Document:

<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,
Spencer Trask Ventures, Inc. (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 [________] (the "Initial Exercise Date") and on or prior
to the close of business on the fifth 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 $0.74 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 [_________], BETWEEN THE COMPANY AND THE SIGNATORIES THERETO.

                                        1
<PAGE>

         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) 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 a new
     Warrant evidencing the portion of this Warrant not so assigned, and this
     Warrant

                                       3
<PAGE>

     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 an 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.

         (a) 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.

         (b) Exercise Price Adjustment. (i) If and whenever the Company issues
or sells, or is deemed to have issued or sold, any Additional Shares of Common
Stock for an effective consideration per share of less than the then Exercise
Price or for no consideration (such lower price, the "Base Share Price" and such
issuances collectively, a "Dilutive Issuance"), then, the Exercise Price shall
be multiplied by a fraction of which the numerator shall be the number of shares
of Common Stock Outstanding immediately prior to the Dilutive Issuance plus the
number of shares of Common Stock which the aggregate offering price for such
Dilutive Issuance (assuming receipt by the Company in full of all consideration
payable upon exercise of such rights, options or warrants) would purchase at the
Exercise Price, and the denominator of which shall be the sum of the number of
shares of Common Stock Outstanding immediately prior to the Dilutive Issuance
plus the number of shares of Common Stock so issued or issuable in connection
with the Dilutive Issuance; provided, that for purposes hereof, all shares of
Common Stock that are issuable upon conversion, exercise or exchange of Capital
Share Equivalents shall be deemed outstanding immediately after the issuance of
such Common Stock. Such adjustment shall be made whenever such shares of Common
Stock or Capital Share Equivalents are issued. For purposes of this Section
11(b), "Common Stock Outstanding" as of a given date shall be the number of
shares of Common Stock (excluding treasury shares, if any) issued and
outstanding. Upon each adjustment of the Exercise Price pursuant to the
provisions of this Section 11(b), the number of Warrant Shares issuable upon the
exercise of this Warrant

                                       5
<PAGE>

shall be adjusted to the nearest full amount by multiplying a number equal to
the Exercise Price in effect immediately prior to such adjustment by the number
of Warrant Shares issuable upon exercise of the Warrants immediately prior to
such adjustment and dividing the product so obtained by the adjusted Exercise
Price.

         (c) As used herein:

         "Additional Shares of Common Stock" shall mean all shares of Common
         Stock issued or deemed to be issued by the Company after the date
         hereof which represent a Dilutive Issuance. If the Company issues any
         Options or Convertible Securities (as hereinafter defined), the maximum
         number of shares of Common Stock issuable thereunder, shall be deemed
         to be Additional Shares of Common Stock issued as of the time of such
         issue, if the consideration per share of such Additional Shares of
         Common Stock (as hereinafter determined) is less than then-applicable
         Exercise Price, until such time as such Options or Convertible
         Securities shall terminate or be exercised or converted into Common
         Stock, upon which time the number of shares of Common Stock actually
         thereupon issued shall be deemed to be Additional Shares of Common
         Stock. The Company shall be deemed to have issued the maximum number of
         shares of Common Stock potentially underlying any Options or
         Convertible Securities. Notwithstanding the foregoing, no issuance or
         deemed issuance nor Common Stock or options or warrants to purchase
         Common Stock issued to (i) officers, directors or employees of or
         consultants to the Company pursuant to any compensation agreement, plan
         or arrangement or the issuance of Common Stock upon the exercise of any
         such options or warrants, provided such securities were issued prior to
         the date hereof or pursuant to a stock option plan that was approved by
         the board of directors (ii) upon conversion of existing convertible
         securities outstanding as of the date hereof; (iii) upon exercise of
         outstanding warrants existing as of the date hereof or this warrant;
         and (iv) an institution or bank lender in connection with a loan
         transaction or equipment lease,

         shall be deemed the issuance of Additional Shares of Common Stock.

         "Options" shall mean rights, options or warrants to subscribe for,
         purchase or otherwise acquire either Common Stock or Convertible
         Securities.

         "Convertible Securities" shall mean any evidences of indebtedness,
         shares (other than Common Stock) or other securities directly or
         indirectly convertible into or exchangeable for Common Stock.

         With respect to Options and Convertible Securities, "Consideration" per
         share of Additional Shares of Common Stock shall be determined by
         adding (x) the aggregate consideration received upon issuance of the

                                       6
<PAGE>

         Options or Convertible Securities divided by the number of shares
         receivable upon the exercise or conversion thereof and (y) the minimum
         possible consideration per share received per share upon the exercise,
         conversion or exchange of such Options or Convertible Securities for
         shares of Common Stock.

         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 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

                                       7
<PAGE>

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,
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

                                       8
<PAGE>

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.

         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.

                                       9
<PAGE>

               (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 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.

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

                                       10
<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:

                                       11
<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.Exhibit
10(iii)

THE STANLEY WORKS
RESTRICTED STOCK UNIT PLAN

FOR NON-EMPLOYEE DIRECTORS

ARTICLE
I

PURPOSE

The purpose of the Plan is to
provide non-employee directors of the Company with compensation tied to
the value of the Company's Common Stock thereby motivating such
directors to perform their duties and responsibilities to the best of
their professional ability and to further align the interests of such
directors with the interests of the Company and its shareholders.

ARTICLE II

DEFINITIONS

As used in the
Plan, the following terms shall have the meanings specified in this
Article 2, except to the extent provided otherwise in an applicable
Award Certificate.

2.1    Adjustment Event:    a
stock split, reverse stock split, combination or exchange of shares,
recapitalization, subdivision, merger, consolidation, reclassification,
reorganization, spin-off or other distribution of stock or property of
the Company, partial or complete liquidation of the Company or any
similar transaction affecting the outstanding Common Stock or the
capitalization of the Company; provided that, when used with respect to
in-kind dividends credited to a Participant's Dividend Equivalent
Account, the term Adjustment Event shall relate to the property subject
to such in-kind dividend.

2.2    Affiliate:    any
Person controlling, controlled by or under common control with the
Company.

2.3    Award:    a cash-settled,
restricted stock unit representing the right, subject to the timing of
payment, distribution, adjustment and other provisions of the Plan, to
receive the future cash value of one share of Common Stock and the
amount credited under the related Dividend Equivalent Account as of the
date of settlement.

2.4    Award Certificate:    a
written certificate evidencing each Award to a Participant under the
Plan and setting forth certain of the terms and conditions applicable
thereto, which certificate shall be in a form approved by the Committee
from time to time.

2.5    Beneficiary:    the
Person(s) designated in accordance with Article 8 below.

2.6    Board:    the Board of Directors of the
Company.

2.7    Committee:    the Corporate
Governance Committee of the Board or, if there is no such committee,
the Board, provided that no Participant shall be permitted to act in
the capacity of a director with respect to any matters pertaining
directly to any of such Participant's Awards.

2.8    Common Stock:    the common stock of the
Company, par value $2.50 per share, subject to adjustment pursuant to
Article 7.

2.9    Company:    The Stanley Works, a
Connecticut corporation.

2.10    Dividend Equivalent
Account:    a notional account established on the books and
records of the Company to record any dividend equivalent amounts
accrued and payable in respect of any outstanding Awards and any
earnings or losses on such dividend equivalent amounts.

2.11    Effective Date:    April 26, 2004.

23

2.12    Grant Date:    with
respect to an Award, the date as of which such Award is granted to a
Participant and set forth in the Award Certificate evidencing such
Award.

2.13    Market Value:    the average of the
high and low price on the New York Stock Exchange for a share of Common
Stock on the last trading day prior to the day as of which Market Value
is to be determined.

2.14    Participant:    a
non-employee director of the Company who is granted an Award under the
Plan.

2.15    Person:    any natural person, firm,
partnership, limited liability company, association, corporation,
company, trust, business trust, governmental authority or other
entity.

2.16    Plan:    The Stanley Works
Restricted Stock Unit Plan for Non-Employee Directors, as set forth
herein and as the same may be amended and in effect from time to
time.

2.17    Secretary:    the individual holding
the position of corporate secretary of the Company from time to time or
his or her delegate.

2.18    Termination
Date:    the date on which a Participant ceases to serve as a
director of the Company for any reason.

ARTICLE
III

ELIGIBILITY AND PARTICIPATION

Non-employee
directors of the Company who are selected by the Committee to receive
an Award shall become Participants in the Plan. Selection for
participation in the Plan shall not entitle any Participant to continue
to serve as a director of the Company for any period or to receive or
be eligible to receive any subsequent or additional Awards.

ARTICLE IV

TERMS OF AWARDS

4.1    
Grant of Awards.

The Committee may grant Awards to eligible
non-employee directors described in Article 3 at such times, in such
amounts and subject to such terms and conditions not inconsistent with
the Plan as it shall determine. Each Award shall be evidenced by an
Award Certificate.

4.2    Vesting of Awards.

Each Award shall be fully vested and nonforfeitable immediately upon
grant to a Participant.

4.3    Dividend Equivalent
Rights.

(A)    Cash
Dividends.    In the event that the Company declares and pays a
cash dividend in respect of the Common Stock as of a record date
occurring after the Grant Date of an Award and prior to the
satisfaction of such Award as provided in Article 4.4, the Company
shall credit an amount to the Participant's Dividend Equivalent
Account, as of the payment date for such dividend, equal to the product
of (i) the cash dividend amount per share of Common Stock declared and
paid, multiplied by the number of Awards held by such Participant. Cash
amounts credited from time to time to a Participant's Dividend
Equivalent Account shall be deemed to earn interest, compounded
quarterly, at an annual rate equal to the rate of interest applicable
from time to time under the Company's Deferred Compensation Plan
for Non-Employee Directors for the period from the date such cash
amount is credited to the Participant's Dividend Equivalent
Account to the date of distribution of such amount, as so adjusted, in
accordance with Article 5.

(B)    Dividends
In Kind.    In the event that the Company declares and pays a
dividend in kind in respect of the Common Stock as of a record date
occurring after the Grant Date of an 

24

Award and prior to the satisfaction of such
Award as provided in Article 4.4, the Company shall credit an amount to
each Participant's Dividend Equivalent Account, as of the payment
date for such dividend, equal to the product of (i) the then-current
fair market value, as determined by the Committee in its sole
discretion, assigned to the property paid in kind in respect of one
share of Common Stock, multiplied by the number of Awards held by such
Participant. Amounts credited from time to time to a
Participant's Dividend Equivalent Account in respect of in-kind
dividends shall be adjusted from time to time to reflect changes in the
fair market value of, or Adjustment Events with respect to, the
property subject to such in kind dividend, as determined by the
Company, during the period from the date such amount is credited to the
Participant's Dividend Equivalent Account to the date of
distribution, as so adjusted, in accordance with Article 5.

4.4    Elections with respect to Method and Timing of
Settlement.    Within 90 days following written notice to a
Participant of the grant of an Award, such Participant may elect for
such Award to be settled in one of the following methods (each, a
"Settlement Method"): (i) in one
lump sum payment, which payment shall be made within twelve months
following such Participant's Termination Date on the Settlement
Date elected by the Participant , or (ii) in a number of approximately
equal annual installments over a period of up to ten years, with the
first installment to be paid on within twelve months following such
Participant's Termination Date on the Settlement Date elected by
the Participant and each subsequent installment to be paid on the first
business day of each succeeding calendar year during the installment
period. For this purpose, the term "Settlement
Date" means the date (day and month) elected by the
Participant to receive or begin receiving payments in settlement of his
or her Award[s], provided, however, that in the event such
day and month fall on a weekend or holiday, the Settlement Date shall
mean the first business day following such date.

Election of the
Settlement Method and Settlement Date shall be made in writing, on such
form as may be approved from time to time by the Secretary. In the
absence of a Participant's effective election with respect to the
Settlement Method and/or Settlement Date of an Award, such Award shall
be settled in one lump sum as of the Participant's Termination
Date.

4.5    Modification of Settlement
Elections.    A Participant may elect to change the Settlement
Date and/or Settlement Method then in effect with respect to all or a
designated portion of his or her Awards to another Settlement Date
and/or Settlement Method permitted under Section 4.4 by filing an
election with the Secretary, in such form as the Secretary may
prescribe from time to time, at least 12 months prior to the Settlement
Date in the current calendar year then applicable to the
Award[s] subject to such election and otherwise in accordance
with any procedures specified by the Committee from time to time;
provided that, (i) without the prior written approval of the Committee,
a Participant may not change a Settlement Date and/or Settlement Method
for an Award more than one time in any three year period and (ii) no
such election may have the effect of accelerating the settlement of any
portion of an Award.

ARTICLE V

SETTLEMENT OF
AWARDS

5.1    Settlement.    In the case of
an Award payable in one lump sum, on the Settlement Date, the Company
shall pay to the Participant, in full settlement of such Award, an
amount, in cash, equal to the sum, determined as of the Settlement
Date, of (i) the Market Value of a share of Common Stock plus (ii) the
aggregate amount then credited to the portion of the
Participant's Dividend Equivalent Account corresponding to such
Award. In the case of an Award payable in installments, on the
Settlement Date applicable to such Award and on each subsequent
installment payment date, the Company shall pay to the Participant, in
partial settlement of such Award, the applicable installment amount, in
cash. The amount of each installment shall be based on the Market Value
of a share of Common Stock plus the aggregate amount credited to the
portion of the Participant's Dividend Equivalent Account
corresponding to such Award, in each case, as of the date immediately
prior to the installment payment date, and shall be determined by
multiplying such amount by a fraction, the numerator of which shall be
one and the denominator of which shall be the number of annual
installments (including the current installment) remaining to be
paid.

25

5.2    Settlement on
Death.    If a Participant should die before all Awards have
been paid in accordance with Section 5.1, the balance of such Awards
shall be paid to the Participant's Beneficiary in a lump sum
payment as of the first business day of the calendar year following the
year of the Participant's death.

ARTICLE
VI

ADMINISTRATION

6.1    Authority of
the Committee.    The Committee shall be responsible for the
administration and interpretation of the Plan and all Award
Certificates. Subject to any guidelines established for the Committee,
as approved in writing by the Board, the Committee shall have full
discretionary authority to exercise its duties and powers under the
Plan and the Award Certificates, including with respect to the
administration and interpretation of the Plan and the Award
Certificates. Subject to the terms of the Plan and the Award
Certificates, the Committee is authorized to prescribe, amend and
rescind rules and regulations relating to the administration and
interpretation of the Plan and the Award Certificates, to provide for
conditions and assurances deemed necessary or advisable to protect the
interests of the Company, and to make all other determinations
necessary or advisable for the administration and interpretation of the
Plan and the Award Certificates or to carry out its or their provisions
and purposes. All determinations, calculations, interpretations and
other actions made or taken by the Committee pursuant to the provisions
of the Plan or any Award Certificate or otherwise in connection with
the administration, operation or interpretation thereof shall be final,
binding and conclusive for all purposes and upon all persons and shall
be made in the sole and absolute discretion of the Committee.

6.2    Delegation by the Committee; Authority of the
Board.    The Committee may appoint in writing such person or
persons as it may deem necessary or desirable to carry out any of the
duties or responsibilities of the Committee hereunder and may delegate
to such person or persons in writing such duties, and confer upon such
person or persons in writing, such powers, discretionary or otherwise,
as the Committee may deem appropriate. The Committee may employ one or
more persons to render advice with regard to any of the duties or
responsibilities of the Committee under the Plan. Any and all rights,
duties and responsibilities of the Committee hereunder may be exercised
by the Board in lieu of the Committee, in the Board's
discretion.

6.3    Reliance.    The Committee shall
be entitled to rely upon all determinations, certificates and reports
made by any financial officer of the Company or any actuary or
independent public accountant and upon all opinions of law given by any
counsel selected by it (who may be counsel to the Company), and shall
be fully protected in respect of any act done or omitted to be done or
any determination made in good faith in reliance upon any such
determination, certificate, report or opinion. No member of the
Committee shall be liable for any act done or omitted to be done or
determination made in the performance of its duties under this Plan or
for any act done or omitted to be done by any agent or representative
of such Committee so long as such person acted in good faith.

6.4    Indemnification.    Each person who is or shall
have been a member of the Committee or otherwise delegated any
administrative duties or responsibilities hereunder shall be
indemnified and held harmless by the Company to the fullest extent
permitted by law from and against any and all losses, costs,
liabilities and expenses (including any related attorneys' fees
and advances thereof) in connection with, based upon or arising or
resulting from any claim, action, suit or proceeding to which such
person may be made a party or in which such person may be involved by
reason of any action taken or failure to act under or in connection
with the Plan and from and against any and all amounts paid by such
person in settlement thereof, with the Company's approval, or
paid by such person in satisfaction of any judgment in any such action,
suit or proceeding against him, provided that such person shall give
the Company an opportunity, at its own expense, to defend the same
before such person undertakes to defend it on his own behalf. The
foregoing right of indemnification shall not be exclusive and shall be
independent of any other rights of indemnification to which such
persons may be entitled under the Company's Certificate of
Incorporation or By-laws, by contract, as a matter of law or
otherwise.

26

ARTICLE VII

ADJUSTMENTS IN
CAPITALIZATION

In the event of any change in the number,
class or type of shares of Common Stock outstanding or other change in
the capitalization of the Company by reason of an Adjustment Event, the
Committee may make such adjustments as it determines are appropriate to
the number of shares of Common Stock and/or the class or type of shares
of capital stock covered by the Awards. In the event of any adjustment
made pursuant to this Article 7, references herein and in any
applicable Award Certificate will be deemed to refer to such different
class or type of shares of common stock or other equity securities.

ARTICLE VIII

GENERAL PROVISIONS

8.1    Right to Payment Unsecured.    The right of a
Participant to receive payments under the Plan shall be only that of an
unsecured creditor against the assets of the Company and payments under
the Plan shall be made solely from the assets of the Company. No
Participant shall have any right to any specific assets of the Company
by virtue of the Plan, any Award Certificate or any Award hereunder or
thereunder.

8.2    Nontransferability of
Awards.    Neither Awards granted under the Plan nor interests
in Dividend Equivalent Accounts may be transferred, sold, assigned,
pledged, encumbered, hypothecated, alienated or otherwise disposed of,
other than by will or by the laws of descent and distribution upon the
death of the Participant.

8.3    Amendment or
Termination.    The Plan and any outstanding Award Certificate
may be amended, modified or terminated by the Board at any time or from
time to time, provided that no such amendment, modification or
termination shall, without the consent of the affected Participant,
materially and adversely affect the rights of such Participant in
respect of outstanding Awards held at the time of such amendment,
modification or termination, as determined by the Committee.
Notwithstanding the foregoing, the Board may amend the Plan and any
Award Certificate to the extent necessary to comply with applicable
securities laws, without the consent of the affected Participant.

8.4    Limitation on Participants' Rights.    
The Plan shall not be construed as conferring upon any Participant any
legal right to continue to serve as a director of the Company.

8.5    Facility of Payments.    In the event that the
Committee shall find that any Participant to whom any benefit is
payable under the Plan is unable to care for his or her affairs because
of illness, accident or otherwise, the Committee may direct that any
benefit due shall be paid to the duly appointed legal representative of
such Participant, or if there is no duly appointed legal
representative, to the Participant's spouse or child of majority
age, and the payment of any such benefits shall be in complete
discharge of the liabilities of the Company under the Plan.

8.6    Beneficiary Designation.    Each Participant may
from time to time name any Beneficiary or Beneficiaries (who may be
named contingently or successively) to whom any benefit under the Plan
is to be paid. Each designation will revoke all prior designations by
the same Participant, shall be in a form prescribed by the Secretary
(which form may be the form used generally for other benefit plan
purposes) and will be effective only when filed by the Participant in
writing with the Secretary during his or her lifetime. In the absence
of any such designation, or in the event the designated beneficiary
shall have predeceased the Participant, the Participant's
Beneficiary shall be deemed to be to the Participant's surviving
spouse, if any, or otherwise his or her estate.

8.7    Rights as a Stockholder.    A Participant shall
not have any rights of a stockholder with respect to any Award,
including any in-kind dividend amount credited to his or her Dividend
Equivalent Account, including, but not limited to, the right of a
stockholder to vote or receive dividends, except for the right to
receive dividend equivalent amounts pursuant to Section 4.3.

27

8.8    No Limitation on
Compensation.    Nothing in the Plan shall be construed as
limiting the right of the Company to establish other plans, or to pay
compensation to its directors in cash or property, in a manner that is
not expressly authorized under the Plan.

8.9    Requirements of Law.    The granting of Awards
and the satisfaction thereof shall be subject to all applicable laws,
rules and regulations, and to such approvals by any governmental
agencies or, as may be appropriate or required, as determined by the
Committee.

8.10    Notices.    Each Participant
shall be responsible for furnishing the Secretary with the current and
proper address for the mailing of notices and delivery of agreements or
other property. Any notices required or permitted to be given shall be
deemed given by the Company if directed to the Participant to whom
addressed at such address and mailed by regular United States mail,
first-class and prepaid. If any item mailed by the Company to such
address is returned as undeliverable to the addressee, mailing will be
suspended until the Participant furnishes the proper address.

8.11    Severability of Provisions.    If any provision
of this Plan shall be held invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provisions hereof, and this
Plan shall be construed and enforced as if such provision had not been
included.

8.12    Applicable Law.    This Plan and
all Award Certificates in all respects shall be construed and
interpreted in accordance with the laws of the State of Connecticut,
without regard to the principles of conflicts of law thereof.

8.13    Number and Gender.    To the extent appropriate
in the context, each term used in this Plan in either the singular or
the plural shall include the singular and the plural, and pronouns
stated in either the masculine, feminine or neuter gender shall include
the masculine, feminine and neuter.

8.14    Headings and
Captions.    Headings and captions in this Plan are inserted for
convenience of reference only and the Plan is not to be construed by
the interpretation thereof.

28

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00069-of-00352.parquet"}]]