Document:

Unassociated Document

     

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

     

    Right
      to
      Purchase up to 350,000 Shares of Common Stock of

    Incentra
      Solutions, Inc.

    (subject
      to adjustment as provided herein)

     

    COMMON
      STOCK PURCHASE WARRANT

     

    
      	
              No.
                _________________

            	
              Issue
                Date: December 28, 2007

            

    

    

    INCENTRA
      SOLUTIONS, INC., a corporation organized under the laws of the State of Nevada
      (“ICNS”), hereby certifies that, for value received, VALENS U.S. SPV I, LLC, or
      assigns (the “Holder”), is entitled, subject to the terms set forth below, to
      purchase from the Company (as defined herein) from and after the Issue Date
      of
      this Warrant and at any time or from time to time before 5:00 p.m., New York
      time, through the close of business December 28, 2027 (the “Expiration Date”),
      up to 350,000 fully paid and nonassessable shares of Common Stock (as
      hereinafter defined), at the applicable Exercise Price (as defined below) per
      share. The number and character of such shares of Common Stock and the
      applicable Exercise Price per share are subject to adjustment as provided
      herein.

     

    As
      used
      herein the following terms, unless the context otherwise requires, have the
      following respective meanings: 

     

    (a) The
      term
“Company” shall include ICNS and any corporation which shall succeed, or assume
      the obligations of, ICNS hereunder. 

     

    (b) The
      term
“Common Stock” includes (i) the Company’s Common Stock, par value $0.001 per
      share; and (ii) any other securities into which or for which any of the
      securities described in (a) may be converted or exchanged pursuant to a plan
      of
      recapitalization, reorganization, merger, sale of assets or
      otherwise.

     

    (c) The
      term
“Other Securities” refers to any stock (other than Common Stock) and other
      securities of the Company or any other person (corporate or otherwise) which
      the
      Holder of this Warrant at any time shall be entitled to receive, or shall have
      received, on the exercise of the Warrant, in lieu of or in addition to Common
      Stock, or which at any time shall be issuable or shall have been issued in
      exchange for or in replacement of Common Stock or Other Securities pursuant
      to
      Section 4 or otherwise. 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d) The
      “Exercise Price” applicable under this Warrant shall be $0.01.

     

    
      
        1.
          Exercise
          of Warrant.
          

      

    

     

    
      	 	
              1.1

            	
              Number
                of Shares Issuable upon Exercise.
                From and after the date hereof, the Holder shall be entitled to receive,
                upon exercise of this Warrant in whole or in part, by delivery of
                an
                original or fax copy of an exercise notice in the form attached hereto
                as
                Exhibit A (the “Exercise Notice”) up to 350,000 shares of Common Stock of
                the Company, subject to adjustment pursuant to Section
                4.

            

    

     

    
      	 	
              1.2

            	
              Fair
                Market Value.
                For purposes hereof, the “Fair Market Value” of a share of Common Stock as
                of a particular date (the “Determination Date”) shall mean:
                

            

    

     

    
      	 	
              (a)

            	
              If
                the Company’s Common Stock is traded on the American Stock Exchange or
                another national exchange or is quoted on the National or Capital
                Market
                of The Nasdaq Stock Market, Inc. (“Nasdaq”), then the closing or last sale
                price, respectively, reported for the last business day immediately
                preceding the Determination Date.

            

    

     

    
      	 	
              (b)

            	
              If
                the Company’s Common Stock is not traded on the American Stock Exchange or
                another national exchange or on the Nasdaq but is traded on the NASD
                Over-the-Counter Bulletin Board, then the mean of the average of
                the
                closing bid and asked prices reported for the last business day
                immediately preceding the Determination
                Date.

            

    

     

    
      	 	
              (c)

            	
              Except
                as provided in clause (d) below, if the Company’s Common Stock is not
                publicly traded, then as the Holder and the Company agree or in the
                absence of agreement by arbitration in accordance with the rules
                then in
                effect of the American Arbitration Association, before a single arbitrator
                to be chosen from a panel of persons qualified by education and training
                to pass on the matter to be
                decided.

            

    

     

    
      	 	
              (d)

            	
              If
                the Determination Date is the date of a liquidation, dissolution
                or
                winding up, or any event deemed to be a liquidation, dissolution
                or
                winding up pursuant to the Company’s charter, then all amounts to be
                payable per share to holders of the Common Stock pursuant to the
                charter
                in the event of such liquidation, dissolution or winding up, plus
                all
                other amounts to be payable per share in respect of the Common Stock
                in
                liquidation under the charter, assuming for the purposes of this
                clause
                (d) that all of the shares of Common Stock then issuable upon exercise
                of
                the Warrant are outstanding at the Determination
                Date.

            

    

     

    
      	 	
              1.3

            	
              Company
                Acknowledgment.
                The Company will, at the time of the exercise of this Warrant, upon
                the
                request of the Holder hereof, acknowledge in writing its continuing
                obligation to afford to such Holder any rights to which such Holder
                shall
                continue to be entitled after such exercise in accordance with the
                provisions of this Warrant. If the Holder shall fail to make any
                such
                request, such failure shall not affect the continuing obligation
                of the
                Company to afford to such Holder any such rights.
                

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	 	
              1.4

            	
              Trustee
                for Warrant Holders.
                In the event that a bank or trust company shall have been appointed
                as
                trustee for the Holder of this Warrant pursuant to Subsection 3.2,
                such
                bank or trust company shall have all the powers and duties of an
                Warrant
                agent (as hereinafter described) and shall accept, in its own name
                for the
                account of the Company or such successor person as may be entitled
                thereto, all amounts otherwise payable to the Company or such successor,
                as the case may be, on exercise of this Warrant pursuant to this
                Section
                1.

            

    

     

    2. Procedure
      for Exercise.

     

    
      	 	
              2.1

            	
              Delivery
                of Stock Certificates, Etc., on Exercise.
                The Company agrees that the shares of Common Stock purchased upon
                exercise
                of this Warrant shall be deemed to be issued to the Holder as the
                record
                owner of such shares as of the close of business on the date on which
                this
                Warrant shall have been surrendered and payment made for such shares
                in
                accordance herewith. As soon as practicable after the exercise of
                this
                Warrant in full or in part, and in any event within three (3) business
                days thereafter, the Company at its expense (including the payment
                by it
                of any applicable issue taxes) will cause to be issued in the name
                of and
                delivered to the Holder, or as such Holder (upon payment by such
                Holder of
                any applicable transfer taxes) may direct in compliance with applicable
                securities laws, a certificate or certificates for the number of
                duly and
                validly issued, fully paid and nonassessable shares of Common Stock
                (or
                Other Securities) to which such Holder shall be entitled on such
                exercise,
                plus, in lieu of any fractional share to which such Holder would
                otherwise
                be entitled, cash equal to such fraction multiplied by the then Fair
                Market Value of one full share, together with any other stock or
                other
                securities and property (including cash, where applicable) to which
                such
                Holder is entitled upon such exercise pursuant to Section 1 or
                otherwise.

            

    

     

    
      	 	
              2.2

            	
              Exercise.
                (a) Payment may be made either (i) in cash of immediately available
                funds
                or by certified or official bank check payable to the order of the
                Company
                equal to the applicable aggregate Exercise Price, (ii) by delivery
                of this
                Warrant, or shares of Common Stock and/or Common Stock receivable
                upon
                exercise of this Warrant in accordance with Section (b) below, or
                (iii) by
                a combination of any of the foregoing methods, for the number of
                Common
                Shares specified in such Exercise Notice (as such exercise number
                shall be
                adjusted to reflect any adjustment in the total number of shares
                of Common
                Stock issuable to the Holder per the terms of this Warrant); provided,
                however, that if at the time of delivery of an Exercise Notice the
                shares
                of Common Stock to be issued upon payment of the Exercise Price have
                been
                registered under the Securities Act of 1933, as amended (the “Securities
                Act”), and are covered by an effective registration statement under the
                Securities Act, payment of the Exercise Price may only be made pursuant
                to
                clause (i) above and may not be made pursuant to clause (ii) or (iii)
                above. Upon receipt by the Company of an Exercise Notice and proper
                payment of the aggregate Exercise Price, the Holder shall thereupon
                be
                entitled to receive the number of duly authorized, validly issued,
                fully-paid and non-assessable shares of Common Stock (or Other Securities)
                determined as provided herein. 

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

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

     

    
      	 	
              X=Y

            	
              (A-B)

            	 
	 	 	
              A

            	 

    

    

    
      	 	
              Where
                X =

               

            	
              the
                number of shares of Common Stock to be issued to the Holder

               

            
	 	
              Y
                =

               

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

               

            
	 	
              A
                =

               

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

               

            
	 	
              B
                =

               

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

               

            

    

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

     

    
      	 	
              3.1

            	
              Reorganization,
                Consolidation, Merger, Etc.
                In case at any time or from time to time, the Company shall (a) effect
                a
                reorganization, (b) consolidate with or merge into any other person,
                or
                (c) transfer all or substantially all of its properties or assets
                to any
                other person under any plan or arrangement contemplating the dissolution
                of the Company, then, in each such case, as a condition to the
                consummation of such a transaction, proper and adequate provision
                shall be
                made by the Company whereby the Holder of this Warrant, on the exercise
                hereof as provided in Section 1 at any time after the consummation
                of such
                reorganization, consolidation or merger or the effective date of
                such
                dissolution, as the case may be, shall receive, in lieu of the Common
                Stock (or Other Securities) issuable on such exercise prior to such
                consummation or such effective date, the stock and other securities
                and
                property (including cash) to which such Holder would have been entitled
                upon such consummation or in connection with such dissolution, as
                the case
                may be, if such Holder had so exercised this Warrant, immediately
                prior
                thereto, all subject to further adjustment thereafter as provided
                in
                Section 4.

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      	 	
              3.2

            	
              Dissolution.
                In the event of any dissolution of the Company following the transfer
                of
                all or substantially all of its properties or assets, the Company,
                concurrently with any distributions made to holders of its Common
                Stock,
                shall at its expense deliver or cause to be delivered to the Holder
                the
                stock and other securities and property (including cash, where applicable)
                receivable by the Holder of this Warrant pursuant to Section 3.1,
                or, if
                the Holder shall so instruct the Company, to a bank or trust company
                specified by the Holder and having its principal office in New York,
                NY as
                trustee for the Holder of this Warrant (the
                “Trustee”).

            

    

     

    
      	 	
              3.3

            	
              Continuation
                of Terms.
                Upon any reorganization, consolidation, merger or transfer (and any
                dissolution following any transfer) referred to in this Section 3,
                this
                Warrant shall continue in full force and effect and the terms hereof
                shall
                be applicable to the shares of stock and other securities and property
                receivable on the exercise of this Warrant after the consummation
                of such
                reorganization, consolidation or merger or the effective date of
                dissolution following any such transfer, as the case may be, and
                shall be
                binding upon the issuer of any such stock or other securities, including,
                in the case of any such transfer, the person acquiring all or
                substantially all of the properties or assets of the Company, whether
                or
                not such person shall have expressly assumed the terms of this Warrant
                as
                provided in Section 4. In the event this Warrant does not continue
                in full
                force and effect after the consummation of the transactions described
                in
                this Section 3, then the Company’s securities and property (including
                cash, where applicable) receivable by the Holders of the Warrant
                will be
                delivered to Holder or the Trustee as contemplated by Section
                3.2.

            

    

     

    4. Extraordinary
      Events Regarding Common Stock.
      In the
      event that the Company shall (a) issue additional shares of the Common Stock
      as
      a dividend or other distribution on outstanding Common Stock or any preferred
      stock issued by the Company, (b) subdivide its outstanding shares of Common
      Stock, or (c) combine its outstanding shares of the Common Stock into a smaller
      number of shares of the Common Stock (each of the preceding clauses (a) through
      (c), inclusive, an “Event”), then, in each such event, the number of shares of
      Common Stock that the Holder shall thereafter, on the exercise hereof as
      provided in Section 1, be entitled to receive shall be increased or decreased
      to
      a number determined by multiplying the number of shares of Common Stock that
      would, immediately prior to such Event, be issuable upon the exercise of this
      Warrant by a fraction of which (a) the numerator is the number of issued and
      outstanding shares of Common Stock immediately after such Event, and (b) the
      denominator is the number of issued and outstanding shares of Common Stock
      immediately prior to such Event.

     

    5. Certificate
      as to Adjustments.
      In each
      case of any adjustment or readjustment in the shares of Common Stock (or Other
      Securities) issuable on the exercise of this Warrant, the Company at its expense
      will promptly cause its Chief Financial Officer or other appropriate designee
      to
      compute such adjustment or readjustment in accordance with the terms of this
      Warrant and prepare a certificate setting forth such adjustment or readjustment
      and showing in detail the facts upon which such adjustment or readjustment
      is
      based, including a statement of (a) the consideration received or receivable
      by
      the Company for any additional shares of Common Stock (or Other Securities)
      issued or sold or deemed to have been issued or sold, (b) the number of shares
      of Common Stock (or Other Securities) outstanding or deemed to be outstanding,
      and (c) the Exercise Price and the number of shares of Common Stock to be
      received upon exercise of this Warrant, in effect immediately prior to such
      adjustment or readjustment and as adjusted or readjusted as provided in this
      Warrant. The Company will forthwith mail a copy of each such certificate to
      the
      Holder of this Warrant and any Warrant agent of the Company (appointed pursuant
      to Section 11 hereof).

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    10. Maximum
      Exercise.
      Notwithstanding anything herein to the contrary, in no event shall the Holder
      be
      entitled to exercise any portion of this Warrant in excess of that portion
      of
      this Warrant upon exercise of which the sum of (1) the number of shares of
      Common Stock beneficially owned by the Holder and its Affiliates (other than
      shares of Common Stock which may be deemed beneficially owned through the
      ownership of the unexercised portion of the Warrant or the unexercised or
      unconverted portion of any other security of the Holder subject to a limitation
      on conversion analogous to the limitations contained herein) and (2) the number
      of shares of Common Stock issuable upon the exercise of the portion of this
      Warrant with respect to which the determination of this proviso is being made,
      would result in beneficial ownership by the Holder and its Affiliates of any
      amount greater than 9.99% of the then outstanding shares of Common Stock
      (whether or not, at the time of such exercise, the Holder and its Affiliates
      beneficially own more than 9.99% of the then outstanding shares of Common
      Stock). As used herein, the term “Affiliate” means any person or entity that,
      directly or indirectly through one or more intermediaries, controls or is
      controlled by or is under common control with a person or entity, as such terms
      are used in and construed under Rule 144 under the Securities Act.   For
      purposes of the second preceding sentence, beneficial ownership shall be
      determined in accordance with Section 13(d) of the Securities Exchange Act
      of
      1934, as amended, and Regulations 13D-G thereunder, except as otherwise provided
      in clause (1) of such sentence. For any reason at any time, upon written or
      oral
      request of the Holder, the Company shall within one (1) business day confirm
      orally and in writing to the Holder the number of shares of Common Stock
      outstanding as of any given date.  The limitations set forth herein (x) may
      be waived by the Holder upon provision of no less than sixty-one (61) days
      prior
      written notice to the Company and (y) shall automatically become null and void
      following notice to the Company upon the occurrence and during the continuance
      of an Event of Default (as defined in the Security Agreement, dated as of
      February 6, 2006, by and among the Company, Laurus Master Fund, Ltd. (“Laurus”),
      the Holder, as partial assignee of Laurus, and the Eligible Subsidiaries defined
      therein).

     

    11. Restriction.
      Notwithstanding anything to the contrary contained herein, the Holder hereby
      agrees that during the period on and after the Issue Date and prior to the
      date
      that is the one year anniversary of the Issue Date, it shall not sell any Common
      Stock acquired upon exercise of this Warrant..

     

    12. Warrant
      Agent.
      The
      Company may, by written notice to the Holder of this Warrant, appoint an agent
      for the purpose of issuing Common Stock (or Other Securities) on the exercise
      of
      this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section
      7, and replacing this Warrant pursuant to Section 8, or any of the foregoing,
      and thereafter any such issuance, exchange or replacement, as the case may
      be,
      shall be made at such office by such agent.

     

    13. Transfer
      on the Company’s Books.
      Until
      this Warrant is transferred on the books of the Company, the Company may treat
      the registered Holder hereof as the absolute owner hereof for all purposes,
      notwithstanding any notice to the contrary.

     

    14. Rights
      of Shareholders.
      No
      Holder shall be entitled to vote or receive dividends or be deemed the holder
      of
      the shares of Common Stock or any other securities of the Company which may
      at
      any time be issuable upon exercise of this Warrant for any purpose (the “Warrant
      Shares”), nor shall anything contained herein be construed to confer upon the
      Holder, as such, any of the rights of a shareholder of the Company or any right
      to vote for the election of directors or upon any matter submitted to
      shareholders at any meeting thereof, or to give or withhold consent to any
      corporate action (whether upon the recapitalization, issuance of shares,
      reclassification of shares, change of nominal value, consolidation, merger,
      conveyance or otherwise) or to receive notice of meetings, or to receive
      dividends or subscription rights or otherwise, in each case, until the earlier
      to occur of (x) the date of actual delivery to Holder (or its designee) of
      the
      Warrant Shares issuable upon the exercise hereof or (y) the third business
      day
      following the date such Warrant Shares first become deliverable to Holder,
      as
      provided herein.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    15. Notices,
      Etc.
      All
      notices and other communications from the Company to the Holder of this Warrant
      shall be mailed by first class registered or certified mail, postage prepaid,
      at
      such address as may have been furnished to the Company in writing by such Holder
      or, until any such Holder furnishes to the Company an address, then to, and
      at
      the address of, the last Holder of this Warrant who has so furnished an address
      to the Company.

     

    16. Miscellaneous.
      This
      Warrant and any term hereof may be changed, waived, discharged or terminated
      only by an instrument in writing signed by the party against which enforcement
      of such change, waiver, discharge or termination is sought. This Warrant shall
      be governed by and construed in accordance with the laws of State of New York
      without regard to principles of conflicts of laws. Any action brought concerning
      the transactions contemplated by this Warrant shall be brought only in the
      state
      courts of New York or in the federal courts located in the state of New York;
      provided, however, that the Holder may choose to waive this provision and bring
      an action outside the State of New York. The individuals executing this Warrant
      on behalf of the Company agree to submit to the jurisdiction of such courts
      and
      waive trial by jury. The prevailing party shall be entitled to recover from
      the
      other party its reasonable attorneys' fees and costs. In the event that any
      provision of this Warrant is invalid or unenforceable under any applicable
      statute or rule of law, then such provision shall be deemed inoperative to
      the
      extent that it may conflict therewith and shall be deemed modified to conform
      with such statute or rule of law. Any such provision which may prove invalid
      or
      unenforceable under any law shall not affect the validity or enforceability
      of
      any other provision of this Warrant. The headings in this Warrant are for
      purposes of reference only, and shall not limit or otherwise affect any of
      the
      terms hereof. The invalidity or unenforceability of any provision hereof shall
      in no way affect the validity or enforceability of any other provision hereof.
      The Company acknowledges that legal counsel participated in the preparation
      of
      this Warrant and, therefore, stipulates that the rule of construction that
      ambiguities are to be resolved against the drafting party shall not be applied
      in the interpretation of this Warrant to favor any party against the other
      party.

     

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      SIGNATURE
        PAGE FOLLOWS]

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

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

     

    
      	 	 	
              INCENTRA
                SOLUTIONS, INC.

            
	 	 	 
	
              WITNESS:

            	 	 
	 	 	
              By:

            	/s/
              Matthew G. Richman
	 	 	
              Name:
                Matthew G. Richman

            
	/s/
              Matthew Wight	 	
              Title:
                Chief Corporate Development Officer, Treasurer, Asst.
                Secretary

            

    

     

    
      SIGNATURE
        PAGE TO

      COMMON
        STOCK PURCHASE WARRANT

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

     

    FORM
      OF SUBSCRIPTION

    (To
      Be
      Signed Only On Exercise Of Warrant)

     

    
      
        	
                TO:

              	
                INCENTRA
                  SOLUTIONS, INC.

              
	 	
                1140
                  Pearl Street

              
	 	
                Boulder,
                  CO 80302

              
	 	
                Attention:
                  Chief Financial Officer

              

      

    

     

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

     

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

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

            
	 

    

    

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

     

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

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

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

            
	 
	 

    

    

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

     

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

     

    
      	
              Dated:

            	 	 	 
	 	 	
              (Signature
                must conform to name of holder as specified on the face of the
                Warrant)

            
	 	 	 
	 	 	
              Address:

            	 
	 	 	 	 

    

    
      
         

        SIGNATURE
          PAGE TO

        COMMON
          STOCK PURCHASE WARRANTY

      

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    EXHIBIT
      B

     

    FORM
      OF TRANSFEROR ENDORSEMENT

    (To
      Be
      Signed Only On Transfer Of Warrant)

     

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

     

    
      	
               

              Transferees

            	 	
               

              Address

            	 	
              Percentage

              Transferred

            	 	
              Number

              Transferred

            
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 

    

    

    

    
      	
              Dated:

            	 	 	 
	 	 	
              (Signature
                must conform to name of holder as specified on the face of the
                Warrant)

            
	 	 	 
	 	 	
              Address:

            	 
	 	 	 	 

    

     

    
      	
               

            	
              SIGNED
                IN THE PRESENCE OF:

            
	 	 
	 	 
	 	
              (Name)

            
	
              ACCEPTED
                AND AGREED:

            	 
	
              [TRANSFEREE]

            	 
	 	 
	 	 
	 	 
	
              (Name)

            	 

    

    

    
      
        
        

      

      
        1Unassociated Document

    VALENS
      U.S. SPV I, LLC

    CALLIOPE
      CAPITAL CORPORATION

    335
      Madison Avenue, 10th Floor

    New
      York,
      New York 10017

    

    December
      28, 2007

    

    Incentra
      Solutions, Inc.

    1140
      Pearl Street

    Boulder,
      Colorado 80302

    Attention:
      Chief Financial Officer

    

    Re:
      Amendment of Existing Note

    

    Ladies
      and Gentlemen:

     

    Reference
      is made to (a) the Securities Purchase Agreement dated as of July 31, 2007
      by
      and between Incentra Solutions, Inc. (the “Company”)
      and
      Calliope Capital Corporation (“Calliope”)
      (as
      amended, restated, modified and/or supplemented from time to time, the
“SPA”);
      and
      (b) the Secured Term Note effective as of July 31, 2007 made by the Company
      in favor of Calliope in the original principal amount of $12,000,000 (as
      amended, restated, modified and/or supplemented from time to time, the
“Note”).
      Reference is further made to the fact that pursuant to one or more instruments
      of assignment, subsequent to July 31, 2007, Calliope assigned a portion of
      its
      interest in the Note, the SPA, any Related Agreements (as defined in the SPA)
      and collateral security therefor to Valens U.S. SPV I, LLC (“Valens”).

     

    The
      Company has requested that Calliope and Valens consent to amend the Note to
      change the beginning amortization date from February 1, 2008 to June 1, 2008
      on
      the condition that the Company enter into this letter agreement.

     

    In
      consideration of the foregoing and other good and valuable consideration, the
      receipt and sufficiency of which are hereby acknowledged, the Company hereby
      agrees to, and acknowledges, the following:

     

    The
      Note
      is amended to replace the text of Section 1.3 with the following:

     

    “Amortizing
      payments of the aggregate principal amount outstanding under this Note at any
      time (the “Principal
      Amount”)
      shall
      be made in cash by the Company on June 1, 2008 and on the first business day
      of
      each succeeding month thereafter through and including the Maturity Date (each,
      an “Amortization
      Date”).
      Commencing on the first Amortization Date, the Company shall make monthly
      payments to the Holder on each Amortization Date, each such payment in the
      amount of $285,714.28 together with any accrued and unpaid interest on such
      portion of the Principal Amount plus any and all other unpaid amounts which
      are
      then owing under this Note, the Purchase Agreement and/or any other Related
      Agreement (collectively, the “Monthly
      Amount”).
      Any
      outstanding Principal Amount together with any accrued and unpaid interest
      and
      any and all other unpaid amounts which are then owing by the Company to the
      Holder under this Note, the Purchase Agreement and/or any other Related
      Agreement shall be due and payable on the Maturity Date.”

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Except
      as
      specifically set forth herein, the SPA, the Note and the other Related
      Agreements (collectively, the “Agreements”)
      shall
      remain in full force and effect, and are hereby ratified and confirmed. The
      execution, delivery and effectiveness of this letter agreement shall not operate
      as a waiver of any right, power or remedy of Calliope or Valens, nor constitute
      a waiver of any provision of any of the Agreements, except to the extent
      expressly provided for herein. This letter agreement shall be binding upon
      and
      inure to the benefit of the parties hereto and their respective successors
      and
      assigns and shall be governed by and construed in accordance with the laws
      of
      the State of New York.

     

    [Remainder
      of Page Intentionally Left Blank; Signatures Appear on Following
      Page]

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    This
      letter agreement may be executed by the parties hereto in one or more
      counterparts, each of which shall be deemed an original and all of which when
      taken together shall constitute one and the same agreement. Any signature
      delivered by a party by facsimile or electronic transmission shall be deemed
      to
      be an original signature hereto.

    

    
      	
              Very
                truly yours,

            
	 
	
              CALLIOPE
                CAPITAL CORPORATION

            
	 
	
              By:

            	
              LAURUS
                CAPITAL MANAGEMENT,

            
	 	
              LLC,
                its investment manager 

            
	 	 	 
	
              By:
                

            	/s/
              Scott Bluestein
	 	
              Name:

            	Scott
              Bluestein
	 	
              Title:
                

            	
              Authorized
                Signatory

            
	 	 	 
	
              VALENS
                U.S. SPV I, LLC

            
	 
	
              By:

            	
              VALENS
                CAPITAL MANAGEMENT,

            
	 	
              LLC,
                its investment manager

            
	 	 	 
	
              By:

            	/s/
              Scott Bluestein
	 	
              Name:

            	Scott
              Bluestein
	 	
              Title:
                

            	
              Authorized
                Signatory

            

    

    

    Consented
      and Agreed to 

    this
      28th
      day of December, 2007:

    

    
      	
              INCENTRA
                SOLUTIONS, INC.

            
	 	 
	
              By:

            	/s/
              Matthew G. Richman
	
              Name:

            	Matthew G.
              Richman
	
              Title:

            	Chief Corporate
              Development Officer, Treasurer, Asst.
              Secretary

    

     

    
      SIGNATURE
        PAGE TO

      LETTER
        AGREEMENT

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