THIS NOTE AND THE COMMON SHARES  ISSUABLE UPON  CONVERSION OF THIS NOTE HAVE NOT
BEEN  REGISTERED  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED,  OR ANY STATE
SECURITIES  LAWS.  THIS NOTE AND THE COMMON SHARES  ISSUABLE UPON  CONVERSION OF
THIS NOTE MAY NOT BE SOLD,  OFFERED  FOR SALE,  PLEDGED OR  HYPOTHECATED  IN THE
ABSENCE OF AN  EFFECTIVE  REGISTRATION  STATEMENT AS TO THIS NOTE UNDER SAID ACT
AND ANY APPLICABLE  STATE  SECURITIES  LAWS OR AN OPINION OF COUNSEL  REASONABLY
SATISFACTORY TO INCENTRA SOLUTIONS, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

                          SECURED CONVERTIBLE TERM NOTE

            FOR VALUE RECEIVED,  INCENTRA SOLUTIONS,  INC., a Nevada Corporation
(the "COMPANY"),  promises to pay to LAURUS MASTER FUND, LTD., c/o M&C Corporate
Services  Limited,  P.O. Box 309 GT, Ugland House,  South Church Street,  George
Town,  Grand Cayman,  Cayman Islands,  Fax:  345-949-8080  (the "HOLDER") or its
registered  assigns or  successors  in  interest,  the sum of One  Million  Five
Hundred  Thousand  Dollars  ($1,500,000),  together  with any accrued and unpaid
interest hereon, on March 31, 2009 (the "MATURITY DATE") if not sooner paid.

            Capitalized  terms used  herein  without  definition  shall have the
meanings ascribed to such terms in that certain  Securities  Purchase  Agreement
dated as of the date  hereof by and  between  the  Company  and the  Holder  (as
amended,   modified  and/or  supplemented  from  time  to  time,  the  "PURCHASE
AGREEMENT").  For the  avoidance of doubt the Company and the Holder  understand
and agree that this Secured  Convertible Term Note (this "NOTE") is being issued
by the Company  together with that certain  Non-Convertible  Note referred to in
the Purchase Agreement as part of the same financing transaction.

            The following terms shall apply to this Note:

                                    ARTICLE I
                         CONTRACT RATE AND AMORTIZATION

            1.1  CONTRACT  RATE.  Subject  to  Sections  4.2 and 5.10,  interest
payable  on the  outstanding  principal  amount  of this  Note  (the  "PRINCIPAL
AMOUNT") shall accrue at a rate per annum equal to the "prime rate" published in
THE WALL STREET JOURNAL from time to time (the "PRIME  RATE"),  plus two percent
(2.0%) (the "CONTRACT RATE").  The Contract Rate shall be increased or decreased
as the case may be for each  increase or decrease in the Prime Rate in an amount
equal to such  increase  or  decrease  in the  Prime  Rate;  each  change  to be
effective as of the day of the change in the Prime Rate. The Contract Rate shall
not at any  time be  less  than  nine  percent  (9.0%).  Interest  shall  be (i)
calculated on the basis of a 360 day year, and (ii) payable monthly, in arrears,
commencing  on May 1,  2006,  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.

<PAGE>

            1.2 CONTRACT RATE PAYMENTS. The Contract Rate shall be calculated on
the last business day of each calendar month hereafter (other than for increases
or decreases in the Prime Rate which shall be calculated and become effective in
accordance with the terms of Section 1.1) until the Maturity Date.

            1.3  PRINCIPAL  PAYMENTS.   Amortizing  payments  of  the  aggregate
principal  amount  outstanding  under  this  Note at any  time  (the  "PRINCIPAL
AMOUNT")  shall be made by the  Company  on  August  1,  2006  and on the  first
business day of each  succeeding  month  thereafter  through and  including  the
Maturity  Date (each,  an  "AMORTIZATION  DATE").  Subject to Article III below,
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 $46,875  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.

                                   ARTICLE II
                            CONVERSION AND REDEMPTION

            2.1 PAYMENT OF MONTHLY AMOUNT.

                  (a) PAYMENT IN CASH OR COMMON STOCK. If the Monthly Amount (or
a  portion  of such  Monthly  Amount  if not all of the  Monthly  Amount  may be
converted into shares of Common Stock pursuant to Section 3.2) is required to be
paid in cash pursuant to Section  2.1(b),  then the Company shall pay the Holder
an amount in cash equal to 100% of the Monthly  Amount (or such  portion of such
Monthly  Amount  to be  paid  in  cash)  due  and  owing  to the  Holder  on the
Amortization Date. If the Monthly Amount (or a portion of such Monthly Amount if
not all of the  Monthly  Amount may be  converted  into  shares of Common  Stock
pursuant  to  Section  3.2) is  required  to be paid in shares  of Common  Stock
pursuant  to  Section  2.1(b),  the  number  of such  shares to be issued by the
Company to the Holder on such  Amortization  Date (in respect of such portion of
the Monthly  Amount  converted  into shares of Common Stock  pursuant to Section
2.1(b)),  shall be the number  determined  by  dividing  (i) the  portion of the
Monthly  Amount  converted  into  shares  of  Common  Stock,  by (ii)  the  then
applicable Fixed Conversion  Price. For purposes hereof,  subject to Section 3.6
hereof, the initial "FIXED CONVERSION PRICE" means $1.40.

                  (b) MONTHLY AMOUNT CONVERSION CONDITIONS.  Subject to Sections
2.1(a),  2.2,  and 3.2 hereof,  the Holder  shall  convert into shares of Common
Stock all or a portion of the Monthly  Amount due on each  Amortization  Date if
the following  conditions  (the  "CONVERSION  CRITERIA") are satisfied:  (i) the
average closing price of the Common Stock as reported by Bloomberg,  L.P. on the
Principal  Market  for the five (5)  trading  days  immediately  preceding  such
Amortization Date shall be greater than or equal to 110% of the Fixed Conversion
Price and (ii) the  amount of such  conversion  does not exceed  twenty  percent
(20%) of the aggregate  dollar trading volume of the Common Stock for the period
of twenty-two (22) trading days immediately preceding such Amortization Date. If
subsection (i) of the Conversion


                                       2
<PAGE>

Criteria is met but subsection (ii) of the Conversion  Criteria is not met as to
the entire  Monthly  Amount,  the  Holder  shall  convert  only such part of the
Monthly  Amount  that meets  subsection  (ii) of the  Conversion  Criteria.  Any
portion of the Monthly  Amount due on an  Amortization  Date that the Holder has
not been able to convert  into shares of Common Stock due to the failure to meet
the  Conversion  Criteria,  shall be paid in cash by the  Company at the rate of
100% of the Monthly Amount otherwise due on such Amortization Date, within three
(3) business days of such Amortization Date.

            2.2  NO  EFFECTIVE  REGISTRATION.  Notwithstanding  anything  to the
contrary  herein,  none  of  the  Company's  obligations  to the  Holder  may be
converted  into  Common  Stock  unless  (a)  either  (i)  an  effective  current
Registration  Statement  (as  defined  in  the  Registration  Rights  Agreement)
covering the shares of Common Stock to be issued in connection with satisfaction
of such obligations  exists or (ii) an exemption from registration for resale of
all of the Common Stock issued and issuable is available pursuant to Rule 144 of
the Securities Act and (b) no Event of Default (as  hereinafter  defined) exists
and is  continuing,  unless such Event of Default is cured within any applicable
cure period or otherwise waived in writing by the Holder.

            2.3 OPTIONAL  REDEMPTION  IN CASH.  The Company may prepay this Note
("OPTIONAL  REDEMPTION")  by  paying to the  Holder a sum of money  equal to one
hundred ten percent  (110%) of 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  Purchase
Agreement or any other Related Agreement (the "REDEMPTION  AMOUNT")  outstanding
on the Redemption  Payment Date (as defined below). The Company shall deliver to
the  Holder  a  written  notice  of  redemption  (the  "NOTICE  OF  REDEMPTION")
specifying  the date for  such  Optional  Redemption  (the  "REDEMPTION  PAYMENT
DATE"), which date shall be seven (7) business days after the date of the Notice
of Redemption (the  "REDEMPTION  PERIOD").  A Notice of Redemption  shall not be
effective  with  respect  to any  portion  of this Note for which the Holder has
previously  delivered a Notice of  Conversion  (as  hereinafter  defined) or for
conversions  elected to be made by the Holder pursuant to Article III during the
Redemption  Period. The Redemption Amount shall be determined as if the Holder's
conversion  elections had been  completed  immediately  prior to the date of the
Notice of Redemption. On the Redemption Payment Date, the Redemption Amount must
be paid in good funds to the Holder.  In the event the Company  fails to pay the
Redemption Amount on the Redemption Payment Date as set forth herein,  then such
Redemption Notice will be null and void.

                                   ARTICLE III
                           HOLDER'S CONVERSION RIGHTS

            3.1  OPTIONAL  CONVERSION.  Subject  to the  terms set forth in this
Article III, the Holder shall have the right, but not the obligation, to convert
all or any portion of the issued and outstanding Principal Amount and/or accrued
interest  and fees due and payable into fully paid and  nonassessable  shares of
Common  Stock at the Fixed  Conversion  Price.  The shares of Common Stock to be
issued upon such conversion are herein referred to as, the "CONVERSION SHARES."


                                       3
<PAGE>

      3.2  CONVERSION  LIMITATION.   Notwithstanding   anything  herein  to  the
contrary,  in no event  shall the Holder be  entitled  to convert any portion of
this Note in excess of that portion of this Note 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 unconverted portion of this Note
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
conversion  of the portion of this Note 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  4.99%  of the  then
outstanding  shares  of  Common  Stock  (whether  or  not,  at the  time of such
conversion,  the Holder and its Affiliates  beneficially  own more than 4.99% 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 proviso to 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  proviso.  The
limitations  set forth herein (x) may be waived by the Holder upon  provision of
no less than  sixty-one  (61) days  prior  notice to the  Company  and (y) shall
automatically  become null and void (i) following notice to the Company upon the
occurrence  and  during the  continuance  of an Event of  Default,  or (ii) upon
receipt by the Holder of a Notice of Redemption.


                                       4
<PAGE>

            3.3 MECHANICS OF HOLDER'S  CONVERSION.  In the event that the Holder
elects to convert this Note into Common  Stock,  the Holder shall give notice of
such election by  delivering  an executed and completed  notice of conversion in
substantially the form of Exhibit A hereto  (appropriate  completed) ("NOTICE OF
CONVERSION")  to the  Company  and such  Notice of  Conversion  shall  provide a
breakdown in reasonable  detail of the Principal  Amount,  accrued  interest and
fees that are being converted.  On each Conversion Date (as hereinafter defined)
and in  accordance  with its Notice of  Conversion,  the  Holder  shall make the
appropriate  reduction to the  Principal  Amount,  accrued  interest and fees as
entered in its records and shall provide  written  notice thereof to the Company
within two (2) business  days after the  Conversion  Date.  Each date on which a
Notice of  Conversion  is delivered or  telecopied  to the Company in accordance
with the provisions  hereof shall be deemed a Conversion  Date (the  "CONVERSION
DATE").  Pursuant to the terms of the Notice of  Conversion,  the  Company  will
issue  instructions  to the transfer agent  accompanied by an opinion of counsel
within two (2)  business  day of the date of the  delivery to the Company of the
Notice  of  Conversion  and shall  cause  the  transfer  agent to  transmit  the
certificates  representing the Conversion  Shares to the Holder by crediting the
account of the Holder's  designated broker with the Depository Trust Corporation
("DTC") through its Deposit  Withdrawal Agent Commission  ("DWAC") system within
three (3) business days after receipt by the Company of the Notice of Conversion
(the "DELIVERY  DATE"). In the case of the exercise of the conversion rights set
forth herein the conversion privilege shall be deemed to have been exercised and
the Conversion Shares issuable upon such conversion shall be deemed to have been
issued upon the date of receipt by the Company of the Notice of Conversion.  The
Holder shall be treated for all purposes as the record holder of the  Conversion
Shares,  unless the Holder  provides  the Company  written  instructions  to the
contrary.

            3.4  LATE  PAYMENTS.  The  Company  understands  that a delay in the
delivery of the Conversion  Shares in the form required pursuant to this Article
beyond the  Delivery  Date  could  result in  economic  loss to the  Holder.  As
compensation  to the Holder for such loss,  in addition to all other  rights and
remedies which the Holder may have under this Note, applicable law or otherwise,
the  Company  shall pay late  payments  to the Holder for any late  issuance  of
Conversion  Shares  in the  form  required  pursuant  to  this  Article  II upon
conversion  of this Note, in the amount equal to $500 per business day after the
Delivery Date.  The Company shall make any payments  incurred under this Section
in immediately available funds upon demand.

            3.5 CONVERSION MECHANICS. The number of shares of Common Stock to be
issued upon each  conversion  of this Note shall be  determined by dividing that
portion of the principal  and interest and fees to be converted,  if any, by the
then  applicable  Fixed  Conversion  Price. In the event of any conversions of a
portion of the outstanding  Principal  Amount pursuant to this Article III, such
conversions  shall  be  deemed  to  constitute  conversions  of the  outstanding
Principal  Amount  applying to Monthly  Amounts for the  remaining  Amortization
Dates in chronological order.

            3.6 ADJUSTMENT PROVISIONS. The Fixed Conversion Price and number and
kind of  shares or other  securities  to be issued  upon  conversion  determined
pursuant to this Note shall be subject to adjustment  from time to time upon the
occurrence  of  certain  events  during the period  that this  conversion  right
remains outstanding, as follows:


                                       5
<PAGE>

                  (a)  RECLASSIFICATION.  If the Company at any time  shall,  by
reclassification  or  otherwise,  change  the  Common  Stock  into the same or a
different  number of  securities  of any class or classes,  this Note, as to the
unpaid Principal Amount and accrued interest thereon, shall thereafter be deemed
to evidence the right to purchase an adjusted number of such securities and kind
of  securities  as would have been  issuable  as the result of such  change with
respect to the Common Stock (i) immediately prior to or (ii) immediately  after,
such reclassification or other change at the sole election of the Holder.

                  (b) STOCK SPLITS, COMBINATIONS AND DIVIDENDS. If the shares of
Common  Stock are  subdivided  or combined  into a greater or smaller  number of
shares of Common  Stock,  or if a dividend  is paid on the  Common  Stock or any
preferred  stock  issued by the  Company  in shares of Common  Stock,  the Fixed
Conversion  Price shall be  proportionately  reduced in case of  subdivision  of
shares or stock dividend or proportionately increased in the case of combination
of shares,  in each such case by the ratio  which the total  number of shares of
Common Stock outstanding  immediately after such event bears to the total number
of shares of Common Stock outstanding immediately prior to such event.

            3.7  RESERVATION OF SHARES.  During the period the conversion  right
exists, the Company will reserve from its authorized and unissued Common Stock a
sufficient  number of shares to provide for the  issuance of  Conversion  Shares
upon the full  conversion of this Note and the Warrant.  The Company  represents
that upon issuance, the Conversion Shares will be duly and validly issued, fully
paid and non-assessable. The Company agrees that its issuance of this Note shall
constitute full authority to its officers,  agents,  and transfer agents who are
charged with the duty of executing and issuing stock certificates to execute and
issue the necessary  certificates for the Conversion  Shares upon the conversion
of this Note.

            3.8 REGISTRATION  RIGHTS.  The Holder has been granted  registration
rights with respect to the  Conversion  Shares as set forth in the  Registration
Rights Agreement.

            3.9 ISSUANCE OF NEW NOTE. Upon any partial  conversion of this Note,
a new Note  containing the same date and  provisions of this Note shall,  at the
request of the Holder,  be issued by the Company to the Holder for the principal
balance of this Note and interest  which shall not have been  converted or paid.
Subject to the  provisions of Article IV of this Note, the Company shall not pay
any costs, fees or any other  consideration to the Holder for the production and
issuance of a new Note.

                                   ARTICLE IV
                                EVENTS OF DEFAULT

            4.1 EVENTS OF DEFAULT. The occurrence of any of the following events
set forth in this Section 4.1 shall  constitute  an event of default  ("EVENT OF
DEFAULT") hereunder:

                  (a)  FAILURE  TO PAY.  The  Company  fails to pay when due any
installment of principal,  interest or other fees hereon in accordance herewith,
or the Company fails to pay any of the other  Obligations  (under and as defined
in the Master Security  Agreement) when due, and, in any such case, such failure
shall  continue for a period of five (5) days  following the date upon which any
such payment was due.


                                       6
<PAGE>

                  (b) BREACH OF COVENANT. The Company or any of its Subsidiaries
breaches  any  covenant  or any  other  term or  condition  of this  Note in any
material respect and such breach, if subject to cure,  continues for a period of
fifteen (15) days after the occurrence thereof.

                  (c)   BREACH   OF   REPRESENTATIONS   AND   WARRANTIES.    Any
representation, warranty or statement made or furnished by the Company or any of
its  Subsidiaries  in this Note,  the Purchase  Agreement  or any other  Related
Agreement  shall at any time be false or misleading  in any material  respect on
the date as of which made or deemed made.

                  (d) DEFAULT  UNDER OTHER  AGREEMENTS.  The  occurrence  of any
default  (or  similar  term)  in the  observance  or  performance  of any  other
agreement or condition relating to any indebtedness or contingent  obligation of
the  Company or any of its  Subsidiaries  (including,  without  limitation,  the
indebtedness  evidenced by (i) the 2006 Security  Agreement and/or any Ancillary
Agreement  referred to in the 2006 Security  Agreement  and/or (ii) that certain
Securities  Purchase  Agreement,  dated as of May 13,  2004,  by and between the
Company and the Purchaser  (as amended,  modified or  supplemented  from time to
time, the "2004 Securities  Purchase  Agreement")  and/or any Related  Agreement
referred to in the 2004 Securities Purchase Agreement,  as amended,  modified or
supplemented  from time to time),  in each case,  beyond the period of grace (if
any),  the effect of which default is to cause,  or permit the holder or holders
of  such  indebtedness  or  beneficiary  or  beneficiaries  of  such  contingent
obligation  to  cause,  such  indebtedness  to become  due  prior to its  stated
maturity or such contingent obligation to become payable;

                  (e) BANKRUPTCY.  The Company or any of its Subsidiaries  shall
(i) apply for,  consent to or suffer to exist the  appointment of, or the taking
of possession by, a receiver,  custodian,  trustee or liquidator of itself or of
all or a substantial  part of its property,  (ii) make a general  assignment for
the benefit of  creditors,  (iii)  commence a  voluntary  case under the federal
bankruptcy laws (as now or hereafter in effect),  (iv) be adjudicated a bankrupt
or  insolvent,  (v) file a petition  seeking to take  advantage of any other law
providing for the relief of debtors, (vi) acquiesce to, without challenge within
ten (10) days of the filing thereof, or failure to have dismissed, within thirty
(30) days,  any petition  filed  against it in any  involuntary  case under such
bankruptcy  laws,  or (vii) take any action for the purpose of effecting  any of
the foregoing;

                  (f) JUDGMENTS.  Attachments or levies in excess of $250,000 in
the aggregate are made upon the Company or any of its  Subsidiary's  assets or a
judgment is rendered  against the  Company's  property  involving a liability of
more than  $250,000  which shall not have been  vacated,  discharged,  stayed or
bonded within ninety (90) days from the entry thereof;

                  (g) INSOLVENCY.  The Company or any of its Subsidiaries  shall
admit in writing its inability, or be generally unable, to pay its debts as they
become due or cease operations of its present business;

                  (h) CHANGE OF CONTROL.  A Change of Control (as defined below)
shall occur with respect to the  Company,  unless  Holder  shall have  expressly
consented to such Change of Control in writing. A "Change of Control" shall mean
any event or circumstance as a result of


                                       7
<PAGE>

which (i) any  "Person" or "group" (as such terms are defined in Sections  13(d)
and 14(d) of the Exchange Act, as in effect on the date hereof),  other than the
Holder,  is or becomes the  "beneficial  owner" (as defined in Rules 13(d)-3 and
13(d)-5 under the Exchange  Act),  directly or  indirectly,  of 35% or more on a
fully  diluted  basis of the then  outstanding  voting  equity  interest  of the
Company (other than a "Person" or "group" that  beneficially owns 35% or more of
such  outstanding  voting  equity  interests of the Company on the date hereof),
(ii) the Board of Directors of the Company  shall cease to consist of a majority
of the Company's  board of directors on the date hereof (or directors  appointed
by a majority  of the board of  directors  in effect  immediately  prior to such
appointment)  or  (iii)  the  Company  or  any  of its  Subsidiaries  merges  or
consolidates with, or sells all or substantially all of its assets to, any other
person or entity;

                  (i)  INDICTMENT;  PROCEEDINGS.  The  indictment  or threatened
indictment of the Company or any of its Subsidiaries or any executive officer of
the  Company  or  any  of  its  Subsidiaries  under  any  criminal  statute,  or
commencement or threatened  commencement of criminal or civil proceeding against
the Company or any of its  Subsidiaries or any executive  officer of the Company
or any of its Subsidiaries  pursuant to which statute or proceeding penalties or
remedies  sought or available  include  forfeiture of any of the property of the
Company or any of its Subsidiaries;

                  (j) THE  PURCHASE  AGREEMENT  AND RELATED  AGREEMENTS.  (i) An
Event of Default  shall occur under and as defined in the Purchase  Agreement or
any Related Agreement,  (ii) the Company or any of its Subsidiaries shall breach
any term or provision of the Purchase  Agreement or any other Related  Agreement
in any  material  respect  and  such  breach,  if  capable  of  cure,  continues
unremedied for a period of fifteen (15) days after the occurrence thereof, (iii)
the Company or any of its  Subsidiaries  attempts to terminate,  challenges  the
validity  of, or its  liability  under,  the  Purchase  Agreement or any Related
Agreement,  (iv) any  proceeding  shall be brought to  challenge  the  validity,
binding  effect of the Purchase  Agreement  or any Related  Agreement or (v) the
Purchase  Agreement or any Related  Agreement ceases to be a valid,  binding and
enforceable  obligation of the Company or any of its Subsidiaries (to the extent
such persons or entities are a party thereto);

                  (k) STOP TRADE.  An SEC stop trade order or  Principal  Market
trading  suspension  of the  Common  Stock  shall  be in  effect  for  five  (5)
consecutive days or five (5) days during a period of ten (10) consecutive  days,
excluding  in all cases a  suspension  of all  trading  on a  Principal  Market,
provided  that  the  Company  shall  not have  been  able to cure  such  trading
suspension  within  thirty  (30) days of the  notice  thereof or list the Common
Stock on another Principal Market within sixty (60) days of such notice; or

                  (l) FAILURE TO DELIVER COMMON STOCK OR  REPLACEMENT  NOTE. The
Company's  failure to deliver Common Stock to the Holder  pursuant to and in the
form  required by this Note and the Purchase  Agreement  and, if such failure to
deliver  Common  Stock shall not be cured  within two (2)  business  days or the
Company is  required to issue a  replacement  Note to the Holder and the Company
shall fail to deliver such replacement Note within seven (7) business days.


                                       8
<PAGE>

            4.2  DEFAULT  INTEREST.  Following  the  occurrence  and  during the
continuance of an Event of Default, the Company shall pay additional interest on
this Note in an amount equal to one and one half percent  (1.5%) per month,  and
all  outstanding  obligations  under this Note, the Purchase  Agreement and each
other Related  Agreement,  including unpaid  interest,  shall continue to accrue
interest at such additional interest rate from the date of such Event of Default
until the date such Event of Default is cured or waived.

            4.3  DEFAULT  PAYMENT.  Following  the  occurrence  and  during  the
continuance  of an Event of  Default,  the  Holder,  at its  option,  may demand
repayment in full of all  obligations  and  liabilities  owing by Company to the
Holder  under  this  Note,  the  Purchase  Agreement  and/or  any other  Related
Agreement and/or may elect, in addition to all rights and remedies of the Holder
under  the  Purchase   Agreement  and  the  other  Related  Agreements  and  all
obligations and liabilities of the Company under the Purchase  Agreement and the
other  Related  Agreements,  to require  the  Company to make a Default  Payment
("DEFAULT  PAYMENT").  The  Default  Payment  shall  be 125% of the  outstanding
principal amount of the Note, plus accrued but unpaid  interest,  all other fees
then remaining  unpaid,  and all other amounts  payable  hereunder.  The Default
Payment  shall  be  applied  first to any fees  due and  payable  to the  Holder
pursuant  to this  Note,  the  Purchase  Agreement,  and/or  the  other  Related
Agreements, then to accrued and unpaid interest due on this Note and then to the
outstanding principal balance of this Note. The Default Payment shall be due and
payable  immediately  on the date  that the  Holder  has  exercised  its  rights
pursuant to this Section 4.3.

                                    ARTICLE V
                                  MISCELLANEOUS

            5.1 CONVERSION  PRIVILEGES.  The conversion  privileges set forth in
Article  III shall  remain in full  force and effect  immediately  from the date
hereof  until the date this Note is  indefeasibly  paid in full and  irrevocably
terminated.

            5.2  CUMULATIVE  REMEDIES.  The  remedies  under  this Note shall be
cumulative.

            5.3 FAILURE OR  INDULGENCE  NOT  WAIVER.  No failure or delay on the
part of the  Holder  hereof in the  exercise  of any power,  right or  privilege
hereunder  shall  operate as a waiver  thereof,  nor shall any single or partial
exercise  of any  such  power,  right or  privilege  preclude  other or  further
exercise  thereof  or of any other  right,  power or  privilege.  All rights and
remedies existing  hereunder are cumulative to, and not exclusive of, any rights
or remedies otherwise available.

            5.4  NOTICES.  Any notice  herein  required or permitted to be given
shall be in writing and shall be deemed  effectively  given:  (a) upon  personal
delivery to the party notified, (b) when sent by confirmed telex or facsimile if
sent during normal  business  hours of the  recipient,  if not, then on the next
business  day, (c) five days after having been sent by  registered  or certified
mail, return receipt  requested,  postage prepaid,  or (d) one day after deposit
with a nationally  recognized  overnight courier,  specifying next day delivery,
with written  verification of receipt.  All communications  shall be sent to the
Company at the address provided in the Purchase Agreement executed in connection
herewith,  and to the Holder at the address  provided in the Purchase  Agreement
for such Holder,  with a copy to John E. Tucker,  Esq.,  825 Third


                                       9
<PAGE>

Avenue,  14th Floor, New York, New York 10022,  facsimile number (212) 541-4434,
or at such other  address as the Company or the Holder may designate by ten days
advance written notice to the other parties hereto. A Notice of Conversion shall
be deemed given when made to the Company pursuant to the Purchase Agreement.

            5.5 AMENDMENT PROVISION. The term "Note" and all references thereto,
as used  throughout  this  instrument,  shall mean this instrument as originally
executed,  or  if  later  amended  or  supplemented,   then  as  so  amended  or
supplemented,  and any successor  instrument as such successor instrument may be
amended or supplemented.

            5.6  ASSIGNABILITY.  This Note shall be binding upon the Company and
its successors and assigns, and shall inure to the benefit of the Holder and its
successors and assigns, and may be assigned by the Holder in accordance with the
requirements  of the Purchase  Agreement.  The Company may not assign any of its
obligations under this Note without the prior written consent of the Holder, any
such purported assignment without such consent being null and void.

            5.7 COST OF  COLLECTION.  In case of any Event of Default under this
Note, the Company shall pay the Holder reasonable costs of collection, including
reasonable attorneys' fees.

            5.8 GOVERNING LAW, JURISDICTION AND WAIVER OF JURY TRIAL.

                  (a) THIS NOTE SHALL BE GOVERNED BY AND  CONSTRUED AND ENFORCED
IN  ACCORDANCE  WITH  THE LAWS OF THE  STATE  OF NEW  YORK,  WITHOUT  REGARD  TO
PRINCIPLES OF CONFLICTS OF LAW.

                  (b) THE COMPANY  HEREBY  CONSENTS AND AGREES THAT THE STATE OR
FEDERAL COURTS  LOCATED IN THE COUNTY OF NEW YORK,  STATE OF NEW YORK SHALL HAVE
EXCLUSIVE  JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE
COMPANY, ON THE ONE HAND, AND THE HOLDER, ON THE OTHER HAND,  PERTAINING TO THIS
NOTE OR ANY OF THE OTHER RELATED  AGREEMENTS OR TO ANY MATTER  ARISING OUT OF OR
RELATED  TO THIS  NOTE OR ANY OF THE  RELATED  AGREEMENTS;  PROVIDED,  THAT  THE
COMPANY  ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY
A COURT  LOCATED  OUTSIDE  OF THE  COUNTY  OF NEW YORK,  STATE OF NEW YORK;  AND
FURTHER  PROVIDED,  THAT  NOTHING  IN THIS NOTE  SHALL BE DEEMED OR  OPERATE  TO
PRECLUDE THE HOLDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION  TO COLLECT THE  OBLIGATIONS,  TO REALIZE ON THE  COLLATERAL OR ANY
OTHER  SECURITY  FOR THE  OBLIGATIONS,  OR TO ENFORCE A JUDGMENT  OR OTHER COURT
ORDER IN FAVOR OF THE HOLDER.  THE  COMPANY  EXPRESSLY  SUBMITS AND  CONSENTS IN
ADVANCE TO SUCH  JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT,
AND THE COMPANY HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF
PERSONAL  JURISDICTION,  IMPROPER  VENUE OR FORUM NON  CONVENIENS.  THE  COMPANY
HEREBY WAIVES PERSONAL SERVICE OF THE


                                       10
<PAGE>

SUMMONS,  COMPLAINT  AND OTHER  PROCESS  ISSUED  IN ANY SUCH  ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS,  COMPLAINT AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED  MAIL  ADDRESSED TO THE COMPANY AT THE ADDRESS SET FORTH
IN THE PURCHASE  AGREEMENT  AND THAT  SERVICE SO MADE SHALL BE DEEMED  COMPLETED
UPON THE EARLIER OF THE COMPANY'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER
DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

                  (c) THE  COMPANY  DESIRES  THAT ITS  DISPUTES BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,  TO ACHIEVE THE BEST COMBINATION
OF THE BENEFITS OF THE JUDICIAL  SYSTEM AND OF  ARBITRATION,  THE COMPANY HERETO
WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO
RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT, OR OTHERWISE BETWEEN THE
HOLDER AND THE COMPANY ARISING OUT OF, CONNECTED WITH,  RELATED OR INCIDENTAL TO
THE  RELATIONSHIP  ESTABLISHED  BETWEEN THEM IN CONNECTION  WITH THIS NOTE,  ANY
OTHER RELATED AGREEMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO.

            5.9  SEVERABILITY.  In the event that any  provision of this Note is
invalid or unenforceable  under any applicable statute or rule of law, then such
provision  shall  be  deemed  inoperative  to the  extent  that it may  conflict
therewith  and shall be deemed  modified to conform with such statute or rule of
law. Any such provision which may prove invalid or  unenforceable  under any law
shall not affect the validity or  enforceability  of any other provision of this
Note.

            5.10 MAXIMUM  PAYMENTS.  Nothing contained herein shall be deemed to
establish  or require  the  payment of a rate of  interest  or other  charges in
excess of the maximum permitted by applicable law. In the event that the rate of
interest  required to be paid or other charges hereunder exceed the maximum rate
permitted  by such law,  any  payments in excess of such  maximum  rate shall be
credited  against amounts owed by the Company to the Holder and thus refunded to
the Company.

            5.11 SECURITY INTEREST AND GUARANTEE.  The Holder has been granted a
security  interest (i) in certain assets of the Company and its  Subsidiaries as
more fully described in the 2004 Master Security Agreement and the 2006 Security
Agreement  and  (ii) in the  equity  interests  of the  Companies'  Subsidiaries
pursuant to the 2006 Stock  Pledge  Agreement.  The  obligations  of the Company
under this Note are guaranteed by certain  Subsidiaries of the Company  pursuant
to the 2006 Subsidiary Guarantee.

            5.12  CONSTRUCTION.  Each party  acknowledges that its legal counsel
participated in the preparation of this Note and, therefore, stipulates that the
rule of construction  that  ambiguities are to be resolved  against the drafting
party shall not be applied in the interpretation of this Note to favor any party
against the other.

            5.13 REGISTERED OBLIGATION. This Note is intended to be a registered
obligation within the meaning of Treasury  Regulation Section  1.871-14(c)(1)(i)
and the Company (or its agent) shall  register this Note (and  thereafter  shall
maintain such registration) as to both principal


                                       11
<PAGE>

and any stated interest.  Notwithstanding any document,  instrument or agreement
relating  to this Note to the  contrary,  transfer of this Note (or the right to
any payments of principal or stated interest thereunder) may only be effected by
(i) surrender of this Note and either the reissuance by the Company of this Note
to the new holder or the issuance by the Company of a new  instrument to the new
holder,  or (ii) transfer through a book entry system  maintained by the Company
(or  its   agent),   within  the   meaning  of   Treasury   Regulation   Section
1.871-14(c)(1)(i)(B).

       [Balance of page intentionally left blank; signature page follows]


                                       12
<PAGE>

            IN WITNESS WHEREOF,  the Company has caused this Secured Convertible
Term Note to be signed in its name effective as of this 31st day of March, 2006.

                                             INCENTRA SOLUTIONS, INC.


                                             By: /s/ Thomas P. Sweeney III
                                                 -------------------------------
                                                 Name:  Thomas P. Sweeney III
                                                 Title: Chief Executive Officer

WITNESS:


--------------------------------


                                       13