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                                                                    EXHIBIT 4.11


                  WARRANT AGREEMENT (this "Agreement"),  dated as of January 25,
2001,  by  and  between  HOME  DIRECTOR,   INC.,  a  Delaware  corporation  (the
"Company"), and SPENCER TRASK SECURITIES, INCORPORATED (the "Agent").

                               W I T N E S S E T H

                  WHEREAS,   in  connection   with  its  role  in  arranging  an
investment in the Company from Cisco Systems,  Inc. the Company proposes to sell
to the Agent and/or its  designees  warrants  ("Warrants")  to purchase  355,567
shares of common  stock,  par value  $.00l per share,  of the  Company  ("Common
Stock").

                  NOW, THEREFORE,  in consideration of the premises, the payment
by the Agent to the Company of ONE DOLLAR,  the agreements  herein set forth and
other good and valuable consideration,  the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

1.  GRANT.  The  Holders  (as  defined  below) are hereby  granted  the right to
purchase,  at any time from the date hereof until 5:30 p.m.,  New York time,  on
the  earlier  of(a) the tenth  anniversary  of the date hereof and (b) the third
anniversary of the closing date of the initial public  offering of the Company's
Common  Stock  occurring  within such  ten-year  period (the  "Warrant  Exercise
Term"), 355,567 shares of Common Stock at the initial exercise price (subject to
adjustment  as provided in Section 8 hereof) of $.001 per share of Common Stock,
subject to the terms and conditions of this Agreement.

2. WARRANT CERTIFICATES. The Warrant certificate(s) (the "Warrant Certificates")
delivered and to be delivered  pursuant to this  Agreement  shall be in the form
set  forth in  Exhibit  A  attached  hereto  and made a part  hereof,  with such
appropriate  insertions,  omissions,  substitutions,  and  other  variations  as
required or permitted by this Agreement.

3. EXERCISE OF WARRANT.

3.1 METHOD OF EXERCISE.  The Warrants are  initially  exercisable  at an initial
exercise price (subject to adjustment as provided in Section 8 hereof) per share
of Common  Stock set forth in Section 5 hereof  payable by certified or official
bank check in New York Clearing  House funds,  subject to adjustment as provided
in Section 8 hereof.  Upon surrender of a Warrant  Certificate  with the annexed
Form of  Election  to  Purchase  duly  executed,  together  with  payment of the
Exercise Price (as hereinafter  defined) for the shares of Common Stock issuable
upon exercise of the Warrants (the "Warrant Shares") at the Company's  principal
offices, currently at 991 Aviation Parkway, Suite 800, Momsville, North Carolina
27560, the registered  holder of a Warrant  Certificate  ("Holder" or "Holders")
shall be entitled to receive a  certificate  or  certificates  for the shares of
Common Stock so  purchased.  The  purchase  rights  represented  by each Warrant
Certificate are exercisable at the option of the Holder thereof,  in whole or in
part  (but not as to  fractional  shares  of the  Common  Stock  underlying  the
Warrants).  Warrants  may be  exercised to purchase all or part of the shares of
Common Stock represented  thereby.  In the case of purchase of less than all the
shares of Common Stock  purchasable under any Warrant  Certificate,  the Company

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shall  cancel said  Warrant  Certificate  upon the  surrender  thereof and shall
execute and deliver a new Warrant  Certificate  of like tenor for the balance of
the shares of Common Stock.

3.2 EXERCISE BY  SURRENDER OF WARRANT.  In addition to the method of payment set
forth in Section 3.1 and in lieu of any cash payment  required  thereunder,  the
Holder(s) of the Warrant shall have the right at any time and from time to time,
provided  that the Common Stock and/or the  Company's  Common  Stock,  par value
$.001 per share ("Common Stock"),  underlying the Common Stock (collectively the
"Stock") is registered under the Securities  Exchange Act of 1934 (the "Exchange
Act"), to exercise the Warrants in full, or in part by surrendering  the Warrant
Certificate in the manner specified in Section 3.1 in exchange for the number of
shares of Common  Stock  equal to the  product of (x) the number of shares as to
which the  Warrants  are  being  exercised  multiplied  by (y) a  fraction,  the
numerator  of which is the Market  Price (as defined in Section 8.1 (vi) hereof)
of the Stock less the Exercise Price and the denominator of which is such Market
Price.

                  Solely for the  purposes of this  Section  3.2,  Market  Price
shall be calculated either (i) on the date on which the annexed Form of Election
is deemed  to have  been  sent to the  Company  pursuant  to  Section  13 hereof
("Notice  Date") or (ii) as the average of the Market Price for each of the five
(5) trading days preceding the Notice Date, whichever of (i) or (ii) is greater.

4. ISSUANCE OF CERTIFICATES. Upon the exercise of the Warrants, certificates for
shares of Common Stock or other securities, properties or rights underlying such
Warrants,  shall be issued  forthwith  (and in any event such issuance  shall be
made within five business days) without charge to the Holder thereof  including,
without  limitation,  any tax which may be payable  in  respect of the  issuance
thereof,  and such  certificates  shall  (subject to the provisions of Section 5
hereof)  be issued in the name of, or in such names as may be  directed  by, the
Holder thereof;  provided, however that the Company shall not be required to pay
any tax which may be payable in respect to any transfer involved in the issuance
and  delivery of any such  certificates  in a name other than that of the Holder
and the  Company  shall not be required  to issue or deliver  such  certificates
unless or until the person or people  requesting the issuance thereof shall have
paid to the  Company  the amount of such tax or it shall be  established  to the
satisfaction of the Company that such tax has been paid.

                  The Warrant Certificates and the certificates representing the
shares of Common Stock (and/or  other  securities,  property or rights  issuable
upon exercise of the Warrants) shall be executed on behalf of the Company by the
manual or facsimile  signature of the then present  Chairman or Vice Chairman of
the Board of Directors or President or Vice  President of the Company  under its
corporate  seal  reproduced  thereon,  attested  to by the  manual or  facsimile
signature of the then present  Secretary or Assistant  Secretary of the Company.
Warrant  Certificates  shall be dated the date of  execution by the Company upon
initial issuance, division, exchange, substitution or transfer.

5. EXERCISE PRICE.

5.1 INITIAL AND ADJUSTED EXERCISE PRICE. Except as otherwise provided in Section
8 hereof,  the Warrants shall be exercisable to purchase Common Stock at a price
of l .00 per share.  The adjusted  exercise price shall be the price which shall
result from time to time from any and all  adjustments  of the initial  exercise
price in accordance with the provisions of Section 8 hereof.


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<PAGE>

5.2  EXERCISE  PRICE.  The term  "Exercise  Price  herein shall mean the initial
exercise price or the adjusted exercise price, depending upon the context.

6.       REGISTRATION RIGHTS.

6.1  REGISTRATION.  Under the Securities  Act of 1933 Neither the Warrants,  the
Warrant  Shares nor the shares of Common  Stock  underlying  the Warrant  Shares
(collectively,   the  "Warrant  Securities")  have  been  registered  under  the
Securities  Act of 1933 (the "Act") for public  resale.  The  Warrants,  and any
securities  issuable  upon  exercise of the  Warrants  shall bear the  following
legends:

                  The Securities  represented by this  certificate have not been
registered  under the Securities Act of 1933 (the "Act") and may not be offered,
sold,  pledged or  otherwise  transferred  except  pursuant to (i) an  effective
registration statement under the Act, or (ii) to the extent applicable, Rule 144
under the Act (or any similar rule under the Act relating to the  disposition of
securities),  provided that the issuer of this  certificate  is provided with an
opinion of counsel reasonably satisfactory to the issuer, that an exemption from
registration under such Act is available.

                  The transfer or exchange of the securities represented by this
certificate is restricted in accordance with the warrant  agreement  referred to
herein.

6.2 PIGGYBACK  REGISTRATION.  If, at any time  commencing  after the date hereof
until the  expiration  of the Warrant  Exercise  Term,  the Company  proposes to
register any of its securities  under the Act on a  registration  statement that
may be used  for the  registration  of the  Warrant  Securities  (other  than in
connection with a merger,  pursuant to Form S-8, S-4 or comparable  registration
statement,  in connection with a registration  requested pursuant to Section 6.3
hereof or in  connection  with an exchange  offer or an  offering of  securities
solely to the Company's  existing  stockholders)  it will give written notice by
registered  mail, at least thirty (30) business days prior to the filing of each
such  registration  statement,  to the  Agent and to all  other  Holders  of the
Warrant  Securities  of its intention to do so. If the Agent or other Holders of
the Warrant  Securities notify the Company within twenty (20) days after receipt
of any such notice of its or their desire to include any Warrant  Securities  in
such  proposed  registration  statement,  the Company shall afford the Agent and
such Holders of the Warrant  Securities the opportunity to have any such Warrant
Securities registered under such registration statement.

                  Notwithstanding  the  provisions  of this Section 6.2, (A) the
Company shall have the right any time after it shall have given  written  notice
pursuant to this  Section  6.2  (irrespective  of whether a written  request for
inclusion of any such  securities  shall have been made) to elect to postpone or
not to file any such proposed  registration  statement,  or to withdraw the same
after filing but prior to the effective date thereof and (B) if the  underwriter
or  underwriters,  if any, of any such proposed  public offering shall be of the
reasonable  opinion  that the  total  amount or kind of  securities  held by the
holders of Warrant  Securities and any other persons or entities  entitled to be
included  in such Public  Offering  would  adversely  affect the success of such
public offering, then the amount of securities to be offered for the accounts of
holders of Warrant  Securities shall be reduced pro rata to the extent necessary
to reduce the total amount of securities to be included in such public  offering
to the amount reasonably recommended by the underwriter or underwriters thereof,
whereupon the Company  shall only be obligated to register such limited  portion
(which may be none) of the Warrant  Securities with respect to which such holder
has provided  notice pursuant to this Section 6.2. In no event shall the Company
be required  pursuant to this Section 6.2 to reduce the amount of  securities to
be registered by it.

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6.3      DEMAND REGISTRATION.

(a) So long as the Company shall have any of its securities registered under the
Act or the  Exchange  Act, at any time  commencing  after the date hereof  until
expiration of the Warrant  Exercise Term, the Holders of the Warrant  Securities
representing a "Majority" (as  hereinafter  defined) of such Warrant  Securities
(assuming the exercise of all of the then  outstanding  Warrants) shall have the
right (which right is in addition to the  registration  rights under Section 6.2
hereof),  exercisable  by written  notice to the  Company,  to have the  Company
prepare and file with the Securities and Exchange Commission (the "Commission"),
on two (2)  occasions,  a  registration  statement  and  such  other  documents,
including a  prospectus,  as may be necessary in the opinion of both counsel for
the Company and the counsel for the Agent and  Holders,  in order to comply with
the  provisions of the Act, so as to permit a public  offering and sale of their
respective  Warrant Securities for no less than one hundred twenty (120) days by
such  Holder and any other  Holders  of the  Warrant  Securities  who notify the
Company  within ten (10) days after  receiving  notice  from the Company of such
request.

(b) The Company  covenants and agrees to give written notice of any registration
request under this Section 6.3 by any Holder or Holders to all other  registered
Holders of the Warrant  Securities within fifteen (15) days from the date of the
receipt of any such registration  request;  provided that the Company shall have
the right to delay the effectiveness of such  registration  request (A) for such
reasonable  period of time until the  Company  receives  or  prepares  financial
statements  for the fiscal  period most  recently  ended  prior to such  written
request, if necessary to avoid the use of stale financial statements,  or (B) if
the  Company  would be required to divulge in such  registration  statement  the
existence of any fact relating to a material business situation,  transaction or
negotiation  not  otherwise  required  to be  disclosed  or (C) if the  Board of
Directors of the Company shall determine in good faith that the  registration to
be effected would not be in the best interest of the Company,  in which case the
Company shall have the right to delay such filing for a period of no longer than
one hundred (120) days.

(c) All expenses (other than underwriting discounts and commissions) incurred in
connection with  registration,  filings or  qualification  pursuant to the first
registration  request made pursuant to the  subsection  (a) of this Section 6.3,
including,   without   limitation,   all  registration,   listing,   filing  and
qualification  fees, printers and accounting fees and the fees and disbursements
of  counsel  for the  Holders  shall  be  borne  by the  Company.  Upon a second
registration request pursuant to subsection (a) of this Section 6.3, the Holders
requesting  registration  shall bear such costs on a pro-rata basis with respect
to the Warrant Securities in respect of which they are requesting registration.

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<PAGE>

(d)  Notwithstanding  anything to the contrary  contained herein, if the Company
shall not have filed a registration  statement for the Warrant Securities within
the time  period  specified  in Section  6.3 (b) hereof  pursuant to the written
notice specified in Section 6.3 (a) of a Majority of the Holders of the Warrants
and/or  Warrant  Securities,  the Company agrees that upon the written notice of
election of a Majority of the Holders of the Warrants and/or Warrant  Securities
it shall  repurchase  (i) any and all  Warrant  Securities  at the higher of the
Market Price as defined in Section 8.1,  (vi) per share of Stock on (x) the date
of the notice  sent  pursuant to Section  6.3 (a) or (y) the  expiration  of the
one-hundred-twenty-day  (120-day)  period  specified in Section 6.3 (b) and (ii)
any and all  Warrants  at such  Market  Price  less the  exercise  price of such
Warrant. Such repurchase shall be in immediately available funds and shall close
within two (2) days after the later of(i) the expiration of the period specified
in  Section  6.3 (b) or (ii) the  delivery  of the  written  notice of  election
specified in this Section 6.3 (d).

6.4 Covenants of the Company with Respect to Registration in connection with any
registration  under Sections 6.2 or 6.3 hereof, the Company covenants and agrees
as follows:

(a) The Company shall use its best efforts to file a  registration  statement as
soon as  practicable  and shall use its best  efforts  to have any  registration
statement  declared  effective at the earliest  possible time, and shall furnish
each Holder  desiring to sell Warrant  Securities such number of prospectuses as
shall reasonably be requested.

(b) Except as provided in Section 6.3(c) above,  the Company shall pay all costs
(excluding  fees and  expenses of  Holder(s)'  counsel and any  underwriting  or
selling  commissions or other charges of any  broker-dealer  acting on behalf of
Holder(s)),  fees and expenses in connection  with all  registration  statements
filed pursuant to Section 6.2 and 6.3 (a) hereof including,  without limitation,
the Company's legal and accounting fees,  printing  expenses,  blue sky fees and
expenses.  The  Holders(s)  will pay all costs,  fees and expenses in connection
with any registration statement filed pursuant to the second sentence of Section
6.3 (c).

(c) The  Company  will  take all  necessary  action  which  may be  required  in
qualifying or registering the Warrant  Securities  included in the  registration
statement  for offering and sale under the  securities  or blue sky laws of such
states as reasonably  are  requested by the Holder(s) in writing,  provided that
the Company shall not be obligated to qualify to do business in any jurisdiction
where it is not then so qualified or to take any action that would subject it to
general  service of process  where it is not so  subject  or would  subject  the
Company to any tax in any jurisdiction where it is not then so subject.
(d) The Company shall  indemnify  the Holder(s) of the Warrant  Securities to be
sold  pursuant  to any  registration  statement  and each  person,  if any,  who
controls  such  Holders  within the  meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, against all loss, claim, damage, expense or liability
(including  all  expenses  reasonably  incurred in  investigating,  preparing or
defending  against any claim whatsoever) to which any of them may become subject
to the same extent and with the same effect as the provisions  pursuant to which
the Company has agreed to  indemnify  the Agent  contained  in Section 7 of that
certain Placement Agency Agreement,  dated April 10, 2000, between the Agent and
the Company (the "Placement Agency Agreement").


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(e)  The  Holder(s)  of  the  Warrant  Securities  to  be  sold  pursuant  to  a
registration statement,  and their successors and assigns, shall severally,  and
not jointly,  indemnify the Company, its officers and directors and each person,
if any, who controls the Company  within the meaning of Section 15 of the Act or
Section 20 (a) of the Exchange Act, against all loss,  claim,  damage or expense
or liability  (including  all  expenses  reasonably  incurred in  investigating,
preparing or defending  against any claim  whatsoever)  to which they may become
subject under the Act, the Exchange Act or otherwise,  arising from  information
furnished by or on behalf of such Holders,  or their successors or assigns,  for
specific inclusion in such a registration  statement to the same extent and with
the same effect as the provision  contained in Section 7 of the Placement Agency
Agreement pursuant to which the Agent has agreed to indemnify the Company.

(f) Nothing  contained in this  Agreement  shall be  construed as requiring  the
Holder(s)  to  exercise  their  Warrants  prior  to the  initial  filing  of any
registration statement or the effectiveness thereof.

(g) The  Company  shall  prepare  and  file  with the SEC  such  amendments  and
post-effective  amendments to the registration  statement as may be necessary to
keep the  Registration  effective  until all such Warrant  Securities  are sold;
cause the prospectus to be. supplemented by. any required prospectus supplement,
and as so  supplemented  to be filed  pursuant to Rule 424 under the  Securities
Act; and comply with the  provisions of the  Securities  Act with respect to the
disposition of all securities covered by such registration  statement during the
applicable  period  in  accordance  with  the  intended  method  or  methods  of
distribution by the sellers thereof as set forth in such registration  statement
or supplement to the prospectus

(h) The  Company  shall  furnish to each  Holder  participating  in an  offering
including Warrant Securities pursuant to Sections 6.2 or 6.3 hereof, and to each
underwriter,  if  any,  a  signed  counterpart,  addressed  to  such  Holder  or
underwriter,  of (i) an opinion of counsel to the Company,  dated the  effective
date of such  registration  statement  (and,  if such  registration  includes an
underwritten public offering, an opinion dated the date of the closing under the
underwriting  agreement),  and (ii) a "cold comfort"  letter dated the effective
date of such  registration  statement  (and,  if such  registration  includes an
underwritten  public offering,  a letter dated the date of the clo6ing under the
underwriting  agreement) signed by the independent  public  accountants who have
issued  a  report  on  the  Company's  financial  statements  included  in  such
registration  statement,  in each case covering  substantially  the same matters
with  respect  to such  registration  statement  (and  the  prospectus  included
therein) and, in the case of such  accountants'  letter,  with respect to events
subsequent to the date of such financial statements,  as are customarily covered
in  opinions  of  issuer's  counsel and in  accountants'  letters  delivered  to
underwriters in underwritten public offerings of securities.

(i) The Company  shall,  as soon as  practicable  after the effective  date of a
registration  statement relating to any Warrant  Securities  pursuant to Section
6.2 or 6.3 hereof, and in any event within fifteen (15) months  thereafter,  use
its reasonable  efforts to make  "generally  available to its security  holders"


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(within the meaning of Rule 158 under the Act) an earnings statement (which need
not be audited) complying with Section 11(a) of the Act and covering a period of
at least twelve (12)  consecutive  months  beginning after the effective date of
the registration statement.

(j) The  Company  shall  deliver  promptly to each  Holder  participating  in an
offering including any Warrant Securities pursuant to Sections 6.2 or 6.3 hereof
who so requests and to the  managing  underwriter  copies of all  correspondence
between  the  Commission  and the  Company,  its  counsel  or  auditors  and all
memoranda  relating to discussions with the Commission or its staff with respect
to the  registration  statement,  and shall permit each  underwriter  to do such
investigation,  upon  reasonable  advance  notice,  with respect to  information
contained in or omitted from the  registration  statement as it deems reasonably
necessary  to comply with  applicable  securities  laws or rules of the National
Association of Securities  Dealers,  Inc.  ("NASD").  Such  investigation  shall
include access to books, records and properties and opportunities to discuss the
business of the Company with its officers and independent auditors,  all to such
reasonable  extent  and at  such  reasonable  times  and as  often  as any  such
underwriter  shall  reasonably  request  as it deems  necessary  to comply  with
applicable securities laws and NASD rules.

(k) With respect to a registration  pursuant to Section 6.3 hereof,  the Company
shall  enter  into an  underwriting  agreement  with  the  managing  underwriter
selected  for such  underwriting  by Holders  holding a Majority  of the Warrant
Securities  requested  to  be  included  in  such  underwriting.  Such  managing
underwriter(s)  shall be  satisfactory  to the  Company and each Holder and such
agreement  shall be  satisfactory  in form and  substance to the  Company,  each
Holder and such managing  underwriters,  and shall contain such representations,
warranties and covenants by the Company and such other terms as are  customarily
contained  in  agreements  of that type used by the  managing  underwriter.  The
Holders  shall  be  parties  to  any  underwriting   agreement  relating  to  an
underwritten sale of their Warrant Securities and may, at their option,  require
that any or all the representations,  warranties and covenants of the Company to
or for  the  benefit  of  such  underwriters  shall  also be made to and for the
benefit  of such  Holders.  Such  Holders  shall  not be  required  to make  any
representations  or  warranties  to  or  agreements  with  the  Company  or  the
underwriters  except as they may  relate  to such  Holders  and  their  intended
methods of distribution.

(l) For  purposes of this  Agreement,  the term  "Majority"  in reference to the
Holders of Warrants or Warrant Securities, shall mean in excess of fifty percent
(50%) of the outstanding Warrants or Warrant Securities that (i) are not held by
the Company, an affiliate  (excluding the Agent and any affiliate of the Agent),
officer,  creditor,  employee  or  agent  thereof  or  any of  their  respective
affiliates,   members  of  their  family,  persons  acting  as  nominees  or  in
conjunction  therewith or (ii) have not been resold to the public  pursuant to a
registration statement filed with the Commission under the Act.

7. INTENTIONALLY DELETED.

8. ADJUSTMENTS TO EXERCISE PRICE AND NUMBER OF SECURITIES.

8.1 COMPUTATION OF ADJUSTED EXERCISE PRICE. Except as hereinafter  provided,  in
case the  Company  shall at any time  after  the date  hereof  issue or sell any
shares of its Stock (as  defined in Section  8.5),  other than the  issuance  or


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sales referred to in Section 8.6 hereof,  including shares held in the Company's
treasury and shares of Stock issued upon the exercise of any options,  rights or
warrants,  to  subscribe  for shares of Stock issued upon the direct or indirect
conversion or exchange of securities  for shares of Stock,  for a  consideration
per  share  less than the  Exercise  Price in  effect  immediately  prior to the
issuance  or sale of such  shares or the  "Market  Price," as defined in Section
8.1(vi), hereof per share of Stock on the date immediately prior to the issuance
or sale of such  shares,  or without  consideration,  then  forthwith  upon such
issuance or sale, the Exercise Price shall (until another such issuance or sale)
be reduced  to the price  (calculated  to the  nearest  full cent)  equal to the
quotient  derived by dividing  (A) an amount equal to the sum of (X) the product
of (a) the lower of (i) the Exercise Price in effect  immediately  prior to such
issuance  or sale and  (ii)  the  Market  Price  per  share of Stock on the date
immediately  prior to the  issuance  or sale of such  shares,  in either  event,
reduced, but not to a number which is below .001, by the positive difference, if
any,  between  the (u) Market  Price per share of Stock on the date  immediately
prior  to the  issuance  or sale  and (v)  the  amount  per  share  received  in
connection  with such issuance or sale,  multiplied b the total number of shares
of Stock  outstanding  immediately  prior to such issuance or sale, plus (Y) the
aggregate of the amount of all  consideration,  if any,  received by the Company
upon such issuance or sale, by (B) the total number of shares Stock  outstanding
immediately  after such  issuance or sale;  provided,  however,  that into event
shall the Exercise Price be adjusted  pursuant to this  computation to an amount
in excess of the Exercise Price in effect immediately prior to such computation,
except in the case of a combination of outstanding  shares of Stock, as provided
by Section 8.3 hereof.

                  For the  purposes of this  Section 8 the term  Exercise  Price
shall mean the  Exercise  Price per share of Common Stock set forth in Section 5
hereof, as adjusted from time to time pursuant to the provisions of this Section
8.

                  For purposes of any  computation to be made in accordance with
this Section 8.1, the following provisions shall be applicable:

(i) In case of the issuance or sale of shares of Stock for a consideration  part
or all of which shall be cash,  the amount of the cash  consideration,  shall be
deemed to be the amount of cash  received by the Company for such shares (or, if
shares of Stock are offered by the Company for  subscription,  the  subscription
price, or, if either of such securities shall be sold to underwriters or dealers
for public  offering  without a subscription  price,  the public offering price,
before  deducting  therefrom any  compensation  paid or discount  allowed in the
sale,  underwriting  or  purchase  thereof by  underwriters  or dealers or other
persons or entities  performing  similar  services),  Or joy expense incurred in
connection  therewith  and less any amounts  payable to security  holders or any
affiliate thereof,  including,  without  limitation,  any employment  agreement,
royalty,  consulting agreement,  covenant not to compete, earn out or contingent
payment right or similar arrangement,  agreement or understanding,  whether oral
or written;  all such amounts  shall be valued at the aggregate  amount  payable
thereunder  whether such payments are absolute or contingent and irrespective of
the period or  uncertainty  of  payment,  the rate of  interest,  if any, or the
contingent nature thereof.

(ii) In case of the  issuance  or sale  (otherwise  than as a dividend  or other
distribution on any stock of the Company) of shares of Stock for a consideration
part or all of which shall be other than cash,  the amount of the  consideration


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<PAGE>

therefore other than cash shall be deemed to be the value of such  consideration
as determined in good faith by the Board of Directors of the Company.

(iii) Shares of Stock issuable by way of dividend or other  distribution  on any
capital  stock of the Company  shall be deemed to have been  issued  immediately
after the  opening of  business  on the day  following  the record  date for the
determination  of  stockholders  entitled  to  receive  such  dividend  or other
distribution and shall be deemed to have been issued without consideration.

(iv) The  reclassification  of  securities  of the Company  other than shares of
Stock into securities  including  shares of Stock shall be deemed to involve the
issuance of such shares of Stock for  consideration  other than cash immediately
prior to the  close of  business  on the date  fixed  for the  determination  of
security  holders  entitled  to  receive  such  shares,  and  the  value  of the
consideration  allocable to such shares of Stock shall be determined as provided
in subsection (ii) of this Section 8.1.

(v) The number of shares of Stock at any one time outstanding  shall include the
aggregate number of shares issued or issuable  (subject to readjustment upon the
actual issuance thereof) upon the exercise of then outstanding options,  rights,
warrants and upon the conversion or exchange of then outstanding  convertible or
exchangeable securities.

(vi) As used  herein,  the phrase 9 Price" at any date shall be deemed to be the
last reported sale price,  or, in case no such reported sale takes place on such
day, the average of the last reported sale prices for the last three (3) trading
days, in either case as officially reported by the principal securities exchange
on which the Stock is listed or  admitted  to  trading,  or, if the Stock is not
listed or admitted to trading on any national securities  exchange,  the average
closing  bid  price as  furnished  by the  NASD  through  NASDAQ  or  similar  ,
organization if NASDAQ is no longer reporting such information,  or if the Stock
is not quoted on NASDAQ,  as determined in good faith by resolution of the Board
of Directors of the Company, based on the best information available to it.

8.2      OPTIONS, RIGHTS, WARRANTS AND CONVERTIBLE AND EXCHANGEABLE SECURITIES.

                  In case the  Company  shall at any time after the date  hereof
issue options, rights or warrants to subscribe for shares of Stock, or issue any
securities  convertible  into  or  exchangeable  for  shares  of  Stock,  for  a
consideration  per share  less than the  Exercise  Price in effect or the Market
Price  immediately  prior to the issuance of such options,  rights,  warrants or
such  convertible or  exchangeable  securities,  or without  consideration,  the
Exercise  Price in effect  immediately  prior to the  issuance of such  options,
rights, warrants or such convertible or exchangeable securities, as the case may
be, shall be reduced to a price determined by making a computation in accordance
with the provisions of Section 8.1 hereof; provided that:

(a) The  aggregate  maximum  number  of  shares  of  Stock,  as the case may be,
issuable under such options, rights or warrants shall be deemed to be issued and
outstanding  at the time such  options,  rights or warrants  were issued,  for a
consideration equal to the minimum purchase price per share provided for in such
options,  rights or warrants  at the time of  issuance,  plus the  consideration
(determined in the same manner as consideration received on the issue or sale of


                                       9
<PAGE>


shares in accordance  with the terms of the Warrants),  if any,  received by the
Company for such options, rights or warrants.

(b) The aggregate  maximum number of shares of Stock issuable upon conversion or
exchange of any  convertible or  exchangeable  securities  shall be deemed to be
issued and  outstanding  at the time of issuance of such  securities,  and for a
consideration  equal to the  consideration  (determined  in the same  manner  as
consideration  received  on the issue or sale of  shares of Stock in  accordance
with the terms of the  Warrants)  received by the  Company for such  securities,
plus the minimum  consideration,  if any,  receivable  by the  Company  upon the
conversion or exchange thereof.

(c) If any change shall occur in the price, per share provided for in any of the
options,  rights or warrants  referred to in subsection (a) of this Section 8.2,
or in the price per share at which the securities  referred to in subsection (b)
of this Section 8.2 are  convertible or  exchangeable,  such options,  rights or
warrants or conversion or exchange  rights,  as the case may be, shall be deemed
to have  expired  or  terminated  on the date  when  such  price  change  became
effective in respect to shares not  theretofore  issued pursuant to the exercise
or  conversion  or exchange  thereof,  and the  Company  shall be deemed to have
issued  upon such  date new  options,  rights  or  warrants  or  convertible  or
exchangeable  securities  at the new price in  respect  of the  number of shares
issuable upon the exercise of such options, rights or warrants or the conversion
or exchange of such convertible or exchangeable securities.

8.3 SUBDIVISION AND COMBINATION  CASE. The Company shall at any time combine the
proportionately decreased in the case of subdivision or increased in the case of
combination.

8.4  ADJUSTMENT IN NUMBER OF  SECURITIES.  Upon each  adjustment of the Exercise
Price  pursuant to the  provisions  of this Section 8, the number of  securities
issuable upon the exercise of each Warrant shall be adjusted to the nearest fill
amount by multiplying a number equal to the Exercise Price in effect immediately
prior to such  adjustment  by the number of  Warrant  Securities  issuable  upon
exercise of the Warrants  immediately  prior to such adjustment and dividing the
product so obtained by the adjusted Exercise Price.

8.5  DEFINITION OF STOCK.  For the purpose of this  Agreement,  the term "Stock"
shall mean (i) the class of stock  designated as Common  Stock,  Series B Common
Stock or Series C Common Stock in any Certificate of Designations of the Company
as may be  amended  as of the  date  hereof,  or (ii) any  other  class of stock
resulting from successive changes or  reclassifications of such Stock consisting
solely of changes in par  value,  or from par value to no par value,  or from no
par value to par  value.  In the event  that the  Company  shall  after the date
hereof issue  securities  with greater or superior voting rights than the shares
of Stock outstanding as of the date hereof,  the Holders,  at their option,  may
receive upon exercise of any Warrants either shares of Stock or a like number of
such securities with greater or superior voting rights.

8.6 MERGER OR  CONSOLIDATION.  In case of any consolidation of the Company with,
or  merger  of the  Company  with,  or  merger  of  the  Company  into,  another
corporation  (other than a consolidation  or merger which does not result in any
reclassification  or change of the outstanding Stock), the corporation formed by
such  consolidation  or  merger  shall  execute  and  deliver  to the  Holder  a
supplemental  warrant  agreement  providing that the holder of each Warrant then

                                       10
<PAGE>

outstanding  or to be  outstanding  shall have the right  thereafter  (until the
expiration of such Warrant) to receive,  upon exercise of such warrant, the kind
and amount of shares of stock of other  securities and property  receivable upon
such  consolidation  or merger,  by a holder of the number of shares of Stock of
the Company for which such warrant might have been exercised  immediately  prior
to such  consolidation,  merger,  sale or transfer.  Such  supplemental  warrant
agreement  shall  provide  for  adjustments  which  shall  be  identical  to the
adjustments  provided in Section 8. The above provision of this Subsection shall
similarly apply to successive consolidations or mergers.

8.7      NO ADJUSTMENT OF EXERCISE PRICE IN CERTAIN CASES. No adjustment of the
 Exercise Price shall be made:


(a) Upon  issuance or sale of the Warrants or the shares of Stock  issuable upon
the exercise of the Warrants.

(b) Upon  conversion of Common Stock or other options,  warrants and convertible
securities outstanding as of the date hereof into shares of Common Stock.

(c) Upon issuance of options,  and Common Stock granted thereunder,  granted. to
employees of the Company  issued under one or more stock options plans that have
an  exercise  price  equal  to the fair  market  value  of the  Common  Stock as
determined in good faith by the Board of Directors.

(d) Upon  issuance  of shares of  Common  Stock as a result of the  antidilution
rights attributable to the Series B or Series C Convertible Common Stock.

(e) If the amount of said  adjustment  shall be less than two cents  ($0.02) per
security issuable upon exercise of the Warrants,  provided, however that in such
case any  adjustment  that would  otherwise be required then to be made shall be
carried  forward  and  shall be made at the time of and  together  with the next
subsequent  adjustment  which,  together with any adjustment so carried forward,
shall amount to at least two cents  ($0.02) per security  issuable upon exercise
of the Warrants.

8.8  DIVIDENDS AND OTHER  DISTRIBUTIONS.  In the event that the Company shall at
any time prior to the exercise of all Warrants  declare a dividend (other than a
dividend  consisting  solely of shares of Stocl or otherwise  distribute  to its
stockholders  any  assets,   properties,   rights,   evidence  of  indebtedness,
securities  (other  than shares of Stock),  whether  issued by the Company or by
another,  or any other thing of value,  the Holders of the unexercised  Warrants
shall  thereafter  be  entitled,  in  addition  to the  shares of Stock or other
securities and property receivable upon the exercise thereof,  to receive,  upon
the exercise of such Warrants, the same property,  assets, rights,  evidences of
indebtedness,  securities  or any other thing of value that they would have been
entitled  to  receive at the time of such  dividend  or  distribution  as if the
Warrants had been exercised  immediately prior to such dividend or distribution.
At the time of any  such  dividend  or  distribution,  the  Company  shall  make
appropriate  reserves to ensure the timely performance of the provisions of this
Subsection 8.8.

                                       11
<PAGE>

9. EXCHANGE AND REPLACEMENT OF WARRANT CERTIFICATES. Each Warrant Certificate is
exchangeable  without  expense,  upon the  surrender  thereof by the  registered
Holder at the principal office of the Company,  for a new Warrant Certificate of
like form,  tenor and date  representing  in the aggregate the right to purchase
the same number of  securities in such  denominations  as shall be designated by
the Holder thereof at the time of such surrender.

                  Upon   receipt   by  the   Company  of   evidence   reasonably
satisfactory to it of the loss, theft,  destruction or mutilation of any Warrant
Certificate,  and,  in case of  loss,  theft or  destruction,  of  indemnity  or
security reasonably  satisfactory to it, and reimbursement to the Company of all
reasonable expenses  incidental thereto,  and upon surrender and cancellation of
the  Warrants,  if  mutilated,  the Company  will make and deliver a new Warrant
Certificate of like form and tenor in lieu thereof.

10.  ELIMINATION OF FRACTIONAL  INTERESTS.  The Company shall not be required to
issue  certificates  representing  fractions  of shares of Common Stock upon the
exercise of the  Warrants,  nor shall it be required to issue script or pay cash
in lieu of  fractional  interests,  it being the intent of the parties  that all
fractional  interests  shall be  eliminated  by rounding  any fraction up to the
nearest whole number or shares of Common Stock

11.  RESERVATION  AND  LISTING OF  SECURITIES.  The  Company  shall at all times
reserve and keep available out of its authorized shares of Common Stock,  solely
for the purpose of issuance  upon the exercise of the  Warrants,  such number of
shares of Common  Stock or other  securities,  properties  or rights as shall be
issuable upon the exercise thereof.  The Company shall at times reserve and keep
available out of its authorized  shares of Common Stock,  solely for the purpose
of issuance  upon the  conversion of the Common Stock  underlying  the Warrants,
such number of shares of Common Stock or other securities,  properties or rights
as shall be issuable upon the exercise thereof. The Company covenants and agrees
that, upon exercise of the Warrants and payment of the Exercise Price therefore,
all shares of Common  Stock and other  securities  issuable  upon such  exercise
shall be duly and validly issued, fully paid,  non-assessable and not subject to
the  preemptive  rights of any  stockholder.  As long as the  Warrants  shall be
outstanding  and the  Company  shall have a class of its  securities  registered
under the Act or the'  Exchange  Act, the Company  shall use its best efforts to
cause all shares of Stock  issuable  upon the  exercise  of the  Warrants  to be
listed  (subject to official  notice of issuance)  on all security  exchanges on
which the Common Stock issued to the public in  connection  herewith may then be
listed and/or quoted.

12. NOTICES TO WARRANT  HOLDERS.  Nothing  contained in this Agreement  shall be
constructed as conferring upon the Holders the right to vote or to consent or to
receive notice to stockholders  in respect of any meetings of  stockholders  for
the  election  of  directors  or any  other  matter,  or as  having  any  rights
whatsoever as a stockholder of the Company.  If,  however,  at any time prior to
the expiration of the Warrants and their exercise,  any of the following  events
shall occur:

(a) the Company shall take a record of the holders of its shares of Common Stock
for the purpose of entitling them to receive a dividend or distribution  payable
otherwise  than in cash, or a cash dividend or  distribution  payable  otherwise


                                       12
<PAGE>

than out of  current  or  retained  earnings,  as  indicated  by the  accounting
treatment of such dividend or distribution on the books of the Company; or

(b) the  Company  shall  offer  to all  the  holders  of its  Common  Stock  any
additional shares of capital stock of the Company or securities convertible into
or exchangeable for shares of capital stock of the Company,  or any option right
or warrant to subscribe therefore; or

(c) a  dissolution,  liquidation  or winding up of the  Company  (other  than in
connection with a consolidation or merger) or a sale of all or substantially all
of its property,  assets and business as an entirety shall be proposed; then, in
any one or more of said events,  the Company  shall give written  notice of such
event at least  fifteen  (15) days prior to the date fixed as a record  date for
the dividend or the date of closing the transfer books for the  determination of
the issuance of any  convertible  or  exchangeable  securities  or  subscription
rights,  options or warrants or for the determination of the persons or entitled
to vote on such  proposed  dissolution,  liquidation,  winding up or sale.  Such
notice shall specify such record date or the date of closing the transfer books,
as the case may be.  Failure to give such notice or any defect therein shall not
affect the validity of any action taken in connection  with the  declaration  or
payment of any such dividend, or the issuance of any convertible or exchangeable
securities  or  subscription  rights,  options  or  warrants,  or  any  proposed
dissolution, liquidation winding up or sale.

13. Notices All notices,  requests,  consents and other communications hereunder
shall be in writing  and shall be deemed to have been duly made when  delivered,
or mailed by registered or certified mail, return receipt requested:

(a) If to the registered  Holder of the Warrants,  to the address of such Holder
as shown on the books of the Company; or

(b) If to the  Company,  to the address set forth in Section 3 hereof or to such
other address as the Company may designate by notice to the Holders.

With a copy to:

                  Kirkpatrick & Lockhart, LLP
                  1251 Avenue of the Americas, 45th Floor
                  New York, New York 10020
                  Attn: Stephen R. Connoni, Esq.

(c) if to the  Agent,  to the last  known  address of the Agent set forth in the
Placement  Agency  Agreement or to such other address as the Agent may designate
by notice to the Company and the Holders.

14. SUPPLEMENTS AND AMENDMENTS.  The Company and the Agent may from time to time
supplement  or amend this  Agreement  without  the  approval  of any  holders of
Warrant  Certificates (other than the Agent) in order to cure any ambiguity,  to
correct or supplement any provision  contained  herein which may be defective or
inconsistent  with any  provision  herein,  or to make any other  provisions  in
regard to matters or questions arising hereunder which the Company and the Agent
may deem  necessary or desirable  and which the Company and the Agent deem shall


                                       13
<PAGE>

not adversely affect the interests of the Holders of Warrant Certificates. Other
amendments to this  Agreement  may be made only with the written  consent of the
Holders of the Majority of the Warrant Securities.

15.  SUCCESSORS.  All the covenants and  provisions of this  Agreement  shall be
binding  upon and inure to the  benefit of the  Company,  the  Holders and their
respective successors and assigns hereunder.

16. TERMINATION.  This Agreement shall terminate at the close of business on the
seventh  anniversary of the Final Closing.  Notwithstanding  the foregoing,  the
indemnification provisions of Section 6 shall survive such termination until the
close of business on the tenth anniversary of the date hereof.

17. GOVERNING LAW:  SUBMISSION TO JURISDICTION.  This Agreement and each Warrant
Certificate  issued  hereunder  shall be deemed to be a contract  made under the
laws of the  State of New  York  and for all  purposes  shall  be  construed  in
accordance  with the laws of said State  without  giving  effect to the rules of
said State governing conflicts of laws.

                  The Company,  the Agent and the Holders  hereby agree that any
action,  proceeding  or claim  against it arising out of, or relating in any way
to, this  Agreement  shall be brought and enforced in the courts of the State of
New York, and irrevocably submits to such jurisdiction, which jurisdiction shall
be exclusive.  The Company,  the Agent and the Holders hereby  irrevocably waive
any objection to such exclusive  jurisdiction  or inconvenient  forum.  Any such
process  or  summons  to be served  upon any of the  Company,  the Agent and the
Holders (at the option of the party  bringing such action,  proceeding or claim)
may be served by  transmitting a copy thereof,  by registered or certified mail,
return receipt requested, postage prepaid, addressed to it at the address as set
forth in Section 13 hereof.  Such mailing shall be deemed  personal  service and
shall be legal and binding upon the party so served in any action, proceeding or
claim.  The  Company,  the  Agent  and the  Holders  agree  that the  prevailing
party(ies)  in any such action or  proceeding  shall be entitled to recover from
the other  party(ies)  all of  its/their  reasonable  legal  costs and  expenses
relating to such action or proceeding  and/or  incurred in  connection  with the
preparation therefore.

18. ENTIRE  AGREEMENT;  MODIFICATION.  This  Agreement  (including the Placement
Agency Agreement to the extent portions thereof are referred to herein) contains
the entire understanding  between the parties hereto with respect to the subject
matter hereof and may not be modified or amended except by a writing duly signed
by the party  againsrwhom  enforcement  of the  modification.  or  amendment  is
sought.

19. SEVERABILITY. If any provision of this Agreement shall be held to be invalid
and  unenforceable,  such  invalidity or  unenforceability  shall not affect any
other provision of this Agreement.

20.  CAPTIONS.  The caption  headings of the Sections of this  Agreement are for
convenience  of  reference  only  and  are  not  intended,  nor  should  they be
construed, as a part of this Agreement and shall be given no substantive effect.

                                       14
<PAGE>

21. BENEFITS OF THIS AGREEMENT.  Nothing in this Agreement shall be construed to
give to any person,  entity or corporation  other than the Company and the Agent
and any other  registered  Holders(s)  of the  Warrant  Certificates  or Warrant
Securities any legal or equitable  right,  remedy or claim under this Agreement;
and this  Agreement  shall be for the sole and exclusive  benefit of the Company
and the Agent and any other  Holder(s)  of the Warrant  Certificates  or Warrant
Securities.

22.  COUNTERPARTS.  This Agreement may be executed in any number of counterparts
and each of such counterpart shall for all purposes be deemed to be an original,
and such count shall together constitute but one and the same instrument.



                                       15

<PAGE>



                  IN WITNESS  WHEREOF,  the  parties  hereto  have  caused  this
Agreement to be duly executed as of the day and year first written.

                          HOME DIRECTOR, INC.



                          By:
                              ----------------------------------------


                          SPENCER TRASK SECURITIES,
                          INCORPORATED


                         By:
                             ----------------------------------------


                                       16
<PAGE>

                               WARRANT CERTIFICATE

THE WARRANT  REPRESENTED BY THIS CERTIFICATE AND THE OTHER  SECURITIES  ISSUABLE
UPON.  EXERCISE  THEREOF HAVE NOT BEEN  REGISTERED  UNDER THE  SECURITIES ACT OF
1933, AS. AMENDED (THE "ACT"); AND MAY NOT BE OFFERED SOLD, PLEDGED OR OTHERWISE
TRANSFERRED  EXCEPT  PURSUANT TO (i) AN EFFECTIVE  REGISTRATION  STATEMENT UNDER
THE, ACT, (ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER SUCH ACT (OR ANY SIMILAR
RULE UNDER THE ACT RELATING TO THE DISPOSITION OF SECURITIES), PROVIDED THAT THE
ISSUER OF THIS  CERTIFICATE  IS PROVIDED  WTTH AN OPINION OF COUNSEL  REASONABLY
SATISFACTORY TO THE ISSUER,  THAT AN EXEMPTION FROM REGISTRATION  UNDER SUCH ACT
IS AVAILABLE.

THE  TRANSFER OR EXCHANGE OF THE WARRANTS  REPRESENTED  BY THIS  CERTIFICATE  IS
RESTRICTED IN ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.


No.                                                           355,567 Warrants

                               WARRANT CERTIFICATE

                  This  Warrant   Certificate   certifies   that  SPENCER  TRASK
SECURITIES,  or its  registered  assigns,  is the  registered  holder of 355,567
Warrants to  purchase  initially,  at any time after the date hereof  until 5:30
p.m.  New York time on date (the  "Expiration  Date") that is the earlier of (a)
the tenth  anniversary of the Final Closing (as defined in the Placement  Agency
Agreement between HOME DIRECTOR,  INC., a Delaware  corporation (the "Company"),
and  Spencer  Trask  Securities,  Incorporated  ("Agent"))  and  (b)  the  third
anniversary of the closing date of the initial public  offering of the Company's
Common Stock occurring  within such ten-year period (the "Warrant Ex Term"),  up
to  355,567  fully paid and  non-assessable  shares of common  stock,  par value
$0.001 per share  ("Common  Stock") of the  Company,  at the  initial.  exercise
price,  subject to adjustment in certain events (the "Exercise Price"), of $.001
upon surrender of this Warrant  Certificate and payment of the Exercise Price at
an office or agency of the Company,  or by surrender of this Warrant Certificate
in lieu of cash payment, but subject to the conditions and adjustments set forth
herein and in the Warrant  Agreement  dated as of January  25, 2001  between the
Company and the Agent (the "Warrant  Agreement").  Payment of the Exercise Price
shall be made by certified  or official  bank check in New York  Clearing  House
funds payable to the order of the Company.

                  No Warrant may be exercised after 5:30 p.m., New York time, on
the  Expiration  Date,  at which  time all  Warrants  evidenced  hereby,  unless
exercised prior thereto, shall thereafter be void.

                  The Warrants evidenced by this Warrant Certificate are part of
a duly authorized  issue of' Warrants issued pursuant to the Warrant  Agreement,
which Warrant  Agreement is hereby  incorporated by reference in and made a part
of this  instrument  and to which  reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Company  and the holders  (the words  "holders"  or "holder"  meaning the
registered holder or registered holders) of the Warrants.


                                       17
<PAGE>

                  The Warrant  Agreement  provides-that,  upon the occurrence of
certain  events,  the Exercise  Price and the type and/or  number of the Company
securities issuable upon their exercise may, subject to certain  conditions,  be
adjusted. In such event, the Company will, at the request of the holder, issue a
new Warrant Certificate evidencing the adjustment in. the Exercise Price and the
number  and/or type of  securities  issuable  upon the exercise of the Warrants;
provided,  however,  that the  failure of the  Company to issue such new Warrant
Certificates  shall not in any way change,  alter or otherwise impair the rights
of the holder as set forth in the Warrant Agreement.

                  Upon due  presentment  for  registration  of  transfer of this
Warrant  Certificate  and the executed form of assignment  attached hereto at an
office  or  agency  of  the  Company,  a  new  Warrant  Certificate  or  Warrant
Certificates  of like form and  tenor and  evidencing  in the  aggregate  a like
number of Warrants  shall be issued to the  transferee(s)  in exchange  for this
Warrant  Certificate,  subject  to the  limitations  provided  herein and in the
Warrant  Agreement,  without any charge except for any tax or other governmental
charge imposed in connection with such transfer.

                  Upon the exercise of less than all of the  Warrants  evidenced
by this  Certificate,  the Company shall  forthwith issue to the holder hereof a
new Warrant Certificate representing such number unexercised Warrants.

                  The Company may deem and treat the registered holder(s) hereof
as the  absolute  owner(s)  of this  Warrant  Certificate  (notwithstanding  any
notation of ownership or other writing  hereon made by anyone),  for the purpose
of any exercise hereof, and of any distribution to the holder(s) hereof, and for
all other  purposes,  and the Company shall not be affected by any notice to the
contrary.

                  All terms used in this Warrant  Certificate  which are defined
in the  Warrant  Agreement  shall-  have the  meanings  assigned  to them in the
Warrant Agreement.

                  IN WITNESS WHEREOF, the has caused this Warrant Certificate to
be duly executed under its corporate seal.

Dated as of January 25, 2001

                                   HOME DIRECTOR, INC.



                                   By
                                      --------------------------------------
                                            Mary E. Walker, President


                                       18
<PAGE>


             [FORM OF ELECTION TO PURCHASE PURSUANT TO SECTION 3.2]

                  The undersigned hereby irrevocably elects to exercise the
right, represented; by this Warrant Certificate, to purchase ____________ shares
of Preferred. Stock.

                  In  accordance  with the terms of  Section  3.2of the  Warrant
Agreement  dated as of January 25, 2001 between HOME DIRECTOR,  INC. and Spencer
Trask Securities,  Incorporated, the undersigned requests that a certificate for
such  securities  be  registered  in the  name of  ______________________  whose
address is ______________________________ and that such Certificate be delivered
to _______________________whose address is
-----------------------------------.

Dated:                     , 2000

                  Signature ________________________________________
                  (Signature must conform in all respects to name of
                  holder as specified on the face of the Warrant
                  Certificate)


                  _____________________________________________________
                  (Insert Social Security or Other Identifying Number of
                   Holder)


                                       19
<PAGE>


                              [FORM OF ASSIGNMENT]

                (TOT BE EXECUTED BY THE RE HOLDER IF SUCH. HOLDER
                  DESIRES TO TRANSFER THE WARRANT CERTIFICATE)

     FOR VALUE RECEIVED  ____________  hereby sells,  assigns and transfers unto
_________________________________________

                  (PLEASE PRINT NAME AND ADDRESS OF TRANSFEREE)

this Warrant  Certificate,  together with all right, title and interest therein,
and does hereby  irrevocably  constitute  and appoint  Attorney to transfer  the
within Warrant Certificate on the books of the within-named  Company,  with full
power of substitution.

Dated:                     , 2000



                  Signature ________________________________________
                  (Signature must conform in all respects to name of
                  holder as specified on the face of the Warrant
                  Certificate)


                   _____________________________________________________
                  (Insert Social Security or Other Identifying Number of
                    Holder)

                                       20
<PAGE>