EMPLOYMENT AGREEMENT
FOR
MR. THOMAS BENNETT
DECEMBER 13, 2004

December 13, 2004

Mr. Thomas Bennett
Seneca 933 Road
Great Falls, VA 22066

Dear Mr. Bennett:

        On behalf of Terabeam Wireless (the “Company”), and subject to Board of
Director approval, I am pleased to offer you (the “Executive”) a position of
increased scope and responsibility, as the Company’s President and Chief
Operating Officer (the “Offered Position”). In this position, you will report
directly to me, the Chief Executive Officer. After you have had the opportunity
to review and consider this offer, please indicate your intentions by responding
in writing as indicated below as soon as possible, but not later than December
15, 2004. Please be advised that the Company reserves its right to withdrawn
this offer prior to your acceptance, without prior notice.

Offer Summary:

1) Duties: Subject to the ultimate control and discretion of the Chief Executive
Officer of the Company, the Executive shall serve in the Offered Position and
perform all duties and services commensurate with that Offered Position.
Examples of, but not a complete list of, the type of duties to be performed by
the Executive follow;

  a) attain Company revenue and profit objectives by: i) the direct supervision
of sales and marketing departments and their respective in-charge personnel, as
well as direct customer and industry interaction; ii) the development and
execution of an effective global distribution strategy; iii) the identification,
articulation, business case analysis of new customer, product, service and
market opportunities; iv) product life cycle management; v) the creation,
increased awareness and customer loyalty to, the Company’s “Brand(s)"; and vi)
product pricing to ensure maximum profitability and target market penetration
levels.

  b) assist in the negotiate sales contracts, distributor agreements and
recommend OEM supplier agreements for new products and services, and

  c) develop Company strategy regarding meeting customer requirements, based on
competitive and market analysis, and

  d)
e)
f)
g)
h)
i) coordinate the periodic preparation of the Company’s business and operating
plans, and
create, maintain and project a positive Company image to the public and
create and maintain positive relations with investors, and
identify strategic business relationships that will enhance the Company’s
performance, and
improve the effectiveness of the Company’s engineering, manufacturing,
production, quality departmentsand improve their them both organizationally and
with better communications and morale; and
any other related duties that may be assigned by the CEO from time to time.

2) Reporting Location: The Executive’s reporting location shall be at Company
provided facilities located at 8000 Lee Highway, Falls Church, VA 22042 (the
“Reporting Location”). Please be advised that since the geographic scope of the
Offered Position is global in nature, significant travel will be required.

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Offer letter-Thomas Bennett (cont.)

3) Compensation: For all considerations and services to be rendered by the
Executive hereunder:

  a) Base Salary: The Company shall pay the Executive an initial base salary
that shall be calculated at the rate of $200,000 (Two Hundred thousand dollars),
effective December 13, 2004, per year, payable in accordance with the company’s
normal payroll practices. This initial base salary may be adjusted from time to
time based on actual performance measured against personal, team and Company
goals, consistent with Company policy, and treatment of other Company
executives.

  b) Additional Compensation Eligibility: The Executive shall be eligible to
receive additional compensation that will be comprised of an annual performance
bonus ranging from 0% to 50% of your base salary. Any such bonus payout, if any,
is at the sole discretion of the Company and requires Board of Director
Approval.

  c) Equity Participation: Subject to approval of the Board of Directors of the
Company, the Executive shall be granted options under a Stock Option Plan of the
Company to purchase One Hundred Thousand (100,000) shares of common stock of the
Company, vesting over a three-year period, at an exercise price equal to the
actual market price of the Company’s stock on the Nasdaq OTCBB on the day of the
actual grant. There will also be a change in control clause that will allow for
full vesting of these options and a continued salary for up to six (6) months
upon the change in control.

  d) Benefits: Upon employment, the Executive shall (a) be eligible to
participate in the Company’s group health and dental insurance, disability
insurance, life insurance, 401k Pension Plan, and other Company-wide benefits;
(b) begin to accumulate fifteen (15) business days of paid vacation per year;
(c) be paid for a reasonable number of sick days per year as defined in the
Company’s Employee Handbook; (d) be entitled to the Company’s Nine (9) scheduled
paid holidays plus a revenue recognition day, if applicable; and (e) participate
in such other benefits that may become available to all employees of the Company
in the future.

  e) Business Expenses: The Company shall promptly reimburse the Executive for
all reasonable and customary expenses incurred by the Executive in connection
with the performance of the Executive’s duties and responsibilities, that are
consistent with Company travel and expense policy and upon presentation of
completed expense reports with supporting receipts and/or other appropriate
documentation.

4) Non-Competition: In consideration of continued employment by the Company and
the Executive’s receipt of the salary and other benefits associated with the
Executive’s employment, and in acknowledgment that (i) the Company is engaged in
a business based upon the development and distribution of wireless communication
technology, (ii) maintains secret and confidential information, (iii) during the
course of the Executive’s employment by the Company such secret or confidential
information may become known to the Executive, and (iv) full protection of the
Company’s business makes it essential that no employee appropriate for his or
her own use, or disclose such secret or confidential information, the Executive
agrees to the following:

  a) The Executive shall not use or disclose at any time during the Executive’s
employment with the Company, or at any time thereafter, any trade secret or
proprietary or confidential information of the Company or any of its affiliates.

  b) During the Executive’s employment with the Company the Executive shall not
be engaged as an officer, director or executive of, or in any way be associated
in a management or ownership capacity with, any corporation, partnership or
other enterprise or venture which conducts a business which is in competition
with the business of the Company provided, however, that the Executive may own
not more than 3% of the outstanding securities, or equivalent equity interests,
of any class of any corporation or firm which is in competition with the
business of the Company, which securities are listed on a national securities
exchange or traded in the over-the-counter market.

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Offer letter-Thomas Bennett (cont.)

  c) The Executive agrees that during his employment to promptly disclose and
assign to the Company the Executive’s entire right, title and interest in any
and all inventions and copyrights (including intellectual properties) solely or
jointly conceived and/or reduced to practice by the Executive during the term of
his employment relating to the current or projected business of the Company. The
Executive agrees that all of such inventions and copyrights are the property of
said Company.

  d) The Executive agrees to receive confidential, proprietary and other
information of the Company in confidence, and not, directly or indirectly,
during the term of is employment or any time after his employment is terminated
for any reason to disclose or furnish to others, assist others in the
application of or use for the Executive’s own gain, such information, including,
but not limited to, the Company’s customer lists and trade secrets, methods of
conducting or obtaining business, the manner or process of manufacture, and the
design and drawings of its products, or any part thereof, unless and until it
has become public knowledge, or has come into the possession of such or others
by legal and equitable means. Furthermore, whether or not such information
comprises proprietary information, trade secrets, or confidential information,
the Executive also agrees not to disclose, furnish to others, assist others in
the application of, or use for the Executive s own gain, either any information
within the categories of information herein above specifically listed, including
the identity of any customers of the Company, or any other information relating
to the Company s business not made available by the Company to the public or in
the public domain.

  e) To assist in carrying out the intent of subparagraph (d) above, the
Executive, during the term of his employment, agrees to refrain from engaging on
his own behalf or on behalf of any third party in the design, manufacture, or
sale of electronic equipment, accessories and components thereof, or to perform
services or research work in this field of activity.

5) Termination:

  a) The Executive acknowledge and agrees that, notwithstanding the foregoing,
the Executive’s employment with the Company is “at will”, meaning that the
Company may terminate the Executive’s employment with the Company at any time,
with or without Cause. As used herein, “Cause” means the Executive’s commission
of a felony, gross dereliction or abdication of duties, repeated refusal to
perform duties assigned to the Executive by management that are consistent with
the Executive’s titles, or the Executive’s intentional acts that cause material
harm to the Company.

6) Definitive Employment Agreement and Board Position:

          By April 30, 2005, the Company will enter into an Executive Employment
Agreement with you having these same general terms and must be approved by the
Board of Directors.

7) Other Provisions:

  a) The Executive agrees to deliver to the Company, upon termination of his
employment, all property and documents of the Company and all data relating to
the Company s business then in his custody and not take with him any drawings,
documents, or reproductions of confidential or trade secret information or of
any other information of any kind not made available to the public by the
Company.

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Offer letter-Thomas Bennett (cont.)

  b) The Executive also agrees that the Company may use for any purpose, at any
time during his employment or after such employment, all photographs of the
Executive taken during the term of his employment.

  c) The Executive also agrees that he will not, directly or indirectly, during
the term of his employment or within one year after termination of his
employment for any reason, in any manner, encourage, persuade, or induce any
other Executive of the Company to terminate his employment, or any person or
entity engaged by the Company to represent it to terminate that relationship.

  d) The Executive also agrees to, and acknowledges that he has been informed
that the Company reserves its right to require the Executive to submit to, and
pass a drug-screening test as a condition of this employment offer.

Please indicate your acceptance of this offer by signing below and returning
this original to Mr. Patrick Milton. If you have any questions regarding this
offer, please feel free to contact me directly by phone at (703) 205-0600 or
e-mail at RF@ydi.com.

Very Truly Yours,

/s/ Robert Fitzgerald
Robert Fitzgerald
CEO
  ACCEPTED AND AGREED:

By: /s/ Thomas C. Bennett
        Thomas Bennett

Date: December 22, 2004

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