Document:

Exhibit 10.7 

STOCK SALE AND PURCHASE AGREEMENT

          THIS
Agreement made and entered into this the 14th
day of August, 2007, by and between Incentra Solutions, Inc., a Nevada
corporation (“Purchaser”), and Paul Chopra (“Chopra”). 

          WHEREAS,
Purchaser desires to purchase all of the right, title and interest which Chopra
has or claims to have in Helio Solutions, Inc., a California corporation
(hereinafter “the Company”); 

          WHEREAS,
Chopra desires to sell all of his ownership in the Company to Purchaser;

          NOW,
THEREFORE, in consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

	
 

	
 

	
 

	
 

	
1.

	
Sale of
 Stock. Subject to the conditions precedent set forth
 in Paragraph 3 hereof, Chopra does hereby agree to sell, convey and transfer
 to Purchaser, and Purchaser does hereby agree to purchase all of Chopra’s
 right, title and interest in the Company, including the 713,333 shares of the
 Company evidenced by stock certificate numbers 4 and 5 (hereinafter “Helio
 Stock”) at the purchase price set forth in Paragraph 2 below.

	
 

	
 

	
2.

	
Purchase
 Price. (a) The total purchase price to be paid by
 Purchaser for the Helio Stock and any other interests of Chopra in the
 Company shall be $2,370,000.00 plus 1,000,000 shares of unregistered
 Purchaser Common Stock. The Purchase Price due Chopra shall be paid to Chopra
 at Closing as follows:

	
 

	
 

	
 

	
 

	
(i)

	
cash in the
 amount of $1,600,000.00 (the “Cash Consideration”);

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
an unsecured
 convertible promissory note in the amount of $770,000.00, bearing interest at
 the rate of 8% per annum, in the form attached hereto as 

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Exhibit A
 (the “Convertible Note”); and

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
1,000,000
 shares of unregistered Common Stock of Purchaser (the “Purchase Consideration
 Stock”).

	
 

	
 

	
 

	
 

	
 

	
(b) If, after the date hereof and prior to the Closing, the
 outstanding shares of Purchaser Common Stock shall be changed into a
 different number, class or series of shares by reason of any
 reclassification, recapitalization or combination, forward stock split,
 reverse stock split, stock dividend or rights issued in respect of such
 stock, or any similar event shall occur (any such action, an “Adjustment Event”),
 the Purchase Consideration Stock shall be adjusted correspondingly to
 obligate Purchaser to issue, and provide to Chopra the right to receive, the
 number of shares of Purchaser Common Stock or other securities or property of
 Purchaser to which a holder of the Purchase Consideration Stock would have
 been entitled on the occurrence of such Adjustment Event. Notwithstanding the foregoing provision,
 the aggregate amount of the Cash Consideration and the principal amount of
 the Convertible Note shall not change under any circumstances.

	
 

	
 

	
 

	
 

	
3.

	
Conditions
 Precedent to Sale. 

	
 

	
 

	
 

	
 

	
          (a)
 The obligation of Purchaser to purchase the Helio Stock and all other
 interests of Chopra in the Company pursuant to this Agreement is specifically
 subject to and conditioned on the following:

	
 

	
 

	
 

	
 

	
 

	
(i)

	
A Settlement
 Agreement and Mutual Release in the form attached hereto as Exhibit B shall
 have been entered into by all of the parties to each of Case No. CIV 462802,
 Superior Court of California, County of San Mateo (Chopra v. Helio Solutions,
 Inc., et. al.) and Case No. 1-06-CV-062181, Superior Court of 

	
 

	
 

	
 

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California,
 County of Santa Clara (Chopra v. Helio Solutions, Inc., et. al.), any and all
 contingencies or conditions of such Mutual Release and Settlement Agreement
 shall have been satisfied, and Chopra’s counsel in the aforesaid cases shall
 have executed and delivered to Helio’s counsel in the aforesaid cases
 Requests for Dismissal with Prejudice in accordance with Paragraph 2 of the
 Settlement Agreement and Mutual Release.

	
 

	
 

	
 

	
 

	
(ii)

	
Purchaser
 and Chopra shall have entered into a Registration Rights Agreement in the
 form attached hereto as Exhibit C and made a part hereof (the “Registration
 Rights Agreement”).

	
 

	
 

	
 

	
 

	
(iii)

	
Each of the
 other parties thereto has waived any and all rights which each of them may
 have under the Entity Purchase Buy-Sell Agreement between such parties, dated
 May 3, 2001 related to the purchase and sale of stock in the Company, and
 they shall have consented to the transfer and conveyance of the Helio Stock
 contemplated by this Agreement notwithstanding any of the provisions or
 restrictions contained in said Entity Purchase Buy-Sell Agreement.

	
 

	
 

	
 

	
 

	
(iv)

	
Purchaser
 shall have acquired One Hundred Percent (100%) of the Company stock owned by
 other than Chopra (the “Helio Majority Stock”) prior to or concurrently with
 the Closing under this Agreement.

	
 

	
 

	
 

	
          (b)
 The obligation of Chopra to sell the Helio Stock to Purchaser and perform
 Chopra’s other obligations hereunder shall be subject to and conditioned
 upon:

	
 

	
 

	
 

	
 

	
(i)

	
Delivery to
 Chopra at Closing of the Cash Consideration, the Convertible Note and the
 Purchase Consideration Stock;

	
 

	
 

	
 

	
 

	
(ii)

	
Purchaser
 and Chopra shall have entered into a Registration Rights Agreement in 

	
 

	
 

	
 

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the form
 attached hereto as Exhibit C and made a part hereof (the “Registration Rights
 Agreement”); and

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
Delivery to
 Chopra of an officer’s certificate from Purchaser in the form attached hereto
 as Exhibit D and made a part hereof certifying that the Board of Directors of
 Purchaser has approved the purchase of the Helio Stock and other transactions
 contemplated hereunder.

	
 

	
 

	
 

	
 

	
4.

	
Chopra
 Representations and Warranties. As of the date
 hereof and on the Closing Date, Chopra warrants and represents as follows:

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Chopra has
 the full right, power and legal authority to sell, convey and transfer the
 Helio Stock and has not assigned or granted any rights in or to the Helio
 Stock;

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Chopra is an
 “accredited investor” as defined in Rule 501(a)(5) or (6) under the
 Securities Act of 1933, as amended (the “Securities Act”);

	
 

	
 

	
 

	
 

	
 

	
(c)

	
Chopra is
 acquiring the shares of Purchaser Common Stock to be issued hereunder for
 investment for his own account, and not for the account of another person and
 not with a view to, or for sale in connection with, any distribution,
 assignment, or resale of any part thereof in violation of the Securities Act,
 nor with any present intention of any such distribution, assignment, or
 resale. Chopra understands that the shares of Purchaser Common Stock to be
 issued to him hereunder have not been and will not be, registered in the
 United States under the Securities Act or applicable state securities laws,
 and may not be sold, hypothecated or otherwise disposed of unless
 subsequently registered under the Securities Act and applicable state
 securities laws or unless disposed of in a 

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transaction
 exempt from such laws, such as in compliance with Rule 144 promulgated by the
 SEC, and that certificates representing the shares of Purchaser Common Stock
 shall bear legends to this effect. Chopra understands that Purchaser’s
 issuance of shares of Purchaser Common Stock contemplated by this Agreement
 is intended to be exempt from the registration provisions of the Securities
 Act, the availability of which depends upon, among other things, the bona
 fide nature of the investment intent and the accuracy of Chopra’s
 representations as expressed herein. Chopra is not a party to nor bound by
 any agreement regarding the ownership or disposition of the shares of
 Purchaser Common Stock other than this Agreement. 

	
 

	
 

	
 

	
 

	
 

	
(d)

	
Chopra has
 made independent investigation of Purchaser and related matters as (i) he
 deems to be necessary or advisable in connection with his investment in and
 acceptance of the shares of Purchaser Common Stock to be issued to him
 hereunder and (ii) he believes to be necessary in order to reach an informed
 decision as to the advisability of making an investment in and accepting the
 shares of Purchaser Common Stock to be issued to him hereunder. Without
 limiting the foregoing, Chopra has reviewed Purchaser’s publicly-available
 SEC filings. In evaluating his investment in and acceptance of the shares of
 Purchaser Common Stock to be issued to him hereunder, Chopra has not relied
 upon any representation or other information (oral or written) other than as
 set forth in this Agreement or in such Purchaser SEC filings.

	
 

	
 

	
 

	
 

	
 

	
(e)

	
Chopra has
 such knowledge and experience in financial and business matters that he is
 capable of evaluating the merits and risks of his investment in the Purchaser

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Common Stock
 as contemplated by this Agreement, and is able to bear the economic risk of
 such investment for an indefinite period of time. Chopra is not relying on
 Purchaser for advice with respect to economic considerations involved in his
 acquisition and acceptance of the shares of Purchaser Common Stock.

	
 

	
 

	
 

	
 

	
 

	
(f)

	
Chopra has
 not engaged any broker, investment banker, financial advisor, finder,
 consultant or other person who is entitled to any broker’s, finder’s,
 financial advisor’s or other similar fee, compensation or commission, however
 and whenever payable, in connection with the sale of the Helio Stock and the
 transactions contemplated by this Agreement and shall hold Purchaser harmless
 from any claims through Chopra for such fees.

	
 

	
 

	
 

	
 

	
5.

	
Purchaser
 Representations and Warranties. As of the date
 hereof and on the Closing Date, Purchaser warrants and represents as follows:

	
 

	
 

	
 

	
 

	
 

	
(a)

	
Purchaser is a corporation duly organized, validly existing and in
 good standing under the laws of the jurisdiction in which it is organized and
 has the requisite corporate power and requisite authority to carry on its
 business as presently being conducted. Purchaser is duly qualified or
 licensed to do business and is in good standing in each jurisdiction in which
 the nature of its business or the ownership, leasing or operation of its
 properties makes such qualification or licensing necessary, except for those
 jurisdictions where the failure to be so qualified or licensed or to be in
 good standing individually or in the aggregate would not reasonably be
 expected to have a Material Adverse Effect on Purchaser. For purposes of this
 Agreement, Material Adverse Effect shall mean any change, effect, event,
 circumstance, occurrence or state of facts that is, or which 

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reasonably could be expected to be, materially adverse to the
 business, assets, liabilities, condition (financial or otherwise), cash flows
 or results of operations of Parent and its subsidiaries, considered as an
 entirety.(b) The authorized capital
 stock of Purchaser consists of 200,000,000 shares of common stock, $.001 par
 value (the “Purchaser Common Stock”), and 5,000,000 shares of Series A
 Preferred Stock, par value $.001 per share, of Purchaser (“Purchaser
 Preferred Stock”). As of the date hereof: (i) 13,087,142 shares of
 Purchaser Common Stock were issued and outstanding and 5,000,000 shares of
 Parent Common Stock will be issued concurrently with the Closing as partial
 initial consideration for the Helio Majority Stock (as defined in Section 3(a)(iv)
 above; (ii) no shares of
 Purchaser Common Stock were held by Purchaser in its treasury; (iii) no
 shares of Purchaser Common Stock were held by subsidiaries of Purchaser; (iv)
 approximately 3,367,486 shares of Purchaser Common Stock were reserved for
 issuance pursuant to stock-based plans (such plans, collectively, the “Purchaser
 Stock Plans”), all of which are subject to outstanding employee stock
 options or other rights to purchase or receive Purchaser Common Stock granted
 under the Purchaser Stock Plans (collectively, “Purchaser Employee Stock
 Options”); (v) 964,286 shares of Purchaser Common Stock are reserved for
 issuance pursuant to convertible notes, (vi) 7,703,118 shares of Purchaser
 Common Stock were reserved for issuance pursuant to outstanding warrants. As
 of the date hereof, (w) 2,466,971 shares of Purchaser Preferred Stock were
 issued and outstanding; (x) no shares of Purchaser Preferred Stock were held
 by Purchaser in its treasury; (y) no shares of Purchaser Preferred Stock were
 held by subsidiaries of Purchaser; 

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and (z) 16,551 shares of Purchaser Preferred Stock were reserved for
 issuance pursuant to outstanding warrants. (c)  All outstanding shares of capital stock of Purchaser have been,
 and all shares thereof which may be issued pursuant to this Agreement or
 otherwise (including upon the conversion of the Convertible Note) will be,
 when issued, duly authorized and validly issued and are fully paid and
 nonassessable and are not subject to preemptive rights created by statute,
 the Purchaser’s articles of incorporation or any agreement to which Purchaser
 is a party or by which Purchaser may be bound. Except as set forth in this
 Section and except for changes since the date of this Agreement resulting
 from the exercise of Purchaser’s employee stock options outstanding on such
 date, there are outstanding (i) no shares of capital stock or other voting
 securities of Purchaser, (ii) no securities of Purchaser convertible into or
 exchangeable for shares of capital stock or voting securities of Purchaser,
 and (iii) no options or other rights to acquire from Purchaser, other than
 Employee Stock Options, and no obligation of Purchaser to issue, any capital
 stock, voting securities or securities convertible into or exchangeable for
 capital stock of Purchaser. 

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(d)

	
Purchaser has a sufficient number of duly authorized but unissued
 shares of Purchaser Common Stock to issue the maximum number of such shares
 contemplated by Section 2 of this Agreement and upon conversion of the
 Convertible Note. The shares of Purchaser common stock to be issued and
 delivered hereunder will be duly and validly issued, fully paid and non-assessable,
 free and clear of all encumbrances.

	
 

	
 

	
 

	
 

	
(e)

	
Purchaser
 has the corporate power and authority to execute, deliver and perform this
 Agreement and the other agreements to be executed and delivered by Purchaser
 in connection herewith and to consummate the transactions contemplated hereby
 and thereby. All corporate acts and proceedings required to be taken by or on
 the part of Purchaser to authorize Purchaser to execute, deliver and perform
 this Agreement and the other agreements to be executed and delivered by
 Purchaser in connection herewith and to consummate the transactions
 contemplated hereby and thereby have been duly and validly taken. This
 Agreement constitutes a valid and binding agreement, and the other agreements
 to be executed and delivered by Purchaser in connection herewith when so
 executed and delivered will constitute valid and binding agreements, of
 Purchaser.

	
 

	
 

	
 

	
 

	
(f)

	
Neither the
 execution nor delivery of this Agreement nor the consummation or performance
 of any of the transactions contemplated herein will, directly or indirectly
 (with or without notice or lapse of time):

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(i)

	
Breach (a)
 any provision of any of the governing documents of Purchaser or (b) any
 resolution adopted by the Board of Directors or the Shareholders of
 Purchaser; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(ii)

	
Breach or
 give any Governmental Entity or other Person the right to challenge any of
 the transactions contemplated herein, or to exercise any remedy or obtain any
 relief under any rule, ordinance, contract, order, decree, or agreement under
 any legally binding arrangement to which Purchaser is subject;

	
 

	
 

	
 

	
 

	
 

	
 

	
(iii)

	
Contravene,
 conflict with or result in a violation or breach of any of the terms or
 requirements of, or give any Governmental Entity the right to revoke, withdraw,
 suspend, cancel, terminate or modify, any Permit or governmental
 authorization that is held by Purchaser or that otherwise relates to the
 business of Purchaser; 

	
 

	
 

	
 

	
 

	
 

	
 

	
(iv)

	
Result in a
 violation or Breach of, or constitute a default under, any of the terms,
 conditions or provisions of any agreement or other instrument or obligation
 to which Purchaser is a party or by which Purchaser or any of its properties
 or assets may be bound, specifically including but not limited to agreements
 between Purchaser and Laurus Master Fund or its affiliates; and

	
 

	
 

	
 

	
 

	
 

	
 

	
(v)

	
Purchaser is
 current with respect to filings required to be made by it with the SEC except
 for that Form 8-K/A due to be filed including the historical audited
 financial statements of Network System Technologies, Inc., a wholly owned
 subsidiary of Purchaser, a delinquency for which 

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Purchaser is
 entitled to relief that Purchaser is in the process of obtaining, and a
 delinquency which has no impact on Purchaser’s ability to register securities
 for resale by Chopra and which does not affect Purchaser’s filing status or
 standing on the OTC Bulletin board.

	
 

	
 

	
 

	
 

	
(g)

	
Purchaser
 has not engaged any broker, investment banker, financial advisor, finder,
 consultant or other person other than Pagemill Partners, LLC who is entitled
 to any broker’s, finder’s, financial advisor’s or other similar fee,
 compensation or commission, however and whenever payable, in connection with
 the purchase of the Helio Stock and the transactions contemplated by this
 Agreement. Purchaser shall be solely responsible for any fees charged by
 Pagemill Partners, LLC, and shall hold Chopra harmless from any claims
 through Purchaser for such fees, and from broker’s, finder’s, financial
 advisor’s or other similar fees of any other person claiming through
 Purchaser.

	
 

	
 

	
 

	
 

	
6.

	
Release.

	
 

	
 

	
 

	
 

	
 

	
(a)

	
For and in
 consideration of the sums specified in this Agreement and the performance of
 all other terms, conditions and covenants of this Agreement, and other good
 and valuable consideration, the receipt and sufficiency of which is hereby
 acknowledged, effective as of the Closing, Chopra releases and forever
 discharges Purchaser, its officers, directors, employees, agents and
 attorneys from any and all claims, demands, actions, causes of action,
 injuries and damages, of any kind known or unknown existing, arising out of
 or in any way connected with (i) Purchaser’s purchase of the Helio Stock
 and/or any other interests in or to Helio, whether owned by Chopra or others,
 and (ii) otherwise related to Helio and/or his ownership therein and accruing
 on or prior to the Closing Date; 

	
 

	
 

	
 

	
 

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provided,
 however, such release shall not apply if Purchaser fails to perform its
 obligations under this Agreement, the Registration Rights Agreement and/or
 the Convertible Note.

	
 

	
 

	
 

	
 

	
 

	
(b)

	
Chopra
 acknowledges that there is a risk that, subsequent to the execution of this
 Agreement, he may incur, suffer or sustain injury, loss, damages, costs,
 attorney’s fees, expenses, or any of these, which are in some way caused by
 and/or connected with the parties hereto; or which are unknown and
 unanticipated at the time this Agreement is signed, or which are not
 presently capable of being ascertained. Chopra further acknowledges that
 there is a risk that such damages as are known may become more serious than
 he now expects or anticipates. Nevertheless, Chopra acknowledges that this
 Agreement has been negotiated and agreed upon in light of those risks and he
 hereby expressly waives all rights he may have in any such unknown claims and
 assumes the risk that the facts and law pertaining to the matters referred to
 in 6(a) above may change or be different than is now known to him. In so
 doing, Chopra has had the benefit of counsel, and has been advised of, understands,
 and knowingly and specifically waives his rights under California Civil Code
 Section 1542 which provides as follows:

	
 

	
 

	
 

	
 

	
A general release does not extend to claims which the creditor does

 not know or suspect to exist in his or her favor at the time of
 executing the
 Release, which if known by him or her, must have
 materially affected his or
 her settlement with the debtor.

	
 

	
 

	
 

	
 

	
7.

	
Closing
 Date. The Closing Date shall be at a time agreed
 upon by the parties which shall be concurrent with or as soon as practicable
 after the closing of Purchaser’s acquisition of the Helio Majority Stock. At
 the Closing, all documents shall be executed and funds 

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delivered as
 is necessary to complete such purchase. A stock certificate or certificates
 representing the Purchaser Common Stock to be issued to Chopra shall be
 delivered at Closing.

	
 

	
 

	
8.

	
The parties
 shall, contemporaneously herewith or hereafter, execute such additional
 documents as may be reasonably necessary to evidence or effectuate the terms
 of this Agreement.

	
 

	
 

	
9.

	
No action or
 failure to act by the parties hereto shall constitute a waiver of any right
 or duty afforded them hereunder, nor shall any such action or failure to act
 constitute an approval of or acquiescence in any breach hereunder, except as
 may be specifically agreed in writing.

	
 

	
 

	
10.

	
This
 Agreement, and any of its terms, conditions and provisions may be modified,
 amended, altered, supplemented, added to, canceled or terminated only by
 mutual agreement in writing signed by all the parties hereto. 

	
 

	
 

	
11.

	
This
 Agreement constitutes the entire agreement between the parties and supersedes
 and replaces any and all other negotiations, conversations, understandings
 and/or agreements, written, oral, implied or otherwise.

	
 

	
 

	
12.

	
This
 Agreement may be executed in multiple counterparts, each of which shall be
 deemed an original hereof, but all such multiple counterparts shall
 constitute but a single instrument. This Agreement may be executed by
 facsimile copy.

	
 

	
 

	
13.

	
The rights,
 obligations, guarantees, warranties, representations and agreements set forth
 in this Agreement shall survive the closing of the sale contemplated by this
 Agreement and the payment of funds hereunder, shall not be affected by any
 reviews, audits, and/or searches performed by or on behalf of Purchaser prior
 to said closing, and shall be 

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binding on
 and inure to the benefit of the heirs, personal representatives, successors
 and assigns of all the parties hereto.

	
 

	
 

	
14.

	
If it
 becomes necessary for any party to enforce this contract by employing an
 attorney, such party shall be entitled to collect reasonable attorney’s fees,
 and court costs from the non-performing party.

	
 

	
 

	
15.

	
This
 Agreement shall be governed by the laws of the State of California without
 regard to its conflicts of laws provisions, notwithstanding the fact that one
 or more of the parties to this Agreement is now or may become a resident or
 citizen of a different state. The invalidity, illegality, or unenforceability
 of any particular provision of this Agreement shall not affect the other
 provisions, and this Agreement shall be construed in all respects as if such
 invalid, illegal, or unenforceable provision had been omitted.

IN WITNESS WHEREOF, the parties
hereto have executed this Agreement on the date set forth above.

	
 

	
 

	
 

	
 

	
CHOPRA

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
   Paul Chopra

	
 

	
 

	
 

	
 

	
INCENTRA
SOLUTIONS, INC.

	
 

	
 

	
 

	
 

	
By:

	
 

	
 

	
 

	

	
 

	
 

	
  Thomas P.
 Sweeney III

	
 

	
 

	
  Chief
 Executive Officer

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EXHIBIT A

CONVERTIBLE
PROMISSORY NOTE

- 15 -

EXHIBIT B

SETTLEMENT
AGREEMENT AND MUTUAL RELEASE

-16-

EXHIBIT C

REGISTRATION
RIGHTS AGREEMENT

-17-

EXHIBIT
D

PURCHASER OFFICER’S CERTIFICATE

-18-Exhibit 10.8

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THIS
NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES
LAWS.

CONVERTIBLE PROMISSORY NOTE

	
  

 	
  

 
	
 $770,000

 	
 August 14,

 2007

 

          FOR
VALUE RECEIVED, Incentra Solutions, Inc., a Nevada corporation (the “Company”)
and any successor corporation to the Company, hereby promises to pay to the
order of PAUL CHOPRA and his assigns (together with his assigns, “Payee”), the
principal amount of Seven Hundred
Seventy Thousand Dollars ($770,000) on the terms set forth below. The
Company promises to pay interest on the principal amount of this Note in
arrears from and including the date hereof on the principal balance from time
to time outstanding, computed daily, at an annual rate of eight percent (8%).
Interest shall be calculated on the basis of actual number of days elapsed over
a year of 360 days. Notwithstanding any other provision of this Note, the
holder hereof does not intend to charge and the Company shall not be required
to pay any interest or other fees or charges in excess of the maximum permitted
by applicable law; any payments in excess of such maximum shall be refunded to
the Company or credited to reduce principal hereunder. The Company may prepay
any or all principal and accrued interest due under this Note at any time, upon
ten (10) days prior notice to holder, without penalty. 

          Twelve
equal payments of principal and interest in the amount of Seventy Two Thousand
Eight Hundred Ninety Nine and 95/100 Dollars ($72,899.95) shall be due and
payable without notice or demand, the first payment being due on November 14,
2007, and the eleven remaining payments being due on the 14th day of each
February, May, August and November during the period beginning on February 14,
2008 and ending on August 14, 2010. For purposes of this Note, each such date
on which payment is due shall be referred to as a “Payment Due Date”. Payments
shall be made by wire transfer of immediately available United States federal
funds sent to an account or accounts designated by the holder in accordance
with the instructions furnished to the Company for that purpose. 

          Upon
the happening of any of the following events, each of which shall constitute a
default hereunder (herein referred to as an “Event of Default”), the entire
unpaid principal balance and accrued interest evidenced by this Note and all
other liabilities of the Company to

the Payee
evidenced by this Note, shall thereupon or thereafter, at the option of the
Payee, without notice or demand, become due and payable: (a) failure of the
Company to pay in full, within ten (10) days after the applicable due date
hereof, any installment of principal and/or interest under this Note or any
other charge or liability hereunder; (b) failure of the Company to perform any
other agreement hereunder; (c) the Company shall make an assignment for the
benefit of creditors; (d) the Company shall petition or apply to any court or
other tribunal for the appointment of a custodian, receiver or any trustee or
shall commence any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect; (e) if there shall have
been filed any such petition or application, or any such proceeding shall have
been commenced against the Company in which an order for relief is entered or
which remains undismissed for a period of sixty (60) days or more; (f) the
Company by any act or omission shall indicate consent to, approval of or fail
to timely object to any such petition, application or proceeding or order for
relief or the appointment of a custodian, receiver or any trustee or shall
suffer any such custodianship, receivership or trusteeship to continue
undischarged for a period of sixty (60) days or more; (g) the Company shall
have made or suffered a transfer of any of its property in contravention of any
bankruptcy, fraudulent conveyance or similar law; or shall have made any
transfer of its property to or for the benefit of a creditor at a time when
other creditors similarly situated have not been paid; or (h) the taking of
possession of any substantial part of the property of the Company at the
instance of any governmental authority. 

          This
Note constitutes the “Promissory Note” described in that certain Stock Purchase
Agreement dated August 14, 2007
(the “Purchase Agreement”), by and among the Company and Payee, and is entitled
to all of the benefits of the Purchase Agreement and the Registration Rights
Agreement. Unless defined herein, capitalized terms used herein that are
defined in the Purchase Agreement have the meaning given to such terms in the
Purchase Agreement.

          The
Company agrees to pay all costs, charges and expenses incurred by the Payee and
its assigns (including, without limitation, costs of collection, court costs,
and reasonable attorneys’ fees and disbursements) in connection with the
successful enforcement of the Payee’s rights under this Note (all such costs,
fees and expenses being herein referred to as “Costs”). The Company hereby
expressly waives presentment, demand, and protest, notice of demand, dishonor
and nonpayment of this Note, and all other notices or demands of any kind in
connection with the delivery, acceptance, performance, default or enforcement
hereof. The rights and remedies of the holder as provided herein shall be
cumulative and concurrent and in addition to any other rights the Payee may
have at law, in equity or otherwise, and may be pursued singularly,
successively or together at the sole discretion of the holder and may be
exercised as often as occasion therefor shall occur. The Company agrees that
any delay or failure on the part of the Payee in exercising any rights or
remedies hereunder will not operate as a waiver of such rights, and further
agrees that any payments and prepayments received hereunder will be applied
first to Costs, then to interest and the balance to principal. The Payee shall
not by any act, delay, omission or otherwise be deemed to have waived any of
its rights or remedies, and no waiver of any kind shall be valid unless in
writing and signed by the party or parties waiving such rights or remedies. All
payments under this Note shall be made without counterclaim, offset or defense
of any kind. 

 2

          This
Note will be registered on the books of the Company or its agent as to
principal and interest. This Note applies to, inures to the benefit of, and
binds the successors and assigns of the parties hereto; provided however that
the Company shall not assign this Note without the prior written consent of the
Payee. Any transfer of this Note will be effected only by surrender of this
Note to the Company and reissuance of a new note to the transferee. The Payee
and any subsequent holder of this Note receives this Note subject to the
foregoing terms and conditions, and agrees to comply with the foregoing terms
and conditions for the benefit of the Company and any other Payees.

          Any
notice required or permitted under this Note shall be in writing and shall be
deemed to have been given on the date of delivery, if personally delivered to
the party to whom notice is to be given, or on the third business day after
mailing, if mailed to the party to whom notice is to be given, by certified
mail, return receipt requested, postage prepaid, and addressed as follows: 

          if
to the Company, at

	
  

 	
  

 
	
  

 	
 Incentra
 Solutions, Inc.

 1140 Pearl Street

 Boulder, CO 80302

 Attn: Chief Executive Officer

 

and, if to the
holder, at the most recent address provided to the Company by the holder for
such purpose; or, in each case, to the most recent address, specified by
written notice, given to the sender pursuant to this paragraph.

          Without
limiting any of Payee’s rights under this Note, Payee shall have the right,
which right may be exercised at Payee’s sole and absolute discretion, at any
time to convert (the “Conversion”) all or any portion of the principal and/or
accrued but unpaid interest then outstanding under this Note into such number
of fully paid and nonassessable shares of the common stock, par value $.001 per
share, of the Company (the “Company Common Stock”), as shall be provided
herein. For purposes of this Note, the price at which each share of Company
Common Stock may be acquired upon any Conversion shall be $1.00 (the
“Conversion Price”). Payee may exercise the Conversion right hereunder by
giving written notice (the “Conversion Notice”) to the Company of the exercise
of such right and stating the name or names in which the stock certificate or
stock certificates for the shares of Company Common Stock are to be issued and
the address to which such certificates shall be delivered. If prepayment of
principal and/or interest is permitted under this Note, then the Company shall
provide Payee at least ten (10) days’ advance written notice (each, a
“Prepayment Notice”) of any proposed prepayment (each, a “Proposed Prepayment”)
specifying the date of prepayment (each, a “Prepayment Date”) and the amounts
that are proposed to be prepaid. In addition to the conversion rights set forth
above, the Payee shall have the right, which right may be exercised at Payee’s
sole and absolute discretion, to convert (a “Prepayment Conversion”) all or any
portion of such Proposed Prepayment amount to shares of the Company Common
Stock at a conversion price equal to $1.00 (the “Prepayment Conversion Price”).
Payee may exercise the Prepayment Conversion right hereunder as to any Proposed
Prepayment by giving written notice (the “Prepayment Conversion Notice”) to the
Company of the exercise of such right at any time during the ten (10) day
period after the date on which Payee receives the Prepayment Notice (the
“Prepayment

3

Conversion
Exercise Period”) and stating the name or names in which the stock certificate
or stock certificates for the shares of Company Common Stock are to be issued
and the address to which such certificates shall be delivered. The number of
shares of Company Common Stock that shall be issuable upon conversion of the
Note shall equal the amount of principal and/or interest requested by Payee to
be converted (the “Conversion Amount”) divided by the Conversion Price (or the
Prepayment Conversion Price, as applicable) in effect on the date the
Conversion Notice (or the Prepayment Conversion Notice, as applicable) is given
(the “Conversion Date”). Within ten (10) business days after the Conversion
Date, the Company shall issue and deliver by hand against a signed receipt
therefor or by United States registered mail, return receipt requested, to the
address designated in the Conversion Notice (or the Prepayment Conversion
Notice, as applicable), a stock certificate or stock certificates of the
Company representing the number of shares of Company Common Stock to which
Payee is entitled and, in exchange for this Note, an executed replacement
Convertible Promissory Note representing the balance of the Note not converted
into shares of Company Common Stock. Any Conversion of principal hereunder shall
be applied to the remaining installments of principal in the order of their
maturities, and the payment schedule of the replacement Convertible Promissory
Note shall reflect such application. In the case of any capital reorganization,
reclassification or recapitalization of, including but not limited to any stock
split or stock dividend issued in respect of, the Company Common Stock, then
the conversion privilege in effect immediately before such action shall be
adjusted so that the Payee may receive the kind and amount of shares of stock
and other securities and property receivable upon such reorganization,
reclassification or recapitalization by a holder of the number of shares of
Company Common Stock into which this Note could have been converted immediately
prior to such reorganization, reclassification or recapitalization; and any
such resulting or surviving corporation shall expressly assume the obligation
to deliver, upon the exercise of the conversion privilege, such shares,
securities or property as the Payee may be entitled to and to make provisions
for the protection of the conversion rights as herein provided. In case
securities or property other than shares of Company Common Stock shall be
issuable or deliverable upon conversion as aforesaid, then all references in
this Note to the Company Common Stock shall be deemed to apply, so far as
appropriate and as nearly as practicable, to such other securities or property.
The Company will not, by amendment of its Organizational Documents or through any
reorganization, transfer of assets, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Company but will at all times in good faith assist in the carrying out of all
the provisions of this Note and in the taking of all such action as may be
necessary or appropriate in order to protect the conversion rights of the Payee
against impairment. No fractional shares of the Company Common Stock are to be
issued upon the Conversion (or the Prepayment Conversion, as applicable) of
this Note. In lieu of delivering any fractional shares to which the Payee would
otherwise be entitled, the number of shares of Company Common Stock shall be
rounded to the nearest whole number. The Company warrants and agrees that it
shall at all times reserve and keep available, free from preemptive rights,
sufficient authorized and unissued shares of Company Common Stock sufficient to
effect Conversion (or Prepayment Conversion, as applicable) of this Note.
Notwithstanding anything contained herein, any portion of the payment which is
due on a Payment Due Date or a Prepayment Date, as applicable, that is not
converted by Payee pursuant this provision shall be paid in full to Payee on
such Payment Due Date or Prepayment Date, as applicable.

4

          This
Note is made under and shall be governed by and construed in accordance with
the internal laws of, and enforced by the courts located within, the State of
Colorado.

          IN
WITNESS WHEREOF, the Company has executed this Note under seal as of the date
first written above.

	
  

 	
  

 	
  

 
	
  

 	
 INCENTRA
 SOLUTIONS, INC.

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
  

 
	
  

 	
  

 	
 

 
	
  

 	
  

 	
 Thomas P.
 Sweeney III

 
	
  

 	
  

 	
 Chief
 Executive Officer

 

5

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