Exhibit
      10.3





THE
      SECURITIES REPRESENTED HEREBY MAY
      NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES HAVE BEEN REGISTERED FOR SALE
      PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED, (II) SUCH SECURITIES MAY
      BE
      SOLD PURSUANT TO RULE 144(K), OR (III) THE COMPANY HAS RECEIVED AN OPINION
      OF
      COUNSEL (IF REQUIRED BY THE COMPANY) REASONABLY SATISFACTORY TO IT THAT SUCH
      TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT
      OF
      1933 OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS.





SUBJECT
      TO THE PROVISIONS OF SECTION 10
      HEREOF, THIS WARRANT SHALL BE VOID AFTER 5:00 P.M. EASTERN TIME ON JULY 23,
      2012
      (THE “EXPIRATION DATE”).





No.
      2007-__________








**TERABEAM,
      INC.**





**WARRANT
      TO PURCHASE _______ SHARES OF**


**COMMON
      STOCK, PAR VALUE $0.01 PER SHARE**





For
      VALUE RECEIVED,
      ____________________ (“Warrantholder”), is entitled to purchase, subject to the
      provisions of this Warrant, from Terabeam, Inc., a Delaware corporation
      (“Company”), from and after January 23, 2008 and at any time not later than 5:00
      P.M., Eastern time, on the Expiration Date (as defined above), at an exercise
      price per share equal to $2.45 (the exercise price in effect being herein called
      the “Warrant Price”), ______ shares (“Warrant Shares”) of the Company’s Common
      Stock, par value $0.01 per share (“Common Stock”).  The number of
      Warrant Shares purchasable upon exercise of this Warrant and the Warrant Price
      shall be subject to adjustment from time to time as described
      herein.  This Warrant is being issued pursuant to the Purchase
      Agreement, dated as of July 19, 2007 (the “Purchase Agreement”), among the
      Company and the initial holders of the Company Warrants (as defined
      below).  Capitalized terms used herein have the respective meanings
      ascribed thereto in the Purchase Agreement unless otherwise defined
      herein.





Section
      1.              Registration.  The
      Company shall maintain books for the transfer and registration of the
      Warrant.  Upon the initial issuance of this Warrant, the Company shall
      issue and register the Warrant in the name of the Warrantholder.





Section
      2.              Transfers.  As
      provided herein, this Warrant may be transferred only pursuant to a registration
      statement filed under the Securities Act of 1933, as amended (the “Securities
      Act”), or an exemption from such registration.  Subject to such
      restrictions, the Company shall transfer this Warrant from time to time upon
      the
      books to be maintained by the Company for that purpose, upon surrender hereof
      for transfer, properly endorsed or accompanied by appropriate instructions
      for
      transfer and such other documents as may be reasonably required by the Company,
      including, if required by the Company, an opinion of its counsel to the
      effect





that
      such
      transfer is exempt from the registration requirements of the Securities Act,
      to
      establish that such transfer is being made in accordance with the terms hereof,
      and a new Warrant shall be issued to the transferee and the surrendered Warrant
      shall be canceled by the Company.





Section
      3.              Exercise
      of Warrant.  Subject to the provisions hereof, the Warrantholder
      may exercise this Warrant, in whole or in part, at any time prior to its
      expiration upon surrender of this Warrant, together with delivery of a duly
      executed Warrant exercise form, in the form attached hereto as Appendix A (the
      “Exercise Agreement”) and payment by cash, certified check or wire transfer of
      funds (or, in certain circumstances, by cashless exercise as provided in Section
      18 below) of the aggregate Warrant Price for that number of Warrant Shares
      then
      being purchased, to the Company during normal business hours on any business
      day
      at the Company’s principal executive offices (or such other office or agency of
      the Company as it may designate by notice to the Warrantholder).  The
      Warrant Shares so purchased shall be deemed to be issued to the Warrantholder
      or
      the Warrantholder’s designee, as the record owner of such shares, as of the
      close of business on the date on which this Warrant shall have been surrendered
      (or the date evidence of loss, theft or destruction thereof and security or
      indemnity satisfactory to the Company has been provided to the Company), the
      Warrant Price shall have been paid and the completed Exercise Agreement shall
      have been delivered.  Certificates for the Warrant Shares so purchased
      shall be delivered to the Warrantholder (or at the Company’s option and with the
      Warrantholder’s consent, electronic shares shall be made available to the
      Warrantholder via DWAC) within a reasonable time, not exceeding three (3)
      business days (seven (7) business days if the Warrantholder does not consent
      to
      DWAC delivery), after this Warrant shall have been so exercised.  The
      certificates so delivered shall be in such denominations as may be requested
      by
      the Warrantholder and shall be registered in the name of the Warrantholder
      or
      such other name as shall be designated by the Warrantholder, as specified in
      the
      Exercise Agreement.  If this Warrant shall have been exercised only in
      part, then, unless this Warrant has expired, the Company shall, at its expense,
      at the time of delivery of such certificates, deliver to the Warrantholder
      a new
      Warrant representing the right to purchase the number of shares with respect
      to
      which this Warrant shall not then have been exercised.  As used
      herein, “business day” means a day, other than a Saturday or Sunday, on which
      banks in New York City are open for the general transaction of
      business.  Each exercise hereof shall constitute the re-affirmation by
      the Warrantholder that the representations and warranties contained in Section
      5
      of the Purchase Agreement are true and correct in all material respects with
      respect to the Warrantholder as of the time of such exercise.





If
      (1) a certificate representing the
      Warrant Shares is not delivered to the Warrantholder (or electronic shares
      are
      not made available to the Warrantholder) within three (3) Business Days (or
      seven (7) Business Days if appropriate pursuant to the first paragraph of this
      Section 3) of the due exercise of this Warrant by the Warrantholder and (2)
      prior to the time such certificate is received by the Warrantholder (or
      electronic shares are so made available), the Warrantholder, or any third party
      on behalf of the Warrantholder or for the Warrantholder’s account, purchases (in
      an open market transaction or otherwise) shares of Common Stock to deliver
      in
      satisfaction of a sale by the Warrantholder of shares represented by such
      certificate (a “Buy-In”), then the Company shall pay in cash to the
      Warrantholder (for costs incurred either directly by such Warrantholder or
      on
      behalf of a third party) the amount by which the total purchase price paid
      for
      Common Stock as a result of the Buy-In (including brokerage commissions, if
      any)
      exceeds


-2-


the
      proceeds received by such Warrantholder as a result of the sale to which such
      Buy-In relates.  The Warrantholder shall provide the Company written
      notice indicating the amounts payable to the Warrantholder in respect of the
      Buy-In.





Section
      4.              Compliance
      with the Securities Act of 1933. Except as provided in the Purchase
      Agreement, the Company may cause the legend set forth on the first page of
      this
      Warrant to be set forth on each Warrant, and a similar legend on any security
      issued or issuable upon exercise of this Warrant, unless counsel for the Company
      is of the opinion as to any such security that such legend is
      unnecessary.





Section
      5.      
       Payment of
      Taxes.  The Company will pay any documentary stamp taxes
      attributable to the initial issuance of Warrant Shares issuable upon the
      exercise of the Warrant; provided, however, that the Company shall not be
      required to pay any tax or taxes which may be payable in respect of any transfer
      involved in the issuance or delivery of any certificates for Warrant Shares
      in a
      name other than that of the Warrantholder in respect of which such shares are
      issued, and in such case, the Company shall not be required to issue or deliver
      any certificate for Warrant Shares or any Warrant until the person requesting
      the same has paid to the Company the amount of such tax or has established
      to
      the Company’s reasonable satisfaction that such tax has been
      paid.  The Warrantholder shall be responsible for income taxes due
      under federal, state or other law, if any such tax is due.





Section
      6.      
       Mutilated or Missing
      Warrants.  In case this Warrant shall be mutilated, lost, stolen,
      or destroyed, the Company shall issue in exchange and substitution of and upon
      surrender and cancellation of the mutilated Warrant, or in lieu of and
      substitution for the Warrant lost, stolen or destroyed, a new Warrant of like
      tenor and for the purchase of a like number of Warrant Shares, but only upon
      receipt of evidence reasonably satisfactory to the Company of such loss, theft
      or destruction of the Warrant, and with respect to a lost, stolen or destroyed
      Warrant, reasonable indemnity or bond with respect thereto, if requested by
      the
      Company.





Section
      7.              Reservation
      of Common Stock.  The Company hereby represents and warrants that
      there have been reserved, and the Company shall at all applicable times keep
      reserved until issued (if necessary) as contemplated by this Section 7, out
      of
      the authorized and unissued shares of Common Stock, sufficient shares to provide
      for the exercise of the rights of purchase represented by this
      Warrant.  The Company agrees that all Warrant Shares issued upon due
      exercise of the Warrant shall be, at the time of delivery of the certificates
      for such Warrant Shares, duly authorized, validly issued, fully paid and
      non-assessable shares of Common Stock of the Company.





Section
      8.              Adjustments.  Subject
      and pursuant to the provisions of this Section 8, the Warrant Price and number
      of Warrant Shares subject to this Warrant shall be subject to adjustment from
      time to time as set forth hereinafter.





(a)   
             If the Company shall, at any time or
      from time to time while this Warrant is outstanding, pay a dividend or make
      a
      distribution on its Common Stock in shares of Common Stock, subdivide its
      outstanding shares of Common Stock into a greater number of shares or combine
      its outstanding shares of Common Stock into a smaller number of shares or issue
      by


-3-


reclassification
      of its outstanding shares of Common Stock any shares of its capital stock
      (including any such reclassification in connection with a consolidation or
      merger in which the Company is the continuing corporation), then (i) the Warrant
      Price in effect immediately prior to the date on which such change shall become
      effective shall be adjusted by multiplying such Warrant Price by a fraction,
      the
      numerator of which shall be the number of shares of Common Stock outstanding
      immediately prior to such change and the denominator of which shall be the
      number of shares of Common Stock outstanding immediately after giving effect
      to
      such change and (ii) the number of Warrant Shares purchasable upon exercise
      of
      this Warrant shall be adjusted by multiplying the number of Warrant Shares
      purchasable upon exercise of this Warrant immediately prior to the date on
      which
      such change shall become effective by a fraction, the numerator of which is
      shall be the Warrant Price in effect immediately prior to the date on which
      such
      change shall become effective and the denominator of which shall be the Warrant
      Price in effect immediately after giving effect to such change, calculated
      in
      accordance with clause (i) above.  Such adjustments shall be made
      successively whenever any event listed above shall occur.





(b)          If
      any capital reorganization, reclassification of the capital stock of the
      Company, consolidation or merger of the Company with another corporation in
      which the Company is not the survivor, or sale, transfer or other disposition
      of
      all or substantially all of the Company’s assets to another corporation shall be
      effected, then, as a condition of such reorganization, reclassification,
      consolidation, merger, sale, transfer or other disposition, lawful and adequate
      provision shall be made whereby each Warrantholder shall thereafter have the
      right to purchase and receive upon the basis and upon the terms and conditions
      herein specified and in lieu of the Warrant Shares immediately theretofore
      issuable upon exercise of the Warrant, such shares of stock, securities or
      assets as would have been issuable or payable with respect to or in exchange
      for
      a number of Warrant Shares equal to the number of Warrant Shares immediately
      theretofore issuable upon exercise of the Warrant, had such reorganization,
      reclassification, consolidation, merger, sale, transfer or other disposition
      not
      taken place, and in any such case appropriate provision shall be made with
      respect to the rights and interests of each Warrantholder to the end that the
      provisions hereof (including, without limitation, provision for adjustment
      of
      the Warrant Price) shall thereafter be applicable, as nearly equivalent as
      may
      be practicable in relation to any shares of stock, securities or assets
      thereafter deliverable upon the exercise hereof.  The Company shall
      not effect any such consolidation, merger, sale, transfer or other disposition
      unless prior to or simultaneously with the consummation thereof the successor
      corporation (if other than the Company) resulting from such consolidation or
      merger, or the corporation purchasing or otherwise acquiring such assets or
      other appropriate corporation or entity shall assume the obligation to deliver
      to the Warrantholder, at the last address of the Warrantholder appearing on
      the
      books of the Company, such shares of stock, securities or assets as, in
      accordance with the foregoing provisions, the Warrantholder may be entitled
      to
      purchase, and the other obligations under this Warrant.  The
      provisions of this paragraph (b) shall similarly apply to successive
      reorganizations, reclassifications, consolidations, mergers, sales, transfers
      or
      other dispositions.





(c)          
      In case the Company shall fix a payment date for the making of a distribution
      to
      all holders of Common Stock (including any such distribution made in connection
      with a consolidation or merger in which the Company is the continuing
      corporation) of evidences


-4-


of
      indebtedness or assets (other than cash dividends or cash distributions payable
      out of consolidated earnings or earned surplus or dividends or distributions
      referred to in Section 8(a)), or subscription rights or warrants, the Warrant
      Price to be in effect after such payment date shall be determined by multiplying
      the Warrant Price in effect immediately prior to such payment date by a
      fraction, the numerator of which shall be the total number of shares of Common
      Stock outstanding multiplied by the Market Price (as defined below) per share
      of
      Common Stock immediately prior to such payment date, less the fair market value
      (as determined by the Company’s Board of Directors in good faith) of said assets
      or evidences of indebtedness so distributed, or of such subscription rights
      or
      warrants, and the denominator of which shall be the total number of shares
      of
      Common Stock outstanding multiplied by such Market Price per share of Common
      Stock immediately prior to such payment date.  “Market Price” as of a
      particular date (the “Valuation Date”) shall mean the following: (a) if the
      Common Stock is then listed on the Nasdaq Global Market or the Nasdaq Capital
      Market (“Nasdaq”) or any other national stock exchange, the closing sale price
      of one share of Common Stock on such exchange on the last trading day prior
      to
      the Valuation Date; (b) if the Common Stock is then quoted on the National
      Association of Securities Dealers, Inc. OTC Bulletin Board (the “Bulletin
      Board”) or such similar quotation system or association, the closing sale price
      of one share of Common Stock on the Bulletin Board or such other quotation
      system or association on the last trading day prior to the Valuation Date or,
      if
      no such closing sale price is available, the average of the high bid and the
      low
      asked price quoted thereon on the last trading day prior to the Valuation Date;
      or (c) if the Common Stock is not then listed on a national stock exchange
      or
      quoted on the Bulletin Board or such other quotation system or association,
      the
      fair market value of one share of Common Stock as of the Valuation Date, as
      determined in good faith by the Board of Directors of the Company and the
      Warrantholder.  If the Common Stock is not then listed on a national
      securities exchange, the Bulletin Board or such other quotation system or
      association, the Board of Directors of the Company shall respond promptly,
      in
      writing, to an inquiry by the Warrantholder prior to the exercise hereunder
      as
      to the fair market value of a share of Common Stock as determined by the Board
      of Directors of the Company.  In the event that the Board of Directors
      of the Company and the Warrantholder are unable to agree upon the fair market
      value in respect of subpart (c) of this paragraph, the Company and the
      Warrantholder shall jointly select an appraiser, who is experienced in such
      matters.  The decision of such appraiser shall be final and
      conclusive, and the cost of such appraiser shall be borne equally by the Company
      and the Warrantholder.  Such adjustment shall be made successively
      whenever such a payment date is fixed.





(d)           An
      adjustment to the Warrant Price shall become effective immediately after the
      payment date in the case of each dividend or distribution and immediately after
      the effective date of each other event which requires an
      adjustment.





(e)     
           In the event that, as a result of an adjustment
      made pursuant to this Section 8, the Warrantholder shall become entitled to
      receive any shares of capital stock of the Company other than shares of Common
      Stock, the number of such other shares so receivable upon exercise of this
      Warrant shall be subject thereafter to adjustment from time to time in a manner
      and on terms as nearly equivalent as practicable to the provisions with respect
      to the Warrant Shares contained in this Warrant.


-5-


(f)          To
      the extent permitted by applicable law and the listing requirements of any
      stock
      market or exchange on which the Common Stock is then listed, the Company from
      time to time may decrease the Warrant Price by any amount for any period of
      time
      if the period is at least twenty (20) days, the decrease is irrevocable during
      the period and the Board shall have made a determination that such decrease
      would be in the best interests of the Company, which determination shall be
      conclusive.  Whenever the Warrant Price is decreased pursuant to the
      preceding sentence, the Company shall provide written notice thereof to the
      Warrantholder at least five (5) days prior to the date the decreased Warrant
      Price takes effect, and such notice shall state the decreased Warrant Price
      and
      the period during which it will be in effect.





Section
      9.             Fractional
      Interest.  The Company shall not be required to issue fractions of
      Warrant Shares upon the exercise of this Warrant.  If any fractional
      share of Common Stock would, except for the provisions of the first sentence
      of
      this Section 9, be deliverable upon such exercise, the Company, in lieu of
      delivering such fractional share, shall pay to the exercising Warrantholder
      an
      amount in cash equal to the Market Price of such fractional share of Common
      Stock on the date of exercise.





Section
      10.           Extension
      of Expiration Date.  If the Company fails to cause any
      Registration Statement covering Registrable Securities (as defined in the
      Registration Rights Agreement) to be declared effective prior to the applicable
      dates set forth therein, or if any of the events specified in Section 2(c)(ii)
      of the Registration Rights Agreement occurs, and the Blackout Period (as defined
      in the Registration Rights Agreement) (whether alone, or in combination with
      any
      other Blackout Period) continues for more than 60 days in any 12 month period,
      or for more than a total of 90 days, then the Expiration Date of this Warrant
      shall be extended one day for each day beyond the 60-day or 90-day limits,
      as
      the case may be, that the Blackout Period continues.





Section
      11.           Benefits.  Nothing
      in this Warrant shall be construed to give any person, firm or corporation
      (other than the Company and the Warrantholder) any legal or equitable right,
      remedy or claim, it being agreed that this Warrant shall be for the sole and
      exclusive benefit of the Company and the Warrantholder.





Section
      12.           Notices
      to Warrantholder.  Upon the happening of any event requiring an
      adjustment of the Warrant Price, the Company shall promptly give written notice
      thereof to the Warrantholder at the address appearing in the records of the
      Company, stating the adjusted Warrant Price and the adjusted number of Warrant
      Shares resulting from such event and setting forth in reasonable detail the
      method of calculation and the facts upon which such calculation is
      based.  Failure to give such notice to the Warrantholder or any defect
      therein shall not affect the legality or validity of the subject
      adjustment.





Section
      13.           Identity
      of Transfer Agent.  The Transfer Agent for the Common Stock is
      Registrar & Transfer Company.  Upon the appointment of any
      subsequent transfer agent for the Common Stock or other shares of the Company’s
      capital stock issuable upon the exercise of the rights of purchase represented
      by the Warrant, the Company will mail to the Warrantholder a statement setting
      forth the name and address of such transfer agent.


-6-


Section
      14.           Notices.  Unless
      otherwise provided, any notice required or permitted under this Warrant shall
      be
      given in writing and shall be deemed effectively given as hereinafter described
      (i) if given by personal delivery, then such notice shall be deemed given upon
      such delivery, (ii) if given by telex or facsimile, then such notice shall
      be
      deemed given upon receipt of confirmation of complete transmittal, (iii) if
      given by mail, then such notice shall be deemed given upon the earlier of (A)
      receipt of such notice by the recipient or (B) three days after such notice
      is
      deposited in first class mail, postage prepaid, and (iv) if given by an
      internationally recognized overnight air courier, then such notice shall be
      deemed given one business day after delivery to such carrier.  All
      notices shall be addressed as follows: if to the Warrantholder, at its address
      as set forth in the Company’s books and records and, if to the Company, at the
      address as follows, or at such other address as the Warrantholder or the Company
      may designate by ten days’ advance written notice to the other:





If
      to the Company:





Terabeam,
      Inc.


2115
      O’Nel Drive


San
      Jose,
      California 95131


Attention:


Fax:





With
      a copy to:





Terabeam,
      Inc.


881
      North
      King Street, Suite 100


Northamption,
      Massachusetts 01060


Attention:  David
      L. Renauld


Fax:  (413)
      584-2685





Section
      15.           Registration
      Rights.  The initial Warrantholder is entitled to the benefit of
      certain registration rights with respect to the shares of Common Stock issuable
      upon the exercise of this Warrant as provided in the Registration Rights
      Agreement, and any subsequent Warrantholder may be entitled to such
      rights.





Section
      16.           Successors.  All the covenants and provisions hereof by or for the
      benefit of the Warrantholder shall bind and inure to the benefit of its
      respective successors and assigns hereunder.





Section
      17.            Governing
      Law; Consent to Jurisdiction; Waiver of Jury Trial.  This Warrant
      shall be governed by, and construed in accordance with, the internal laws of
      the
      State of New York, without reference to the choice of law provisions
      thereof.  The Company and, by accepting this Warrant, the
      Warrantholder, each irrevocably submits to the exclusive jurisdiction of the
      courts of the State of New York located in New York County and the United States
      District Court for the Southern District of New York for the purpose of any
      suit, action, proceeding or judgment relating to or arising out of this Warrant
      and the transactions contemplated hereby.  Service of process in
      connection with any such suit, action or proceeding


-7-


may
      be
      served on each party hereto anywhere in the world by the same methods as are
      specified for the giving of notices under this Warrant.  The Company
      and, by accepting this Warrant, the Warrantholder, each irrevocably consents
      to
      the jurisdiction of any such court in any such suit, action or proceeding and
      to
      the laying of venue in such court.  The Company and, by accepting this
      Warrant, the Warrantholder, each irrevocably waives any objection to the laying
      of venue of any such suit, action or proceeding brought in such courts and
      irrevocably waives any claim that any such suit, action or proceeding brought
      in
      any such court has been brought in an inconvenient forum. **EACH OF THE
      COMPANY AND, BY ITS ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES ANY
      RIGHT
      TO REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS WARRANT AND
      REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS
      WAIVER.**





Section
      18.           Cashless
      Exercise.  Notwithstanding any other provision contained herein to
      the contrary, from and after the first anniversary of the Closing Date and
      so
      long as the Company is required under the Registration Rights Agreement to
      have
      effected the registration of the Warrant Shares for resale to the public
      pursuant to a Registration Statement (as such term is defined in the
      Registration Rights Agreement), if the Warrant Shares may not be freely sold
      to
      the public for any reason (including, but not limited to, the failure of the
      Company to have effected the registration of the Warrant Shares or to have
      a
      current prospectus available for delivery or otherwise, but excluding the period
      of any Allowed Delay (as defined in the Registration Rights Agreement), the
      Warrantholder may elect to receive, without the payment by the Warrantholder
      of
      the aggregate Warrant Price in respect of the shares of Common Stock to be
      acquired, shares of Common Stock of equal value to the value of this Warrant,
      or
      any specified portion hereof, by the surrender of this Warrant (or such portion
      of this Warrant being so exercised) together with a Net Issue Election Notice,
      in the form annexed hereto as Appendix B, duly executed, to the
      Company.  Thereupon, the Company shall issue to the Warrantholder such
      number of fully paid, validly issued and nonassessable shares of Common Stock
      as
      is computed using the following formula:





X
      = Y
      (A - B)


A





where





X
      =           the number of
      shares of Common Stock to which the Warrantholder is entitled upon such cashless
      exercise;





Y
      =           the total
      number of shares of Common Stock covered by this Warrant for which the
      Warrantholder has surrendered purchase rights at such time for cashless exercise
      (including both shares to be issued to the Warrantholder and shares as to which
      the purchase rights are to be canceled as payment therefor);





A
      =           the “Market
      Price” of one share of Common Stock as at the date the net issue election is
      made; and


-8-


B
      =           the Warrant
      Price in effect under this Warrant at the time the net issue election is
      made.





Section
      19.            Limitations
      on Exercise.  Notwithstanding anything to the contrary contained
      herein, the number of Warrant Shares that may be acquired by the Warrantholder
      upon any exercise of this Warrant (or otherwise in respect hereof) shall be
      limited to the extent necessary to insure that, following such exercise (or
      other issuance), the total number of shares of Common Stock then beneficially
      owned by such Warrantholder and its Affiliates and any other Persons whose
      beneficial ownership of Common Stock would be aggregated with the
      Warrantholder's for purposes of Section 13(d) of the Securities Exchange Act
      of
      1934, as amended (the “Exchange Act”), does not exceed 9.999% of the total
      number of issued and outstanding shares of Common Stock (including for such
      purpose the shares of Common Stock issuable upon such exercise). For such
      purposes, beneficial ownership shall be determined in accordance with Section
      13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
      This provision shall not restrict the number of shares of Common Stock which
      a
      Holder may receive or beneficially own in order to determine the amount of
      securities or other consideration that such Holder may receive in the event
      of a
      transaction contemplated by Section 8 of this Warrant.  This
      restriction may not be waived.  Notwithstanding anything to the
      contrary herein, the foregoing limitation on exercise shall not apply to Lloyd
      I. Miller, III and/or any Affiliate of Lloyd I. Miller, III.





Section
      20.           No
      Rights as Stockholder.  Prior to the exercise of this Warrant, the
      Warrantholder shall not have or exercise any rights as a stockholder of the
      Company by virtue of its ownership of this Warrant.





Section
      21.           Amendment;
      Waiver.  This Warrant is one of a series of Warrants of like tenor
      issued by the Company pursuant to the Purchase Agreement and initially covering
      an aggregate of 2,150,000 shares of Common Stock (collectively, the “Company
      Warrants”).  Any term of this Warrant may be amended or waived
      (including the adjustment provisions included in Section 8 of this Warrant)
      upon
      the written consent of the Company and the holders of Company Warrants
      representing at least 50% of the number of shares of Common Stock then subject
      to all outstanding Company Warrants (the “Majority Holders”); provided,
      that (x) any such amendment or waiver must apply to all Company Warrants; (y)
      the number of Warrant Shares subject to this Warrant, the Warrant Price and
      the
      Expiration Date may not be amended, and the right to exercise this Warrant
      may
      not be altered or waived, without the written consent of the Warrantholder;
      and
      (z) Section 19 of the Warrants issued to Lloyd I. Miller, III and/or any
      Affiliate of Lloyd I. Miller, III may not be amended to limit his and/or their
      ability to exercise those Warrants without the prior written consent of Lloyd
      I.
      Miller.





Section
      22.           Section
      Headings.  The section headings in this Warrant are for the
      convenience of the Company and the Warrantholder and in no way alter, modify,
      amend, limit or restrict the provisions hereof.


-9-


IN
      WITNESS WHEREOF, the Company has caused this Warrant to be duly executed, as
      of
      the 23rd day of July, 2007.





TERABEAM,
                INC.By:___________________________Name:
                Robert E. FitzgeraldTitle:
                Chief Executive Officer








-10-


APPENDIX
      A


TERABEAM,
      INC.


WARRANT
      EXERCISE FORM





To
      Terabeam, Inc.:





The
      undersigned hereby irrevocably
      elects to exercise the right of purchase represented by the within Warrant
      (“Warrant”) for, and to purchase thereunder by the payment of the Warrant Price
      and surrender of the Warrant, _______________ shares of Common Stock (“Warrant
      Shares”) provided for therein, and requests that certificates for the Warrant
      Shares be issued as follows:





NameAddressFederal
                Tax ID or Social Security No.





and
      delivered
      by                                           (certified
      mail to the above address, or


(electronically
      (provide DWAC
      Instructions:___________________), or


(other
      (specify):
      __________________________________________).





and,
      if
      the number of Warrant Shares shall not be all the Warrant Shares purchasable
      upon exercise of the Warrant, that a new Warrant for the balance of the Warrant
      Shares purchasable upon exercise of this Warrant be registered in the name
      of
      the undersigned Warrantholder or the undersigned’s Assignee as below indicated
      and delivered to the address stated below.








Dated:
      ___________________, ____





Note:  The
      signature must correspond
      with


Signature:______________________________


the
      name
      of the Warrantholder as written


on
                the first page of the Warrant in everyparticular,
                without alteration or enlargement
            Name
                (please print)or
                any change whatever, unless the Warranthas
                been assigned.AddressFederal
                Identification orSocial
                Security No.Assignee:








APPENDIX
      B


TERABEAM,
      INC.


NET
      ISSUE
      ELECTION NOTICE








To:
      Terabeam, Inc.





Date:[_________________________]








The
      undersigned hereby elects under Section 18 of this Warrant to surrender
      the right to purchase [____________] shares of Common Stock pursuant to this
      Warrant and hereby requests the issuance of [_____________] shares of Common
      Stock.  The certificate(s) for the shares issuable upon such net issue
      election shall be issued in the name of the undersigned or as otherwise
      indicated below.








SignatureName
                for RegistrationMailing
                Address