UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C.  20549








FORM
      8-K





CURRENT
      REPORT





Pursuant
      to Section 13 or 15(d) of the


Securities
      Exchange Act of 1934








Date
                  of Report (date of earliest event reported):
              April 24, 2007








TERABEAM,
                  INC.(Exact
                  name of registrant as specified in its
                  charter)








Delaware
              000-29053
              04-2751645(State
                  or other jurisdiction of incorporation)
              (Commission
                  file number)
              (IRS
                  employer identification no.)








2115
                  O’Nel Drive, San Jose, CA
              95131(Address
                  of principal executive offices)
              (Zip
                  code)








Registrant’s
                telephone number, including area code:
            (408)
                731-2700








Not
                  Applicable(Former
                  name or former address, if changed since last
                  report)






Check
      the
      appropriate box below if the Form 8-K filing is intended to simultaneously
      satisfy the filing obligation of the registrant under any of the following
      provisions (see General Instruction A.2. below):




o
            Written
                communications pursuant to Rule 425 under the Securities Act (17 CFR
                230.425)




o
            Soliciting
                material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
                240.14a-12)




o
            Pre-commencement
                communications pursuant to Rule 14d-2(b) under the Exchange Act (17
                CFR 240.14d-2(b))




o
            Pre-commencement
                communications pursuant to Rule 13e-4(c) under the Exchange Act (17
                CFR 240.13e-4(c))











Item
      1.01.  Entry into a Material Definitive Agreement.





On
      April
      24, 2007, Terabeam, Inc. entered into an Assignment Agreement (the “First
      Assignment”) with SPH America, LLC, a Virginia limited liability
      company.  Also on April 24, 2007, Terabeam, Inc. and its subsidiary
      Proxim Wireless Corporation entered into an Assignment Agreement (the “Second
      Assignment”) with SPH America, LLC.





In
      the
      First Assignment, Terabeam agreed to transfer all of its right, title, and
      interest in and to United States patent numbers 5,400,338 and 6,480,497 and
      any
      inventions disclosed and claimed therein (and any corresponding foreign patents,
      applications, and rights) to SPH America pursuant to assignment documents to
      be
      delivered by Terabeam to an escrow agent before June 10, 2007.  In
      return, SPH America (a) agreed to pay Terabeam $1.0 million on or before June
      10, 2007, (b) agreed to pay Terabeam $1.5 million on or before June 30, 2007,
      and (c) granted Terabeam and its subsidiaries perpetual,
      irrevocable, transferable (subject to specified limitations), fully paid,
      worldwide rights to make, have made, use, sell, offer for sale, and import
      their
      products generally in the ordinary course of business subject to certain
      limitations, including limitations on the products covered by these granted
      rights.  These granted rights include rights for direct and indirect
      customers of Terabeam and its subsidiaries to use, sell, offer for sale, or
      import Terabeam’s products for their intended purpose.  The
      First Assignment contemplates that the escrow agent will deliver the patent
      assignment documents to SPH after SPH has made the two contemplated payments
      to
      Terabeam.





In
      the
      Second Assignment, Terabeam and Proxim Wireless agreed to transfer all of their
      right, title, and interest in and to United States patent numbers 5,231,634
      and
      7,085,284 and United States patent application 11/441,617 and any inventions
      disclosed and claimed therein (and any corresponding foreign patents,
      applications, and rights) to SPH America pursuant to assignment documents to
      be
      delivered by Terabeam and Proxim Wireless to an escrow agent before June 10,
      2007.  In return, SPH America (a) agreed to pay Terabeam $2.5 million
      on or before June 30, 2007 and (b) granted Terabeam and its subsidiaries perpetual,
      irrevocable, transferable (subject to specified limitations), fully paid,
      worldwide rights to make, have made, use, sell, offer for sale, and import
      their
      products generally in the ordinary course of business subject to certain
      limitations, including limitations on the products covered by these granted
      rights.  These granted rights include rights for direct and indirect
      customers of Terabeam and its subsidiaries to use, sell, offer for sale, or
      import Terabeam’s products for their intended purpose.  The
      Second Assignment contemplates that the escrow agent will deliver the patent
      and
      patent application assignment documents to SPH after SPH has made the
      contemplated payment to Terabeam.





However,
      SPH America’s obligations under the Second Assignment are subject to
      satisfactory due diligence by SPH on the licenses previously granted on the
      patents and patent application to be assigned.  If its due diligence
      reveals a reasonable basis for SPH to no longer desire to purchase the patents
      and patent application to be assigned and SPH so notifies Terabeam on or before
      May 30, 2007, the parties’ obligations under the Second Assignment are
      void.  If SPH does not provide any such notice to Terabeam on or
      before May 31, 2007, this due diligence contingency will no longer constitute
      a
      condition to either party’s performance of its obligations under the Second
      Assignment.  Terabeam can provide no assurance that
      SPH  will be satisfied by its due diligence review or that Terabeam
      will receive any payment under the Second Assignment.





The
      foregoing description of the two assignment agreements does not purport to
      be
      complete and is qualified in its entirety by the terms and conditions of those
      documents, copies of which are filed as Exhibit 10.1 and Exhibit 10.2 to this
      Form 8-K and are incorporated by reference.





Item
      9.01  Financial Statements and Exhibits.





(c)
            Exhibits





See
      Exhibit Index.





2


SIGNATURE





Pursuant
      to the requirements of the Securities Exchange Act of 1934, the registrant
      has
      duly caused this report to be signed on its behalf by the undersigned hereunto
      duly authorized.





TERABEAM,
                    INC.Dated:
                    April 30, 2007
                By:
                /s/ David L. RenauldDavid
                    L. RenauldVice
                    President





EXHIBIT
      INDEX








Number
            Title10.1
            Assignment
                Agreement dated as of April 24, 2007 between Terabeam, Inc. and SPH
                America, LLC10.2
            Assignment
                Agreement dated as of April 24, 2007 among Terabeam, Inc., Proxim
                Wireless
                Corporation, and SPH America, LLC













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