Document:

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                             BUCKEYE PARTNERS, L.P.

                  UNIT OPTION AND DISTRIBUTION EQUIVALENT PLAN

                              Amended and Restated
                               as of April 1, 2005

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                  UNIT OPTION AND DISTRIBUTION EQUIVALENT PLAN

1.    PURPOSE

      The Unit Option and Distribution Equivalent Plan (the "Plan") of Buckeye
Partners, L.P., a Delaware limited partnership (the "Partnership"), is designed
to assist the Partnership, Buckeye GP LLC, the Partnership's general partner
(the "General Partner"), and Affiliates in attracting and retaining employees of
outstanding competence and to enable selected officers and key employees of the
Partnership, the General Partner and Affiliates to acquire or increase ownership
interests in the Partnership on a basis that will encourage them to perform at
increasing levels of effectiveness and to use their best efforts to promote the
growth and profitability of the Partnership. Consistent with these objectives,
the Plan authorizes the granting of options (the "Options") to acquire limited
partnership interests in the Partnership represented by units (the "Units") to
selected officers and key employees (the "Optionees") pursuant to the terms and
conditions hereinafter set forth. As used herein, the terms "Affiliate" and
"Affiliates" refer to any domestic or foreign corporation, partnership, limited
liability company or other entity that directly or indirectly controls, is
controlled by or is under common control with either the Partnership or the
General Partner. For purposes of this Plan, Buckeye Pipe Line Services Company
shall be considered an Affiliate of the General Partner.

2.    EFFECTIVE DATE OF THE PLAN.

      Effective Date; Unitholder Approval. The Plan originally became effective
April 25, 1991 and was amended and restated as of April 24, 2002. This 2005
amendment and restatement was approved by the holders of Units (the
"Unitholders") and became effective on April 1, 2005.

3.    ADMINISTRATION.

      (a) Administration by Committee. The Plan shall be administered by either
the Board of Directors of the General Partner (the "Board"), or a committee of
the Board consisting of at least two (2) members of the Board (the "Committee").
For purposes of the Plan, the term "Committee," as used hereinafter, shall refer
to the Board if the Board has not appointed the Committee to administer the
Plan. The Committee shall have and exercise all of the powers and authority
granted to it by the provisions of the Plan. Members of the Committee shall
serve, and may be removed, at the pleasure of the Board.

      (b) Quorum. For purposes of administration of the Plan, a majority of the
members of the Committee eligible to serve as such shall constitute a quorum,
and any action taken by a majority of the members of the Committee present at
any meeting at which a quorum is present, or acts approved in writing by a
majority of such members of the Committee, shall be the acts of the Committee.

      (c) Committee Power. Subject to the express provisions of the Plan, the
Committee shall have full authority (i) to decide when Options will be granted
under the Plan, (ii) to select Optionees under the Plan and (iii) to determine
the number of Units to be covered by each Option, the price at which such Units
may be purchased and any other terms and conditions of such Option, including
the applicability of the Distribution Equivalent feature described in Section 7.
The Board or the Committee may, by resolution, authorize one or more officers of
the General Partner to do one or both of the following: (1) designate the
Optionees, and (2) determine the number of Options to be received by such
Optionees; provided, however, that the resolution so authorizing such officer or
officers shall specify the total number of Options such officer or officers may
so award. The Board or the Committee may not authorize an officer to designate
himself or herself as a recipient of any such Options.

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      (d) Plan Interpretation. Subject to the express provisions of the Plan,
the Committee shall have full and express discretionary authority to interpret
the Plan and any option agreements evidencing Options granted hereunder (the
"Option Agreements"), to issue rules for administering the Plan, to change,
alter, amend or rescind such rules, and to make all other determinations
necessary or appropriate for the administration of the Plan. All determinations,
interpretations and constructions made by the Committee pursuant to this Section
3 shall be final and conclusive. No member of the Committee shall be liable for
any action, determination or omission taken or made in good faith with respect
to the Plan or any Option granted hereunder. All Options shall be granted
conditional upon the Optionee's acknowledgement, in writing or by acceptance of
the Option, that all decisions and determinations of the Committee shall be
final and binding on the Optionee, his or her beneficiaries and any other person
having or claiming an interest under such Option. Grants need not be uniform as
among the Optionees.

4.    UNITS SUBJECT TO OPTIONS.

      (a) Number, Source and Use of Units. The equity securities to be subject
to Options granted under the Plan shall be limited partnership interests in the
Partnership represented by Units. The aggregate number of Units which may be
issued under Options granted pursuant to the Plan shall not exceed 1,400,000
Units, subject to further adjustment as provided in Sections 4(b) and 8(b) of
the Plan. If an Option, or any portion thereof, expires, terminates or is
surrendered or canceled for any reason (including pursuant to a cancellation and
new grant of Options pursuant to Section 10) without the full number of Units
being issued to the Optionee, the Units subject to such expired, terminated,
surrendered or canceled portion of the Option shall be available for subsequent
Option grants under this Plan. Units which are the subject of Options may be
previously issued and outstanding Units reacquired by the Partnership or certain
of its Affiliates and held in treasury, or may be authorized but unissued Units,
or may be partly of each.

      (b) Adjustment Provisions. In the event that (i) any change is made to the
Units issuable under the Plan pursuant to Section 8 or otherwise, or (ii) the
Partnership makes any distribution of cash, Units, assets or other property to
Unitholders which result from the sale or disposition of a major asset or
separate operating division of the Partnership or any other extraordinary event
and, in the judgment of the Committee, such change or distribution would
significantly dilute the rights of Optionees hereunder then, subject to the
provisions of Section 8 of the Plan, the Committee may make appropriate
adjustments in the maximum number of Units issuable under the Plan to reflect
the effect of such change or distribution upon the Partnership's capital
structure, and may make appropriate adjustments to the number of Units and the
purchase price subject to each outstanding Option. The adjustments determined by
the Committee shall be final, binding and conclusive.

5.    ELIGIBILITY

      Subject to the immediately succeeding sentence, the persons who shall be
eligible to receive Options pursuant to the Plan shall be such officers and key
employees of the Partnership, the General Partner, or any Affiliate who can make
a meaningful contribution to the Partnership's success, as determined by the
Committee from time to time. The following individuals shall not be eligible to
receive grants of Options under the Plan, nor shall they receive material
increases in benefits with respect to previously granted Options: (1) a member
of the Board of Directors or (2) an officer of the General Partner whose
compensation is not reimbursed by the Partnership pursuant to the terms and
conditions of the Third Amended and Restated Exchange Agreement dated as of
December 15, 2004.

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6.    OPTIONS.

      (a) Grant of Options. Subject to the provisions of Section 4, Options may
be granted at any time and from time to time as may be determined by the
Committee. The Committee shall have complete discretion in determining the
number of Options granted and the number of Units subject to such Options. The
grant of Options under the Plan shall in no way affect the Partnership's or the
General Partner's right to adjust, reclassify, reorganize or otherwise change
the Partnership's capital or business structure, nor shall the grant of any
Option affect the Partnership's or the General Partner's right to merge,
consolidate, dissolve, liquidate or sell or transfer any part of the
Partnership's business or assets.

      (b) Nature of Options. Options granted pursuant to the Plan shall be
authorized by the Committee and shall be non-statutory options which are not
intended to meet the requirements of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").

      (c) Terms and Conditions of Options. Each Option granted pursuant to the
Plan shall be evidenced by an Option Agreement between the Partnership and the
Optionee in such form or forms as the Committee, from time to time, shall
prescribe, which agreements need not be identical to each other but shall
comply, inter alia, with and be subject to the terms and conditions of this
Section 6(c). In addition, the Committee may, in its absolute discretion,
include in any Option Agreement other terms, conditions and provisions that are
not inconsistent with the express provisions of the Plan.

            (i) Option Price. The price at which each Unit may be purchased
pursuant to an Option granted under the Plan shall be not less than 100% of the
higher of the "fair market value" for each such Unit (A) on the date the
Committee approves the grant of such Option (the "Date of Grant"), or (B) on a
future date if such is fixed on the Date of Grant by the Committee. The "fair
market value" of the Units on any date shall be the mean between the high and
the low prices of the Units on such date on the New York Stock Exchange (or the
principal market in which the Units are traded, if the Units are not listed on
that Exchange on such date), or if the Units were not traded on such date, the
mean between the high and the low prices of the Units on the next preceding
trading day during which the Units were traded. Anything contained in this
subsection (i) to the contrary notwithstanding, in the event that the number of
Units subject to any Option is adjusted pursuant to 4(b) or 8(b) hereof, a
corresponding adjustment shall be made in the price at which the Units subject
to such Option may be purchased thereafter.

            (ii) Duration of Options. An Option (or portion thereof) granted
under the Plan shall expire and all rights to purchase Units pursuant to the
Option (or portion thereof) shall cease at the end of the day which is seven
years following the date such Option (or portion thereof) became exercisable for
the first time, or such lesser period as may be prescribed by the Committee and
specified in the Option Agreement (the "Expiration Date").

            (iii) Vesting of Options. The Units subject to each option granted
hereunder may only be purchased to the extent that the Optionee is vested in
such Option. An Optionee shall vest separately in each Option granted hereunder
in accordance with a schedule determined by the Committee in its sole
discretion, which will be appended to the Option Agreement. In the absence of
any special circumstances, including the circumstances described in Sections 8
and 12 of the Plan or the terms of any vesting schedule contained in any Option
Agreement which differ from the schedule below, the Committee will cause the
Options to vest in accordance with the following schedule:

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<TABLE>
<CAPTION>
 Number of anniversaries the Optionee has
remained in the employ of the Partnership,
   the General Partner or any Affiliate             Extent to which the Optionee
     following the Date of the Grant                         is Vested
     -------------------------------                         ---------
<S>                                                 <C>
Under three........................................................0%
Three or more....................................................100%
</TABLE>

At the time an Option (or portion thereof) becomes vested in accordance with the
foregoing schedule, the Option (or such portion) shall remain exercisable for a
period of seven (7) years following the date the Option (or such portion) became
vested. Anything contained in this subsection (iii) to the contrary
notwithstanding, an Optionee shall become fully (100%) vested in each of his or
her Options upon (A) his or her termination of employment with the Partnership,
the General Partner or an Affiliate for reasons of death, Disability or
Retirement (as such terms are defined in Section 12); (B) his or her termination
of employment by the Partnership, the General Partner or an Affiliate within one
year after the merger of the Partnership into, consolidation of the Partnership
with, or sale or transfer of all or substantially all the Partnership's assets
to, another entity, or within one year after the acquisition of effective voting
control of the Partnership by any individual or entity or by any individuals or
entities acting in concert (a good faith determination by the Committee that
such control has been acquired shall be final and conclusive), in any such case
for a reason other than discharge for cause; (C) a determination by the
Committee in its sole discretion that acceleration of the Option vesting
schedule would be desirable for the Partnership; or (D) such Options becoming
vested pursuant to Section 8 of the Plan.

            (iv) Unit Retention Requirement. The Committee may require, as a
term of an Option Agreement, that the Optionee accumulate and retain a minimum
number of Units, as specified by the Committee in its discretion ("Unit
Retention Requirement"). The Committee shall permit an Optionee to satisfy the
Unit Retention Requirement over a period determined by the Committee. An
Optionee who fails to comply with the Unit Retention Requirement after
expiration of the prescribed period shall not be eligible to receive further
grants of Options under the Plan.

      (d) Purchase of Units Pursuant to Options. An Optionee may purchase Units
subject to the vested portion of an Option in whole at any time, or in part from
time to time, by delivering to the Secretary of the General Partner, or his
designee, written notice specifying the number of Units with respect to which
the Option is being exercised. The Optionee shall pay the purchase price of such
Units in full, plus any applicable federal, state or local taxes for which the
Partnership, the General Partner or any Affiliate has a withholding obligation
in connection with such purchase. Such payment shall be payable to the
Partnership in full in cash or by payment through a broker in accordance with
procedures permitted by Regulation T of the Federal Reserve Board. During the
lifetime of the Optionee, the Option shall be exercised only by the Optionee and
shall not be assignable or transferable by the Optionee other than (1) by will,
(2) by the laws of descent and distribution, (3) pursuant to the terms of the
Plan, or (4) pursuant to the terms of a qualified domestic relations order.

      (e) Unitholder Rights. An Optionee shall have none of the rights of a
Unitholder with respect to any Units issuable pursuant to an Option under the
Plan until such Optionee shall have been issued such Units upon the exercise or
partial exercise of such Option.

      (f) Compliance with Rule 16b-3. The Committee may impose such conditions
on the exercise of an Option as may be necessary to satisfy the requirements of
Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the "1934
Act"), or any other comparable provisions in effect at the time.

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7.    DISTRIBUTION EQUIVALENTS.

      (a) Distribution Equivalents. The Committee may grant, in its discretion
and subject to such conditions, if any, as it shall determine, certain Options
with a feature which would allow Optionees to accumulate accrued credit balances
as adjusted in subsection (c) (the "Distribution Equivalents"). Only those
Options which have been specifically awarded with Distribution Equivalents, as
evidenced by the terms of the Option Agreement relating to such Option, shall be
deemed to have the Distribution Equivalent feature. The Partnership shall
maintain records with respect to each Option granted to an Optionee with
Distribution Equivalents, calculated in accordance with subsection (b) (the
"Distribution Equivalent Account").

      (b) Calculation of Distribution Equivalents. From the date an Option is
granted with a Distribution Equivalent feature until the earlier of (i) the date
in which the Option (or portion thereof) becomes exercisable in accordance with
Section 6(c) or 8, or (ii) the date of the Optionee's termination of employment
for any reason including death, Disability or Retirement, as such terms are
defined as in Section 12, the Partnership shall record in each Distribution
Equivalent Account on the date of each regular quarterly Partnership
distribution, an amount equal to (x) the Partnership's per Unit regular
quarterly distribution as declared from time to time by the Board, multiplied by
(y) the number of Units subject to such Option that have not vested. No interest
shall be payable or credited to the balance in any Distribution Equivalent
Account. Any special per Unit distributions declared by the Board may be
credited to the Distribution Equivalent Accounts only upon specific Committee
approval.

      (c) Use of Distribution Equivalents. As a term of an Option Agreement, the
Committee may condition the Optionee's receipt of the Distribution Equivalent
Account value upon continued service and upon the achievement of such corporate
performance goals as the Committee may establish in its discretion. If the
Committee conditions receipt of Distribution Equivalents on performance goals,
the Committee shall establish a performance period and performance goals with
such terms as the Committee determines. At the end of the specified period, the
Committee shall (i) adjust the accumulated Distribution Equivalents to reflect
the achievement of such performance goals (which may result in an increase or
decrease in the Distribution Equivalents credited to the Distribution Equivalent
Account) and (ii) distribute the Distribution Equivalents, as adjusted, in cash
to each Optionee who has met the applicable service requirements. If the
Committee increases an Optionee's Distribution Equivalents based on achievement
of performance goals, the maximum amount that may be credited to the Optionee's
Distribution Equivalent Account for a specified period is 200% of the
Distribution Equivalents otherwise credited to the Distribution Equivalent
Account pursuant to subsection (b) above for the applicable performance period.
Notwithstanding anything in the Plan to the contrary, Distribution Equivalents
shall be paid on specified dates or as otherwise required in order to comply
with the requirements of Section 409A of the Code, if applicable.

8.    ADJUSTMENTS UPON EXTRAORDINARY TRANSACTIONS OR CHANGES IN PARTNERSHIP
      CONTROL.

      (a) Extraordinary Transaction. In the event of one or more of the
following transactions (an "Extraordinary Transaction"):

            (1) the Unitholders approve a merger or consolidation of the
Partnership with any other entity, other than a merger or consolidation which
would result in the Unitholders retaining at least 75% of the total equity
interest of the surviving entity, as represented by the percentage of Units or
equity securities of the Partnership or such surviving entity held by the
Unitholders immediately after such merger or consolidation;

                                      -6-
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            (2) a plan of complete dissolution of the Partnership is adopted or
the Unitholders approve an agreement for the sale or disposition by the
Partnership (in one transaction or a series of transactions) of all or
substantially all the Partnership's assets; or

            (3) the General Partner is removed, or any person or entity except
one or more of the equity interest holders of the General Partner or any
employee benefit plan of the General Partner (or of any affiliate or any person
or entity organized, appointed or established by the General Partner for or
pursuant to the terms of any such employee benefit plan), together with all
affiliates of such person or entity, becomes, directly or indirectly, the
beneficial owner, or the holder of proxies, in the aggregate of 51% or more of
the general partnership interests of the Partnership,

then (i) each Option at the time outstanding under the Plan and not then
otherwise fully exercisable shall, during the ten (10) business day period
immediately prior to the specified effective date for the Extraordinary
Transaction, become fully exercisable for up to the total number of Units
purchasable or issuable thereunder and may be exercised for all or any portion
of the Units for which the Option is so accelerated, (ii) all Units issuable
upon the exercise of Options under this Section 8(a) of the Plan shall be
delivered to the Optionee immediately prior to the specified effective date for
the Extraordinary Transaction, and (iii) all accumulated Distribution
Equivalents, without adjustment pursuant to Section 7(c), shall be paid to the
Optionee in cash. Notwithstanding the foregoing, if the Extraordinary
Transaction is abandoned, (A) any Units not purchased upon exercise of such
Option shall continue to be available for purchase in accordance with the other
provisions of the Plan, and (B) to the extent that any Option not exercised
prior to such amendment shall have vested solely by operation of this Section 8,
such vesting shall be deemed annulled, and the vesting schedule set forth in
Section 6(c), or in the Option Agreement if different from the vesting schedule
in Section 6(c), shall be reinstituted as of the date of such abandonment.

      In no event shall any such acceleration or payment in connection with an
Extraordinary Transaction occur if the terms of the agreement governing the
Extraordinary Transaction require, as a condition to consummation, that the
outstanding Options shall either be assumed by the successor entity, or its
affiliate, or be replaced with a comparable option or right to purchase or
receive securities of the successor entity or affiliate. The determination of
such comparability shall be made by the Committee, and its determination shall
be final, binding and conclusive. Upon consummation of an Extraordinary
Transaction, all outstanding Options under the Plan shall, to the extent not
previously exercised or assumed by the successor entity or its affiliate,
terminate. For purposes of this Section 8, the term "affiliate" means any
domestic or foreign corporation, partnership, limited liability company or other
entity that directly or indirectly controls, is controlled by or is under common
control with the party in question.

      Notwithstanding the above, in the event of any Extraordinary Transaction,
the Committee shall have the discretion to cancel outstanding Options in whole
or in part, subject to such conditions as the Committee may determine, upon
payment to Optionees with respect to each Option then exercisable an amount in
cash equal to the excess of (i) the fair market value (at the effective date of
such Extraordinary Transaction) of the consideration the Optionee would have
received in the Extraordinary Transaction if the Option had been exercised
immediately prior to the effective date of such Extraordinary Transaction over
(ii) the aggregate exercise price of such Option. In that event, the Committee
may determine that accumulated Distribution Equivalents shall be paid to the
Optionees in cash.

      (b) If any change is made to the Units issuable under the Plan by reason
of an Extraordinary Transaction that does not result in the termination of all
outstanding Options, the Committee may adjust the maximum number of Units
issuable under the Plan, the number of Units subject to Options, and the Option
price of any outstanding Options.

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9.    VALUATION.

      For purposes of the Plan, the term "fair market value," when used in
connection with a discussion concerning the value of a Unit, shall represent the
value described in Section 6(c)(i). When used in connection with a discussion
concerning the value of a right, an asset or other property, other than a Unit,
the term "fair market value" shall mean, on any relevant date, the market value
of such asset, as determined by the Committee in accordance with such method of
valuation as the Committee shall determine to be reasonable and appropriate.

10.   TERM OF PLAN.

      Unless the Plan is sooner terminated in accordance with Section 8 or by
the Committee, no further Options shall be granted under the Plan after the
earlier of (i) the twentieth (20th) anniversary of the effective date of the
2005 amendment and restatement of the Plan, as described in Section 2 above or
(ii) the date on which all Units available for issuance under the Plan have been
issued.

11.   AMENDMENT OF THE PLAN AND AWARDS.

      The Committee shall have complete and exclusive power and authority to
terminate or amend the Plan and the Committee may amend outstanding Options
issued under the Plan in any or all aspects whatsoever not inconsistent with the
terms of the Plan; provided, however, that no such termination or amendment
shall adversely affect the rights of an Optionee with respect to Options at the
time outstanding under the Plan unless the Optionee consents to such amendment;
and provided, further, that the Committee shall not, without the approval of the
Unitholders, amend the Plan to (i) materially increase the maximum number of
Units which may be issued under the Plan, except for permissible adjustments
under Section 4(b), (ii) materially increase the benefits accruing to
individuals who participate in the Plan, or (iii) materially modify the
eligibility requirements for the grant of Options under the Plan.
Notwithstanding the foregoing, the Committee may amend the Plan in such manner
as the Committee deems necessary or appropriate to comply with the requirements
of Section 409A of the Code.

12.   TREATMENT OF OPTIONS UPON OPTIONEE'S TERMINATION OF EMPLOYMENT.

      Unless otherwise determined by the Committee, the following rules shall
apply in the event of an Optionee's termination of employment with the
Partnership, the General Partner or any Affiliate:

      (a) Termination for Cause; Voluntary Termination Without Consent. In the
event of an Optionee's termination of employment with the Partnership, the
General Partner or any Affiliate either (i) for cause or (ii) voluntarily on the
part of the Optionee and without the written consent of the Secretary of the
General Partner, or his designee, any and all Option(s) held by such person
shall immediately terminate.

      (b) Termination in Special Circumstances. In the event of an Optionee's
termination of employment with the Partnership, the General Partner or any
Affiliate under circumstances other than those specified in subsection (a)
hereof and for reasons other than death, Disability or Retirement (as defined in
subsection (d) hereof), such Option shall terminate on the date which is 90 days
from the date of such termination of employment or on its Expiration Date,
whichever shall first occur; provided, however, that if the Optionee is a former
officer of the General Partner subject to Section 16 of the 1934 Act who
terminates employment pursuant to this subsection (b), his or her Options shall
terminate on (i) the date which is the later of (A) 90 days from the date of
such termination of employment, or (B) six months and ten days after such
person's last purchase or sale, for purposes of Section 16, of Units or any

                                      -8-
<PAGE>

derivative security thereto prior to his or her ceasing to be such an officer,
or (ii) their Expiration Date, whichever shall first occur.

      (c) Death of Optionee. In the event of the death of an Optionee (i) while
he or she is employed by the Partnership, the General Partner or any Affiliate,
or (ii) if subsections (b) or (d) hereof is applicable, during the respective
periods of time specified therein following his or her termination of
employment, such Option shall become fully exercisable, but shall terminate on
the first anniversary of the Optionee's death, Disability or Retirement (as such
terms are defined in subsection (d) hereof) or on its Expiration Date, whichever
shall first occur.

      (d) Disability or Retirement of Optionee. In the event of the Optionee's
termination of employment with the Partnership, the General Partner or any
Affiliate for reasons of the inability, due to mental or physical infirmity, of
the Optionee to discharge the regular responsibilities and duties of his or her
employment with the Partnership, the General Partner or any Affiliate, as the
case may be ("Disability"), or for reasons of termination of employment other
than discharge for cause (i) at or after age 65, or (ii) before age 65 provided
the Optionee has at the time of such termination satisfied the age and vesting
requirements for normal or early retirement pursuant to the terms of any
"defined benefit plan" (as such term is defined in Section 3(35) of the Employee
Retirement Income Security Act of 1974, as amended, or any successor provision)
maintained by the Partnership, the General Partner or any Affiliate in which the
Optionee participates, or (iii) if the Optionee does not participate at the time
of such termination in such a "defined benefit plan," at or after age 55 and
before age 65 provided the Optionee has been employed by the Partnership, the
General Partner or any Affiliate for at least five full years (any of which
terminations in clauses (i)-(iii) above shall constitute "Retirement"), such
Option shall become fully exercisable, but shall terminate on the date which is
a number of years after the date of such termination of employment as shall be
fixed by the Committee or on its Expiration Date, whichever shall first occur.

      (e) Limitations of Option Acceleration Upon Termination of Employment of
Optionee. Anything contained in this Section 12 to the contrary notwithstanding,
an Option may only be exercised following the Optionee's termination of
employment with the Partnership, the General Partner or any Affiliate for
reasons other than death, Disability or Retirement if, and to the extent that,
such Option was exercisable immediately prior to such termination of employment.

      (f) Certain Transfers of Employment. An Optionee's transfer of employment
between or among the Partnership, the General Partner and an Affiliate or
between or among Affiliates, shall not constitute a termination of employment
and the Committee shall determine in each case whether an authorized leave of
absence for military service or otherwise shall constitute a termination of
employment.

13.   ISSUANCE OF UNITS; RESTRICTIONS.

      (a) Subject to the conditions and restrictions provided in this Section
13, the Partnership shall, within twenty (20) business days after an Option has
been duly exercised in whole or in part, deliver to the person who exercised the
Option a certificate, registered in the name of such person, for the number of
Units with respect to which the Option has been exercised. The Partnership may
legend any certificate issued hereunder to reflect any restrictions provided for
in this Section 13.

      (b) Unless the Units subject to Options granted under the Plan have been
registered under the Securities Act of 1933, as amended (the "1933 Act"), (and,
in the case of any Optionee who may be deemed an affiliate of the Partnership
for purposes of the 1933 Act, such Units have been registered under the 1933 Act
for resale by such Optionee), or the Partnership has determined that an
exemption from registration is available, the Partnership may require prior to
and as a condition of the issuance of any

                                      -9-
<PAGE>

Units that the person exercising an Option hereunder furnish the Partnership
with a written representation in a form prescribed by the Committee to the
effect that such person is acquiring said Units solely with a view to investment
for his or her own account and not with a view to the resale or distribution of
all or any part thereof, and that such person will not dispose of any of such
Units otherwise than in accordance with the provisions of Rule 144 under the
1933 Act unless and until either the Units are registered under the 1933 Act or
the Partnership is satisfied that an exemption from such registration is
available.

      (c) Anything contained herein to the contrary notwithstanding, the
Partnership shall not be obligated to sell or issue any Units under the Plan
unless and until the Partnership is satisfied that such sale or issuance
complies with (i) all applicable requirements of the New York Stock Exchange (or
the governing body of the principal market in which such Units are traded, if
such Units are not then listed on such Exchange), (ii) all applicable provisions
of the 1933 Act, and (iii) all other laws or regulations by which the
Partnership is bound or to which the Partnership is subject.

14.   GENERAL PROVISIONS.

      (a) No Right to Employment. Nothing contained in the Plan or any Option
Agreement shall confer, and no grant of an Option shall be construed as
conferring, upon any Optionee any right to continue in the employ of the
Partnership, the General Partner or any Affiliate or to interfere in any way
with the right of the Partnership, the General Partner or any Affiliate to
terminate his or her employment at any time or increase or decrease his or her
compensation from the rate in effect at the Date of Grant.

      (b) No Limit on Other Compensatory Arrangements. Nothing contained in this
Plan shall prevent the Partnership, the General Partner or any Affiliate from
adopting other or additional compensation arrangements (which may include
arrangements which relate to Options under the Plan), and such arrangements may
be either generally applicable or applicable only in specific cases.

                                      -10-Exhibit 10.1

                          REGISTRATION RIGHTS AGREEMENT

         REGISTRATION RIGHTS AGREEMENT, dated as of March 30, 2005, between
INCENTRA SOLUTIONS, INC., a Nevada corporation (the "Company"), and Barry R.
Andersen and Gary L. Henderson (each a "Shareholder" and collectively
"Shareholders").

                              W I T N E S S E T H:

         WHEREAS, pursuant to the terms of a Stock Purchase Agreement dated as
of March 30, 2005 (the "Purchase Agreement") between the Company and the
Shareholders, the Company has agreed to issue to the Shareholders such number of
shares of Common Stock, $.001 par value, of the Company (the "Common Stock") as
determined pursuant to the Purchase Agreement; and

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

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

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

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

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

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

                  1.4 "Existing Rights Agreements" shall mean (i) the warrant
agreements originally dated as of October 10, 2000 between the Company and the
Original Warrantholders for the purchase of an aggregate of 800,000 shares of
Common Stock and any warrant agreement

                                       1
<PAGE>

executed and delivered by the Company upon the registration or transfer of any
warrants evidenced by such warrant agreements, (ii) the Registration Rights
Agreement dated as of October 10, 2000 between the Company and Equity Pier LLC
(iii) the warrant agreement between the Company and Equity Pier LLC dated
February 28, 2001, (iv) the Form SB-2 filed on or about June 29, 2004, (v) the
Registration Rights Agreement between the Company and former ManagedStorage
International, Inc. shareholders dated August 18, 2004, and (vi) the
Registration Rights Agreement dated as of February 18, 2005 between the Company
and Alfred Curmi.

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

                  1.6 "Initiating Holders" shall mean Holders representing (on a
fully diluted basis) at least fifty-one percent (51%) of the total number of
Registrable Securities.

                  1.7 "Original Warrantholders" shall mean Hawke Company Ltd,
Tillgrove Investments Ltd and Notel Group Limited.

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

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

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

                  1.11 "Registration Expenses" shall mean all expenses incurred
by the Company in compliance herewith, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel for the Company, blue sky fees and expenses, the reasonable fees and
expenses (subject to documentation thereof) of one counsel for all Holders and
Other Stockholders that offer securities being sold pursuant to the Existing
Rights Agreements, and the expense of any special audits incident to or required
by any such registration

                                       2
<PAGE>

(but excluding the compensation of regular employees of the Company, which shall
be paid in any event by the Company).

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

                  1.13 "Selling Expenses" shall mean all underwriting discounts
and commissions applicable to the sale of Registrable Securities.

         2. Requested Registration.

                  2.1 Request for Registration. At any time after March 31, 2006
(such date being hereinafter referred to as the "Demand Date"), if the Company
shall receive from Initiating Holders a written request that the Company effect
any registration with respect to Registrable Securities the Company will:

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

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

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

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

                                       3
<PAGE>

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

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

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

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

                  2.3      Underwriting.

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

                                       4
<PAGE>

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

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

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

                                       5
<PAGE>

         3.       Company Registration.

                  3.1 At any time after March 31, 2006, if the Company shall
determine to register under the Securities Act any of its equity securities or
securities convertible into equity securities either for its own account or the
account of a security holder or holders exercising any demand registration
rights, other than a registration relating solely to employee benefit plans, or
a registration relating solely to a Commission Rule 145 transaction, or a
registration on Form S-4 or S-8, or the Form SB-2 filed on or about June 29,
2004, (or any successor forms thereto), the Company will:

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

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

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

                  3.3 Limitations on Shares to be Included. Notwithstanding any
other provision of this Section 3, if the representative of the underwriters of
a firm commitment underwriting advises the Company in writing that marketing
factors require a limitation or elimination on the number of shares to be
underwritten, the representative may (subject to the allocation priority set
forth below) limit the number of or eliminate the Registrable Securities to be
included in the registration and underwriting. The Company shall so advise all
holders of securities requesting registration, and the number of shares of
securities that are entitled to be included in the registration and underwriting
shall be allocated as follows: first, if such underwritten offering

                                       6
<PAGE>

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

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

         5. Registration Procedures.

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

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

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

                                       7
<PAGE>

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

                     (d) Notify each seller of Registrable Securities covered by
            such registration statement at any time when a prospectus relating
            thereto is required to be delivered under the Securities Act of the
            happening of any event as a result of which the prospectus included
            in such registration statement, as then in effect, includes an
            untrue statement of a material fact or omits to state a material
            fact required to be stated therein or necessary to make the
            statements therein not misleading or incomplete in the light of the
            circumstances then existing, and at the request of any such seller,
            prepare and furnish to such seller a reasonable number of copies of
            a supplement to or an amendment of such prospectus as may be
            necessary so that, as thereafter delivered to the purchasers of such
            shares, such prospectus shall not include an untrue statement of a
            material fact or omit to state a material fact required to be stated
            therein or necessary to make the statements therein not misleading
            or incomplete in the light of the circumstances then existing;

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

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

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

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

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

                         (ii) "comfort" letters signed by the Company's
                     independent public accountants who have examined and
                     reported on the Company's financial statements included in
                     the registration statement, to the extent

                                       8
<PAGE>

                     permitted by the standards of the American Institute of
                     Certified Public Accountants, covering such matters as are
                     customarily covered in opinions of issuer's counsel and
                     accountants' "comfort" letters delivered to underwriters in
                     underwritten public offerings of securities;

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

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

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

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

         6.       Indemnification.

                  6.1 Indemnification by the Company. The Company will indemnify
each Holder, each of its officers, directors and partners, and each person
controlling such Holder, with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each Person who controls any underwriter, against all claims,
losses, damages and liabilities (or actions, proceedings or settlements in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a

                                       9
<PAGE>

material fact contained in any prospectus, offering circular or other document
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction required
of the Company in connection with any such registration, qualification or
compliance, and will reimburse each such Holder, each of its officers, directors
and partners, and each Person controlling such Holder, each such underwriter and
each Person who controls any such underwriter, for any legal and any other
expenses reasonably incurred in connection with investigating and defending or
settling any such claim, loss, damage, liability or action, provided that the
Company will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any untrue
statement or omission made in reliance upon and based upon written information
furnished to the Company by such Holder or underwriter and stated to be
specifically for use therein.

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

                  6.3 Notices of Claims, Procedures, etc. Each party entitled to
indemnification under this Section 6 (the "Indemnified Party") shall give notice
to the party required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, and shall permit the Indemnifying Party to assume
the defense of any such claim or any litigation resulting therefrom, provided
that counsel for the Indemnifying Party, who shall conduct the defense of such
claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not be unreasonably withheld), and the
Indemnified Party may participate in such defense at the

                                       10
<PAGE>

Indemnified Party's sole expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 7 unless such failure
is prejudicial to the ability of Indemnifying Party to defend such claim or
action. Notwithstanding the foregoing, such Indemnified Party shall have the
right to employ its own counsel in any such litigation, proceeding or other
action if (i) the employment of such counsel has been authorized by the
Indemnifying Party, in its sole and absolute discretion, or (ii) the named
parties in any such claims (including any impleaded parties) include any such
Indemnified Party and the Indemnified Party and the Indemnifying Party shall
have been advised in writing (in suitable detail) by counsel to the Indemnified
Party either (A) that there may be one or more legal defenses available to such
Indemnified Party which are different from or additional to those available to
the Indemnifying Party, or (B) that there is a conflict of interest by virtue of
the Indemnified Party and the Indemnifying Parties having common counsel, in any
of which events, the legal fees and expenses of a single counsel for all
Indemnified Parties with respect to each such claim, defense thereof, or
counterclaims thereto shall be borne by Indemnifying Party. No Indemnifying
Party, in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability in respect to such claim or litigation. Each Indemnified Party
shall cooperate to the extent reasonably required and furnish such information
regarding itself or the claim in question as an Indemnifying Party may
reasonably request in writing and as shall be reasonably required in connection
with defense of such claim and litigation resulting therefrom.

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

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

         9. Exchange Act Compliance. So long as the Company remains subject to
the reporting requirements of the Exchange Act, the Company shall file the
reports required to be

                                       11
<PAGE>

filed by it under the Securities Act and the Exchange Act and the rules and
regulations adopted by the Commission thereunder, and will take all actions
reasonably necessary to enable holders of Registrable Securities to sell such
securities without registration under the Securities Act within the limitation
of the provisions of (a) Rule 144 under the Securities Act, as such Rule may be
amended from time to time, (b) Rule 144A under the Securities Act, as such Rule
may be amended from time to time, if applicable or (c) any similar rules or
regulations hereunder adopted by the Commission. Upon the request of any Holder
of Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements. After any sale
of Registrable Securities pursuant to the provisions of Rule 144 or 144A, the
Company will, to the extent allowed by law, cause any restrictive legends to be
removed and any transfer restrictions to be rescinded with respect to such
Registrable Securities. In order to permit a Holder to sell the same, if it so
desires, pursuant to Rule 144A promulgated by the Commission (or any successor
to such rule), the Company will comply with all rules and regulations of the
Commission applicable in connection with use of Rule 144A (or any successor
thereto). Prospective transferees of Registrable Securities that are Qualified
Institutional Buyers (as defined in Rule 144A) that would be purchasing such
Registrable Securities in reliance upon Rule 144A may request from the Company
information regarding the business, operations and assets of the Company. Within
five (5) business days of any such request, the Company shall deliver to any
such prospective transferee copies of annual audited and quarterly unaudited
financial statements of the Company and such other information as may be
required to be supplied by the Company for it to comply with Rule 144A.

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

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

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

                                       12
<PAGE>

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

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

         15. Notices. All notices, offers, acceptances and other communications
required or permitted to be given or to otherwise be made to any party to this
Agreement shall be deemed to be sufficient if contained in a written instrument
delivered by hand, first class mail (registered or certified, return receipt
requested), telecopier or overnight air courier guaranteeing next day delivery,
if to the Company, at 1140 Pearl Street, Boulder, Colorado 80302, Attention:
Chief Financial Officer, with a copy to Reed Guest, Esq., 94 Underhill Road,
Orinda, CA 94563, and if to the Shareholders, to Barry Andersen, 10508 Exeter
Ave. NE, Seattle, WA 98125, Gary Henderson, 5522 105th Ave NE, Kirkland, WA
98033, with a copy to Daniel M. Hendrickson, O'Shea Barnard Martin P.S., Suite
1500, 10900 NE 4th Street, Bellevue, WA 98004, or at such other address or
addresses as may have been furnished the Company in writing.

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

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

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

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

                  [Remainder of page intentionally left blank]

                                       13
<PAGE>

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

                                        INCENTRA SOLUTIONS, INC.

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

                                        THE SHAREHOLDERS

                                        /s/ Barry R. Andersen
                                        ---------------------
                                        Barry R. Andersen

                                        /s/ Gary L. Henderson
                                        ---------------------
                                        Gary L. Henderson

                                       14

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