Exhibit
10.4




DATAMEG
CORPORATION


OPTION
AGREEMENT





This
Option Agreement (the “Agreement”) sets forth the terms under which Gerald Bellis(the
“Subscriber”) agrees to serve on the board of directors of Datameg Corporation,
a Delaware corporation (the “Company”) in exchange for options to purchase
shares of the Company’s Common Stock.





WHEREAS, the Company has
engaged the subscriber to serve on the Company’s board of directors pursuant to
a letter agreement between the Company and the Subscriber dated as of the date
hereof; and





WHEREAS, the Subscriber has
agreed in exchange and compensation for such service to accept options to
purchase the number of shares of the company’s Common Stock set forth below in
the paragraph entitled “Grant of Options” (the “Options”);





NOW THEREFORE, in connection
therewith, the parties set forth hereafter their understanding and
agreement:





THIS
AGEEMENT DOES NOT CONSTITUTE AN OFFER (A) BY ANYONE IN ANY JURISDICTION IN WHICH
THE COMPANY IS NOT QUALIFIED TO MAKE SUCH AN OFFER; (B) TO ANY PERSON TO WHOM IT
IS UNLAWFUL TO MAKE SUCH AN OFFER; OR (C) IN ANY JURISDICTION IN WHICH SUCH AN
OFFER WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION OF THE SECURITIES
DEFINED BELOW.





THE
OPTIONS AND THE SHARES OF THE COMPANY’S COMMON STOCK SUBJECT TO SUCH OPTIONS,
SOMETIMES REFERRED TO HEREIN AS THE “SECURITIES”, HAVE NOT BEEN REGISTERED UNDER
THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES
LAWS OF ANY STATES, AND ARE BEING OFFERED AND SOLD IN RELIANCE ON CERTAIN
EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH LAWS. THE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISION (THE “COMMISSION”) AND NO REGULATORY BODY HAS PASSED UPON OR ENDORSED
THE ACCURACY, ADEQUACY OR COMPLETENESS OF THIS AGREEMENT OR THE SHARES. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL. SUBSCRIBERS MUST RELY ON THEIR OWN
EXAMINATION OF THIS AGREEMENT AND AVAILABLE INFORMATION CONCERNING THE OFFERING,
INCLUDING THE MERITS OF, AND RISKS INVOLVED IN ACQUIRING THE SECURITIES. THE
SECURITIES CANNOT BE SOLD UNLESS THEY ARE SUBSEQUENTLY REGISTERED UNDER THE ACT
AND UNDER APPLICABLE STATE SECURITIES LAW OR WHERE EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.





Execution
of this Agreement by the Subscriber shall constitute an agreement by the
Subscriber that he is accepting the Options hereof as compensation for certain
service rendered to the Company on the terms and conditions specified herein. By
executing this Agreement, the Subscriber acknowledges, accepts, and agrees to be
bound by all the terms contained in this Agreement.





Grant of Options: In
consideration of the above referenced service to the Company and for other good
and valuable consideration, the Company grants to the Subscriber the option to
purchase Seven Hundred and
Fifty Thousand (750,000) shares of the Company’s Common Stock (the
“Shares”) for the Exercise Price and subject to the other terms and conditions
set forth below. If the Company’s Common Stock is changed by reason of a stock
split, reverse stock split, stock dividend, or recapitalization, combination or
reclassification, appropriate adjustments shall be made by the Company’s Board
of Directors in (a) the number and class of Shares subject to the Options, and
(b) the per-share Exercise Price of the Options; provided, however, that the
Company shall not be required to issue fractional shares as a result of any such
adjustments.





Exercise Price: The purchase
price of the Shares subject to the Options shall be: $0.025per share for 500,000
and $.035 for 250,000
(“Exercise Price”). In each exercise notice, the Subscriber shall designate his
exercise price.





Subscription and Consideration for
Shares:The Subscriber hereby subscribes for the Options in consideration
for the Subscriber’s service to the Company, as described above.





Vesting: The Options will
become exercisable (vest) on each of the following dates as long as the
subscriber  remains a Director,  (a) as to 500,000 Shares
immediately (b) as to 250,000 Shares on April 1, 2009. The right of exercise
shall be cumulative so that to the extent the option is not exercised in any
period to the maximum extent permissible it shall continue to be exercisable, in
whole or in part, with respect to all Shares for which it is vested until the
earlier of the Expiration Date (as defined below) or the Termination Date (as
defined below). In addition, the Options shall become exercisable as to all of
the Shares immediately upon a Change of Control (as defined below).





For
purposes hereof, a “Change of Control” shall deemed to have occurred if the
Company is merged with or into or consolidated with another corporation or
similar entity under circumstances in which the stockholders of the Company
immediately prior to such merger or consolidation do not own after such merger
or consolidation shares representing at least fifty (50%) of the voting power of
the Company or the surviving or resulting corporation or similar entity, as the
case may be, or if the Company sells or otherwise disposes of substantially all
of its assets.





Manner of Exercise: The
Options or any portions of the Options shall be exercised only to the extent
vested and only in accordance to the provisions of this Agreement. The person
exercising the Options shall give to the Company a written notice (“Exercise
Notice”) that shall (a) state the number of Shares with respect to which the
Options are being exercised; and (b) specify a date (other than Saturday, Sunday
or legal holiday) not more than ten days after the date of such written notice,
as the date on which the Shares will be purchased. Such tender and conveyance
shall take place at the principal office of the Company during ordinary business
hours, or at such other hour and place agreed upon by the Company and the person
or persons exercising the Option. On the date specified in such written notice,
the Company shall accept payment for the Shares being purchased in cash, by bank
or certified check, by wire transfer, or by such other means as may be approved
by the Company, and shall deliver to the person or persons exercising the
Options in exchange therefore an appropriate certificate or certificates for
fully paid non-assessable shares or undertake to deliver certificates within a
reasonable period of time. In the event of any failure to take up and pay for
the number of Shares specified in the Exercise Notice on the date set forth
therein (or on the extended date as provided above), the right to exercise the
Options shall terminate with respect to such number of Shares, but shall
continue with respect to the remaining Shares covered by the Options and not yet
acquired pursuant thereto.









Notwithstanding
any provisions herein to the contrary, in lieu of exercising the Options as
hereinabove permitted, the Subscriber may elect to exercise the Options or a
portion thereof and to pay for the Shares issuable upon such exercise by way of
cashless exercise by electing such a cashless exercise in the Exercise Notice,
in which event the Company shall issue to the Subscriber that number of Shares
computed using the following formula:





X=
            
            Y x (A-B)A





Where:





X equals
the number of Shares to be issued to the Subscriber;





Y equals
the number of Shares purchasable pursuant to the Option, or, if only a portion
of the Option is being exercised, the portion of the Option being exercised at
the date of such calculation;





A equals
the Fair Market Value (at the date of such calculation) of one share of Common
Stock of the Company; and





B equals
the Exercise Price.





The
person who exercises the Option shall warrant to the Company that, at the time
of such exercise, such person is acquiring his Option Shares for investment and
not with a view to, or for, or in connection with, the distribution of any such
Shares, and shall make such other representations, warranties, acknowledgements
and affirmations, if any, as the Company may require. In such event, the person
acquiring such Shares shall be bound by the provisions of an appropriate legend,
which shall be endorsed upon the certificate(s) evidencing his or her Shares
issued pursuant to such exercise. The Company may delay issuance of the Shares
if completion of any corporate action or required consent is not obtained that
the Company deems necessary under any applicable law.





Conditions to Issuance of Stock
Certificates: The share of stock deliverable upon the exercise of the
Option, or any portion thereof, may be previously authorized, but issued or
un-issued shares, which have been reacquired by the Company. Such shares shall
be fully paid and non-assessable.





Rights of Shareholders: The
Subscriber shall not be, nor have any of the rights or privileges of a
shareholder of the Company in respect to any shares purchasable upon exercise of
any part of the Options unless and until certificates representing such shares
have been issued by the Company to the Subscriber.





Exercise and Duration: Except
as specified below, vested Options may be exercised at any time until their
expiration on Sept. 12, 2010(the “Expiration Date”). Notwithstanding the foregoing: (a) in the case
of the Subscriber’s death, the Options shall terminate on the one-year
anniversary of the Subscriber’s death, and (b) if Subscriber ceases to serve as
a director of the Company, the Options shall terminate on the 60th day
following the effective date of such termination of employment or consulting
status, (each a “Termination Date”). If the Company learns of the Subscriber’s
death prior to the Expiration Date or the Termination Date (as the case may be),
the Company shall provide written notice of the existence of this Agreement,
together with a copy of this Agreement, to the estate of the Subscriber not less
than thirty (30) days prior to the termination of the Options in accordance with
the terms of this paragraph.





Transfer of Option: Unless
otherwise permitted by applicable law and approved in writing in advance by the
Company, the Option shall not be transferable by the Subscriber and shall be
exercisable during the Subscriber’s lifetime, only by such Subscriber or his or
her guardian or legal representative in the event of the Subscriber’s
incapacity.





Shares to be Reserved: The
Company shall at all times during the term of the Option reserve and keep
available such number of shares of stock as will be sufficient to satisfy the
requirements of this Agreement.





Subscriber’s Representations,
Warranties and Covenants: The Subscriber represents, warrants to and
covenants with the Company as follows:





The
Subscriber is purchasing the Securities solely for his own account, for
investment purposes only and not with an intent to divide his participation with
others, resell, or otherwise dispose of all or any part of such
investment.





The
Subscriber will be the beneficial owner of the Securities standing in the
Subscriber’s name.





The
Subscriber has been furnished with the sufficient written and oral information
about the Company to allow him to make an informed investment decision prior to
purchasing the Investment and has been furnished access to any additional
information that he may require.





The
Subscriber is fully familiar with the business proposed to be conducted by the
Company and with the Company’s use and proposed use of the proceeds from the
sale of Securities.





The
Subscriber has such knowledge and experience in financial and business matters
that he is capable of evaluating the merits and risks of the
investment.










The
Subscriber is able to bear the economic risk of losing his entire
investment





The
Subscriber is knowledgeable and has experience concerning investments of the
type represented by the investment.





The
Subscriber agrees to hold the Company, its agents, managers, and their
respective successors and assigns harmless and to indemnify them against all
liability, cost and expenses incurred by them as a result of any sale or
distribution by the Subscriber in violation of the Act or any state securities
laws. All representations, warranties and indemnities made by the Subscriber
with reference to the Act shall be deemed to be equally applicable in connection
with all applicable state and securities laws.





As set
forth above, the Subscriber understands that the Securities have not been
registered under the Act, or under any state exempt from registration. The
Subscriber further acknowledges that the reliance on such exemptions is in part
based upon the foregoing representations, warranties and covenants of the
Subscriber.





Survival of Representations,
Warranties, Covenants and Agreements: The representations, warranties, covenants
and agreements contained herein shall survive the delivery of and the payment
for the Securities.





Notices: Any and all notices,
designations, consents, offers, acceptances or any other communication provided
for herein shall be given in writing and shall be either hand delivered or sent
by recognized overnight express courier service or by United States mail
(certified, return receipt requested) to the parties at the following addresses:
(i) if to Company, in care of its President (or the President’s delegate in the
case of the President’s absence), addressed to the Company’s principal place of
business and (ii) if to the Subscriber, to the address appearing below or to
such other address as may be designated by the Subscriber in writing in
accordance with this Section. Notice shall be deemed effective upon receipt or
within three (3) days after deposit in the United States mail (properly
addressed with postage prepaid thereon), whichever is earlier.





General Provisions: This
Agreement shall be binding upon and shall insure the benefit of the parties and
their respective successors, assigns, executors and administrators. This
Agreement and the respective and obligations of the parties may not be assigned
by any party without the prior written consent of the other. This Agreement
represents the entire understanding and agreement between the parties with
respect to the subject matter hereof and cannot be amended, supplemented or
modified except by an instrument in writing signed by the party against whom
enforcement of any such amendment, supplement or modification is sought. The
failure of any provision of this Agreement shall not be construed to be a waiver
by such party of any succeeding breach of such provision or a waiver by such
party of any breach of any other provision.





* * *
*


Executed
and acknowledged by the Subscriber as of Sept. 12, 2008





SUBSCRIBER:Signature:
            
            /s/
      Gerald
      BellisPrint Name:
            
            Gerald
      BellisAddress:
            
            2925
      Eagle LaneWest
      Palm Beach Fl. 33409





The
foregoing subscription for Options to purchase 750,000 Shares of Common Stock of
Datameg Corporation by Gerald Bellis is hereby accepted as of September 12,
2008.





DATAMEG
      CORPORATIONBy:
            
            /s/
      James
      MurphyName:
            
            James
      MurphyTitle:
            
            President
      and Chief Executive Officer