News Release

Home Director Announces Investment by Cisco Systems

MORRISVILLE, N.C., July 18, 2000 - Home Director, Inc., a
Jul 18, 2000

MORRISVILLE, N.C., July 18, 2000 - Home Director, Inc., a spin-off of IBM's Home Network Solutions unit, today announced that Cisco Systems, the world leader in networking systems for the Internet, has invested in the company.

Home Director is the technology leader for home networking systems for Internet, entertainment and communications applications, and its Network Connection Center forms the backbone of a home's technology infrastructure.

Spencer Trask Intellectual Capital Company, a prominent venture capital firm in New York, is leading the company's funding through private equity markets. With strong financial backing, Home Director has the necessary resources to drive rapid market growth and expand its research and development investment. Cisco Systems is among Home Director's equity shareholders.

"We are pleased that Cisco and others in the investment community have chosen to invest in Home Director and recognize the potential and leadership that our company brings to the home networking market," said Mary Walker, president and chief executive officer of Home Director. "With this funding we will be able to grow the home networking market as never before and continue to build on our solid foundation of technology, innovation and channel management."

Home Director and Cisco Systems are working together to drive the emerging intelligent home industry and to provide greater access to technology for families. In May at the Connections 2000 conference, Cisco showed its residential Internet Home Gateway incorporated with Home Director's Network Connection Center, allowing high-speed Internet connections and services for education, entertainment and home offices to be easily distributed throughout the home. This product combination demonstrates the delivery of technology and services to and throughout the home in the evolution of the "Internet everywhere" lifestyle.

Home Director does not disclose funding amounts from individual or institutional investors.