Exhibit 10.2

                        INCENTIVE STOCK OPTION AGREEMENT
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      THIS INCENTIVE STOCK OPTION AGREEMENT is made as of May 19, 2006 between
TERABEAM, INC., a corporation organized under the laws of the State of Delaware
(hereinafter called the "Corporation"), and Pankaj Manglik (hereinafter referred
to as the "Employee").

      WHEREAS, the Employee is in the employ of the Corporation or one of its
affiliates and the Corporation considers it desirable and in its best interests
to encourage the Employee as an eligible employee under its 2004 Stock Plan (the
"Plan") to remain in such employ and to motivate the Employee to exert the
Employee's best efforts on behalf of the Corporation and its affiliates;

      NOW, THEREFORE, it is agreed as follows:

      1. Grant of Option. The Corporation hereby grants to the Employee as of
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the date of this Agreement ("Date of Grant") the right, privilege and option to
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purchase not more than ____________________________ shares (the "Grant Number")
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of the Common Stock of the Corporation, par value $.01 per share, as constituted
on the date of this Agreement pursuant to the terms, provisions and conditions
of the Plan which is incorporated herein and made a part hereof by reference as
if fully set forth herein at length and subject to the terms, provisions and
conditions set forth below.

      2. Option Price. The option price per share of Common Stock as constituted
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on the date of this Agreement, as determined in accordance with the Plan, shall
be $__________ per share.

      3. Time of Exercise; Acceleration. This option will vest as to eight and
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one-third percent (8.33%) of the Grant Number on July 1, 2006 and then as to
eight and one-third percent (8.33%) of the Grant Number on the first day of each
January, April, July, and October thereafter until the option has vested in full
(the day on which any options are scheduled to vest under this Agreement is
referred to in this Agreement as a "Vesting Date"); provided, however, that upon
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the event of (i) the completion of a merger or consolidation of the Corporation
with any other entity (other than a merger or consolidation which would result
in the shareholders of the Corporation immediately prior thereto continuing to
own (either by remaining outstanding or by being converted into voting
securities of the surviving entity or its parent) more than 50% of the combined
voting power of the voting securities of the Corporation or such surviving
entity (or its parent) outstanding immediately after such merger or
consolidation), (ii) the sale of substantially all of the Corporation's assets
to another entity, or (iii) the sale of more than 50% of the outstanding capital
stock of the Corporation to an unrelated person or group of persons acting
collectively in one or a series of transactions, fifty percent (50%) of the
unvested options that would have vested on each Vesting Date (rounded down to
the nearest whole number if necessary) will be immediately vested.
Notwithstanding the foregoing sentence, (a) the number of options that will vest
on each Vesting Date, if other than a whole number, will be rounded

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down to the nearest whole number and (b) any fractional options resulting from
the preceding clause will vest on the twelfth Vesting Date.

      Only vested stock options may be exercised. This option may be exercised
in whole or in part as to shares which have vested for not in excess of the
difference between (i) the total number of shares then vested and (ii) the total
number of shares as to which the option has been previously exercised. No
partial exercise of this option within any year may be for less than 100 shares
(or the remaining shares purchasable under this option if less than 100 shares).

      4. Method of Exercise. This option shall be exercisable from time to time
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as provided above by written notice in the form of Exhibit "A", signed by the
person entitled to exercise the option, setting forth in terms of shares of
Stock as constituted on the date of this Agreement, the number of shares as to
which this option is being exercised. Such notice shall be delivered to the
Corporation at its principal place of business or as otherwise directed by the
Corporation and be accompanied by the purchase price. Alternatively, the person
entitled to exercise the option may exercise the option and pay the purchase
price by any other method that may be authorized by the Corporation from time to
time. The Corporation shall make prompt delivery of the shares of Stock as to
which the option is exercised against payment of the purchase price; provided,
however, that if any law or regulation requires the Corporation to take any
action with respect to the Stock before the issuance thereof, then the date of
delivery of the Stock shall be extended for the period necessary to take such
action.

      5. Further Limitations on Exercise.
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         A. Termination of Employment.
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            (i) If Employee's employment with or service to the Corporation
terminates other than by reason of death or Disability, (a) no further vesting
of this option will occur subsequent to the date of termination, and (b) this
option will terminate on the date three months after the date of termination or
on the option's specified expiration date, if earlier. Nothing in this Agreement
will be deemed to give the Employee the right to continued employment with the
Corporation.

            (ii) If Employee's employment or other service to the Corporation is
terminated due to the Employee's death or Disability, this option may be
exercised, up to that portion of the option which the Employee could have
exercised on the date of death or Disability, by the Employee, or in the case of
death, the Employee's estate, personal representative or any beneficiary who has
acquired the option by will or by the laws of descent and distribution, at any
time prior to the earlier of the specified expiration date of this option or one
year after the Employee's death or Disability.

         B. Condition to Exercise. As a condition of the Corporation's
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obligation to issue Stock upon exercise of this option, the Employee or other
person entitled to exercise this option must, at the time of exercise, be
subject to and bound by an agreement not to compete in favor of the Corporation,
either in an employment agreement or in a separate document reasonably
acceptable to the Corporation.

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         C. Payment. The option price shall be paid as follows: (i) by check,
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and/or (ii) to the extent the Stock is publicly traded, by delivery to the
Corporation by the Employee of Stock already owned by such Employee, properly
endorsed and having a fair market value equal to the purchase price (if
permitted by the Corporation) and/or (iii) in any other manner permitted by the
Corporation from time to time. For purposes of this Section 5(C), the market
value of such stock to be delivered to the Corporation in payment of the option
price shall be determined in accordance with the Plan.

         D. Non-Transferability. This option is not transferable by the
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Employee, except by will or by laws of descent and distribution, and is
exercisable during the Employee's lifetime only by the Employee.

         E. Adjustment. If a dividend is declared upon the Stock payable in
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Stock, then the shares of Stock then subject to this option (and the number of
shares reserved for issuance) shall be increased proportionately without any
change in the aggregate purchase price. If the outstanding Stock is changed into
or exchanged for a different number or class of shares of stock of the
Corporation or of another corporation, whether through reorganization,
recapitalization, stock split-up, combination of shares, merger or
consolidation, then (i) there shall be substituted for each such share of Stock
then subject to this option (and for each share reserved for issuance) the
number and class of shares of Stock into which each outstanding share of Stock
is so changed or exchanged, all without any change in the aggregate purchase
price for the shares then subject to this option and (ii) the vesting schedule
set forth in Section 3 above shall also be adjusted proportionately to reflect
the impact of such reorganization, recapitalization, stock split-up, combination
of shares, merger or consolidation.

         F. Withholding Taxes. Whenever under this Agreement Stock is to be
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issued, the Corporation shall have the right to require the recipient to remit
to the Corporation an amount sufficient to satisfy federal, state and local
withholding tax requirements prior to delivery of any certificate or
certificates representing the Stock.

      6. Stock Ownership. An optionee shall be entitled to the privilege of
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stock ownership only as to such shares of Stock as are issued upon exercise of
this option.

      7. Requirements of Law. The granting of this option and issuance of shares
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of Stock upon the exercise of this option, and the Corporation's obligations
relating thereto, shall be subject to compliance with all of the applicable
requirements of law with respect to the granting of this option and issuance and
sale of such shares (including, without limitation, having an effective
registration statement relating to such shares in force with the Securities and
Exchange Commission). The Corporation shall not be required to take any action
pursuant to this Agreement that would violate any applicable federal, state,
local, or foreign law or require the Corporation to qualify to do business in,
obtain any certifications or approvals from, or make any filings with any state,
local, or foreign jurisdiction.

      8. Expiration Date. This option and all rights granted in this Agreement
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shall, in all events, expire five (5) years from the Date of Grant.

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      9. Legend. The Employee hereby agrees that the stock certificates
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delivered upon exercise of this option may bear a legend or legends in the form
designated by the Corporation to ensure compliance with legal or contractual
restrictions.

      10. Definitions. Unless otherwise defined in this Agreement, the terms
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used in this Agreement shall have the same meanings as in the Plan. The term
"Stock" shall mean shares of Common Stock of the Corporation as constituted on
the date of this Agreement and such other stock as shall be substituted therefor
or issued thereon as provided in Section 5(E) above or as shall be substituted
for or issued upon or in exchange for Stock issued pursuant to the options.

      11. Disposition of Stock. The Employee acknowledges that the "incentive
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stock option" rules set forth in Section 422 of the Internal Revenue Code of
1986, as amended, will not be applicable to any Stock issued to the Employee
pursuant to this Agreement if such Stock is disposed of either within two (2)
years of the Date of Grant or within one (1) year of the issuance of such Stock
to the Employee. The Employee shall give the Corporation prompt notice of a
Disqualifying Disposition.

      12. Notices. All notices under this Agreement shall be sufficient if in
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writing and delivered in hand or mailed, registered or certified mail, postage
prepaid, and addressed to the Corporation at TERABEAM, INC., 2115 O'Nel Drive,
San Jose, CA 95131, Attn: Chief Financial Officer or to the Employee at the most
recent address of the Employee set forth in the personnel records of the
Corporation. Either party may change the address to which notices shall be
delivered by like notice given at least ten (10) days before the effective date
of such change of address.

      13. Binding Effect. This Agreement shall be binding upon and inure to the
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benefit of the Corporation, its successors and assigns, and the Employee, his
legal representatives, heirs, legatees and assigns.

      14. Governing Law. This Agreement shall be governed by and construed in
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accordance with the internal laws of the State of Delaware, U.S.A.

      15. Possible Changed Terms due to Employment Agreement. The Employee is
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party to an employment agreement with the Corporation. That employment agreement
may provide for different vesting provisions or post-termination exercise
provisions than this Agreement. Any applicable provisions in the employment
agreement shall take priority over the terms of this Agreement.

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      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date and year first above written.

TERABEAM, INC.                                 Employee


By:
   ------------------------------              ------------------------------
Name:                                          Pankaj Manglik
Title:


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                                    EXHIBIT A
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                                                     ---------------------------
                                                                (date)
TERABEAM, INC.
2115 O'Nel Drive
San Jose, CA  95131

Ladies and Gentlemen:

      I wish to exercise my option to purchase ____________ shares of common
stock, par value $.01 per share (the "Securities") at a price of $__________ per
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share pursuant to the Incentive Stock Option Agreement dated as of May 19, 2006
(the "Agreement") under the Corporation's 2004 Stock Plan.
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Check one of the following boxes:

[_]  I enclose herewith my check for $_____________________ (the exercise
amount).

[_]  I am paying the exercise price by the following means which has been
approved by the Corporation:
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----------------------------------------------------------------------------.

      I understand that at the time of exercise of this option, I must be
subject to and bound by an agreement not to compete in favor of the Corporation,
either in an employment agreement or in a separate document reasonably
acceptable to the Corporation.

      I further agree that I will not make any sales or other transfers or
dispositions of the securities covered by this letter during the time period
following the closing of any public offering by the Corporation of its
securities requested by the underwriter or, in the absence of such request,
ninety (90) days.

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                                             Very truly yours,


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Employee Social Security Number              Employee Signature (on line above)
                                             Employee Name (printed):____________________

                                                 Address to which certificates are to be sent
Employee's Home Address:                         (complete ONLY if different than home address):


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