retained by Calliope, the undersigned’s obligations to Calliope shall be reinstated and this Guaranty shall remain in full force and effect (or be reinstated) until payment shall have been made to Calliope, which payment shall be due on demand.

          11. Books and Records. The books and records of Calliope showing the account between Calliope and each Company shall be admissible in evidence in any action or proceeding, shall be binding upon the undersigned for the purpose of establishing the items therein set forth and shall constitute prima facie proof thereof (absent manifest error).

          12. No Waiver. No failure on the part of Calliope to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Calliope of any right, remedy or power hereunder preclude any other or future exercise of any other legal right, remedy or power. Each and every right, remedy and power hereby granted to Calliope or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by Calliope at any time and from time to time.

          13. Waiver of Jury Trial. EACH OF THE UNDERSIGNED DESIRES THAT ITS DISPUTES BE RESOLVED BY A JUDGE APPLYING APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, EACH OF THE UNDERSIGNED HERETO WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN CALLIOPE, AND/OR ANY OF THE UNDERSIGNED ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THE

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RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS GUARANTY, ANY DOCUMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO.

          14. Governing Law; Jurisdiction. THIS GUARANTY CANNOT BE CHANGED OR TERMINATED ORALLY, AND SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. EACH OF THE UNDERSIGNED HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY OF THE UNDERSIGNED, ON THE ONE HAND, AND CALLIOPE, ON THE OTHER HAND, PERTAINING TO THIS GUARANTY OR ANY OF THE DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS GUARANTY OR ANY OF THE DOCUMENTS; PROVIDED, THAT EACH OF THE UNDERSIGNED ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW YORK, STATE OF NEW YORK; AND FURTHER PROVIDED, THAT NOTHING IN THIS GUARANTY SHALL BE DEEMED OR OPERATE TO PRECLUDE CALLIOPE FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF CALLIOPE. EACH OF THE UNDERSIGNED EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH UNDERSIGNED HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. EACH OF THE UNDERSIGNED HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH UNDERSIGNED IN ACCORDANCE WITH SECTION 18 AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH UNDERSIGNED’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

          15. Understanding With Respect to Waivers and Consents. Each Guarantor warrants and agrees that each of the waivers and consents set forth in this Guaranty is made voluntarily and unconditionally after consultation with outside legal counsel and with full knowledge of its significance and consequences, with the understanding that events giving rise to any defense or right waived may diminish, destroy or otherwise adversely affect rights which such Guarantor otherwise may have against any Company, Calliope or any other person or entity or against any collateral. If, notwithstanding the intent of the parties that the terms of this Guaranty shall control in any and all circumstances, any such waivers or consents are determined to be

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unenforceable under applicable law, such waivers and consents shall be effective to the maximum extent permitted by law.

          16. Severability. To the extent permitted by applicable law, any provision of this Guaranty which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

          17. Amendments, Waivers. No amendment or waiver of any provision of this Guaranty nor consent to any departure by the undersigned therefrom shall in any event be effective unless the same shall be in writing executed by each of the undersigned directly affected by such amendment and/or waiver and Calliope.

          18. Notice. All notices, requests and demands to or upon the undersigned, shall be in writing and shall be deemed to have been duly given or made (a) when delivered, if by hand, (b) three (3) days after being sent, postage prepaid, if by registered or certified mail, (c) when confirmed electronically, if by facsimile, or (d) when delivered, if by a recognized overnight delivery service in each event, to the numbers and/or address set forth beneath the signature of the undersigned.

          19. Successors. Calliope may, from time to time, without notice to the undersigned, sell, assign, transfer or otherwise dispose of all or any part of the Obligations and/or rights under this Guaranty. Without limiting the generality of the foregoing, Calliope may assign, or grant participations to, one or more banks, financial institutions or other entities all or any part of any of the Obligations. In each such event, Calliope, its Affiliates and each and every immediate and successive purchaser, assignee, transferee or holder of all or any part of the Obligations shall have the right to enforce this Guaranty, by legal action or otherwise, for its own benefit as fully as if such purchaser, assignee, transferee or holder were herein by name specifically given such right. Calliope shall have an unimpaired right to enforce this Guaranty for its benefit with respect to that portion of the Obligations which Calliope has not disposed of, sold, assigned, or otherwise transferred.

          20. Joinder. It is understood and agreed that any person or entity that desires to become a Guarantor hereunder, or is required to execute a counterpart of this Guaranty after the date hereof pursuant to the requirements of any Document, shall become a Guarantor hereunder by (x) executing a joinder agreement in form and substance satisfactory to Calliope, (y) delivering supplements to such exhibits and annexes to such Documents as Calliope shall reasonably request and/or as may be required by such joinder agreement and (z) taking all actions as specified in this Guaranty as would have been taken by such such Guarantor had it been an original party to this Guaranty, in each case with all documents required above to be delivered to Calliope and with all documents and actions required above to be taken to the reasonable satisfaction of Calliope.

          21. Release. Nothing except indefeasible payment in full of the Obligations shall release any of the undersigned from liability under this Guaranty.

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          22. Remedies Not Exclusive. The remedies conferred upon Calliope in this Guaranty are intended to be in addition to, and not in limitation of any other remedy or remedies available to Calliope under applicable law or otherwise.

          23. Limitation of Obligations under this Guaranty. Each Guarantor and Calliope (by its acceptance of the benefits of this Guaranty) hereby confirms that it is its intention that this Guaranty not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act or any similar Federal or state law. To effectuate the foregoing intention, each Guarantor and Calliope (by its acceptance of the benefits of this Guaranty) hereby irrevocably agrees that the Obligations guaranteed by such Guarantor shall be limited to such amount as will, after giving effect to such maximum amount and all other (contingent or otherwise) liabilities of such Guarantor that are relevant under such laws and after giving effect to any rights to contribution pursuant to any agreement providing for an equitable contribution among such Guarantor and the other Guarantors (including this Guaranty), result in the Obligations of such Guarantor under this Guaranty in respect of such maximum amount not constituting a fraudulent transfer or conveyance.

[REMAINDER OF THIS PAGE IS BLANK.
SIGNATURE PAGE IMMEDIATELY FOLLOWS]

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          IN WITNESS WHEREOF, this Guaranty has been executed by the undersigned as of the date and year here above written.

PWI TECHNOLOGIES, INC.

By:

Name: Matthew G. Richman

Title: Secretary

Address: 1140 Pearl Street Boulder, CO 80302

Telephone: (303) 440-7829

Facsimile: (303) 449-9584

State of Formation:

INCENTRA SOLUTIONS OF CALIFORNIA, INC.

By:

Name: Matthew G. Richman

Title: Secretary

Address: 1140 Pearl Street Boulder, CO 80302

Telephone: (303) 440-7829

Facsimile: (303) 449-9584

State of Formation:

MANAGEDSTORAGE INTERNATIONAL, INC.

By:

Name: Matthew G. Richman

Title: Assistant Secretary

Address: 1140 Pearl Street Boulder, CO 80302

Telephone: (303) 440-7829

Facsimile: (303) 449-9584

State of Formation:

10

INCENTRA SOLUTIONS INTERNATIONAL, INC.

By:

Name: Matthew G. Richman

Title: Assistant Secretary

Address: 1140 Pearl Street Boulder, CO 80302

Telephone: (303) 440-7829

Facsimile: (303) 449-9584

State of Formation:

INCENTRA SOLUTIONS OF THE NORTHEAST, INC.

By: 

Name: Matthew G. Richman

Title: Secretary

Address: 1140 Pearl Street Boulder, CO 80302

Telephone: (303) 440-7829

Facsimile: (303) 449-9584

State of Formation:

NETWORK SYSTEM TECHNOLOGIES, INC.

By:

Name: Matthew Richman

Title: Secretary

Address: 1140 Pearl Street Boulder, CO 80302

Telephone: (303) 440-7829

Facsimile: (303) 449-9584

State of Formation:

TACTIX, INC.

By:

Name: Matthew G. Richman

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Title: Secretary

Address: 1140 Pearl Street Boulder, CO 80302

Telephone: (303) 440-7829

Facsimile: (303) 449-9584

State of Formation:

INCENTRA HELIO ACQUISITION CORP., INC.

By:

Name: Matthew G. Richman

Title: Secretary

Address: 1140 Pearl Street Boulder, CO 80302

Telephone: (303) 440-7829

Facsimile: (303) 449-9584

State of Formation:

12

EX-10.17

Exhibit 10.17

REGISTRATION RIGHTS AGREEMENT

          This Registration Rights Agreement (this “Agreement”) is made and entered into as of July 31, 2007, by and between INCENTRA SOLUTIONS, INC., a Nevada corporation (the “Company”), and Calliope Capital Corporation (the “Purchaser”).

          This Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date hereof, by and between the Purchaser and the Company (as amended, modified or supplemented from time to time, the “Securities Purchase Agreement”), and pursuant to the Warrant referred to therein.

          The Company and the Purchaser hereby agree as follows:

1.Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Securities Purchase Agreement shall have the meanings given such terms in the Securities Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:

                    “Commission” means the Securities and Exchange Commission.

                    “Common Stock” means shares of the Company’s common stock, par value $0.001 per share.

                    “Effectiveness Date” means (i) with respect to the initial Registration Statement required to be filed hereunder, a date no later than one hundred eighty (180) days following the date hereof and (ii) with respect to each additional Registration Statement required to be filed hereunder, a date no later than thirty (30) days following the applicable Filing Date.

                    “Effectiveness Period” has the meaning set forth in Section 2(a).

                    “Exchange Act” means the Securities Exchange Act of 1934, as amended, and any successor statute.

                    “Filing Date” means, with respect to (i) the shares of Common Stock issuable upon exercise of the initial Warrant referred to in the Securities Purchase Agreement, a date no later than sixty (60) days following the date hereof, (ii) the shares of Common Stock issuable upon the exercise of any other Warrant issued in connection with the Securities Purchase Agreement, the date which is thirty (30) days after the date of the issuance of such Warrant, and (iii) the shares of Common Stock issuable to the Holder as a result of adjustments to the Exercise Price made pursuant to the Warrant or otherwise, thirty (30) days after the occurrence such event or the date of the adjustment of the Exercise Price.

                    “Holder” or “Holders” means the Purchaser or any of its affiliates or transferees to the extent any of them hold Registrable Securities, other than those purchasing Registrable Securities in a market transaction.

                    “Indemnified Party” has the meaning set forth in Section 5(c).

                    “Indemnifying Party” has the meaning set forth in Section 5(c).

                     “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

                    “Prospectus” means the prospectus included in the Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by the Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

                    “Registrable Securities” means the shares of Common Stock issued upon the exercise of the Warrants.

                    “Registration Statement” means each registration statement required to be filed hereunder, including the Prospectus therein, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement.

                    “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

                    “Rule 415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

                     “Securities Act” means the Securities Act of 1933, as amended, and any successor statute.

                    “Securities Purchase Agreement” shall have the meaning set forth in the second paragraph of this Agreement.

                    “Trading Market” means any of the NASD Over the Counter Bulletin Board, NASDAQ Capital Market, the NASDAQ National Market, the American Stock Exchange or the New York Stock Exchange.

                    “Warrants” means the Common Stock purchase warrants issued in connection with the Securities Purchase Agreement, whether on the date hereof or thereafter.

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2. Registration.
		(a)	On or prior to each Filing Date the Company shall prepare and file with the Commission a Registration Statement covering the Registrable Securities for a selling stockholder resale offering to be made on a continuous basis pursuant to Rule 415. The Registration Statement shall be on Form SB-2 or Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on such Forms, in which case such registration shall be on another appropriate form in accordance herewith). The Company shall cause the Registration Statement to become effective and remain effective as provided herein. The Company shall use its reasonable commercial efforts to cause each Registration Statement to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event no later than the Effectiveness Date. The Company shall use its reasonable commercial efforts to keep each Registration Statement continuously effective under the Securities Act until the date which is the earlier date of when (i) all Registrable Securities covered by such Registration Statement have been sold, or (ii) all Registrable Securities covered by such Registration Statement may be sold immediately without registration under the Securities Act and without volume restrictions pursuant to Rule 144(k), as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company’s transfer agent and the affected Holders (each, an “Effectiveness Period”).
		(b) Within three business days of the Effectiveness Date, the Company shall cause its counsel to issue a blanket opinion substantially in the form attached hereto as Exhibit A, to the transfer agent stating that the shares are subject to an effective registration statement and can be reissued free of restrictive legend upon notice of a sale by the Purchaser and confirmation by the Purchaser that it has complied with the prospectus delivery requirements, provided that the Company or such counsel has not advised the transfer agent orally or in writing that the opinion has been withdrawn. Copies of the blanket opinion required by this Section 2(b) shall be delivered to the Purchaser within the time frame set forth above.
3. Registration Procedures. If and whenever the Company is required by the provisions hereof to effect the registration of any Registrable Securities under the Securities Act, the Company will, as expeditiously as possible:
	(a)			prepare and file with the Commission the Registration Statement with respect to such Registrable Securities, respond as promptly as possible to any comments received from the Commission, and use its reasonable commercial efforts to cause such Registration Statement to become and remain effective for the Effectiveness Period with respect thereto, and promptly provide to the Purchaser copies of all filings and Commission letters of comment relating thereto;
	(b)			prepare and file with the Commission such amendments and supplements to such Registration Statement and the Prospectus used in connection therewith as may be

3

		necessary to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by such Registration Statement and to keep such Registration Statement effective until the expiration of the Effectiveness Period applicable to such Registration Statement;
	(c)	furnish to the Purchaser such number of copies of the Registration Statement and the Prospectus included therein (including each preliminary Prospectus) as the Purchaser reasonably may request to facilitate the public sale or disposition of the Registrable Securities covered by such Registration Statement;
	(d)	use its reasonable commercial efforts to register or qualify the Purchaser’s Registrable Securities covered by such Registration Statement under the securities or “blue sky” laws of such jurisdictions within the United States as the Purchaser may reasonably request, provided, however, that the Company shall not for any such purpose be required to qualify generally to transact business as a foreign corporation in any jurisdiction where it is not so qualified or to consent to general service of process in any such jurisdiction;
	(e)	list the Registrable Securities covered by such Registration Statement with any securities exchange on which the Common Stock of the Company is then listed;
	(f)	immediately notify the Purchaser at any time when a Prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event of which the Company has knowledge as a result of which the Prospectus contained in such Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing; and
	(g)	make available for inspection by the Purchaser and any attorney, accountant or other agent retained by the Purchaser, all publicly available, non-confidential financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors and employees to supply all publicly available, non-confidential information reasonably requested by the attorney, accountant or agent of the Purchaser.
4. Registration Expenses. All expenses relating to the Company’s compliance with Sections 2 and 3 hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including reasonable counsel fees) incurred in connection with complying with state securities or “blue sky” laws, fees of the NASD, transfer taxes, fees of transfer agents and registrars, fees of, and disbursements incurred by, one counsel for the Holders, are called “Registration Expenses”. All selling commissions applicable to the sale of Registrable Securities, including any fees and disbursements of any special counsel to the Holders beyond those included in Registration Expenses, are called

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“Selling Expenses.” The Company shall only be responsible for all Registration Expenses.

5. Indemnification.

(a)

In the event of a registration of any Registrable Securities under the Securities Act pursuant to this Agreement, the Company will indemnify and hold harmless each Holder, and its officers, directors and each other person, if any, who controls each Holder within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which such Holder, or such persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement under which such Registrable Securities were registered under the Securities Act pursuant to this Agreement, any preliminary Prospectus or final Prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse such Holder, and each such person for any reasonable legal or other expenses incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in any such case if and to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished by or on behalf of the Purchaser or any such person in writing specifically for use in any such document.

(b)

In the event of a registration of the Registrable Securities under the Securities Act pursuant to this Agreement, the Purchaser will indemnify and hold harmless the Company, and its officers, directors and each other person, if any, who controls the Company within the meaning of the Securities Act, against all losses, claims, damages or liabilities, joint or several, to which the Company or such persons may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact which was furnished in writing by the Purchaser to the Company expressly for use in (and such information is contained in) the Registration Statement under which such Registrable Securities were registered under the Securities Act pursuant to this Agreement, any preliminary Prospectus or final Prospectus contained therein, or any amendment or supplement thereof, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and each such person for any reasonable legal or other expenses incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action,

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	provided, however, that the Purchaser will be liable in any such case if and only to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission so made in conformity with information furnished in writing to the Company by or on behalf of the Purchaser specifically for use in any such document. Notwithstanding the provisions of this paragraph, the Purchaser shall not be required to indemnify any person or entity in excess of the amount of the aggregate net proceeds received by the Purchaser in respect of Registrable Securities in connection with any such registration under the Securities Act.
(c)	Promptly after receipt by a party entitled to claim indemnification hereunder (an “Indemnified Party”) of notice of the commencement of any action, such Indemnified Party shall, if a claim for indemnification in respect thereof is to be made against a party hereto obligated to indemnify such Indemnified Party (an “Indemnifying Party”), notify the Indemnifying Party in writing thereof, but the omission so to notify the Indemnifying Party shall not relieve it from any liability which it may have to such Indemnified Party other than under this Section 5(c) and shall only relieve it from any liability which it may have to such Indemnified Party under this Section 5(c) if and to the extent the Indemnifying Party is prejudiced by such omission. In case any such action shall be brought against any Indemnified Party and it shall notify the Indemnifying Party of the commencement thereof, the Indemnifying Party shall be entitled to participate in and, to the extent it shall wish, to assume and undertake the defense thereof with counsel satisfactory to such Indemnified Party, and, after notice from the Indemnifying Party to such Indemnified Party of its election so to assume and undertake the defense thereof, the Indemnifying Party shall not be liable to such Indemnified Party under this Section 5(c) for any legal expenses subsequently incurred by such Indemnified Party in connection with the defense thereof; if the Indemnified Party retains its own counsel, then the Indemnified Party shall pay all fees, costs and expenses of such counsel, provided, however, that, if the defendants in any such action include both the Indemnified Party and the Indemnifying Party and the Indemnified Party shall have reasonably concluded that there may be reasonable defenses available to it which are different from or additional to those available to the Indemnifying Party or if the interests of the Indemnified Party reasonably may be deemed to conflict with the interests of the Indemnifying Party, the Indemnified Party shall have the right to select one separate counsel and to assume such legal defenses and otherwise to participate in the defense of such action, with the reasonable expenses and fees of such separate counsel and other expenses related to such participation to be reimbursed by the Indemnifying Party as incurred.
(d)	In order to provide for just and equitable contribution in the event of joint liability under the Securities Act in any case in which either (i) the Purchaser, or any officer, director or controlling person of the Purchaser, makes a claim for indemnification pursuant to this Section 5 but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the

6

expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Section 5 provides for indemnification in such case, or (ii) contribution under the Securities Act may be required on the part of the Purchaser or such officer, director or controlling person of the Purchaser in circumstances for which indemnification is provided under this Section 5; then, and in each such case, the Company and the Purchaser will contribute to the aggregate losses, claims, damages or liabilities to which they may be subject (after contribution from others) in such proportion so that the Purchaser is responsible only for the portion represented by the percentage that the public offering price of its securities offered by the Registration Statement bears to the public offering price of all securities offered by such Registration Statement, provided, however, that, in any such case, (A) the Purchaser will not be required to contribute any amount in excess of the public offering price of all such securities offered by it pursuant to such Registration Statement; and (B) no person or entity guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of the Act) will be entitled to contribution from any person or entity who was not guilty of such fraudulent misrepresentation.

6. Representations and Warranties.

(a) The Common Stock of the Company is registered pursuant to Section 12(b) or 12(g) of the Exchange Act and, except with respect to certain matters which the Company has disclosed to the Purchaser on Schedule 4.21 to the Securities Purchase Agreement, the Company has timely filed all proxy statements, reports, schedules, forms, statements and other documents required to be filed by it under the Exchange Act. The Company has filed its Annual Report on Form 10-K for its fiscal years ended December 31, 2005 and December 31, 2006 and its Quarterly Reports on Form 10-Q for the fiscal quarter ended March 31, 2007 (collectively, the “SEC Reports”). To the knowledge of the Company, each of the SEC Reports was, at the time of its filing, in substantial compliance with the requirements of its respective form and none of the SEC Reports, nor the financial statements (and the notes thereto) included in the SEC Reports, as of its respective filing date, contained any untrue statement of a material fact or omitted 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. The financial statements of the Company included in the SEC Reports comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) applied on a consistent basis during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed) and fairly present in all material respects the financial condition, the results of operations and the cash flows of the Company

7

	and its subsidiaries, on a consolidated basis, as of, and for, the periods presented in each such SEC Report.
(b)	The Common Stock is listed for trading on the NASD Over-the-Counter Bulletin Board (“OTCBB”) and satisfies all requirements for the continuation of such listing. The Company has not received any notice that its Common Stock will be no longer quoted on the OTCBB (except for prior notices which have been fully remedied) or that the Common Stock does not meet all requirements for the continuation of such listing.
(c)	Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly made any offers or sales of any security or solicited any offers to buy any security under circumstances that would cause the offering of the Securities pursuant to the Securities Purchase Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act which would prevent the Company from selling the Common Stock pursuant to Rule 506 under the Securities Act, or any applicable exchange-related stockholder approval provisions, nor will the Company or any of its affiliates or subsidiaries take any action or steps that would cause the offering of the Securities to be integrated with other offerings (other than such concurrent offerings to the Purchaser).
(d)	The Warrants and the shares of Common Stock which the Purchaser may acquire pursuant to the Warrants are all restricted securities under the Securities Act as of the date of this Agreement. The Company will not issue any stop transfer order or other order impeding the sale and delivery of any of the Registrable Securities at such time as such Registrable Securities are registered for public sale or an exemption from registration is available, except as required by federal or state securities laws.
(e)	The Company understands the nature of the Registrable Securities issuable upon the exercise of the Warrants and recognizes that the issuance of such Registrable Securities may have a potential dilutive effect. The Company specifically acknowledges that its obligation to issue the Registrable Securities is binding upon the Company and enforceable regardless of the dilution such issuance may have on the ownership interests of other shareholders of the Company.
(f)	Except for agreements made in the ordinary course of business, there is no agreement that has not been filed with the Commission as an exhibit to a registration statement or to a form required to be filed by the Company under the Exchange Act, the breach of which could reasonably be expected to have a material and adverse effect on the Company and its subsidiaries, or would prohibit or otherwise interfere with the ability of the Company to enter into and perform any of its obligations under this Agreement in any material respect.

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(g) The Company will at all times have authorized and reserved a sufficient number of shares of Common Stock for the full exercise of the Warrants.

7. Miscellaneous.

(a)	Remedies. In the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, will be entitled to specific performance of its rights under this Agreement.
(b)	No Piggyback on Registrations. Except as and to the extent specified in Schedule 4.15 to the Securities Purchase Agreement and on Schedule 7(b) hereto, neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in any Registration Statement other than the Registrable Securities, and the Company shall not after the date hereof enter into any agreement providing any such right for inclusion of shares in the Registration Statement to any of its security holders. Except as and to the extent specified in Schedule 4.15 to the Securities Purchase Agreement and on Schedule 7(b) hereto, the Company has not previously entered into any agreement granting any registration rights with respect to any of its securities to any Person that have not been fully satisfied.
(c)	Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act as applicable to it in connection with sales of Registrable Securities pursuant to any Registration Statement.
(d)	Discontinued Disposition. Each Holder agrees by its acquisition of such Registrable Securities that, upon receipt of a notice from the Company of the occurrence of a Discontinuation Event (as defined below), such Holder will forthwith discontinue disposition of such Registrable Securities under the applicable Registration Statement until such Holder’s receipt of the copies of the supplemented Prospectus and/or amended Registration Statement or until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus may be resumed, and, in either case, has received copies of any additional or supplemental filings that are incorporated or deemed to be incorporated by reference in such Prospectus or Registration Statement. The Company may provide appropriate stop orders to enforce the provisions of this paragraph. For purposes of this Agreement, a “Discontinuation Event” shall mean (i) when the Commission notifies the Company whether there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration Statement (the Company shall provide true and complete copies thereof and all written responses thereto to each of the Holders); (ii) any request by the Commission or any other Federal or state governmental authority for amendments or supplements to such Registration

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	Statement or Prospectus or for additional information; (iii) the issuance by the Commission of any stop order suspending the effectiveness of such Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose; (iv) the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose; and/or (v) the occurrence of any event or passage of time that makes the financial statements included in such Registration
	Statement ineligible for inclusion therein or any statement made in such Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to such Registration Statement, Prospectus or other documents so that, in the case of such Registration Statement or Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any 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.
(e)	Piggy-Back Registrations. If at any time during any Effectiveness Period there is not an effective Registration Statement covering all of the Registrable Securities required to be covered during such Effectiveness Period and the Company shall determine to prepare and file with the Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, then the Company shall send to each Holder written notice of such determination and, if within fifteen days after receipt of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such Holder requests to be registered to the extent the Company may do so without violating registration rights of others which exist as of the date of this Agreement, subject to customary underwriter cutbacks applicable to all holders of registration rights and subject to obtaining any required consent of any selling stockholder(s) to such inclusion under such registration statement.
(f)	Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of the then outstanding Registrable Securities. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of certain Holders and that does not directly or indirectly affect the rights of other Holders may be given by Holders of at least a majority of the Registrable Securities to which such waiver or consent relates;

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provided, however, that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the immediately preceding sentence.

(g)

Notices. Any notice or request hereunder may be given to the Company or the Purchaser at the respective addresses set forth below or as may hereafter be specified in a notice designated as a change of address under this Section 7(g). Any notice or request hereunder shall be given by registered or certified mail, return receipt requested, hand delivery, overnight mail, Federal Express or other national overnight next day carrier (collectively, “Courier”) or telecopy (confirmed by mail). Notices and requests shall be, in the case of those by hand delivery, deemed to have been given when delivered to any party to whom it is addressed, in the case of those by mail or overnight mail, deemed to have been given three (3) business days after the date when deposited in the mail or with the overnight mail carrier, in the case of a Courier, the next business day following timely delivery of the package with the Courier, and, in the case of a telecopy, when confirmed. The address for such notices and communications shall be as follows:

If to the Company:	Incentra Solutions, Inc.
	1140 Pearl Street
	Boulder, Colorado 80302
	Attention:	Chief Financial Officer
	Facsimile:	(303) 449-9584
with a copy to:
	Law Offices of Karl Reed Guest
	94 Underhill Road
	Orinda, CA 94563
	Attention:	Reed Guest, Esq.
	Facsimile:	(925) 254-9226
If to a Purchaser:	To the address set forth under such Purchaser name on the signature pages hereto.
If to any other Person who is then the registered
Holder:	To the address of such Holder as it appears in the stock transfer books of the Company

or such other address as may be designated in writing hereafter in accordance with this Section 7(g) by such Person.

(h) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign its rights or obligations hereunder without the prior written consent of each Holder. Each

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	Holder may assign its respective rights hereunder in the manner and to the Persons as permitted under the Warrant, the Securities Purchase Agreement and the Related Agreements (as defined in the Securities Purchase Agreement).
(i)	Execution and Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all of which taken together shall constitute one and the same agreement. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed) the same with the same force and effect as if such facsimile signature were the original thereof.
(j)	Governing Law, Jurisdiction and Waiver of Jury Trial. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. The Company hereby consents and agrees that the state or federal courts located in the County of New York, State of New York shall have exclusive jurisdiction to hear and determine any Proceeding between the Company, on the one hand, and the Purchaser, on the other hand, pertaining to this Agreement or to any matter arising out of or related to this Agreement; provided, that the Purchaser and the Company acknowledge that any appeals from those courts may have to be heard by a court located outside of the County of New York, State of New York, and further provided, that nothing in this Agreement shall be deemed or operate to preclude the Purchaser from bringing a Proceeding in any other jurisdiction to collect the obligations, to realize on the Collateral or any other security for the obligations, or to enforce a judgment or other court order in favor of the Purchaser. The Company expressly submits and consents in advance to such jurisdiction in any Proceeding commenced in any such court, and the Company hereby waives any objection which it may have based upon lack of personal jurisdiction, improper venue or forum non conveniens. The Company hereby waives personal service of the summons, complaint and other process issued in any such Proceeding and agrees that service of such summons, complaint and other process may be made by registered or certified mail addressed to the Company at the address set forth in Section 7(g) and that service so made shall be deemed completed upon the earlier of the Company’s actual receipt thereof or three (3) days after deposit in the U.S. mails, proper postage prepaid. The parties hereto desire that their disputes be resolved by a judge applying such applicable laws. Therefore, to achieve the best combination of the benefits of the judicial system and of arbitration, the parties hereto waive all rights to trial by jury in any Proceeding brought to resolve any dispute, whether arising in contract, tort, or otherwise between the Purchaser and/or the Company arising out of, connected with, related or incidental to the relationship established between them in connection with this Agreement. If either party hereto shall commence a Proceeding to enforce any provisions of this Agreement, the Securities Purchase

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	Agreement or any other Related Agreement, then the prevailing party in such Proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.
(k)	Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.
(l)	Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
(m)	Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

[BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURE PAGE FOLLOWS]

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

INCENTRA SOLUTIONS, INC.		CALLIOPE CAPITAL CORPORATION
By:		By:
Name:	Matthew G. Richman	Name:
Title:	Senior Vice President, Chief Corporate Development Officer & Treasurer
		Title:
		Address for Notices:
		c/o Laurus Capital Management, LLC
		335 Madison Avenue – 10th Floor
		New York, NY 10017
		Attention:	Portfolio Services
		Facsimile:	212-581-5037

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EXHIBIT A

[Month __, 2007]

[Continental Stock Transfer
    & Trust Company
Two Broadway
New York, NY 10004
Attn: William Seegraber]

Re: Incentra Solutions, Inc.
Registration Statement on Form SB-2

Ladies and Gentlemen:

          As counsel to Incentra Solutions, Inc., a Nevada corporation (the “Company”), we have been requested to render our opinion to you in connection with the resale by the individuals or entitles listed on Schedule A attached hereto (the “Selling Stockholders”), of an aggregate of [amount]shares (the “Shares”) of the Company’s Common Stock.

          The Company’s Registration Statement on Form SB-2 (Reg. No. 333-____) (the “Registration Statement”) under the Securities Act of 1933, as amended (the “Act”), with respect to the resale of the Shares was declared effective by the Securities and Exchange Commission on [date]. Enclosed is a copy of the Prospectus dated [date] included in the Registration Statement. We understand that the Shares are to be offered and sold in the manner described in the Prospectus.

          Based upon the foregoing, upon request by the Selling Stockholders at any time while the Registration Statement remains effective, it is our opinion that the Shares have been registered for resale under the Act and new certificates evidencing the Shares upon their transfer or re-registration by the Selling Stockholders may be issued without restrictive legend. We will advise you if the Registration Statement is not available or effective at any point in the future.

Very truly yours,

[Company counsel]

Schedule A

Selling Stockholder Shares
Being Offered

Schedule 7(b)

1.	The Registration Rights Agreement dated as of October 10, 2000 between the Company and Equity Pier LLC
2.	The Registration Rights Agreement between the Company and former ManagedStorage International, Inc. shareholders dated August 18, 2004.
3.	The Registration Rights Agreement dated as of March, 2005 between the Company and Barry R. Andersen and Gary L. Henderson.
4.	The Registration Rights Agreement dated as of March 30, 2005 between the Company and MRA Systems, Inc., dba GE Access.
5.	The Registration Rights Agreement dated as of April 13, 2006 between the Company and Joseph Graziano and Transition Management Consultants.
6.	The Registration Rights Agreement dated as of August 24, 2006 between the Company and Craig Armstrong and Lord Amherst Holdings.
7.	The Registration Rights Agreement dated on or about June 30, 2006 between the Company and Blueline Partners LP, RAB Capital and other individual holders.

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EX-10.18

Exhibit 10.18

STOCK PLEDGE AGREEMENT

          This Stock Pledge Agreement (this “Agreement”), dated as of July 31, 2007, among Calliope Capital Corporation (the “Pledgee”), Incentra Solutions, Inc., a Nevada corporation (the “Company”), and each of the other undersigned parties (other than the Pledgee) (the Company and each such other undersigned party, a “Pledgor” and collectively, the “Pledgors”).

BACKGROUND

          The Company has entered into a Securities Purchase Agreement, dated as of July 31, 2006 as amended, modified, restated or supplemented from time to time, the “Securities Purchase Agreement”), pursuant to which the Pledgee has provided, provides or will provide certain financial accommodations to the Company and certain subsidiaries of the Company.

          In order to induce the Pledgee to provide or continue to provide the financial accommodations described in the Securities Purchase Agreement, each Pledgor has agreed to pledge and grant a security interest in the collateral described herein to the Pledgee on the terms and conditions set forth herein.

          NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration the receipt of which is hereby acknowledged, the parties hereto agree as follows:

          1. Defined Terms. All capitalized terms used herein which are not defined shall have the meanings given to them in the Securities Purchase Agreement.

          2. Pledge and Grant of Security Interest. To secure the full and punctual payment and performance of (the following clauses (a) and (b), collectively, the “Obligations”) (a) the obligations under the Securities Purchase Agreement and the Related Agreements referred to in the Securities Purchase Agreement (the Securities Purchase Agreement and the Related Agreements, as each may be amended, restated, modified and/or supplemented from time to time, collectively, the “Documents”) and (b) all other obligations and liabilities of each Pledgor to the Pledgee whether now existing or hereafter arising, direct or indirect, liquidated or unliquidated, absolute or contingent, due or not due and whether under, pursuant to or evidenced by a note, agreement, guaranty, instrument or otherwise (in each case, irrespective of the genuineness, validity, regularity or enforceability of such Obligations, or of any instrument evidencing any of the Obligations or of any collateral therefor or of the existence or extent of such collateral, and irrespective of the allowability, allowance or disallowance of any or all of such in any case commenced by or against any Pledgor under Title 11, United States Code, including, without limitation, obligations of each Pledgor for post-petition interest, fees, costs and charges that would have accrued or been added to the Obligations but for the commencement of such case), each Pledgor hereby pledges, assigns, hypothecates, transfers and grants a security interest to Pledgee in all of the following (the “Collateral”):

                    (a) the shares of stock set forth on Schedule A annexed hereto and expressly made a part hereof (together with any additional shares of stock or other equity interests acquired

by any Pledgor, the “Pledged Stock”), the certificates representing the Pledged Stock and all dividends, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the Pledged Stock;

                    (b) all additional shares of stock of any issuer (each, an “Issuer”) of the Pledged Stock from time to time acquired by any Pledgor in any manner, including, without limitation, stock dividends or a distribution in connection with any increase or reduction of capital, reclassification, merger, consolidation, sale of assets, combination of shares, stock split, spin-off or split-off (which shares shall be deemed to be part of the Collateral), and the certificates representing such additional shares, and all dividends, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such shares; and

                    (c) all options and rights, whether as an addition to, in substitution of or in exchange for any shares of any Pledged Stock and all dividends, cash, instruments and other property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all such options and rights.

          3. Delivery of Collateral. All certificates representing or evidencing the Pledged Stock shall be delivered to and held by or on behalf of Pledgee pursuant hereto and shall be accompanied by duly executed instruments of transfer or assignments in blank, all in form and substance satisfactory to Pledgee. Each Pledgor hereby authorizes the Issuer upon demand by the Pledgee to deliver any certificates, instruments or other distributions issued in connection with the Collateral directly to the Pledgee, in each case to be held by the Pledgee, subject to the terms hereof. Upon the occurrence and during the continuance of an Event of Default (as defined below), the Pledgee shall have the right, during such time in its discretion and without notice to the Pledgor, to transfer to or to register in the name of the Pledgee or any of its nominees any or all of the Pledged Stock. In addition, the Pledgee shall have the right at such time to exchange certificates or instruments representing or evidencing Pledged Stock for certificates or instruments of smaller or larger denominations.

          4. Representations and Warranties of each Pledgor. Each Pledgor jointly and severally represents and warrants to the Pledgee (which representations and warranties shall be deemed to continue to be made until all of the Obligations have been paid in full and each Document and each agreement and instrument entered into in connection therewith has been irrevocably terminated) that:

                    (a) the execution, delivery and performance by each Pledgor of this Agreement and the pledge of the Collateral hereunder do not and will not result in any violation of any agreement, indenture, instrument, license, judgment, decree, order, law, statute, ordinance or other governmental rule or regulation applicable to any Pledgor;

                    (b) this Agreement constitutes the legal, valid, and binding obligation of each Pledgor enforceable against each Pledgor in accordance with its terms;

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                    (c) all Pledged Stock owned by each Pledgor is set forth on Schedule A hereto and (ii) each Pledgor is the direct and beneficial owner of each share of the Pledged Stock;

                    (d) all of the shares of the Pledged Stock have been duly authorized, validly issued and are fully paid and nonassessable;

                    (e) no consent or approval of any person, corporation, governmental body, regulatory authority or other entity, is or will be necessary for (i) the execution, delivery and performance of this Agreement, (ii) the exercise by the Pledgee of any rights with respect to the Collateral or (iii) the pledge and assignment of, and the grant of a security interest in, the Collateral hereunder;

                    (f) there are no pending or, to the best of Pledgor’s knowledge, threatened actions or proceedings before any court, judicial body, administrative agency or arbitrator which may materially adversely affect the Collateral;

                    (g) each Pledgor has the requisite power and authority to enter into this Agreement and to pledge and assign the Collateral to the Pledgee in accordance with the terms of this Agreement;

                    (h) each Pledgor owns each item of the Collateral and, except for the pledge and security interest granted to Pledgee hereunder, the Collateral shall be, immediately following the closing of the transactions contemplated by the Documents, free and clear of any other security interest, mortgage, pledge, claim, lien, charge, hypothecation, assignment, offset or encumbrance whatsoever (collectively, “Liens”);

                    (i) there are no restrictions on transfer of the Pledged Stock contained in the certificate of incorporation or by-laws (or equivalent organizational documents) of the Issuer or otherwise which have not otherwise been enforceably and legally waived by the necessary parties;

                    (j) none of the Pledged Stock has been issued or transferred in violation of the securities registration, securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject;

                    (k) the pledge and assignment of the Collateral and the grant of a security interest under this Agreement vest in the Pledgee all rights of each Pledgor in the Collateral as contemplated by this Agreement; and

                    (l) The Pledged Stock constitutes one hundred percent (100%) of the issued and outstanding shares of capital stock of each Issuer.

          5. Covenants. Each Pledgor jointly and severally covenants that, until the Obligations shall be indefeasibly satisfied in full and each Document and each agreement and instrument entered into in connection therewith is irrevocably terminated:

                    (a) No Pledgor will sell, assign, transfer, convey, or otherwise dispose of its rights in or to the Collateral or any interest therein; nor will any Pledgor create, incur or permit to

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exist any Lien whatsoever with respect to any of the Collateral or the proceeds thereof other than that created hereby.

                    (b) Each Pledgor will, at its expense, defend Pledgee’s right, title and security interest in and to the Collateral against the claims of any other party.

                    (c) Each Pledgor shall at any time, and from time to time, upon the written request of Pledgee, execute and deliver such further documents and do such further acts and things as Pledgee may reasonably request in order to effectuate the purposes of this Agreement including, but without limitation, delivering to Pledgee, upon the occurrence of an Event of Default, irrevocable proxies in respect of the Collateral in form satisfactory to Pledgee. Until receipt thereof, upon an Event of Default that has occurred and is continuing beyond any applicable grace period, this Agreement shall constitute Pledgor’s proxy to Pledgee or its nominee to vote all shares of Collateral then registered in each Pledgor’s name.

                    (d) No Pledgor will consent to or approve the issuance of (i) any additional shares of any class of capital stock or other equity interests of the Issuer; or (ii) any securities convertible either voluntarily by the holder thereof or automatically upon the occurrence or nonoccurrence of any event or condition into, or any securities exchangeable for, any such shares, unless, in either case, such shares are pledged as Collateral pursuant to this Agreement.

          6. Voting Rights and Dividends. In addition to the Pledgee’s rights and remedies set forth in Section 8 hereof, in case an Event of Default shall have occurred and be continuing, beyond any applicable cure period, the Pledgee shall (i) be entitled to vote the Collateral, (ii) be entitled to give consents, waivers and ratifications in respect of the Collateral (each Pledgor hereby irrevocably constituting and appointing the Pledgee, with full power of substitution, the proxy and attorney-in-fact of each Pledgor for such purposes) and (iii) be entitled to collect and receive for its own use cash dividends paid on the Collateral. No Pledgor shall be permitted to exercise or refrain from exercising any voting rights or other powers if, in the reasonable judgment of the Pledgee, such action would have a material adverse effect on the value of the Collateral or any part thereof; and, provided, further, that each Pledgor shall give at least five (5) days’ written notice of the manner in which such Pledgor intends to exercise, or the reasons for refraining from exercising, any voting rights or other powers other than with respect to any election of directors and voting with respect to any incidental matters. Following the occurrence of an Event of Default, all dividends and all other distributions in respect of any of the Collateral, shall be delivered to the Pledgee to hold as Collateral and shall, if received by any Pledgor, be received in trust for the benefit of the Pledgee, be segregated from the other property or funds of any other Pledgor, and be forthwith delivered to the Pledgee as Collateral in the same form as so received (with any necessary endorsement).

          7. Event of Default. An “Event of Default” under this Agreement shall occur upon the happening of any of the following events:

                    (a) An “Event of Default” under any Document or any agreement or note related to any Document shall have occurred and be continuing beyond any applicable cure period;

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                    (b) Any Pledgor shall default in the performance of any of its obligations under any Document, including, without limitation, this Agreement, and such default shall not be cured during the cure period applicable thereto;

                    (c) Any representation or warranty of any Pledgor made herein, in any Document or in any agreement, statement or certificate given in writing pursuant hereto or thereto or in connection herewith or therewith shall be false or misleading in any material respect;

                    (d) Any portion of the Collateral is subjected to a levy of execution, attachment, distraint or other judicial process or any portion of the Collateral is the subject of a claim (other than by the Pledgee) of a Lien, other than the Permitted Liens as defined in the Securities Purchase Agreement, or other right or interest in or to the Collateral and such levy or claim shall not be cured, disputed or stayed within a period of fifteen (15) business days after the occurrence thereof; or

                    (e) Any Pledgor shall (i) apply for, consent to, or suffer to exist the appointment of, or the taking of possession by, a receiver, custodian, trustee, liquidator or other fiduciary of itself or of all or a substantial part of its property, (ii) make a general assignment for the benefit of creditors, (iii) commence a voluntary case under any state or federal bankruptcy laws (as now or hereafter in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file a petition seeking to take advantage of any other law providing for the relief of debtors, (vi) acquiesce to, or fail to have dismissed, within thirty (30) days, any petition filed against it in any involuntary case under such bankruptcy laws, or (vii) take any action for the purpose of effecting any of the foregoing.

          8. Remedies. In case an Event of Default shall have occurred and is continuing, the Pledgee may:

                    (a) Transfer any or all of the Collateral into its name, or into the name of its nominee or nominees;

                    (b) Exercise all corporate rights with respect to the Collateral including, without limitation, all rights of conversion, exchange, subscription or any other rights, privileges or options pertaining to any shares of the Collateral as if it were the absolute owner thereof, including, but without limitation, the right to exchange, at its discretion, any or all of the Collateral upon the merger, consolidation, reorganization, recapitalization or other readjustment of the Issuer thereof, or upon the exercise by the Issuer of any right, privilege or option pertaining to any of the Collateral, and, in connection therewith, to deposit and deliver any and all of the Collateral with any committee, depository, transfer agent, registrar or other designated agent upon such terms and conditions as it may determine, all without liability except to account for property actually received by it; and

                    (c) Subject to any requirement of applicable law, sell, assign and deliver the whole or, from time to time, any part of the Collateral at the time held by the Pledgee, at any private sale or at public auction, with or without demand, advertisement or notice of the time or place of sale or adjournment thereof or otherwise (all of which are hereby waived, except such

5

notice as is required by applicable law and cannot be waived), for cash or credit or for other property for immediate or future delivery, and for such price or prices and on such terms as the Pledgee in its sole discretion may determine, or as may be required by applicable law.

                    Each Pledgor hereby waives and releases any and all right or equity of redemption, whether before or after sale hereunder. At any such sale, unless prohibited by applicable law, the Pledgee may bid for and purchase the whole or any part of the Collateral so sold free from any such right or equity of redemption. All moneys received by the Pledgee hereunder, whether upon sale of the Collateral or any part thereof or otherwise, shall be held by the Pledgee and applied by it as provided in Section 10 hereof. No failure or delay on the part of the Pledgee in exercising any rights hereunder shall operate as a waiver of any such rights nor shall any single or partial exercise of any such rights preclude any other or future exercise thereof or the exercise of any other rights hereunder. The Pledgee shall have no duty as to the collection or protection of the Collateral or any income thereon nor any duty as to preservation of any rights pertaining thereto, except to apply the funds in accordance with the requirements of Section 10 hereof. The Pledgee may exercise its rights with respect to property held hereunder without resort to other security for or sources of reimbursement for the Obligations. In addition to the foregoing, Pledgee shall have all of the rights, remedies and privileges of a secured party under the Uniform Commercial Code of New York (the “UCC”) regardless of the jurisdiction in which enforcement hereof is sought.

          9. Private Sale. Each Pledgor recognizes that the Pledgee may be unable to effect (or to do so only after delay which would adversely affect the value that might be realized from the Collateral) a public sale of all or part of the Collateral by reason of certain prohibitions contained in the Securities Act, and may be compelled to resort to one or more private sales to a restricted group of purchasers who will be obliged to agree, among other things, to acquire such Collateral for their own account, for investment and not with a view to the distribution or resale thereof. Each Pledgor agrees that any such private sale may be at prices and on terms less favorable to the seller than if sold at public sales and that such private sales shall be deemed to have been made in a commercially reasonable manner. Each Pledgor agrees that the Pledgee has no obligation to delay sale of any Collateral for the period of time necessary to permit the Issuer to register the Collateral for public sale under the Securities Act.

          10. Proceeds of Sale. The proceeds of any collection, recovery, receipt, appropriation, realization or sale of the Collateral shall be applied by the Pledgee as follows:

                    (a) First, to the payment of all costs, reasonable expenses and charges of the Pledgee and to the reimbursement of the Pledgee for the prior payment of such costs, reasonable expenses and charges incurred in connection with the care and safekeeping of the Collateral (including, without limitation, the reasonable expenses of any sale or any other disposition of any of the Collateral), attorneys’ fees and reasonable expenses, court costs, any other fees or expenses incurred or expenditures or advances made by Pledgee in the protection, enforcement or exercise of its rights, powers or remedies hereunder;

                    (b) Second, to the payment of the Obligations, in whole or in part, in such order as the Pledgee may elect, whether or not such Obligations are then due;

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                    (c) Third, to such persons, firms, corporations or other entities as required by applicable law including, without limitation, Section 9-615(a)(3) of the UCC; and

                    (d) Fourth, to the extent of any surplus to the Pledgors or as a court of competent jurisdiction may direct.

                    In the event that the proceeds of any collection, recovery, receipt, appropriation, realization or sale are insufficient to satisfy the Obligations, each Pledgor shall be jointly and severally liable for the deficiency plus the costs and fees of any attorneys employed by Pledgee to collect such deficiency.

          11. Waiver of Marshaling. Each Pledgor hereby waives any right to compel any marshaling of any of the Collateral.

          12. No Waiver. Any and all of the Pledgee’s rights with respect to the Liens granted under this Agreement shall continue unimpaired, and Pledgor shall be and remain obligated in accordance with the terms hereof, notwithstanding (a) the bankruptcy, insolvency or reorganization of any Pledgor, (b) the release or substitution of any item of the Collateral at any time, or of any rights or interests therein, or (c) any delay, extension of time, renewal, compromise or other indulgence granted by the Pledgee in reference to any of the Obligations. Each Pledgor hereby waives all notice of any such delay, extension, release, substitution, renewal, compromise or other indulgence, and hereby consents to be bound hereby as fully and effectively as if such Pledgor had expressly agreed thereto in advance. No delay or extension of time by the Pledgee in exercising any power of sale, option or other right or remedy hereunder, and no failure by the Pledgee to give notice or make demand, shall constitute a waiver thereof, or limit, impair or prejudice the Pledgee’s right to take any action against any Pledgor or to exercise any other power of sale, option or any other right or remedy.

          13. Expenses. The Collateral shall secure, and each Pledgor shall pay to Pledgee on demand, from time to time, all reasonable costs and expenses, (including but not limited to, reasonable attorneys’ fees and costs, taxes, and all transfer, recording, filing and other charges) of, or incidental to, the custody, care, transfer, administration of the Collateral or any other collateral, or in any way relating to the enforcement, protection or preservation of the rights or remedies of the Pledgee under this Agreement or with respect to any of the Obligations.

          14. The Pledgee Appointed Attorney-In-Fact and Performance by the Pledgee. Upon the occurrence of an Event of Default, each Pledgor hereby irrevocably constitutes and appoints the Pledgee as such Pledgor’s true and lawful attorney-in-fact, with full power of substitution, to execute, acknowledge and deliver any instruments and to do in such Pledgor’s name, place and stead, all such acts, things and deeds for and on behalf of and in the name of such Pledgor, which such Pledgor could or might do or which the Pledgee may deem necessary, desirable or convenient to accomplish the purposes of this Agreement, including, without limitation, to execute such instruments of assignment or transfer or orders and to register, convey or otherwise transfer title to the Collateral into the Pledgee’s name. Each Pledgor hereby ratifies and confirms all that said attorney-in-fact may so do and hereby declares this power of attorney to be coupled with an interest and irrevocable. If any Pledgor fails to perform any agreement herein contained, the Pledgee may itself perform or cause performance thereof, and any costs and expenses of the

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Pledgee incurred in connection therewith shall be paid by the Pledgors as provided in Section 10 hereof.

          15. Waivers. THE PARTIES HERETO DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN LAURUS, AND/OR ANY COMPANY ARISING OUT OF, CONNECTED WITH, RELATED OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT, ANY OTHER DOCUMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO.

          16. Recapture. Notwithstanding anything to the contrary in this Agreement, if the Pledgee receives any payment or payments on account of the Obligations, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver, or any other party under the United States Bankruptcy Code, as amended, or any other federal or state bankruptcy, reorganization, moratorium or insolvency law relating to or affecting the enforcement of creditors’ rights generally, common law or equitable doctrine, then to the extent of any sum not finally retained by the Pledgee, each Pledgor’s obligations to the Pledgee shall be reinstated and this Agreement shall remain in full force and effect (or be reinstated) until payment shall have been made to Pledgee, which payment shall be due on demand.

          17. Captions. All captions in this Agreement are included herein for convenience of reference only and shall not constitute part of this Agreement for any other purpose.

          18. Miscellaneous.

                    (a) This Agreement constitutes the entire and final agreement among the parties with respect to the subject matter hereof and may not be changed, terminated or otherwise varied except by a writing duly executed by the parties hereto.

                    (b) No waiver of any term or condition of this Agreement, whether by delay, omission or otherwise, shall be effective unless in writing and signed by the party sought to be charged, and then such waiver shall be effective only in the specific instance and for the purpose for which given.

                    (c) In the event that any provision of this Agreement or the application thereof to any Pledgor or any circumstance in any jurisdiction governing this Agreement shall, to any extent, be invalid or unenforceable under any applicable statute, regulation, or rule of law, such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform to such statute, regulation or rule of law, and the remainder of this Agreement and the application of any such invalid or unenforceable provision to parties, jurisdictions, or circumstances other than to whom or to which it is held invalid or unenforceable

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shall not be affected thereby, nor shall same affect the validity or enforceability of any other provision of this Agreement.

                    (d) This Agreement shall be binding upon each Pledgor, and each Pledgor’s successors and assigns, and shall inure to the benefit of the Pledgee and its successors and assigns.

                    (e) Any notice or other communication required or permitted pursuant to this Agreement shall be given in accordance with the Securities Purchase Agreement.

                    (f) THIS AGREEMENT AND THE OTHER DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

                    (g) EACH PLEDGOR HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY PLEDGOR, ON THE ONE HAND, AND THE PLEDGEE, ON THE OTHER HAND, PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OF THE OTHER DOCUMENTS, PROVIDED, THAT EACH PLEDGOR ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE COUNTY OF NEW YORK, STATE OF NEW YORK; AND FURTHER PROVIDED, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE PLEDGEE FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO COLLECT THE INDEBTEDNESS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE INDEBTEDNESS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE PLEDGEE. EACH PLEDGOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH PLEDGOR HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. EACH PLEDGOR HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PLEDGOR AT THE ADDRESS SET FORTH IN THE SECURITIES PURCHASE AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE SUCH PLEDGOR’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

                    (h) It is understood and agreed that any person or entity that desires to become a Pledgor hereunder, or is required to execute a counterpart of this Agreement after the date hereof pursuant to the requirements of any Document, shall become a Pledgor hereunder by

9

(x) executing a Joinder Agreement in form and substance satisfactory to the Pledgee, (y) delivering supplements to such exhibits and annexes to such Documents as the Pledgee shall reasonably request and/or set forth in such joinder agreement and (z) taking all actions as specified in this Agreement as would have been taken by such Pledgor had it been an original party to this Agreement, in each case with all documents required above to be delivered to the Pledgee and with all documents and actions required above to be taken to the reasonable satisfaction of the Pledgee.

                    (i) This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which when taken together shall constitute one and the same agreement. Any signature delivered by a party by facsimile transmission shall be deemed an original signature hereto.

[Remainder of Page Intentionally Left Blank]

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          IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first written above.

INCENTRA SOLUTIONS, INC.
By:
Name:	Matthew G. Richman
Title:	Senior Vice President, Chief Corporate
Development Officer & Treasurer
MANAGEDSTORAGE INTERNATIONAL, INC.
By:
Name:	Matthew G. Richman
Title:	Assistant Secretary
CALLIOPE CAPITAL CORPORATION
By:
Name:
Title:

11

SCHEDULE A to the Stock Pledge Agreement

Pledged Stock

Pledgor	Issuer	Class of Stock	Stock Certificate Number	Par Value	Number of Shares
Incentra Solutions, Inc.	PWI Technologies, Inc.	Common	5	No Par Value	800,000
ManagedStorage International, Inc.	Incentra Solutions International, Inc.	Common	2	$.01	100
Incentra Solutions, Inc.	Incentra Solutions of California, Inc.	Common	1	$.001	200
Incentra Solutions, Inc.	ManagedStorage International, Inc.	Common	2	$.001	200
Incentra Solutions, Inc.	Network System Technologies, Inc.	Common	4	No Par Value	1,000
Incentra Solutions, Inc.	Tactix, Inc.	Common	1	No Par Value	680.3403
Incentra Solutions, Inc.
	Incentra Solutions of the Northeast, Inc.	Common	2	$.001	100
Incentra Solutions, Inc.	Incentra Helio Acquisition Corporation	Common	1	$.001	200

EX-10.19

Exhibit 10.19

GRANT OF SECURITY INTEREST

IN PATENTS AND TRADEMARKS

          THIS GRANT OF SECURITY INTEREST (“Grant”), effected as of July 31, 2007, is executed by INCENTRA SOLUTIONS, INC., a corporation organized under the laws of the State of Nevada (the “Company”) and MANAGEDSTORAGE INTERANTIONAL, INC., a corporation organized under the laws of the State of Delaware (“MI” and together with the Company, the “Grantors” and each, a “Grantor”), in favor of CALLIOPE CAPITAL CORPORATION (the “Secured Party”).

          A. Pursuant to a Securities Purchase Agreement dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”) among the Company and the Secured Party, the terms and provisions of which are hereby incorporated herein as if fully set forth herein, the Company and its direct and indirect Subsidiaries have granted a security interest to the Secured Party in consideration of the Secured Party’s agreement to provide financial accommodations to the Company.

          B. Each Grantor (1) has adopted, used and are using the trademarks reflected in the trademark registrations and trademark applications in the United States Patent and Trademark Office more particularly described on Schedule 1 annexed hereto as part hereof (the “Trademarks”), and (2) has registered or applied for registration in the United States Patent and Trademark Office of the patents more particularly described on Schedule 2 annexed hereto as part hereof (the “Patents”).

          C. Each Grantor wishes to confirm its grant to the Secured Party of a security interest in all right, title and interest of such Grantor in and to the Trademarks and Patents, and all proceeds thereof, together with the business as well as the goodwill of the business symbolized by, or related or pertaining to, the Trademarks, and the customer lists and records related to the Trademarks and Patents and all causes of action which may exist by reason of infringement of any of the Trademarks and Patents (collectively, the “T&P Collateral”), to secure the payment, performance and observance of the Obligations (as that term is defined in the Security Agreement).

          NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged:

          1. Each Grantor does hereby further grant to the Secured Party a security interest in the T&P Collateral to secure the full and prompt payment, performance and observance of the Obligations.

          2. Each Grantor agrees to perform, so long as the Security Agreement is in effect, all acts deemed necessary or desirable by the Secured Party to permit and assist it, at such Grantor’s expense, in obtaining and enforcing the Trademarks and Patents in any and all countries. Such acts may include, but are not limited to, execution of documents and assistance or cooperation in legal proceedings. Each Grantor hereby appoints the Secured Party as such Grantor’s attorney-

in-fact to execute and file any and all agreements, instruments, documents and papers as the Secured Party may determine to be necessary or desirable to evidence the Secured Party’s security interest in the Trademarks and Patents or any other element of the T&P Collateral, all acts of such attorney-in-fact being hereby ratified and confirmed.

          3. Each Grantor acknowledges and affirms that the rights and remedies of the Secured Party with respect to the security interest in the T&P Collateral granted hereby are more fully set forth in the Security Agreement and the rights and remedies set forth herein are without prejudice to, and are in addition to, those set forth in the Security Agreement. In the event that any provisions of this Grant are deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall govern.

          4. Each Grantor hereby authorizes the Secured Party to file all such financing statements or other instruments to the extent required by the Uniform Commercial Code and agrees to execute all such other documents, agreements and instruments as may be required or deemed necessary by the Secured Party, in each case for purposes of affecting or continuing Secured Party’s security interest in the T&P Collateral.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

2

          IN WITNESS WHEREOF, each Grantor and Calliope has caused this instrument to be executed as of the day and year first above written.

INCENTRA SOLUTIONS, INC.
By:
	Name: Matthew G. Richman
	Title: Senior Vice President. Chief Corporate Development Officer & Treasurer
MANAGEDSTORAGE INTERNATIONAL, INC.
By:
	Name: Matthew G Richman
	Title: Assistant Secretary
CALLIOPE CAPITAL CORPORATION
By:
	Name:
	Title:

3

SCHEDULE 1 TO GRANT OF SECURITY INTEREST

REGISTERED TRADEMARKS AND TRADEMARK APPLICATIONS

Trademark	Registration or Application Number	Registration or Application Date	Country
MSI ManagedStorage	2775014	10/21/03	US
MSI ManagedStorage	2777592	10/28/03	US
ManagedStorage International	2757723	8/26/03	US
ManagedStorage International	2757722	8/26/03	US
ManagedStorage International	2739321	7/15/03	US
Gridworks	2838870	5/4/04	US
Gridcomplete	3010115	11/1/05	US
Remotestor	2822979	3/16/04	US
MSI ManagedStorage	2785848	11/25/03	US
Gridwatch	2845385	5/25/04	US
Estorage for Ebusiness	2437730	3/20/01	US

SCHEDULE 2 TO GRANT OF SECURITY INTEREST

PATENTS AND PATENT APPLICATIONS

Patent	Registration or Application Number	Registration or Application Date	Country
Direct Disk Monitor	10/216,941 (application)	8/12/02	USA

STATE OF ____________	)
	) ss.:
COUNTY OF __________	)

          On this ____ day of _________, ____, before me personally came ________________________ who, being by me duly sworn, did state as follows: that he is ______________ of Incentra Solutions, Inc., that he is authorized to execute the foregoing Grant on behalf of said corporation and that he did so by authority of the Board of Directors of said corporation.

Notary Public

STATE OF ____________	)
	) ss.:
COUNTY OF __________	)

          On this ____ day of _________, ____, before me personally came ________________________ who, being by me duly sworn, did state as follows: that he is ______________ of ManagedStorage International, Inc., that he is authorized to execute the foregoing Grant on behalf of said corporation and that he did so by authority of the Board of Directors of said corporation.

Notary Public

STATE OF ___________	)
	) ss
COUNTY OF _________	)

          On this ____ day of _________, ____, before me personally came _____________________________ who, being by me duly sworn, did state as follows: that [s]he is __________________ of Calliope Capital Corporation, that [s]he is authorized to execute the foregoing Grant on behalf of said corporation and that [s]he did so by authority of the Board of Directors of said corporation.

Notary Public

EX-10.20

Exhibit 10.20

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO INCENTRA SOLUTIONS, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

Right to Purchase up to 600,000 Shares of Common Stock of
Incentra Solutions, Inc.
(subject to adjustment as provided herein)

COMMON STOCK PURCHASE WARRANT

No. ________________________ Issue Date: August 20, 2007

          INCENTRA SOLUTIONS, INC., a corporation organized under the laws of the State of Nevada (“ICNS”), hereby certifies that, for value received, PAGEMILL PARTNERS, LLC, or assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company (as defined herein) from and after the Issue Date of this Warrant and at any time or from time to time before 5:00 p.m., Denver, Colorado time, through the close of business August 20, 2012 (the “Expiration Date”), up to 600,000 fully paid and nonassessable shares of Common Stock (as hereinafter defined), at the applicable Exercise Price (as defined below) per share. The number and character of such shares of Common Stock and the applicable Exercise Price per share are subject to adjustment as provided herein.

          As used herein the following terms, unless the context otherwise requires, have the following respective meanings:

          (a) The term “Company” shall include ICNS and any corporation which shall succeed, or assume the obligations of, ICNS hereunder.

          (b) The term “Common Stock” includes (i) the Company’s Common Stock, par value $0.001 per share; and (ii) any other securities into which or for which any of the securities described in (i) may be converted or exchanged pursuant to a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

          (c) The term “Other Securities” refers to any stock (other than Common Stock) and other securities of the Company or any other person (corporate or otherwise) which the Holder of this Warrant at any time shall be entitled to receive, or shall have received, on the exercise of the Warrant, in lieu of or in addition to Common Stock, or

which at any time shall be issuable or shall have been issued in exchange for or in replacement of Common Stock or Other Securities pursuant to Section 4 or otherwise.

          (d) The “Exercise Price” applicable under this Warrant shall be $0.80 per share.

1. Exercise of Warrant.

                    1.1 Number of Shares Issuable upon Exercise. From and after the date hereof, the Holder shall be entitled to receive, upon exercise of this Warrant in whole or in part, by delivery of an original or fax copy of an exercise notice in the form attached hereto as Exhibit A (the “Exercise Notice”) up to 600,000 shares of Common Stock of the Company, subject to adjustment pursuant to Section 4.

                    1.2 Fair Market Value. For purposes hereof, the “Fair Market Value” of a share of Common Stock as of a particular date (the “Determination Date”) shall mean:

          (a) If the Company’s Common Stock is traded on the American Stock Exchange or another national exchange or is quoted on the National or SmallCap Market of The Nasdaq Stock Market, Inc. (“Nasdaq”), then the closing or last sale price, respectively, reported for the last business day immediately preceding the Determination Date.

          (b) If the Company’s Common Stock is not traded on the American Stock Exchange or another national exchange or on the Nasdaq but is traded on the National Association of Securities Dealers, Inc. Over-the-Counter Bulletin Board, then the mean of the average of the closing bid and asked prices reported for the last business day immediately preceding the Determination Date.

          (c) Except as provided in clause (d) below, if the Company’s Common Stock is not publicly traded, then as the Holder and the Company agree or in the absence of agreement by arbitration in accordance with the rules then in effect of the American Arbitration Association, before a single arbitrator to be chosen from a panel of persons qualified by education and training to pass on the matter to be decided.

          (d) If the Determination Date is the date of a liquidation, dissolution or winding up, or any event deemed to be a liquidation, dissolution or winding up pursuant to the Company’s charter, then all amounts to be payable per share to holders of the Common Stock pursuant to the charter in the event of such liquidation, dissolution or winding up, plus all other amounts to be payable per share in respect of the Common Stock in liquidation under the charter, assuming for the purposes of this clause (d) that all of the shares of Common Stock then issuable upon exercise of the Warrant are outstanding at the Determination Date.

                    1.3 Company Acknowledgment. The Company will, at the time of the exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing its continuing obligation to afford to such Holder any rights to which such Holder shall continue to be entitled after such exercise in accordance with the provisions of this Warrant. If the Holder

2

shall fail to make any such request, such failure shall not affect the continuing obligation of the Company to afford to such Holder any such rights.

                    1.4 Trustee for Warrant Holders. In the event that a bank or trust company shall have been appointed as trustee for the Holder of this Warrant pursuant to Subsection 3.2, such bank or trust company shall have all the powers and duties of a Warrant agent (as hereinafter described) and shall accept, in its own name for the account of the Company or such successor person as may be entitled thereto, all amounts otherwise payable to the Company or such successor, as the case may be, on exercise of this Warrant pursuant to this Section 1.

2. Procedure for Exercise.

                    2.1 Delivery of Stock Certificates, Etc., on Exercise. The Company agrees that the shares of Common Stock purchased upon exercise of this Warrant shall be deemed to be issued to the Holder as the record owner of such shares as of the close of business on the date on which this Warrant shall have been surrendered and payment made for such shares in accordance herewith. As soon as practicable after the exercise of this Warrant in full or in part, and in any event within three (3) business days thereafter, the Company at its expense (including the payment by it of any applicable issue taxes) will cause to be issued in the name of and delivered to the Holder, or as such Holder (upon payment by such Holder of any applicable transfer taxes) may direct in compliance with applicable securities laws, a certificate or certificates for the number of duly and validly issued, fully paid and nonassessable shares of Common Stock (or Other Securities) to which such Holder shall be entitled on such exercise, plus, in lieu of any fractional share to which such Holder would otherwise be entitled, cash equal to such fraction multiplied by the then Fair Market Value of one full share, together with any other stock or other securities and property (including cash, where applicable) to which such Holder is entitled upon such exercise pursuant to Section 1 or otherwise.

                    2.2 Exercise. (a) Payment may be made either (i) in cash or by certified or official bank check payable to the order of the Company equal to the applicable aggregate Exercise Price, (ii) by delivery of this Warrant, or shares of Common Stock and/or Common Stock receivable upon exercise of this Warrant in accordance with Section (b) below, or (iii) by a combination of any of the foregoing methods, for the number of Common Shares specified in such Exercise Notice (as such exercise number shall be adjusted to reflect any adjustment in the total number of shares of Common Stock issuable to the Holder per the terms of this Warrant); provided, however, that if at the time of delivery of an Exercise Notice the shares of Common Stock to be issued upon payment of the Exercise Price have been registered under the Securities Act of 1933, as amended (the “Securities Act”), and are covered by an effective registration statement under the Securities Act, payment of the Exercise Price may only be made pursuant to clause (i) above and may not be made pursuant to clause (ii) or (iii) above. Upon receipt by the Company of an Exercise Notice and proper payment of the aggregate Exercise Price, the Holder shall thereupon be entitled to receive the number of duly authorized, validly issued, fully-paid and non-assessable shares of Common Stock (or Other Securities) determined as provided herein.

          (b) Notwithstanding any provisions herein to the contrary, if the Fair Market Value of one share of Common Stock is greater than the Exercise Price (at the date of calculation as set

3

forth below), in lieu of exercising this Warrant for cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being exercised) by surrender of this Warrant at the principal office of the Company together with the properly endorsed Exercise Notice, in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula:

X=Y	(A-B)
	A

Where X =	the number of shares of Common Stock to be issued to the Holder
Y =	the number of shares of Common Stock purchasable under this Warrant or, if only a portion of this Warrant is being exercised, the portion of this Warrant being exercised (at the date of such calculation)
A =	the Fair Market Value of one share of the Company’s Common Stock (at the date of such calculation)
B =	the Exercise Price (as adjusted to the date of such calculation)

3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.

                    3.1 Reorganization, Consolidation, Merger, Etc. In case at any time or from time to time, the Company shall (a) effect a reorganization, (b) consolidate with or merge into any other person, or (c) transfer all or substantially all of its properties or assets to any other person under any plan or arrangement contemplating the dissolution of the Company, then, in each such case, as a condition to the consummation of such a transaction, proper and adequate provision shall be made by the Company whereby the Holder of this Warrant, on the exercise hereof as provided in Section 1 at any time after the consummation of such reorganization, consolidation or merger or the effective date of such dissolution, as the case may be, shall receive, in lieu of the Common Stock (or Other Securities) issuable on such exercise prior to such consummation or such effective date, the stock and other securities and property (including cash) to which such Holder would have been entitled upon such consummation or in connection with such dissolution, as the case may be, if such Holder had so exercised this Warrant, immediately prior thereto, all subject to further adjustment thereafter as provided in Section 4.

                    3.2 Dissolution. In the event of any dissolution of the Company following the transfer of all or substantially all of its properties or assets, the Company, concurrently with any distributions made to holders of its Common Stock, shall at its expense deliver or cause to be delivered to the Holder the stock and other securities and property (including cash, where applicable) receivable by the Holder of this Warrant pursuant to Section 3.1, or, if the Holder shall so instruct the Company, to a bank or trust company specified by the Holder and having its principal office in San Francisco, CA as trustee for the Holder of this Warrant (the “Trustee”).

                    3.3 Continuation of Terms. Upon any reorganization, consolidation, merger or transfer (and any dissolution following any transfer) referred to in this Section 3, this Warrant shall continue in full force and effect and the terms hereof shall be applicable to the shares of

4

stock and other securities and property receivable on the exercise of this Warrant after the consummation of such reorganization, consolidation or merger or the effective date of dissolution following any such transfer, as the case may be, and shall be binding upon the issuer of any such stock or other securities, including, in the case of any such transfer, the person acquiring all or substantially all of the properties or assets of the Company, whether or not such person shall have expressly assumed the terms of this Warrant as provided in Section 4. In the event this Warrant does not continue in full force and effect after the consummation of the transactions described in this Section 3, then the Company’s securities and property (including cash, where applicable) receivable by the Holders of the Warrant will be delivered to Holder or the Trustee as contemplated by Section 3.2.

4. Extraordinary Events Regarding Common Stock. In the event that the Company shall (a) issue additional shares of the Common Stock as a dividend or other distribution on outstanding Common Stock or any preferred stock issued by the Company, (b) subdivide its outstanding shares of Common Stock, or (c) combine its outstanding shares of the Common Stock into a smaller number of shares of the Common Stock (each of the preceding clauses (a) through (c), inclusive, an “Event”), then, in each such event, the number of shares of Common Stock that the Holder shall thereafter, on the exercise hereof as provided in Section 1, be entitled to receive shall be increased or decreased to a number determined by multiplying the number of shares of Common Stock that would, immediately prior to such Event, be issuable upon the exercise of this Warrant by a fraction of which (a) the numerator is the number of issued and outstanding shares of Common Stock immediately after such Event, and (b) the denominator is the number of issued and outstanding shares of Common Stock immediately prior to such Event.

5. Certificate as to Adjustments. In each case of any adjustment or readjustment in the shares of Common Stock (or Other Securities) issuable on the exercise of this Warrant, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute such adjustment or readjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable by the Company for any additional shares of Common Stock (or Other Securities) issued or sold or deemed to have been issued or sold, (b) the number of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in effect immediately prior to such adjustment or readjustment and as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the Holder of this Warrant and any Warrant agent of the Company (appointed pursuant to Section 11 hereof).

6. Reservation of Stock, Etc., Issuable on Exercise of Warrant. The Company will at all times reserve and keep available, solely for issuance and delivery on the exercise of this Warrant, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of this Warrant.

7. Assignment; Exchange of Warrant. Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced hereby, may be transferred by any registered holder hereof (a “Transferor”) in whole or in part. On the surrender for exchange of this Warrant, with the

5

Transferor’s endorsement in the form of Exhibit B attached hereto (the “Transferor Endorsement Form”) and together with evidence reasonably satisfactory to the Company demonstrating compliance with applicable securities laws, which shall include, without limitation, the provision of a legal opinion from the Transferor’s counsel that such transfer is exempt from the registration requirements of applicable securities laws, and with payment by the Transferor of any applicable transfer taxes) will issue and deliver to or on the order of the Transferor thereof a new Warrant of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a “Transferee”), calling in the aggregate on the face or faces thereof for the number of shares of Common Stock called for on the face or faces of the Warrant so surrendered by the Transferor.

8. Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender and cancellation of this Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.

9. Registration Rights. The Holder of this Warrant has been granted certain registration rights by the Company. These registration rights are set forth in the Registration Rights Agreement dated as of August 20, 2007 entered into by the Company and the initial Holder of this Warrant, as amended, modified or supplemented from time to time.

10. Restriction. Notwithstanding anything to the contrary contained herein, the Holder hereby agrees that during the period on and after the Issue Date and prior to the date that is the one year anniversary of the Issue Date, it shall not sell any Common Stock acquired upon exercise of this Warrant.

11. Warrant Agent. The Company may, by written notice to the Holder of this Warrant, appoint an agent for the purpose of issuing Common Stock (or Other Securities) on the exercise of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section 7, and replacing this Warrant pursuant to Section 8, or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent.

12. Transfer on the Company’s Books. Until this Warrant is transferred on the books of the Company, the Company may treat the registered Holder hereof as the absolute owner hereof for all purposes, notwithstanding any notice to the contrary.

13. Notices, Etc. All notices and other communications from the Company to the Holder of this Warrant shall be mailed by first class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company in writing by such Holder or, until any such Holder furnishes to the Company an address, then to, and at the address of, the last Holder of this Warrant who has so furnished an address to the Company.

14. Miscellaneous. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought. This Warrant shall be governed by and

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construed in accordance with the laws of State of Colorado without regard to principles of conflicts of laws. Any action brought concerning the transactions contemplated by this Warrant shall be brought only in the state courts of Colorado or in the federal courts located in the state of Colorado. In the event that any provision of this Warrant is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this Warrant. The headings in this Warrant are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision hereof. The Company acknowledges that legal counsel participated in the preparation of this Warrant and, therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Warrant to favor any party against the other party.

          IN WITNESS WHEREOF, the Company has executed this Warrant as of the date first written above.

	INCENTRA SOLUTIONS, INC.
WITNESS:
	By:
	Name:	Matthew G. Richman
	Title:	SVP, Chief Corporate Development
		Officer and Treasurer

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EXHIBIT A

FORM OF SUBSCRIPTION
(To Be Signed Only On Exercise Of Warrant)

TO:	INCENTRA SOLUTIONS, INC.
	1140 Pearl Street
	Boulder, CO 80302
	Attention:	Chief Financial Officer

          The undersigned, pursuant to the provisions set forth in the attached Warrant (No.____), hereby irrevocably elects to purchase (check applicable box):

_____	_______ shares of the Common Stock covered by such Warrant; or
_____	the maximum number of shares of Common Stock covered by such Warrant pursuant to the cashless exercise procedure set forth in Section 2.

          The undersigned herewith makes payment of the full Exercise Price for such shares at the price per share provided for in such Warrant, which is $1.40. Such payment takes the form of (check applicable box or boxes):

_____	$_______ in lawful money of the United States; and/or
_____	the cancellation of such portion of the attached Warrant as is exercisable for a total of _______ shares of Common Stock (using a Fair Market Value of $_______ per share for purposes of this calculation); and/or
_____	the cancellation of such number of shares of Common Stock as is necessary, in accordance with the formula set forth in Section 2.2, to exercise this Warrant with respect to the maximum number of shares of Common Stock purchasable pursuant to the cashless exercise procedure set forth in Section 2.

          The undersigned requests that the certificates for such shares be issued in the name of, and delivered to ______________________________________________________________ whose address is ___________________________________________________________________________.

          The undersigned represents and Warrants that all offers and sales by the undersigned of the securities issuable upon exercise of the within Warrant shall be made pursuant to registration of the Common Stock under the Securities Act of 1933, as amended (the “Securities Act”) or pursuant to an exemption from registration under the Securities Act.

Dated:
	(Signature must conform to name of holder as
	specified on the face of the Warrant)
	Address:

A-1

EXHIBIT B

FORM OF TRANSFEROR ENDORSEMENT
(To Be Signed Only On Transfer Of Warrant)

          For value received, the undersigned hereby sells, assigns, and transfers unto the person(s) named below under the heading “Transferees” the right represented by the within Warrant to purchase the percentage and number of shares of Common Stock of INCENTRA SOLUTIONS, INC. into which the within Warrant relates specified under the headings “Percentage Transferred” and “Number Transferred,” respectively, opposite the name(s) of such person(s) and appoints each such person Attorney to transfer its respective right on the books of INCENTRA SOLUTIONS, INC. with full power of substitution in the premises.

Transferees Address Percentage
Transferred Number
Transferred

Dated:
	(Signature must conform to name of holder as
	specified on the face of the Warrant)
	Address:
	SIGNED IN THE PRESENCE OF:
	(Name)
ACCEPTED AND AGREED:
[TRANSFEREE]
(Name)

B-1

EX-10.21

Exhibit 10.21

REGISTRATION RIGHTS AGREEMENT

          REGISTRATION RIGHTS AGREEMENT, dated as of August 20, 2007, between INCENTRA SOLUTIONS, INC., a Nevada corporation (the “Company”), and Pagemill Partners, LLC (“Pagemill”).

W I T N E S S E T H:

          WHEREAS, pursuant to the terms of the Engagement of Pagemill Partners, LLC dated as of July 19, 2006 (the “Fee Agreement”) with the Company, the Company has agreed to issue to Pagemill a warrant to purchase such number of shares of Common Stock, $.001 par value, of the Company (the “Warrant”) as determined pursuant to the Fee Agreement; and

          WHEREAS, pursuant to the terms of the Fee Agreement, the Company has agreed to provide certain registration rights pursuant to the terms of this Agreement;

          NOW, THEREFORE, in consideration of the mutual covenants and obligations hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows:

          1. Definitions. For purposes of this Agreement, capitalized terms used herein shall have the meanings set forth in the preambles hereto and in this Section 1.

                    1.1 “Commission” shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

                    1.2 “Common Stock” shall mean the common stock, par value $.001 per share, of the Company or, in the case of a conversion, reclassification or exchange of such shares of such Common Stock, shares of the stock issued or issuable in respect of such shares of Common Stock, and all provisions of this Agreement shall be applied appropriately thereto and to any stock resulting therefrom.

                    1.3 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar federal statute enacted hereafter, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time.

                    1.4 “Existing Rights Agreements” shall mean (i) the Registration Rights Agreement dated as of October 10, 2000 between the Company and Equity Pier LLC (ii) the warrant agreement between the Company and Equity Pier LLC dated March 28, 2001, (iii) the Form S-1 Registration Statement filed on or about May 4, 2007, (iv) the Registration Rights Agreement between the Company and former ManagedStorage International, Inc. shareholders dated August 18, 2004, (v) the Registration Rights Agreement dated as of March 30, 2005 between the Company and Barry R. Andersen and Gary L. Henderson, (vi) the Amended and

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Restated Registration Rights Agreement dated as of January 6, 2006, between the Company and Laurus Master Fund Ltd., (vii) the Registration Rights Agreement dated as of March 31, 2006 by and between the Company and Laurus Master Fund Ltd. (viii) the Registration Rights Agreement dated as of April 13, 2006 between the Company and Joseph J. Graziano, (ix) the Registration Rights Agreement dated as of April 13, 2006 between the Company and Transitional Management Consultants, Inc., (x) the Registration Rights Agreement dated June 26, 2006 between the Company, RAB American Opportunities Fund Limited, RAB North American Dynamic Fund and others, (xi) the Registration Rights Agreement dated August 24, 2006 between the Company, Craig Armstrong and Amherst Holdings, LLC, (xii) the Registration Rights Agreement dated as of July 31, 2007 between the Company and Calliope Capital Corporation, and (xiii) the Registration Rights Agreements dated as of August 14, 2007 between the Company and Paul Chopra, Dave Condensa, Bert Condensa, Terri Marine, David Auerweck, and Kevin Hawkins.

                    1.5 “Holder” shall mean any holder of Registrable Securities; provided, however, that any Person who acquires any of the Registrable Securities in a distribution pursuant to a registration statement filed by the Company under the Securities Act or pursuant to a public sale under Rule 144 under the Securities Act or any similar or successor rule shall not be considered a Holder.

                    1.6 “Initiating Holders” shall mean Holders representing (on a fully diluted basis) at least sixty-six and 2/3 percent (66 2/3%) of the total number of Registrable Securities.

                    1.7 “Person” shall mean any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, government (or an agency or political subdivision thereof) or other entity of any kind.

                    1.8 “Register”, “registered” and “registration” shall refer to a registration effected by preparing and filing a registration statement with the Commission in compliance with the Securities Act and applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement by the Commission.

                    1.9 “Registrable Securities” shall mean the shares of Common Stock issuable upon exercise of the Warrant issued to Pagemill; provided, however, that such shares of Common Stock shall only be treated as Registrable Securities hereunder if and so long as they have not been sold in a registered public offering or have not been sold to the public pursuant to Rule 144 under the Securities Act or any similar or successor rule.

                    1.10 “Registration Expenses” shall mean all expenses incurred by the Company in compliance herewith, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, blue sky fees and expenses, the reasonable fees and expenses (subject to documentation thereof) of one counsel for all Holders and Other Stockholders that offer securities being sold pursuant to the Existing Rights Agreements, and the expense of any special audits incident to or required by any such registration (but excluding the compensation of regular employees of the Company, which shall be paid in any event by the Company).

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                    1.11 “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar federal statute enacted hereafter, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time.

                    1.12 “Selling Expenses” shall mean all underwriting discounts and commissions applicable to the sale of Registrable Securities.

          2. Requested Registration.

                    2.1 Request for Registration. At any time after August 20, 2009 (such date being hereinafter referred to as the “Demand Date”), if the Company shall receive from Initiating Holders a written request that the Company effect any registration with respect to Registrable Securities the Company will:

>	>	>
	(a) promptly give written notice of the proposed registration to all other Holders; and
	(b) as soon as practicable, use all reasonable efforts to effect such registration (including, without limitation, the execution of an undertaking to file post- effective amendments, appropriate qualification under the blue sky or other state securities laws requested by Initiating Holders and appropriate compliance with applicable regulations issued under the Securities Act) as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any Holder or Holders joining in such request as are specified in a written request given within thirty (30) days after receipt of such written notice from the Company; provided, that the Company shall not be obligated to effect, or to take any action to effect, any such registration pursuant to this Section 2:
		(i) in any particular jurisdiction in which the Company would be required to execute a general consent to service of process in effecting such registration, qualification or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act or applicable rules or regulations thereunder;
		(ii) less than ninety (90) calendar days after the effective date of any registration declared or ordered effective other than a registration on Form S-3 or Form S-8;
		(iii) if, while a registration request is pending pursuant to this Section 2, the Company determines, in the good faith judgment of the Board of Directors of the Company, with the advice of counsel, that the filing of a registration statement would require the disclosure of non-

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>	>	>
		public material information the disclosure of which would have a material adverse effect on the Company or would otherwise materially adversely affect a financing, acquisition, disposition, merger or other significant transaction, the Company shall deliver a certificate to such effect signed by its President to the proposed selling Holders and the Company shall not be required to effect a registration pursuant to this Section 2 until the earlier of (A) three (3) days after the date upon which such material information is disclosed to the public or ceases to be material or (B) 90 days after the Company makes such good faith determination; provided, however, that the Company shall not utilize this right more than once in any twelve month period; or
		(iv) except as set forth in Section 2.5, after the second such registration pursuant to this Section 2.1 has been declared or ordered effective.

          Subject to the foregoing clauses (i), (ii), (iii) and (iv), the Company shall file a registration statement covering the Registrable Securities so requested to be registered as soon as practicable after receipt of the request or requests of the Initiating Holders.

                    2.2 Additional Shares to be Included. The registration statement filed pursuant to the request of the Initiating Holders may, subject to the provisions of Sections 2.4 and 3.3 below, include (a) other securities of the Company (the “Additional Shares”) which are held by (i) officers or directors of the Company who, by virtue of agreements with the Company, are entitled to include their securities in any such registration or (ii) other persons who, by virtue of agreements with the Company, including the Existing Rights Agreements, are entitled to include their securities in any such registration (the “Other Stockholders”), and (b) securities of the Company being sold for the account of the Company.

                    2.3 Underwriting.

                    (a) If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2 and the Company shall include such information in the written notice to other Holders referred to in Section 2.1 above. The right of any Holder to registration pursuant to this Section 2 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein and subject to the limitations provided herein. A Holder may elect to include in such underwriting all or a part of the Registrable Securities he holds.

                    (b) The Company shall (together with all Holders, officers, directors and Other Stockholders proposing to distribute their securities through such underwriting) negotiate and enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected for such underwriting by a majority in interest of the Initiating Holders, which underwriter(s) shall be reasonably acceptable to the Company; provided that no Holder shall be required to make any representations or warranties to or agreements (other than a

4

lock-up agreement pursuant to Section 12) with the Company or the underwriters, other than representations, warranties or agreements regarding the Holder, its Registrable Securities and its intended method of distribution and any other representation required by law.

                    2.4 Limitations on Shares to be Included. Notwithstanding any other provision of this Section 2, if the representative of the underwriters of a firm commitment underwriting advises the Initiating Holders in writing that marketing factors require a limitation on the number of shares to be underwritten, the number of shares of securities that are entitled to be included in the registration and underwriting shall be allocated as follows: first, among the Other Stockholders that offer securities being sold pursuant to the Existing Rights Agreements, in proportion, as nearly as practicable, to the respective amounts of Additional Shares which they had requested to be included in such registration pursuant to the Existing Rights Agreements; second, among the Holders, in proportion, as nearly as practicable, to the respective amounts of Registrable Securities which they had requested to be included in such registration; third, to the Company for securities being sold for its own account; and thereafter, the number of shares that may be included in the registration statement and underwriting shall be allocated among all officers or directors or remaining Other Stockholders, in each case in proportion, as nearly as practicable, to the respective amounts of Additional Shares which they had requested to be included in such registration at the time of filing the registration statement. If the Company or any Holder, officer, director or Other Stockholder who has requested inclusion in such registration as provided above disapproves of the terms of any such underwriting, such Person may elect to withdraw such Person’s Registrable Securities or Additional Shares therefrom by written notice to the Company and the underwriter and the Initiating Holders. Any Registrable Securities or other securities excluded shall also be withdrawn from such registration. No Registrable Securities or Additional Shares excluded from such registration by reason of such underwriters’ marketing limitation shall be included in such registration. To facilitate the allocation of shares in accordance with this Section 2.4, the Company or underwriter or underwriters selected as provided above may round the number of Registrable Securities of any Holder which may be included in such registration to the nearest 100 shares.

                    2.5 Additional Demand Registration. If with respect to the last registration permitted to be exercised by the Holders of Registrable Securities under Section 2.1, the Holders are unable to register all of their Registrable Securities because of the operation of Section 2.4 hereof, such Holders shall be entitled to require the Company to effect one additional registration to afford the Holders an opportunity to register all such Registrable Securities. Such additional registration shall again be subject to the provisions of this Section 2.

          3. Company Registration.

                    3.1 At any time after August 20, 2009, if the Company shall determine to register under the Securities Act any of its equity securities or securities convertible into equity securities either for its own account or the account of a security holder or holders exercising any demand registration rights, other than a registration relating solely to employee benefit plans, or a registration relating solely to a Commission Rule 145 transaction, or a registration on Form S-4 or S-8, or the Form S-1 filed on or about May 8, 2007, (or any successor forms thereto), the Company will:

5

>	>	>
	(a) promptly give to each Holder written notice thereof (which shall include a list of the jurisdictions in which the Company intends to attempt to qualify such securities under the applicable blue sky or other state securities laws); and
	(b) include in such registration (and, subject to Section 2.1(b)(i), any related qualification under blue sky laws or other compliance), and in any underwriting involved therein, all the Registrable Securities specified in a written request or request, made by any Holder within thirty (30) days after receipt of the written notice from the Company described in clause (a) above, except as set forth in Section 3.3 below. Such written request may specify all or a part of a Holder’s Registrable Securities.

                    3.2 Underwriting. If the registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Holders as a part of the written notice given pursuant to Section 3.1(a). The right of any Holder to registration pursuant to this Section 3 shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall (together with the Company and any officers, directors or Other Stockholders distributing their securities through such underwriting) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected by the Company; provided that no Holder shall be required to make any representations or warranties to or agreements (other than a lock-up agreement pursuant to Section 12) with the Company or the underwriters, other than representations, warranties or agreements regarding the Holder, its Registrable Securities and its intended method of distribution and any other representation required by law.

                    3.3 Limitations on Shares to be Included. Notwithstanding any other provision of this Section 3, if the representative of the underwriters of a firm commitment underwriting advises the Company in writing that marketing factors require a limitation or elimination on the number of shares to be underwritten, the representative may (subject to the allocation priority set forth below) limit the number of or eliminate the Registrable Securities to be included in the registration and underwriting. The Company shall so advise all holders of securities requesting registration, and the number of shares of securities that are entitled to be included in the registration and underwriting shall be allocated as follows: first, if such underwritten offering shall have been initiated by the Company for the sale of securities for its own account, to the Company for securities being sold for its own account; second, among the Other Stockholders that offer securities being sold pursuant to the Existing Rights Agreements, in proportion, as nearly as practicable, to the respective amounts of Additional Shares which they had requested to be included in such registration pursuant to the Existing Rights Agreements; third, among the Holders, in proportion, as nearly as practicable, to the respective amounts of Registrable Securities which they had requested to be included in such registration; fourth, if such underwritten offering shall not have been initiated by the Company, to the Company for securities being sold for its own account; and thereafter, the number of shares that may be

6

included in the registration statement and underwriting shall be allocated among all officers or directors or remaining Other Stockholders, in each case in proportion, as nearly as practicable, to the respective amounts of Additional Shares which they had requested to be included in such registration at the time of filing the registration statement. If any Holder of Registrable Securities or any officer, director or Other Stockholder disapproves of the terms of any such underwriting, he may elect to withdraw therefrom by written notice to the Company and the underwriter. Any Registrable Securities or other securities excluded or withdrawn from such underwriting shall also be withdrawn from such registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 3 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration.

          4. Expenses of Registration. All Registration Expenses incurred in connection with any registration, qualification or compliance pursuant to Sections 2, 3 or 4 of this Agreement shall be borne by the Company, except that Selling Expenses shall be borne pro rata by each Holder in accordance with the number of shares sold.

          5. Registration Procedures.

                    5.1 In the case of each registration effected by the Company pursuant to this Agreement, the Company will keep each Holder advised in writing as to the initiation of each registration and as to the completion thereof and will, at its expense:

>	>	>
	(a) use all reasonable efforts to keep such registration effective for a period of 180 days or until the Holder or Holders have completed the distribution described in the registration statement relating thereto, whichever first occurs; provided, however, that the Company will keep such registration effective for longer than 180 days if the costs and expenses associated with such extended registration are borne by the selling Holders;
	(b) Prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement;
	(c) Furnish such number of prospectuses and other documents incident thereto, including any amendment of or supplement to the prospectus, as a Holder from time to time may reasonably request;
	(d) Notify each seller of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing, and at

7

>	>	>
	the request of any such seller, prepare and furnish to such seller a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such shares, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in the light of the circumstances then existing;
	(e) List all such Registrable Securities registered in such registration on each securities exchange or automated quotation system on which the Common Stock of the Company is then listed;
	(f) Provide a transfer agent and registrar for all Registrable Securities and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration;
	(g) Make available for inspection by any seller of Registrable Securities, any underwriter participating in any disposition pursuant to such registration statement, and any attorney or accountant retained by any such seller or underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers and directors to supply all information reasonably requested by any such seller, underwriter, attorney or accountant in connection with such registration statement;
	(h) Furnish to each selling Holder upon request a signed counterpart, addressed to each such selling Holder, of
		(i) an opinion of counsel for the Company, dated the effective date of the registration statement in form reasonably acceptable to the Company and such counsel, and
		(ii) “comfort” letters signed by the Company’s independent public accountants who have examined and reported on the Company’s financial statements included in the registration statement, to the extent permitted by the standards of the American Institute of Certified Public Accountants, covering such matters as are customarily covered in opinions of issuer’s counsel and accountants’ “comfort” letters delivered to underwriters in underwritten public offerings of securities;
	(i) Furnish to each selling Holder upon request a copy of all documents filed with and all correspondence from or to the Commission in connection with any such offering; and
	(j) Make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months, but not more than eighteen months, beginning with the first month after the

8

.	>
	effective date of the Registration Statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act.

                    5.2 It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Agreement that the Holders proposing to register Registrable Securities shall furnish to the Company such information regarding themselves, the Registrable Securities held by them, and their intended method of distribution of such Registrable Securities as the Company shall reasonably request and as shall be required in connection with the action to be taken by the Company; provided that no Holder shall be required to make any representations or warranties to or agreements (other than a lock-up agreement pursuant to Section 12) with the Company or the underwriters, other than representations, warranties or agreements regarding the Holder, its Registrable Securities and its intended method of distribution and any other representation required by law.

                    5.3 In connection with the preparation and filing of each registration statement under this Agreement, the Company will give the Holders on whose behalf such Registrable Securities are to be registered and their underwriters, if any, and their respective counsel and accountants, the opportunity to review such registration statement, each prospectus included therein or filed with the Commission, and each amendment thereof or supplement thereto, and will give each such Holder such access to the Company’s books and records and such opportunities to discuss the business of the Company with its officers, its counsel and the independent public accountants who have certified the Company’s financial statements, as shall be necessary, in the opinion of such Holders or such underwriters or their respective counsel, in order to conduct a reasonable and diligent investigation within the meaning of the Securities Act.

          6. Indemnification.

                    6.1 Indemnification by the Company. The Company will indemnify each Holder, each of its officers, directors and partners, and each person controlling such Holder, with respect to which registration, qualification or compliance has been effected pursuant to this Agreement, and each underwriter, if any, and each Person who controls any underwriter, against all claims, losses, damages and liabilities (or actions, proceedings or settlements in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any prospectus, offering circular or other document (including any related registration statement, notification or the like) incident to any such registration, qualification or compliance, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, or any violation by the Company of the Securities Act or any rule or regulation there under applicable to the Company and relating to action or inaction required of the Company in connection with any such registration, qualification or compliance, and will reimburse each such Holder, each of its officers, directors and partners, and each Person controlling such Holder, each such underwriter and each Person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending or settling any such claim, loss, damage, liability or action, provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission made in reliance upon and based upon written information

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furnished to the Company by such Holder or underwriter and stated to be specifically for use therein.

                    6.2 Indemnification by the Holders. Each Holder will, if Registrable Securities held by him are included in the securities as to which such registration, qualification or compliance is being effected, indemnify the Company, each of its directors and officers and each underwriter, if any, of the Company’s securities covered by such a registration statement, each person who controls the Company (other than such Holder) or such underwriter within the meaning of the Securities Act and the rules and regulations thereunder, each other such Holder and each of their officers, directors and partners, and each Person controlling such Holder or other stockholder, against all claims, losses, damages, expenses and liabilities (or actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained in any such registration statement, prospectus, offering circular or other document, or any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company, each of its directors and officers, each underwriter or control Person, each other Holder and each of their officers, directors and partners and each Person controlling such Holder or other stockholder for any legal or any other expenses reasonably incurred in connection with investigating or defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus, offering circular or other document in reliance upon and in conformity with written information furnished to the Company by such Holder and stated to be specifically for use therein.

                    6.3 Notices of Claims, Procedures, etc. Each party entitled to indemnification under this Section 6 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at the Indemnified Party’s sole expense, and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 7 unless such failure is prejudicial to the ability of Indemnifying Party to defend such claim or action. Notwithstanding the foregoing, such Indemnified Party shall have the right to employ its own counsel in any such litigation, proceeding or other action if (i) the employment of such counsel has been authorized by the Indemnifying Party, in its sole and absolute discretion, or (ii) the named parties in any such claims (including any impleaded parties) include any such Indemnified Party and the Indemnified Party and the Indemnifying Party shall have been advised in writing (in suitable detail) by counsel to the Indemnified Party either (A) that there may be one or more legal defenses available to such Indemnified Party which are different from or additional to those available to the Indemnifying Party, or (B) that there is a conflict of interest by virtue of the Indemnified Party and the Indemnifying Parties having common counsel, in any of which events, the legal fees and expenses of a single counsel for all Indemnified Parties with respect to each such claim, defense thereof, or counterclaims

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thereto shall be borne by Indemnifying Party. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such claim or litigation. Each Indemnified Party shall cooperate to the extent reasonably required and furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be reasonably required in connection with defense of such claim and litigation resulting therefrom.

          7. Information by Holder. Each Holder of Registrable Securities shall furnish to the Company such information regarding such Holder and the distribution proposed by such Holder as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration, qualification or compliance referred to in this Agreement; provided that no Holder shall be required to make any representations or warranties to or agreements (other than a lock-up agreement pursuant to Section 12) with the Company or the underwriters, other than representations, warranties or agreements regarding the Holder, its Registrable Securities and its intended method of distribution and any other representation required by law.

          8. Transfer or Assignment of Registration Rights. The rights to cause the Company to register securities granted by the Company under this Agreement may be transferred or assigned by a Holder to a transferee or assignee of any Registrable Securities; provided that the Company is given written notice at or prior to the time of said transfer or assignment, stating the name and address of said transferee or assignee and identifying the securities with respect to which such registration rights are being transferred or assigned; and provided further that the transferee or assignee of such rights assumes in writing the obligations of a Holder under this Agreement to the Company and other Holders in effect at the time of transfer under all effective agreements.

          9. Termination of Registration Rights. No Holder shall be entitled to exercise any right provided for in Section 2 or Section 3 above after the earlier of, as to each Holder, the time at which such Holder (i) has sold all shares of Common Stock to which this agreement applies, or (ii) can sell all shares of Common Stock held by it and to which this agreement applies without restriction in compliance with Rule 144(k).

          10. Exchange Act Compliance. So long as the Company remains subject to the reporting requirements of the Exchange Act, the Company shall file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the Commission thereunder, and will take all actions reasonably necessary to enable holders of Registrable Securities to sell such securities without registration under the Securities Act within the limitation of the provisions of (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, (b) Rule 144A under the Securities Act, as such Rule may be amended from time to time, if applicable or (c) any similar rules or regulations hereunder adopted by the Commission. Upon the request of any Holder of Registrable Securities, the Company will deliver to such Holder a written statement as to whether it has complied with such requirements. After any sale of Registrable Securities pursuant to the provisions of Rule 144 or

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144A, the Company will, to the extent allowed by law, cause any restrictive legends to be removed and any transfer restrictions to be rescinded with respect to such Registrable Securities. In order to permit a Holder to sell the same, if it so desires, pursuant to Rule 144A promulgated by the Commission (or any successor to such rule), the Company will comply with all rules and regulations of the Commission applicable in connection with use of Rule 144A (or any successor thereto). Prospective transferees of Registrable Securities that are Qualified Institutional Buyers (as defined in Rule 144A) that would be purchasing such Registrable Securities in reliance upon Rule 144A may request from the Company information regarding the business, operations and assets of the Company. Within five (5) business days of any such request, the Company shall deliver to any such prospective transferee copies of annual audited and quarterly unaudited financial statements of the Company and such other information as may be required to be supplied by the Company for it to comply with Rule 144A.

          11. No Conflict of Rights. The Company will not hereafter enter into any agreement with respect to its securities which is inconsistent with the rights granted to the Holders in this Agreement. Without limiting the generality of the foregoing, the Company will not hereafter enter into any agreement with respect to its securities which grants, or modifies any existing agreement with respect to its securities to grant, to the holder of its securities equal or higher priority to the rights granted to the Holders under Sections 2 and 3 of this Agreement.

          12. Lockup Agreement. In consideration for the Company agreeing to its obligations hereunder, the Holders of Registrable Securities agree in connection with any registration of the Company’s securities (which includes Registrable Securities of at least $75,000 in value) pursuant to Section 3 hereof that, upon the request of the Company not to sell, make any short sale of, loan, grant any option for the purchase of or otherwise dispose of any Registrable Securities (other than those shares included in such registration) without the prior written consent of the Company for such period of time (not to exceed 180 days) from the effective date of such registration as the Company may specify.

          13. Benefits of Agreement; Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns, legal representatives and heirs. This Agreement does not create, and shall not be construed as creating, any rights enforceable by any other Person.

          14. Complete Agreement. This Agreement constitutes the complete understanding among the parties with respect to its subject matter and supersedes all existing agreements and understandings, whether oral or written, among them. No alteration or modification of any provisions of this Agreement shall be valid unless made in writing and signed, on the one hand, by the Holders of a majority of the Registrable Securities then outstanding and, on the other, by the Company.

          15. Section Headings. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

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          16. Notices. All notices, offers, acceptances and other communications required or permitted to be given or to otherwise be made to any party to this Agreement shall be deemed to be sufficient if contained in a written instrument delivered by hand, first class mail (registered or certified, return receipt requested), telecopier or overnight air courier guaranteeing next day delivery, if to the Company, at 1140 Pearl Street, Boulder, Colorado 80302, Attention: Chief Financial Officer, with a copy to Reed Guest, Esq., 94 Underhill Road, Orinda, CA 94563, and if to Pagemill, to 2475 Hanover Street, Palo Alto, CA 94304, Attention: Chief Financial Officer, or at such other address or addresses as may have been furnished the Company in writing.

          All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; when receipt acknowledged, if telecopied; and the next business day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any party may change the address to which each such notice or communication shall be sent by giving written notice to the other parties of such new address in the manner provided herein for giving notice.

          17. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware without giving effect to the provisions, policies or principles thereof respecting conflict or choice of laws.

          18. Counterparts. This Agreement may be executed in one or more counterparts each of which shall be deemed an original but all of which taken together shall constitute one and the same agreement.

          19. Severability. Any provision of this Agreement which is determined to be illegal, prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such illegality, prohibition or unenforceability without invalidating the remaining provisions hereof which shall be severable and enforceable according to their terms and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

SIGNATURE PAGE FOLLOWS

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          IN WITNESS WHEREOF, the parties have signed this Agreement as of the date first set forth above.

>	>	>
	INCENTRA SOLUTIONS, INC.
	By:
	Name: Matthew G. Richman
	Title:   Chief Corporate Development Officer and Treasurer
	PAGEMILL PARTNERS, LLC
	Name: Bill Sunstrum
	Chief Financial Officer

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EX-99.I

Exhibit 99.1

1140 Pearl Street, Boulder, Colorado 80302

NEWS RELEASE for August 20, 2007 at 7:30 AM EDT
Contacts for Incentra Solutions:
Allen & Caron Inc.	Incentra Solutions, Inc.
Jill Bertotti (investors)	Tom Sweeney
jill@allencaron.com	Chief Executive Officer
Len Hall (financial media)	tsweeney@incentrasolutions.com
len@allencaron.com	(303) 449-8279
(949) 474-4300

INCENTRA SOLUTIONS ACQUIRES HELIO SOLUTIONS,
LEADING PROVIDER OF IT AND DATA CENTER SOLUTIONS IN CALIFORNIA/ARIZONA

          Boulder, CO, August 20, 2007– Incentra Solutions, Inc. (OTCBB: ICNS), a provider of complete IT and storage management solutions to enterprises and managed service providers in North America and Europe, today announced that it has acquired Santa Clara, CA-based Helio Solutions, Inc. (www.heliosolutions.com) for approximately $10.3 million, subject to certain post-closing working capital adjustments. The price paid at closing included $5 million in cash, six million restricted shares of Incentra common stock and the issuance of an unsecured, convertible three-year note for $770,000. Based on meeting certain performance thresholds in each of the three years following closing, the sellers are eligible to receive additional consideration consisting of a combination of cash and restricted shares of Incentra common stock. The sellers have entered into a multi-year year lockup and voting agreement covering all Incentra common stock received in the transaction.

          Privately-held Helio, which is a premier provider of IT and secure data center solutions to mid-tier enterprises and Fortune 1000 companies, had sales of approximately $75 million for the 12 months ended June30, 2007.

          Helio will become a wholly-owned subsidiary of Incentra Solutions and continue to operate from its offices in Santa Clara, San Jose, San Francisco, Los Angeles, and Phoenix, AZ. The acquisition will add a staff of approximately 60 professionals and more than 350 customers to Incentra’s existing operations, and Helio president Dave Condensa will remain with the business and report directly to Incentra Solutions President and Chief Operating Officer Shawn O’Grady.

          Incentra Solutions Chairman and CEO Thomas P. Sweeney said that acquiring Helio will significantly strengthen Incentra’s presence in California and Arizona. The acquisition is another important step in the Company’s strategy to rapidly grow revenues by acquiring systems integrators with existing direct sales organizations serving the enterprise market. With the addition of Helio revenue, Incentra is well positioned to enter 2008 with an annual revenue run rate of more than $200 million.

          “In addition to the investments we are making in organic growth, as we have previously demonstrated we will continue to seek strategic opportunities to grow through acquisition, when appropriate,” Sweeney said. “Helio brings to Incentra experienced management and an excellent professional staff with a successful track record. With its large base of well established customers, it meets our strategic goal of providing significant opportunities to increase sales of our value

added services including First Call and Enhanced First Call support services, professional services and our GridWorks remote monitoring and management system.”

          Dave Condensa said, “Joining Incentra Solutions is a significant move for our employees and our customer base. It not only creates attractive career opportunities for our professional staff, it adds critically important service offerings to our product line to help solve our customer’s growing data management requirements. The entire Helio organization is very excited about becoming part of Incentra for we believe this business combination positions the Company as the most complete provider of IT products and value added service solutions on the west coast.”

          Pagemill Partners, headquartered in Palo Alto, CA, advised Incentra Solutions regarding the acquisition.

About Incentra Solutions, Inc.

          Incentra Solutions, Inc. (www.incentrasolutions.com) (OTCBB:ICNS) is a provider of complete IT & storage management solutions to enterprises and managed service providers in North America and Europe. Incentra’s complete solution includes managed services, professional services, hardware and software products with the Company’s First Call and Enhanced First Call support services, IT outsourcing solutions and financing options.

Incentra Solutions Forward Looking Statements

          Certain information discussed in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the federal securities laws. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions at the time made, it can give no assurance that its expectations will be achieved. Readers are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements are inherently subject to unpredictable and unanticipated risks, trends and uncertainties such as the Company’s inability to accurately forecast its operating results; the Company’s potential inability to achieve profitability or generate positive cash flow; the availability of financing; and other risks associated with the Company’s business. For further information on factors which could impact the Company and the statements contained herein, reference should be made to the Company’s filings with the Securities and Exchange Commission, including Annual Reports on Form 10-KSB, Quarterly Reports on Form 10-QSB and Current Reports on Form 8-K. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

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