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: December 28, 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)

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

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

o Pre-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

Effective December 28, 2007, we entered into an assignment and amendment agreement (“Assignment and Amendment”) with Laurus Master Fund Ltd., a Cayman Islands corporation (“Laurus”). The primary purpose of the Assignment and Amendment was to amend the terms of the Security Agreement dated as of February 6, 2006 between Laurus and our company (the "Security Agreement") and our Secured Revolving Note, dated February 6, 2006, in favor of Laurus (the "Note") in order to increase the available borrowing amount from $15,000,000 to $20,000,000.

Under the Assignment and Amendment, interest payable on the outstanding principal amount of the Note was amended to a fixed rate per annum equal to ten percent (10%). Under the original Note, interest accrued at the rate of prime plus one percent (1%), currently eight and one-quarter percent (8.25%).

 Further, under the Assignment and Amendment, we issued to Valens U.S. a common stock purchase warrant to purchase 350,000 shares of our common stock at an exercise price of $0.01 ("the Warrant"). The Warrant expires on December 28, 2027. Valens U.S. may not exercise the warrant in connection with a number of shares of common stock which would exceed the difference between (i) 9.99% of the issued and outstanding shares of common stock and (ii) the number of shares of common stock beneficially owned by Valens U.S. and affiliates except upon (i) sixty-one (61) days prior notice from Valens U.S. to us or (ii) upon the occurrence and continuance of an event of default under the Security Agreement.

Pursuant to a Registration Rights Agreement, dated as of December 28, 2007, between our company and Valens U.S. , we are obligated to (a) file a registration statement on or before April 11, 2008 to register the resale of the shares of our common stock underlying the Warrant, (b) use our best efforts to have the registration statement declared effective not later than June 25, 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.

On December 28, 2007, we also entered into a letter agreement with Calliope Capital Corporation (“Calliope”), an affiliate of Laurus, and Valens U.S. SPV I, LLC (“Valens”).  Under the letter agreement, Calliope and Valens agreed to amend the terms of our Secured Term Note, effective July 31, 2007, in favor of Calliope in the amount of $12,000,000 (the "Calliope Note") to defer certain monthly principal payments of $285,714.28.  Originally scheduled to begin February 1, 2008, these monthly payments will now begin June 1, 2008 thereby deferring $1,142,857.12 from 2008 until the Calliope Note maturity date of July 31, 2010.

In conjunction with the above transactions, we paid fees of $32,145 to Valens Capital Management, LLC, the fund manager of Valens U.S., $42,855 to Valens U.S., and $35,000 for the reimbursement of legal fees incurred by Valens.  Also on December 28, 2007 Laurus assigned to Valens U.S. a twenty-five percent (25%) interest in the Note.

SECTION 2 – FINANCIAL INFORMATION

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

The disclosures contained in Item 1.01 are incorporated herein by reference.

SECTION 3 - SECURITIES AND TRADING MARKETS

Item 3.02 Unregistered Sales Of Equity Securities

In connection with the transactions described in Item 1.01, we issued to Valens U.S. the Common Stock Purchase Warrant described therein. The Warrant was 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 Valens U.S. A represented to us that it is an “accredited investor”, as defined in the Securities Act of 1933.

SECTION 5 - CORPORATE GOVERNANCE AND MANAGEMENT

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers

On December 31, 2007, we entered into an Employment Agreement Extension with Shawn O’Grady, President and Chief Operating Officer of our company, which extends the term of original Employment Agreement, effective as of October 17, 2005, until December 31, 2009. Further, Mr. O’Grady’s annual base salary was increased from $240,000 to $315,800. His target performance bonus opportunity remains unchanged at $160,000 per annum.

SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS.

Item 9.01 Financial Statements and Exhibits.

(c)       Exhibits.

Number	Documents
10.1	Assignment and Amendment Agreement dated as of December 28, 2007 by and among Luarus Master Fund Limited, Valens U.S. SPV I, LLC, Incentra Solutions, Inc., PWI Technologies, Inc., ManagedStorage International, Incentra Solutions International, Inc. Incentra Solutions of California, Inc., Network System Technologies, Inc., Tactix, Inc., Incentra Solutions of the Northeast, Inc., Sales Strategies, Inc., and Incentra Helio Acquisition Corp.
10.2	Common Stock Purchase Warrant, dated as of December 28, 2007, executed by our company in favor of Valens U.S. SPV I, LLC.
10.3	Letter from Valens U.S. SPV I, LLC and Calliope Capital Corporation to Incentra Solutions, Inc. dated as of December 28, 2007, amending the amortization schedule under the Secured Term Note effective July 31. 2007.
10.4	Registration Rights Agreement dated as of December 28, 2007 by and between Incentra Solutions, Inc. and Valens U.S. SPV I, LLC.
10.5	Employment Agreement Extension dated as of December 31, 2007 by and between Incentra Solutions, Inc. and Shawn O’Grady.

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: January 4, 2008	By:	/s/ Thomas P. Sweeney III
		Thomas P. Sweeney III
		Chief Executive Officer

Exhibit Index

Number	Documents
10.1	Assignment and Amendment Agreement dated as of December 28, 2007 by and among Luarus Master Fund Limited, Valens U.S. SPV I, LLC, Incentra Solutions, Inc., PWI Technologies, Inc., ManagedStorage International, Incentra Solutions International, Inc. Incentra Solutions of California, Inc., Network System Technologies, Inc., Tactix, Inc., Incentra Solutions of the Northeast, Inc., Sales Strategies, Inc., and Incentra Helio Acquisition Corp.
10.2	Common Stock Purchase Warrant, dated as of December 28, 2007, executed by our company in favor of Valens U.S. SPV I, LLC.
10.3	Letter from Valens U.S. SPV I, LLC and Calliope Capital Corporation to Incentra Solutions, Inc. dated as of December 28, 2007, amending the amortization schedule under the Secured Term Note effective July 31. 2007.
10.4	Registration Rights Agreement dated as of December 28, 2007 by and between Incentra Solutions, Inc. and Valens U.S. SPV I, LLC.
10.5	Employment Agreement Extension dated as of December 31, 2007 by and between Incentra Solutions, Inc. and Shawn O’Grady.

EX-10.1

ASSIGNMENT AND AMENDMENT AGREEMENT

THIS ASSIGNMENT AND AMENDMENT AGREEMENT (this “Agreement”) dated as of December 28, 2007 by and among LAURUS MASTER FUND, LTD., a Cayman Islands company (“Assignor”); VALENS U.S. SPV I, LLC, a Delaware limited liability company (“Assignee”); INCENTRA SOLUTIONS, INC., a Nevada corporation (“Parent“), PWI TECHNOLOGIES, INC., a Washington corporation (“PWI”), MANAGEDSTORAGE INTERNATIONAL, INC., a Delaware corporation (“MSI”), INCENTRA SOLUTIONS INTERNATIONAL, INC., a Delaware corporation (“ISI”), INCENTRA SOLUTIONS OF CALIFORNIA, INC., a Delaware corporation (“ISC”), NETWORK SYSTEM TECHNOLOGIES, INC., an Illinois corporation (“NST”), TACTIX, INC., an Oregon corporation (“Tactix”), INCENTRA SOLUTIONS OF THE NORTHEAST, INC., a Delaware corporation (“ISN”), SALES STRATEGIES, INC., a New Jersey corporation (“SSI”) and INCENTRA HELIO ACQUISITION CORP., a Delaware corporation (“Helio,” and collectively with Parent, PWI, MSI, ISI, ISC, NST, Tactix, SSI and ISN, the “Companies”, and individually each are referred to herein sometimes as a “Company”).

BACKGROUND

Companies and Assignor are parties to a Security Agreement dated as of February 6, 2006 (as amended, restated, modified and/or supplemented from time to time, the “Security Agreement”) and the Ancillary Agreements as therein defined (such Ancillary Agreements together with the Security Agreement, as each may be amended, restated modified and/or supplemented from time to time, collectively, the “Loan Documents”).

Assignor has agreed to sell and assign to Assignee a portion of its interest in all Loans outstanding from time to time under, and its funding and other obligations and commitments pursuant to, the Loan Documents and Assignee has agreed to purchase the same from Assignor on the terms and conditions herein contained.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.Definitions. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Security Agreement.

2. Assignment and Assumption.

(a)As of the date hereof, Assignor hereby TRANSFERS, ASSIGNS, SELLS, GRANTS and CONVEYS, WITHOUT RECOURSE, REPRESENTATION OR WARRANTY OF ANY NATURE WHATSOEVER (except as expressly set forth in Section 6(a) of this Agreement) unto Assignee a twenty-five percent (25%) interest in all Loans outstanding on and after the date hereof, together with an attendant twenty-five percent (25%) interest in all liens, rights, claims, title, assignments and interests (including security interests), pertaining to or arising from the Loan Documents (the “Assigned Rights”). Notwithstanding anything to the contrary contained herein, the Assigned Rights shall not include any warrants previously issued to Assignor that are exercisable for shares of Common Stock of Parent evidenced by certain of the Existing Common Stock Purchase Warrants and Options (as defined in paragraph 5(b) below) provided, that nothing contained herein shall in any way address, revise or otherwise modify any such warrant expressly assigned, transferred or conveyed by Assignor to Assignee prior to the date hereof, if any.

(b)Effective as of the date hereof, Assignee hereby PURCHASES all of the Assigned Rights and ASSUMES a twenty-five percent (25%), pro-rata, share of all of Assignor’s obligations under and with respect to the Loan Documents (including its funding and other obligations and commitments thereunder arising on and after the date hereof) (“Assumed Obligations”).

3.Payment of Purchase Price. In consideration for the Assigned Rights, Assignee shall on the date hereof pay to Assignor an amount equal to twenty-five percent (25%) of the amount of all Loans outstanding as of the date hereof, including, without limitation, all Loans to be made on the date hereof pursuant to the request of the Company Agent.

4.Amendment of Security Agreement and Certain Ancillary Agreements. As of the date hereof, the Security Agreement is amended as follows:

(a)The definitions of “Capital Availability Amount” and “Revolving Note” set forth in Annex A to the Security Agreement are each hereby amended by deleting the amount “Fifteen Million Dollars ($15,000,000)” appearing therein and inserting the amount “Twenty Million Dollars ($20,000,000)” in lieu thereof in each case.

(b)The Revolving Note is hereby amended by increasing the stated amount as appearing in the first paragraph thereof from “Fifteen Million Dollars ($15,000,000)” to “Twenty Million Dollars ($20,000,000)”.

(c)The Revolving Note is hereby amended by deleting Section 1.1 and replacing such section in its entirety with the following:

“1.1Contract Rate. Subject to Sections 3.2 and 4.10, interest payable on the outstanding principal amount of this Note (the “Principal Amount”) shall accrue at a fixed rate per annum equal to ten percent (10%) (the “Contract Rate”). Interest shall be (i) calculated on the basis of a 360 day year, and (ii) payable monthly, in arrears, commencing on March 1, 2006 and continuing 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.”

(d)The Revolving Note is hereby amended by adding a new section to Article 1 thereof as follows:

“1.2Rebate. If by June 27 2008, the Companies prepay in full the Principal Amount outstanding at such time together with accrued but unpaid interest thereon and any and all other sums due, accrued or payable to the Holder arising under this Note, the Security Agreement or any other Ancillary Agreement (collectively, the “Redemption Amount”) and the Security Agreement has been irrevocably terminated, upon receipt in full of the Redemption Amount in good funds, Valens U.S. SPV I, LLC (“Valens U.S.) will rebate to the Parent fifty percent (50%) of any fees it received from the Companies pursuant to that certain Assignment and Amendment Agreement dated December 28, 2007 among Valens U.S., Laurus Master Fund, Ltd. and the Companies.

5.Additional Consideration to Assignee. In consideration for Assignee’s agreement to purchase all of the Assigned Rights and to assume all of the Assumed Obligations, each of the Companies hereby agrees as follows:

(a)Parent shall, on the date hereof, issue to Assignee a common stock purchase warrant, in the form of Exhibit A hereto (the “Warrant”), exercisable for 350,000 shares of Common Stock of the Parent, subject to adjustment as therein set forth (the “Warrant Shares”);

(b)Each Company hereby represents and warrants to Assignor and Assignee that (i) such Company is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation (which is as set forth in the preamble to this Agreement), (ii) it has the corporate power and authority to own and operate its properties and assets and to execute and deliver this Agreement and, as applicable, the Warrant and to issue the Warrant Shares, (iii) each direct and indirect Subsidiary of Parent and the authorized, issued and outstanding capital stock of Parent and each direct and indirect Subsidiary of Parent, together with a detailed list of the persons and entities (together with percentage ownership interests) owning such capital stock (other than owners of capital stock of Parent who, together with their affiliates, own less than five percent (5%) of the aggregate outstanding capital stock of Parent), is set forth on Schedule 1 hereto, (iv) except as set forth on Schedule 2 hereto, other than shares which may be granted pursuant to (A) this Agreement, (B) that certain Common Stock Purchase Warrant originally exercisable for 4,435,000 shares of Common Stock of Parent dated as of May 13, 2004 made by Parent in favor of Assignor, (C) that certain Common Stock Purchase Warrant originally exercisable for 500,000 shares of Common Stock of Parent dated as of October 25, 2004 made by Parent in favor of Assignor, (D) that certain Common Stock Purchase Warrant originally exercisable for 3,625,000 shares of Common Stock of Parent dated as of February 17, 2005 made by Parent in favor of Assignor, (E) that certain Common Stock Purchase Warrant originally exercisable for 400,000 shares of Common Stock of Parent dated as of June 30, 2005 made by Parent in favor of Assignor, (F) that certain Common Stock Purchase Option dated as of February 6, 2006 issued by the Parent to Assignor, (G) that certain Common Stock Purchase Warrant originally exercisable for 417,857 shares of Common stock of Parent dated as of March 31, 2006 made by Parent in favor of Assignor, (H) that certain Common Stock Purchase Warrant originally exercisable for 360,000 shares of Common Stock of Parent dated as of June 18, 2007 made by Parent in favor of Assignor and (I) that certain Common Stock Purchase Warrant originally exercisable for 3,750,000 shares of Common Stock of Parent dated as of July 31, 2007 made by Parent in favor of Calliope Capital Corporation (the items referenced in subclauses (B) and (I) above, collectively, and each as amended, modified, restated and/or supplemented from time to time, referred to as the “Existing Common Stock Purchase Warrants and Options”), there are no outstanding options, warrants, 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 Parent of any of its securities, (v) neither the issuance of the Warrant, 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 Parent outstanding under anti-dilution or other similar provisions contained in or affecting any such securities, (vi) all issued and outstanding shares of Parent’s Common Stock have been duly authorized and validly issued and are fully paid and nonassessable, (vii) the rights, preferences, privileges and restrictions of the shares of Parent’s Common Stock are as stated in Parent’s Articles of Incorporation as amended through the date hereof, (viii) the Warrant Shares have been duly and validly reserved for issuance and when issued will be validly issued, fully paid and nonassessable, and will be free of any liens or encumbrances, (ix) neither the issuance of the Warrant nor the issuance of the Warrant Shares is subject to any preemptive rights or rights of first refusal that have not been properly waived or complied with, (x) to the extent it is a party thereto, its execution, delivery and performance of and compliance with this Agreement and the issuance of the Warrant pursuant hereto, will not, with or without the passage of time or giving of notice, result in any 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 any Company or the suspension, revocation, impairment, forfeiture or nonrenewal of any permit, license, authorization or approval applicable to any of the Companies, their respective businesses or operations or any of their respective assets or properties, (xi) Parent’s obligation to issue the Warrant Shares upon exercise of the Warrant is binding upon Parent and enforceable regardless of the dilution such issuance may have on the ownership interests of other shareholders of Parent; and (xii) all issued and outstanding shares of Parent’s capital stock shall be issued in compliance with all applicable state and federal laws concerning the issuance of securities; and

(c)On the date hereof, Parent shall pay (i) to Valens Capital Management, LLC, the investment manager of the Assignee (“VCM”), a non-refundable payment in an amount equal to $32,145, plus reasonable expenses (including legal fees and expenses) incurred in connection with the entering into of this Agreement and the Ancillary Agreements, plus expenses incurred in connection with each of VCM’s and/or Assignee’s due diligence review of the Companies and all other related matters, (ii) to Valens US, a non-refundable payment in an amount equal to $21,427.50 and (iii) to Valens US, an advance prepayment discount in an amount equal to $21,427.50. Each of the foregoing payments in clauses (i), (ii) and (iii) shall be deemed fully earned on the date hereof and, except as expressly set forth in Section 1.2 of the Revolving Note, shall not be subject to rebate or proration for any reason.

6. Representations, Warranties and Covenants of Assignor and Assignee.

(a)Assignor represents and warrants that (i) upon the assignment hereby, the Assigned Rights are free and clear of any lien or encumbrance created by Assignor; (ii) this Agreement has been duly authorized, executed and delivered by Assignor, and is the legal, valid and binding obligation of Assignor enforceable in accordance with its terms; (iii) it has title to the Assigned Rights, (iv) it has not previously assigned, sold, sold a participation interest in, hypothecated or otherwise transferred any interest that it had or may have in the Assigned Rights or the Loan Documents, (v) no Loan Document has been modified or amended in any manner, except to the extent disclosed by Assignor to Assignee, and (vi) as of the date hereof, the aggregate outstanding balance of the Loans is $15,031,137.53 (inclusive of Loans made or to be made on the date hereof).

(b)Assignee hereby acknowledges that it is taking the Assigned Rights as is, without recourse to Assignor, without the benefit of any representations or warranties from Assignor, except as expressly stated in Section 6(a) above.

(c)Assignee represents and warrants that this Agreement has been duly authorized, executed and delivered by it, and is the legal, valid and binding obligation of Assignee enforceable in accordance with its terms.

7.Ratification. Each Company hereby acknowledges, ratifies and confirms that Assignor and Assignee (as partial assignee of Assignor) has and shall continue to have (and hereby grants to Assignor and Assignee) as security for the Obligations a valid first priority perfected security interest in the Collateral pursuant to and in accordance with the Loan Documents. Each Company hereby acknowledges, ratifies and confirms that it is a party to the Security Agreement and the Revolving Note and is joined thereto as a Company, and, in the case of each Company other than Parent, an Eligible Subsidiary, and is bound by all of the terms, conditions and duties applicable to a Company and an Eligible Subsidiary thereunder. Each Company acknowledges and confirms that as of the date hereof, the aggregate outstanding balance of the Loans is the amount set forth in clause (vi) of paragraph 6(a) above.

8.Miscellaneous. Each Company hereby acknowledges, confirms and agrees that (a) any breach by any Company of any term or provision of this Agreement shall constitute an Event of Default under the Loan Documents. Each Company hereby reaffirms and restates, as of the date hereof, all of the representations and warranties made by such Company to Assignor in the Security Agreement and represents and warrants to Assignor and Assignee that all such representations and warranties are true and correct as of the date hereof (unless made expressly as of an earlier date in which case the Companies represent and warrant that such representations and warranties were true and correct as of such date).

9.Further Assurances.

(a)Assignor agrees to execute and deliver all such further documents, to do or cause to be done all such further acts and things in order to effect the transactions contemplated by this Agreement and to otherwise grant to Assignee the intended benefit of this Agreement. Such actions include without limitation (a) filing of assignments sufficient to transfer Assignor’s security interests, (b) instructing depositary banks to accept the instructions of Assignee with respect to disbursements from bank accounts, (c) effecting the transfers or re-issuances of any Loan Document and (d) delivering any documents necessary to effect the transactions contemplated by this Agreement and to otherwise grant to Assignee the intended benefit of this Agreement, the delivery of which Assignee expressly waives on the date hereof. Assignor hereby authorizes Assignee to file assignments of all security interests (including assignments of UCC financing statements) currently naming Assignor as secured party and any one or more of the Companies as debtors.

(b)Each Company agrees to execute and deliver all such further documents, to do or cause to be done all such further acts and things, and to obtain all consents reasonably requested by Assignor or Assignee, in order to effect the transactions contemplated by this Agreement and to otherwise grant to Assignor and Assignee the intended benefit of this Agreement. Such actions include, without limitation, (a) executing any and all documents requested by Assignee to ensure that Assignee’s security interest in the Collateral is properly perfected and (b) executing and delivering to Assignee, upon Assignee’s request, a promissory note in substantially the form of the Revolving Note. Each Company hereby authorizes Assignee to file amendments to any and all UCC financing statements previously filed by Assignor against such Company and/or new UCC financing statements naming Assignee as secured party and any one or more Companies as debtors.

10.GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

11.WAIVER OF JURY TRIAL. EACH OF ASSIGNOR, ASSIGNEE AND EACH COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

12.Counterparts. This Agreement may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same agreement. Any signature delivered by facsimile transmission or other electronic transmission shall be deemed an original signature hereto.

[Signatures appear on the following page]

IN WITNESS WHEREOF, this Assignment of, and Amendment to, Loans, Liens and Documents has been executed by the parties hereto on the date first written above.

ASSIGNOR:			ASSIGNEE:
LAURUS MASTER FUND, LTD.			VALENS U.S. SPV I, LLC
By:	Laurus Capital Management, LLC, its investment manager		By:	Valens Capital Management, LLC, its investment manager
	By:	/s/ Scott Bluestein		By:	/s/ Scott Bluestein
	Name:	Scott Bluestein		Name:	Scott Bluestein
	Title:	Authorized Signatory		Title:	Authorized Signatory

COMPANIES:
INCENTRA SOLUTIONS, INC.
By:	/s/ Matthew G. Richman
Name:	Matthew G. Richman
Title:	Asst. Secretary
PWI TECHNOLOGIES, INC.
By:	/s/ Matthew G. Richma
Name:	Matthew G. Richman
Title:	Secretary
MANAGEDSTORAGE INTERNATIONAL, INC.
By:	/s/ Matthew G. Richman
Name:	Matthew G. Richman
Title:	Asst. Secretary
INCENTRA SOLUTIONS INTERNATIONAL, INC.
By:	/s/ Matthew G. Richman
Name:	Matthew G. Richman
Title:	Asst. Secretary

 

SIGNTURE PAGE TO ASSIGNMENT AND

AMENDMENT AGREEMENT

INCENTRA SOLUTIONS OF CALIFORNIA, INC.
By:	/s/ Matthew G. Richman
Name:	Matthew G. Richman
Title:	Secretary
NETWORK SYSTEM TECHNOLOGIES, INC.
By:	/s/ Matthew G. Richman
Name:	Matthew G. Richman
Title:	Secretary
TACTIX, INC.
By:	/s/ Matthew G. Richman
Name:	Matthew G. Richman
Title:	Secretary
INCENTRA SOLUTIONS OF THE NORTHEAST, INC.
By:	/s/ Matthew G. Richman
Name:	Matthew G. Richman
Title:
INCENTRA HELIO ACQUISITION CORP.
By:	/s/ Matthew G. Richman
Name:	Matthew G. Richman
Title:	Secretary

SIGNTURE PAGE TO ASSIGNMENT AND

AMENDMENT AGREEMENT

SALES STRATEGIES, INC.
By:	/s/ Matthew G. Richman
Name:	Matthew G. Richman
Title:	Secretary

SIGNTURE PAGE TO ASSIGNMENT AND

AMENDMENT AGREEMENT

SCHEDULE 1

(Parent and Subsidiary Corporate Structure and Capitalization)

Incentra Solutions, Inc. – Public Company, OTCBB: ICNS

Greater than 5% shareholders:

	Common		% of Total			Preferred		% of Total
Great Hill		2,046,271		10	%		843,170		34	%
Tudor		675,867		3	%		1,004,405		41	%
JP Morgan		1,125,246		5	%		602,775		24	%
Joseph Graziano		1,063,878		5	%
David Condensa		2,882,231		14	%
Thomas Kunigonis		1,369,863		6	%
Total Outstanding		21,317,863					2,466,971		99	%

Subsidiaries:
1.	ManagedStorage International, Inc.	100% Direct Ownership
2.	PWI Technologies, Inc.	100% Direct Ownership
3.	Incentra Solutions of California, Inc.	100% Direct Ownership
4.	Network System Technologies, Inc.	100% Direct Ownership
5.	Incentra Solutions International, Inc.	Indirect Ownership – 100% Owned by ManagedStorage International, Inc.
6.	Tactix, Inc.	100% Direct Ownership
7.	Incentra Solutions of the Northeast, Inc.	Indirect Ownership – 100% Owned by ManagedStorage International
8.	Incentra Helio Acquisition Corporation	100% Direct Ownership
9.	Sales Strategies, Inc.	100% Direct Ownership

Subsidiary Capitalization

ManagedStorage International, Inc.

100 Common Shares (par value $.01) Authorized, Issued and Outstanding

PWI Technologies, Inc.

1,000,000 Common Shares Authorized (no par)

800,000 Common Shares Issued and Outstanding

Incentra Solutions of California, Inc.

200 Common Shares (par value $.001) Authorized, Issued and Outstanding

Network System Technologies, Inc.

10,000 Common Shares Authorized, 1,000 Common Shares (no par) Issued and Outstanding

Incentra Solutions International, Inc.

100 Common Shares (par value $.01) Authorized, Issued and Outstanding

Tactix, Inc. (no par value)

10,000 Common Shares Authorized

680.3403 Common Shares Issued and Outstanding

Incentra Solutions of the Northeast, Inc.

200 Common Shares (par value $.001) Authorized

100 Common Shares Issued and Outstanding

Incentra Helio Acquisition Corporation, Inc.

200 Common Shares (par value $.001) Authorized, Issued and Outstanding

Sales Strategies, Inc. (no par value)

2,000 Common Shares Authorized

100 Common Shares Issued and Outstanding

SCHEDULE 2

(outstanding options, warrants, rights, proxy or stockholder agreements, or arrangements or

agreements of any kind for the purchase or acquisition from Parent of any of its securities)

Earnout agreements with former owners of Network System Technologies, Helio Solutions and Sales Strategies to issue common stock

Series A Preferred Stock:

· Series A Preferred shareholders have the right to participate in any new offerings in an amount proportionate to their ownership in the company

· As a result of the warrants issued in the Laurus funding for the Helio/SSI acquisitions and the shares issued at the closings for each of the acquisitions, the conversion price for the Series A Preferred will be reduced from $6.30 to approximately $4.00.

$770,000 unsecured promissory note issued in connection with Helio acquisition, convertible at $1.00 per share

$1,350,000 of unsecured notes payable, convertible at $1.40 per share

Common Stock Warrants:	# of shares		Strike Price
Unsecured Notes June 2006		570,688	$	1.400
AllianceSoft acquisition		100,000	$	1.400
Pagemill Partners - Helio Acquisition		600,000	$	0.800
other		82,500	$	1.000
other		20,274	$	0.003
other		74,371	$	> 1.40
Total Warrants (ex Laurus)		1,447,833

Series A Preferred Stock Purchase warrants to purchase 33,029 Series A Preferred Shares

Employee Stock Options: approximately 4,012,312 outstanding

EX-10.2

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 350,000 Shares of Common Stock of

Incentra Solutions, Inc.

(subject to adjustment as provided herein)

COMMON STOCK PURCHASE WARRANT

No. _________________ Issue Date: December 28, 2007

INCENTRA SOLUTIONS, INC., a corporation organized under the laws of the State of Nevada (“ICNS”), hereby certifies that, for value received, VALENS U.S. SPV I, 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., New York time, through the close of business December 28, 2027 (the “Expiration Date”), up to 350,000 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 (a) 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 $0.01.

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 350,000 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 NASD 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 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.

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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 an 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 of immediately available funds 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.

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(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 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.

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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 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).

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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 the date hereof entered into by the Company and the initial Holder of this Warrant, as amended, modified or supplemented from time to time.

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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 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) may be waived by the Holder upon provision of no less than sixty-one (61) days prior written notice to the Company and (y) 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 Security Agreement, dated as of February 6, 2006, by and among the Company, Laurus Master Fund, Ltd. (“Laurus”), the Holder, as partial assignee of Laurus, and the Eligible Subsidiaries defined therein).

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..

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.Rights of Shareholders. No Holder shall be entitled to vote or receive dividends or be deemed the holder of the shares of Common Stock or any other securities of the Company which may at any time be issuable upon exercise of this Warrant for any purpose (the “Warrant Shares”), nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon the recapitalization, issuance of shares, reclassification of shares, change of nominal value, consolidation, merger, conveyance or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise, in each case, until the earlier to occur of (x) the date of actual delivery to Holder (or its designee) of the Warrant Shares issuable upon the exercise hereof or (y) the third business day following the date such Warrant Shares first become deliverable to Holder, as provided herein.

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15.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.

16.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. The prevailing party shall be entitled to recover from the other party its reasonable attorneys' fees and costs. 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:	/s/ Matthew G. Richman
	Name: Matthew G. Richman
/s/ Matthew Wight	Title: Chief Corporate Development Officer, Treasurer, Asst. Secretary

SIGNATURE PAGE TO

COMMON STOCK PURCHASE WARRANT

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:

SIGNATURE PAGE TO

COMMON STOCK PURCHASE WARRANTY

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. (the “Company”) 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 the Company 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)

1

EX-10.3

VALENS U.S. SPV I, LLC

CALLIOPE CAPITAL CORPORATION

335 Madison Avenue, 10th Floor

New York, New York 10017

December 28, 2007

Incentra Solutions, Inc.

1140 Pearl Street

Boulder, Colorado 80302

Attention: Chief Financial Officer

Re: Amendment of Existing Note

Ladies and Gentlemen:

Reference is made to (a) the Securities Purchase Agreement dated as of July 31, 2007 by and between Incentra Solutions, Inc. (the “Company”) and Calliope Capital Corporation (“Calliope”) (as amended, restated, modified and/or supplemented from time to time, the “SPA”); and (b) the Secured Term Note effective as of July 31, 2007 made by the Company in favor of Calliope in the original principal amount of $12,000,000 (as amended, restated, modified and/or supplemented from time to time, the “Note”). Reference is further made to the fact that pursuant to one or more instruments of assignment, subsequent to July 31, 2007, Calliope assigned a portion of its interest in the Note, the SPA, any Related Agreements (as defined in the SPA) and collateral security therefor to Valens U.S. SPV I, LLC (“Valens”).

The Company has requested that Calliope and Valens consent to amend the Note to change the beginning amortization date from February 1, 2008 to June 1, 2008 on the condition that the Company enter into this letter agreement.

In consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company hereby agrees to, and acknowledges, the following:

The Note is amended to replace the text of Section 1.3 with the following:

“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 June 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.”

Except as specifically set forth herein, the SPA, the Note and the other Related Agreements (collectively, the “Agreements”) shall remain in full force and effect, and are hereby ratified and confirmed. The execution, delivery and effectiveness of this letter agreement shall not operate as a waiver of any right, power or remedy of Calliope or Valens, nor constitute a waiver of any provision of any of the Agreements, except to the extent expressly provided for herein. This letter agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns and shall be governed by and construed in accordance with the laws of the State of New York.

[Remainder of Page Intentionally Left Blank; Signatures Appear on Following Page]

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This letter agreement may be executed by the parties hereto 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 or electronic transmission shall be deemed to be an original signature hereto.

Very truly yours,
CALLIOPE CAPITAL CORPORATION
By:	LAURUS CAPITAL MANAGEMENT,
	LLC, its investment manager
By:	/s/ Scott Bluestein
	Name:	Scott Bluestein
	Title:	Authorized Signatory
VALENS U.S. SPV I, LLC
By:	VALENS CAPITAL MANAGEMENT,
	LLC, its investment manager
By:	/s/ Scott Bluestein
	Name:	Scott Bluestein
	Title:	Authorized Signatory

Consented and Agreed to

this 28th day of December, 2007:

INCENTRA SOLUTIONS, INC.
By:	/s/ Matthew G. Richman
Name:	Matthew G. Richman
Title:	Chief Corporate Development Officer, Treasurer, Asst. Secretary

SIGNATURE PAGE TO

LETTER AGREEMENT

EX-10.4

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made and entered into as of December 28, 2007, by and between INCENTRA SOLUTIONS, INC., a Nevada corporation (the “Company”), and Valens U.S. SPV I, LLC (the “Purchaser”).

This Agreement is made pursuant to the Security Agreement, dated as of February 6, 2006, by and among the Company, each Eligible Subsidiary set forth therein (collectively with the Company, the “Companies”), Laurus Master Fund, Ltd. (“Laurus”) and the Purchaser, as partial assignee of Laurus (as amended, modified or supplemented from time to time, the “Security Agreement”), as such Security Agreement and Ancillary Agreements (as defined in the Security Agreement) have been assigned in part by Laurus to Purchaser pursuant to that certain Assignment and Amendment Agreement dated as of the date hereof among Laurus, Valens, the Company and the Companies (the “Assignment Agreement”).

The Company and the Purchaser hereby agree as follows:

1.Definitions. Capitalized terms used and not otherwise defined herein that are defined in the Security Agreement shall have the meanings given such terms in the Security Agreement. As used in this Agreement, the following terms shall have the following meanings:

“Assignment Agreement” shall have the meaning set forth in the second paragraph of this Agreement.

“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 Warrant issued to Purchaser, a date no later than one hundred five (105) days following the date hereof, (ii) the shares of Common Stock issuable upon the exercise of any other Warrant issued to Purchaser, 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.

1

“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.

“Security 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 Assignment Agreement, whether on the date hereof or thereafter.

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 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 “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, 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 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 Security 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 quarters ended March 31, 2007, June 30, 2007 and September 30, 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 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 Assignment 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.

(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 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 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 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; 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 Holder may assign its respective rights hereunder in the manner and to the Persons as permitted under the Warrant, the Security Agreement and the Ancillary Agreements (as defined in the Security 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 furtherprovided, 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 forumnonconveniens. 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 Security Agreement or any other Ancillary 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]

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

INCENTRA SOLUTIONS, INC.		VALENS U.S. SPV I, LLC
		By:Valens Capital Management, LLC,         investment manager
By:	/s/ Matthew G. Richman	By:	/s/ Scott Bluestein
Name:	Matthew G. Richman	Name:	Scott Bluestein
Title:	Chief Corporate Development Officer, Treasurer, Asst. Secretary	Title:	Authorized Signatory
		Address for Notices:
		c/o Valens Capital Management, LLC
		335 Madison Avenue − 10th Floor
		New York, NY 10017
		Attention:Portfolio Services
		Facsimile:212-581-5037

SIGNATURE PAGE TO

REGISTRATION RIGHTS AGREEMENT

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]

1

Schedule A

Selling Stockholder Shares Being Offered

1

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.

8. The Registration Rights Agreement dated as of August 14, 2007 between the Company and Dave Condensa, Bart Condensa, Kevin Hawkins, David Averweck, Terri Marine and Paul Chopra.

9. The Registration Rights Agreement dated as of August 31, 2007 between the Company and Thomas G. Kunigonis, Jr.

EX-10.5

SHAWN O'GRADY

EMPLOYMENT AGREEMENT EXTENSION

This extension (the "Extension") to the Shawn O'Grady Employment Agreement dated October 10, 2005 (the "Employment Agreement"), by and between Incentra Solutions, Inc., a Nevada corporation with its headquarters located in Boulder, Colorado (the "Employer"), and Shawn O'Grady (the "Executive") is entered into this 31st day of December, 2007. In consideration of the mutual covenants contained in the Employment Agreement and this Extension, the Employer and the Executive agree as follows:

1. The Employment Agreement is hereby extended for a period of two (2) years until December 31, 2009 (the "Extended Term"), subject to the amendments set forth in this Extension. Upon expiration of the Extended Term, the Employment Agreement shall become an "at-will" employment agreement unless and until otherwise extended (the "At-Will Period").

2. Paragraph 4(a) of the Employment Agreement is hereby amended to read in full as follows:

"(a)Base Salary. For all services rendered by the Executive under this Agreement, the Employer shall pay the Executive a base salary (the "Salary") from and after December 31, 2007, at the annual rate of Three Hundred Fifteen Thousand Eight Hundred Dollars ($315,800.00) subject to increase from time to time at the discretion of the Board of Directors upon recommendation of the Compensation Committee of the Board of Directors (the "Compensation Committee"). The Salary shall be payable in periodic installments in accordance with the Employer's usual practice for its senior executives."

3. Paragraph 4(b) of the Employment Agreement is hereby amended to read in full as follows:

"(b)Bonus. Executive shall be eligible for an annual bonus of One Hundred Sixty Thousand Dollars ($160,000.00) at target, for the years 2007 through 2009, inclusive, based upon Executive's achievement of certain performance criteria to be determined and evaluated by the Board of Directors in its sole discretion. Executive's annual bonus eligibility for the years 2008 and 2009 may be increased at the discretion of the Board of Directors upon recommendation of the Compensation Committee. Such bonus shall be payable on or before February 25th of each year."

4. This Extension may be executed in counterparts which, when taken together, shall constitute one and the same agreement. Execution and delivery of this Extension by exchange of facsimile copies bearing the facsimile signature of a party hereto shall constitute a valid and binding execution and delivery of this Extension by such party. Such facsimile copies shall constitute enforceable original documents.

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5. Except as otherwise expressly modified by this Extension, all terms, provisions, covenants and agreements contained in the Employment Agreement, including but not limited to the Termination and Termination Benefits provisions of Paragraph 6 of the Employment Agreement, shall remain unmodified and in full force and effect for the Extended Term and any At-Will Period.

IN WITNESS WHEREOF, this Extension has been executed by the Employer and by the Executive as of the date first written above.

INCENTRA SOLUTIONS, INC.
By:	/s/ Thomas P. Sweeney III
Name: Thomas P. Sweeney III
Title: Chairman and Chief Executive Officer
EXECUTIVE:
/s/ Shawn O'Grady
Shawn O'Grady

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