Exhibit 10.4

LOGO

INTRAWARE, INC.

1998 DIRECTOR OPTION PLAN
(as amended September 25, 2000)

1.Purposes of the Plan.The purposes of this 1998 Director Option Plan are to attract and retain the
best available personnel for service as Outside Directors (as defined herein) of the Company, to provide additional incentive to the Outside Directors of the Company to serve as Directors, and to
encourage their continued service on the Board.

All
options granted hereunder shall be nonstatutory stock options.

2.Definitions.As used herein, the following definitions shall apply:



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3.Stock Subject to the Plan.Subject to the provisions of Section 10 of the Plan, the maximum
aggregate number of Shares which may be optioned and sold under the Plan is 350,000 Shares (the "Pool"). The Shares may be authorized, but unissued, or reacquired Common Stock.

If
an Option expires or becomes unexercisable without having been exercised in full, the unpurchased Shares which were subject thereto shall become available for future grant or sale
under the Plan (unless the Plan has terminated). Shares that have actually been issued under the Plan shall not be returned to the Plan and shall not become available for future distribution under the
Plan.

4.Administration and Grants of Options under the Plan.



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5.Eligibility.Options may be granted only to Outside Directors. All Options shall be automatically
granted in accordance with the terms set forth in Section 4 hereof.

The
Plan shall not confer upon any Optionee any right with respect to continuation of service as a Director or nomination to serve as a Director, nor shall it interfere in any way
with any rights which the Director or the Company may have to terminate the Director's relationship with the Company at any time.

6.Term of Plan.The Plan shall become effective upon the earlier to occur of its adoption by the Board
or its approval by the shareholders of the Company as described in Section 16 of the Plan. It shall continue in effect for a term of ten (10) years unless sooner terminated under
Section 11 of the Plan.

7.Form of Consideration.The consideration to be paid for the Shares to be issued upon exercise of an
Option, including the method of payment, shall consist of (i) cash, (ii) check, (iii) other shares which (x) in the case of Shares acquired upon exercise of an option, have
been owned by the Optionee for more than six (6) months on the date of surrender, and (y) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised, (iv) consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan, or
(v) any combination of the foregoing methods of payment.

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8.Exercise of Option.



9.Non-Transferability of Options.The Option may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee.

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10.Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale.



If
the Successor Corporation does not assume an outstanding Option or substitute for it an equivalent option, the Option shall become fully vested and exercisable, including as to
Shares for which it would not otherwise be exercisable. In such event the Board shall notify the Optionee that the Option shall be fully exercisable for a period of thirty (30) days from the
date of such notice, and upon the expiration of such period the Option shall terminate.

For
the purposes of this Section 10(c), an Option shall be considered assumed if, following the merger or sale of assets, the Option confers the right to purchase or receive,
for each Share of Optioned Stock subject to the Option immediately prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities or property) received in the
merger or sale of assets by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares). If such consideration received in the merger or sale of assets is not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option, for each Share of Optioned Stock subject to the
Option, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or sale of
assets.

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11.Amendment and Termination of the Plan.



12.Time of Granting Options.The date of grant of an Option shall, for all purposes, be the date
determined in accordance with Section 4 hereof.

13.Conditions Upon Issuance of Shares.Shares shall not be issued pursuant to the exercise of an
Option unless the exercise of such Option and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of law, including, without limitation, the Securities
Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, state securities laws, and the requirements of any stock exchange upon which the Shares may then be listed,
and shall be further subject to the approval of counsel for the Company with respect to such compliance.

As
a condition to the exercise of an Option, the Company may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are
being purchased only for investment and without any present intention to sell or distribute such Shares, if, in the opinion of counsel for the Company, such a representation is required by any of the
aforementioned relevant provisions of law.

Inability
of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance
and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

14.Reservation of Shares.The Company, during the term of this Plan, will at all times reserve and
keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

15.Option Agreement.Options shall be evidenced by written option agreements in such form as the Board
shall approve.

16.Shareholder Approval.The Plan shall be subject to approval by the shareholders of the Company
within twelve (12) months after the date the Plan is adopted. Such shareholder approval shall be obtained in the degree and manner required under applicable state and federal law and any stock
exchange rules.

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INTRAWARE, INC.

DIRECTOR OPTION AGREEMENT

Intraware, Inc., (the "Company"), has granted to  (the "Optionee"), an option to purchase a total of
[ ()] shares of the Company's Common Stock (the "Optioned Stock"), at the price
determined as provided herein, and in all respects subject to the terms, definitions and provisions of the Company's 1998 Director Option Plan (the "Plan") adopted by the Company which is incorporated
herein by reference. The terms defined in the Plan shall have the same defined meanings herein.

1.Nature of the Option.This Option is a nonstatutory option and is not intended to qualify for any
special tax benefits to the Optionee.

2.Exercise Price.The exercise price is $ for each share
of Common Stock.

3.Exercise of Option.This Option shall be exercisable during its term in accordance with the
provisions of Section 8 of the Plan as follows:



4.Method of Payment.Payment of the exercise price shall be by any of the following, or a combination
thereof, at the election of the Optionee:



5.Restrictions on Exercise.This Option may not be exercised if the issuance of such Shares upon such
exercise or the method of payment of consideration for such shares would constitute a violation of any applicable federal or state securities or other law or regulations, or if such issuance would not
comply with the requirements of any stock exchange upon which the Shares may then be listed. As a

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condition to the exercise of this Option, the Company may require Optionee to make any representation and warranty to the Company as may be required by any applicable law or regulation.

6.Non-Transferability of Option.This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by the Optionee. The terms of this Option shall be binding upon the
executors, administrators, heirs, successors and assigns of the Optionee.

7.Term of Option.This Option may not be exercised more than ten (10) years from the date of
grant of this Option, and may be exercised during such period only in accordance with the Plan and the terms of this Option.

8.Taxation Upon Exercise of Option.Optionee understands that, upon exercise of this Option, he or she
will recognize income for tax purposes in an amount equal to the excess of the then Fair Market Value of the Shares purchased over the exercise price paid for such Shares. Since the Optionee is
subject to Section 16(b) of the Securities Exchange Act of 1934, as amended, under certain limited circumstances the measurement and timing of such income (and the commencement of any capital
gain holding period) may be deferred, and the Optionee is advised to contact a tax advisor concerning the application of Section 83 in general and the availability a Section 83(b)
election in particular in connection with the exercise of the Option. Upon a resale of such Shares by the Optionee, any difference between the sale price and the Fair Market Value of the Shares on the
date of exercise of the Option, to the extent not included in income as described above, will be treated as capital gain or loss.

|DATE OF GRANT: |  |                                         |  | 
|-------------- |  | --------------------------------------- |  | 
|               |  | INTRAWARE, INC.,
a Delaware corporation
|               |  | By:                                     |  | 

Optionee
acknowledges receipt of a copy of the Plan, a copy of which is attached hereto, and represents that he or she is familiar with the terms and provisions thereof, and hereby
accepts this Option subject to all of the terms and provisions thereof. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Board upon any
questions arising under the Plan.

|Dated: |  |         
|------ |  | --------
|       |  | Optionee

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EXHIBIT A
DIRECTOR OPTION EXERCISE NOTICE

INTRAWARE, INC.
25 Orinda Way
Orinda, CA 94563

Attention:
Corporate Secretary

1.Exercise of Option.The undersigned ("Optionee") hereby elects to exercise Optionee's option to
purchase  shares of the Common Stock (the "Shares") of Intraware, Inc. (the "Company") under and pursuant to the Company's 1998 Director Option
Plan and the Director Option Agreement dated  (the "Agreement").

2.Representations of Optionee.Optionee acknowledges that Optionee has received, read and understood
the Agreement.

3.Federal Restrictions on Transfer.Optionee understands that the Shares must be held indefinitely
unless they are registered under the Securities Act of 1933, as amended (the "1933 Act"), or unless an exemption from such registration is available, and that the certificate(s) representing the
Shares may bear a legend to that effect. Optionee understands that the Company is under no obligation to register the Shares and that an exemption may not be available or may not permit Optionee to
transfer Shares in the amounts or at the times proposed by Optionee.

4.Tax Consequences.Optionee understands that Optionee may suffer adverse tax consequences as a result
of Optionee's purchase or disposition of the Shares. Optionee represents that Optionee has consulted with any tax consultant(s) Optionee deems advisable in connection with the purchase or disposition
of the Shares and that Optionee is not relying on the Company for any tax advice.

5.Delivery of Payment.Optionee herewith delivers to the Company the aggregate purchase price for the
Shares that Optionee has elected to purchase and has made provision for the payment of any federal or state withholding taxes required to be paid or withheld by the Company.

6.Entire Agreement.The Agreement is incorporated herein by reference. This Exercise Notice and the
Agreement constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof.
This Exercise Notice and the Agreement are governed by California law except for that body of law pertaining to conflict of laws.

|Submitted by: |  | Accepted by:   
|------------- |  | ---------------
|OPTIONEE:     |  | INTRAWARE, INC.
|              |  | By:            
|              |  | Its:           

|Address: |  |  |  |       
|-------- |  |  |  | ------
|Dated:   |  |  |  | Dated:

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