Exhibit
      10.1

    


    [WHERIFY
      WIRELESS, INC. LETTERHEAD]

    


    May
      29,
      2008

    


    Mr.
      J.
      Sherman Henderson III

    President
      and Chief Executive Officer

    Lightyear
      Network Solutions, LLC

    1901
      Eastpoint Parkway

    Louisville,
      KY 40223

    


    RE: Letter
      of Intent

    


    Dear
      Mr.
      Henderson:

    


    This
      letter of intent (the “Agreement”)
      summarizes our mutual understandings of the basic terms of a business
      combination between Wherify Wireless, Inc. (“Wherify”)
      and
      Lightyear Network Solutions, LLC (“Lightyear”).
      Although these terms are not binding on either party, it is the intention of
      the
      parties to cooperate fully with each other in connection with completing the
      transactions contemplated herein on the following basic terms (the “Proposed
      Terms”):

    


    
      	1.  	
              Lightyear
                will be merged into a newly created wholly owned subsidiary of Wherify
                (the “Merger
                Sub”)
                in a transaction (the “Merger”)
                pursuant to which, after taking into account (i) all then current
                outstanding fully-diluted shares of Wherify and (ii) those shares
                to be
                issued in connection with the Merger and the Recapitalization Financing
                (as defined below), will result in the shareholders of Lightyear
                owning
                not less than 51% of the fully diluted shares of Wherify that will
                be
                outstanding on the closing date of the Merger (the “Merger
                Closing Date”).

            


    

    


    
      	2.  	
              On
                the Merger Closing Date, Wherify and its subsidiaries will have the
                following proforma debt and other liability
                capitalization:

            


    

    


    
      	a.  	
              The
                Lightyear Debt:
                Merger Sub will assume, in connection with the Merger, current Lightyear
                debt in an amount not to exceed $16 million (the “Lightyear
                Debt”),
                such Lightyear Debt having the following basic
                terms:

            


    

    


    
      	
              Senior
                Secured Portion

            
	
              Amount:

            	
              Not
                more than $10,000,000

            
	
              Form:

            	
              Senior
                Secured Term Note

            
	
              Interest:
                

            	
              Libor
                + 4 (capped at 7.5%), payable on a current basis quarterly in
                arrears

            
	
              Term:

            	
              3
                years

            
	
              Prepayment:

            	
              Anytime
                in whole or part without penalty

            
	
              Security:

            	
              Lightyear
                and Merger Sub customer contracts, accounts receivable and inventory
                existing on or after the Merger Closing Date. The holder of the Lightyear
                Debt shall not have a security interest in any of the assets of Wherify
                or
                Wherify California

            
	 	 


    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    
      	
              Senior
                Subordinated Convertible Note

            
	
              Amount:

            	
              $6,000,000

            
	
              Form:

            	
              Senior
                Subordinated Note

            
	
              Interest
                Rate:

            	
              9%
                p.a., payable quarterly in arrears in cash or, at the option of the
                Merger
                Sub, in additional notes

            
	
              Term:

            	
              3
                years

            
	
              Conversion:

            	
              The
                holder of the note may convert the note into Wherify common stock
                at any
                time in whole or part at a conversion price (the “Conversion
                Price”)
                equal to 125% of the underlying price per share associated with the
                securities issued in the Recapitalization Financing (as defined in
                Section
                3 below) 

            


    

     

    Wherify
      may be a guarantor or obligor on the Lightyear Debt, but the holder of the
      Lightyear debt shall not have a security interest in the assets of Wherify
      or
      Wherify California

     

    
      	b.  	
              The
                Wherify Obligations:
                The entirety of Wherify’s approximate $22 million in existing debt and
                other payables, overdue vendor obligations and liabilities for prior
                taxes
                and workers compensation as of the date of this letter (collectively,
                the
                “Wherify
                Obligations”)
                shall be restructured as follows:

            


    

    


    The
      Existing Senior Secured Debt:
      YA
      Global Investments, L.P. (f/k/a Cornell Capital Partners, LP) (“YA
      Global”),
      the
      holder of the existing approximate $5,510,000 (principal and accrued interest)
      in Wherify Senior Secured Debt, will settle the full amount of the Wherify
      Senior Secured Debt (including all principal, accrued interest, fees, costs,
      and
      expenses) in exchange for: (i) $2.5 million in cash plus (ii) a replacement
      $2.5
      million secured note (the “YA
      Replacement Note”)
      made
      jointly and severally payable by the Merger Sub, Wherify, and Wherify California
      to YA Global, where such YA Replacement Note will have the following basic
      terms:

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	
              Amount:

            	
              $2,500,000

            
	
              Interest:

            	
              12%
                per annum, payable quarterly in arrears 

            
	
              Maturity:

            	
              3
                years 

            
	
              Payments:

            	
              Commencing
                on the thirteen month anniversary date from the Merger Closing Date,
                and
                continuing on the like day of each month thereafter, the makers shall
                make
                monthly principal payments in the amount of $83,333.33 each. At maturity
                of the YA Replacement Note, the then outstanding principal balance
                plus
                any accrued and unpaid interest, and any other amounts due under
                the YA
                Replacement Note shall be due and payable in full.

            
	
              Prepayment:

            	
              Anytime
                in whole or part without penalty

            
	
              Security:

            	
              YA
                Global shall continue to hold a first perfected security interest
                in all
                assets of Wherify and Wherify California, whether existing as of
                the
                Merger Closing Date or acquired thereafter (including, without limitation,
                Wherify’s and Wherify California’s intellectual property). YA Global shall
                not have a security interest in the assets of the Merger Sub. YA
                Global’s
                security documents shall provide that Wherify and Wherify Califonria
                may
                license or utilize their intellectual property in the ordinary course
                of
                business in any reasonable way, provided that (a) any license of
                the
                intellectual property shall be expressly subordinate to the security
                interest of YA Global, and (b) Wherify and/or Wherify California
                shall not
                sell or transfer title to such intellectual property or grant exclusive
                licenses or the like without the prior written consent of YA
                Global1.
                Wherify and Wherify California shall covenant and agree that none
                of their
                assets will be transferred to the Merger Sub either in connection
                with the
                Merger or otherwise without the prior written consent of YA
                Global.

            


    

    


    In
      addition, as part of this restructuring, the existing 7.0 million in Wherify
      warrants owned by YA Global will be reset to provide an Exercise Price equal
      to
      equal to 75% of the underlying price per share associated with the securities
      issued in the Recapitalization Financing (as defined in Section 3 below). In
      addition, the Wherify warrants issued to YA Global shall also be amended to
      provide (a) the cashless exercise may be elected at anytime and shall not be
      subject to any conditions in order to elect the same, and (b) the expiration
      date of the warrant shall be seven years from the Merger Closing Date. Further,
      Wherify acknowledges and agrees that it is intended that after resetting and
      amending the warrants as set forth above, the holding period of such warrants
      will continue to be calculated from the original issue date of such warrants,
      and Wherify will provide all agreements, customary legal opinions, and other
      documentation, and take such actions, as are reasonably necessary to confirm
      the
      same. 

    
      

        

      

      
        
          1
            Provided, however, that with respect to exclusive licenses such consent
            shall
            not be unreasonably withheld so long as no default or event of default
            has
            occurred and is continuing, and such exclusive license is geographically
            and
            temporally limited and otherwise of a nature customarily entered into
            by Wherify
            in the ordinary course of its business.

        

      



    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    Wherify,
      Wherify California, and Merger Sub shall execute and deliver such documents,
      instruments, and agreements as may be required by YA Global to evidence the
      restructure outlined above, which documents shall be in a form and of a
      substance acceptable to YA Global in all respects.

    


    All
      Other Debt Obligations:
      The
      approximate $18 million in other Wherify debt, payables, overdue vendor
      obligations and liabilities for prior taxes and workers compensation obligations
      (the “Wherify
      Unsecured Creditors”)
      will
      be extinguished for an aggregate of not more than (i) $2.5 million in cash
      and
      (ii) that number of shares of common stock, priced at 75% of the underlying
      price per share associated with the securities issued in the Recapitalization
      Financing (as defined in Section 3 below), required to extinguish the balance
      of
      obligations not paid off in cash (the “Debt
      for Equity Shares”);
      provided,
      however,
      in no
      event will the Debt for Equity Shares aggregate in excess of 6% of the aggregate
      fully-diluted shares of Wherify that will be in existence on the Merger Closing
      Date after giving consideration to all shares of Wherify common stock that
      are
      contemplated to be issued or retired as part of the transactions contemplated
      herein.

    


    The
      Series A Convertible Preferred Stock:
      In order
      to facilitate completion of the Recapitalization Financing defined in Section
      3,
      GPS Associates LLC, the holder of Wherify’s existing Series A and Series B
      Preferred Stock (the “Wherify
      Preferred Stock”),
      will
      agree to fully convert such Wherify Preferred Stock on the Merger Closing Date,
      in return which it will be issued a five year warrant to purchase 20,000,000
      shares of Wherify common stock at an exercise price equal to the above defined
      Conversion Price.

    


    Proforma
      for the transactions contemplated in this Section 2, on the Merger Closing
      Date
      Wherify will be capitalized as set forth in Exhibit I appended
      hereto.

    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    
      	3.  	
              On
                the Merger Closing Date, Wherify will have net cash on hand from
                a new
                equity financing (the “Recapitalization
                Financing”)
                of not less than $6.5 million (the “Closing
                Date Working Capital Requirement”),
                after taking into consideration (i) the fees and expenses associated
                with
                raising such Recapitalization Financing and (ii) any cash used therefrom
                to satisfy resolution of the Wherify Obligations as set forth in
                Section 2
                above. Exhibit II appended hereto illustrates that the aggregate
                funding
                requirements the parties hereto contemplate will need to be covered
                by the
                Recapitalization Financing is equal to $15 million. It is contemplated
                that investors providing the equity for the Recapitalization Financing
                will receive preferred stock in Wherify in exchange for their investment.
                Such preferred stock shall contain provisions providing that no cash
                dividends or cash distributions of any nature may be made to the
                holder of
                such preferred stock, and no put, redemption, buyback, or similar
                provision may be exercised, unless and until the payment in full
                of all
                amounts due under the YA Replacement Note. In addition, the parties
                hereto
                understand and agree that the investors providing the Recapitalization
                Financing will likely require holders of preferred or common stock
                or
                warrants exercisable for preferred or common stock, who hold shares,
                or
                warrants exercisable for shares, or some combination thereof, which,
                in
                the aggregate, are in excess of 1% of the capital stock of Wherify
                (on a
                fully diluted basis), to enter into an “Orderly Market Resale Program” or
                similar agreement which may, among other things, limit the amount
                of
                shares such parties may sell at one time and the timing of such sales,
                and
                by accepting or consenting to this Agreement, such parties agree
                that they
                will not unreasonably withhold their consent to such an Agreement
                provided
                that all such parties to which the foregoing applies, and all directors
                and officers and other insiders of Wherify, shall be subject to the
                same
                rules and restrictions. For the purposes of illustration, reference
                is
                made to Exhibit I appended hereto for the projected percentages of
                stock
                and warrants to be held by each party after the closing on the
                Merger.

            


    

    


    
      	4.  	
              On
                the Merger Closing Date (or as soon thereafter as practicable), the
                following will occur:

            


    

    


    
      	a.  	
              The
                name of the Merger Sub will be changed to Lightyear Network Solutions,
                Inc.

            


    

    


    
      	b.  	
              The
                Lightyear shareholders will have the right to choose 60% of the merged
                company Board of Directors and, in that connection, Sherm Henderson
                will
                be designated as Chairman.

            


    

    


    
      	5.  	
              Among
                other things, it shall be a condition of closing the Merger that:
                

            


    

    


    
      	a.  	
              Wherify
                obtain by requisite proxy approval:

            


    

    


    
      	i.  	
              favorable
                consent to the transaction and, in that regard, GPS Associates LLC,
                the
                holder of the Wherify Preferred Stock, shall have expressly consented
                to
                (x) the Merger, (y) the conversion of the Wherify Preferred Stock
                and (z)
                release any and all claims that it may have against Wherify, its
                officers
                and directors (the “GPS
                Consent and Release”);
                and

            


    

    


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
      	ii.  	
              all
                due authorizations necessary to complete the Merger and transactions
                contemplated herein, including, without
                limitation:

            


    

    


    
      	1.  	
              any
                reverse split or other share authorizations that may be
                required;

            


    

    


    
      	2.  	
              the
                Name Change; and

            


    

    


    
      	3.  	
              all
                other matters requiring approval of the Wherify
                shareholders.

            


    

    


    
      	b.  	
              Wherify
                obtain all required creditor
                approvals.

            


    

    


    
      	c.  	
              Lightyear
                obtain all required shareholder and creditor approvals to the
                Merger.

            


    

    


    
      	6.  	
              The
                parties agree to work expeditiously to complete the transactions
                contemplated herein, including without limitation:
                

            


    

    


    
      	a.  	
              Signing,
                to the extent practicable within 20 days from the Effective Date
                hereof, a
                Definitive Merger Agreement conditioned solely upon completion of
                all the
                transactions contemplated herein;

            


    

    


    
      	b.  	
              The
                restructuring of the Lightyear Debt as contemplated in Section
                2(a);

            


    

    


    
      	c.  	
              The
                restructuring of the Wherify Obligations as contemplated in Section
                2(b),
                including for these purposes, a determination at the earliest possible
                date of the cash amount that will be
                required;

            


    

    


    
      	d.  	
              The
                preparation of offering materials for use in soliciting investor
                interest
                in the Recapitalization Financing, including a mutually agreed description
                of the business, prospects and proforma financial condition of each
                of
                Lightyear, Wherify and the combined companies;
                and

            


    

    


    
      	e.  	
              The
                preparation of all required proxy materials and, in the case of Lightyear,
                all required audit work necessary to comply with the SEC financial
                reporting requirements on and after the Merger Closing
                Date.

            


    

    


    Exhibit
      III appended hereto sets forth proposed time schedule for the completion of
      all
      the matters needed to be completed in order for the transactions contemplated
      herein to be completed.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
      	7.  	
              The
                parties agree that each will bear for its own account the cost each
                incurs
                in connection with working to complete the transactions contemplated
                herein.

            


    

    


    
      	8.  	
              This
                Agreement will become effective (the “Effective
                Date”)
                when: 

            


    

    


    
      	a.  	
              signed
                by the parties in the spaces provided below;
                and

            


    

    


    
      	b.  	
              there
                is evidence satisfactory to Lightyear that Wherify shall have access
                to
                interim working capital (the “Bridge
                Loan”)
                for use in carrying Wherify during the process of trying to satisfy
                the
                conditions precedent to closing the Merger as contemplated herein.
                Exhibit
                IV sets forth the principal terms of the proposed Bridge
                Loan.

            


    

    


    The
      parties being in agreement with the provisions of this Agreement so indicate
      by
      their respective signature in the spaces provided below:

    


    
      	
              WHERIFY
                WIRELESS, INC.

            	
              LIGHTYEAR
                NETWORK SOLUTIONS

            
	 	 	 	 
	 	 	 	 
	
              BY:

            	
              ________________________

            	
              BY:

            	
              ______________________________

            
	 	
              Vincent
                D. Sheeran

            	 	
              J.
                Sherman Henderson

            
	 	 	 	 
	
              ITS:

            	
              Chief
                Executive Officer

            	
              ITS:

            	
              
                President
                  & Chief Executive Officer

              

            


    

     

    
      
        
        

      

      
        7