Exhibit
10.4


FORBEARANCE AGREEMENT


This Forbearance
Agreement is entered into as of May 6, 2004 (the
"Amendment"), by and between PACIFIC BUSINESS
FUNDING, a division of Greater Bay Bank, N.A.
("Purchaser") and HOME DIRECTOR, INC.
("Seller").

RECITALS

A.   Seller and Purchaser are parties to that certain Factoring
Agreement dated as of March 23, 2004, as amended (the
"Agreement").

B.   An Event of
Default has occurred under the Agreement by virtue of Seller's
failure to comply with Section 5(V)(iv) set forth in #6 of Schedule 1
to the Agreement (the "Existing Default").
The Existing Default entitles Purchaser immediately to enforce all the
remedies set forth in the Agreement. Seller has asked Purchaser to
forbear from exercising those remedies as a result of the Existing
Default, and Purchaser has agreed, provided Seller enters into this
Agreement.

NOW, THEREFORE, the parties agree as follows:

1.   Seller acknowledges that there is an existing and uncured
Event of Default under the Agreement. Seller further acknowledges and
agrees that, except as set forth below, Purchaser is not in any way
agreeing to waive such Event of Default as a result of this Forbearance
or the performance by the parties of their respective obligations under
the Agreement. Subject to the conditions contained herein and
performance by Seller of all of the terms of this Forbearance and the
Agreement after the date hereof Purchaser shall, until July 1, 2004,
forbear from exercising any remedies that it may have against Seller as
a result of the occurrence of the Existing Default. Such forbearance
does not apply to any other Event of Default or any other failure by
Seller to perform in accordance with the Agreement or this Forbearance.
This forbearance shall not be deemed a continuing waiver or forbearance
with respect to any Event of Default of a similar nature that may occur
after the date of this Forbearance. If, on or before July 1, 2004,
Seller receives new cash proceeds from the sale and issuance of its
equity securities of at least Two Million Dollars ($2,0000,000), then,
as of such date, the Existing Default shall be automatically waived.
Such waiver shall not apply to any other failure by Seller to perform
its Obligations under the Agreement, and Purchaser does not waive any
other obligations Seller may have under the Agreement. The waiver shall
not be a continuing waiver with respect to any failure to perform any
Obligation after July 1, 2004.

2.   Unless otherwise defined,
all initially capitalized terms in this Forbearance shall be as defined
in the Agreement. The Agreement, as amended hereby, shall be and remain
in full force and effect in accordance with its respective terms and
hereby is ratified and confirmed in all respects. Except as expressly
set forth herein, the execution, delivery, and performance of this
Forbearance shall not operate as a waiver of, or as an amendment of,
any right, power, or remedy of Purchaser under the Agreement, as in
effect prior to the date hereof. Seller ratifies and reaffirms the
continuing effectiveness of the Agreement and all instruments,
documents and agreements entered into in connection with the
Agreement.

3.   Seller represents and warrants that the
representations and warranties contained in the Agreement are true and
correct as of the date of this Forbearance, and that no Event of
Default has occurred and is continuing.

4.   This Forbearance
may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
instrument.

5.   As a condition to the effectiveness of this
Forbearance, Purchaser shall have received, in form and substance
satisfactory to Purchaser, the following:

(a)   this Forbearance, duly executed by
Seller;

(b)   an amount equal to all fees and
expenses owing by Seller to Purchaser; and

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(c)   such other
documents, and completion of such other matters, as Purchaser may
reasonably deem necessary or appropriate.

IN WITNESS WHEREOF,
the undersigned have executed this Forbearance as of the first date
above written.


		HOME DIRECTOR,
INC.





		By:   ____________________________





		Title:   __________________________





		PACIFIC
BUSINESS FUNDING, a division of
Greater Bay Bank,
N.A.





		By:   ____________________________





		Title:   __________________________




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