EXHIBIT 10.4

THIS OPTION AND THE UNDERLYING SHARES OF COMMON STOCK HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE “SECURITIES ACT”), OR ANY OTHER SECURITIES
LAWS, HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD OR TRANSFERRED OR
OFFERED FOR SALE OR TRANSFER UNLESS A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND OTHER APPLICABLE SECURITIES LAWS WITH RESPECT TO SUCH
SECURITIES IS THEN IN EFFECT, OR IN THE OPINION OF COUNSEL TO THE ISSUER OF
THESE SECURITIES, SUCH REGISTRATION UNDER THE SECURITIES ACT AND OTHER
APPLICABLE SECURITIES LAWS IS NOT REQUIRED.

 

Date: ________________

 

OPTION FOR THE PURCHASE OF SHARES OF
COMMON STOCK OF INFORMATION SYSTEMS ASSOCIATES, INC.

THIS IS TO CERTIFY that, for value received, __________        __, of
__________________ (the “Holder”), is entitled to purchase, subject to the terms
and conditions hereinafter set forth, __________________     (_________)
  shares of Information Systems Associates, Inc., a Florida corporation (the
“Company”) common stock,    _______ par value per share (“Common Stock”), and to
receive certificates for the Common Stock so purchased.  The exercise price of
this Option is $__________   per share, subject to adjustment as provided below
(the “Exercise Price”).   

1.

Exercise Period and Vesting. These Options vest: _________________________
__________________, subject to continued employment with the Company. Once
vested, the options may be exercised by the Holder at any time through ______
p.m., New York time, ______________, (the “Exercise Period”).  This Option will
terminate automatically and immediately upon the expiration of the Exercise
Period.

2.

Exercise of Option.  This Option may be exercised, in whole or in part, at any
time and from time to time during the Exercise Period.  Such exercise shall be
accomplished by tender to the Company of an amount equal to the Exercise Price
multiplied by number of underlying shares being purchased (the “Purchase
Price”), in cash, by wire transfer or by certified check or bank cashier’s
check, payable to the order of the Company, together with presentation and
surrender to the Company of this Option with an executed subscription agreement
in substantially the form attached hereto as Exhibit A (the “Subscription”).
Upon receipt of the foregoing, the Company will deliver to the Holder, as
promptly as possible, a certificate or certificates representing the shares of
Common Stock so purchased, registered in the name of the Holder or its
transferee (as permitted under Section 3 below).  With respect to any exercise
of this Option, the Holder will for all purposes be deemed to have become the
holder of record of the number of shares of Common Stock purchased hereunder on
the date a properly executed Subscription and payment of the Purchase Price is
received by the Company (the “Exercise Date”), irrespective of the date of
delivery of the certificate evidencing such shares, except that, if the date of
such receipt is a date on which the stock transfer books of the Company are
closed, such person will be deemed to have become the holder of such shares at
the

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close of business on the next succeeding date on which the stock transfer books
are open.  Fractional shares of Common Stock will not be issued upon the
exercise of this Option.  In lieu of any fractional shares that would have been
issued but for the immediately preceding sentence, the Holder will be entitled
to receive cash equal to the current market price of such fraction of a share of
Common Stock on the trading day immediately preceding the Exercise Date.  In the
event this Option is exercised in part, the Company shall issue a new Option to
the Holder covering the aggregate number of shares of Common Stock as to which
this Option remains exercisable for.

3.

Transferability and Exchange.

(a)

This Option, and the Common Stock issuable upon the exercise hereof, may not be
sold, transferred, pledged or hypothecated unless the Company shall have been
provided with an opinion of counsel reasonably satisfactory to the Company that
such transfer is not in violation of the Securities Act of 1933 (“Securities
Act”), and any applicable state securities laws.  Subject to the satisfaction of
the aforesaid condition, this Option and if the underlying shares of Common
Stock may not all be sold under Rule 144 of the Securities Act, the shares of
Common Stock shall be transferable from time to time by the Holder upon written
notice to the Company.  If this Option is transferred, in whole or in part, the
Company shall, upon surrender of this Option to the Company, deliver to each
transferee a Option evidencing the rights of such transferee to purchase the
number of shares of Common Stock that such transferee is entitled to purchase
pursuant to such transfer.  The Company may place a legend similar to the legend
at the top of this Option on any replacement Option and on each certificate
representing shares issuable upon exercise of this Option or any replacement
Options. Only registered Holder may enforce the provisions of this Option
against the Company.  A transferee of the original registered Holder becomes a
registered Holder only upon delivery to the Company of the original Option and
an original Assignment, substantially in the form set forth in Exhibit B
attached hereto.

(b)

This Option is exchangeable upon its surrender by the Holder to the Company for
new Options of like tenor and date representing in the aggregate the right to
purchase the number of shares purchasable hereunder, each of such new Options to
represent the right to purchase such number of shares as may be designated by
the Holder at the time of such surrender (not to exceed the aggregate number of
shares underlying this Option).

4.

Adjustments to Exercise Price and Number of Shares Subject to Option.  

The Exercise Price and the number of shares of Common Stock purchasable upon the
exercise of this Option are subject to adjustment from time to time upon the
occurrence of any of the events specified in this Section 4.  For the purpose of
this Section 4, “Common Stock” means shares now or hereafter authorized of any
class of Common Stock of the Company, however designated, that has the right to
participate in any distribution of the assets or earnings of the Company without
limit as to per share amount (excluding, and subject to any prior rights of, any
class or series of preferred stock).

(a)

In case the Company shall (i) pay a dividend or make a distribution in shares of
Common Stock to Holder of shares of Common Stock, (ii) subdivide its outstanding
shares of Common Stock into a greater number of shares, (iii) combine its
outstanding shares of Common Stock into a smaller number of shares, or (iv)
issue by reclassification of its shares of Common Stock other securities of the
Company, then the Exercise Price in effect at the time of

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the record date for such dividend or on the effective date of such subdivision,
combination or reclassification, and/or the number and kind of securities
issuable on such date, shall be proportionately adjusted so that the Holder of
the Option thereafter exercised shall be entitled to receive the aggregate
number and kind of shares of Common Stock (or such other securities other than
Common Stock) of the Company, at the same aggregate Exercise Price, that, if
such Option had been exercised immediately prior to such date, the Holder would
have owned upon such exercise and been entitled to receive by virtue of such
dividend, distribution, subdivision, combination or reclassification. Such
adjustment shall be made successively whenever any event listed above shall
occur.

(b)

In case the Company shall fix a record date for the making of a distribution of
cash, evidences of indebtedness or assets, or subscription rights or Options to
all Holders of Common Stock (including any such distribution made in connection
with a consolidation or merger in which the Company is the surviving
corporation), the Exercise Price to be in effect after such record date shall be
determined by multiplying the Exercise Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the Fair  Market
Value  per share of Common Stock on such record date, less the amount of cash to
be distributed or the Fair Market Value (as determined in good faith by, and
reflected in a formal resolution of, the Board of Directors of the Company) of
the portion of the assets or evidences of indebtedness so to be distributed, or
of such subscription rights or Options, applicable to one share of Common Stock,
and the denominator of which shall be the  Fair Market Value per share of Common
Stock.  Such adjustment shall be made successively whenever such a record date
is fixed; and in the event that such distribution is not so made, the Exercise
Price shall again be adjusted to be the Exercise Price which would then be in
effect if such record date had not been fixed.  When determining Fair Market
Value of the Company’s Common Stock, Fair Market Value  shall mean:  (i) if the
principal trading market for such securities is a national securities exchange
including The Nasdaq Stock Market, or the Over-the-Counter Bulletin Board
(“OTCBB”) (or a similar system then in use), the last reported sales price on
the principal market the trading day immediately prior to such record date; or
(ii) if subsection (i) is not applicable, and if bid and ask prices for shares
of Common Stock are reported by the principal trading market or the Pink Sheets,
the average of the high bid and low ask prices so reported for the trading day
immediately prior to such record date.  Notwithstanding the foregoing, if there
is no last reported sales price or bid and ask prices, as the case may be, for
the day in question, then Fair Market Value shall be determined as of the latest
day prior to such day for which such last reported sales price or bid and ask
prices, as the case may be, are available, unless such securities have not been
traded on an exchange or in the over-the-counter market for 30 or more days
immediately prior to the day in question, in which case the Fair Market Value
shall be determined in good faith by, and reflected in a formal resolution of,
the Board of Directors of the Company.

(c)

Notwithstanding any provision herein to the contrary, no adjustment in the
Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Exercise Price; provided, however,
that any adjustments which by reason of this Section 4(c) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment.  All calculations under this Section 4 shall be made to the nearest
cent or the nearest one-hundredth of a share, as the case may be.

(d)  

In the event that at any time, as a result of an adjustment made pursuant to
Section 4(a) above, the Holders of any Option thereafter exercised shall become
entitled to

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receive any shares of capital stock of the Company other than shares of Common
Stock, thereafter the number of such other shares so receivable upon exercise of
any Option shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
shares of Common Stock contained in this Section 4, and the other provisions of
this Option shall apply on like terms to any such other shares.

(e)

If the Company merges or consolidates into or with another corporation or
entity, or if another corporation or entity merges into or with the Company
(excluding such a merger in which the Company is the surviving or continuing
corporation and which does not result in any reclassification, conversion,
exchange, or cancellation of the outstanding shares of Common Stock), or if all
or substantially all of the assets or business of the Company are sold or
transferred to another corporation, entity, or person, then, as a condition to
such consolidation, merger, or sale (any a “Transaction”), lawful and adequate
provision shall be made whereby the Holder shall have the right from and after
the Transaction to receive, upon exercise of this Option and upon the terms and
conditions specified herein and in lieu of the shares of the Common Stock that
would have been issuable if this Option had been exercised immediately before
the Transaction, such shares of stock, securities, or assets as the Holder would
have owned immediately after the Transaction if the Holder had exercised this
Option immediately before the effective date of the Transaction.

(f)

In case any event shall occur as to which the other provisions of this Section 4
are not strictly applicable but the failure to make any adjustment would not
fairly protect the purchase rights represented by this Option in accordance with
the essential intent and principles hereof, then, in each such case, the Company
shall effect such adjustment, on a basis consistent with the essential intent
and principles established in this Section 4, as may be necessary to preserve,
without dilution, the purchase rights represented by this Option.

5.

No Registration Rights.  The Option has not been registered under the Securities
Act.  Unless (i) the appropriate period under Rule 144 of the Securities Act has
expired so that the shares may be sold without restrictions of any kind, or (ii)
an effective registration statement exists with a current prospectus for the
shares of Common Stock, upon exercise, the stock certificates shall bear the
following legend:

“The securities represented by this certifi­cate have not been registered under
the Securities Act of 1933 (the “Securities Act”), and may not be offered for
sale or sold except pursuant to (i) an effective registration statement under
the Securities Act, or (ii) an opinion of counsel to the issuer of these
securities that an exemption from registration under the Securities Act is
available”.

6.

Reservation of Shares.  The Company agrees at all times to reserve and hold
available out of its authorized but unissued shares of Common Stock the number
of shares of Common Stock issuable upon the full exercise of this Option.  The
Company further covenants and agrees that all shares of Common Stock that may be
delivered upon the exercise of this Option will, upon delivery, be fully paid
and non-assessable and free from all taxes, liens and charges with respect to
the purchase thereof hereunder.

7.

Notices to Holder.  Upon any adjustment of the Exercise Price (or number of
shares of Common Stock issuable upon the exercise of this Option) pursuant to
Section 4, the Company shall promptly thereafter cause to be given to the Holder
written notice of such

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adjustment.  Such notice shall include the Exercise Price (and/or the number of
shares of Common Stock issuable upon the exercise of this Option) after such
adjustment, and shall set forth in reasonable detail the Company’s method of
calculation and the facts upon which such calculations were based.  Where
appropriate, such notice shall be given in advance and included as a part of any
notice required to be given under the other provisions of this Section 7.

In the event of (a) any fixing by the Company of a record date with respect to
the Holder of any class of securities of the Company for the purpose of
determining which of such Holder are entitled to dividends or other
distributions, or any rights to subscribe for, purchase or otherwise acquire any
shares of capital stock of any class or any other securities or property, or to
receive any other right, (b) any capital reorganization of the Company, or
reclassification or recapitalization of the capital stock of the Company or any
transfer of all or substantially all of the assets or business of the Company
to, or consolidation or merger of the Company with or into, any other entity or
person, or (c) any voluntary or involuntary dissolution or winding up of the
Company, then and in each such event the Company will give the Holder a written
notice specifying, as the case may be (i) the record date for the purpose of
such dividend, distribution, or right, and stating the amount and character of
such dividend, distribution, or right; or (ii) the date on which any such
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, conveyance, dissolution, liquidation, or winding up is to take place and
the time, if any is to be fixed, as of which the Holder of record of Common
Stock (or such capital stock or securities receivable upon the exercise of this
Option) shall be entitled to exchange their shares of Common Stock (or such
other stock securities) for securities or other property deliverable upon such
event.  Any such notice shall be given at least 10 days prior to the earliest
date therein specified.

8.

No Rights as a Stockholder.  This Option does not entitle the Holder to any
voting rights or other rights as a stockholder of the Company, nor to any other
rights whatsoever except the rights herein set forth. Provided, however, the
Company shall not enter into any merger agreement in which it is not the
surviving entity, or sell all or substantially all of its assets unless the
Company shall have first provided the Holder with 10 days’ prior written notice.

9.

Additional Covenants of the Company.  For so long as the Common Stock is listed
for trading or trades on any national securities exchange including The Nasdaq
Stock Market or the OTCBB, the Company shall, upon issuance of any shares for
which this Option is exercisable, at its expense, promptly obtain and maintain
the listing or qualifications for trading of such shares.

The Company shall comply with the reporting requirements of Sections 13 and
15(d) of the Securities Exchange Act of 1934 for so long as and to the extent
that such requirements apply to the Company.

The Company shall not, by amendment of its Certificate of Incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issuance or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Option.  Without limiting the generality of the foregoing, the Company (a) shall
comply with Section 6 of this Option and have available sufficient shares of
Common Stock to be issued from time to time upon exercise of this Option, (b)
will not increase the par value of any shares of Common Stock issuable upon
exercise of this Option above the amount payable therefore upon such exercise,
and (c) will take all such actions as may be necessary or

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appropriate in order that the Company may validly and legally issue fully paid
and non-assessable stock.

10.

Successors and Assigns.  This Option shall be binding upon and inure to the
benefit of the Company, the Holder and their respective successors and permitted
assigns.

11.

Notices.  The Company agrees to maintain a ledger of the ownership of this
Option (the “Ledger”).  Any notice hereunder shall be given by Federal Express
or other overnight delivery service for delivery on the next business day if to
the Company, at its principal executive office and, if to the Holder, to their
address shown in the Ledger of the Company; provided, however, that either the
Company or the Holder may at any time on three days’ written notice to the other
designate or substitute another address where notice is to be given.  Notice
shall be deemed given and received after a Federal Express or other overnight
delivery service is delivered to the carrier.

12.

Severability.  Every provision of this Option is intended to be severable. If
any term or provision hereof is illegal or invalid for any reason whatsoever,
such illegality or invalidity shall not affect the remainder of this Option.

13.

Governing Law.  This Option shall be governed by and construed in accordance
with the laws of the State of Delaware without giving effect to the principles
of choice of laws thereof.

14.

Attorneys’ Fees.  In any action or proceeding brought to enforce any provision
of this Option, the prevailing party shall be entitled to recover reasonable
attorneys’ fees in addition to its costs and expenses and any other available
remedies.

15.

Entire Agreement.  This Option (including the Exhibits attached hereto)
constitutes the entire understanding between the Company and the Holder with
respect to the subject matter hereof, and supersedes all prior negotiations,
discussions, agreements and understandings relating to such subject matter.

IN WITNESS WHEREOF, the Company has caused this Option to be executed by its
duly authorized officer as of the date first set forth above.

Information Systems Associates, Inc.  

By: ______________________

Title: _________________

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Exhibit A

SUBSCRIPTION FORM

(To be Executed by the Holder to Exercise the Rights To Purchase Common Stock
Evidenced by the Within Option)

The undersigned hereby irrevocably subscribes for _______ shares of the Common
Stock (the “Stock”) of Information Systems Associates, Inc.  (the “Company”)
pursuant to and in accordance with the terms and conditions of the attached
Option (the “Option”), and hereby makes payment of $_______ therefor by
[tendering cash, wire transferring or delivering a certified check or bank
cashier’s check, payable to the order of the Company] [surrendering _______
shares of Common Stock received upon exercise of the Option, which shares have
an aggregate fair market value equal to the Purchase Price as required in
Section 2 of the Option].  The undersigned requests that a certificate for the
Stock be issued in the name of the undersigned and be delivered to the
undersigned at the address stated below.  If the Stock is not all of the shares
purchasable pursuant to the Option, the undersigned requests that a new Option
of like tenor for the balance of the remaining shares purchasable thereunder be
delivered to the undersigned at the address stated below.

In connection with the issuance of the Stock, I hereby represent to the Company
that I am acquiring the Stock for my own account for investment and not with a
view to, or for resale in connection with, a distribution of the shares within
the meaning of the Securities Act of 1933, as amended (the “Securities Act”).

I understand that if at this time the Stock has not been registered under the
Securities Act, I must hold such Stock indefinitely unless the Stock is
subsequently registered and qualified under the Securities Act or is exempt from
such registration and qualification. I shall make no transfer or disposition of
the Stock unless (a) such transfer or disposition can be made without
registration under the Securities Act by reason of a specific exemption from
such registration and such qualification, or (b) a registration statement has
been filed pursuant to the Securities Act and has been declared effective with
respect to such disposition.  I agree that each certificate representing the
Stock delivered to me shall bear substantially the same legend as set forth on
the front page of the Option.

I further agree that the Company may place stop transfer orders with its
transfer agent having the same effect as the above legend.  The legend and stop
transfer notice referred to above shall be removed only upon my furnishing to
the Company an opinion of counsel (reasonably satisfactory to the Company) to
the effect that such legend may be removed.

Date:_______________________________

Signed: _______________________________
Print Name:____________________________
Address:______________________________

Date:_______________________________

Signed: _______________________________
Print Name:____________________________
Address:______________________________

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Exhibit B

ASSIGNMENT

(To be Executed by the Holder to Effect Transfer of the Attached Option)

For Value Received __________________________ hereby sells, assigns and
transfers to _________________________ the Option attached hereto and the rights
represented thereby to purchase _________ shares of Common Stock in accordance
with the terms and conditions hereof, and does hereby irrevocably constitute and
appoint ___________________________ as attorney to transfer such Option on the
books of the Company with full power of substitution.

Dated:________________________

Signed: _____________________________

Please print or typewrite
name and address of
assignee:

 

Please insert Social Security
or other Tax Identification
Number of Assignee:

Dated:________________________

Signed: _____________________________

Please print or typewrite
name and address of
assignee:

 

Please insert Social Security
or other Tax Identification
Number of Assignee: