<PAGE>




                    SEPARATION AGREEMENT AND GENERAL RELEASE

         AGREEMENT, made this 3rd day of March, 2004 (this "Agreement"), by and
among ROBERT N. WISE ("Executive"), HOME DIRECTOR, INC., a Delaware corporation
(the "Company"), HOME DIRECTOR TECHNOLOGIES, INC., a Delaware corporation
("HDT") and DIGITAL INTERIORS, INC., a California corporation ("DI").

         A. Executive is currently a director of HDT, DI and the Company and
employed as the President and Chief Operating Officer of HDT, DI and the Company
pursuant to an Employment Agreement dated January 17, 2002 by and between HDT
and Executive, as modified by Section 5(m) of the Placement Agency Agreement by
and between the Company, Spencer Trask Ventures, Inc., Donald B. Witmer and
Executive (the "Employment Agreement").

         B. Executive desires to resign from his positions as director,
President and Chief Operating Officer of HDT, DI and the Company, and HDT, DI
and the Company are willing to accept such resignations and terminate their
respective relationships with Executive, all on the terms set forth herein. Such
resignations are effective as of the date hereof (the "Termination Date").

         C. The Company desires to retain Executive as an independent consultant
and Executive is willing to provide the Company with certain consulting services
on the terms and subject to the conditions set forth herein.

         NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:

         1. Resignation; Termination of Employment; Retention and Return of
Personal Property. Executive's employment with HDT and the Company are hereby
terminated, and Executive hereby resigns as a director, the President and the
Chief Operating Officer of HDT, DI and the Company. Executive shall promptly
return to the Company all property of the Company in his possession, but he
shall be entitled to retain for his own use and as his property the IBM ThinkPad
computer provided to him by the Company, excluding proprietary or confidential
information of the Company stored thereon, which he shall immediately cancel,
erase or destroy. Notwithstanding the foregoing, Executive shall be entitled to
the continued possession and use of the Lincoln Navigator automobile currently
provided to Executive by the Company, and the Company shall continue to pay the
lease rentals therefor for the remainder of the lease term and shall pay the
residual amount due under the lease at the end of such term, for the benefit of
Executive, to enable Executive to acquire ownership of the vehicle pursuant to
the lease.

         2. Consulting During Transition Period. Notwithstanding the
resignations, terminations and releases contemplated hereby, during the period
commencing on the Termination Date and ending 30 days thereafter (such period,
the "Transition Period"), Executive shall serve as an independent consultant to
the Company on a part-time basis to provide sales and advisory services to the
Company in connection with the proposed contracts, agreements, transactions and
projects described in Annex A to this Agreement (each a "Transaction" and,
collectively, the "Transactions"). During the Transition Period, Executive shall
and expend his best efforts, energies and skills to the Transactions and the
Company's interest therein.
<PAGE>

         3. Compensation Matters. The parties agree that:

         (a) Executive shall be entitled to receive from the Company, and the
Company shall pay or provide to Executive: (i) all compensation and
reimbursement accrued under the Employment Agreement as of the Termination Date,
payable in accordance with the Company's customary payroll practices, (ii) an
additional cash payment of $10,000 on the last day of the Transition Period
(minus applicable tax withholdings and other appropriate payroll deductions),
(iii) an additional cash payment of $50,000 concurrently with the execution of
this Agreement, as consideration for cancellation of the unexpired term of the
Employment Agreement, (iv) the Transaction Commissions (as defined in Section
3(b) and payable as provided therein), (v) the vehicle lease and residual
payments provided for in Section 1, and (vi) all benefits that Executive would
be entitled to receive under the Company's employee benefit plans pursuant to
Section 3.6 of the Employment Agreement (including coverage under the Company's
health plan for himself and his family) during the period commencing on the
Termination Date and ending on December 31, 2004, to the same extent as if he
continued to be employed by the Company on a full-time basis through December
31, 2004. Executive acknowledges and agrees that from and after the Termination
Date he has and shall have no claim or entitlement to compensation or benefits
from the Company, under the Employment Agreement or otherwise, except as
provided in this Section 3, and that the Company's, HDT's and DI's obligations
to employ Executive under the Employment Agreement are terminated as of the
Termination Date. Notwithstanding the foregoing, and for the avoidance of doubt,
(i) Executive shall be fully vested as of the date hereof with respect to
options to purchase a total of 120,000 shares of the Company's common stock
granted to him as of January 16, 2003 under the Company's Amended and Restated
Stock Option Plan, and such options shall remain exercisable in accordance with
their terms until March 3, 2005, (ii) all of Executive's options to purchase the
Company's common stock other than those described in clause (i) are terminated
and expire as of the date hereof, and (iii) Executive's rights under outstanding
warrants to purchase shares of the Company's common stock shall remain in full
force in accordance with their terms and shall be unaffected by anything
contained in this Agreement.

         (b) For purposes of this Agreement, "Transaction Commissions" means,
with respect to each Transaction, an amount equal to: (A) 2% of the Company's
net collected revenue (if any) derived from such Transaction during the period
commencing on the date that the Company begins to sell products or provide
services in connection with such Transaction and ending 12 months thereafter
(the "First Measurement Period") and (B) 1% of the Company's net collected
revenue (if any) derived from such Transaction during the period commencing on
the day after the end of the First Measurement Period and ending 12 months
thereafter; provided, however, that "Transaction Commissions" shall not include,
and Executive shall not be entitled to receive, any portion of the Company's
revenue derived from any Transaction after December 31, 2006; and provided,
further, that the amounts otherwise payable in respect of Transaction
Commissions shall be reduced by the sum of $15,000 which shall be deducted from
the first amounts, if any, otherwise payable in respect of Transaction
Commissions. For the avoidance of doubt, the term "net collected revenue" means
non-refundable amounts received by the Company, excluding amounts payable to
subcontractors. Transaction Commissions, if any are due, shall be payable
quarterly, within 15 days after the end of each calendar quarter, commencing
with the calendar quarter ending June 30, 2004.
<PAGE>


         (c) The Company's obligations to pay compensation and provide benefits
to Executive under clauses (ii) through (v) of Section 3(a) shall be subject to
Executive's continuing compliance with the provisions of this Agreement. In the
event Executive fails to provide consulting services as contemplated by Section
2, the Company shall have no obligation to provide the payments contemplated by
clauses (ii) and (iv) of Section 3(a) but shall nevertheless be obligated to
provide the payments and benefits contemplated by the remaining provisions of
Section 3(a). The obligations to make payments and provide benefits pursuant to
such remaining provisions shall immediately cease and terminate in the event of
any violation by Executive of the provisions of Sections 7 or 8 hereof or
Section 5, 6 or 7 of the Employment Agreement.

         4. Release by Executive.

         (a) Executive for himself and for his heirs, executors, administrators
and assigns (all of the foregoing collectively, the "Releasors"), hereby forever
releases and discharges the Company, HDT, DI, and any of its or their parent
companies, whether direct or indirect, subsidiaries, divisions, affiliates or
related business entities, successors and assigns and any of its or their past
or present shareholders, directors, officers, members, managers, attorneys,
agents, trustees, administrators, employees or assigns (whether acting as agents
for the Company, HDT or DI or in their individual capacities) (hereinafter
referred to collectively as "Releasees"), from any and all claims, demands,
causes of action, fees and liabilities of any kind whatsoever, whether known or
unknown, which Releasors ever had, now have or may have against Releasees by
reason of any actual or alleged act, omission, transaction, practice, conduct,
occurrence or other matter up to and including the date hereof; provided,
however, that this Section 4 does not release or waive any claims that may arise
as a result of a breach of this Agreement by the Company, HDT or DI.

         (b) Without limiting the generality of the foregoing, this Agreement is
intended to and shall release Releasees, to the fullest extent permitted by law,
from any and all claims, whether known or unknown, which Releasors ever had, now
have and may have against Releasees, including but not limited to any claims,
whether or not asserted, arising out of Executive's employment with Releasees
and/or the termination of such employment, including but not limited to: (i) any
claim under the Civil Rights Act of 1964, as amended; (ii) any other claim of
discrimination or retaliation in employment (whether based on federal, state or
local law, statutory or decisional); (iii) any claim arising out of the terms
and conditions of Executive's employment with the Company, HDT or DI, the
termination of such employment, and/or any of the events relating directly or
indirectly to or surrounding such termination; (iv) any claim of discrimination
or breach of fiduciary duly under the Employee Retirement Income Security Act of
1974, as amended (except claims for accrued vested benefits under any employee
benefit plan of the Company accordance with the terms of such plan and
applicable law); (v) any claim for attorney's fees, costs, disbursements and/or
the like; and (vi) any claim arising under the Age Discrimination in Employment
Act.

         It is the intention of the Company, HDT, DI and Executive that this
Section 4 shall be effective as a full and final accord and satisfaction and
release by Executive of each and every matter referred to herein. Executive
acknowledges that he is familiar with Section 1542 of the Civil Code of the
State of California which provides as follows:
<PAGE>

    "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
    KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
    WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
    DEBTOR."

         Executive hereby waives and relinquishes any right and benefit which he
has under Section 1542 to the full extent that he may lawfully waive such rights
and benefits pertaining to the subject matter hereof.

         5. Release by Company. The Company, HDT and DI hereby forever release
and discharge Executive from any and all claims, demands, causes of action, fees
and liabilities of any kind whatsoever, whether known or unknown, which the
Company, HDT and DI ever had, now has or may have against Executive by reason of
any actual or alleged act, omission, transaction, practice, conduct, occurrence
or other matter up to and including the date hereof; provided, however, that
this Section 5 does not release or waive any claims that may arise as a result
of (i) Executive's embezzlement, theft or willful misappropriation of, or the
commission of any fraud related to, the funds or assets of the Company, HDT or
DI, (ii) a breach of this Agreement or (iii) a breach by Executive of any of his
obligations under Section 6 or 7 of the Employment Agreement; and provided,
further, that this Section 5 shall be void and of no effect in the event that
(x) Executive exercises his rights under Section 11 hereof to revoke or rescind
the release in Section 4 hereof, (y) Executive challenges the effectiveness or
enforceability of the release in Section 4 hereof or (z) Executive breaches any
provision of this Agreement.

         6. Confidentiality of Agreement. The financial terms and conditions of
this Agreement are and shall be deemed confidential and shall not be disclosed
by Executive to any other person or entity, except to accountants, tax advisors
or immediate family members, provided they agree to maintain the confidentiality
of this Agreement.

         7. Covenants Not to Sue.

         (a) Executive covenants, except to the extent prohibited by law, not to
commence, maintain, prosecute or participate in any action, charge, complaint or
proceeding of any kind (on his own behalf and/or on behalf of any other person
or entity and/or on behalf of or as a member of any alleged class of persons) in
any court, or before any administrative or investigative body or agency (whether
public, quasi-public or private), except if otherwise required by law, against
Releasees with respect to any act, omission, transaction or occurrence up to and
including the date on which this Agreement is executed, except the foregoing
shall not prohibit an action for any claims which are not released under Section
4 hereof. Executive represents that he has not commenced, maintained, prosecuted
or participated in any action, charge, complaint or proceeding of any kind (on
his own behalf and/or on behalf of any other person and/or on behalf of or as a
member of any alleged class of persons) that is presently pending in any court,
or before any administrative or investigative body or agency (whether public,
quasi-public, or private), against or involving Releasees.

         (b) The Company covenants, except to the extent prohibited by law, not
to commence, maintain, prosecute or participate in any action, charge, complaint
or proceeding of any kind (on its own behalf and/or on behalf of any other
person or entity and/or on behalf of or as a member of any alleged class of
persons) in any court, or before any administrative or investigative body or
agency (whether public, quasi-public or private), except if otherwise

<PAGE>

required by law, against Executive with respect to any act, omission,
transaction or occurrence up to and including the date on which this Agreement
is executed, except the foregoing shall not prohibit an action for any claims
which are not released under Section 5 hereof. The Company represents that it
has not commenced, maintained, prosecuted or participated in any action, charge,
complaint or proceeding of any kind (on its own behalf and/or on behalf of any
other person and/or on behalf of or as a member of any alleged class of persons)
that is presently pending in any court, or before any administrative or
investigative body or agency (whether public, quasi-public, or private), against
or involving Executive.

         8. Nondisparagement.

         (a) Executive agrees not to publish or communicate to any person or
entity any Disparaging (as defined below) remarks, comments or statements
concerning the Company, HDT, DI and/or their present and former respective
members, managers, partners, director, shareholders, officers, employees,
agents, attorneys, successors and assigns. "Disparaging" remarks, comments or
statements are those that impugn the character, honesty, integrity or morality
or business acumen or abilities in connection with any aspect of the operation
of business of the individual or entity being disparaged.

         (b) The Company agrees not to publish or communicate to any person or
entity any Disparaging (as defined above) remarks, comments or statements
concerning Executive. In response to a request from any future employer
regarding Executive's service with the Company, the Company shall provide only
information as to the dates of his employment and a statement that such
employment was terminated by mutual agreement.

         9. Arbitration. Section 11 of the Employment Agreement is incorporated
in this Agreement as if set forth herein at length. All references to the
"Agreement" therein shall be references to this Agreement, and the reference to
"Section 9" therein shall be a reference to Section 10 of this Agreement.

         10. Equitable Remedies. In view of the irreparable harm and damage
which would be incurred by the Company, HDT and/or DI in the event of any
violation by Executive of any of the provisions of Sections 7 or 8 hereof or
Section 5, 6 or 7 of the Employment Agreement, Executive hereby consents and
agrees that in any such event, the Company, HDT and/or DI, in addition to any
other rights that it may have, and without prejudice to any other remedies which
may be available hereunder or otherwise, at law or in equity, shall be entitled
to an injunction or similar equitable relief to be issued by any court of
competent jurisdiction restraining Executive from committing or continuing any
such violation, without the necessity of proving damage, or posting any bond or
other security.

         11. Acknowledgment by Executive. Executive acknowledges that: (i) he
has carefully read this Agreement in its entirety; (ii) he has had an
opportunity to consider fully the terms of this Agreement; (iii) he has been
advised to consult with an attorney of his choosing in connection with this
Agreement; (iv) he fully understands the significance of all the terms and
conditions of this Agreement; (v) he has discussed it with his independent legal
counsel, or has had a reasonable opportunity to do so; (vi) he has had answered
to his satisfaction any questions he has asked with regard to the meaning and
significance of any of the provisions of this Agreement; (vii) he is signing
this Agreement voluntarily and of his own free will and assents to all the terms
and conditions contained herein; (viii) he has had at least 21 days to review
and consider this Agreement or has waived the opportunity for such time to
review; and (ix) HE
<PAGE>

UNDERSTANDS THAT HE MAY REVOKE THE RELEASE SET FORTH IN SECTION 4 HEREOF WITHIN
SEVEN (7) DAYS OF SIGNING, by delivering a written notice thereof to Michael
Liddle at the offices of the Company.

         12. Severability. If any provision of this Agreement shall be held by a
court of competent jurisdiction to be illegal, void, or unenforceable, such
provision shall be of no force and effect. However, the illegality or
unenforceability of such provision shall have no effect upon, and shall not
impair the enforceability of, any other provision of this Agreement; provided,
however, that upon a finding by a court of competent jurisdiction that any
release or covenant provided for in Sections 4 through 9 hereof or Section 5, 6
or 7 of the Employment Agreement is illegal, void, or unenforceable, Executive
or the Company, HDT and DI, as the case may be, shall execute a release, waiver
and/or covenant to the same effect but limited to the extent necessary so that
the same shall be legal and enforceable. Any material breach of this Agreement
shall entitle the Company to seek appropriate relief (including but not limited
to repayment of the amounts paid under this Agreement) in a court of competent
jurisdiction.

         13. Blue Pencil. It is the intention of the parties hereto that, if any
court construes any provision or clause of this Agreement, or any portion
thereof, to be illegal, void or unenforceable because of the duration of such
provision or the geographic scope covered thereby, such court shall reduce the
duration or the geographic scope of such provision (or the parties shall agree
in writing to reduce the duration or the geographic scope of such provision),
and, in its reduced form, such provision shall then be enforceable and shall be
enforced.

         14. Entire Agreement. Except with respect to Section 5
(Non-Interference; Noncompetition), 6 (Property Rights) and Section 7
(Confidentiality) of the Employment Agreement, which sections shall remain in
full force and effect after the Termination Date, this Agreement represents the
complete understanding between the parties and supersedes any and all
agreements, understandings and discussions, whether written or oral, between the
parties. For the avoidance of doubt, the Termination Date shall be the last day
of the term of the Employment Agreement for purposes of Section 6 of the
Employment Agreement. To the extent this Agreement may conflict with the
Employment Agreement, this Agreement shall control, and for the purposes of
clarification, Executive shall be entitled to no compensation other than as
provided in this Agreement. No other promises or agreements shall be binding
unless in writing and signed by the parties hereto after the execution of this
Agreement.

         15. Governing Law. This Agreement shall be governed by the laws of the
State of California applicable to contracts made and to be wholly performed in
that State.

         16. Binding Effect. This Agreement is binding upon, and shall inure to
the benefit of, the parties and their respective heirs, executors,
administrators, successors and assigns. All Releasees are intended to be third
party beneficiaries hereunder.

         17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which together shall constitute one and the same
agreement. This Agreement shall be binding on the parties hereto notwithstanding
that the parties are not all signatories to the same counterpart so long as each
party shall have executed and delivered a counterpart of this Agreement. The
transmission of a signed counterpart of this Agreement by telecopier shall
constitute sufficient delivery hereof.


<PAGE>

         [Remainder of Page Intentionally Blank, Signature Page Follows]

<PAGE>




                  WHEREFORE, the parties hereto have caused this Separation
Agreement and General Release to be signed as of the date first written above.




                               Robert N. Wise



                               HOME DIRECTOR, INC.



                               By:
                                   -----------------------------------------
                                   Michael Liddle
                                   Chief Executive Officer


                               HOME DIRECTOR TECHNOLOGIES,  INC.



                               By:
                                   -----------------------------------------
                                   Michael Liddle
                                   Chief Executive Officer


                               DIGITAL INTERIORS, INC.



                               By:
                                   -----------------------------------------
                                   Michael Liddle
                                   Chief Executive Officer




<PAGE>


                                     ANNEX A

                                  TRANSACTIONS

ALL WORK DONE IN CONNECTION WITH ANY OF THE FOLLOWING PROJECTS OR FOR ANY OF THE
FOLLOWING BUILDERS OR ENTITIES THEY CONTROL:

LAND TEJAS COMMUNITIES

DIABLO GRANDE COMMUNITY (PATTERSON CAL.)

BRIGHT HOMES

JONATHAN HOMES

RAFI DEVELOPMENT GROUP