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

                                SECURED TERM NOTE

            FOR VALUE RECEIVED,  INCENTRA SOLUTIONS,  INC., a Nevada Corporation
(the "COMPANY"),  promises to pay to 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  Seven
Hundred  Fifty  Thousand  Dollars  ($1,750,000),  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  Term Note (this  "NOTE")  is being  issued by the
Company together with that certain  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 2.2 and 3.9, interest payable
on the outstanding  principal amount of this Note (the "PRINCIPAL AMOUNT") shall
accrue at a rate per  annum  equal to the  "prime  rate"  published  in THE WALL
STREET  JOURNAL from time to time (the "PRIME  RATE"),  plus two percent  (2.0%)
(the "CONTRACT RATE").  The Contract Rate shall be increased or decreased as the
case may be for each  increase or decrease in the Prime Rate in an amount  equal
to such  increase or decrease in the Prime Rate;  each change to be effective as
of the day of the change in the Prime Rate.  The Contract  Rate shall not at any
time be less than 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 in cash 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").   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 $54,688 together with any
accrued and unpaid interest on such portion of the Principal Amount plus any and
all other  unpaid  amounts  which are then owing under this Note,  the  Purchase
Agreement  and/or  any  other  Related  Agreement  (collectively,  the  "MONTHLY
AMOUNT").  Any outstanding Principal Amount together with any accrued and unpaid
interest  and any and all  other  unpaid  amounts  which  are then  owing by the
Company to the Holder under this Note, the Purchase  Agreement  and/or any other
Related Agreement shall be due and payable on the Maturity Date.

            1.4 OPTIONAL  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").  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 II
                                EVENTS OF DEFAULT

            2.1 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  obligations of the Company or any of its
Subsidiaries  under the Purchase  Agreement or any Related  Agreement  when due,
and, in any such case, such failure shall continue for a period of five (5) days
following the date upon which any such payment was due.


                                       2
<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


                                       3
<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

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


                                       4
<PAGE>

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

                                   ARTICLE III
                                  MISCELLANEOUS

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

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

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

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


                                       5
<PAGE>

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

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

            3.7 GOVERNING LAW, JURISDICTION AND WAIVER OF JURY TRIAL.

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

                  (b) THE COMPANY  HEREBY  CONSENTS AND AGREES THAT THE STATE OR
FEDERAL COURTS  LOCATED IN THE COUNTY OF NEW YORK,  STATE OF NEW YORK SHALL HAVE
EXCLUSIVE  JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE
COMPANY, ON THE ONE HAND, AND THE HOLDER, ON THE OTHER HAND,  PERTAINING TO THIS
NOTE OR ANY OF THE OTHER RELATED  AGREEMENTS OR TO ANY MATTER  ARISING OUT OF OR
RELATED  TO THIS  NOTE OR ANY OF THE  RELATED  AGREEMENTS;  PROVIDED,  THAT  THE
COMPANY  ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY
A COURT  LOCATED  OUTSIDE  OF THE  COUNTY  OF NEW YORK,  STATE OF NEW YORK;  AND
FURTHER  PROVIDED,  THAT  NOTHING  IN THIS NOTE  SHALL BE DEEMED OR  OPERATE  TO
PRECLUDE THE HOLDER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION  TO COLLECT THE  OBLIGATIONS,  TO REALIZE ON THE  COLLATERAL OR ANY
OTHER  SECURITY  FOR THE  OBLIGATIONS,  OR TO ENFORCE A JUDGMENT  OR OTHER COURT
ORDER IN FAVOR OF THE HOLDER.  THE  COMPANY  EXPRESSLY  SUBMITS AND  CONSENTS IN
ADVANCE TO SUCH  JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT,
AND THE COMPANY HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF
PERSONAL  JURISDICTION,  IMPROPER  VENUE OR FORUM NON  CONVENIENS.  THE  COMPANY
HEREBY  WAIVES  PERSONAL  SERVICE OF THE SUMMONS,  COMPLAINT  AND OTHER  PROCESS
ISSUED IN ANY SUCH  ACTION OR SUIT AND  AGREES  THAT  SERVICE  OF SUCH  SUMMONS,
COMPLAINT  AND  OTHER  PROCESS  MAY BE  MADE BY  REGISTERED  OR  CERTIFIED  MAIL
ADDRESSED TO THE COMPANY AT THE ADDRESS SET FORTH IN THE PURCHASE  AGREEMENT AND
THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE COMPANY'S
ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER
POSTAGE PREPAID.

                  (c) THE  COMPANY  DESIRES  THAT ITS  DISPUTES BE RESOLVED BY A
JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO


                                       6
<PAGE>

ACHIEVE  THE BEST  COMBINATION  OF THE  BENEFITS OF THE  JUDICIAL  SYSTEM AND OF
ARBITRATION,  THE  COMPANY  HERETO  WAIVES  ALL  RIGHTS  TO TRIAL BY JURY IN ANY
ACTION,  SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,  WHETHER ARISING IN
CONTRACT,  TORT, OR OTHERWISE BETWEEN THE HOLDER AND THE COMPANY ARISING OUT OF,
CONNECTED WITH,  RELATED OR INCIDENTAL TO THE RELATIONSHIP  ESTABLISHED  BETWEEN
THEM  IN  CONNECTION  WITH  THIS  NOTE,  ANY  OTHER  RELATED  AGREEMENT  OR  THE
TRANSACTIONS RELATED HERETO OR THERETO.

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

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

            3.10 SECURITY INTEREST AND GUARANTEE.  The Holder has been granted a
security  interest (i) in certain assets of the Company and its  Subsidiaries as
more fully described in the 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.

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

            5.13 REGISTERED OBLIGATION. This Note is intended to be a registered
obligation within the meaning of Treasury  Regulation Section  1.871-14(c)(1)(i)
and the Company (or its agent) shall  register this Note (and  thereafter  shall
maintain  such  registration)  as to both  principal  and any  stated  interest.
Notwithstanding  any document,  instrument or agreement relating to this Note to
the  contrary,  transfer of this Note (or the right to any payments of principal
or stated  interest  thereunder)  may only be effected by (i)  surrender of this
Note and either the  reissuance by the Company of this Note to the new holder or
the  issuance by the  Company of a new  instrument  to the new  holder,  or (ii)
transfer  through a book entry system  maintained by the Company (or its agent),
within the meaning of Treasury Regulation Section 1.871-14(c)(1)(i)(B).

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


                                       7
<PAGE>

            IN WITNESS WHEREOF, the Company has caused this Secured 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:


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


                                       8