Document:

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                                                                    EXHIBIT 10.3

                               Amendment No. 2 to
                           Tenth Amended and Restated
         Investors' Rights Agreement (the "Investors' Rights Agreement")

            (a) Schedule A is hereby amended so as to add Ferghana Partners Inc.
as a party to the Investors' Rights Agreement as an "Investor" as such term is
used therein.

            (b) Section 2.1 is hereby amended so as to add a new defined term
"Ferghana Registrable Securities" which shall read in its entirety as follows:

                  "(p) The term "Ferghana Registrable Securities" means (i)
      those shares of Common Stock issued or issuable upon conversion of the
      shares of Common Stock issued or issuable upon exercise of that certain
      Warrant Agreement by and between Acusphere and Ferghana Partners Inc. and
      issued in connection with Acusphere's consummation of strategic
      transaction with Nycomed Danmark APS on July 6, 2004 pursuant to that
      certain Letter Agreement by and between Acusphere and Ferghana Partners
      Inc. dated June 5, 2003 (the "Ferghana Warrant") and (ii) any common stock
      of Acusphere issued as (or issuable upon the conversion or exercise of any
      warrant, right or other security which is issued as) a dividend or other
      distribution with respect to, or in exchange for or in replacement of the
      shares referenced in (i) above, excluding in all cases, however, any
      Registrable Securities sold by a person in a transaction in which the
      rights under this Section 2 are not assigned.

            (c) Section 2.1(k) is hereby amended so as to amend the definition
of "Registrable Securities" so that such definition, as amended, shall read in
its entirety as follows:

                  "(k) The term "Registrable Securities" means (A) (i) the
      Common Stock issuable or issued upon conversion of the Series A-1 Stock,
      the Series A-2 Stock, the Series B-1 Stock, the Series B-2 Stock, the
      Series C-1 Stock, the Series C-2 Stock, the Series D-1 Stock, the Series
      D-2 Stock, the Series E-1 Stock, the Series E-2 Stock, the Series F-1
      Stock, the Series F-2 Stock, the Series I-1 Stock, the Series I-2 Stock,
      the Series J Stock, the Series J-1 Stock, the Series J-2 Stock and the
      Series J-3 Stock, (ii) any Common Stock of Acusphere issued as (or
      issuable upon the conversion or exercise of any warrant, right or other
      security which is issued as) a dividend or other distribution with respect
      to, or in exchange for or in replacement of the shares referenced in (i)
      above, (iii) the Bridge Note Registrable Securities, (iv) the Bridge
      Warrant Registrable Securities, and (v) the Venture Lender Registrable
      Securities, excluding in all cases, however, any Registrable Securities
      sold by a person in a transaction in which the rights under this Section 2
      are not assigned; (B) solely for the purposes of Sections 2.1, 2.3 through
      2.15, 3.11, 4.1, 4.7 and 4.9 of this Agreement, the Alexandria Registrable
      Securities and the Venture Lender Registrable Securities; and (C) solely
      for purposes of Sections 2.1, 2.3, 2.5, 2.6 and 2.8 through 2.15, the
      Ferghana Registrable Securities."

            (e) Except as hereby amended, the Investors' Rights Agreement shall
remain in full force and effect.

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      IN WITNESS WHEREOF, the parties have executed this Amendment No. 2 to
Tenth Amended and Restated Investors' Rights Agreement as of the day first above
written.

                                       ACUSPHERE, INC.
                                       500 Arsenal Street
                                       Watertown, MA 02472

                                       By: /s/ Sherri C. Oberg
                                           -------------------------------------
                                           Sherri C. Oberg
                                           President and Chief Executive Officer

<PAGE>

/s/ Robert Langer
-----------------------------
Robert Langer

<PAGE>

POLARIS VENTURE PARTNERS, L.P.

By: Polaris Venture Management Co., LLC,
    Its General Partner

By: /s/ Terence McGuire
   ------------------------------------
    Member

<PAGE>

POLARIS VENTURE FOUNDERS' FUND, L.P.

By: Polaris Venture Management Co., LLC,
    Its General Partner

By: /s/ Terence McGuire
   ------------------------------------
    Member

<PAGE>

BANK OF AMERICA VENTURES

By: /s/ Kate D. Mitchell
   ------------------------------------

Title: President and Managing Director
      ---------------------------------

<PAGE>

BA VENTURE PARTNERS II LLC

By: /s/ Kate D. Mitchell
   ------------------------------------

Title: Managing Director
      ---------------------------------

<PAGE>

THOMAS WEISEL CAPITAL PARTNERS, L.P.

By: Tailwind Capital Partners LLC,
    its general partner

By: /s/ Douglas M. Karp
    -----------------------------------
Name:  Douglas M. Karp
Title: Managing Partner
<PAGE>

TWP CEO FOUNDERS' CIRCLE (AI), L.P.

By: Tailwind Capital Partners LLC,
    its general partner

By: /s/ Douglas M. Karp
    -----------------------------------
Name:  Douglas M. Karp
Title: Managing Partner
<PAGE>

TWP CEO FOUNDERS' CIRCLE (QP), L.P.

By: Tailwind Capital Partners LLC,
    its general partner

By: /s/ Douglas M. Karp
   ____________________________________

Name: Douglas M. Karp
Title: Managing Partner
<PAGE>

THOMAS WEISEL CAPITAL PARTNERS (DUTCH), L.P.

By: Thomas Weisel Capital Partners (Dutch) LLC,
    its general partner

By: Tailwind Capital Partners LLC,
    its managing member

By: /s/ Douglas M. Karp
    __________________________________________

Name: Douglas M. Karp
Title: Managing Partner
<PAGE>

THOMAS WEISEL CAPITAL PARTNERS
(DUTCH II), L.P.

By: Thomas Weisel Capital Partners (Dutch), LLC,
      its general partner

By: Tailwind Capital Partners LLC,
      its managing member

      /s/ Douglas M. Karp
By:__________________________________________
Name: Douglas M. Karp
Title: Managing Partner
<PAGE>

THOMAS WEISEL CAPITAL PARTNERS EMPLOYEE FUND, L.P.

By: Tailwind Capital Partners LLC,
      its general partner

By: /s/ Douglas M. Karp
   ____________________________________

Name:  Douglas M. Karp
Title: Managing Partner

<PAGE>

TWP 2000 CO-INVESTMENT FUND, L.P.

By: Thomas Weisel Capital Management LLC,
      its general partner

By: Thomas Weisel Partners Group LLC,
      its managing member

By: /s/ Jack Helfard
   ____________________________________

Name:  Jack Helfard
Title: Vice President<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 ___________________ Shares of Common Stock of

                               HOME DIRECTOR, INC.

     THIS COMMON STOCK PURCHASE WARRANT CERTIFIES that, for value received,
[Subscriber] (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 ________, 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"), up to ______________
shares (the "Warrant Shares") of Common Stock, par value $.0.01 per share, of
the Company (the "Common Stock"). The purchase price of one share of Common
Stock (the "Exercise Price") under this Warrant shall be $_____ subject to
adjustment hereunder. The Exercise Price and the number of Warrant Shares for
which the Warrant is exercisable shall be subject to adjustment as provided
herein. CAPITALIZED TERMS USED AND NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE
MEANINGS SET FORTH IN THOSE CERTAIN SUBSCRIPTION AGREEMENT(S) (THE "SUBSCRIPTION
AGREEMENT"), DATED _________________, 2004, BETWEEN THE COMPANY AND THE ORIGINAL
HOLDER HEREOF.

                                       1
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         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 Shares. The Company covenants that all Warrant
Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this
Warrant 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) Except as provided in Section 4 herein, 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 Exercise
     Price by wire transfer or cashier's check drawn on a United States bank or
     by means of a cashless exercise pursuant to Section 3(c), 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) Trading 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(a) by the third Trading Day after the date of exercise, then
     the Holder will have the right to rescind such exercise.

               (b) 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 Holder a new Warrant evidencing the
     rights of 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.

                                       2
<PAGE>

               (c) If at any time after one year from the date of issuance of
     this Warrant there is no effective registration statement registering the
     resale of the Warrant Shares by the Holder, this Warrant may also be
     exercised, at any time prior to the Termination Date, by means of a
     "cashless exercise" in which the Holder shall be entitled to receive a
     certificate for the number of Warrant Shares equal to the quotient obtained
     by dividing [(A-B) (X)] by (A), where:

         (A) = the closing bid price on the trading day preceding the date of
               such election;

         (B) = the Exercise Price of the Warrants, as adjusted; and

         (X) = the number of Warrant Shares issuable upon exercise of the
               Warrants in accordance with the terms of 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 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 a 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

                                       3
<PAGE>

     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 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 (or by means of a cashless exercise),
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.

                                       4
<PAGE>

         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. 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 a 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

                                       5
<PAGE>

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.

         15. Notice of Corporate Action. If at any time:

               (a) the Company shall take a record of the holders of its Common
     Stock for the purpose of entitling them to receive a dividend or other
     distribution, or any right to subscribe for or purchase any evidences of
     its indebtedness, any shares of stock of any class or any other securities
     or property, or to receive any other right, or

               (b) there shall be any capital reorganization of the Company, any
     reclassification or recapitalization of the capital stock of the Company or
     any consolidation or merger of the Company with, or any sale, transfer or
     other disposition of all or substantially all the property, assets or
     business of the Company to, another corporation or,

               (c) there shall be a voluntary or involuntary dissolution,
     liquidation or winding up of the Company;

then, in any one or more of such cases (but not in such cases if the rights of
the Holder or holders of Common Stock will not be materially affected thereby,
as for example in the case of a merger to effect a change of domicile), the
Company shall give to Holder (i) at least 15 days' prior written notice of the
date on which a record date shall be selected for such dividend, distribution or
right or for determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
liquidation or winding up, and (ii) in the case of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,

                                       6
<PAGE>

dissolution, liquidation or winding up, at least 15 days' prior written notice
of the date when the same shall take place. Such notice in accordance with the
foregoing clause also shall specify (i) the date on which any such record is to
be taken for the purpose of such dividend, distribution or right, the date on
which the holders of Common Stock shall be entitled to any such dividend,
distribution or right, and the amount and character thereof, and (ii) the date
on which any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up is to take place
and the time, if any such time is to be fixed, as of which the holders of Common
Stock shall be entitled to exchange their Warrant Shares for securities or other
property deliverable upon such disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to Holder
at the last address of Holder appearing on the books of the Company and
delivered in accordance with Section 17(d).

         16. Authorized Shares. 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.

         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, 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.

         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.

                                       7
<PAGE>

         17. Miscellaneous.

               (a) Jurisdiction. This Warrant shall constitute a contract under
     the laws of New York, without regard to its conflict of law, 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 Holder shall operate
     as a waiver of such right or otherwise prejudice 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, whether such
     liability is asserted by the Company.

               (f) Remedies. 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 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 Holder. The provisions of this
     Warrant are intended to be for the benefit of all Holders from time to time
     of this Warrant and shall be enforceable by any such 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

                                       8
<PAGE>

     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.

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

                                       9
<PAGE>

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

Dated: _____________, 2004
                                         HOME DIRECTOR, INC.

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

                                       10
<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) Payment shall take the form of (check applicable box):

                    [ ] in lawful money of the United States; or

                    [ ] the cancellation of such number of Warrant Shares as is
                    necessary, in accordance with the formula set forth in
                    subsection 3(c), to exercise this Warrant with respect to
                    the maximum number of Warrant Shares purchasable pursuant to
                    the cashless exercise procedure set forth in subsection
                    3(c).

         (3) 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:

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

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

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

                                             [Warrant holder]

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

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

<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.

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