<PAGE>

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO
AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A
FINANCIAL INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT.

                          COMMON STOCK PURCHASE WARRANT

                  To Purchase 100,000 Shares of Common Stock of

                               Home Director, Inc.

            THIS COMMON STOCK PURCHASE WARRANT CERTIFIES that, for value
received, SLD Capital Corp. (the "Holder"), is entitled, upon the terms and
subject to the limitations on exercise and the conditions hereinafter set forth,
at any time on or after December 9, 2003 (the "Initial Exercise Date") and on or
prior to the close of business on the third anniversary of the Initial Exercise
Date (the "Termination Date"), but not thereafter, to subscribe for and purchase
from Home Director, Inc., a Delaware corporation (the "Company"), at the
Exercise Price provided for herein, up to 100,000 shares (the "Warrant Shares")
of the Company's Common Stock, par value $0.01 per share (the "Common Stock");
provided, however, that the Holder shall not be entitled to subscribe for and
purchase more than 50,000 shares of Common Stock until such time (if ever) as
the condition described in Section 3(a) of this Warrant shall have been
satisfied. The purchase price of one share of Common Stock (the "Exercise
Price") under this Warrant shall be $1.15 adjustment as provided herein. The
Exercise Price and the number of Warrant Shares shall be subject to adjustment
as provided herein.

            1. Title to Warrant. Prior to the Termination Date and subject to
compliance with applicable laws and Section 7 of this Warrant, this Warrant and
all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed. Prior to the effectiveness of any such transfer, the
transferee shall sign a representation letter in form and substance reasonably
satisfactory to the Company.

            2. Authorization of Warrant Shares. The Company covenants that all
Warrant Shares which may be issued upon the exercise of the purchase rights
represented by this Warrant

<PAGE>

will, upon exercise of the purchase rights represented by this Warrant in
accordance with its terms and payment of the Exercise Price, be duly authorized,
validly issued, fully paid and nonassessable and free from all liens, issue or
transfer taxes and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such issue).

            3. Exercise of Warrant.

                  (a) This Warrant shall not be exercisable with respect to more
than 50,000 shares of Common Stock until such time (if ever) as the Company
shall, for any period of 15 consecutive trading days, satisfy the then published
and effective requirements of the American Stock Exchange for initial listing of
the Common Stock on such Exchange.

                  (b) Exercise of the purchase rights represented by this
Warrant may be made at any time or times on or after the Initial Exercise Date
and on or before the Termination Date by the surrender of this Warrant and the
Notice of Exercise Form annexed hereto duly executed, at the office of the
Company (or such other office or agency of the Company as it may designate by
notice in writing to the registered Holder at the address of such Holder
appearing on the books of the Company) and upon payment of the aggregate
Exercise Price of the number of Warrant Shares purchased upon such exercise, by
wire transfer or cashier's check drawn on a United States bank, the Holder shall
be entitled to receive a certificate for the number of Warrant Shares so
purchased. Certificates for shares purchased hereunder shall be delivered to the
Holder within three (3) business days after the date on which this Warrant shall
have been exercised as aforesaid. This Warrant shall be deemed to have been
exercised and such certificate or certificates shall be deemed to have been
issued, and Holder or any other person so designated to be named therein shall
be deemed to have become a holder of record of such shares for all purposes, as
of the date the Warrant has been exercised by payment to the Company of the
Exercise Price and all taxes required to be paid by the Holder, if any, pursuant
to Section 5 prior to the issuance of such shares, have been paid. If the
Company fails to deliver to the Holder a certificate or certificates
representing the Warrant Shares pursuant to this Section 3(b) by the third
business day after the date of exercise, then the Holder will have the right to
rescind such exercise.

                  (c) If this Warrant shall have been exercised in part, the
Company shall, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to the Holder a new Warrant evidencing the
rights of the Holder to purchase the unpurchased Warrant Shares called for by
this Warrant, which new Warrant shall in all other respects be identical with
this Warrant.

            4. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.

            5. Charges, Taxes and Expenses. Issuance of certificates for Warrant
Shares shall be made without charge to the Holder for any issue or transfer tax
or other incidental


                                       2
<PAGE>

expense in respect of the issuance of such certificates, all of which taxes and
expenses shall be paid by the Company, and such certificates shall be issued in
the name of the Holder or in such name or names as may be directed by the
Holder; provided, however, that in the event certificates for Warrant Shares are
to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached
hereto duly executed by the Holder; and the Company may require, as conditions
thereto, (1) the transferee to execute an investment representation letter in
form and substance reasonably satisfactory to the Company and (2) the payment of
a sum sufficient to reimburse the Company for any transfer tax incidental
thereto.

            6. Closing of Books. The Company will not close its stockholder
books or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.

            7. Transfer, Division and Combination.

            (a) Subject to compliance with any applicable securities laws and
the conditions set forth in Sections 1 and 7(e) hereof, this Warrant and all
rights hereunder are transferable, in whole or in part, upon surrender of this
Warrant at the principal office of the Company, together with a written
assignment of this Warrant substantially in the form attached hereto duly
executed by the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall execute and deliver a new
Warrant or Warrants in the name of the assignee or assignees and in the
denomination or denominations specified in such instrument of assignment, and
shall issue to the assignor a new Warrant evidencing the portion of this Warrant
not so assigned, and this Warrant shall promptly be cancelled. A Warrant, if
properly assigned, may be exercised by a new holder for the purchase of Warrant
Shares without having a new Warrant issued.

            (b) This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 7(a), as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.

            (c) The Company shall prepare, issue and deliver at its own expense
(other than transfer taxes) the new Warrant or Warrants under this Section 7.

            (d) The Company agrees to maintain, at its aforesaid office, books
for the registration and the registration of transfer of the Warrants.

            (e) If, at the time of the surrender of this Warrant in connection
with any transfer of this Warrant, the transfer of this Warrant shall not be
registered pursuant to an effective registration statement under the Securities
Act and under applicable state securities or blue sky laws, the Company may
require, as a condition of allowing such transfer (i) that the


                                       3
<PAGE>

Holder or transferee of this Warrant, as the case may be, furnish to the Company
a written opinion of counsel (which opinion shall be in form, substance and
scope customary for opinions of counsel in comparable transactions) to the
effect that such transfer may be made without registration under the Securities
Act and under applicable state securities or blue sky laws, (ii) that the holder
or transferee execute and deliver to the Company a representation letter in form
and substance acceptable to the Company and (iii) that the transferee be an
"accredited investor" as defined in Rule 501(a) promulgated under the Securities
Act.

            8. No Rights as Shareholder until Exercise. This Warrant does not
entitle the Holder to any voting rights or other rights as a shareholder of the
Company prior to the exercise hereof. Upon the surrender of this Warrant and the
payment of the aggregate Exercise Price following any exercise of this Warrant,
the Warrant Shares so purchased shall be and be deemed to be issued to such
Holder as the record owner of such shares as of the close of business on the
later of the date of such surrender or payment.

            9. Loss, Theft, Destruction or Mutilation of Warrant. The Company
covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such warrant or stock certificate, if mutilated,
the Company will make and deliver a new warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.

            10. Saturdays, Sundays, Holidays, etc. If the last or appointed day
for the taking of any action or the expiration of any right required or granted
herein shall be a Saturday, Sunday or a legal holiday, then such action may be
taken or such right may be exercised on the next succeeding day that is not a
Saturday, Sunday or legal holiday.

            11. Adjustments of Exercise Price and Number of Warrant Shares. The
number and kind of securities purchasable upon the exercise of this Warrant and
the Exercise Price shall be subject to adjustment from time to time upon the
happening of any of the following. In case the Company shall (i) pay a dividend
in shares of Common Stock or make a distribution in shares of Common Stock to
holders of its outstanding 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 of Common Stock, or (iv)
issue any shares of its capital stock in a reclassification of the Common Stock,
then the number of Warrant Shares purchasable upon exercise of this Warrant
immediately prior thereto shall be adjusted so that the Holder shall be entitled
to receive the kind and number of Warrant Shares or other securities of the
Company which it would have owned or have been entitled to receive had such
Warrant been exercised in advance thereof. Upon each such adjustment of the kind
and number of Warrant Shares or other securities of the Company which are
purchasable hereunder, the Holder shall thereafter be entitled to purchase the
number of Warrant Shares or other securities resulting from such adjustment at
an Exercise Price per Warrant Share or other security obtained by multiplying
the Exercise Price in effect immediately prior to such adjustment by the number
of Warrant Shares purchasable pursuant hereto immediately prior to such
adjustment and dividing by the number of Warrant Shares or other securities of
the Company resulting from such adjustment.


                                       4
<PAGE>

An adjustment made pursuant to this paragraph shall become effective immediately
after the effective date of such event retroactive to the record date, if any,
for such event.

            12. Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of all or substantially all its property,
assets or business to another corporation and, pursuant to the terms of such
reorganization, reclassification, merger, consolidation or disposition of
assets, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("Other
Property"), are to be received by or distributed to the holders of Common Stock
of the Company, then the Holder shall have the right thereafter to receive, at
the option of the Holder, upon exercise of this Warrant, the number of shares of
Common Stock of the successor or acquiring corporation or of the Company, if it
is the surviving corporation, and Other Property receivable upon or as a result
of such reorganization, reclassification, merger, consolidation or disposition
of assets by the Holder of the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to such event. In case of any such
reorganization, reclassification, merger, consolidation or disposition of
assets, the successor or acquiring corporation (if other than the Company) shall
expressly assume the due and punctual observance and performance of each and
every covenant and condition of this Warrant to be performed and observed by the
Company and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined in good faith by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of Warrant Shares for which this Warrant is exercisable which shall
be as nearly equivalent as practicable to the adjustments provided for in this
Section 12. For purposes of this Section 12, "common stock of the successor or
acquiring corporation" shall include stock of such corporation of any class
which is not preferred as to dividends or assets over any other class of stock
of such corporation and which is not subject to redemption and shall also
include any evidences of indebtedness, shares of stock or other securities which
are convertible into or exchangeable for any such stock, either immediately or
upon the arrival of a specified date or the happening of a specified event and
any warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 12 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.

            13. Voluntary Adjustment by the Company. The Company may at any time
during the term of this Warrant reduce the then current Exercise Price to any
amount and for any period of time deemed appropriate by the Board of Directors
of the Company.

            14. Notice of Adjustment. Whenever the number of Warrant Shares or
number or kind of securities or other property purchasable upon the exercise of
this Warrant or the Exercise Price is adjusted, as herein provided, the Company
shall give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.


                                       5
<PAGE>

            15. Piggyback Registration Rights. (a) If at any time after the
Initial Exercise Date and before the Termination Date the Company proposes to
file a registration statement under the Securities Act with respect to an
offering by the Company of Common Stock for its own account (other than a
registration statement on Form S-4 or S-8 or any successor thereto) or for the
account of any stockholder of the Company, then the Company shall give written
notice of such proposed filing to the Holder and such notice shall describe the
proposed registration and offer the Holder the opportunity to register such
number of Warrant Shares as the Holder may request (a "Piggy-Back
Registration"). If, within ten days after the Company sends such notice, the
Holder shall so request in writing, the Company shall include in such
registration statement all or any part of the Warrant Shares; provided, however,
that the Company shall not be required to register any Warrant Shares pursuant
to this Section 15 that are eligible for resale pursuant to Rule 144 under the
Securities Act.

            (b) In connection with any Piggyback Registration under this Section
15 involving an underwritten offering, the Company shall not be required to
include any Warrant Shares in such underwritten offering unless the Holder
accept the terms of the underwritten offering as agreed upon between the
Company, such other stockholders, if any, and the managing underwriter or
underwriters (the "Company Underwriter"), and then only in such quantity as the
Company Underwriter believes will not jeopardize the success of the offering by
the Company. If the Company Underwriter determines that the registration of all
or part of the Warrant Shares which the Holder has requested to be included
would materially adversely affect the success of such offering, then the Company
shall be required to include in such registration, to the extent of the amount
that the Company Underwriter believes may be sold without causing such material
adverse effect, first, all of the securities to be offered on account of the
Company, second, the Warrant Shares to be offered for the account of the Holder
pursuant to this Section 15, on a pro-rata basis with the number of shares to be
offered for the account of other stockholders pursuant to registration rights
granted by the Company to such other stockholders.

            (c) To the extent not inconsistent with applicable law, the Holder
hereby agrees not to effect any public sale or distribution (including sales
pursuant to Rule 144 under the Securities Act) of any Common Stock or any
options, rights and warrants convertible into or exercisable for any Common
Stock during the period commencing seven days prior to and ending 180 days after
the effective date of any registration statement filed by the Company in
connection with an underwritten offering unless the Company Underwriter shall
otherwise agree.

            (d) Registration Procedures. In connection with any registration
statement in which the Warrant Shares are included, the Company shall:

                  (i) use its best efforts to cause such registration statement
to become and remain effective for a period of 24 months (or such shorter period
as the Holder is subject to the volume limitations of Rule 144(e) under the
Securities Act);

                  (ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of the Warrant
Shares;


                                       6
<PAGE>

                  (iii) respond as promptly as reasonably possible to any
comments received from the Securities and Exchange Commission (the "SEC") with
respect to such registration statement or any amendment thereto;

                  (iv) notify the Holder, as promptly as is reasonably possible
after it shall receive notice thereof, of the time when such registration
statement has become effective or a supplement to any prospectus forming a part
of such registration statement has been filed;

                  (v) furnish such number of prospectuses and other documents
incident thereto, including supplements and amendments, as the Holder may
reasonably request;

                  (vii) use its reasonable best efforts to avoid the issuance
of, or, if issued, obtain the withdrawal of (A) any order suspending the
effectiveness of such registration statement, or (B) any suspension of the
qualification (or exemption from qualification) of any of the Warrant Shares for
sale in any jurisdiction, at the earliest practicable moment; provided, however,
that the Company may delay the filing of, withdraw, suspend or revoke the
effectiveness of such registration statement in the event that the Company's
board of directors determines, in good faith, that the Company possesses
material information not appropriate for disclosure, and that continued
effectiveness of such registration statement would be seriously detrimental to
the Company or its stockholders, in which case the filing and effectiveness of
such registration statement may be deferred in the sole discretion of the
Company; and

                  (viii) comply with all applicable rules and regulations of the
SEC.

            (e) Expenses. (i) All fees, costs and expenses in connection with a
Piggyback Registration hereunder (as specified in subparagraph (ii) below) shall
be borne by the Company; provided, however, that the Holder shall bear its
pro-rata share of the underwriting discount, commissions, expense allowances and
transfer taxes and the cost of its own counsel.

                  (ii) The fees, costs and expenses of registration to be borne
by the Company as provided in paragraph (i) above shall include, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel and accountants for the Company, and all legal fees and
disbursements and other expenses of complying with state securities or blue sky
laws of any jurisdictions in which the securities to be offered are to be
registered and qualified (except as provided in subparagraph (i) above). Fees
and disbursements of counsel and accountants for the Holder and any other
expenses incurred by the Holder not expressly included above shall be borne by
the Holder.

            (f) The Holder covenants and agrees that (i) it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it in
connection with sales of the Warrant Shares pursuant to any registration
statement filed hereunder and (ii) it will furnish to the Company upon request a
certified statement as to the number of shares of Common Stock beneficially
owned by the Holder and the controlling person of the Holder (if any).

            (g) Indemnification. (i) The Company will indemnify the Holder, each
of its officers, directors, agents, employees and partners, and each person
controlling the Holder, with respect to each registration, qualification or
compliance effected pursuant to this Section 15, and each underwriter, if any,
and each person who controls any underwriter, and their respective


                                       7
<PAGE>

counsel against all claims, losses, damages and liabilities (or actions,
proceedings or settlements in respect thereof) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact contained in
any prospectus, offering circular or other document prepared by the Company
(including any related registration statement, notification or the like)
incident to any such registration, qualification or compliance, or based on any
omission (or alleged omission) to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
any violation by the Company of the Securities Act or any rule or regulation
thereunder applicable to the Company and relating to action or inaction required
of the Company in connection with any such registration, qualification or
compliance, and will reimburse the Holder, each of its officers, directors,
agents, employees and partners, and each person controlling the Holder, each
such underwriter and each person who controls any such underwriter, for any
legal and any other expenses as they are reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement (or alleged untrue statement) or omission (or alleged
omission) based upon written information furnished to the Company by the Holder
or such underwriter.

                  (ii) The Holder will indemnify the Company, each of its
directors and officers and each underwriter, if any, of the Company's securities
covered by a registration statement filed pursuant to this Section 15, each
person who controls the Company or such underwriter within the meaning of the
Securities Act and the rules and regulations thereunder, each other selling
stockholder under such registration statement and each of their officers,
directors and partners, and each person controlling each such selling
stockholder, and their respective counsel against all claims, losses, damages
and liabilities (or actions in respect thereof) arising primarily and directly
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any such registration statement, prospectus, offering
circular or other document, or any omission (or alleged omission) to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse the Company and such
selling stockholders, directors, officers, partners, persons, underwriters or
control persons for any legal or any other expenses as they are reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by the Holder; provided, however, that the obligations
of the Holder hereunder shall be limited to an amount equal to the net proceeds
to the Holder under such registration statement, prospectus, offering circular
or other document as contemplated herein.

                  (iii) Each party entitled to indemnification under this
Section 15 (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim or any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting


                                       8
<PAGE>

therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense; and provided further that if any Indemnified
Party reasonably concludes that there may be one or more legal defenses
available to it that are not available to the Indemnifying Party, or that such
claim or litigation involves or could have an effect on matters beyond the scope
of this Agreement, then the Indemnified Party may retain its own counsel at the
expense of the Indemnifying Party; and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Agreement unless and only to
the extent that such failure to give notice results in material prejudice to the
Indemnifying Party. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to
entry of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation. Each Indemnified Party shall furnish such information regarding
itself or the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with defense of
such claim and litigation resulting therefrom.

                  (iv) If the indemnification provided for in this Section 15 is
held by a court of competent jurisdiction to be unavailable to an Indemnified
Party with respect to any loss, liability, claim, damage or expense referred to
herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified
Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense
in such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party on the one hand and of the Indemnified Party on the other in
connection with the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and of the
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
Indemnifying Party or by the Indemnified Party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

            16. Authorized Shares. (a) The Company covenants that during the
period the Warrant is outstanding, it will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for the issuance
of the Warrant Shares upon the exercise of any purchase rights under this
Warrant. The Company further covenants that its issuance of this Warrant shall
constitute full authority to its officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for
the Warrant Shares upon the exercise of the purchase rights under this Warrant.
The Company will take all such reasonable action as may be necessary to assure
that such Warrant Shares may be issued as provided herein without violation of
any applicable law or regulation, or of any requirements of the trading market
upon which the Common Stock may be listed.

                  (b) Except and to the extent as waived or consented to by the
Holder, the Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger,


                                       9
<PAGE>

dissolution, issue 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 Warrant,
but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or appropriate to
protect the rights of Holder as set forth in this Warrant against impairment.
Without limiting the generality of the foregoing, the Company will (a) not
increase the par value of any Warrant Shares above the amount payable therefor
upon such exercise immediately prior to such increase in par value, (b) take all
such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable Warrant Shares upon the
exercise of this Warrant, and (c) use commercially reasonable efforts to obtain
all such authorizations, exemptions or consents from any public regulatory body
having jurisdiction thereof as may be necessary to enable the Company to perform
its obligations under this Warrant.

                  (c) Before taking any action which would result in an
adjustment in the number of Warrant Shares for which this Warrant is exercisable
or in the Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.

            17. Miscellaneous.

            (a) Jurisdiction. This Warrant shall constitute a contract under the
laws of New York, without regard to its conflict of laws principles or rules.

            (b) Restrictions. The Holder acknowledges that the Warrant Shares
acquired upon the exercise of this Warrant, if not registered, will have
restrictions upon resale imposed by state and federal securities laws.

            (c) Nonwaiver and Expenses. No course of dealing or any delay or
failure to exercise any right hereunder on the part of the Holder shall operate
as a waiver of such right or otherwise prejudice the Holder's rights, powers or
remedies, notwithstanding all rights hereunder terminate on the Termination
Date. If the Company willfully and knowingly fails to comply with any provision
of this Warrant, which results in any material damages to the Holder, the
Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys' fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.

            (d) Notices. Any notice, request or other document required or
permitted to be given or delivered to the Holder by the Company shall be
delivered in accordance with the notice provisions of the Subscription
Agreement.

            (e) Limitation of Liability. No provision hereof, in the absence of
any affirmative action by Holder to exercise this Warrant or purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company.


                                       10
<PAGE>

            (f) Remedies. The Holder, in addition to being entitled to exercise
all rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Warrant. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Warrant and hereby agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate.

            (g) Successors and Assigns. Subject to the express provisions of
this Warrant and applicable securities laws, this Warrant and the rights and
obligations evidenced hereby shall inure to the benefit of and be binding upon
the successors of the Company and the successors and permitted assigns of the
Holder.

            (h) Amendment. This Warrant may be modified or amended or the
provisions hereof waived with the written consent of the Company and the Holder.

            (i) Severability. Wherever possible, each provision of this Warrant
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provisions or the remaining provisions of this Warrant.

            (j) Headings. The headings used in this Warrant are for the
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

                              ********************


                                       11
<PAGE>

            IN WITNESS WHEREOF, the Company has caused this Warrant to be
executed by its officer thereunto duly authorized.

Dated: December 9, 2003

                               HOME DIRECTOR, INC.


                               By:______________________________________________
                                  Name: Daryl Stemm
                                  Title: Chief Financial Officer and Secretary

ACKNOWLEDGED AND AGREED TO:

SLD CAPITAL CORP.


By:____________________________
   Name:
   Title:


                                       12
<PAGE>

                               NOTICE OF EXERCISE

To: Home Director, Inc.

            (1) The undersigned hereby elects to purchase________ Warrant Shares
of Home Director, Inc. pursuant to the terms of the attached Warrant, and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.

            (2) Please issue a certificate or certificates representing said
Warrant Shares in the name of the undersigned or in such other name as is
specified below:

                           Name:
                                    ------------------------------------------
                           Address:
                                    ------------------------------------------

                                    ------------------------------------------

                           SS or Tax
                           ID number:
                                    ------------------------------------------

The Warrant Shares shall be delivered to the following:

                  ----------------------------------------

                 ----------------------------------------

                  ----------------------------------------

                                            HOLDER

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

                                            Dated:
                                                  -----------------------------


                                       13
<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

            FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

                                               Dated:  ______________, _______

                           Holder's Signature: _____________________________

                           Holder's Address:   _____________________________

                                               _____________________________

Signature Guaranteed:  ___________________________________________

NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust company. Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.


                                       14