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                              EMPLOYMENT AGREEMENT

         AGREEMENT made as of January 7, 2004 between Home Director, Inc,
(Company), a Delaware corporation, with an office at 2525 Collier Canyon Road,
Livermore, CA 94550 and Jerry Steckling (Employee), with an address at 1445
Morning Glory, Petaluma, CA 94952.

                                    RECITALS

         Company wishes to employ Employee as Vice-President of Advanced
Technology and Chief Technology Officer; and

         Employee is willing to accept that employment upon the terms and
conditions described herein.

         NOW, THEREFORE in consideration of the Recital and the terms and
conditions described herein, the parties agree as follows:

         1. Employee's Duties, Obligations and Authority.

1.1 General. Company hereby employs Employee as its Vice President of Advanced
Technology and Chief Technology Officer (the Employment) and Employee accepts
the Employment upon the terms and conditions described herein.

1.2 Employee's Responsibilities

a) Employee's responsibilities, duties and authority shall be consistent with
his position as Vice President of Advanced Technology and Chief Technology
Officer and he shall have and accept such other responsibilities, duties and
authorities assigned to him by the CEO from time to time;

b) Employee shall serve Company faithfully and to the best of his abilities. He
shall devote such business time and effort to Company's and any subsidiaries'
and affiliates' business and affairs and the promotion of their interests and
such other activities assigned to him by the CEO from time to time. The
foregoing provisions shall not be construed as preventing Employee from (i)
investing his assets in such form or manner that will not require any services
on his part; or (ii) performing a reasonable amount of charitable services;

c) Company understands and acknowledges that during the Employment, Employee
will be permitted to engage in other activities, provided that such activities,
individually or in the aggregate, do not materially interfere with the proper
performance of his duties and responsibilities hereunder and, in the reasonable
judgmentof the CEO, do not conflict with his duties to Company hereunder; and
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d) Company shall furnish Employee with reasonable office and engineering
facilities and such other items that are commensurate with his position
hereunder and adequate to allow him to perform the Employment.

2. The Term. The term (Term) of this Agreement shall commence on the date and
year first set forth above and continue through January 7, 2007. Unless this
Agreement is terminated in accordance with Section 3 below, the Term shall be
automatically extended after January 7, 2004 for additional one-year periods.

3. Termination of Employment.

a) Company may terminate the Employment at any time, with or without Cause (as
defined below). If Company terminates the Employment for Cause, Employee shall
not be paid any Severance (as defined below). If Company terminates the
Employment without Cause, Employee shall be paid the following severance
(Severance) : (i). before the expiration of one year from the date hereof , an
amount equal to his Base (as defined below) paid over the 3-month period
preceding such termination;; and (ii). after one year from the date hereof, an
amount equal to his Base paid the 4 month period preceding such termination (the
applicable period is referred to herein as the Severance Period).

b) After the termination of the Employment without Cause, Employee shall have
a duty to seek other employment and shall inform the Company regarding his
success in obtaining such employment and the terms of such employment when
obtained. Company shall have the right to review Employee's tax returns and the
supporting documentation for the periods that include the Severance Period.
Company's obligation to provide Severance to Employee (and the continuation of
Benefits, as well as, the acceleration of the vesting of options and the
continued exercisability of options pursuant to Section 4.6 hereof) shall be
subject to Employee's execution of a general release acceptable to Company which
releases it and certain other parties from any claims Employee may then have
against Company and such other parties. During the Severance Period, Employee
shall continue to be entitled to the Benefits he received immediately prior to
the termination of his employment; provided, however, any health insurance he is
entitled to shall terminate upon his achieving eligibility to health insurance
coverage from another employer or under his spouse's coverage.

c) The portion of Employee's Severance based on Base shall be paid to - him at
the same intervals that his regular Base is paid, reduced by such amounts that
he has earned (whether paid or deferred and whether in cash or in other
property) from third parties over the Severance Period. Any Bonus due to
Employee under this Section 3 shall be paid to him at the time such Bonus would
otherwise be due to Employee pursuant to Section 4.3 hereof.

d) Company's obligation to provide Severance to Employee (and the continuation
of Benefits, as well as, the acceleration of the vesting of options and the
continued exercisability of options pursuant to Section 4.5 hereof) shall be
subject to Employee's execution of a general release acceptable to Company which
releases it and certain
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other parties from any claims Employee may then have against Company and such
other parties. During the Severance Period, Employee shall continue to be
entitled to the Benefits he received immediately prior to the termination of his
employment; provided, however, any health insurance he is entitled to shall
terminate upon his achieving eligibility to health insurance coverage from
another employer or under his spouse's coverage.


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4. Compensation and Benefits.

         4.1 Salary; Base. Employee shall receive a base salary (Base) from
Company at an annual rate of $180,000, or such increased rate as its Board of
Directors (the Board), in its sole discretion, may hereafter from time to time
determine, payable in accordance with its regular payroll practices, subject to
all applicable federal and state deductions and withholdings.

         4.2 Incentive Compensation. Employee shall be eligible to receive
annual incentive compensation (Bonus) from Company for each calendar year
(starting in 2004) up to 30% of Base, contingent upon the achievement of certain
objective standards determined by the CEO in his sole discretion. The Bonus with
respect to a calendar year shall be paid within 30 days after the Board receives
and approves Company's audited financial report for such calendar year. Except
as otherwise provided herein, Employee shall not be entitled to any Bonus for
any calendar year, unless he is a Company employee on the date the Bonus is to
be paid.

         4.3 Expenses. Company shall pay or reimburse Employee for his
reasonable and necessary Company business expenses, including, but not limited
to, travel, lodging and all other reasonable out-of-pocket expenses incurred by
him in performing his services hereunder. All such payments or reimbursements
shall be made under Company's current expense account and reimbursement
policies, provided that Employee submits the required documentation of such
expenses to Company's CFO.

         4.4 Other Benefits. Company shall pay Employee all health and welfare
benefits (Benefits) that it currently provides to its senior management team,
subject to the terms of its applicable plans and other arrangements.

         4.5 Options.

         a) Company shall grant Employee a ten year option (the Initial Option)
to acquire that number of shares of Company stock (Company Stock) equal to 1.5%
of the sum of the outstanding Company Stock and Company Stock subject to in-the-
money warrants as of the consummation of the current Spencer Trask private
offering (the Offering). The Initial Option shall vest and become exercisable to
the extent of 1/3rd of the shares subject to such Option on the first
anniversary hereof and to the extent of 1/12th of the Company Stock subject to
such Option on the last day of the calendar quarter after the said first
anniversary hereof and an additional 1/12th of the Company Stock subject to such
option on the last day of each subsequent calendar quarter until the option is
100% vested and exercisable or terminates in accordance herewith.

         b) All options granted pursuant to this Section 4.5 shall be subject to
the terms and provisions of the Company stock option plan (Stock Option Plan)
and the stock option agreements reflecting the terms of such grants. The parties
hereto acknowledge that the Stock Option Plan does not currently have sufficient
shares of Company Stock available for grant of the
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options contemplated in this Section 4.5 and any grant of such options in excess
of shares available shall be subject to shareholder approval of an amendment to
the Stock Option Plan increasing the number of shares available under the plan.

         c) Each option granted pursuant to this Section 4.5 shall have an
option exercise price equal to the fair market value of a share of Company Stock
on the date of its grant.

         d) If Employee's employment is terminated by Company without Cause, all
outstanding options granted to Employee pursuant to this Section 4.5 shall
immediately vest and become exercisable and such options shall remain
exercisable for their remaining original term.

         e) If Employee's employment is terminated by Company with Cause or by
Employee, all unexercised options shall immediately be cancelled. All vested and
exercisable options shall remain exercisable for a period of 30 days after
Employee's termination and then any unexercised options shall be cancelled.

4.6 Vacation. Employee shall be entitled to two (2) weeks of paid vacation
during each calendar year of the Term and. In addition,the Base shall be paid
for holidays given by Company to its employees generally. Any unused vacation
days for any calendar year of Employment may be used by Employee in a subsequent
calendar year of the Employment. Upon termination of the Employment, Employee
shall be paid an amount equivalent to all accrued and unused vacation as of the
termination date.

5. Termination of Employment.

         5.1 Events of Termination. Employee's employment hereunder shall
terminate, upon the occurrence of any one or more of the following events:

                  a) Death. In the event of his death, Employee's employment
         hereunder shall terminate on the date of death. If Employee's
         employment hereunder is terminated as a result of his death, Company
         shall pay his estate the Base through the date of death, any unpaid
         Bonus earned with respect to a calendar year prior to the year of
         death, accrued vacation pay and reimbursement of any expenses incurred
         by him to the date of death.

                  b) Disability. In the event of his disability, the Employment
         shall terminate on the date of disability. Disability shall mean
         Employee's inability, due to physical or mental incapacity, to
         substantially perform his duties and responsibilities under this
         Agreement for a period of 90 consecutive days. If Employee's
         employment hereunder is terminated as a result of his disability,
         Company shall pay him the Base through the date of termination of the
         Employment, any unpaid Bonus earned with respect to a calendar year
         prior to the year of such termination, accrued vacation pay and
         reimbursement of any expenses incurred by him to the termination date.


<PAGE>

                  c) Termination by Company for Cause. Company may terminate the
         Employment for Cause upon written notice to Employee and it shall
         terminate on the date on which such notice is given. As used herein,
         Cause shall include Employee's (i) conviction of, or guilty plea or a
         plea of nolo contrendere to, a felony; (ii) commission of fraudulent,
         illegal or dishonest acts, as determined by the Board; (iii) willful
         misconduct or gross negligence which reasonably could be expected to be
         materially injurious to the business or operations of the Company
         (monetarily or otherwise); or (iv) material failure to perform his
         duties hereunder, or any other material breach hereof, as reasonably
         determined by the Board if Employee fails to cure any such failure or
         other material breach within thirty (30) days following receipt of
         written notice thereof. If the Employment is terminated for Cause,
         Employee shall be entitled to only the Base earned by him to and
         including the effective date of such termination, accrued vacation pay,
         and any of his expenses that have not been reimbursed.

                  d) Termination by Employee. Employee may terminate the
         Employment for any reason by giving the Board and the CEO at least
         thirty (30) days prior written notice. If the Employment is terminated
         by Employee under this provision, he shall be entitled to only the Base
         earned to and including the effective date of such termination, accrued
         vacation pay and any of his expenses that have not been reimbursed.

6. Non-Interference; Noncompetition.

         a). During Employment and for one (1) year thereafter, Employee shall
         not:

                  (i) interfere with any of Company's relationships with, or
         endeavor to employ or entice away any person who at any time is or
         shall be a Company employee of or interfere with or seek to alter
         Company's relationship with any supplier, licensee or distributor; or

                  (ii)) directly or indirectly, engage in or facilitate or
         support others to engage in the production, sale or distribution of any
         products or services competitive to Company's products or business, or
         directly or indirectly, solicit or attempt to solicit for business any
         suppliers, clients or customers with whom it shall have done business
         in a manner that reasonably be expected to result in a detriment to
         Company; or

                  (iii) seek or obtain employment with or provide services to
         any company customer or client which employment or services could
         reasonably be expected to result in a detriment to Company.b). For two
         (2) years after Employment, Employee shall not:

                  (i) interfere with any of Company's relationships with, or
         endeavor to employ or entice away any person who at any time is or
         shall be a Company

<PAGE>

         employee of or interfere with or seek to alter Company's relationship
         with any supplier, licensee or distributor; or

                  (ii) directly or indirectly, directly or indirectly, solicit
         or attempt to solicit for business any suppliers, clients or customers
         with whom it shall have done business in a manner that reasonably be
         expected to result in a detriment to Company.

7. Property Rights.

a) Employee's Prior Inventions. Attached as Exhibit A is a list describing all
inventions, original works of authorship, developments, improvements, and trade
secrets made by Employee prior to the Employment or currently being worked -on,
or developed by him in conjunction with third parties (collectively referred to
as "Prior Inventions") that belong to Employee or such third parties that may
relate to Company's proposed business, products, or research and development;
however, the item on Exhibit A are not assigned to Company hereunder. In that
regard, as soon as practicable, the parties shall enter into a separate
agreement under which Company may, if Employee agrees, purchase such items, or
any of them from Employee on such terms as the parties shall agree.

b) Property Rights During the Employment. With respect to information,
inventions and discoveries developed, made or conceived by Employee, either
alone or with third parties at any time during the Employment and whether or not
during working hours, arising out of the Employment or pertinent to any field of
business or research in which, during the Employment, Company is engaged or (if
such is known to or ascertainable by Employee) is considering, Employee
understands and acknowledges that:

                  (a) all such information, inventions and discoveries, patent,
         patent application, copyright or other property right based thereon
         whether or not patented or patentable (collectively Information), shall
         be and remain the exclusive property of Company;

                  (b) Employee shall promptly disclose to an authorized Company
         representative all Information in his possession as to possible
         applications and uses thereof;

                  (c) Employee shall not file any patent application relating to
         any Information , except with the prior written consent of an
         authorized Company officer;

                  (d) Employee waives and releases any and all rights he may
         have in and to any Information and hereby assigns to Company all of his
         rights, titles and interests in the Information and any of its
         components , and all of his rights, titles and interests in them..
         Employee irrevocably designates and appoints Company
<PAGE>

         and its duly authorized officers and agents as agent and
         attorney-in-fact to act for him and in his behalf and stead to execute
         and file any documents and to do all other lawfully permitted acts to
         further the prosecution, issuance and enforcement of any such patent,
         patent application, copyright or other property right with the same
         force and effect as if executed and delivered by him; and

                  (e) at the request of Company, and without expense to
         Employee, he shall execute such documents and perform such other acts
         as Company deems necessary or appropriate, to obtain patents on such
         inventions in a jurisdiction or jurisdictions designated by it, and to
         assign to it such inventions and any and all patent applications and
         patents relating thereto.

         8. Confidentiality. With respect to the Information and all other
information, whatever its nature and form and whether obtained orally, by
observation, from graphic materials or otherwise (except such as is generally
available through publication), obtained by Employee during or as a result of
the Employment relating to any Information or improvement, enhancement, product,
know-how, formula, software, process, apparatus, design, concept or other
creation, or to any use of any of them, or to materials, tolerances,
specifications, costs (including, without limitation, manufacturing costs),
prices, suppliers, finances or to any plans or strategies of Company, or to any
of its other trade secret or proprietary information, Employee understands and
acknowledges that:

                  (a) he shall hold all Information, that has not otherwise
         become public knowledge in strict confidence and not publish or
         otherwise disclose any of it to any person or entity, other than
         Company, except with the prior written consent of an authorized
         officer, or as may be required by law;

                  (b) he shall take all reasonable precautions to assure that
         the Information, and other items described herein related thereto are
         properly protected from access by unauthorized persons;

                  (c) he shall not make use of or exploit in any way the
         information and other items described herein related thereto, except as
         required in the performance of the Employment ;

                  (d) upon termination of the Employment , or at any time upon
         its request, Employee shall deliver to Company all graphic materials
         and all substances, models, software, prototypes and the like
         containing or relating to any such information, invention or discovery,
         all of which graphic materials and other things shall be and remain the
         exclusive property of Company; and

                  (e) for purposes hereof, Graphic Materials includes, without
         limitation, letters, memoranda, reports, notes, notebooks, books of
         account, drawings, prints, specifications, formulae, software, data
         print-outs, microfilms, magnetic
<PAGE>

         tapes and disks and other documents and recordings, together with all
         copies, excerpts and summaries thereof.

         9. No Conflicts. Employee acknowledges and represents that his entering
into this Agreement and the performance of his obligations hereunder do not
breach any other agreement to which he is a party. Employee understands and
acknowledges that the Employment does not and will not breach any agreement made
by him to keep in confidence information acquired by him prior to or outside of
the Employment . Employee shall comply with any and all valid obligations which
he may now have to prior employers or to others relating to confidential
information, inventions or discoveries which are the property of those prior
employers or others. He has supplied or shall promptly supply to Company, upon
request, a copy of each written agreement setting forth any such obligation.
Employee understands and acknowledges that he has not brought and will not bring
with him for use in the performance of his duties hereunder any materials,
documents or information of a former employer or any third party that are not
generally available to the public, unless he has express written authorization
from the owner thereof for possession and use or he has otherwise undisputed
proprietary rights to such material, documents or information.

         10. Specific Performance. Without intending to limit the remedies
available to Company hereunder, Employee understands and acknowledges that
damages at law would be an inadequate remedy to Company if he breaches or
attempts to breach this Agreement, including any provisions thereof and, in that
event, Company may apply for and, without the posting of any bond or other
security, obtain injunctive relief in any court of competent jurisdiction to
restrain Employee's breach or threatened breach hereof, or otherwise to enforce
specifically, any of the covenants contained herein.

         11. Survival. The provisions of Sections 3, 4,5,6, 7, 8, 9, 10, 11,
12.1, 12.4, 12.5 and 12.7 shall, subject to any express provisions of such
Sections, survive any termination of this Agreement. Employee's obligations
under Sections 5, 6, and 7 hereof shall remain in effect throughout the
Employment and, subject to the express provisions of such Sections, thereafter,
unaffected by any transfer to a subsidiary or affiliate of Company, and without
regard to the reason for termination of Employee's employment.

         12. Miscellaneous.

         12.1 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California applicable to agreements
made and entered into and performed in that state, without regard to principles
of conflict of laws.

         12.2 Entire Agreement; Amendment. This Agreement contains the complete
understanding and agreement between the parties with respect to the subject
matter hereof, and supersedes all prior understandings and agreements, written
or oral, between the parties.

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         12.3 Assignment. This Agreement and the rights and obligations
hereunder may not be assignable or delegable by any party without the prior
written consent of the other party, except with respect to an assignment by
Company to any affiliate or pursuant to a merger or consolidation involving
Company or pursuant to the sale of all or substantially all of its assets.

         12.4 Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law and any such invalidity or unenforceability shall be deemed
replaced by a term or provision determined by the parties as coming closest to
expressing the intention of the invalid or unenforceable term or provision.

         12.5 Notice. Any notice to be given hereunder shall be in writing and
either delivered in person, by facsimile, by nationally recognized overnight
courier, or by registered or certified first class mail, postage prepaid,
addressed the parties at the addresses first set forth above. Notices delivered
personally shall be deemed given as of actual receipt; notices sent via
facsimile transmission shall be deemed given as of one business day following
sender's receipt from sender's facsimile machine of written confirmation of
transmission thereof; notices sent by overnight courier shall be deemed given as
of one business day following sending; and notices mailed shall be deemed given
as of five business days after proper mailing. Any party may change its address
in a notice given to the other party in accordance with this Section.

         12.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective heirs, legal
representatives, successors (including, without limitation, any successor by
merger or sale of all or substantially all assets) and permitted assigns.

         12.7 Further Assurances. Employee shall execute and deliver all
instruments and other documents which are mutually and reasonably agreed to by
Employee and Company to be necessary or appropriate to carry out the terms
hereof. 12.8 Headings. The Section headings in this Agreement are for
convenience of reference only and shall not affect its interpretation.

         12.8 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which when
together shall constitute one and the same agreement.

         12.9. Attorney's Fees. If any legal action, arbitration, or other
proceeding is brought for the enforcement of this Agreement, the successful or
prevailing party or parties will be entitled to recover reasonable attorney fees
and other costs incurred in that action or proceeding, in addition to any other
relief to which they may be entitled.

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         12.10. Warranty of Authority. Each party hereto, on behalf of Company
represents and warrants that he is duly authorized to execute and deliver this
Agreement on behalf of Company , and that it is binding upon said corporation
without further action or approval by any person or entity.

         12.11 Rights Cumulative. The rights and remedies provided by this
Agreement are cumulative and the exercise of any right or remedy by either party
hereto (or by its successor), whether pursuant to this Agreement, to any other
agreement, or by law, shall not preclude or waive their or its rights to
exercise any or all other rights and remedies.


<PAGE>


         IN WITNESS WHEREOF, this Agreement has been executed and delivered by
the parties hereto as of the date first above written.

                                    EMPLOYER:

                                                     HOME DIRECTOR, INC.


                                    By:
                                        ------------------------------
                                    Print Name
                                              ------------------------
                                    Print Title
                                               -----------------------


                                    EMPLOYEE:


                                    ----------------------------------
                                    Jerome Steckling



<PAGE>


                                    EXHIBIT A

Agreement dated January 7, 2004 between:
Company and
EmployeePage 1 of 2

EMPLOYEE'S PRIOR INVENTIONS AND EXISTING BUSINESS ASSOCIATIONS




o        Pioneer/TAD professional and theatre contracts and relationship;

o        ADI (AB Amplifier) relationship and business opportunities;

o        Presidio, Lucas Films, Skywalker, Pixar, AMPAS, and other custom
         development projects;

o        JSX audio technology products and potential patents; and

o        The items listed below:

         1. 4 microphone small room measurement system and software

         2. Long acoustic wavelength vector measurement method using predictive
         waveshape analysis.

         3. Adding and subtracting of impulse response generated from program
         material for base line differenced data

         4. Unique method for the display of small room acoustic data on
         standard computer and small PDA monitors

         5. Method for the integration of sound measurement microphones,
         accelerometers, and transducers in loudspeakers

         6. Method for the integration of sound measuring systems from the
         electrical inputs to loudspeakers

         7. Stored error correction lookup tables for latency compensation in
         DSP processors

<PAGE>

Exhibit A

Page 2 of 2

         8. Measurement and reverse error correction applications of impedance
         vs. time

         9. Integrating sound measuring and sound treatment in a chip set.

         10.Universal protocol for output of sound measuring data

         11.Sound measurement protocol to standard spreadsheet format for sound
         system control

         12.Extended audio analyzing for bi-directional networking system of
         acoustic and transfer function error data

         13.The collection of aggregate sound system data from direct
         bi-directional measurement of system and sound field

         14.Linear filter tapped digital signal process for the subtraction of
         loudspeaker and acoustic errors.

         15.Forward sending of uncompressed unprocessed audio program material
         in low data rate sub codes for the purpose of comparing actual program
         material events, where comparison data is used for error correction and
         aggregate tally and system health information

         16.Quantity distribution of pulse code modulation data in digital to
         analog converters for the purposes of ballistic error correction in
         loudspeakers

         17.Non-moving helper coil and method of electronic excitement for
         ballistic control of loudspeakers

         18.Wall dampening method for diffraction horn lenses

         19. Apparatus for audio compression driver throat diffraction and
         aiming for variable diffraction polar patterns