Document:

Exhibit 10.1 

OMNIBUS AMENDMENT

This Omnibus Amendment (this “Amendment”),
dated as of June 18, 2007, is entered into by INCENTRA SOLUTIONS, INC. (f/k/a
Front Porch Digital, Inc.) a Nevada  corporation (the “Company”),
each of the undersigned Subsidiaries of the Company and LAURUS MASTER FUND, LTD.,
a Cayman Islands company (“Laurus”),
for the purpose of amending the terms of each of (i) that certain Security Agreement,
dated as of February 6, 2006, by and among the Company, Network System Technologies,
Inc., an Illinois corporation (“NST”),
Tactix, Inc., an Oregon corporation (“Tactix”),
Incentra Solutions of the Northeast, Inc., a Delaware corporation  (“ISNE”),
PWI Technologies, Inc., a Washington corporation (“PWI”),
Incentra Solutions of California, Inc., a  Delaware corporation (“ISC”),
ManagedStorage International, Inc.,a Delaware corporation (“MSI”),
Incentra  Solutions International, Inc., a Delaware corporation (“ISI” and
together with the Company, NST, Tactix, ISNE, PWI, ISC, MSI and ISI, the “Credit
 Parties” and each, a “Credit
 Party”) (the “Security
 Agreement”), (ii) that
certain Secured Revolving Note, dated as of February 6, 2006, issued by the Company
 and each of the other Credit Parties to Laurus (as amended, modified or supplemented
 from time to time, the “Feb
2006 Revolving Note”),
(iii) that certain Secured Convertible Term Note, dated as of March 31, 2006,
issued by the Company to Laurus (as amended, modified  or supplemented from time
to time, the “Mar 2006 Term
Note”), (iv) that certain Common Stock Purchase
Warrant, dated as  of May 13, 2004, issued by the Company to Laurus (as amended,
modified or supplemented from time to time, the “May
2004 Warrant”), (v) that certain Common Stock
Purchase Warrant,  dated as of October 25, 2004, issued by the Company to Laurus
(as amended, modified or supplemented from time to time, the “Oct
2004 Warrant”), (vi) that certain Common Stock
 Purchase Warrant, dated as of February 17, 2005, issued by the Company to Laurus
(as amended, modified or supplemented from time to time, the “Feb
2005 Warrant”), (vii) that
certain Common Stock Purchase Warrant, dated as of June 30, 2005, issued by the
Company to Laurus (as amended, modified or supplemented from time to time, the “June
2005 Warrant”),
(viii) that certain Common Stock Purchase Option, dated as of February 6, 2006,
issued by the Company to Laurus (as amended, modified or supplemented from time
to time, the “Feb 2006 Option”),
and (ix) that certain Common Stock Purchase Warrant, dated as of March 31, 2006,
issued by the Company to Laurus (as amended, modified or supplemented from time
to time, the “Mar 2006
Warrant” and together with the May 2004 Warrant,
the Oct 2004 Warrant, the Feb 2005 Warrant, and the June 2005 Warrant, the “Warrants”).
 Capitalized terms used herein without definition shall have the meanings ascribed
to such terms in the Security Agreement. 

          WHEREAS, the Company and Laurus have agreed to make certain changes to the Security Agreement, the Feb 2006 Revolving Note, the Mar 2006 Term Note, each Warrant and the Feb 2006 Option as set forth
herein. 

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

          1.           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 “Ten

Million Dollars ($10,000,000)” appearing therein and inserting the amount “Fifteen Million Dollars ($15,000,000)” in lieu thereof in each case. 

          2.           The Feb 2006 Revolving Note is hereby amended by increasing the stated amount as appearing in the first paragraph thereof from “Ten
Million Dollars ($10,000,000)” to “Fifteen Million Dollars ($15,000,000)”. 

          3.           Effective on the Waiver Effective Date (as defined below), Section 3.2 of the March 2006 Term Note is hereby deleted in its entirety and the
following new Section 3.2 is hereby inserted in lieu thereof: 

                “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 9.99% 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 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 (i) following notice to the Company upon the occurrence
        and during the continuance of an Event of Default (as defined below),
        or (ii) upon receipt by the Holder of a Notice of Redemption.” 

          4.           Effective on the Waiver Effective Date (as defined below), Section 10 of each Warrants is hereby deleted in its entirety and the following
new Section 10 is hereby inserted in lieu thereof: 

                “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

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  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, Network System Technologies, Inc., Tactix, Inc.,
      Incentra Solutions of the Northeast, Inc., PWI Technologies, Inc., Incentra
      Solutions of California, Inc., ManagedStorage International, Inc. and Incentra
      Solutions International, Inc.)” 

          5.           Effective on the Waiver Effective Date (as defined below), Section 10 of the Feb 2006 Option is hereby deleted in its entirety and the
following new Section 10 is hereby inserted in lieu thereof: 

                “10.           Maximum
        Exercise. Notwithstanding anything herein
        to the contrary, in no event shall the Holder be entitled to exercise
        any portion of this Option in excess of that portion of this Option 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 Option 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 Option 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

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  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, Network System Technologies, Inc., Tactix, Inc.,
      Incentra Solutions of the Northeast, Inc., PWI Technologies, Inc., Incentra
      Solutions of California, Inc., ManagedStorage International, Inc. and Incentra
      Solutions International, Inc.)” 

          6.           The Company and Laurus agree that, upon execution of this Amendment by the Company and Laurus (the “Waiver
Effective Date”), the Company will be deemed to have received notice from Laurus of Laurus’ waiver of the 4.99% conversion limitation set forth in Section 3.2 of the Mar 2006 Term Note, Section 10 of each
Warrant and Section 10 of the Feb 2006 Option, which waiver shall become effective on the 76th day following the Waiver Effective Date. 

          7.           The Company will, on the date hereof, issue to Laurus a warrant (the “Issued Warrant”) to purchase 360,000 shares of the Common Stock of the Company with an exercise price of $0.01 per share, such Issued Warrant to be in the form attached hereto as Exhibit A. The Company further agrees that if at any time
after the date hereof there is not an effective Registration Statement covering all of the shares of Common Stock issuable upon exercise of the Issued Warrant (the “Additional Warrant Shares”) and the Company shall determine to prepare and file with the Securities and Exchange 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 of the Issued Warrant written notice of such determination and, if within fifteen (15) 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 Additional Warrant Shares 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. 

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          8.           Upon execution of this Agreement by each Company and Laurus, the Credit Parties shall jointly and severally pay to Laurus Capital
Management, LLC, the investment advisor of Laurus (“LCM”), a non-refundable payment in an amount equal to two percent (2.00%) of the increase to the Capital Availability Amount
(i.e. $100,000).  The foregoing payment is referred to herein as the “Additional LCM Payment.”  Such Additional LCM
Payment shall be deemed fully earned on the Effective Date (as defined below) and shall not be subject to rebate or proration for any reason. 

          9.           This Amendment shall be effective on the first date on which (the “Effective Date”) each of the following has occurred: (i) the execution and delivery of this Amendment by each Credit Party and Laurus, (ii) the issuance to Laurus of a Issued Warrant, and the receipt by Laurus of such Issued Warrant and
(iii) the receipt by LCM via wire transfer in immediately available funds of the Additional LCM Payment. 

          10.         Except
as specifically set forth in this Amendment, there are no other amendments to
the Security Agreement, the Feb 2006 Revolving Note,  the Mar 2006 Term Note,
any Warrant or the Feb 2006 Option, and all of the other forms, terms and provisions
of the Security Agreement, the Feb 2006 Revolving Note, the Mar 2006 Term Note,,
each Instrument and the Feb 2006 Option remain in full  force and effect. 

          11.         Each
Credit Party hereby represents and warrants to Laurus that as of the date hereof,
both before and after giving effect to this  Amendment, (i) no Event of Default
(as defined in the Security Agreement) exists and is continuing and (ii) all
representations, warranties and covenants made by each Credit Party and its subsidiaries
in connection with the Security Agreement and/or  any Ancillary Agreement referred
to in the Security Agreement are true, correct and complete and all of each Credit
Party’s and its respective subsidiaries’ covenant requirements have
been met. The Company hereby agrees to, no later than  five days after the date
hereof, file an 8-K with the Securities and Exchange Commission disclosing the
transactions set forth in this Amendment (the “8-K”)
on the date  hereof.

          12.         This
Amendment shall be binding upon the parties hereto and their respective successors
and permitted assigns and shall inure to the  benefit of and be enforceable by
each of the parties hereto and its successors and permitted assigns. THIS
AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
This Amendment may be executed in any number of
counterparts, each of which shall be an original, but all of which shall constitute
one instrument.

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          IN WITNESS WHEREOF, each Credit Party and Laurus has caused this Amendment to be effective and signed in its name effective as of the date set forth above. 

  	INCENTRA SOLUTIONS,
            INC. 
	 	 
	 	 
	By: 	/s/ Matthew
        G. Richman 
	Name: Matthew G. Richman 
	Title: Senior Vice President & Treasurer 
	 	 
	 	 
	MANAGEDSTORAGE
            INTERNATIONAL, INC. 
	 	 
	 	 
	By: 	/s/ Matthew
        G. Richman 
	Name: Matthew G. Richman 
	Title: Assistant Secretary  
	 	 
	 	 
	INCENTRA SOLUTIONS
            INTERNATIONAL, 
	INC. 
	 	 
	 	 
	By: 	/s/ Matthew
        G. Richman 
	Name: Matthew G. Richman 
	Title: Assistant Secretary  
	 	 
	 	 
	PWI TECHNOLOGIES, INC. 
	 	 
	 	 
	By: 	/s/ Matthew
        G. Richman 
	Name: Matthew G. Richman 
	Title: Secretary  
	 	 
	 	 
	INCENTRA SOLUTIONS OF CALIFORNIA, 
	INC. 
	 	 
	 	 
	By: 	/s/ Matthew
        G. Richman 
	Name: Matthew G. Richman 
	Title: Secretary  

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  	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: Secretary  
	 	 
	 	 
	 	 
	 	 
	LAURUS MASTER FUND,
            LTD. 
	 	 
	By: 	 /s/ David Grin
	Name: David Grin 
	Title:  

  

7Exhibit 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 360,000 Shares of Common Stock of 

Incentra Solutions, Inc. 

(subject to adjustment as provided herein) 

COMMON STOCK PURCHASE WARRANT 

	
No. _____________ 
  	 
  	
    Issue Date: June __, 2007
    

          INCENTRA SOLUTIONS, INC., a corporation organized under the laws of the State of Nevada (“ICNS”), hereby certifies that, for value received, LAURUS MASTER FUND, LTD., 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 June __, 2027 (the “Expiration Date”), up to 360,000 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 360,000 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

  
	 

2

	 	
 

  	shall continue to be entitled after such exercise
      in accordance with the provisions of this Warrant. If the Holder shall fail
      to make any such request, such failure shall not affect the continuing obligation
    of the Company to afford to such Holder any such rights.

	 
	 	
1.4     	
Trustee for Warrant Holders. In the event that a bank or trust company shall have been appointed as trustee for the Holder of this Warrant pursuant to Subsection 3.2, such bank
or trust company shall have all the powers and duties of 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

  
	 

3

  pursuant to clause (i) above and may
      not be made pursuant to clause (ii) or (iii) above. Upon receipt by the
      Company of an Exercise Notice and proper payment of the aggregate Exercise
      Price, the Holder shall thereupon be entitled to receive the number of
      duly authorized, validly issued, fully-paid and non-assessable shares of
      Common Stock (or Other Securities) determined as provided herein.

          (b)           Notwithstanding any provisions herein to the contrary, if the Fair Market Value of one share of Common Stock is greater than the Exercise Price (at the date of calculation as set forth below), in
lieu of exercising this Warrant for cash, the Holder may elect to receive shares equal to the value (as determined below) of this Warrant (or the portion thereof being exercised) by surrender of this Warrant at the principal office of the Company
together with the properly endorsed Exercise Notice, in which event the Company shall issue to the Holder a number of shares of Common Stock computed using the following formula: 

	          	
  X=Y
  	(A-B) 	 
	 	 

  	A 	 
	 	 

  	 	 	 
	 	
Where X =
  	 
  	 	 the number of shares of Common Stock to be issued to the Holder
  
	 

  
	 	
Y =
  	 
  	 	
    the number of shares of Common Stock purchasable under this
  Warrant or, if only a portion of this Warrant is being exercised, the portion
  of this Warrant being exercised (at the date of such calculation)    

	 

  
	 	
A =
  	 
  	 	
    the Fair Market Value of one share
        of the Company’s Common
  Stock (at the date of such calculation)
    

	 

  
	 	
B =
  	 
  	 	
    the Exercise Price (as adjusted to the date of such calculation)
    

	
3.       	
Effect of Reorganization, Etc.; Adjustment of Exercise Price.

  
	 
	 	
3.1     	
Reorganization, Consolidation, Merger, Etc. In case at any time or from time to time, the Company shall (a) effect a reorganization, (b) consolidate with or merge into any other
person, or (c) transfer all or substantially all of its properties or assets to any other person under any plan or arrangement contemplating the dissolution of the Company, then, in each such case, as a condition to the consummation of such a
transaction, proper and adequate provision shall be made by the Company whereby the Holder of this Warrant, on the exercise hereof as provided in Section 1 at any time after the consummation of such reorganization, consolidation or merger or the
effective date of such dissolution, as the case may be, shall receive, in lieu of the Common Stock (or Other Securities) issuable on such exercise prior to such consummation or such effective date, the stock and other securities and property
(including cash) to which such Holder would have been entitled upon such consummation or in connection with such dissolution, as 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

5

of shares of Common Stock (or Other Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price and the number of shares of Common Stock to be received upon exercise of this Warrant, in effect immediately prior
to such adjustment or readjustment and as adjusted or readjusted as provided in this Warrant. The Company will forthwith mail a copy of each such certificate to the Holder of this Warrant and any Warrant agent of the Company (appointed pursuant to
Section 11 hereof). 

6.      Reservation of Stock, Etc., Issuable on Exercise of Warrant. The Company will at all times reserve and keep available, solely for
issuance and delivery on the exercise of this Warrant, shares of Common Stock (or Other Securities) from time to time issuable on the exercise of this Warrant. 

7.      Assignment; Exchange of Warrant.  Subject to compliance with applicable securities laws, this Warrant, and the rights evidenced hereby,
may be transferred by any registered holder hereof (a “Transferor”) in whole or in part. On the surrender for exchange of this Warrant, with the Transferor’s endorsement in the form of Exhibit B attached hereto (the “Transferor
Endorsement Form”) and together with evidence reasonably satisfactory to the Company demonstrating compliance with applicable securities laws, which shall include, without limitation, the provision of a legal opinion from the Transferor’s
counsel that such transfer is exempt from the registration requirements of applicable securities laws, and with payment by the Transferor of any applicable transfer taxes) will issue and deliver to or on the order of the Transferor thereof a new
Warrant of like tenor, in the name of the Transferor and/or the transferee(s) specified in such Transferor Endorsement Form (each a “Transferee”), calling in the aggregate on the face or faces thereof for the number of shares of Common
Stock called for on the face or faces of the Warrant so surrendered by the Transferor. 

8.      Replacement of Warrant. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of any such loss, theft or destruction of this Warrant, on delivery of an indemnity agreement or security reasonably satisfactory in form and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense will execute and deliver, in lieu thereof, a new Warrant of like tenor. 

9.      Registration Rights.  The Holder of this Warrant has been granted certain registration rights by the Company.  These registration rights
are set forth in the Registration Rights Agreement dated as of March 31, 2006 entered into by the Company and the initial Holder of this Warrant, as amended, modified or supplemented from time to time. 

10.    Maximum
Exercise. Notwithstanding anything herein to the
contrary, in no event shall the Holder be entitled to exercise any portion of
 this Warrant in excess of that portion of this Warrant upon exercise of which
the sum of (1) the number of shares of Common Stock 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

6

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, Network System Technologies, Inc., Tactix, Inc., Incentra Solutions of the Northeast, Inc., PWI Technologies, Inc., Incentra Solutions of California, Inc., ManagedStorage
International, Inc. and Incentra Solutions International, Inc.). 

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

7

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. 

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.] 

8

          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

	 

  	     	Title: 	     Senior Vice President & Treasurer

9

EXHIBIT A

FORM OF SUBSCRIPTION 

(To Be Signed Only On Exercise Of Warrant) 

	
TO:    
  	
INCENTRA SOLUTIONS, INC.
  
	 

  	
1140 Pearl Street
  
	 

  	
Boulder, CO 80302
  
	 

  	
Attention:
  	      
  	
    Chief Financial Officer
    

          The undersigned, pursuant to the provisions set forth in the attached Warrant (No.____), hereby irrevocably elects to purchase (check applicable box): 

	———	          	________ shares of the Common Stock covered by such
    Warrant; or 

	 	 	

	———	 	the maximum number of shares of Common Stock covered
          by such Warrant pursuant to the cashless exercise procedure set forth
    in Section 2. 

          The
undersigned herewith makes payment of the full Exercise Price for such shares
at the price per share provided for in such Warrant, which is $___________.
Such payment takes the form of  (check applicable box or boxes): 

	———	          	
$__________ in lawful money of the United States; and/or
  
	 	 	 

  
	———	 	
    the cancellation of such portion of the attached Warrant as
  is exercisable for a total
        of _________ shares of Common
        Stock (using a Fair Market Value of $_______ per share
  for purposes of this calculation); and/or 

	 	 	 
  
	———	 	
    the cancellation of such number of shares of Common Stock
  as is necessary, in accordance with the formula set forth in Section 2.2, to
  exercise this Warrant with respect to the maximum number of shares of Common
  Stock purchasable pursuant to the cashless exercise procedure set forth in Section
  2.    

          The undersigned
    requests that the certificates for such shares be issued in the name of,
    and delivered to ________________________________________________________________________________________ whose address
    is ___________________________________________________________________________. 

           The undersigned
    represents and Warrants that all offers and sales by the undersigned of the
    securities issuable upon exercise of the within Warrant shall be made pursuant
    to registration of the Common Stock under the Securities Act of 1933, as
    amended (the “Securities Act”) or pursuant to an exemption from
    registration under the Securities Act. 

	
Dated:_________________
  	 

  
	 

  	
    (Signature must conform to name of holder as
  
	 

  	
    specified on the face of the Warrant)
  
	 

  
	 

  	Address:
   	 

	 	 	 

A-1 

EXHIBIT B

FORM OF TRANSFEROR ENDORSEMENT

(To Be Signed Only On Transfer Of Warrant) 

          For value received, the undersigned hereby sells, assigns, and transfers unto the person(s) named below under the heading “Transferees” the right represented by the within Warrant to
purchase the percentage and number of shares of Common Stock of INCENTRA SOLUTIONS, INC. into which the within Warrant relates specified under the headings “Percentage Transferred” and “Number Transferred,” respectively, opposite
the name(s) of such person(s) and appoints each such person Attorney to transfer its respective right on the books of INCENTRA SOLUTIONS, INC. with full power of substitution in the premises. 

	 

  	 
  	 

  	 
  	
    Percentage
    
	 
  	
Number
  
	
Transferees
  	 
  	
Address
  	 
  	
    Transferred
    
	 
  	
Transferred
  
	 	 	 	 	 	 	 
	 
	 	 
	 	 
	 	 

	 	 	 	 	 	 	 
	 
	 	 
	 	 
	 	 

	 	 	 	 	 	 	 
	 
	 	 
	 	 
	 	 

	 	 	 	 	 	 	 
	 
	 	 
	 	 
	 	 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

	
Dated: ___________________________________ 
  	 	 

  
	 

  	 	
    (Signature must conform to name of holder as
  
	 

  	 	
    specified on the face of the Warrant)
  
	 

  
	 

  	 	Address: 
  	 

	 

  	 	 	 

	 

  
	 

  
	 

  	 	
    SIGNED IN THE PRESENCE OF:
  
	 

  
	 

  	 	 

	 

  	 	
  (Name)
  

	
ACCEPTED AND AGREED:
  	 	 
  	 

  
	
[TRANSFEREE]
  	 	 
  	 

  
	 

  
	 

  
	 

  	 	 	 
	 (Name)
  
	 	 
  	 

  

B-1

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